Understanding an Invoice Discount Example for Engineering

On invoice discount example for Engineering

in material Master each and every field I'm going to explain very detailly so we can start with the material Master basic data one view under the basic data one view the first topic material number so what do mean by material number in material Master what is the purpose the sap material number is the primary Master data element of the scpm module it is used to both describe and record history of purchases made the material numbers for each unique material is generated by the sap system materials are linked to account code vendor price descriptions and other informations needed for the execution of a structured purchase order using this material number when creating a purchase document a material can be searched by its material number descriptive name or selected from drill down from Material group name once selected the material short text can be amended to more precisely describe the item and unlimited long text is also available so what is the use the material number uniquely identifies your material in the sap system as a rule a material Master record must exist for each material subject to inventory management within your form this record is store under the material number why do we need this a structure purchase order is the most efficient use of the sap material management system a structured sap purchase order is one in which a vendor is identified and an outline agreement is in place within sap the material number is the primary linking mechanism within sap mm module it can reference multiple data source within sap and Link them to the purchase order for reference agreements vendor terms and conditions bill off materials so we can say Etc setting up a material number is not a simple task since it can link into a significant number of data sources the link also must be maintained and the links updated as things change use of materials allows as to get a better picture of what we are purchasing thus allowing strategic purchasing decisions to be taken to get leverage for better prices terms and conditions from our supply ERS by concentrating purchasing power so without a material number the system allow us merely to report on who we are buying from it provides no informations about what we are buying so each department will have access to purchase reports to allow determination of spending patterns of their purchasing groups are against suppliers and material groups and materials sap provides the ability to link supplier Master data to material Master data through a mechanism so material number is very very important in the material master so here see uh some examples under the staring assembly so we have the power staring pump so 71 015 this is my unique number power staring pump so this is my unique number number for Tire and this is my unique number for stabilizer so system will have unique number each and every material in our sap system material Masters so second one industry sector so first of all what is mean by industry sector industry sectors indicates the assignment of your materials to a certain branch of industry for example uh plant engineering and constructions chemical industry mechanical engineering and pharmaceutical Industries so what is the use like the material type the industry key also has important control functions it determines for example the selection of data fields on screens or the screen sequence the subdivision into different industry sectors is necessary because for example a material chemical industry such as a chemical Solutions differs from your material in mechanical engineering in its basic characteristics in the standard version of SCP system the following industry sectors has been defined for the material Master record so the industry key we have to create by using on digigit ID so a plant engineering and construction C chemical y mechanical engineering P pharmaceutical so these are all the standard industry key available in our SCP systems so then material type in SCP material management module the material types are the materials which are having similar attributes are categorized together and assigned to a material type it is a classification of allowed material into material types based on the material Master material type controls the following functions number range assignment it may be internally or externally field selection for example which fields are mandatory which fields are optional which field we can hide or we can make it display then quantity and value basis external procurement or internal procurement which value classes are to be allowed so these metrics controlled by material type so in SCP standard systems we have the standard material type service spare parts finished product semi-finished product pipeline material raw material consumable materials packaging non-stock materials these are all the standard material type in our SAP systems so different type of material types let's say raw material type which means child parts we can purchase from our suppliers then subassembly which means semi-finished product material type so we can assemble internally or we can manufacture in our Factory or in our manufacturing plant the final one is finished goods or final assembly so this finished goods also manufactured by our company or our plant so the next topic material description your short text describing a material you can enter this text in the material Master record in as many languages as you like though only one text is allowed per language you normally enter the material descriptions in the log on language on the First Data screen you process since the material descriptions is the same for all user departments it is important to agree on your suitable descriptions when the material Master record is created changing your material descriptions the material descriptions can be changed on any data screen in the material Master by user authorized to change the field valid at the client levels so the next one base unit of measure in Industry terminology we used to call us unit of measure U so these are all the examples base unit of measure examples so the system distinguishes between the following unit of measure we used to call this base unit of measure this is the unit of measure in which the stocks of your materials are managed system converts all quantities entered in other units to the base unit of measure so the second type is alternative unit of measure so individual departments may have their own unit of measures for example purchasing may use your different units than the sales or warehouse management all units of measure other than the base unit of measure are referred to as alternative unit of measure the system supports the following alternative unit of measure order unit which means allows a material to be ordered in a unit differing from the base unit of measure the order unit is proposed automatically in purchasing functions where it can be changed second type is sales unit allows the material to be sold in a unit differing from the base unit of measure the sales unit is proposed automatically in the sales order where it can be changed third one is UN need of issue unit of measure in which the material is issued from the warehouse it allows conception stock transfer transferring postings and physical inventories to be recorded in your unit differing from the base unit of measure and from stock keeping unit so the final one is warehouse management unit unit of measure in which materials are managed in warehouse management for inventory management the system convert the quantities entered in the virus management unit into the base unit of measure for example if a material is normally managed using pieces as the base unit of measure but several thousands pieces are contained in your box it may be more appropriate to Define your wus management unit that is more managed for wus management purpose so the next field in material Master basic data one view material group so what do mean by material group material groups are defined at client level you can Define material groups in SCP to differentiate the various materials for example an electronic manufacturing organizations can classify computers as desktops television as Electronics speakers as sound systems Etc each classifications have its own individual group material which are having the same characteristics are grouping together and assigned to a material group in a it is not a Control Function like material type where the material groups are used to generate the reports this is only for reporting purpose so these are all the examples like all the fers coming under one material group all the rer items can coming under one material group all electrical component coming under one material group all plastic component coming under one material group so like this we can classify different material group so these are all the SCP standard material group available in the SCP standard systems so the next one what is mean by old material number in material Master field under the basic data one View so old material number means the number under which you have managed the material so far or still manage it for example in another system or in a card index use you can use this old material number to systematically search for material Master record bya match quotes So the next One external material group so what is mean by extern material group it's normally used for provision materials also the relevant supplier can defer depending on the material requested you can use this external material group to distinguish you supply relationship you suppli relationship by different material the external material group assigned in the relevant material Master record is used to differentiate the supply Rel relationships when you create a supply relationship you define time period for the relationship as well as the external material group for which the supply relationship is to be used if a purchase order is created for your material the system determines the external material group from the material Master record and uses the supply relationship to determine the related Force element material requirements therefore arise automatically for the force element that is responsible for supplying this material so the next one division in material Master basic data view division that you see in SCP is actually the material division when you create materials it can belong to One Division of your company say for example if you take unil L there are many divisions there so they have food and Beverages and they have Health Products and they have products for woman they have products for babies so now these are broad classifications so now if you have material T it can fall in food and beverage division so here we have some of the examples food and beverages health care products Health Products beauty products detergent products so these are the different divisions in the material master so this is only for examples so use of division it can help you in creating different pricing it can help you in reporting and Analysis also it can help you in customizing some of the operations within sap so then why does sales area have division in it the reason I think is simple the division in sales area can give you flexibility in the above example we know that there are a lot of Divisions but you want to have one common division to sell all your products to customers then you can have only one division as common Division and use rest of the divisions to price and item or do an analysis so now suppose you are an organization which supplies materials to Military and also to commercial market so then you want to restrict all the customers from the commercial Market to buy materials which are in Military Division then you can create two separate sales areas and work around it even distribution channels can be used in this case in my experience these are all the things that I have seen and also what I understand is the division of material is for pricing and subsequent report Basics if you want to break down the sales based on the division for each sales organization and distribution Channel then you should have the division in the sales orders if divisions should come in sales orders then it should be there in the sales area so I hope now you understand what is the difference between material Division and sales divisions so the material division helps to creating different pricing and also for reporting and Analysis and we can customizing the operations within SCP this is the purpose of material division so the next field in the material master basic data one view lab or office so what are all labories offices in ACP Laboratories design offices are mostly used in sap production planning PP module to identify the person responsible for a Bild of materials mostly if the material is the chemical component this field is mandatory in the basic data view on the material Master record so this lab and office is the responsible persons especially used for chemical Industries so the next field in the basic data one view product allocation product allocation functionality allows one to manage the supply of products which do not follow a fixed pattern of Supply the system can perform availability checks together with the product checks in production allocations you can allocate quantities for specific materials at various hierarchial combinations and in turn reverse this quantity for the characteristics so these characteristics are hierarchial combination can be either the sales area data or this can be even up to customer groups or customer level the precise planning and controlling mechanism is one of the atmost important for the execution of competitive order processing with guaranteed efficient and timely delivery to the m customer of the required order quantity un forcing problems such as product deficits or increased demand can have critical consequences for order processing and must be brought under control as soon as possible the product allocation is a function provided by the sap R3 systems for carrying out these control options intended to help you company to avoid critical requirements and procurement situations this should enable you to keep production to your minimum at the same time as allowing you to reach quickly to bottlenecks and changing Market situations this is example for for production allocations material a 5,000 pieces so the customer a allocated 3,000 pieces customer B allocated 1,500 pieces all other customers allocated 500 pieces the total quantity coming under 5,000 pieces so the next field product hierarchy in the basic data one view so what is mean by product hierarchy product hierarchies are the the domain of material management the product hierarchy is assigned to the material Master record this hierarchy is broken down into two specific levels each level containing into own characteristics the product hierarchy is recorded by the sequence of Digit within a hierarchy number this hierarchy numbers may have a maximum of 18 digits with a maximum of nine levels the custom product hierarchies can be maintained in/ in v/ 76d code product hierarchy number of characters at various levels in the standard systems the product hierarchy consist of up to maximum three levels the first and second level have five digit and the third level has 8 digit the maximum number of Digit is 18 and the maximum number of level is N9 in the CP standard system you can Define hierarchy Noe at the individual levels of the product hierarchy so for example every finished product will have product hierarchy so the level one 01 paint level two trip 01 trip 02 interior emultion exterior emultion level three 001 0 0 2 white based color based these configurations to be done in v/ 76d code then when you choose the product hierarchy every level will appears one by one to be selected so this is example for product hierarchy the level one paint so 1 0 under the paint we have two different categories interior emultion exterior emultion so we can have separate number for interior and exterior emultion under the interior emtions we have white board and color board the same exterior utions we have white board and color board so now see here under the interior Evolution whiteboard we have three different number the first one representing paint the second one representing interior Evolution third one representing white board the same method goes for all the level three materials so in basic data one view the next topic xplant material status in the complex world of SCP managing inventory effectively requires control over every aspect of your materials xplant material status plays the vital role by offering a way to define your materials usability across all plants within your organizations or company so first of all what is mean by xplant material status simply put it xplant material status is a two character code determining whether your material can be used in various functions when all your plants it acts as a company specific flag allowing you to restrict or enable material usage based on its current life cycle stage or other relevant criteria so why we need explant material status so there are several reasons why expand material status as a valuable tool the first one is control procurement activities by setting a block status you can prevent users from creating purchase requisitions or purchase orders for a particular material across all plans this is useful for absolute asardes or undergoing reformulation materials second one is improve Inventory management xplant material status helps you identify materials that requires special handling or nearby the end of the life cycle this allows for better planning and prevent unnecessary inventory holding in our plant or in our company third one is enforce standardization if you have standardized materials across plants xplant material status can ensure consistency in their use so usage of xplan material status once configured the plan material status is assigned to a material in its primary data view within the material Master the transaction code mm01 or mm02 this status then affects various functionalities across the system such as procurement Inventory management and production planning so what is the benefits of explant material status management by effectively utilizing xplant material status you can achieve several benefits increase efficiency streamline procurement process and avoid Errors By restricting absolute or unvaluable material usage second one is improved cost control reduce unnecessary inventory holding cost and ensure optimal material utility ation third one is enhanced compliance facilitate adherance to internal policies or regulations regarding material usage so the next field in the basic data one view valid from date so in materials planning the valid from date of the material status is considered only if it is preds or is the same as the planning date that is if the valid from date is later than the planning date it is not considered even if it is within the planning Horizon example this is my planning Horizon this is my planning date validity from date and time in this case the valid from date is not considered in materials planning since it is later than the planning date in purchasing the valid from date of the material status is checked against the current date examples you block the materials for purchasing from May 1 and the year let's say 2024 your purchase order is created for the material on April 28 the year 2024 with a delivery date of May 10 in year 2024 in this case the validity from date May 1 20 24 is checked against the purchase order date April 28 2024 and the purchase order is allowed so had you created the purchase order on May 3 in 2024 an error message would have been issued so this is the example for the valid from date so the next topic assign effectivity parameter values slash override change numbers I will try to explain about parameter effectivity and its usage and its relevance in any manufacturing process parameter effectivity is used to manage multiple configurations of your billof material and routing to make it easy to manage all possible units using the same super billof material and super routing when we need to manufacture a specific unit the super billof material and the super routing is filtered to retrive the master data relevant to that unit only and this master data is assigned to the production order suppose I have a change request which is valid for your certain bill of material with this change request we can actually govern the time dependent aspect of the billof material for example from when the changes will be valid with the help of the field valid from date this is every simple and most commonly used scenario so now if you want to change the bill of material based on the serial number or customer Etc so here I'm showing the examples so we have three customer customer a customer B and customer C for a car manufacturing firm the customer B always wants a vehicle with the sign board of driving school on top of the car so as soon as customer B is added in the sales order the bill of mat item is selected and making any changes to this via engineering change management is also possible this can be easily achieved via the usage of parameter effectivity so the next field in the basic data one view General item category group in general item category group is used in the sales process like a bill of material where we have higher item category and the default item categories so General item category group is an extension item category group example if one select item category group as a NM NM which means the standard item category group but under the item category group NM can further be classified as service item packaging item or normal item using general item category group also General item category group is maintained at client level this field can be maintained from basic data view of material Master thus in case item category group is missing then the general item category group used for item category determination so the next field in the basic data one view authorization group so what is meant by authorization group the four character authorization group provides another level of protection to objects Beyond per lied activities for example creating changing displaying or deleting the data to carry out an action against an object with authorization group requires a user to have a role with with maintained values for the combination of activity and authorization group in materials management Master data authorization group is checked with below authorization object one is material type second is material group third is materials fourth one is various combination of options above sample Matrix for material type authorization groups so here the configuration material type and the authorization group different material type with the different authorization group so here role maintenance so authorization group is 001 which means the related to the material type ft finished product you can create change display and delete so this is for all the material types then the role two authorization group is at 001 can able to create change display and delete but the second material type ha wa authorization group is2 can able to display only the same for zat the matal type zat also you can make it as a display so then the RO three Ro four Ro five so I'm taking five examples So based on the different material type with the different authorization group you can make the combinations Matrix based on the client requirement for each and every users so in sap basic data one View the next field cross weight net weight and weight unit the concept of cross weight and net weight is like for example if I'm selling one bottle of edible oil then in that case the weight of the edible oil alone is let say 1 kg 1 kog and the weight of total bottle bottle weight plus edible oil weight which is 1.1 kg in this case 1 1 kg becomes grass weight and 1 kg the edible oil itself net weight so the kilogram is weight unit now if you are further using the packaging feature of sap and packing these pules in a cotton box then at the time the cross weight will be sum of cross weight of all bottles plus the weight of cotton box we will also get added to the grass weight of the total deliverable product so let's say edible oil weight 1 kilog bottle weight1 kg so then the grass weight 1.1 kg n weight 1 kg so if you're going to pack all this bottles under one cotton box or pallet then the cotton box or pallet weight also added in the cross weight so the next volume and volume unit so here volume means so we can enter length bread height and width of the product so here volume unit so you can measure like length of the product and height of the product width of the product then size and dimensions this is only a text field hence the data store here will only be a text and not actual dimensions we to fill data in length width and height Fields individually so then e/ UPC and Ean category so e is nothing but European article number or Universal product code UPC means the international article number also known as European article number r e r UPC is a standard describing a barcode numbering system used in global trade to uniquely identify a specific product typically a are 12 digits with the last digit being a check digit so will be assigned automatically in the material master so these numbers helps customers and Warehouse uniquely identify a product using barcode scanning or Ed Transmissions business are required to purchase an EA number range before it can be set up in sap a can be internal or external you use internal if you have purchased an e in range and you want to sap to generate numbers from that range or external if you are using your own number range so then what is mean by competitor competitors are managed in the SAP systems as customers of your particular account group this account group group defines internally that the customer is the competitor you can store company personal and any other data for each competitor so what is the use of this competitor entity the competitor number in the material Master record serves to identify a competitive product as that of a particular competitor products can be contrasted and compared at different hierarchial levels so so this allocation of One's Own products and competitive products to the product groups so then material group packaging materials so the packaging materials are intended to enclose or hold together the materials that are to be packed in addition the materials that is to be packed can be packed into or onto the packing material the packaging material can be a load carrier the most important packaging material include cruds boxes containers and Etc so what is the use you have to maintain the material Master data for each packaging material you want to use when creating material Master records for packaging materials enter either material type VP which is nothing but uh the material type for packaging in a CPS standard system or a customer specific material type that you have all set in customizing material type VP contains additional packing relevant field in the sales General plan data screen you can use the field selection to make the additional field available for input for all the material types the grass weight and the volume that you enter in the material Master have special significance for packing when you create a handling unit hu this is system automatically copies the packing materials Master data and uses the grass weight and volume as the packaging materials so the integration part packaging materials are special types of materials that can be used for packing or for transporting goods during packing you must always specify a packaging material so that handling units can be created so these are all the examples create pallet box container for our packaging materials so then the next field product composition what do mean by product composition one client distributes forat DRS there may be some cases they have to sell the product which is not in stock in those cases they will sell some other drug having same composition so we need to maintain the composition in material Master for this we activated specification assignment screen and created new specification type equal to composition which is nothing but composition now we wanted to maintain the main composition in the screen which will be accessible by particular user group so most of the time the product composition used by uh fora Industries to manage the material shortage so then the next field reference material for materials packed in same way material Master record that serves as a template for packing instructions for materials that can be packed in the same way so what is the use the material for which the reference material is entered in the material Master record can be packed with special packing instructions for the reference material for example the material Force 1 1 01 and 4711 02 can be picked in the same way for both materials the reference material number is 4711 is entered in the material Master record so the next two digit 01 and 02 can be packed in the same way if you now create your packing instructions containing the reference material 4711 as an item of item Type R both material 471101 and 4711 02 can be packed automatically using this packing instructions so we need to set up the packing instructions based on the requirement so then languages maintained basic data text during execution of uh material Master creation or materal Master edit you can change the text in multiple languages through additional data in the tab so next material Master basic data to view so under the basic data to view the first topic production SL inspection memo so we want to maintain your production memo on material Level for the print out on production order paper material Master text like a basic data text inspection text internal command are all used for specified functions the next field industry standard descriptions such as ISO so description of the material in ance with the appropriate industry standard such as Ansa or ASO standard this field is purely for informations so the next one page format of production memo page format of the materials production or inspection memo the Ansa are ISO paper size standards So based on the standard size the recommended standard size we need to set up the phage format of production memo as per ISO standard for example a z paper size a0 = to 841 into 10189 MM the paper size A1 594 into 841 mm and so on so these are all the standard paper size as per the Ansa or ISO standards and this uh field also purely for information purpose so then the next field basic material so what do mean by basic material when you maintain your material Master record any basic material that you specify on the basic data screen in the standard SCP R3 systems is checked against your table of basic materials that you can specify in customizing for more information see the documentation for the activity Define basic materials in customizing screen for the material master so the next field in the basic data to view manufacturer book part number the concept of manufacturer book part number arises when you sell variance of the same material to your distributors or resellers who may not distinguish between them manufacturer book pot number is an um under which you group such materials you maintain your material Master record for each manufacturer book part number you assign manufacturer book part number to each DRM relevant material in the material Master record of the material so the next field medium so what is mean by medium the medium that is transferred through the link between the two technical object two pumps created in the system as pieces of equipment are linked with each other by means of the piece of equipment pipe the pumps Supply water through the pipe and therefore the medium in this case is water so we can transfer the water from one pump to another pump by using the pipe so here the medium is nothing but water so the next field in the basic data to view dangerous goods indicator profile the dangerous goods indicator profile can only be used if you have environment and health and safety is present in your system it is basically used in EHS module So Below are the basic DG profiles present in EHS first one is relevant for dangerous goods checks and documents second one is relevant for dangerous goods if you want other DG profile you need to configure in our SCP systems based on your requirement the next field environmentally relevant specifies that this is an environmentally relevant material so the next one indicator in bulk SL liquid indicator that shows if the dangerous goods are to be transported in bulk usage you use this indicator to Control Data output like aard identification number for example on transport documents so then the next field highly viscous indicator that shows if the material is a highly viscous substance you use this indicator to Control Data output or transport document so then the next field under the basic data to view segmentation strategy to efficiently plan your requirement it is necessary to fulfill newly arising requirement such as sales orders with existing or future stock for example uh purchase requisition if you have defined the segment for your material you can assign the stock to the requirement using these segments how requirement segments are assigned to stock segments this kind of segment takes place during available to promise ATP check the material requirements planning in MRP segmentation strategy is also important for the following requirement elements and stock elements for externally procured materials during planning run for example the independent requirements and the Fulfillment of those for conception of planned independent requirement using the actual customer requirements during the planning run so the next one design documents assigned number of the drawing that exist for this object together with the document version the document number is used as information for Technical Services it is displayed in various list subdivides the document into groups that are subject to the same organizational process so where we are using this document together with the document number and the document version the document type represents the key for document management it is the main Criterion for controlling document management the document type controls field selection and the available status for a document info record the next one is document version version number of an inhouse technical document for this object so then page number of Doc docment number of the pages in the document on which the material can be found so then document change number number that indicates the change status of the drawing the next one page format of document the page format of the internal technical document for this object so then number of sheets number of pages that the technical documents contains so then Cross plant configurable material alha numeric key uniquely identifying the configurable material unlike the plant specific configurable material the Cross plant configurable material is valid for all plants so what is meant by material configurable so the configural material is useful if you have a large number of combination of parts that go into your product it means different permutations and combinations of the parts of same material if you maintain a unique material code for each combination you require a large number of material numbers so the material type K8 km8 at may may be used in such a case where you maintain just one generic product code a super billof material is maintained for such a material consisting of all possible Alternatives your routing is also maintained consisting of all possible operations that could be used typically the configural material is used in make to order environment however frequently ordered configuration may be planned with a material variant which needs to have a material Master record the material variance may have stock and value depending upon characteristic values chosen at sales order entry and sales order B is created routing operations are also chosen depending upon which BM components are assigned to them let me show you some examples for configurable material so here I'm going to purchase one bicycle the bicycle we have two types one is gear type another one is non-gear type so in gear type I have three different gear ratio and I have five different suspension and I have three three different sheets so let's say the finished goods variant is my bicycle so the next level it is shows as a characteristics which means the major component under the bicycle so the flexi gear standard gear suspension and seat so under the flexi gear we have three variant Sports 10 is 4 hybrid 7 is3 City 6 is2 under the standard gear we have only one gear ratio 6 is2 under the suspensions I have three types mono flexible hydraulic suspensions under the seat I have three types heavy medium plush for example as a customer I'm going to purchase one bicycle and I can choose what kind of gear ratio required either it is coming in flexi gear or standard gear and what kind of suspension required and what kind of seat required so as a customer I can customize my bicycle So based on my requirement so my client going to assemble the product and they going to sell it to me so this is the example for configurable material so we have different combinations we can choose based on our requirement the individual requirement so the next field is APN code identifies the materials that are controlled by the Brazilian oil agency this is called APN code so the next one product group type product group types are your prerequisites for the formation of product groups product group type and product groups facilitates the grouping of similar products the product group type defines the Criterion ing to which the product group are formed so then the product group grouping of products of the same type defined in customizing for the product Master product groups are assigned to a product group type which is similarly defined in customizing for the product Master while the product group type specifies the criteria by which grouping takes place product groups represents the instance of such a grouping for example uh small medium large in Metal Master third view extended surface SP plan so this future enables you to perform planning functions specific to Service Parts and provides transparency thought to supply chain throughout the supply chain right from the moment demand occurs through to the delivery of the product for example you can perform the following activities you can capture and manage demand for your location product to generate a demand history you can plan the optimal stock of location products using the planning service manager PSM you can react flexibility to change demands and determine the best forecast [Music] model so for example constant model Trend model seasonal model so these are all the examples and for your location product and use stability rules to prevent two rapid changes to the forecast model you can organize replacement planningin bills of distributions you can determine the distribution of goods within a bill of distribution you can balance excess and shortages at individual locations by adding them to inventory balancing areas you can analyze extended service for planning in sap analytics Cloud we used to call this the shortcut sa so fourth view in material Master purchasing view under the purchasing the first field purchasing order unit of measure specifies the unit of measure in which material is ordered enter a value in this field only if you want to use a unit of measure differing from the base unit of measure in material Master basic data one view if the field does not contain an entry the system will assume that the unit of measure is the base unit of measure which means which is available in the basic data one view so you can convert the purchasing order unit for example from 1 gallon to 3.785 L this is the conversion variable purchase order unit active in the material can be ordered in more than one unit of measure enter one in the variable order unit field this setting adapted in the purchasing info record and allows you to enter an order unit that differs from the one in the purchasing info record when creating or maintaining a purchase order or Source list so the next field in the purchasing view plant specific material status so the plant to specific material status indicates whether for a specific plant the material may be used in the following areas like materials management for example in purchasing and in Inventory management second one is production planning and control third one is plant maintenance and fourth one is warehouse management so what is the use of plant specific material status so the plant specific material status restricts the usability of the material for the plant concerned that is it defines whether a warning or ER message is displayed if you include the material in the particular function for example the material may be a part under development or one to be discontinued so the next field tax indicator for material in purchasing in purchasing there might be requirements of defaulting of tax codes in purchasing documents for various conditions of material plan bant and account assignment the tax indicator is used in the automatic determinations of the tax code in purchasing the tax code can be determined automatically within the framework of price determination via the pricing conditions the tax indicators can be derived from the material Master record customizing or the purchasing document the system determines the tax code from the combination of these tax indicators if the tax scode can be determined automatically via conditions it takes procedure over the tax code that has been maintained in the purchasing info record tax indicators there are three types of tax indicator in purchasing tax indicator for material tax indicator for plant and account assignment and all the defined in spr as Ender so in purchasing view the next field material qualifies for Discount in kind this function allows to get a product free of charge in the form of free Goods when a certain quantity of product is ordered discount in kind can be in the form of free or bonus Goods free goods are of two types inclusive bonus quantity and second type is is exclusive bonus quantity so what is inclusive bonus quantity free Goods that are part of order quantity but not included in the invoice the quantity units of the free Goods delivered or the ordered Goods must be the same the ordered goods and the free Goods both involve the same material example we order 10 CHS and vendor delivers all the 10 pieces declares that one chair among them is free and invoices only for 9 pieces this free goods are inclusive in the total quantity ordered so we are ordering 10 share so the vendar says if you're buying 10 chair so we will give one free chair free of cost so which means the invoice going to be generated only for n ch second type is exclusive bonus quantity here in addition to the purchase order quantity a certain quantity of materials are guaranteed as free Goods the larger quantity is delivered than the order whereby no charge is made for the additional quantity delivered the materials delivered a free Goods do not necessarily have to be the same as the material orders example when five tables are ordered the vendor supplies one chair as free Goods therefore if you order five tables we receive a chair as free Goods this is exclusive bonus quantity which means not necessary in the same material so the next field in the purchasing material fright group the material Freight group is used to group materials so that they can be classified ing to Freight code and class use fright codes and classes in your fright code set or determined by the material fright group The Freight code set is used to determine fright cost and for common with Service agents so the next one indicator automatic purchase orders allowed automatic purchase order creation is one of the most important functionalities in sap material due to this functionality purchasing team can save time from the manual work in this document I have provided the settings required to create purchase order automatically I hope this document will be helpful to you as I am providing with the screenshots transaction code for automatic purchase order is me 59n step one material should have the flag for autoo in purchasing views as shown below step number two automatic purchase order flag should be activated in purchasing data of vendar Master so the T code slash in BP step number three Bend has to be fixed in Source list this is an optional activity because vendar can be manually given during purchase retion creation T code to create Source list /me 01 step number four info record should be maintained for the vendor and material combination as invoice re is the source for Price tax code Etc so we can maintain under the T code m R M2 step number five create a purchase requisition with required quantity if you don't create Source list with the fixed vendor vendor should be given in purchase requisition if Source list is already created assign source of Supply needs to be clicked this will update the vendar details in T code M 51n step number six purchase orders can be created automatically as per the purchase requisition or plant or material as per the requirement transaction code which we used to run this is me 59n if you want to create po against only one PR PR can be given as a input if you want to create po against all the PRS of your material the material can be given as input depends on the requirement input can be given as shown below I have highlighted few important input fields in the input screen of me 59n so here we need to mention per company code and per requisition and material number based on the requirement so display of the purchase order is provided below int code me23n so this purchase order automatically created based on the purchase requisition so the next field in the purchasing view batch management SCP batch management is used for a similar functionality to identify your material by a unique number that processes some specified informations this functional it is activated in SCP based on the business requirement that products produced and procured need to be identified separately for tracking purposes so this batch management used for tracking purposes so the next field in the purchasing view purchasing value key purchasing value key is useful for setting reminder for the material you can find in material master in purchasing view purchasing value key determines the following things the first number one reminder keys there are three keys which determine in how many days before or after the vendar has to be reminded are urging letters for the material procurement step number two over and under deliveries tolerances step number three order acknowledgement requirement in purchase order it gives all the conditions in which the procurement is made you can have different purchasing value Keys which has to be customize in sap IMG Metal Management under the purchasing tab so Define purchasing value keys so the next field in the purchasing view Goods receive processing time in days number of work days required after receiving the material for inspection and placement into the storage locations in a particular plant so this is Goods reip processing time in days so normally uh we used to put 1 Hour 2 days to receive the goods so the next field post to inspection stock if you set this indicator the quantity of the material will be posted to inspection stock during a Goods M if the indicator is not set the material will be posted to unrestricted use stock only the quality management department can post the material out of inspection stock if the quality management component is active for the inspection proc in functions inspection Lots will also be created so now I'm going to show you in our SCP system so how the stocks are defined go to sap enter the T code /n mm B enter so here we need to enter material remove the plant ID and then execute so now now see here so the stocks are coming under unrestricted use which means this quantity we can use at any time ready to use so here we have called inspections so if the post to inspection stock indicator is set for a particular material Master the immediately stock goes to under the quality inspections after completing the quality inspections the quality management team will transfer the stock from Quality Inspection to unrestricted use if the post to inspection stock is not set then immediately Goods transferred to unrestricted use directly so the next field indicator critical part specifies whether the material is a critical part that is a particularly important part in inventory sampling critical parts are included in the complete count area the indicator is otherwise for your information only so then the indicator Source list requirement so specifies that the source list must have been maintained in the case of external procurement for a certain plant so where we need to use this indicator if the indicator has been set for your plant your source of supply must be entered in the source list before a purchase order can be created for issue to the source for the plant thank you so the next view in the material Master International Trade import so the first field material group for intrastate in sap S4 now some of the functionalities like product classifications legal control for export Emgo checks and inate Reporting has been provided under International Trade which is part of governance risk and control so the next field in the international trade import CA number for pharmaceutical products in foreign trade the ca number refers to a single R in some cases to a group of chemical substances a material may contain then this substances but will be identical with it exceptionally only it is very common to maintain c number in specifications data base of EHS module and to assign those substances then to materials the specification base is the chemical view including the c number and the material is the logistical view so next field production statistics p d coom number for foreign trade Master data relevant to foreign trade that is used throughout the entire Logistics chain in material management and sales and distribution documents control code for conception taxes in foreign trade normally control code specifies the N to follow by the supply plant for a sale of exports each country will have a set of rules to get follow as a saturator this code specifies the rules or certificates so the next field country SL region of origin of material country of region is used to represent the original country of production or manufacturing this is used in exports Imports for generating legal documents for customers for Customs for supply chain Integrity purposes it is needed to verify the country of origin of of your material prior to receip and also during selling to countries which is require coo as legal documents so C is nothing but country of origin of material so the next field region of origin of material you can enter a region of the country from which the goods originate this information is required for for the Declarations regarding Goods dispatches or Imports and the goods reip and exports which are made to the authorities declarations to the authorities for foreign trade are a legal requirement in many countries so we have to fulfill This legal requirement in material Master view number six purchase order text in the purchase order text view in material master the screen is divided into two sections one the left the languages are listed and the text is on the right there is a create button on the left side where you can creating a long text in different languages so here we have create button so you can use this create button so we can enter the informations in different languages in material Master 7th view mrp1 Under The mrp1 View so the first fielded MRP group so what is mean by MRP group an MRP group is an object which you can use to assign common control parameters to a group of material for planning and organizational purposes you can group group materials using MRP groups each of the MRP group can have its own MRP parameter set you can set the MRP group in the material Master MRP 1 view MRP group can be maintained using transaction code SL n o p by assigning the MRP groups to a set of materials allow planner to configure these materials to behave in a certain manner for planning purposes all the materials in the group would then have unique planning method or unique planning features thus the organizations can device multiple MRP groups with their own planning features and characteristics rather than having one set of planning future set to the plant level so the next field in the mrp1 view ABC indicator indicator that classifies a material as an a b or c part ing to its conception value this classification process is known as the ABC analysis the three indicator have the following meanings a means important part High conception value which means we are going to use daily Basics indicator b less important part medium consumption value maybe we can use a weekly once or two weeks once or few days in a month then the C indicator C relatively unimportant part low consumption values maybe we can use uh monthly ones or 3 months once 6 month once so you use this indicator to determine how the material is treated in the case of status ification for inventory sampling so the next fielded MRP type this is a key which is used to regulate the material requirements planning SCP MRP type also determines how and when the materials is to be planned or to be available for the requirement there are several sap MRP types that have been defined in the standard SCP systems please find the below the list of standard SCP MRP types so let me go to sap I'm going to show you the details I'm going to select one material under the material Master mrp1 view so these are all the MRP type different type of MRP systems so ND means no planning so then PD forecast [Music] consumption R1 time based planning VV forast based planning VB reorder Point planning so VM automatic reorder Point planning so these are all the different type of MRP type so based on the requirement we can use in our material Master the next field in the mrp1 view reorder point in the reorder Point planning procedure the system Compares available Barrow stock with the reorder level if available stock Falls below the reorder level an order proposal is generated the reorder level is made up of the sum of of the Safety stock plus the expected average material consumption within the replacement lead time so therefore when determining the reorder level you must take Safety stock previous conception values or future requirements under the replenishment lead time into account Safety stock must be set at the level which covers both excess material consumption within the replenishment time under the additional requirements which may occur during delivery delays you must therefore take previous conception for our further requirements under the vendors delivery timelines or that of production into account when determining the Safety stock level types of reorder Point planning so we have two types one is manual reorder Point planning another one is automatic reorder Point planning if you choose the manual reorder Point planning procedure you must specify both the reorder level and the Safety stock level yourself and enter them in the appropriate material Master record if you choose the automatic reorder Point planning procedure then both the order level and the Safety stock level are determined by the integrator forecasting program the system determines the forecast values for future requirements by means of historical data from these forecast values the system then calculate the reorder level and the Safety stock level for a particular material so which is specified by the MRP controller under the materials replacement lead time into account so the next one planning cycle key that determines the day on which the material is planned and ordered the planning cycle is planning calender that is defined in customizing for MRP in addition to the planning cycle you can enter a delivery cycle which is defined in the planning calender field for example it makes sense to enter a delivery cycle for the following situation you carry out the planning run and place orders every Monday and Tuesday the materials that are ordered on Monday are delivered on Wednesday and the materials that are ordered on Tuesday are not delivered until Friday so theem so the system interrupts an additionally specified planned delivery time as the minimum delivery time which means that at least this number of days PA between the planning run or the order and delivery so the next one planning Time Fence the planning Time Fence specifies a period within which no automatic changes are to be made to the master plan the planning Time Fence is maintained in work days so the important note it is only used for materials that are planned using an MRP type which includes a firming type the firming type determines how order proposals are to be created or scheduled within the planning Time Fence so the next field MRP controller material requirements planning controller is a mandatory field in material Master it represents the person or group that will be responsible of controlling the material workflow scheduling the material requirements planning controller is the physical person that will be responsible for following the plan planning of the material requirements among its usage within the organizations so the next one large sizing procedure within material planning this is a setting by which we decide how the material will be produced or procured with your lot let's say Coke comes in a crate and one crate means 24 numbers so if requirement is 70 by lot sizing procedure we can decide to have so 24 + 24 + 24 equal to 72 numbers so my requirement is 70 but system will consider as a 72 weekly and monthly lot size means this will propose entire requirement clubbing together in week or month so this is example one create means 24 number requirement is 17 number so by lot seing procedure we can decide to have 24 + 24 + 24 equal to 72 numbers my requirement is 70 based on the large SI I can get 72 numbers so then minimum lot size so what is the definition minimum procurement quantity of a receipt this is my minimum lot size so we we to use this minimum lot size if you define a minimum lot size the system can only create receipts with a procurement quantity that does not fall short of the minimum lot size to recover a requirement whose requirements quantity falls short of the minimum lot size the system must create a receipt with the minimum lot size you can use the minimum lot size for the following standard lot seing procedure the one is lot for lot quantity two period lot sizing procedure three reorder Point procedure the minimum lot size is not relevant for manually creating a receipt here the system always creates a receipt with the required yield example you have defined a minimum lot size of 100 pieces under the assembly scrap of 20% for your product produced in house to cover an uncovered requirement of 40 pieces 50 pieces must be produced all together taking the assembly scrap into account due to the minimum lot size of 100 100 pieces however the system creates a receip with a procurement quantity of 100 pieces so corresponding to the yield of 80 pieces so what is maximum large size maximum procurement quantity of your receipt so where it is used if you define a maximum lot size the system can only create receipts with a procurement quantity that does not exceed the maximum lot size to cover the requirement whose requirements quantity exceeds the maximum large size the system must create several reip ingly you can use the maximum lot size for the following standard lot sizing procedure lot for lot quantity period lot sizing procedure and the reorder Point method example you have defined a large size of 100 pieces and an assembly scrap of 20% for a product produced in house to cover the uncovered requirement of 200 pieces 250 piece must be produced all together taking the assembly scrap into account due to the maximum lot size of 100 100 pieces the system create two receipt with the procurement quantity of 100 100 pieces each corresponding to yield of 80 pieces each and a further receip with a procurement quantity of 50 pieces corresponding to the yield of 40 pieces so which means so the maximum lot is ended quantity and we defined in the system assembly scrap is 20% so to cover the uncovered requirement of 200 pieces so 250 pieces must be produced all together so taking to the assembly scrap into the account so due to the maximum large size of 100 pieces system will create three different receipt first two receipt for 100 and 100 pieces the last receipt for 50 pieces so which means corresponding to the yield of 80% so then the next field fixed lot size when planning used fixed lot size the the system will use the fixed order quantity recorded in the material Master for the lot size calculation if a material shortage exist if the fixed lot size is not sufficient to balance out the material shortage the several lots are planned for the same date until material shortage is eliminated so the next one maximum stock level you use the lot sizing procedure replenishment up to maximum stock level if you want to fill the stock up to the highest possible level or if you can only store a certain quantity of a material due to container size this applies to a tank for example capacity of the tank determines the maximum stock level so the next field lot size independent cost cost that are incurred irrespective of a lot size for each purchase order or production order over the above the purchase order price or production cost use where we need to use this independent cost the ordering cost are used only for calculating the lot size in Optimum lot sizing procedures you must specify the ordering cost in currency of the company code belonging to the plant so the next field storage cost percentage [Music] code so the key concept storage cost indicator is a feuture in a CCE material requirement planning component that allows user to calculate the cost of storing materials it takes into account factors such as the cost of the material itself the cost of the storage space and the cost of Labor associated with the storing and ring the materials this indicator helps user Make informed decisions about their inventory management and storage strategies how to use it to use the storage cost indicator users must first enter the relevant data into a cmrp system this includes information about the material being stored such as its cost size and weight users must also enter data about the storage space such as its s and cost finally users must enter the data about labor cost associated with the storing and retiring materials once all this data is entered the storage cost indicator will calculate the total cost of storing the material so the next field in the mrp1 view assembly scrap in percent percentage scrap that occurs during production of the material if the material is an assembly use the assembly scrap is used in material planning to calculate the large size of the assembly the system increases the quantity to be produced by the scrap quantity calculated so if the material is an assembly specify the percentage scrap as required for example if the quantity to be produced is 200 pieces and you specify an assembly scrap of 10% which means you have to produce 220 pieces then you can get the output of 200 pieces so the next field in the MRP 1 View Talk time talk time is a tool for setting the pace and rhythm of your manufacturing process and aligning it with customer demand as a metric talk time is the amount of time to manufacture each part such as producing one part every 22 seconds as a tool it helps you to Esta flow and eliminate waste in your process so what is the talk time formula talk time is traditionally calculated from available production time and customer demand in other words take the amount of production time you have available for running your process which by convention include budgeted down time and exclude change over and brakes and divided that time time by the number of pieces you need to manufacture to meet customer demand in order to determine how much time you have to manufacture each pieces so talk time equal to available production time divided by customer demand this is the formula to calculate talk time each and every