Introduction to sap r3 (mm)

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  • The SAP R/3 is mainly structured in modules:
    The top level are functional modules.
    In this slide green modules belong to Logistics. These are: SD (Sales and Distribution), MM (Material Management), PP (Production Planning and Controlling), QA (Quality Assurance), PM (Plant Maintenance).
    The accounting modules are red: FI (Financial Accounting), CO (Controlling, Cost Accounting), AM (Asset Management), PS (Project System).
    Human Resource Management is the yellow module.
    OC means office communication like emailing.
    IS stands for Industry Solutions. These are branch-specific packages (e.g. automotive, retailing, oil industry).
    Currently, HR is the only module which is separated from the other moduls
  • Purchasing (MM-PUR) 
    Purpose
    The R/3 System consists of a number of components that are completely integrated with one another. This integration allows the various departments and units of an enterprise to share and maintain the same information.
    Purchasing is a component of Materials Management (MM). The Materials Management (MM) module is fully integrated with the other modules of the SAP System. It supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.
    The tasks of the MM Purchasing component are as follows:
    External procurement of materials and services
    Determination of possible sources of supply for a requirement identified by the materials planning and control system or arising directly within a user department
    Monitoring of deliveries from and payments to vendors
    Good communication between all participants in the procurement process is necessary for Purchasing to function smoothly.
    Valuation
    MM - Material Price Change (MM-IV-MP)
    Balance Sheet Valuation (MM-IM-VP)
    Actual Costing/Material Ledger (CO-PC-ACT)
    Inventory Management and Physical Inventory (MM-IM) 
    Purpose
    This component deals with the following tasks:
    Management of material stocks on a quantity and value basis
    Planning, Entry, and Documentation of all Goods Movements
    Carrying out the Physical Inventory
    Features
    Material Master (LO-MD-MM) 
    Purpose
    The material master contains information on all the materials that a company procures or produces, stores, and sells. It is the company's central source for retrieving material-specific data. This information is stored in individual material master records.
    MRP Procedures in Consumption-Based Planning 
    Use
    In consumption-based planning, the following MRP procedures are available:
    Reorder point procedure
    Forecast-based planning
    Time-phased materials planning
    Logistics Invoice Verification (MM-IV-LIV) 
    Purpose
    Logistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that 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.
    Product Catalog
    A number of media can be used as vehicles for presentations, including:
    Print media
    CD-ROM
    Online services (such as internet, T-Online, CompuServe, AOL)
    Information kiosks at the point of purchase
    The Product Catalog functionality comprises a programming interface (Business API) for accessing the data and integrated maintenance of product catalog-related data. This data comprises:
    The layout of the product catalog
    The materials and prices in the product catalog
    Texts
    Multi-media objects (graphics, sound documents, video clips etc.).
    Service Master
    MM External Services Management provides a basic process for the procurement of externally performed services. This basic process comprises the following functionality:
    Foreign Trade
    Official customs brokers are licensed by the customs service to assist you with import and export transactions. They have the responsibility to ensure that all foreign trade customs procedures are followed completely and comply to legal regulations. They also ensure that the duties collected from your company are turned over to the government when they become due.
    Although the services of a customs broker replace the need for your company to handle the necessary tasks associated with foreign trade, they can be very costly.
    SAP's FT system incorporates all of the necessary checks and balances necessary to ensure that your import and export transactions are handled lawfully and that the duties owed to the customs authorities are calculated instantly and accurately.
  • Master data does not change very often
    Org data – should not change
    Transaction data (application data) – changes every transaction
    If you setup organizational data and wish to change it, it very well may be more work than the initial setup.
  • There are five organizational structures that we will define for our material management
    Plant
    Valuation area
    Storage locations
    Purchasing organizations
    Purchasing groups
  • Plant is a physical or logical location
    It may be a warehouse: PHYSICAL
    Vendor are in warehouse (Vendor managed inventory)
    Customer site (consigned inventory): LOGICAL
    Can do multiple plants within the same physical structure
    We value material at the plant level.
    Planning done at the plant not organizational level
    The plant is an operating area or branch within a company.
    The plant is embedded in the organizational structure as follows:
    The plant is assigned to a single company code. A company code can have several plants.
    Several storage locations in which material stocks are managed can belong to a plant.
    A single business area is assigned to a plant and to a division.
    A plant can be assigned to several combinations of sales organization and distribution channel.
    A plant can have several shipping points. A shipping point can be assigned to several plants.
    A plant can be defined as a maintenance planning plant.
    A plant has the following attributes:
    A plant has an address.
    A plant has a language.
    A plant belongs to a country.
    A plant has its own material master data. You can maintain data at plant level for the following views on a material master record in particular: MRP, Purchasing, Storage, Work scheduling, Production resources/tools, Forecasting, Quality management, Sales, Costing.
    The plant plays an important role in the following areas:
    material valuation
    If the valuation level is the plant, the material stocks are valuated at plant level. If the valuation level is the plant, you can define the material prices for each plant. Each plant can have its own account determination.
    inventory management
    The material stocks are managed within a plant.
    MRP
    Material requirements are planned for each plant. Each plant has its own MRP data. Analyses for materials planning can be made across plants.
    production
    costing
    In costing, valuation prices are defined only within a plant.
    plant maintenance
    If a plant performs plant maintenance planning tasks, it is defined as a maintenance planning plant. A maintenance planning plant can also carry out planning tasks for other plants (maintenance plants).
  • We are going to create at the plant level.
    System defaults to plant level.
    Define valuation level
    You define the valuation level by specifying the level at which material stocks are valuated. You can valuate material stocks at the following levels:
    Plant level
    Valuation must be at this level in the following cases:
    If you want to use the application component Production Planning (PP) or Costing
    Company code level
    The decision you make is valid for the whole client. You are recommended setting material valuation at plant level.
  • Maintain storage location
    A storage location is the place where stock is physically kept within a plant.
    A storage location has the following attributes:
    There may be one or more storage locations within a plant.
    A storage location has a description and at least one address.
    It is possible to store material data specific to a storage location.
    Stocks are managed only on a quantity basis and not on a value basis at storage location level.
    Physical inventories are carried out at storage location level.
    A storage location can be assigned to a warehouse number in the Warehouse Management System . You can assign more than one storage location to the same warehouse number within a plant.
    Storage locations are always created for a plant.
    Could be inventory management
    Production floor
    Quality
    Engineering bin
  • here you can see how the POrg, the plants and PG‘s are linked up responsible, assigned to
  • Here you can see an overview of the hierarchical structure including the objects of the warehouse management
    IDES = exemplary company maintained in the SAP system
    different Storage locations are assigned to a warehouse number
  • I will talk about the material master later
    before you order the material from a vendor you have to plan the quantites you need in each period
    next, the ... can be mentioned
     user department
    ...
    after you have received the goods, the vendor will make out an invoice and send it to you.Before paying the invoice has to be verified  compare with PO, delivery notes etc.
  • talking of the inter-depENdencies of MM one can say that all of the other modules regularly access data maintained and updated in the module MM
    like the material master for example, which is relevant for prod. planning and sales & distrib.
    also: requirements planning....
  • There are two types of basic data in the module MM
  • different sections
  • so far: considered information about
    material
    vendors
    now: talk about information relating to the combination
    ERM
  • the process has the following main steps:
  • 3 possibilities of ordering material
  • Introduction to sap r3 (mm)

    1. 1. Introduction SAP R/3 – MM Dr. Djamal Ziani King Saud University
    2. 2. ERP-Software: SAP R/3 Sales and Distribution Material Management SD Financial Accounting FI CO MM R/3 PP AM Client / Server PS ABAP/4 QA OC PM HR IS Controlling
    3. 3. Components of Materials Management 3
    4. 4. Organizational Data • A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions • Are static data and are rarely changed • The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured 4
    5. 5. Organizational Structures
    6. 6. Organizational Structures • • • • • • • Client Company Plant Valuation Area Storage Locations Purchasing Organizations Purchasing Groups 6
    7. 7. Organizational Structures: Client • The client is a unit within an SAP R/3 system that is self-contained both in legal and organizational terms and in terms of data, with separate master records and an independent set of tables. • From a business viewpoint, the client represents a corporate group, for example. • Client: 3 numerical digits
    8. 8. Organizational Structures: Company & Company code • The company code is the smallest organizational unit of external accounting for which a complete, self-contained bookkeeping system can be replicated. • A company code represents an independent unit producing its own balance sheet, for example, a company within a corporate group (client). • Company code = 4 characters
    9. 9. Organizational Structures: Plant • Lowest valuation area • Organizational level where Material Requirements (MRP) runs • Generally used to describe a production site, a distribution center or centralized warehouse • May be a physical or logical unit 9
    10. 10. Organizational Structures: Valuation Area • The valuation area determines at which level a material is valuated (inventory value is established) • SAP R/3 allows valuation at the company code or plant level, but recommends valuation area be set at the plant level. • Means each plant can have its own material prices and account determination 10
    11. 11. Organizational Structures: Storage Location • Subdivision of a plant • Where materials are managed (inventory management) – Raw Materials – Maintenance, Repair, and Other (MRO) – Finished Product • May be a physical or logical unit 11
    12. 12. Organizational Structures: Purchasing Organizations • An organizational unit responsible for procuring materials or services for one or more plants and for negotiating general conditions of purchase with vendors. • The purchasing organization assumes legal responsibility for all external purchase transactions.
    13. 13. Purchasing organization material group purchasing organization purchasing group MG 0, 3 purchasing group MG 1, 4 purchasing group MG 2, 5 purchasing group MG 6 plant purchasing group MG 7, 8, 9
    14. 14. Organizational Structures: Purchasing Organization Groups •The purchasing organization is further subdivided into purchasing groups (buyer groups), which are responsible for day-to-day buying activities. A purchasing group can also act for several purchasing organizations.
    15. 15. Inventory Management with a Warehouse Management System 0001 – ABC inc. 0001 – ABC inc. client company code 0001 – Jones inc. purchasing organization plant distrib.0001 center 0001 storage location 0001 0001 0001 0001 0002 0002 0002 0002 0003 0003 0002 0002 warehouse number storage type storage bin (physical stock) 0002 – Model Ltd. 0003 0003 0004 0004 0003 0003 0001 0001 MM factory 0004 0004 001 001 001 001 WM 002 002 05-04-03 05-04-03 05-04-04 05-04-04
    16. 16. The Module MM – Main Functions
    17. 17. MM – interdependencies to other modules Logistik PP production planning MM material master SD sales and distrib. purchasing requirements plan. QM quality management FI financial acc. inventory mgmt. invoice verification CO controlling PM plant maintenance AM fixed assets mgmt.
    18. 18. Basic Data • Master records - include information about 1. vendors 2. material and services to be procured 3. the relation between 1. and 2. (purchasing info record) e.g. prices / terms and conditions • bills of material for – – – – production planning purchasing sales and distribution withdrawal of Material
    19. 19. Structure of the Vendor Master Record sections utilization area of validity  General data • name • address • control data client wide  purchasing • terms and cond. • partner functions • currency • • • request for quotation quotation processing purch. order handling  accounting data • bank account • acc. maintenance • payment • • • invoice entry invoice verification payment handling for each purchasing organization client wide or for each company code
    20. 20. Create a Vendor Creating Your Own Vendor Master Record Usage We recommend that you create your own vendor master record for this scenario. If, however, you prefer to use the reference vendor instead, it could be that the order currency has already been changed and this IDES scenario may no longer work. You create a German vendor in company code 1000, IDES AG Germany, to create purchase orders and invoices denominated in euros.
    21. 21. Create a Vendor Procedure 1.Call up the transaction as follows: Menu Path Logistics → Materials Management → Purchasing → Master Data → Vendor → Central → Create Transaction Code XK01
    22. 22. . Create a vendor On the Create Vendor: Initial Screen, enter the following data: Field Data Vendor Your own vendor (choose a number between 1000 and 1999) Company code 1000 Purch. organization 1000 Account group LIEF Reference vendor 1080 Reference company code 1000 Reference purchasing organization 1000
    23. 23. Create a Vendor On the Create Vendor: Address screen, enter the following data: Field Data Description Any Search term Any, for example "euro" Street/House number Any Postal code/City 5-figure, numerical (any) Country DE Language DE
    24. 24. Create a Vendor 1. Choose until you reach the Create Vendor: Accounting and make sure that 160000 appears in the Reconciliation Account 160000 field. 2. Choose appears. until the Create Vendor: Purchasing Data screen 3. On the Create Vendor: Purchasing Data screen, check that the order currency is EUR. 4. Choose appears. until the Create Vendor: Partner Functions screen 5. Choose appears. until the Create Vendor: Partner Functions screen 6. Choose appears. until the Create Vendor: Partner Functions screen
    25. 25. Create a Vendor
    26. 26. Create a Vendor
    27. 27. Create a Vendor
    28. 28. Views on the Material Master Record each view is maintained by a certain user department of the firm        accounting: valuation- und calculation-specific information requirements planning: information about material requirements planning (e. g. reorder point) purchasing: e. g. responsible purchasing group, order unit engineering: technical information storage: information about warehousing, material movements, ... forecast: information about the forecasting of the material requirements S & D: informationen about sales orders and price determination
    29. 29. Demo: Create Material Master
    30. 30. Demo: Create Material Master •Select the views: Basic data 1, Purchasing, Purchase Order text, Gl. Plant Data/Storage 1, Accounting 1
    31. 31. Demo: Create Material Master
    32. 32. Demo: Create Material Master
    33. 33. Demo: Create Material Master
    34. 34. Demo: Create Material Master
    35. 35. Demo: Create Material Master
    36. 36. Demo: Create Material Master SAVE
    37. 37. purchasing info record info record prices terms & cond. PO statistics tolerance levels date quotation outline agreement order
    38. 38. Purchasing Process PO ? = invoice X X X invoice verification X X determination: requirements vendor X X X goods received & inventory mgmt. MM X outline agreem. X determination: source of supply vendor 22 vendor vendor 11 vendor PO PO PO PO monitoring purchase order processing ? vendor selection
    39. 39. Create Purchase Order (PO) vendor 22 vendor purch. order 1 vendor known terms & cond. 2 vendor not known source list purch. order outline agrement info record vendor 3 assigned purchase requisition exists (from user department) vendor 22 vendor purch. req. purch. order
    40. 40. Purchasing Process • Create a requisition • First release of requisition • Create RFQ (Request for Quotation) with reference to requisition • Create PO (Purchase Order) with reference to RFQ • Department receives material ordered (GR) • Department pays invoice (MIRO).
    41. 41. Purchase Requisition Document generated by a user department or storeroom-personnel to notify the purchasing department of items it needs to order, their quantity, and the timeframe. It may also contain the authorization to proceed with the purchase. Also called purchase request or requisition.
    42. 42. Request for Quotation Is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products or services. RFQ generally means the same thing as IFB (Invitation For Bid)
    43. 43. Purchase Order Buyer-generated document that authorizes a purchase transaction. It sets forth the descriptions, quantities, prices, discounts, payment terms, date of performance or shipment, other associated terms and conditions, and identifies a specific seller.
    44. 44. Create Purchase Requisition
    45. 45. Create Purchase Requisition
    46. 46. Create Purchase Requisition • In the item, enter your material, Plant= 1000, QT = 100
    47. 47. Create Purchase Requisition • Save your Purchase requisition • Take note of Purchase requisition number
    48. 48. Demo: Create Purchase Order
    49. 49. Demo: Create Purchase Order • Open document overview: Click on document overview button • Choose “Selection variant list” icon •Then select “My purchase requisition”, you will get your purchase requisition listed •Click on “adopt” icon, your purchase requisition will be copied to the purchase order (or you can drag and drop it into the shopping cart)
    50. 50. Demo: Create Purchase Order
    51. 51. Demo: Create Purchase Order • Enter your vendor, and price 30 euro and save
    52. 52. Posting an Order Entry (Goods Receipt) Logistics PP production planning MM purchasing req. planning goods receipt SD sales and distrib. inventory mgmt. goods issue. QM quality management FI financial acc. inventory controlling transfer posting invoice verification CO controlling PM plant maintenance AM fixed assets mgmt.
    53. 53. Demo: Posting Order Entry (Goods Received) 1. Use T_code : MIGO 2. Select Goods Receipt 3. Select Purchase Order 4. Enter PO number for goods to be received. 5. Hit "Enter"
    54. 54. Demo: Posting Order Entry (Goods Received) 6. Enter Document date & posting date 7. Enter Header text (comment) if necessary. 8. Close detail data.
    55. 55. Demo: Posting Order Entry (Goods Received) 9. Notice that movement data is "101" 10. If you only received first item, then Check the "OK" box for first line item.therefore, the second item need not be processed
    56. 56. Demo: Posting Order Entry (Goods Received) 11. If you only received 3 pcs out of 10 pcs of item one & 2 pcs out of 10 pcs of item two, then Check the "OK" box for both line item 12. Input actual quantity (3 & 2 pcs ). 13. Hit "Enter"
    57. 57. Demo: Posting Order Entry (Goods Received) 14. Click "Check" button to find out if there is any error. 15. Check the "status" column . . Green means OK . Yellow means Warning . Red means error
    58. 58. Invoice Verification input information orders goods receipt master data: material vendors accounts terms & cond. invoice verification output information actions: • • • • enter invoice verify invoice post invoice update relevant data • (re-edit invoice) financial accounting asset management cost accounting
    59. 59. Create Invoice Create Invoice using Tcode MIRO Enter the Required details in all Tabs Enter the Purchase order no. and click on Enter, to display the material details.
    60. 60. Create Invoice (contd..) Click the check box, to calculate the Tax
    61. 61. Create Invoice (contd..) Enter the Amount and click on save
    62. 62. Create Invoice (contd..) Invoice is created
    63. 63. Demo: Invoice Verification Using the tcode: MIRO"
    64. 64. Demo: Invoice Verification
    65. 65. Demo: Invoice Verification net amount for positions

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