mm process flow
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MM Cookbook - Process Flow
Determination of Requirements
The user department responsible is manually passing a requirement for materials to the purchasing department via Purchase Requisition. Purchase requests are generated when business runs the MRP and Request are also generated based in Consumption based planning (CBP) for Production and Engg.Stores.
Determination of Source of Supply
The purchasing component helps the buyer determine the sources of supply. User use the determination of the source of supply to create Requests for quotation (RFQs) and then to enter quotations. User is accessing the existing Purchase Orders and Conditions in the System.
Vendor Selection and Comparison of Quotations
The System is capable of simulating pricing scenarios and simplifies the selection of vendors by making price comparisons between the various quotations.
Purchase Order Processing
The purchasing system adopts information from purchase requisition and the quotation to help to create Purchase Orders. They are also creating manual purchase order directly for stock, non-stock items, services etc.
Purchase Order Monitoring
The buyer monitor the processing status of the purchase order online at any time and determine whether goods or an invoice have been received for the relevant purchase order item.
Goods Receipt and Inventory Management
The Goods receiving requester confirms the receipt of the materials by simply entering the Purchase Order Number. The system compares the goods receipt quantity with the purchase order quantity. By specifying permissible tolerances, buyers can limit over deliveries and under deliveries of ordered materials.
PURCHASING
Purchasing Functionality is integrated with Inventory Management and Invoice Verification within MM.
MM Cookbook - Enterprise Structure
Define valuation level
BACKGROUND
This configuration setting enables to define at which level the stock are to be valuated in SAP.
Stocks can be valuated at following two levels in SAP.
Plant level Company code level
It is recommended to keep at plant level. This is a client level setting.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Logistics - General ® Define valuation level
1. Click
2. Select the radio button
3. Click Save
Define Plant
BACKGROUND
This configuration setting enables to define the plant. Each manufacturing facility or branch of a company is defined as a plant in SAP.
Plant is assigned to the company code.
Storage locations are created under each plant.
If the valuation level is the plant, the stocks are valuated at plant level.
Note: - It is common practice to copy plan from the existing defined plant. It will be defined by the FI.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Logistics - General ® Define copy, delete, check plant
1. Click
2. Click
3. Click
4. Click
5. Enter from plant as 0001 to copy from SAP defined plant
6. Enter To Plant – E.g. IND6
7. Click
8. Click to return to main menu.
Note: - Definition of plant and assignment of plant to the company codes along with relevant GL accounts is done by the FI team. However the creation of plant is demonstrated.
Maintain plant details and Factory calendar in Plant
BACKGROUND
When copying the plant, the entire details will be copied from the source plant. Address of the plant and other details attached to the plant can be changed.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Logistics - General ® Define copy, delete, check plant
1. Double click
2. Select plant IND6 by clicking the grey box in the left side
3. Click
4. Click
5. Maintain the entire address, contact details of the plant.
6. Factory calendar must be attached to the plant
Below screen shows the details of plant settings.
Define Location
BACKGROUND
This configuration setting enables to define the location. Location indicates where the materials are stored inside the plant.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Logistics - General ® Define Location
1. Click
2. Click
3. Update required and optional fields:
Field Name Description Value Plant Name of the plant e.g. IND6 Location Location identification E.g. PROD Name Description of the location Production location
4. Click
Note: - Maintain the address of the location in the subsequent screen.
5. Enter title as Company
6. Enter country
7. Click
Click .
Maintain Storage Location
BACKGROUND
This configuration setting enables to define the physical storage location. This will indicate where the stocks are stored physically inside the plant.
Each item must have storage location. One material can be stored in many storage locations.
Storage locations can be assigned to the warehouse through warehouse management.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Materials Management ® Maintain storage location
Click
Enter the plant where the storage location is to be created. E.g. IND6
Click
Click
Enter Storage location
Enter description of the storage location
Click
Select the storage location
Double Click
Enter the sequential number 1
Click
Select the sequence number
Click
Maintain the address.
Click
Click
Repeat the above to maintain the address for all storage locations
Maintain Purchase organization
BACKGROUND
This configuration setting enables to define the purchase organization.
Purchase organization is the part of the enterprise structure from MM point of view. It represents the responsibilities to
Procure materials and services Negotiation with vendor
Purchase organization is assigned to the company codes and plants. Following are the possibilities of assignments.
One purchase organization to many company codes One purchase organization to one company code One purchase organization to one plant
Note: - It must be assigned to plant.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Materials Management ® Maintain purchase organization
1. Click
2. click
3. Update the following fields
Field Name Description Purch.organization Key identifying the purchase organization.
E.g. IND6 Purch.org.descr. Description of the purchase organization.
E.g. For plant IND6
4. Click .
Assign Plant to company
BACKGROUND
This configuration setting enables to assign plant to the company code.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Assignment ® Logistics – General ® Assign plant to company code
1. Click
2. Select the desired company code by clicking the cursor on it.
3. Click
4. Select the plant from the display
5. Click
6. Click .
Assign purchase organization to the company code
BACKGROUND
This configuration setting enables to assign the purchase organization to a company code.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Assignment ® Materials Management ® Assign purchase organization to company code
1. Click
2. Select the desired company code by clicking the cursor on it.
3. Click
4. Select the purchase organization
5. Click
6. Click
Assign purchase organization to plant
BACKGROUND
This configuration setting enables to assign the purchase organization to a plant.
INSTRUCTIONS
Follow the Menu Path: IMG ® Enterprise structure ® Assignment ® Materials Management ® Assign purchase organization to plant
1. Click
2. Select the desired plant by clicking the cursor on it.
3. Click
4. Select the purchase organization
5. Click
6. Click
All right guys, not much about MM organization structure. Now we shall look into material master related to configurations.
MM Cookbook - Vendor Creation
Definition:-
Every vendor is identified with the code in SAP. It is called Vendor master record.
Vendor master record contains details of
Address Payment terms Delivery terms Lead time to supply GL Account for reconciliation
Each vendor record will be created at company code and purchase organization level.
Normally vendor master contains the details of both accounts related and also purely purchasing related, hence it is created in consultation with FI team.
Menu Path:-
Logistics à Materials Management à Purchasing à Master Data à Vendor à Central à XK01 Create
Maintain Vendor code number, company code, Purchase organization and account group
Click
Maintain
Maintain
Note: - Click to enter more lines in the address
Maintain
Maintain
Click
Nothing specific to be maintained in this screen
Click
Maintain the payment related details.
Click
Maintain the reconciliation account. E.g. 160000
Note: - these entries maintained in consultation with accounts.
Click
Maintain more FI related information here.
Click
Dunning data are maintained here.
Click
Maintain order currency, terms of payment, Incoterms
Maintain schema group vendor – to determine the right pricing procedure.
Maintain the control data
Click
Click
Click
MM Cookbook - Create RFQ
Definition:-
Purchase request is the requirement document created manually or through the MRP run. Purchase request is further processed to create Purchase order document.
It is possible to create Request for Quotation purpose.
Let us create RFQ for a material.
Menu Path:-
Logistics à Materials Management à Purchasing à RFQ/Quotation à Request for Quotation à ME41 Create
Double Click ME41
Maintain the details as shown below
Click
Enter collective number. Collective number is like a tracking number in PR creation used to group together and process the RFQ.
E.g. RM10 to indicate Raw Material requirement for 10th Month
Click
Click F7 key to maintain Vendor address
Maintain vendor as shown below
Click
Note: - Details will be copied from info record.
Click
Click to enter material number and quantity
Click
Click
Click
Message appear at the bottom
MM Cookbook - Maintain Quotation
Definition:-
When the quote is received from the vendor, with reference to the request, quote can be maintained.
Quotation is the reply from vendor for our enquiry regarding the price and quantity and supply schedule confirmation.
Let us maintain the quotation for the RFQ 6000000007.
Prerequisite:-
Manual confirmation from vendor must be available
RFQ must be available
Menu Path:-
Logistics à Materials Management à Purchasing à RFQ/Quotation à Request for Quotation à ME47 Maintain
Double Click ME47
Maintain the details as shown below
Enter RFQ number
Click to maintain rate at item level details
Click to maintain condition record
Maintain discount and freight as shown below.
Click
Click
Enter the quotation validity period
Enter payment terms
Enter vendor quotation reference.
Maintain the details as shown below.
Click to confirm the condition at header level
Click
Click
Click
Click
Note: - To compare the price from various vendor, use transaction code ME49 – price
MM Cookbook - Create Info record
Definition:-
Purchase info record is the kind of template with all the information required to create purchase order. For each vendor, material and plant combination purchase info record can be created.
Info records are created for following types of transactions
Standard PO Sub contracting Consignment Pipeline
When creating PO, most of the information will be copied from info record into PO.
Info record controls
Validity period for each vendor
Indicates vendor as preferred vendor Blocking vendor from raising PO Source relevancy to MRP Supplying plant incase of STO
Menu Path:-
Logistics à Materials Management à Purchasing à Master Data à Info Record à ME11 Create
Double Click ME11
Maintain Vendor code number
Maintain Material code number
Maintain purchasing organization
Maintain Plant
Select the radio button Standard
Click
Maintain the following fields according to the business needs
Field name Field description Number of days after which a reminder is
to be sent to the vendor for supply. Material number used by vendor.
Material group to which the vendor belongs to.
Used for volume and point based rebates.
Click
Maintain planned delivery time
Maintain purchasing group
Maintain standard quantity
Maintain net price
Click
Click
Note: - Text maintained in purchase order text will be copied into the PO.
Click
Condition type specific to this vendor and material can be maintained here. It will be copied into the purchase order
Click
Message appear at the bottom
MM Cookbook - Maintain Source list
Definition:-
Source list is used to find the vendor automatically during auto vendor assignment process. It is a plant specific master data.
Through configuration, it can be made as mandatory or an optional.
Source list controls
Validity period for each vendor Indicates vendor as preferred vendor Blocking vendor from raising PO Source relevancy to MRP Supplying plant incase of STO
Menu Path:-
Logistics à Materials Management à Purchasing à Master Data à Source List à ME01 Maintain
Double Click ME01
Maintain Material code number
Maintain Plant
Click
Maintain valid from date
Maintain Valid to date
Maintain vendor code
Maintain Purchase organization
Note: - field is used incase of STO. Supplying plant can be mentioned here.
Tick the check box to indicate the vendor as preferred vendor.
Note: - Only one vendor can be indicated as preferred vendor in the same validity period.
Check box is used to block the vendor
If this source is to be used by MRP, fill the column.
Following are the allowed entries
Click
Click
MM Cookbook - Create Purchase Request
Definition:-
Purchase request is the requirement document created manually or through the MRP run. Purchase request is further processed to create Purchase order document.
It is possible to create Request for Quotation purpose.
Let us create Purchase Request for a material.
Menu Path:-
Logistics à Materials Management à Purchasing à Purchase Requisition à ME51N Create
Double Click ME51N
Click to close enjoySAP portion of the screen
Click to open the window
Maintain the details at item level as shown below
Click
To view more details, click the item details tab screen one by one.
Click
Change or maintain the details as required by the business.
Click
Click
Click
Click
click
Note: - Maintain the required text here
Click
Click
Message appear at the bottom
MM Cookbook - Create Purchase Order
Definition:-
Purchase order is an agreement between the vendor and a company to supply the goods at an agreed rate and at an agreed duration of interval.
Purchase order is a legal document between a vendor and a company. It covers the payment terms and terms of delivery also.
Menu Path:-
Logistics à Materials Management à Purchasing à Purchase Order à Create à ME21N – Vendor/Supplying Plant known
Double Click ME21N
Enter vendor number. E.g. IND6-1
Click
Enter Purchase organization, purchasing group and company code details as shown below
Click
Click to view the item over view
Enter Material, PO quantity and Plant where it is to be received as shown below.
Click the tab screens one by one in the item detail screen. Maintain the appropriate entries.
Click
Note: - If material master is set with the QM inspection type 01, then stock type will be QM stock. QA control key from the material master will be copied here into the PO.
Click
Ensure check box is ticked to have GR based Invoice.
Enter the tax code.
Click
Click
Click
Click to scroll down the screen
Click
Click to maintain Payment terms
Note: - To send the message at the time of GR to the person who created the PO, click the
check box
Click
Click
Note: - Text can be maintained here.
Click
Click
Message will appear at the bottom
Click
Click
Click
Click
MM Cookbook - Goods Receipt against PO
By Subhajeet Behera
Definition:-
There are three types of main material movements in SAP. They are
Goods Receipt Good Issue Transfer Posting
Through MIGO transaction entire above three types of transactions can be performed. There are many options with MIGO transaction code.
Goods receipt is the process of receiving materials in to the storage location.
Example receiving goods with reference to PO, customer returns, from production. When goods are received, inventory will be increased and relevant other documents will be adjusted.
During the material movement, material document is generated for all movements. Relevant accounting and controlling documents are also created for relevant movement types.
Menu Path:-
Logistics à Materials Management à Inventory management à Goods Movement à MIGO – Goods Movement (MIGO)
Double Click MIGO
Maintain the entries as explained below
Ensure Goods receipt is selected in the left top box above the header details
.
To look at the other possible entries click . Other possible entries are
Ensure is selected to make GR with reference to purchase order.
Other possible entries are
Above two fields indicate the Process and reference document. I.e. Goods Receipt with reference to Purchase Order.
Enter the purchase order number and serial number as shown below.
Note: - PO can be selected from the left side display. Left side display will show the past purchase orders used. To select from left side display, double click on the required PO.
Click
Note: - as soon as pressing the key display of purchase order in the above box where we mentioned the PO will disappear.
Maintain the delivery note details
Click the tab screens one by one in the detail data area
Click
Click
Maintain the received quantity
Click to maintain the storage location where it is to be received
Note:- If the material is batch managed, batch number has to be entered.
Click
Click
Click at the bottom
Click at the top to verify the data correctness
Message will appear at the bottom.
Note: -If any warning or information message appeared, click to proceed.
Click
Message appear at the bottom.
Note:-
If the item is batch managed and the items under one delivery note with different batches
are received, quantity can be split into according to the batch size by pressing
Screen will appear as below
If the item is batch managed, batch column will also appear.
Click after completing the entry.
MM Cookbook - Create Contract
Contract is an agreement between the vendor and the company to supply goods and services as per the agreed terms and condition.
At the time of negotiating, it may not be clear as of how much is required and when it is required. In such a situation, an open contract can be released on the vendor.
Every contract must be followed by a release order which is nothing but a normal PO with reference to the contract.
Contracts can be release centrally or with specific to plant. In case of multiple plants, central contract can be released and release order specific to each plants can be released.
Menu Path:-
Logistics à Materials Management à Purchasing à Outline Agreement à Contract à ME31K – Create
Double Click ME31K
Enter vendor number. E.g. IND6-1
Enter document type. Possible entries are
E.g select MK.
Click
Enter Purchase organization, purchasing group and storage location.
Click
Maintain the entries as shown below.
Click
Enter material code and target quantity. E.g. STJRM001 and 10000 respectively
Select the item
Click to maintain the pricing conditions
Note:- Condition which are already maintained in the info record only appear here. If required add discount condition type manually.
Double click on item serial number to enter item detail tax
Click
Message will appear at the bottom
MM Cookbook - Create Scheduling Agreement
By Subhajeet Behera
Definition:-
Purchase order is an agreement between the vendor and a company to supply the goods at an agreed rate and at an agreed duration of interval.
Purchase order is a legal document between a vendor and a company. It covers the payment terms and terms of delivery also.
Scheduling agreement is one of the purchase order types. It defines the agreement between vendor and the company similar to the PO. For every scheduling agreement, delivery schedule is a must to indicate the supply schedule.
If scheduling agreement exist, MRP can automatically create the delivery schedule.
Let us create the scheduling agreement with vendor IND6-1 for material STJRM001.
Menu Path:-
Logistics à Materials Management à Purchasing à Outline Agreement à Scheduling Agreement à Create à ME31L – Vendor Known
Double Click ME31L
Maintain the entries as shown below
Click
Maintain the entries as shown below.
Click to maintain the item details
Maintain the entries as shown below
Click
Select the row by clicking the grey box in the left
Click to check the conditions
Note: - Scheduling agreement is used where the rate is fixed over the period of time without any changes.
Click
Message would appear at the bottom
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