Sap Material Management Configuration Manual: Prepared by

SAP MATERIAL MANAGEMENT CONFIGURATION MANUAL
PREPARED BY RAMESH KAMISHETTY AT ITION Solutions Limited
Contents
Contents ........................................................................................................................................................ 1
1)Organization Structure .............................................................................................................................. 4
1)Client: ......................................................................................................................................................... 4
2)Company: ................................................................................................................................................... 4
3)Company code: .......................................................................................................................................... 4
4)Plant: .......................................................................................................................................................... 4
5)Storage location: ........................................................................................................................................ 5
6)purchase Organization: .............................................................................................................................. 5
7)Reference Purchase organization: ............................................................................................................. 5
8)Standard purchase Organization: .............................................................................................................. 5
9)Purchase group: ......................................................................................................................................... 5
Organization Structure flow chart ................................................................................................................ 6
To Define Organization Structure : ............................................................................................................ 7
To define Company: ...................................................................................................................................... 7
TO CREATE COMPANY CODE: ....................................................................................................................... 8
To Create Controlling: ................................................................................................................................. 10
To create/ copy Plant: ................................................................................................................................. 11
To Maintain Storage Location: .................................................................................................................... 12
To maintain purchase organization: ........................................................................................................... 13
To assign organization elements(structure) ............................................................................................... 14
To assign company code to company ..................................................................................................... 14
To assign controliing area: .......................................................................................................................... 16
To Assign plant to company code: .............................................................................................................. 17
To Assign purchasing organization to company code :............................................................................... 18
To Assign purchasing organization to plant : .............................................................................................. 19
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To Assign standard purchasing organization to plant:................................................................................ 20

To Assign purch. organization to reference purch. organization: .............................................................. 20
To Create Purchase Group: ......................................................................................................................... 21
2.0)Master Data .......................................................................................................................................... 22
Material master ...................................................................................................................................... 22
Material Type: ......................................................................................................................................... 22
Control data for Material types: ............................................................................................................. 23
To Define number ranges for Material Master enter the following .......................................................... 25
To assign material number range to material type .................................................................................... 28
To Create Material master record: ............................................................................................................. 29
Vendor master ............................................................................................................................................ 32
To create vendor account groups: .............................................................................................................. 33
TO CREATE NUMBER RANGES FOR VENDOR ACCOUNT GROUPS: ............................................................. 34
TO ASSIGN NUMBER RANGES TO VENDOR ACCOUNT GROUPS: ............................................................... 36
TO CREATE VENDOR MASTER: .................................................................................................................... 36
Purchasing info record ............................................................................................................................ 40
To Create Purchasing INFO Record: ............................................................................................................ 40
Source list ................................................................................................................................................ 41
To Maintain Source List: ............................................................................................................................. 42
Quota arrangement .................................................................................................................................... 42
To Maintain Quota arrangement: ............................................................................................................... 43
Purchasing Documents ............................................................................................................................... 44
Document types .......................................................................................................................................... 44
Item Categories: .......................................................................................................................................... 45
Standard Item categories are: .................................................................................................................... 45
Account Assignment Category: ................................................................................................................... 45
1)Purchase Requisition ............................................................................................................................... 46
To Define Number Ranges for Purchase Requisition .............................................................................. 46
To Define Document Types for Purchase requisition ................................................................................. 47
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To create Normal Purchase requisition ...................................................................................................... 48

2)Request for Quotation/Quotation ........................................................................................................... 49
To create Request for quotation document number ranges: .................................................................... 49
To create RFQ Document types .................................................................................................................. 50
To create RFQ:............................................................................................................................................. 51
To Maintain Quotation ............................................................................................................................... 53
3)Purchase Order ........................................................................................................................................ 54
To create purchase order document number range: ................................................................................. 54
To define Purchase Order Document type ................................................................................................. 55
To Create Purchase Order ........................................................................................................................... 56
4)Outline agreements ................................................................................................................................. 57
4a)Contracts ............................................................................................................................................ 57
To create contract ....................................................................................................................................... 57
To define Contract Number Ranges........................................................................................................ 57
To define Contract Document types: .......................................................................................................... 58
To Create Contract: ..................................................................................................................................... 59
4b)Scheduling agreement ....................................................................................................................... 60
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1)Organization Structure
Organization structure consists of organizational units, Organization structure is form frame work of
company in which company activities takes place.
1).Client.
2)Company.
3)Company code.
4).Plant.
5).Storage locations.
6).Purchase organization.
7).Reference purchase organization.
8).Standard Purchase organization.
9).purchase group.
1)Client: A client is a commercial Organizational unit within SAP R/3 system with its own data,
Master records and set of tables from the business prospective a client forms a corporate group. Client
is denoted by Max 3 digit code in SAP
2)Company: A company is a corporate group. Company is the highest and independent

organizational unit and that represents corporate group. Company denoted by Max 6 digit code in SAP.
3)Company code: A company code is an organizational unit for which you have an independent
accounting department with in external accounting. A company code represents an independent
accounting unit. A company code is denoted by Max 4 digit in SAP. Balance sheet, profit/loss
statements as required by law are prepared at company code level. Company code is a Branch with in a
company.
4)Plant: A plant is a logistics organization unit that structures the business prospective of planning,
procurement, production and maintenance. a plant represents manufacturing facility or a branch within
the company code, apart from manufacturing facility Corporate/Head office, Branch Office, Regional
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office, Warehouse, Depot, Service stations all can be created as Plants in SAP. Plant is denoted by MAX
4 digit code SAP.
5)Storage location: A storage location is a smallest organizational level, that allows the
differentiate task at Client level. Inventory management on quantity basis is carried out at storage
location level in a plant. Physical inventory carried out at storage location level. A storage location is not
an independent organizational unit in SAP MM Module.
6)purchase Organization: It is a Organizational element that negotiates conditions of

purchase with vendors for a plant or multiple plants. It is also responsible to complete purchasing
contracts. it is denoted by Max 4 digit code in SAP.
6a).Company specific Purchase organization
A purchase organization procures for a just
6b).Plant specific Purchase organization
6c).Corporate group wide purchase organization.
7)Reference Purchase organization: It represents the central purchasing department at

corporate group level, it takes care of strategic and Asset Procurement. it is denoted by Max 4 digit code
in SAP
8)Standard purchase Organization: It takes care of Consignment procurement process of

company it is denoted by Max 4 digit code in SAP.
9)Purchase group: It is a key given by a buyer or group of buyers responsible for certain
purchasing activities. I t is an Independent organizational element and it is not assigned to any of the
organizational units in Organization structure.
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Organization Structure flow chart
Organization Structure
Company
Company code Company code
Plant 1 Plant 2 Plant 1 Plant 3

Plant 1 Plant 1
Storage 1 Storage 2 Storage 1 Storage 2
Plant 1 Plant 1
Purchase 1 Purchase 2 Purchase 1 Purchase 2
Plant 1 Plant 1
Reference Reference
Purchase Purchase
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Purchase
To Define Organization Structure :
To define Company:
Path : SPRO > SAP REF IMG > Enterprise Structure >Financial Accounting > Define company (EXECUTE
/F8)
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TO CREATE COMPANY CODE:
Path : SPRO > SAP REF IMG > Enterprise Structure >Financial Accounting > Edit,
Copy, Delete, Check Company Code (EXECUTE /F8)
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press Enter and enter and enter and edit company code data
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click on save and company code edited.
To Create Controlling:
Path > spro > sap ref Img > enterprise structure > Definition > Controlling > Maintain Controlling Area
(Execute /F8) and new pop up double click on > Maintain Controlling Area.
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To create/ copy Plant:

Path > spro > sap ref Img > enterprise structure > Definition > > Logistics - General >Define, copy,
delete, check plant (execute /F8)
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To Maintain Storage Location:

Path:spro > sap ref img > enterprise structure >definition > material management >Maintain storage
location(execute /F8)
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To maintain purchase organization:

Path:spro > sap ref img > enterprise structure >definition > material management > Maintain
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purchasing organization(execute /F8)
To assign organization elements(structure)

To assign company code to company
Path>spro > sap ref img > Enterprise Structure > Assignment > Financial Accounting> Assign company
code to company(execute/F8)
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To assign controliing area:

Path>spro > sap ref img > Enterprise Structure > Assignment > Financial Accounting > controlling >
Assign company code to controlling area(Execute/F8)
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To Assign plant to company code:

path >spro > sap ref Img > Enterprise structure >Assignment > Logistics - General > Assign plant to
company code(Execute / F8)
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To Assign purchasing organization to company code :

path >spro > sap ref Img > Enterprise structure >Assignment > Materials Management > Assign
purchasing organization to company code(Execute/F8)
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To Assign purchasing organization to plant :

purchasing organization to plant (Execute/F8)
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To Assign standard purchasing organization to plant:

standard purchasing organization to plant(Execute /F8)
To Assign purch. organization to reference purch. organization:

path >spro > sap ref Img > Enterprise structure >Assignment > Materials Management > Assign purch.
organization to reference purch. organization (Execute /F8).
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To Create Purchase Group:

spro > sap ref Img > Materials management >Purchasing >Create Purchase groups(Execute /F8)
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2.0)Master Data
Material master
A Material master is the place of all the data used for a material in SAP system. Material master contains
the information on all the materials that a company procures, produces, stores and sells. It is the
company's central source for retrieving material specific data. This information is stored in individual
master records, the material master is used by all components in the SAP Logistics systems.
Material Type:
Material type categorized the Materials into different type.
Standard Material types are:
S no Code Description
1 ROH Raw Materials
2 HALB Semi Finished goods
3 FERT Finished Goods
4 VERP Packing Materials
5 ERSA Spare Parts
6 HAWA Trading Goods
7 DIEN Service/SD Module
8 NLAG Non Stock items
9 UNBW Non valuated Materials
10 HIBE Operating supplies/Consumables
11 HERS Manufacturing parts
12 PIPE Pipeline Material
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Control data for Material types:

1)Number ranges
1)Internal number ranges
2)External number ranges.
2a)External number ranges with system check
2b)External number ranges without system check.
3).screen layout/filed selection
4)Procurement types
4a).Internal Procurement
4b).External procurement
4b1).Vendors.
4 b2).Other Plants.
5)Price control
5a)Standard price(s)
5b)Moving average price(v).
Material types creation:
Path:SPRO>Logistic General>Material Master>Basic settings>Material types>Define attributes of

material types(F8/Execute) TCODE:OMS2
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Select Material type KROH and double click on qty/value update.
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To Define number ranges for Material Master enter the following

path>SPRO>SAP REF IMG>LOGISTIC GENERAL>MATERIAL MASTER>BASIC SETTINGS>MATERIAL
TYPES>DEFINE NUMBER RANGES FOR EACH MATERIAL TYPES>F8 (execute) TCODE MMNR
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To assign material number range to material type
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To Create Material master record:

Path > SAP Easy Access > Logistics > Material management > Material master > Create General > click
MMO1.
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press enter
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Vendor master
Vendor master consists of three types
1)General data
2)Company code data
3)Purchasing data
Vendor are classified by using vendor account groups ,it is denoted by Max 4 digit code in SAP.
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Standard vendor account groups are:
S no Code Description
1 0001 Main vendor
2 0002 Goods supplier
3 0003 Alternate payee
4 0004 Invoice presented by
5 0005 Forwarding agent/freight vendors
6 0006 Ordering Address
7 0007 Plants
8 CPD One time Vendor
9 MNFR Manufactures
Control data for vendor account groups:
1)Number ranges
1a)Internal number ranges(Automatic)
1b)External number ranges(Manual)
2) Screen layout/Field selection.
2a).Mandatory
2b).Optional
2c).Display
2d).Hide/suppress.
3)Partner roles: 1)VN-Main vendor 2) GS-Goods Supplier 3)OA-Ordering Address
To create vendor account groups:

Path> SPRO > SAP REF IMG > FINANCIAL ACCOUNTING NEW > ACCOUNTS RECEIVABLE AND PAYBLE >
VENDOR ACCOUNTS > MASTER DATA > Preparations for Creating Vendor Master Data > Define
Account Groups with Screen Layout (Vendors) CLICK ON EXECUTE (F8)
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TO CREATE NUMBER RANGES FOR VENDOR ACCOUNT GROUPS:

VENDOR ACCOUNTS > MASTER DATA > Preparations for Creating Vendor Master Data > Create
Number Ranges for Vendor Accounts (CLICK ON EXECUTE/F8)
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TO ASSIGN NUMBER RANGES TO VENDOR ACCOUNT GROUPS:

VENDOR ACCOUNTS > MASTER DATA > Preparations for Creating Vendor Master Data > Assign
Number Ranges to Vendor Account Groups (CLICK ON EXECUTE/F8)
TO CREATE VENDOR MASTER:

PATH > SAP EASY ACCESS > SAP MENU > LOGISTICS > Materials Management > Purchasing > Master
Data > Vendor > Central > XK01 - Create(DOUBLE CLICK)./TCODE XK01.
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Purchasing info record

Purchasing info record is a Purchasing master data created with combination of Material, Vendor for a
Purchasing Organization in a Plant with reference to Info category.
Info category Represents the type of Procurement.
Info category in SAP are
1).Standard
2).Sub Contract
3).Consignment
4).Pipeline
***Important information stored in info record is Price.
***Info records are useful for creating Purchase orders.
To Create Purchasing INFO Record:

Path > sap easy access > sap menu > Logistics > Materials Management > Purchasing > Master Data >
Info Record > ME11 - Create (double click).
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Source list
A source list represents a list of approved Vendors for a Material in a Plant.
* By using source list we can block the vendors
* By using source list we can the fix the vendors( fixed vendors means order will go to particular vendor)
*By using source list we can control the Purchasing officer.
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To Maintain Source List:

Path > sap easy access > sap menu > Logistics > Materials Management > Purchasing > Master Data >
Source List > ME01 - Maintain(Double click).
Quota arrangement
The quota arrangement specifies which portion of the total requirement of a material over a certain
period s to be assigned to particular vendor on the basis of quota.
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To Maintain Quota arrangement:

Path:sap easy access > sap menu > Logistics > Materials Management >
Purchasing > Master Data > Quota Arrangement > MEQ1 - Maintain.
Press enter
click on save icon
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Purchasing Documents
Purchasing documents are identified by document category, it is single (one) digit character ID.
Document categories are in SAP are Standard ,we cannot create our own document categories.
S no Description Document Category

1 Purchase Requisation B
2 Request for Quotation A
3 Purchase Order F
4 Contract K
5 Scheduling Agreement L
Document types
Purchasing Documents are further classified by Document types it denoted by 4 character ID.We can
create our own documents types by copying standard types.
S no Purchase document Category Type Description

NB Standard Purchase Requisition
1 Purchase Requisition B FO Framework Requisition
RV Outline agreement Requisition
AN Request for Quotation
2 Request for Quotation A AB Global Percentage Bid
NB Standard Purchase Order
3 Purchase Order F FO Framework Purchase order
UB Stock Transfer Purchase order
MK Quantity Contract
4 Contract K WK Value Contract
LP Scheduling Agreement
5 Scheduling Agreement L LPA Release Document
LU Stock Transport Scheduling Agreement
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Item Categories:
It represents the type of procurement and it is denoted by single digit character ID.Item Category
defined in SAP are Standard or fixed, we cannot create our own item categories.
Standard Item categories are:

S no symbol Description
1 - (blank) Stock item/Inventory
2 D Service
3 K Consignment
4 S Third Party
5 U Stock Transport
6 T Text
7 B Limit
8 L Sub contract
Account Assignment Category:

account assignment category in SAP is denoted by Single Character ID, we can create our own account
assignment categories by copying standards. Account assignment category required for Direct
consumption of material.
S no Symbol Description
1 - (blank) Stock
2 A Asset
3 C Sales Order
4 F Order
5 K Cost center
6 P Project
7 U Unknown
8 X Auxilary
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1)Purchase Requisition
To Define Number Ranges for Purchase Requisition
path:spro > sap ref Img >Materials Management > Purchasing >Purchase requisitions >
Define Number Ranges (Execute / F8)( Tcode OMH7)
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To Define Document Types for Purchase requisition

path:spro > sap ref Img >Materials Management > Purchasing >Purchase requisitions > Define
Document Types (Execute / F8)
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To create Normal Purchase requisition

path >sap easy access >sap menu > Logistics > Materials Management > Purchasing > Purchase
Requisition > ME51N - Create(Double click)
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2)Request for Quotation/Quotation
To create Request for quotation document number ranges:
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Path >spro > sap ref img >materials management > purchasing >request for quotation/quotation
>Define Number Ranges (Execute /F8)
To create RFQ Document types

Path >spro > sap ref img >materials management > purchasing >request for quotation/quotation >
Define Document Types (Execute /F8)
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press enter and enter and save.
To create RFQ:
path >sap easy access >sap menu > Logistics > Materials Management > Purchasing > RFQ/Quotation >
Request for Quotation > ME41 - Create(Double click)
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To Maintain Quotation
path >sap easy access >sap menu > Logistics > Materials Management > Purchasing > RFQ/Quotation >
Quotation > ME47 - Maintain(Double click)
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3)Purchase Order
To create purchase order document number range:

path >spro > sap ref Img > materials management > Purchasing > Purchase Order > Define Number
Ranges(Execute /F8)
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To define Purchase Order Document type

path >spro > sap ref Img > materials management > Purchasing > Purchase Order > Define Document
Types(Execute/F8)
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To Create Purchase Order

Path > sap easy access >SAP Menu > Logistics > Materials Management > Purchasing > Purchase Order >
Create > ME21N - Vendor/Supplying Plant Known (Double Click)(Tcode ME21N).
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4)Outline agreements
4a)Contracts
To create contract
To define Contract Number Ranges
Path >spro >sap ref IMG >Materials Management >Purchasing >Contract >Define Number
Ranges(Execute /F8)
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To define Contract Document types:

Path >spro >sap ref IMG >Materials Management >Purchasing >Contract > Define Document Types
(Execute /F8)
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To Create Contract:
Path >sap easy access >sap menu >Logistics > Materials Management > Purchasing > Outline Agreement
> Contract > ME31K - Create(Double click) /Tcode ME31K.
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4b)Scheduling agreement
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Sap Material Management Configuration Manual: Prepared by

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SAP MATERIAL MANAGEMENT CONFIGURATION MANUAL

PREPARED BY RAMESH KAMISHETTY AT ITION Solutions Limited

To Assign standard purchasing organization to plant:................................................................................ 20

To create Normal Purchase requisition ...................................................................................................... 48

7).Reference purchase organization.

8).Standard Purchase organization.

2)Company: A company is a corporate group. Company is the highest and independent

6)purchase Organization: It is a Organizational element that negotiates conditions of

6a).Company specific Purchase organization

A purchase organization procures for a just

6b).Plant specific Purchase organization

6c).Corporate group wide purchase organization.

7)Reference Purchase organization: It represents the central purchasing department at

8)Standard purchase Organization: It takes care of Consignment procurement process of

Organization Structure flow chart

Company code Company code

Plant 1 Plant 2 Plant 1 Plant 3

Storage 1 Storage 2 Storage 1 Storage 2

Purchase 1 Purchase 2 Purchase 1 Purchase 2

To Define Organization Structure :

TO CREATE COMPANY CODE:

click on save and company code edited.

To create/ copy Plant:

To Maintain Storage Location:

To maintain purchase organization:

purchasing organization(execute /F8)

To assign organization elements(structure)

To assign controliing area:

Assign company code to controlling area(Execute/F8)

To Assign plant to company code:

To Assign purchasing organization to company code :

To Assign purchasing organization to plant :

To Assign standard purchasing organization to plant:

To Assign purch. organization to reference purch. organization:

To Create Purchase Group:

Standard Material types are:

Control data for Material types:

1)Internal number ranges

2)External number ranges.

2a)External number ranges with system check

2b)External number ranges without system check.

3).screen layout/filed selection

5b)Moving average price(v).

Material types creation:

Path:SPRO>Logistic General>Material Master>Basic settings>Material types>Define attributes of

Select Material type KROH and double click on qty/value update.

To Define number ranges for Material Master enter the following

To assign material number range to material type

To Create Material master record:

2)Company code data

Standard vendor account groups are:

1a)Internal number ranges(Automatic)

1b)External number ranges(Manual)

2) Screen layout/Field selection.

3)Partner roles: 1)VN-Main vendor 2) GS-Goods Supplier 3)OA-Ordering Address

To create vendor account groups:

TO CREATE NUMBER RANGES FOR VENDOR ACCOUNT GROUPS:

TO ASSIGN NUMBER RANGES TO VENDOR ACCOUNT GROUPS:

TO CREATE VENDOR MASTER:

Purchasing info record

Info category Represents the type of Procurement.

Info category in SAP are