SAP MM - Master Data Configuration steps and explanation

1. Master Data,Transactional Data And
configuration data

4. Basic Overview

5. Master data
Data that is created centrally, and is valid for all
applications. It remains constant over time but we need to
update it on a regular basis.
It has all the data to define a material in a client specific
system.
Integrates with sales and distribution,production,accounts
and other departments.
For example: Vendor is a type of master data that is used
for creating purchase orders or contracts.

6. Master data

7. Master data

8. Material Types
Materials with some common attributes are grouped
together and they are assigned to a material type.
It differentiates the materials and allows organizations to
manage different materials in a systematic manner in
accordance to a company’s requirement.
For example, raw material and finished products are some
of the material types. Material type can be created by
following the steps given below.

9. • Material types in the SAP standard version are, for
example, raw materials, trading goods, semi-finished
products, finished products, or services.
The material type represents certain features of materials
in the system, and has important control functions: the
material type is used, among other things, to group field
selection functions for a material, or to define the screen
sequence, the type of number assignment and number
ranges during material master record maintenance.

10. • Path to create material type
• IMG ⇒ Logistics General ⇒ Material Master ⇒ Basic
Settings ⇒ Material Types ⇒ Define Attributes of Material
Types
• TCode: OMS2

11. Real Life example of a car engine assembly

12. Material Groups
Material group is a wider range of material type.
Materials with some common attributes are taken together
and they are assigned to a material group.
For example: We have some materials that are to be
packaged, so the material type can be electrical or food
products, but we can group these material types and put
them in the packaged material group. Follow the steps
given below to create a Material Group.

13. • Path to Create Material Group
• IMG ⇒ Logistic General ⇒ Material Master ⇒ Settings for
Key Fields ⇒ Define Material Groups
• TCode: OMSF

14. Material Number Range
When we create a material master record, every material
is recognized by a unique number that is known as the
material number. We can assign a number to a material
through two ways −

15. Material Number Range
• External number assignment − While creating a material,
you have to enter your own number (containing alphabets
or digits), and that should be unique.
• Internal number assignment − While creating a material,
you need not enter any number. The system automatically
generates a unique number to that material.

16. How to Define Number Range?
Internal number range can be defined by following the steps
given below −
• Path to Create Number Range
IMG ⇒ Logistic General ⇒ Material Master ⇒ Basic Settings ⇒
Material Types ⇒ Define Number Range for Each material
Type
• TCode: MMNR

17. Assignment of Number Range
Internal number range can be defined by following the
steps given below −
For a particular material group, we can assign a number range
here.
TCode: MMNR

18. Material Master Creation
Material master contains information on all materials that a
company procures, produces, or sells. It contains central data
that is available at all the levels. Follow the steps given below
to create a material master − Material 100000000000000045
Path : Logistics ⇒ Materials Management ⇒ Material Master
⇒ Material ⇒ Create Material
TCode: MM01
Note − For any create transaction, we use 01, for edit 02, for
display 03 as suffix.

20. Classification View

21. Additional data - UoM Conversion

22. Price Control in Accounting View
In any SAP system (SAP ERP or SAP S/4HANA), there are two basic
types of price control for materials: moving average price and standard
price. We’ll discuss the differences between the two.
There are a few complex scenarios in which you could be purchasing
different types of materials and dealing with goods receipts or invoice
receipts in an SAP system. General ledger (GL) accounts are posted
differently in the different cases, and the sequence of goods receipt and
invoice receipt also increases the complexity.

23. Moving Average Price Control
Moving average price(V) is an inventory costing method
where the average price is calculated after obtaining the
goods. The average cost of each inventory item in stock is
re-calculated after every inventory purchase.
To calculate it, you would use this formula:
Moving average price = total stock value / total stock
quantity.

24. Standard Price for Price Control
Standard price(S) is a predetermined price, and both receipts
and issues will be valued at this price. It also remains constant
for a certain amount of time, such as a quarter, a month, or
some other timeframe. This method follows the standard costing
technique of accounting, or the practice of substituting an
expected cost for an actual cost in the accounting records.
In the common practice, raw materials use the moving average
price and semi-finished/finished products use the standard
price.

25. Differnce between Moving and Standard Price

26. Transactional data
• Transactional data − Data that is associated with
processing of business transaction is transactional data.