Purchasing View-->
Purchasing View is a critical component of the Material Management process. Understanding and correctly utilizing key fields such as Purchasing Group, Material Group, and Purchasing Value Key ensures efficient procurement operations, better supplier management, and cost optimization for an organization. By maintaining accurate and up-to-date data in the MM01 transaction, companies can streamline their procurement processes and enhance their overall supply chain efficiency.
1)Purchasing Group-:
The Purchasing Group in SAP MM is a crucial organizational unit responsible for procuring materials. It defines a group of buyers who are authorized to purchase specific materials on behalf of the company. The Purchasing Group is essential in streamlining procurement activities, ensuring efficient communication with suppliers, and negotiating favorable terms and conditions. When creating a material in the MM01 transaction, the appropriate Purchasing Group should be assigned to ensure a seamless procurement process.2)Material Group-:
Material Group serves as a classification criterion for materials within an organization. It groups together similar materials based on certain attributes, such as material type, industry sector, or commodity type. By using Material Group, companies can apply consistent purchasing strategies, analyze spending patterns, and optimize procurement processes for specific categories of materials. In the MM01 transaction, selecting the appropriate Material Group is vital for efficient material management and cost optimization.
3)Purchasing Value Key-:
The Purchasing Value Key in the SAP MM01 transaction allows organizations to maintain specific purchasing-related data at the material level. It helps in defining conditions, such as pricing, discounts, and delivery lead times, specific to a particular material. By assigning a Purchasing Value Key, organizations can customize procurement-related parameters for individual materials, ensuring accurate and precise purchasing information.
Follow Steps->
1)Purchasing Group-> E01.(Raw Material),E02.(Chemical)E03.(Packing Material)...etc
2)Material Group-> ECTRAW.(Active Raw Material),PAC(Packing Material)ECEM.(Chemical Material)...etc
3)Purchasing Value Key-> 1 e.g- 1st reminder 10 days , 2nd reminder 20 days , 3rd reminder 30 days etc...
MRP1: Material Planning Data->
MRP1 is the first level of MRP data for a material. It includes critical parameters that determine the material's planning behavior.The key fields under MRP1 include:1)MRP Type->: This field specifies the type of planning to be used for the material. Common MRP types include Consumption-based Planning (VB), Reorder Point Planning (VM),and Forecast-based Planning (VV).
Reorder Point-: The reorder point is the inventory level at which a new procurement proposal is generated to replenish stock. It is a vital factor for MRP calculations.
Safety Stock-: Safety stock is the quantity of stock kept on hand as a buffer to mitigate unexpected demand fluctuations.
2)MRP Controller-: This field assigns a specific MRP controller to the material. The MRP controller is responsible for executing MRP runs and managing material availability.
3)Lot Size-: Lot size determines the quantity of the material to be procured or produced at a time, based on various factors like economic order quantity or fixed lot size.
Follow Steps->
MRP TYPE->..PD
MRP CONTROLLER-> 904..MRP CONTR PRODUCTION
LOT SIZE -> EX ...LOT FOR LOT OREDR QUANTITY
MRP2 view->:Among its vital components is the MRP2 view, which holds critical information for managing procurement, inventory, and delivery of materials. This blog aims to shed light on the key fields within the MRP2 view, focusing on the procurement type, shelf margin, and planned delivery time key fields.
Procurement Type->The "Procurement Type" field is a critical MRP2 key field that influences how materials are procured. In SAP MM, the procurement type determines whether materials are procured externally from vendors (external procurement) or produced internally through in-house manufacturing processes (internal procurement).
procurement types are->:
a. In-House Production (Internal Procurement)
b. External Procurement (External Sourcing)
c. Both In-House and External (Mixed Procurement)
Planned Delivery Time Key->The "Planned Delivery Time" key field in the MRP2 view is instrumental in planning and scheduling material deliveries.It represents the expected lead time required to procure or produce the material from the time a requisition or order is placed.
Scheduling Margin Key->Scheduling Margin Key field within the MRP2 tab influences the scheduling and lead time calculations for materials. It is a key component in determining the time between the material's requirement date and its actual delivery date. By selecting an appropriate scheduling margin key, organizations can ensure that they meet customer demands and maintain an optimal inventory level.
Follow Steps->
Procurement Type->..F (EXTERNAL)
Planned Delivery Time Key->.. 30 DAYS
Scheduling Margin Key -> 000 ...
Forecast Models->This field determines the specific forecast model to be used for the material. SAP provides various models such as 'Moving Average, 'Exponential Smoothing,' and 'Seasonal Decomposition,' each suited for different scenarios.
1)Historical Data: SAP MM01 allows you to input historical consumption or sales data for the material. This information is vital for the system to make accurate predictions based on past trends. 2)Forecasting Horizon: This field defines the period for which the forecast is to be generated. It helps in determining the short-term or long-term predictions for the material. 3)Planning Strategy Group: This field plays a role in selecting the planning method and consumption-based planning. It helps the system understand how to handle demand and supply for the material.
Plant Data Storage 1->
a) Total Shelf Life: Represents the total shelf life of the material from the date of production to the expiration date.
b) Remaining Shelf Life: Indicates the remaining usable shelf life of the material based on the current date.
c) Shelf Life Expiration Date: Automatically calculated based on the production date and total shelf life.
d) Minimum Remaining Shelf Life: Specifies the minimum remaining shelf life allowed for the material to be used or sold.
Follow Steps->
Storage Period->..36 (month)
Time Out->.. 3 (Mon)
Shelf life -> 6 ...
Total Shelf life -> 36 ...
Accounting 1->
1.Valuation Class->:Valuation class is a significant aspect of material master data, especially in accounting and inventory management. It links a material to a particular account category in the general ledger and influences how the material's value is handled during transactions.The valuation class in MM01 is represented by the field "Valuation Class (VAL_CLASS)."
For instance, different valuation classes might be set up for materials that require different accounting treatment, such as inventory accounts, expense accounts, or asset accounts. The valuation class selected for a material determines the general ledger accounts that will be used during goods movements and valuation.
2. Price Control->:In SAP MM, price control specifies how the material's price is determined for valuation purposes. The two main price control options are: a).Standard Price (S): With standard price control, the material's value is calculated based on a predefined standard cost, which remains constant until changed. This method is commonly used for materials with stable costs.
b).Moving Average Price (V): Moving average price control recalculates the material's value after each goods receipt, considering the new purchase price. It is suitable for materials with fluctuating costs.The price control field in MM01 is represented by the "Price Control (PRICE_CTRL)" attribute.
Follow Steps->
Valuation Class->..3000 (Raw Material 1)
Price Control->.. V (Moving Average Price)
Costing 1 and Costing 2:->
Costing 1 and Costing 2 are fields in that handle the valuation and cost accounting aspects of materials.Costing 1 typically refers to the standard price of a material, while Costing 2 can be used for additional cost-related information or alternate valuation approaches. These fields are crucial in determining the material's value, helping businesses make informed pricing and cost decisions.
Plant and Storage Location Stock:
it's essential to define which plants and storage locations a material is associated with. Plant stock represents the inventory available plant. Properly managing plant and storage location stock is crucial for efficient inventory control and material availability.Vendor Master Execution:
When creating or updating a material master in MM01,linking it to the appropriate vendor master data is essential. The vendor master execution allows businesses associate materials with specific suppliers, enabling smooth procurement processes, timely deliveries, and accurate cost information.
VM Packing:
VM (Vendor Managed) packing is a feature in MM01 that enables suppliers to manage the packaging and replenishment of materials at a customer's location.By allowing suppliers to monitor and control stock levels directly, VM packing streamlines the supply chain, reduces lead times, and ensures optimal inventory
levels.Compliance and Basic Material Information:
Compliance-related information is a crucial part of material master data. It includes data such as hazardous material classification, environmental safety guidelines, and legal requirements. Basic material information, on the other hand, encompasses general details like material descriptions, units of measure, and basic categorization.
MRS (Material Requirements Planning) Fields:
MRS fields in MM01 are essential for production planning and scheduling. Material Requirements Planning helps companies determine the necessary materials and quantities required to meet production demands. Configuring MRS fields correctly ensures that materials are available when needed, preventing production delays and optimizing resource utilization.
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