Expert Guidance in SAP MM: Material Master Record Configuration and explanation

Master Data

Material master record

Vendor master record

Purchasing info record

When we create purchasing documents, the R/3 System copies the data from existing master records as default values into the purchasing documents. It copies data such as units of measure, material short texts and PO text from the material master record. It copies currency, payment data and delivery time from vendor master record and copies price from the purchasing info records.

Material Master Record

The data contained in the material master record is required for many purposes like below

Ÿ Purchasing data for ordering

Ÿ Inventory management data for posting goods movements and managing physical inventory

Ÿ Accounting data for material valuation

Ÿ MRP data for Material Requirements Planning

Ÿ Sales data for Sales order processing

Ÿ Warehouse data for warehouse management

Each user department has a different view of the material master record and is responsible for maintaining the data to support its function.

Material Master: Organizational Levels

n Data at client level: General material data that is valid for the whole company is stored at client level (Basic data 1 and 2).

n Data at plant level: All data that is valid for a plant (Purchasing data, MRP data,).

n Data at storage location level: All data that is valid for a particular storage location is stored at storage location level.

Creating Material Master Record

When we are creating a material master record first we need to select the industry sector and material type, then we need to select the views and finally we need to select the organizational levels for which we want to create the material.

Material Type

In SAP we have Material types like Raw materials (ROH), Operating supplies, Semi-finished products, and finished products, for example.

The material type controls:

The type of number assignment (internal or external).

The permitted number range interval.

Which screens are displayed and in which order.

Which user department specific data (view) is suggested for entry.

Which procurement type is permitted for a material; that is, whether the material is produced in house, procured externally, or whether both options are allowed.

Industry Sector

When we create a material master record, the industry sector defines which screens are displayed and in which order and which industry-specific fields are displayed on each screen.

Data Screens in Material Master Maintenance

The data screens used in processing material master records can be subdivided into the following types of screens:

Main work level

These are the screens for each user-department, such as basic data, materials planning, and so on.

Additional data level

These are screens you use to maintain additional information, such as units of measure, material descriptions, consumption values.

Purchasing Data in the Material Master Record

In purchasing data we can specify the purchase order unit, under- and over-delivery tolerances and reminder levels, the Source list requirement, Quota arrangement usage and Automatic PO allowed indicators.

Valuation Class

We maintain the valuation class in the Accounting view of the material master record. The valuation class allowed for a material depends on the material type, and is configured in Customizing. The valuation class links MM with FI and is linked to the G/L accounts and does automatic account determination.

Material Valuation Procedures

Material valuation can be carried out according to the moving average price procedure (V price) or the standard price procedure (S price). In the standard price (price control “S”), the system carries out all stock postings at a price defined in the material master. Variances are posted to price difference accounts. In the moving average price (price control “V”), the system valuates goods receipts with the purchase order price and goods issues with the current moving average price. The system automatically calculates the moving average price upon every goods movement by dividing the total value by the total stock quantity. This means after posting every new GR for a PO the moving average price changes.

Creating a new material type

We can create a new material type in IMG in below path

Click above

Select Material type ROH and click Details button

We can see Field reference ROH, SRef, material type ROH

External no. assignment w/o check is checked

We can see the user departments for Raw material

External Purchase orders allowed (indicator 2)

Internal Purchase orders not allowed ( indicator 0)

Scroll down

Price control is V – Moving average price (This means when we create a material of material type ROH the Price control will be V by default.

Account category reference – 0001 (Account category reference is linked to valuation class and explained in next page)

Double click on Quantity/value updating

Our valuation area is 1111 and qty and value updating is checked in our valuation area. This means whenever we create a PO, Post GR and Invoice for the material, quantity and value is updated in Accounting 1 view in the material master record of the material for plant 1111.

We can create a new material type by copying from a standard material type like ROH/HALB and change the below

Number assignment

Procurement type

User departments or views

Valuation details for account determination

Account category reference is linked to valuation class in below IMG path

SPRO > Material Management > Valuation and account assignment > Account determination > Account determination without wizard > Define valuation classes

Click valuation class

We can see account category reference 0001 is assigned to valuation classes 3000, 3001, 3002, 3003, 3004 and 3008. This means when we create a material of material type ROH, we can give any valuation classes from above in Accounting 1 view)

Back

Click Material type/account category reference

Transaction code to create material is MM01

Change material MM02

Display material MM03

Exercise

Create a material master record for Raw materials. The material is to be used in plant 1111 first. Use the data below.

Material: MAT-351125

Ind. sector: Mechanical Engineering M

Material type: Raw material ROH

Select view(s): Choose the views Basic Data 1, Basic data 2, Purchasing, Purchase Order Text, and General Plant Data/Storage 1, Accounting1 view

Organizational levels: Plant: 1111 (Hamburg) Storage Location. 1111 (Receiving area)

Basic data: The material description is Plate for motor casing 400 mm

Piece is the base unit of measure for the material.

The material is assigned to material group 00120 Pumps.

Purchasing:

The purchasing group 001 is responsible for procuring the material.

Urging letters about undelivered goods should be sent after 10, 20, and 30 days Under or over deliveries are not accepted. Choose the relevant purchasing value key 1.

It takes 3 days to process goods receipts for this material.

Purchase order text:

Maintain the text below: “The delivered material must meet our technical specification number 125769”.

In Accounting 1 view use Valuation class 3000

MM01