1. Material Management (MM) Master Data & Records EGN 5620 Enterprise Systems Configuration Spring, 2012

2. MM Master Data & Records Theories & Concepts

3. Enterprise resource types Human resources Material Machine Tools Equipment Facility Utilities Human resource Capital

4. Material data Definition ◦Physical objects to buy, transform into, sell, maintain other resources, or use in support for business activities. Generic classification(material types) : ◦Trading goods ◦Raw materials ◦Semi-finished products (WIPs) ◦Finished products ◦Consumables (e.g., stationery, production tools) ◦Spare parts (for maintenance)

5. Material data Material attributes, grouped by business functions: ◦Application/industry (sector) ◦Engineering (i.e., material properties) ◦Purchase ◦Production ◦Inventory (MRP) ◦Warehousing ◦Sales ◦Accounting

6. Material Numbering Scheme Each inventory item must has a unique number. Naïve approach: automatic assignment of material numbers is the best (simplest) choice for simplicity of maintenance. Intelligent scheme, considering: ◦The length of a material number ◦Numbering scheme:  Option 1: use sequential numbers  Option 2: use a template to define the meaning of material numbers, according to: ◦ Material type ◦ Material property type ◦ Material shape and/or ◦ Dimensions

7. MM Master Data & Records SAP MM Master Data and Records MM Master Data & Records SAP MM Master Data and Records

8. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.8 MM Master Data (review) Material master data are a part of master data, which are relatively fixed The organizational structures must be completed before configuring master data

9. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.9 Business Process Integration Master Data MM

10. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.10 Master Data (review) Master data include business rules and supportive information which are applied while generating master data records Master data are maintained by individual data owners in various organizational units inside the SAP client

11. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.11 Master Data records (review) Each master data record is unique Master data records are usually created or converted (from a legacy system) at the beginning of SAP deployment Material master records are maintained by various organization units such as sales, purchasing, production, & accounting, etc.

12. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.12 Material Master Data Modeling Capture material attributes that sufficiently differentiate their: ◦Application/Industry Sector ◦(Material) Type ◦Maintenance Features ◦Organizational Levels ◦Various Business Views

13. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.13 Material Master – Industry Sector Industry sector is used to group records It determines industry-specific data that will appear on the master record Industry sector examples: ◦Chemical industry (C ), ◦Mechanical engineering (M), ◦Pharmaceuticals (P), ◦Plant Engineering/Construction (A), ◦Retail, and so on.

14. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.14 Material Master – Material Type It is used to categorize materials It defines material attributes of: ◦Valuation ◦Procurement, and ◦Price control, etc. It controls transaction (types) allowed for the material It controls the screen (view) sequence, number assignment, field selection, and account determination

15. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.15 Material Master – Material Type Material type information determines: What views are maintained Whether internal or external procurement is allowed whether changes in material quantity need to be updated Which general ledger accounts need to be updated

16. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.16 Material Master – Material Types SAP standard material types (used in all industries): ◦ROH (Raw Materials)  Purchased externally only  No sales view ◦HAWA (Trading Goods)  Always purchased externally  Sold without any change to the material  No manufacturing views exist ◦FERT (Finished Products)  Are produced internally  Normally no purchasing views exist

17. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.17 Material Master – More Material Types HIBE(Operating Supplies) VERP(Customer returnable packaging) LEER(Empty containers) KMAT(Configurable material) ERSA(Spare parts) DIEN(Services) NLAG (Non-stock, non-valuated material) UNBW (Non-valuated, stocked material) FHMI (Production resources/tools) WETT (Competitive products) PROD (Product group) IBAU (Maintenance assembly, plant maintenance)

18. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.18 Material Master – Data maintenance features Default ◦It speeds data entry by using the most frequently used field values (plant, purchasing organization, etc.) Reference Material ◦It speeds data entry by copying data from existing material master Profile ◦It speeds data entry by copying standard data created in a profile into a selected view Materials Requirements Planning (MRP) Collective entry of storage location data ◦It speeds the creation of multiple storage locations

19. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.19 Material Master – Organization Levels Material master data can be related to all organizational levels General information of material master records (such as description, number, base unit of measure) has to be related to the highest level of organization (i.e., the client) Other material master records are tailored at the plant or lower levels

20. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.20 Material Master – at Various Organization Levels Data are visible ◦At client level:  Description  Units of measure  Material number  Engineering data ◦At plant level:  Planning data  Manufacturing data  Purchasing data ◦At storage Location level:  Stock quantities

21. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.21 Material Master – Primary Views Basic data 1 Sales: sales organization data 1 Sales: sales organization data 2 Sales: general/plant data Sales: texts Purchasing Forecasting Purchasing View MRP 1 View Barrel Pen

22. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.22 Material Master – More Primary Views MRP: 1 MRP: 2 MRP: 3 Work scheduling General Plant Data/Storage Accounting 1 Costing 1

23. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.23 Material Master – Basic Data 1 View General data ◦Basic Unit of Measure  Unit of measure in which stocks of the material are managed ◦Material Group  Used to group together several materials or services with the same attributes ◦Division (areas)  Used to determine the sales area and the business area for a material, product, or service

24. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.24 Material Master – Basic Data 1 View Dimensions/EANs ◦Gross weight  Used to check storage capacity in warehouse ◦Net weight  Weight excluding packaging and extras – this is needed for sales and distribution ◦Weight Unit  Unit of Measure for weight ◦Volume  The space that the material occupies per unit of volume

25. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.25 Material Master – sales view 1: sales organization General Data ◦Base Unit of Measure  The Base Unit of Measure is the unit of measure in which stocks are managed within your company. ◦Division  You may enter the Division which your product is in for sales (defaults if entered in the Basic data screen). ◦Material Group  A key that’s used to group several materials or services for analysis/reporting as well as search by match code. ◦Sales Unit  The unit of measure in which the material is sold, if left blank then uses the base unit of measure.

26. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.26 Material Master – sales view 1: sales organization ◦Delivering Plant  Plant from which the material is available for sale. ◦Cash discount  Indicator used for materials, which allow for a cash discount. ◦Conditions  Pricing procedure for the material Tax Data ◦Tax classification material  The indicator with which the system determines output tax for the material when processing sales and distribution-specific documents

27. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.27 Material Master – sales view 1: sales organization Quantity Stipulations ◦Minimum Order Quantity  Minimum quantity a customer may order. ◦Minimum Delivery Quantity Minimum quantity that may be delivered to a customer ◦Delivery Unit  The delivery unit consists of a number and a unit of measure. In the case of a delivery unit of 30 pieces, 30, 60, 90, and so on pieces can be delivered, but not, however, 100 pieces.

28. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.28 Material Master – sales view 2: sales organization Grouping Terms ◦Material Statistics Group  Determine which data the system updates in the logistics information system ◦Material Pricing Group  A way of grouping materials to which you want to apply the same conditions ◦Volume Rebate Group  Group definition used for rebate settlement. ◦General Item Category Group  Materials grouping that helps the system to determine item categories during sales document processing.

29. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.29 Grouping Terms (continued) ◦Item Category Group  A grouping of materials that the system uses to determine item categories during the processing of sales documents. ◦Commission Group  Commission group to which the material is assigned. Material Master – sales view 2: sales organization

30. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.30 Material Master – sales view: general/plant view General Data ◦Base unit  The unit of measure in which items are managed in the company ◦Gross weight  Used to check storage capacity in warehouse ◦Net weight  Weight excluding packaging and extras – this is needed for sales and distribution ◦Availability check  Option to do an availability check for orders and MRP

31. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.31 Material Master – sales view: general/plant view Shipping Data (times in days) ◦Transportation Group  Defines materials that have the same transportation requirements. For example, bulk stock materials ◦Loading Group  Defines materials that have the same loading requirements, such as forklift truck, or crane.

32. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.32 Material Master – sales view: general/plant view Packaging Material Data ◦Material group Pack Materials  Materials that require similar packaging materials General Plant Parameters ◦Negative stock  It indicates if negative stocks of the material are allowed at the plant ◦Profit Center  It identifies the profit center in the current controlling area

33. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.33 Material Master - sales view: sales texts Sales Texts ◦Sales texts are information to be exchanged throughout the logistics chain ◦In sales and distribution, this exchange of information is supported by texts in master records and documents ◦The user may define as many text types as required for master records and documents such as:  sales texts,  shipping texts,  internal notes, &  supplement texts, etc.)

34. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.34 Material Master – Purchasing View General Data Order Unit The unit of measure in which a company purchases the product Purchasing Group Key for a buyer or a group of buyers, who is/are responsible for certain purchasing activities. Purchasing Values Purchasing Value Key It defines the reminder days and tolerance limits for purchasing

35. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.35 Material Master – Forecasting view Number of Periods Required ◦Historical Periods  The number of historical values the system uses for the forecast ◦Forecast Periods  Number of period splits for which a forecast should be created Forecast Values ◦The numeric quantity for future periods Consumption Values ◦The sum of planned and unplanned consumption

36. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.36 Material Master – MRP view 1 General Data ◦Purchasing Group  The buyer(s) who are responsible for certain purchasing activities MRP Procedures ◦MRP Type  It determines whether and how the material is planned ◦Reorder Point  If stock falls below this point, the system is flagged to create a planned order ◦MRP Controller  The person(s) responsible for the material planning

37. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.37 Material Master – MRP view 1 Lot Size Data ◦Lot Size  The lot sizing procedure to calculate the quantity to be produced or procured ◦Minimum Lot Size  The smallest order quantity ◦Fixed Lot Size  The quantity to be ordered

38. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.38 Material Master – MRP view 2 Scheduling ◦Planned Delivery Time  Number of calendar days needed to obtain the material ◦Scheduling Margin Key  Used to determine the floats required for scheduling Net Requirement Calculation ◦Safety Stock  It specifies the quantity of safety stock whose purpose is to satisfy unexpectedly high demand in the coverage period

39. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.39 Material Master – MRP view 3 Availability Check ◦It specifies whether and how the system checks availability and generates requirements for materials planning

40. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.40 Material Master – work scheduling view Production scheduler ◦It specifies the production scheduler Production Scheduler Profile ◦It specifies production scheduler profile

41. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.41 Material Master – plant data/storage view 1 General Data ◦Container Requirements  It defines the regulations that govern which type of container the material must be stored and shipped in ◦Storage Conditions  It defines the conditions on how a material must be stored or warehoused Shelf Life Data ◦Minimum remaining shelf life  Minimum time the material must keep upon goods receipt for the goods receipt to be accepted by the system ◦Total Shelf Life  Period of time the material will keep in total, from the date of production or receipt to the shelf life expiration date

42. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.42 Material Master – Accounting view 1 Current Valuation ◦Valuation Class It allows the stock values of materials of the same material type to be posted to different G/L accounts. It allows the stock values of materials of different material types to be posted to the same G/L account. It determines together with other factors the G/L accounts updated for a valuation-relevant transaction (Material Movements) ◦Price Unit Number of units to which the price refers

43. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.43 Material Master – Accounting view 1 Current Valuation ◦Price Control Indicator The price control used to valuate the stock of a material (e.g., Standard or Moving Average Price) ◦Standard Price The valuation of material stocks at standard prices means that all goods movements are valuated at the same price over an extended period ◦Moving Average Price The system calculates the moving average price automatically by dividing the material value in the stock account by the total of all storage location stocks in the plant concerned

44. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.44 Material Master – costing view General Data ◦Overhead Group  It assigns same overhead rate to group Standard Cost Estimate ◦Future  Planned cost of material in future ◦Current  Current standard cost of material ◦Previous  Historical standard cost of material

45. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.45 Material Master – Costing view Planned Prices ◦Future price of material Valuation Data ◦Valuation Class  Class type for G/L posting

46. PEN, Inc. MM Master Data and Records PEN, Inc. MM Master Data and Records

47. Trading Goods Trading Goods Material TypeMaterialsViews required Account Category Valuation class HAWABPENxxxBasic data 100053100 (Trading Goods)CPENxxxPurchasing PPENxxxMRP 1, 2, 3 BOXxxxGeneral Plant data/Storage 1 Accounting 1 Sales: Sales Org. Dta 1 Sales: Sales Org. Data 2 Sales: General/Plant data

48. Operating Suppliers Material TypeMaterialsViews required Account Category Valuation class HIBETAPExxxBasic data 100023030/3031 (Operating supplies) TISSUExxxPurchasing PAPERxxxMRP 1, 2, 3 FORMSxxxGeneral Plant data/Storage 1 Accounting 1

49. Raw Materials Raw Materials Material TypeMaterialsViews Required Account Category Valuation class ROHBarrelxxxBasic data 10001 3000/3001/ 3002/3003 (Raw Material)ClipxxxPurchasing CapxxxMRP 1, 2, 3 BandxxxGeneral Plant Data/Storage 1 CartridgexxxAccounting 1 CrownxxxCosting 1 Standxxx Giftboxxxx

50. Finished Products Material TypeMaterialsViews created Account Category Valuation class FERTEPENxxxBasic data 100097920 (Finished Products) ESETxxxSales: Sales Org. Data 1 Sales: Sales Org. Data 2 Sales: General/Plant data MRP 1, 2, 3 Working Scheduling General Plant Data/Storage Accounting 1 Costing 1

51. Exercises: 114. Create sales organization 115. Assign sales organization to company code 117. Assign distribution channel to sales organization 120. Assign division to sales organization 122. Set up sales areas 125. Assign plant to sales organization and distribution channel 126. Assign shipping point to plant 127. Create sales views for trading goods 204. Create raw materials inventory account 205. Create finished goods inventory account 206. Create raw materials expense account 207. Create finished goods expense account

52. Exercises: 247. Define storage location for raw materials 248. Create production scheduling profile 249. Create production scheduler 250. Control Parameters for MRP 251. Assign availability check to order type 252. Define scheduling parameters for operations 253. Define control parameters for order type 254. Create confirmation parameters 255.Define valuation for goods received 256. Create material master for raw materials 257. Create material master for finished products