1.  TATA CONSULTANCY SERVICES MATERIALS MANAGEMENT

2.  TATA CONSULTANCY SERVICES Target Group Purchase department Stores department

3.  TATA CONSULTANCY SERVICES Introduction Contents  MM overview  Organizational elements  Material master  Vendor master  Other master records Exercises Solutions

4.  TATA CONSULTANCY SERVICES Course Objectives To get an overview of MM Maintain MM related views of Material Master and vendor master Creating other master records or changing the existing master records At the conclusion of this course, you will be able to:

5.  TATA CONSULTANCY SERVICES MM - Overview Major components of MM- Module materials planning and control purchasing goods receiving inventory management invoice verification.

6.  TATA CONSULTANCY SERVICES Integration with other Modules Finance / Asset Management Procurement Logistics Planning Sales Logistics Production

7.  TATA CONSULTANCY SERVICES Integrated Business Process Overview Requirement for Goods / Services Purchase Order Purchase Order Goods Receipt Goods Receipt Invoice Verification Invoice Verification Financial and Managerial Reporting and Analysis G/L Inventory / GRIR G/L GRIR/ Expense AP Invoice Vendor Payment Vendor Payment

8.  TATA CONSULTANCY SERVICES

9. Organizational Elements - Client Highest Hierarchical Level in SAP(e.g. a corporation) Can be Used to Differentiate between a Development, Quality Assurance, and Production System within R/3 All Areas of an Organization that are to be Integrated into the SAP R/3 Production System should be Included Under one Client Client Characteritics

10.  TATA CONSULTANCY SERVICES Organizational Elements - MM Responsible for Procurement for One or More Plants Responsible for Negotiating Pricing and Delivery Terms with Vendors Purchasing Organization is Assigned to A Company where Inventory is Legally Tracked or Costs are Legally Incurred. Purchasing Organization

11.  TATA CONSULTANCY SERVICES Organizational Elements - MM Usually a Manufacturing Facility, Warehouse, or a Location that Stocks, Manages, and Valuates Inventory May be a Physical Site with Multiple Manufacturing/Production Lines May be Multiple Manufacturing/Production Lines at One Physical Site Can be a Physical Location(cost centers may or may not be associated to a plant i.e. administrative vs. manufacturing cost centers) SD Availability Checking is Normally Done at the Plant Level Plant

12.  TATA CONSULTANCY SERVICES Organizational Elements - MM Links to Production (PP), Materials Management (MM), and Sales and Distribution (SD) A Plant is Assigned to A Company Purchasing Organization are Assigned to Plants Plant (Cont.)

13.  TATA CONSULTANCY SERVICES Organizational Elements - MM A Location within a Plant where Inventory is Stored Storage Location

14.  TATA CONSULTANCY SERVICES Basic data in MM Material Master Vendor Master Service Master Purchasing info record Source List Vendor Excise Details Material and Chapter ID combination Excise Tax rate

15.  TATA CONSULTANCY SERVICES Material master in SAP. The material master contains information on all the materials that a company procures, produces, stores, and sells. The material master is used by all components in the SAP Logistics System Different departments in a company work with the same material, so data in a material master record is subdivided in the form of user departments. Material description and Base unit of measure appear in all user departments.

16.  TATA CONSULTANCY SERVICES Use of material master in SAP logistics system functions. In Purchasing for ordering materials. In Inventory Management for goods movement postings and physical inventory In Invoice Verification for posting invoices In FI for maintaining value of material. In Production Planning and Control for material requirements planning, scheduling, and work scheduling

17.  TATA CONSULTANCY SERVICES User departments using same material master

18.  TATA CONSULTANCY SERVICES Material Numbers Definition Number uniquely identifying a material master record, and thus a material. Use For every material that your company uses, you must create a material master record in the material master. This record is uniquely identified by a material number. Internal and External number assignment.

19.  TATA CONSULTANCY SERVICES Industry sector It determines type of industry. Eg. mechanical industry,chemical industry,pharmaceutical etc. The industry sector you specify determines Which screens appear and in what sequence Which industry-specific fields appear on the individual screens

20.  TATA CONSULTANCY SERVICES Material Types Materials with the same basic attributes are grouped together and assigned to a material type. When creating a material master record, you must assign the material to a material type. The material type determines certain attributes of the material and has important control functions. Some of the standard material types are ROH: Raw materials which are bought from outside and goes into production. Halb :Semi-finished material which are bought externally and manufactured inside. They can be sold individually as well. FERT:Finished materials are final products of the company

21.  TATA CONSULTANCY SERVICES Views relevant to MM Basic data1 Purchasing Purchase order text Storage 1 Storage 2

22.  TATA CONSULTANCY SERVICES CREATING MATERIAL MASTER IN SAP From logistics screen click Logistics  Materials Management  material master, to bring up material master screen. Click material  create(general)  immediately Organizational levels. Plant Storage location

23.  TATA CONSULTANCY SERVICES Material master In Purchasing screen you can enter Purchasing group purchasing value key Set indicator for automatic PO

24.  TATA CONSULTANCY SERVICES Material master In purchase order text screen, you can enter the text, which will be defaulted in PO every time when you create a PO for this material. In Storage 1 you can enter, Storage bin Unit of issue Shelf life data Batch management

25.  TATA CONSULTANCY SERVICES Concept of vendor master in SAP. vendor master record is maintained by both Accounting and Purchasing. A vendor can be a one time vendor or regular vendor A vendor master record contains the vendor’s name and address, as well as data such as:  the currency used for ordering from the vendor  terms of payment  names of important contact persons (sales staff)

26.  TATA CONSULTANCY SERVICES Organization of vendor master records A vendor master record is subdivided into three different data areas: General Data Company code data Purchasing organization data

27.  TATA CONSULTANCY SERVICES Creating vendor master record. Menu Path Logistics -> Material management -> purchasing ->master data vendor ->purchasing ->create In the initial screen you can enter, Vendor number (For External number assignment ) Vendor account group Purchasing organization

28.  TATA CONSULTANCY SERVICES Creating vendor master record. In general data you can maintain, Address Control Payment transactions In Purchasing organization data you can maintain, Purchasing Data Partner functions

29.  TATA CONSULTANCY SERVICES Changing vendor master record You cannot change Vendor account group (One time vendor cannot be converted in to a regular vendor) Blocking a vendor Flag for deletion Changing other options Automatic PO Vendor schema group Payment terms Discount

30.  TATA CONSULTANCY SERVICES Service Master Records Descriptions of all services that may need to be procured can be stored. The organizational level at which services are procured is the purchasing organization. In addition to a unique description of the service, a service master record contains further information that is necessary for procurement purposes (such as texts or units of measure).

31.  TATA CONSULTANCY SERVICES Service master records You can store price information at various levels: for example, $100 per hour as the "market" or "own estimated" price, $98 as vendor Acme’s price and $105 as vendor Zenith’s price for service A. The individual service master records can be grouped into different service types (e.g. trades or activities).

32.  TATA CONSULTANCY SERVICES Creating a service master record In the initial screen you can enter Service number (if external number assignment) Service category In the Basic data screen enter, Base unit of measure Description of services Valuation class (3200 for services) In the classification screen enter, The class for classifying the services

33.  TATA CONSULTANCY SERVICES Concept of Purchasing info rec in SAP. An info record represents a material-vendor relationship. The info record contains concise information about a vendor and a material that you already procure from that vendor. Info records are created automatically when you order a material. You can also create, change, and delete info records.

34.  TATA CONSULTANCY SERVICES Purchasing info rec (Contd…) Use of Purchasing info rec in PO creation Net price for the item will be defaulted in PO All the pricing conditions will be defaulted other uses include  Remainders  Delivery tolerance  Shelf life  Purchase order text

35.  TATA CONSULTANCY SERVICES Purchasing info rec (Contd…) Use of info rec in Vendor evaluation Order price history Quotation price history Delivery reliability Quantity reliability

36.  TATA CONSULTANCY SERVICES Concept of source list in SAP A source list specifies the possible sources of supply for a material over a given period of time It shows the time period in which a material may be ordered from a given vendor Source list can be created automatically using generate source list option Source list can also be maintained manually.

37.  TATA CONSULTANCY SERVICES Source List (Contd…) Uses of source list Fixed vendor Vendor blocking Auto PO creation Source list requirement at plant level Can be made mandotory

38.  TATA CONSULTANCY SERVICES Tables for Excise purpose Chapter ID Excise Law Chapters, Headings and subheadings Example 7216.10  72 - Iron and Steel  16 - Angles, shapes and sections Material and Chapter ID combination Material assessable value Net dealer price Material assessable value

39.  TATA CONSULTANCY SERVICES Tables for excise purpose (contd..) MODVAT Determination Input material MODVAT output material MODVAT Vendor Excise details SSI Rates Excise Tax rates