MM Purchasing

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 MM module is fully integrated with other modules in the SAP System. It supports all phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.

The Purchasing component has the following tasks:

• 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 and payments to vendors

Good communication between all participants in the procurement process is necessary for Purchasing to function smoothly.

Integration

Purchasing communicates with other modules in the SAP System to ensure a constant flow of information. For example, it works side by side with the following modules:

• Controlling (CO)

The interface to the cost accounting system (Controlling) can be seen above all in the case of purchase orders for materials intended for direct consumption and for services, since these can be directly assigned to a cost center or a production order.

• Financial Accounting (FI)

Purchasing maintains data on the vendors that are defined in the system jointly with Financial Accounting. Information on each vendor is stored in a vendor master record, which contains both accounting and procurement information. The vendor master record represents the creditor account in financial accounting.

Through PO account assignment, Purchasing can also specify which G/L accounts are to be charged in the financial accounting system.

• Sales and Distribution (SD)

Within the framework of materials planning and control, a requirement that has arisen in the Sales area can be passed on to Purchasing. In addition, when a requisition is created, it can be directly assigned to a sales order.

See also:

Procurement in Materials Management

Organization of an Enterprise in the SAP System

Purchasing Menu

Purchasing Document

SAP MM Procurement in Materials Management

Purpose

External procurement in the MM System centers around a general cycle of activities.

Process Flow

The typical procurement cycle for a service or material consists of the following phases:

1. Determination of Requirements

Materials requirements are identified either in the user departments or via materials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials defined by master records, use of the order-point method, and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.

2. Source Determination

The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements. This speeds up the process of creating requests for quotation (RFQs), which can be sent to vendors electronically via SAP EDI, if desired.

3. Vendor Selection and Comparison of Quotations

The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically.

4. Purchase Order Processing

The Purchasing system adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically. Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase agreement) are also supported.

5. Purchase Order Follow-Up

The system checks the reminder periods you have specified and - if necessary - automatically prints reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders.

6. Goods Receiving and Inventory Management

Goods Receiving personnel can confirm the receipt of goods simply by entering the Po number. By specifying permissible tolerances, buyers can limit over- and underdeliveries of ordered goods.

7. Invoice Verification

The system supports the checking and matching of invoices. The accounts payable clerk is notified of quantity and price variances because the system has access to PO and goods receipt data. This speeds the process of auditing and clearing invoices for payment.

SAP SD Proc. for Stock vs. Proc. for Direct Consumption

Use

This section provides an overview of external procurement in the MM System.
It discusses:

• The distinction between procuring materials for stock and procurement for direct consumption
• Account assignments for stock materials and materials intended for direct consumption.
• The various forms of external procurement

Features

Procurement for Stock Versus Procurement for Direct Consumption

In the MM System, you procure either for stock or for direct consumption . You can determine the purpose for which ordered materials are being procured in the purchase order, for example.

This section describes the differences between procuring for stock and procuring for direct consumption in the MM System.

Procurement for Stock

A stock material is a material that is kept in stock. Such materials are placed in storage following a goods receipt . When goods are received by or issued from stores or the warehouse, the stock on hand is increased or reduced by the amount of the quantity received or issued.

When you order a material for stock, the system does not require an account assignment . This is because the posting to the appropriate stock and consumption accounts occurs automatically after each goods movement (for example, after a material is received by the stores or issued from stores) . Furthermore, the value and the quantity of the stocked material are updated in the material master record.

To order a material for placement in stock, the material must have a master record . For more information on material master records, refer to Master Records from the Purchasing View.

Procurement for Direct Consumption

When you procure for direct consumption, you specify the consumption purpose by entering an account assignment (for example, a cost center) . On goods receipt, the material or service counts as having been consumed.

If a material is procured for direct consumption, the consumption accounts in Financial Accounting are posted when the goods receipt is entered . The total quantity and value of existing stocks of the material are not affected.

Material Account Assignment

For each item of a purchasing document, you specify whether procurement is for stock or for direct consumption . In a purchasing document, you can enter items with or without account assignments.

If you order stock materials, the ordered material must have a material master record . If you order consumable materials, the ordered material may have a material master record.

Account assignments are possible for the following purchasing documents:

• Purchase requisitions
• Purchase orders
• Outline agreements

Forms of Procurement

Before ordering a material or service from a vendor, you must decide which purchasing instrument you wish to employ . This section describes the three basic forms of external procurement supported by the MM Purchasing component:

• One-time purchase orders
• Longer-term contracts with the subsequent issue of release orders
• Longer-term scheduling agreements and delivery schedules

One-Time Purchase Order

You use one-time orders for materials or services that you order irregularly .

You can reference a purchase requisition, RFQ, or another PO when creating a one-time order . The vendor’s current conditions for the material are adopted from the purchasing information record when the new PO is created.

For more information, refer to the section Purchase Orders

Contract and Release Orders

For materials that are ordered regularly and in sufficient quantity, you can negotiate longer-term pricing and conditions with the vendor and record them in a contract. In the contract, you specify its validity period and the total target quantity or total dollar value covered.

When creating a contract, you can reference an RFQ or another contract . The contract requisition (representing a request to set up a longer-term contract) can also simplify the data entry process by serving as a reference document.

When you create the associated release orders, information is adopted from the contract . Individual deliveries are effected on the basis of the release orders, which specify the exact order quantity and the delivery date.

For more information, refer to the section Outline Agreements with Vendors.

Scheduling Agreement

If a material is ordered on a regular basis and is to be delivered according to an exact time schedule, then you set up a scheduling agreement . This method of procurement is typically used when Just-in-Time deliveries are required from the vendor (for example, in the automobile industry).

As in the case of the contract, the material and the basic conditions are specified in the scheduling agreement . Once you have set up the agreement, you can create delivery schedules specifying exact quantities, delivery dates, and times extending over a certain period into the future.

For more information, refer to the section Outline Agreements with Vendors.

Organization of an Enterprise in the SAP MM Purchasing System

Use

This section describes the organization of an enterprise in the SAP system. The section also demonstrates how Purchasing is integrated into this structure.

Features

Organizational Levels

The structure of an enterprise is represented in the SAP R/3 System by the following organizational levels:

Client
A grouping or combination of legal, organizational, business and/or administrative units with a common purpose.

Example: corporate group.

Company code
This level represents an independent accounting unit within a client. Each company code has its own balance sheet and its own profit and loss statement.

Example: a subsidiary company, member of a corporate group.

Plant
Operational unit within a company code.

Example: production facility, branch office.

Purchasing organization
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.

Purchasing group
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.

Assignment of Organizational Levels

In the SAP system, a plant must be assigned to one or more purchasing organizations. Furthermore, a plant must always be assigned to a company code. A purchasing organization can, but need not, be assigned to a company code.

If you make no assignments of purchasing organizations to company codes, each purchasing organization can engage in procurement operations for every company code.
A precondition for this is that the plant for which procurement is carried out is assigned to the purchasing organization.

Central/Distributed Purchasing
You can set up your Purchasing function as

• A central purchasing unit with one purchasing organization, or as
• A distributed purchasing system, with different purchasing organizations, each responsible for different plants

Depending on the way your system is set up, you can keep the individual purchasing organizations separate, or permit a reference purchasing organization to negotiate a comprehensive contract (having more advantageous conditions due to greater purchase volumes) with a vendor. Other purchasing organizations, responsible for procurement in the individual plants, would then also be able to release (call off) materials against this contract by issuing release (call-off) orders.

For information on centrally agreed contracts, refer to the section Centrally Agreed Contract.

Working with a reference purchasing organization saves time and effort in maintaining data because purchasing organization data, vendor master records, and purchasing info records only have to be created by the reference purchasing organization. Other purchasing organizations that are linked to the latter via Customizing can use this data without having to maintain data themselves.

With the aid of SAP Application Link Enabling (ALE), individual companies belonging to a group but working with separate SAP systems can make common use of contracts. The latter are referred to as "distributed contracts" in such cases.

For information on this topic, refer to the section Distributed Contracts

You can set up your system in such a way that one purchasing organization procures material for a plant from a vendor (plant) that belongs to another company code within the same client (corporate group). This is an instance of an inter-company stock transfer with an SD delivery and a billing document.

For information on inter-company stock transfers, refer to the documentation MM Special Stocks and Special Forms of Procurement in Materials Management ( section Cross-Company Stock Transfer).

SAP MM Purchasing Menu

Use

This section describes the menu that constitutes the starting point for purchasing activities in the R/3 System: the Purchasing menu.

The Purchasing menu is the point from which you begin all the operations described in this documentation. Your attention will be expressly drawn to individual cases where this does not apply.

Features

Displaying the Purchasing Menu

To display the Purchasing menu, do the following:

1. Log on to the system
. The SAP-wide system menu appears.
2. Choose Logistics
® Materials management ® Purchasing. The Purchasing menu appears.

About the Purchasing Menu

The tasks you can perform from the Purchasing menu are organized by purchasing document . For example, to display a purchase order, choose Purchase order ® Display from the Purchasing menu.

The Master Data menu contains functions for creating and displaying info records and vendor and purchasing master data.

When you complete a purchasing function - creating a purchase order, for example - choose Purchase order ® Exit, to return to the Purchasing menu.

Standard Menu Functions

The following list describes the standard menu options for purchasing documents:

Create
Use this option to create a purchasing document . Enter the required information and save the document . The document is then stored under a unique number.

Change
Use this option to change a purchasing document . You need the document number in order to access the document.

Display
Use this option to display a purchasing document . You cannot change or add any information to the document that is displayed . You need the document number in order to access the document.

List displays/reporting
Use these options to generate reports analyzing purchasing documents (for example, a list of all purchase orders for Vendor ABC) . How to generate reports and analyses is described in Reporting in Purchasing.

Follow-on functions
This option allows you to perform tasks related to (following on from) but not included in the purchasing functionality, such as entering a goods receipt or an invoice in the system.

Messages
This option enables you to print or transmit documents in message form (for example, transmission via electronic data interchange (EDI), fax, and so on).

SAP MM Purchasing Document

Definition

A purchasing document is an instrument used by Purchasing to procure materials or services.

The following list shows the various external purchasing documents available in the standard SAP System. (Note: purchase requisitions are not included on this list because they are usually regarded as internal documents used within Purchasing and are therefore treated separately.)

Request for quotation (RFQ)
Transmits a requirement defined in a requisition for a material or service to potential vendors .

Quotation
Contains a vendor's prices and conditions and is the basis for vendor selection.

Purchase order (PO)
The buying entity’s request or instruction to a vendor (external supplier) to supply certain materials or render/perform certain services/works, formalizing a purchase transaction .

Contract
In the SAP Purchasing component, a type of "outline agreement", or longer-term buying arrangement . The contract is a binding commitment to procure a certain material or service from a vendor over a certain period of time.

Scheduling agreement
Another type of "outline agreement", or longer-term buying arrangement. Scheduling agreements provide for the creation of delivery schedules specifying purchase quantities, delivery dates, and possibly also precise times of delivery over a predefined period .

Requirements of materials or services can be reported to Purchasing by means of purchase requisitions.

Structure

Each purchasing document is subdivided into two main areas: the header and individual items . Each document will contain a header and can contain several items.

The header contains information relevant to the whole document . The items specify the materials or services to be procured . For example, information about the vendor and the document number is contained in the document header, and the material description and the order quantity are specified in each item.

The additional data provides extra information about the item, and has no direct connection with the item procurement data. Additional data includes, for example, account assignment data (such as cost center and G/L account) and the PO history for an item, which contains information on already recorded goods and invoice receipts relating to the item.

Each item in a purchasing document represents a unit of procurement . Purchasing operations (involving requisitioning, ordering and follow-up processes) occur on an item-specific basis.

How does the SAP System Differentiate Between Purchasing Documents?

In the SAP System, the different kinds of purchasing document are distinguished from one another by means of the document type. The latter determines the relevant number range and the fields that are offered to you for data maintenance purposes, for example . The relevant document type appears as a default value when you create a purchasing document.

Document types are defined for RFQs, purchase orders, and contracts, for example . The standard SAP system includes certain document types . However, your enterprise can also define its own.

How are Purchasing Documents Numbered?

Each document is assigned a unique number . (Note that the "number" may also be an alphanumeric code: see below). This number can be assigned internally or externally, depending on the policy of your enterprise . Internal number assignment means that the system assigns the number. External number assignment means that the person creating the document must supply it.
Alphanumeric assignment is only possible in the latter case.

Working with SAP MM Purchasing Documents

Use

This section describes how to navigate and find information within a purchasing document . In addition, the facilities for and aids in the creation of purchasing documents are discussed.

Before reading this section, you should have a basic understanding of the R/3 System . For a review of the basic skills you need to use the SAP R/3 System, see Getting Started with the R/3 System.

Features

Initial Screen

If you are creating a new purchasing document, you use the initial screen to assign the responsible purchasing organization and purchasing group.
If you are processing an existing one, here you enter general data (for example, the number) to enable the system to call up the document you are interested in.

To reduce the amount of data you have to key in, you can make entries in certain fields in the Default data area of the initial screen . You can enter the receiving plant and storage location, or the delivery date, for example, if they are the same for most or all items in the order . The system automatically adopts these entries in all items on the subsequent PO item overview.

The data you entered on the initial screen of documents is also adopted in the document being created if you are creating a new document by referencing an already existing one .

This function is especially relevant to release orders created against contracts which themselves contain no supplying plant, no storage location, and no delivery date (for example, centrally agreed contracts) .

If you create a release order against a contract that already contains the data "plant" and "storage location" and you enter default data on the initial screen, the data from the contract will be taken and your data ignored.

If, for instance, you wish to create a release order against a centrally agreed contract using the function Purchase order ® Create with reference ® To contract, and enter a plant and a storage location on the initial screen, this default data will be adopted in the items of the purchase order because such data does not exist in contracts of this kind .

The same procedure applies to documents referencing RFQs.

Item Overview

The item overview is a summary of the header and item data in a purchasing document . The top part of the item overview screen contains important header data . The center portion of the screen contains data on the items to be procured .

The items are numbered according to the item number increment defined for the document type . You can change the default item number if you wish.

In addition, you can switch between single and double-line display on the item overview screen. To do so, choose Edit ® Change display.

Selecting an Item for Processing

The fields for selecting individual items are in the first column on the left of the item overview screen . Here you select the item you wish to process .

You can also select an item by choosing Edit ® Selections . In this way, you can select all items, a block of items, or cancel the selection.

Header Detail Screen

The header data of a purchasing document includes pertinent information about the vendor and the ordering department . For example, it shows the vendor’s terms of payment and the responsible sales representative . (Exception: the purchase requisition contains no header data, therefore no header detail screen is available.)

To display the header data, choose Header ® Details from the item overview screen.

Item Detail Screen

The item detail screen contains important data on the procurement of a material . For example, it shows data for monitoring compliance with due dates and data for controlling goods and invoice receipts.

To display the detailed information on an item, select the item on the overview screen . Then choose Item ® Details.

Additional Data on Items

The additional data comprises further information on an item (e.g. prices and conditions, account assignment, texts, etc.). You can display the additional data by selecting the desired item on the item overview screen and choosing the data to be displayed from the Item menu.

Entry Aids

You can create items of a purchasing document by referencing other purchasing documents , or copy a purchasing document. Such entry aids can be called up from the initial screen or from the item overview screen via the Create w. reference or Copy menu options.

Master Records from the SAP MM Purchasing View

Use

This section describes the functions of the material master and vendor master records that specifically relate to purchasing. It discusses purchasing-specific master data and describes how to enter and maintain material and vendor data relating to purchasing.

Features

MM Purchasing processes the following types of data:

• Material Master Data

Details on materials an enterprise procures externally or produces in-house. The unit of measure and the description of a material are examples of the data stored in a material master record. Other SAP Logistics components also access the material data.

• Vendor Master Data

Information about external suppliers (creditors). The vendor’s name and address, the currency the vendor uses, and the vendor number (stored in the SAP system as an account number) are typical vendor data.

• Purchasing Master Data, such as the following:

- Purchasing Info Record

The info record establishes the link between material and vendor, thus facilitating the process of selecting quotations. For example, the info record shows the unit of measure used for ordering from the vendor, and indicates vendor price changes affecting the material over a period of time.

- Source List

The source list specifies the possible sources of supply for a material. It shows the time period during which a material may be ordered from a given vendor.

- Quota Arrangement

The quota arrangement specifies which portion of the total requirement of a material over a certain period is to be assigned to particular vendors on the basis of quotas.

See also:

Material Master Data

Vendor Master Data

Master Data in Purchasing

SAP Vendor Master Data

Use

The vendor master database contains information about the vendors that supply an enterprise. This information is stored in individual vendor master records. A vendor master record contains the vendor’s name and address, as well as data such as:

• Currency used for ordering from the vendor
• Terms of payment
• Names of important contact persons (sales staff)

Since, to the accounts department, the vendor is generally a creditor (accounts payable), the vendor master record also contains accounting information, such as the relevant control account (reconciliation account) in the general ledger.

Therefore, the vendor master record is maintained by both Accounting and Purchasing. This section deals with the creation, changing, and displaying of the data relevant to Purchasing stored in the vendor master.

The accounting data must be provided for a vendor before you can enter the vendor's invoice for payment in the system.

How is the Vendor Master Record Organized?

The structure of the vendor master record reflects that of your enterprise. A vendor master record is subdivided into three different data areas:

1. General data This is data that applies equally to all company codes within your corporate enterprise. The general data includes information such as the vendor's address and telephone number, and the language of communication with the vendor.
2. Company code data A large amount of accounting information is kept at company code level. This data includes, for example, payment transaction data and the number of the relevant control account.
3. Purchasing organization data Certain purchasing data is kept at purchasing organization level. Such data includes contact persons, terms of delivery, etc.

The organizational level "purchasing organization" contains the following sub-levels that are relevant to the wholesale/retail trade:

– Vendor sub-range (VSR)

– Plant

– Vendor sub-range/plant

In addition to the data applicable to a purchasing organization, you can maintain data for a certain plant or vendor sub-range (terms of payment or Incoterms, for example) that varies from that at the purchasing organization level.

The search for and outputting of data is carried out according to the following priorities:

1. Vendor sub-range - plant - purchasing organization
2. Vendor sub-range - purchasing organization
3. Plant - purchasing organization
4. Purchasing organization

This means:

1. If data exists for the most specific level "vendor sub-range - plant - purchasing organization", this data is used.
2. If not, the system checks whether data has been maintained at the level "vendor sub-range - purchasing organization" and outputs this if available.
3. If no data exists at this level either, the system searches for data at the level "plant - purchasing organization."
4. If nothing is available here either, only the general data at the purchasing organization level is outputted.

Specifying Variant Data

If, in the retail industry for example, you wish to work with different data for certain sites or vendor sub-ranges, proceed as follows:

1. On the Purchasing data or Partner roles (partner functions) screen, choose Different data. The button is only available if an account group allowing the data retention levels "vendor sub-range" and/or "site" was chosen.

If no variant data has yet been created, you will be asked to specify the data retention levels. The existing levels are displayed.

2. Select the desired data retention level and choose Purchasing details or Partner details. The relevant screen appears. Enter the variant data and then return to your starting point.

What is the Function of the Account Group?

When you create a vendor master record, you must enter an account group.

The account group determines

• The type of number assignment
• The number range from which the account number used by the system to identify the vendor is assigned
• Whether or not a one-time vendor is involved
• Which fields screens contain and whether entries in these fields are mandatory or optional
• Which data retention levels below the purchasing organization are allowed (for example, vendor sub-range)
• Which partner determination schemas are valid

Once a vendor master record is created, you cannot change the account group. Only your system administrator is authorized to do so in exceptional cases. (This may be necessary, for example, if a further application comes into use.) In this case, fields that were previously suppressed at the time of creation may be ready to accept input when the master record is changed.

How are the Vendor Master Records Numbered?

Each vendor master record is assigned a unique number (the vendor's account number used by Financial Accounting). You need this number to call up the master record or to enter purchase orders.

Numbers can be assigned on an internal or external basis. Internal number assignment means that the system assigns the numbers. External number assignment means that you enter a number when you create the master records. For external number assignment, alphanumeric numbers are also allowed.

The type of number assignment and the number range are determined through the account group that you enter when you create a master record.

The system ensures that the numbers are always unique. With internal number assignment, the system assigns numbers consecutively from a given range. With external number assignment, it prevents an already used number from being reused.

A vendor has the same account number in all company codes.

Maintaining SAP MM Vendor Master Records

Use

This section explains how to create, change, or block a vendor master record.

Features

Creating a Vendor Master Record

1. Choose Master data
® Vendor ® Centrally ® Create from the Purchasing menu.
2. Enter the purchasing organization and an account group. If you want to use another vendor master record as a reference, enter the account number of that vendor in the Vendor (Creditor) field (under Reference). Press
ENTER.
3. Enter the vendor's address and fill the Country and Language fields. These entries are mandatory. Press
ENTER. The Create Vendor: Control screen appears.
4. On this screen, you can enter the following information: accounting data required by the payment and dunning programs, the data for declarations to the tax authorities, and data required for analyses in Purchasing (such as an industry key). Press
ENTER. The Purchasing Data screen appears.
5. On this screen, enter purchasing-specific data such as the order currency or the key for the terms of payment.
6. Save the vendor master record.

Terms of Payment

Terms of payment represent stipulations concerning the time of payment of amounts due, including the specification of any discounts granted for prompt payment, together with the discount-qualifying periods (for example, the clause "payable in 30 days net", or "discount of 2% if payment is made within 10 days". In the latter example, the discount is deducted from the invoice amount if payment is made within the specified period.

You specify the terms of payment in the vendor master record. They automatically appear as default values in any purchase orders created for the vendor in question; however, you can change them as needed.

Terms of payment can also be entered in the vendor's invoice. These are then applied by the payment program.

Changing a Vendor Master Record

1. From the menu bar, choose Master data
® Vendor ® Purchasing ® Change.
2. Enter the vendor number and the purchasing organization, and select the data you wish to change. Press
ENTER.
3. Make your changes and save.

Displaying a List of Vendors

You can create a list of vendors. This list contains important information on individual vendors: the purchasing organizations for which material was procured from a vendor, the terms of payment, and the blocking status of the vendor, for example.

1. Choose Master data
® Vendor ® List displays, then Purchasing list.
2. Enter your selection criteria and run the analysis.

Blocking Vendors

Suppose you would like to prevent further deliveries from a vendor who delivers goods of poor quality. You can freeze or "block" the vendor account in the vendor master record.

Once you have set the blocking indicator in the vendor master record, purchase orders can no longer be placed with this vendor. The "blocked" status for the vendor applies until such time as you cancel the blocking indicator in the vendor master record.

To block a vendor, proceed as follows:

1. Choose Master data
® Vendor ® Purchasing ® Block. Enter the vendor number and the purchasing organization. Then press ENTER.
2. A screen appears, in which you can indicate whether the vendor is to be blocked for a specific purchasing organization or for all purchasing organizations. Save your input.

You can block a vendor for an individual material via the source list. Source lists are discussed in the section Optimized Purchasing.

If QM is active within the procurement function, you can impose a block for quality reasons. (See Quality Management in Procurement.)

One-Time Vendors

You can create a special vendor master record for vendors from whom you procure goods only once or rarely.

For example, suppose you order goods from a vendor with whom you usually do not place orders, because your main vendor was not able to supply the required items. In this case, you would store the relevant data in a "one-time vendor" master record.

In contrast to other master records, a "one-time vendor" master record is used for several vendors. The purpose of this is to avoid the unnecessary creation of an excessive number of individual vendor master records. For this reason, you may not store any vendor-specific data in a "one-time vendor" master record. When you create a purchasing document with a one-time vendor, the system automatically branches to a master data screen. There you enter the specific data relating to the vendor, such as name, address, and bank. This information is stored separately within the document.

"One-time vendor" master records are displayed, blocked, or deleted in the same way as all other master records.

When creating a "one-time vendor" master record, you must assign a one-time account group. This account group determines that the vendor-specific fields are suppressed. You provide this data when you create the relevant purchasing document.

Maintaining Partners

The business partner "vendor" can assume different roles in its dealings with another enterprise. Accordingly, in a procurement transaction, the vendor is first the order recipient, then the supplier of goods, then the invoicing party, and finally the payee. One or more of these roles may involve different vendor master records.

For this reason, several partner roles (partner functions) can be assigned to the vendor. The variant data is used in the associated downstream logistics and accounting functions.

On the Partner roles (partner functions) screen, the partner roles that are marked as mandatory roles in the partner determination schema of the account group (defined in Customizing) are suggested by the system during the creation of a vendor master record.

In the Number field, you enter a vendor number. The system checks whether this vendor has been created for the current purchasing organization.

The following partner roles are defined in the standard system:

• Vendor
• Order recipient
• Goods supplier
• Invoicing party
• Payee

You determine which of the partner roles are optional and which are mandatory via the Customizing functions. All roles except that of vendor are optional. If no other roles have been maintained, the data of the "vendor" role apply.

The "different payee" is displayed if it has been maintained under the payment transaction data.

To maintain partners in the vendor master record, choose Vendor ® Change. On the initial screen that then appears, choose Partner roles (partner functions).

Partners for centrally agreed contract
You can maintain partners for centrally agreed contracts in the vendor master record and in the contract. If the partners have been maintained in the vendor master record, they are suggested in the contract.

To create partners in a centrally agreed contract, choose Header ® Partners in the contract. The overview screen for partner maintenance appears. Here you can determine the levels at which you want to enter partners. Branch to the screen for partner maintenance and enter the data.

Creating a SAP MM Purchase Requisition - w/o Master Record

Prerequisites

If the requested material has no master record and is to be ordered for direct usage or consumption, you can specify which consumption account is to be charged. This process is termed account assignment.

For example, you can assign the purchase costs associated with a requisition to your own cost center or to a sales order. The account assignment category indicates the category of the account to be charged (for example, cost center or sales order).

You can specify the account assignment category in the requisition or in the purchase order (see Account Assignment).

Procedure

1. Choose Requisition
® Create.

The initial screen is displayed.

2. Enter the relevant data or change the existing values, if necessary.




You can specify that Purchasing is to enter into a longer-term purchase agreement with a vendor (these are referred to in the SAP System as "outline agreements") on the basis of the purchase requisition. If you do so, Purchasing cannot issue a purchase order against the requisition: it can only set up such an agreement (either a "contract" or a "scheduling agreement").

In this case, enter rv (for "outline agreement") in the field Document type.

3. Press
ENTER. The item overview appears.
4. Enter the following information:

– Material short text (short description)

– Key for the purchasing group (buyer group) responsible for ordering the material (in column Pgp.),

– Account assignment category (in column A),

– Requested quantity and unit of measure,

– Delivery date,
(If Purchasing is to set up an outline agreement, you will not be able to specify a delivery date.)

– Material group

– Number of the receiving plant (Plant column) and the storage location (if known).

– Currency (local or foreign)

5. Choose Goto
® Details to enter the valuation price for the material on the item details screen.

The price should reflect the value based on the order unit.

6. If you entered an account assignment category other than
u (unknown), press ENTER in order to enter additional account assignment data (for example, the G/L account number).
7. Save the purchase requisition.

SAP Maintaining Purchasing Data in Material Master Record

Use

Material master records are created when the MM module is first installed. Thereafter, the departments using the material master database are responsible for keeping the information it contains up to date.

Material master records may be created and changed either centrally or by individual departments. In the latter case, for example, the Purchasing Department will be responsible for continually updating purchasing data and, in the same way, Sales will be responsible for maintaining sales and distribution data.

This section shows how the purchasing data in a material master record is entered and changed.

What is a Material Type?

The material type identifies the characteristics of a material that are important with regard to Accounting and Inventory Management. A material is assigned a type when you create the material master record.

"Raw materials" and "finished products" are examples of material types. In the standard MM module, the material type for the former (ROH) denotes an externally procured (bought-in) material, whereas the material type for the latter (FERT) indicates that the relevant material is produced in-house.

The material type determines the accounts to be debited or credited when a material enters or leaves the stores/warehouse, or is used or consumed by a user department. It also determines whether numbers for materials are assigned by the system (internally) or by the user (externally).

Activities

Displaying a Material Master Record

1. To view a material master record, proceed as follows: First choose Logistics
® Materials management ® Material master from the system menu. Then choose Material ® Display.
2. Enter the material number in the Material field. If you do not know the material number, use the Possible entries facility to search for the desired material via matchcode.
3. Enter the selection criteria for the matchcode. When you press
ENTER, the master records corresponding to your selection criteria are displayed.

You can also display a material master record from the item overview of any purchasing document. To do so, choose Environment ® Material from the menu bar.

Displaying Stock Levels

There are two ways to display the stock level of a given material:

• Starting from the material master record

To view the stock level, choose Environment ® Stock overview while displaying the material master record.

• Starting from purchasing documents

While displaying purchase orders, outline agreements, RFQs, or quotations, choose Environment ® Material stocks to display the stock overview screen for a selected item.

Creating or Maintaining a Material Master Record (Purchasing)

This section explains how to enter purchasing data in a material master record.

When Do You Create or Maintain a Material Master Record?

You have to create or maintain a material master record if the material to be procured

• Is not defined in the material master database (that is, the material does not have a master record)
• Has already been defined for a different plant, but not for the plant for which the PO is to be issued
• Has been defined for the correct plant, but the purchasing data for the material has not been entered. This may be the case if a user from another department (Accounting for instance) created a material master record but was not authorized to add the data relevant to Purchasing.

To determine whether or not a material has a master record, try to display the material using the Possible entries facility. In doing so, proceed as described under Displaying a Material Master Record.

Prerequisites

Before creating a material master record, you need the following information:

• Material type and industry sector
• Units of measure, such as the base unit (stockkeeping unit), and the order unit
• Purchasing group (buyer group) responsible for the material
• Accounting data, such as the valuation class, price control, and standard or moving average price

Procedure

To create or maintain a material master record, proceed as follows:

1. From the system menu, first choose Logistics
® Materials management ® Material master, then Material ® Create (general).
2. If the material master record does not exist:
Enter the industry sector in which the material is used (for example m for mechanical engineering) and the material type (e.g. roh for raw materials) in the relevant fields.

Enter the material number only if your enterprise uses external number assignment. Otherwise, the system assigns a number to the material automatically.

If the material master record already exists: Enter the material number and press ENTER .

The Select view box appears. It contains a list of possible user departments.

If a similar material master record already exists, you can use it as a reference when creating a new one. To do this, enter the number of the reference material. A copy of the reference material master record will be displayed. Here, you can make any desired changes.

3. Select Purchasing and Accounting, and PO text (if you wish to enter one) in the dialog box. Press
ENTER.
4. In the Organizational levels dialog box, enter the plant key and press
ENTER. The Purchasing screen of the material master record appears.
5. If no master record for the material yet exists, enter the short text (short description), the base unit of measure, the material group, and the purchasing group responsible for procuring the material.




The short text (short description) is used to identify the material on all purchasing documents as well as documents from other departments. Therefore, you should enter a description that is also meaningful to other departments.

6. Enter the purchasing-specific information for the material, such as:

Order unit
Make an entry here only if the order unit differs from the base unit of measure. If you specify a value in this field, you must also supply the factor for conversions from the order unit into the base unit.

Purchasing group
In this field, specify the buyer or group of buyers responsible for procuring the material.

Purchasing value key
Key defining various values for Purchasing functions, such as reminder intervals and tolerances. The reminder intervals are specified in days and indicate after which periods the first, second, and third reminders/urging letters are to be sent to a vendor with regard to outstanding quotations, outstanding order acknowledgments, or overdue deliveries. The system generates the reminders or urging letters (expediters) automatically.

The underage and overage tolerance limits give the percentage of under- and overdelivery allowed for the material by your firm.

Make relevant specifications under Basic data and Foreign trade: Import.

As part of the purchasing value key, you can also set the parameters Minimum delivery quantity and Standardizing value for delivery date variance on a material-specific basis. These values are used by the MM Vendor Evaluation functionality.

7. Press
ENTER to display the purchase order text screen. The text you enter here is adopted in all purchasing documents relating to the relevant material.
8. Press
ENTER to display the accounting data. Enter the valuation class, price control (key indicating valuation on the basis of moving average or standard price), and the moving average or standard price. The relevant material will then be valuated according to the specified price.
9. Save the material master record.

Alternative Units of Measure

In addition to the base unit of measure, used by the system in managing stocks and carrying out all its computations, other departments can use their own units of measure.

All units of measure other than the base unit are known as alternative units. The following are examples of alternative units of measure:

Order unit
Unit of measure in which a material is ordered. It is the default unit in Purchasing functions.

Order price unit
Unit in which the vendor invoices you. The order price unit is defined in the purchase order or in the purchasing info record. If you have defined an order price unit in the PO, the goods receipt will be recorded in both the order unit and the order price unit.

Sales unit
Unit of measure in which a material is sold. It automatically appears as the default in a sales order and can be changed there.

Unit of issue
Unit of measure in which a material is issued from the warehouse/stores. You can use this unit of measure in conjunction with goods issues and physical inventory activities.

Any quantities that you specify in a unit of measure other than the base unit are automatically converted into the base unit by the system. To make this possible, you must enter the ratio for conversions between alternative units and the base unit (the conversion factor) in the material master record. You can enter this information when specifying the alternative unit of measure.

Variable Units of Measure

In the material master record, you can specify that the material can be procured in a unit of measure that differs from the order unit. If you do not specifically allow this option, you will have to use the order unit of measure defined in the material master record.

If the material can be ordered in more than one unit of measure, enter 1 in the Variable order unit field.

Changing a Material Master Record

When you change a material master record, the system records the change, the name of the user, and the time of the change. This provides an audit trail of changes to material master records.

1. Choose Logistics
® Materials management ® Material master from the system menu. Then choose Material ® Change.
2. Enter the material number and press
ENTER.
A dialog box with a list of specialized areas (corresponding to user departments) appears.
3. Select Purchasing and press
ENTER.
4. Enter the plant key and press
ENTER. The Purchasing view of the material master record appears.
5. Make your changes.
6. Save the material master record.

SAP Master Data in Purchasing

Use

In addition to vendor and material master data, Purchasing is supported in its everyday work by the following additional types of master data:

• Purchasing info record
• Source list
• Quota arrangement
• Conditions
• Vendor evaluation

Features

Purchasing Info Record

Info record is short for information record. The info record contains concise information about a vendor and a material that Purchasing already procures from that vendor. An info record thus represents a material-vendor relationship.

For example, the info record indicates the units of measure in which materials are ordered from the vendor, and the applicable reminder levels. It also shows price changes affecting the material in question. This information can be useful in the process of evaluating quotations to determine the successful bidder.

Info records are created automatically when you order a material. You can also create, change, and delete info records.

See also:

Purchasing Info Records

Source List

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 or under a certain long-term purchase agreement.

The source list supports the user in answering the question: "Which vendors or internal suppliers can supply a material at a given point in time?" It is also used in the automatic selection of vendors for a material.

See also:

Optimized Purchasing

Quota Arrangement

A quota arrangement is a mechanism for determining the source of supply to which a material requirement is assigned. It enables you to determine which is the valid source for the procurement of the material covered by a purchase requisition at any given time. Setting quotas allows you to automatically apportion the total requirement of a material over a period among a number of different sources of supply.

See also:

Optimized Purchasing

Time-Dependent Conditions

These are conditions that are defined centrally, are valid for a certain period of time, and which determine the value of purchase orders. Time-dependent conditions are used as the basis for calculating the effective price.

See also:

Conditions and Price Determination

Vendor Evaluation

Vendor evaluation is the process of analyzing and assessing the performance of your external suppliers. It also constitutes a basis for vendor selection. Vendors are awarded scores for a number of different criteria. Vendors’ overall scores can be used to determine whether they are retained in or eliminated from your vendor base.
For further information on this topic, please refer to the documentation MM Vendor Evaluation.