a project report materials manegement piyush hitesh

8/2/2019 A Project Report Materials Manegement Piyush Hitesh

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A Project Report

On

Subcontracts & Reselling In Materials Management

Submitted By

Piyush R. Patel:-10084251028

Hitesh A. Patel:-10084251017

Master in Computer Management (M.C.M)

Semester-IV

Guided By

Hemant Darji

Submitted toDepartment of Computer Science

Ganpat University, Ganpat Vidyanagar-384012


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May / June - 2012

DD / MM / YYYY

CERTIFICATET O W H O M S O E V E R I T M A Y C O N C E R N

This is to certify that the following students of Master in

Computer Management (M.C.M.) Semester-IV have completed

their full time project work titled Subcontracts & Reselling In

Materials Management satisfactorily to fulfill the requirement

of Master in Computer Management (M.C.M.) Semester-IV.

Enroll. No Name Exam No

Internal Guide Project Co-ordinator Principal/HOD

Department of Computer Science

Ganpat University,

Ganpat Vidyanagar-384012


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3.Industry Certificate


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4. AcknowledgementFirst of all, we thankful to Ganpat University for giving us

opportunity to develop the system. Secondly, we are thankful to

Department Of Computer Science, Ahmedabad to provide

the excellent environment to us for develop the project.

We are very grateful and thankful to professors of my

college. And very kindly say that the professor of my college.

Prof.Anjali Gokhle who give me a tremendous guidance and

gives suggestion about each and every topic which we are study

and research. He gives me guidance about how research can be

taken and also consumer survey.

We also express our heartily thankfulness to all out

friendly classmate and those entire people who have directly

helped us in the preparation of this project.

Thank you, to allpeoples involved in this project.

Piyush R.Patel

Hitesh A. Patel


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5.Preface


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6: Contents

I. Project Profile ..7

II. Company Profile9III. SAP Overview11

IV. SAP Web Architecture..12

V. SAP R/3 Structure.13

VI. H/W&S/W Requirements for Server Side..14

VII. H/W&S/W Requirements for Client Side...15

VIII. Overview of MM16

IX. MM Functional Structure.17

X. Business Process & Work flow.19

XI. MM Use Master Data20

XII. MM use For Tables21

XIII. Cross Functionality Of MM..35XIV. The Final Business Process On Subcontracts

&Reselling...61


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1. Project Profile


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2.Company Profile


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Master Data:-

Vendor Master and Material Master data

Consumption Based Planning

Inventory Management

Evaluation of Materials

Invoice Verification

Purchasing

Logistics Invoice Verification

Physical Inventory

Material Valuation

Material Requirements Planning (MRP)

External Services Management


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Material Master record

Menu

Path

LogisticsMaterials ManagementMaterial

MasterMaterial Create (General)

T Code

MM01 Create

MM02 Change

MM03 Display

o Material : KEY101

o Industry Type : M Mechanical Engineering

o Material Type : ROH Raw Material

o Select Views : Basic Data 1, Basic Data 2, Purchasing, General Plant Data/

Storage1, General Plant Data/Storage2, Accounting1,

Accounting2, Costing1, Costing2

o Plant : 1000

o Storage Location: RAW1

Sl No Field Description Field Values

1 Description of the Material SS KEY 10 /10

2 Base Unit of Measure EA

3 Material Group Fasteners

4 Purchasing Group 103

5 GR Processing Time 1

6 Post to Ins. Stock X

7 Valuation Class 3000

8 Price Control V

10 Moving Average Price 50


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11 Profit Center 1000


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Display purchasing initial Screen.

Enter foreign Trade Export information Screen


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Now Enter information the MRP Screen.


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Open the Plant Data/Storage 1


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Open the Plant Data/Storage 2

Open the Screen Accounting information.


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Open the Screen accounting information.

Open the Screen Costing 1 information.


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Open the Screen Costing 2 information.

Now SAVE the Material Yes/No


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SAVE the Material initial screen.


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Vendor Master Record

Vendor Master record

o Vendor : Piyush2012

o Company Code : 0001

o Purchasing Organisation : 1000

o Account Group : GAEL

Sl No Field Description Field Values

1 Title Company2 Name Piyush2012

3 Search Term TEST VENDOR

4 Street Address Market Road 38/1

5 Postal Code 254123

6 City Ahmedabad

7 Country IN

8 Region 06

9 Telephone 079 22222222

10 CST No 132131

11 LST No 12311

12 ECC No 1211 2

13 Excise Reg No 3132131

14 Excise Range Ahmedabad

15 Excise Division DIV II

16 Commissionarate Ahmedabad

17 Type of Vendor M

18 Excise Ind. Vendor 1

19 PAN No RSP1134-A

20 Reconcillation Account 13110000


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21 Order Currency INR

22 Terms of Payment 0001

23 Schema group, Vendor ZD

24 GR Based Inv. Verf. X

25 Purchasing Group 104

Create Vendor Initial Screen.

Enter the Vendor Address and Other Detail.


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Now Control the Vendor Screen.

Enter the information Payment Transactions for

Vendor.


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Enter the Accounting information for Vendor.

Enter the Payment transactions Accounting Info.


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Enter the Corresponding Accounting info.

Display screen SAVE Vendor.


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Display initial Screen Save the vendor.


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Creating Purchase Requisition

Use

A Purchase Requisition is created to indicate purchase department to procure materials or

services with details like how much quantity is required, when required. Generally it is

created automatically for Raw materials and Packing Materials through MRP Run and Spares

and Service related to Plant Maintenance Purchase Requisition is generated automatically

from Plant maintenance Order. In this process Purchase Requisition is created against

Quantity Contract created in above step 1.1.4 with exact delivery / requirement date.

This transaction is optional for the process.

Procedure

1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu LogisticsMaterials ManagementPurchasingPurchaseRequisitionCreate

Transaction code ME51N

2. On the Create Purchase Requisitionscreen, make the following entries:

Press or Ctrl+S to Save the Purchase Requisition.


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Result

Purchase Requisition is created,


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Example

Purchase requisition number 1103230535 created.

Assign and Process Purchase Requisition

Use

This section explains the functions provided by the SAP System for converting requisitionsinto external purchasing documents (purchase orders, contract release orders, schedulingagreement delivery schedules, RFQs), and the processing options thereby available to you:

Assigning means defining the desired source for each purchase requisition item

o Further processing involves generating lists of requisitions that have been assigned or

flagged as outlined above, and the subsequent creation of RFQs, purchase orders, or

lines of delivery schedules under scheduling agreements.

Procedure


SAP R/3 menu LogisticsMaterials Management PurchasingPurchase

Requisition Follow-On FunctionsAssign and Process

Transaction code ME57

2. The assignment of sources to and further processing of purchase requisitions are two distinctfunctions. You can choose whether you wish to perform the functions in two separate steps or in justone.

3. Below are the Selection Parameters to restrict the process of PO from PR


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Press or F8 to enter into the next screen


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1. After Pressing the Assignments button the system will lead to the next screen as given below:


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4. Press Process Assignment which will lead to the small pop-up screen enter the appropriate details:


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1 PROCUREMENT OF SUBCONTRACTING &RESELLING MATERIALSBUSINESS

PROCESS

1.1 CREATION OF SUBCONTRACTING PURCHASE ORDER63

1.1.1 USE

1.1.2 PREREQUISITES1.1.3 PROCEDURE

1.1.4 RESULT

1.1.5 EXAMPLE

1.2 MESSAGE OUTPUT.66

1.2.1 USE

1.2.2 PROCEDURE

1.3 TRANSFER OF COMPONENTS TO SUBCONTRACTOR.,.68

1.3.1 USE

1.3.2 PREREQUISITES1.3.3 PROCEDURE

1.3.4 RESULT

1.3.5 EXAMPLE1.4 CREATION OF SUBCONTRACTING CHALLAN..72

1.4.1 USE1.4.2 PREREQUISITES

1.4.3 PROCEDURE

1.4.4 RESULT

1.4.5 EXAMPLE

1.5 GOODS RECEIPT FOR PURCHASE ORDER FOR SUB-CONTRACTING MATERIAL.75

1.5.1 USE

1.5.2 PROCEDURE

1.5.3 RESULT

1.5.4 EXAMPLE

1.6 RECONCILING SUBCONTRACTING CHALLAN.803.6.1 USE1.6.2 PROCEDURE

1.6.3 RESULT

1.6.4 EXAMPLE

1.7 COMPLETING/REVERSAL/RE-CREDIT SUBCONTRACTING CHALLAN..83

1.7.1 USE1.7.2 PROCEDURE

1.7.3 RESULT

1.7.4 EXAMPLE

1.8 LOGISTICS INVOICE VERIFICATION FOR SUBCONTRACTING MATERIAL85

1.8.1 USE

1.8.2 PROCEDURE 1.8.3 RESULT

1.8.4 EXAMPLE


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Procurement of Subcontracting Materials Business Process Procedure

1.1 sProcurement of Subcontracting Material Procurement process

1.1.1 Purpose

In Indian subcontracting process when you issue materials to a subcontractor, you need to

keep track of what materials you have issued and when they have to be returned by

subcontractor. The reason for this close monitoring has to do with Indian tax law. Under

excise law 57AC, when you send materials to a subcontractor for processing, you are not

required to pay any excise duty, even though the materials have left your premises.

However, if the materials have not been returned to you within 180 days specified by the

law, you will have to reverse any excise credit that you posted when you have purchased

the materials. When you send material out of your factory premises you need to send with

57F4 Challan. In this process you are going to do the same.

1.1.2 Prerequisites

The following scenario specific master data must be created for operation of this

building block and subsequent dependent building blocks.

Material Master record (Refer User Manual Procurement of Stock Materials (Domestic))

Vendor Master record (Refer User Manual Procurement of Stock Materials (Domestic))

Purchasing Info Record (Optional)

Ensure that Sub-Contracting as Info Category.

(Refer User Manual Procurement of Stock Materials (Domestic))

CIN Master Data (Refer User Manual Procurement of Stock Materials (Domestic))


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o Chapter IDs

o Material ID and chapter ID combination (Ensure Sub-Contract check box is selected for

the Materials that provided to vendor)

o CENVAT Determination

o Vendor Excise Details

o Excise Indicator for Plants

o

Excise Indicator for Plant and Vendoro Excise Tax Rates

1.1 Creation of Subcontracting Purchase Order

1.1.1 Use

A purchase order is a legal document used to record an individual purchase with the vendor.It also provides the vendor with a reference document to link to goods receipt and invoiceverification processes. The purchase order is a commitment to a vendor for a givensubcontracting activity, in a specified quantity at a predetermined price and delivery date.

1.1.2 Prerequisites

Components stock should be available for providing to subcontracting vendor.

1.1.3 Procedure


SAP R/3 menu Logistics Materials Management Purchasing Purchase

OrderCreateVendor/Supplying Plant Known

Transaction code ME21N

2. On the Create Purchase Orderscreen, make the following entries:

Display initial Screen for purchase order.


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Now initial screen to display purchase order and SAVE it.


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3. Click on the Components and enter the materials that had to be sent:

4. Choose on Green Arrowor F3 to come back to main purchase order screen.

5. Ensure appropriate tax code have been entered for both the line items (G1 Service Tax for Sub-

Contracting Item)


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1.2 Message Output

1.2.1 Use

A Purchase Order needs to be printed for transmitting to vendor.

1.2.2 Procedure


SAP R/3 menu LogisticsMaterials ManagementPurchasingPurchaseOrderMessagesPrint/Transmit

Transaction code ME9F

2. On the Message Outputscreen, make the following entries


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3. Choose to Execute.

4. On screen Message Outputselect the appropriate Document number and perform the following:


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Choose Output Messageand/or

Choose Display Messageand/or

Choose Message Detailand/or

Choose Trial Printout.

1.3 Transfer of Components to Subcontractor

1.3.1 Use

The Nature of subcontracting purchase order is that company will provide components to

subcontractor. This process describes how to transfer post materials to subcontractor.

1.3.2 Prerequisites

Sufficient stocks of components should be available for making transfer posting.

1.3.3 Procedure


SAP R/3 menu LogisticsMaterials ManagementInventory ManagementGoods MovementTransfer posting

Transaction code MB1B

2. On the Enter Transfer Posting: Initial Screen, make the following entries:

Field name Description R/O/C User action and values Comment

DocumentDate

Document Date R Input date

Posting Date Posting Date R Input date

MovementType

Movement Type R 541


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Plant Plant R 1000

StorageLocation

Storage location R RAW1

3. Choose on To Purchase Ordericon on the top of the screen or choose F9 on key board. System willgive new popup screen asking for purchase order number. Give the purchase order number andchoose enter to continue.


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4. System will display two components from purchase order with quantities

5. Choose only the Material that you are sending and enter the Storage Location from which it has to beissued.

6. Here since the RAW Material is same for both the Line items it shows the total qty to send forVendor.

7. Choose on Adopt + Detailsicon or F6.


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8. Choose Enter if required the quantity of components can be changed.

9. Choose Saveicon or Control + S to post the document.

If no error comes now u can select SAVE. The system checks for S.Loc and Material Stock Qty.


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1.3.4 Result

A message will be displayed stating that the document posted.

1.3.5 Example

Material document4900329653posted.

1.4 Creation of Subcontracting Challan

1.4.1 Use

It is statutory requirement to send the components to subcontractor with 57F4 Challan.

1.4.2 Prerequisites

Select the Sub-Contracting Material in Material and Chapter ID Combination of theExcise Master (J1ID) for the sending Material.

Ensure that the details of the receiving Material maintained in the Excise Master(J1ID).

CENVAT Determination of the Excise Master (J1ID) Maintained for the both sendingand receiving Material.

Ensure that the Assessable value for the sending material is maintained in the ExciseMaster (J1ID)


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1.4.3 Procedure


SAP User menu

CIN Menu

Indirect Taxes Procurement Subcontracting Subcontracting ChallansCreate

Transaction code J1IF01

2. On the Subcontracting Challan - Create, make the following entries:


Material Doc. Material document number R 4900329653

Mat. Doc. Year Material document year R 2012 Appropriate

Excise Group Excise Group R 10 Appropriate

Series Group Series Group R 101 Appropriate


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Various Series Group available are given below

100 STO & RETURN DELV SERIES GROUP

101 SUB CONTARCTING SERIES GROUP

102 SALES SERIES GROUP

105 MANUFACTURING EXPORT SERIES

3. Choose Enter to continue, system will take new Subcontracting Challan Createscreen, make thefollowing entries:


Select Posting tab

Posting date & time Posting date andtime

R Input date and time ofmaterial removal

Print Immediately Print Immediately O Check this box if you wantchallan printout immediately.

Select Overview Tab

Preprinted no Preprinted number O Enter pre-printed number ifyou have


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Save challan by choosing on Saveicon or Control + S.

1.5 Goods Receipt for Purchase Order for Sub-Contracting Material

1.5.1 Use

Goods are received from the Vendor as a result of a Purchase Order at the receiving plant. A

goods movement is entered into the system referencing this PO and a goods receipt materialdocument is posted. Appropriate general ledger accounts are also posted and stocks areupdated.

1.5.2 Procedure


SAP R/3 menu Logistics Materials Management Inventory ManagementGoods Movement Goods Receipt For Purchase OrderPO Number Known

Transaction code MIGO

2. On the Goods Receipt Purchase Orderscreen, make the following entries:


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3. Expand the Receiving Material and can enter the exact consumption of the sent materials.


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4. Select the Check box Item OK, after entering all the data.

To get Excise Invoice tab at Header Data for referring subcontracting challan which we sent tovendor.


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System will issue the following error message

Please enter Excise Invoice number and Excise Invoice Date

Message no. 4F184

Close the error message and proceed further.

On the Excise Invoicetab at Header Data select Refer Subcontracting Challan.

5. After clicking the More Data it will lead to a pop-up window where Sub-Contracting Challan No to beentered.

6. Choose Checkat the top of screen.

7. Choose button to post the document.


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1.5.3 Result

Material document posted

1.5.4 Example

Material document 5000112723 posted


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1.6 Reconciling Subcontracting Challan

1.6.1 Use

After making Goods Receipt the GR has to be reconciled with the challan sent tosubcontractor.

1.6.2 Procedure


SAP User menu

CIN Menu

Indirect Taxes Procurement Subcontracting Subcontracting ChallansReconcile Quantity

Transaction code J1IFQ

2. On the Quantity reconciliation for Subcontracting Challanscreen, make the following entries:

Field name Description R/O/C User action andvalues

Comment

Material Document Goods Receipt documentnumber

R 5000112723

Mat. Doc. Year Year of document R 2012

Year Subcontracting challan year R 2012

Chalan No Subcontracting challan No R 1010000023


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3. Choose on Reconcileicon or F8 to go reconciliation screen.

4. System will take you to new Quantity reconciliation for Subcontracting Challans.

5. Here on this you can see system display items from Goods Receipt at top and items from challan atbottom of screen.

6. Here you need to allocate the components consumed in GR stage are reconciled with challan to do

this, choose on Allocate based on FIFOicon in the middle of screen with calculator icon.


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7. Or you can do allocation by entering manually also in respective line items at bottom, where Assignedquantityfiled is located in white color.

8. After assignment save the document by choosing Saveicon or choose Control + S

1.6.3 Result

Material document was successfully reconciled.

1.6.4 Example

Material Document 5000112723, 2012 was successfully reconciled.


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1.7 Completing/Reversal/Re-credit Subcontracting Challan

1.7.1 Use

This transaction is basically used to complete the challan if you have reconciled as statedabove step. There may be cases subcontractor may not able to supply within stipulated 180days limit then in this case also same transaction is used for reversal of challan or re-crediting the amount.

1.7.2 Procedure


SAP User menu

CIN Menu

Indirect Taxes Procurement Subcontracting Subcontracting ChallansComplete/Reverse/Recredit

Transaction code J1IF13

2. On the Subcontracting Challan Complete/Reverse/Recreditscreen, make the following entries:


Challan No Subcontracting challan No R 1010000023

Excise year Document year R 2012

3. Choose enter to go to inside the challan document.


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4. Select the radio button CompleteChallanand.

5. Save the document by choosing Saveicon or choose Control + S.


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1.7.3 Result

Subcontracting challan successfully completed.

1.7.4 Example

Subcontracting Challan 1010000023 2012; Series Group 101 successfully completed.

1.8 Logistics Invoice Verification for Subcontracting Material

1.8.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms

of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved

in the system. The system updates the data saved in the invoice documents in Materials

Management and Financial Accounting.


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1.8.2 Procedure


SAP R/3 menu Logistics Materials Management Logistics invoiceVerification Document Entry Enter Invoice

Transaction code MIRO

1. If you are opening for the first time this transaction, system will ask for Company Code, please give

1000to go in side the transaction.

2. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

Select both the Line items .


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Transaction Invoice R Select Invoice from dropdown list

Header Data Header data of Invoice R Defaulted by system

Basic tab Basic information tab R Select basic information tabto give initial information

Invoice Date Invoice Date R Enter the Vendor invoicedate

Reference Invoice reference O Enter the vendor invoice

referenceFor Example

USERMANUAL

Posting date Posting Date R Enter the posting date ofdocument

System will givecurrent date asdefault

Amount Invoice Amount R Enter invoice gross amountincluding taxes and duties

Amountmentioned is


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only an example

Currency R Enter the currency in whichthe bill is presented byvendor, if not entered byuser system will default thedocument currency frompurchase order

INR

Calculate tax Check box calculatetax

O Check this tick box, systemwill calculate tax amount

Tax code R Select the tax code fromdrop down list

V1

Bus.place/sectn

Business place orsection code

R Enter section code if Taxdeduction for source isactive for this vendor

Leave blank forthis process

Text Text O Enter text if required for

referencePayment tab Payment tab R Select payment details tab

BaselineDt Base line date forpayment

R Enter the base line date forpayment

Will be defaultedif payment termsentered in PO

Pmnt terms Payment terms O Payment terms ofdocument, if entered will bedefaulted from purchaseorder

Due on Payment due on O Will be calculated bysystem

Grayed out

Discount Cash discount O Enter if cash discount isoffered by vendor

Hide Header data for getting full screen of items if required.

Purchase order /Schedule Agreement

R Select Purchase order /Schedule Agreement in thereference documentcategory from drop downlist

Defaulted foruser

Purchase ordernumber

R Enter the first purchaseorder number generated

above

Goods / service items R Select Goods / Serviceitems in indicator from dropdown list

Defaulted

Layout Layout of invoiceverification

R Select All information fromdrop down list

Choose Enter


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Choose Enterto complete the document feeding part.

To check the document credit and debit is balanced on the top right corner of your screen a traffic light

is displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or

yellow color.

If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth

row of your screen.


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3. Choose Save / Post, forposting the document.

1.8.3 Result

Logistics Invoice verification document is posted

1.8.4 Example

Document no. 5105685252 created


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a project report materials manegement piyush hitesh

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