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LO020 Processes in Procurement 4.6C mySAP Product Lifecycle Management Date Training Center Instructors Education Website Instructor Handbook Course Version: 2001 Q4 Course Duration: 5 Day(s) Material Number: 50040958 Owner: Michael Schmidt (D027146) An SAP Compass course - use it to learn, reference it for work

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Page 1: LOGISTIC - Sap Mm Logistic Course Lo020 En

LO020Processes in Procurement 4.6C

mySAP Product Lifecycle Management

Date

Training Center

Instructors

Education Website

Instructor HandbookCourse Version: 2001 Q4Course Duration: 5 Day(s)Material Number: 50040958Owner: Michael Schmidt (D027146)

An SAP Compass course - use it to learn, reference it for work

Page 2: LOGISTIC - Sap Mm Logistic Course Lo020 En

Copyright

Copyright © 2003 SAP AG. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for anypurpose without the express permission of SAP AG. The information contained herein maybe changed without prior notice.

Some software products marketed by SAP AG and its distributors contain proprietarysoftware components of other software vendors.

Trademarks

� Microsoft®, WINDOWS®, NT®, EXCEL®, Word®, PowerPoint® and SQL Server®are registered trademarks of Microsoft Corporation.

� IBM®, DB2®, OS/2®, DB2/6000®, Parallel Sysplex®, MVS/ESA®, RS/6000®,AIX®, S/390®, AS/400®, OS/390®, and OS/400® are registered trademarks of IBMCorporation.

� ORACLE® is a registered trademark of ORACLE Corporation.� INFORMIX®-OnLine for SAP and INFORMIX® Dynamic ServerTM are registered

trademarks of Informix Software Incorporated.� UNIX®, X/Open®, OSF/1®, and Motif® are registered trademarks of the Open

Group.� Citrix®, the Citrix logo, ICA®, Program Neighborhood®, MetaFrame®, WinFrame®,

VideoFrame®, MultiWin® and other Citrix product names referenced herein aretrademarks of Citrix Systems, Inc.

� HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C®,World Wide Web Consortium, Massachusetts Institute of Technology.

� JAVA® is a registered trademark of Sun Microsystems, Inc.� JAVASCRIPT® is a registered trademark of Sun Microsystems, Inc., used under

license for technology invented and implemented by Netscape.� SAP, SAP Logo, R/2, RIVA, R/3, SAP ArchiveLink, SAP Business Workflow, WebFlow,

SAP EarlyWatch, BAPI, SAPPHIRE, Management Cockpit, mySAP.com Logo andmySAP.com are trademarks or registered trademarks of SAP AG in Germany andin several other countries all over the world. All other products mentioned aretrademarks or registered trademarks of their respective companies.

Disclaimer

THESE MATERIALS ARE PROVIDED BY SAP ON AN "AS IS" BASIS, AND SAPEXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR APPLIED,INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY ANDFITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THESE MATERIALSAND THE SERVICE, INFORMATION, TEXT, GRAPHICS, LINKS, OR ANY OTHERMATERIALS AND PRODUCTS CONTAINED HEREIN. IN NO EVENT SHALL SAP BELIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL,OR PUNITIVE DAMAGES OF ANY KIND WHATSOEVER, INCLUDING WITHOUTLIMITATION LOST REVENUES OR LOST PROFITS, WHICH MAY RESULT FROM THEUSE OF THESE MATERIALS OR INCLUDED SOFTWARE COMPONENTS.

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About This HandbookThis handbook is intended to complement the instructor-led presentationof this course, and serve as a source of reference. It is not suitable forself-study.

Typographic ConventionsAmerican English is the standard used in this handbook. The followingtypographic conventions are also used.

Type Style Description

Example text Words or characters that appear on the screen.These include field names, screen titles,pushbuttons as well as menu names, paths, andoptions.

Also used for cross-references to otherdocumentation both internal (in thisdocumentation) and external (in other locations,such as SAPNet).

Example text Emphasized words or phrases in body text, titlesof graphics, and tables

EXAMPLE TEXT Names of elements in the system. These includereport names, program names, transaction codes,table names, and individual key words of aprogramming language, when surrounded bybody text, for example SELECT and INCLUDE.

Example text Screen output. This includes file and directorynames and their paths, messages, names ofvariables and parameters, and passages of thesource text of a program.

Example text Exact user entry. These are words and charactersthat you enter in the system exactly as theyappear in the documentation.

<Example text> Variable user entry. Pointed brackets indicatethat you replace these words and characters withappropriate entries.

November 2001 © 2003 SAP AG. All rights reserved. iii

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About This Handbook LO020

Icons in Body TextThe following icons are used in this handbook.

Icon Meaning

For more information, tips, or background

Note or further explanation of previous point

Exception or caution

Procedures

Indicates that the item is displayed in theinstructor�s presentation.

iv © 2003 SAP AG. All rights reserved. November 2001

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ContentsCourse Overview ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Course Goals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viiCourse Objectives ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Unit 1: Navigation..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 1Navigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Unit 2: Basics of the Procurement Process ...... . . . . . . . . . . . . . . . . . 37Organizational Elements .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Purchase Order Basics.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Goods Receipts Basics ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Invoice Verification Basics ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108

Unit 3: Master Data ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137Material Master Records .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139Vendor Master Records ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .187

Unit 4: Procurement of Stock Material .... . . . . . . . . . . . . . . . . . . . . . . . . . 223Requests for Quotation (RFQ) ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225Purchasing Information Records.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261Purchase Orders for Stock Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .291Stocks, Valuation, and Goods Receipt .. . . . . . . . . . . . . . . . . . . . . . . . . . .305Invoice Verification for Stock Materials.. . . . . . . . . . . . . . . . . . . . . . . . . . .338

Unit 5: Procurement of Consumable Material ... . . . . . . . . . . . . . . . . . 361Purchase Requisitions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .363The Procurement Process for Consumable Materials . .. . . . . . . .393Blanket Purchase Orders .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .417

Unit 6: Procurement of External Services..... . . . . . . . . . . . . . . . . . . . . 447The Procurement Process and Master Data in ExternalServices ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .449

Unit 7: Automated Procurement..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485Automated Procurement, Master Data and Contracts ... . . . . . . .487Material Requirements Planning and Generation of PurchaseOrders .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .517

Shipping Notification and Goods Receipt.. . . . . . . . . . . . . . . . . . . . . . . .541Evaluated Receipt Settlement (ERS).. . . . . . . . . . . . . . . . . . . . . . . . . . . . .551

November 2001 © 2003 SAP AG. All rights reserved. v

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Contents LO020

Unit 8: Reporting in Materials Management ..... . . . . . . . . . . . . . . . . . 571Transaction-Based Reporting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .573Reporting with Logistics Information System... . . . . . . . . . . . . . . . . . .582

Unit 9: mySAP.com Implementation ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . 611mySAP.com Implementation... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .612

Unit 10: Supplemental Materials ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635Business Process Review ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .636

Appendix 1: Frequently-used Menu Paths ..... . . . . . . . . . . . . . . . . 655

Glossary..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 661

Index ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685

vi © 2003 SAP AG. All rights reserved. November 2001

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Course OverviewThis course is designed to prepare the participant to perform the basicfunctions of the procurement process in the R/3 System. Stock material andconsumable material processing are used as examples. One unit addressesthe procurement of external services.

The specific areas addressed are material and vendor masters, thecreation of various purchasing documents, examination of the financialand valuation effect of basic procurement transactions, and reporting ontransactions that have been executed.

Target AudienceThis course is intended for the following audiences:

� Project managers� Project teams

Course PrerequisitesRequired Knowledge

� Basic procurement knowledge and experience� Good working knowledge of Windows operating environment� (SAP01) SAP Overview

Course Duration DetailsUnit 1:Navigation

Navigation 30 MinutesExercise 1: Logging On to SAP Systems MinutesExercise 2: Navigating Menus MinutesExercise 3: Personalizing the System MinutesExercise 4: Creating Web Site Links in the Favorites

List Minutes

Unit 2: Basics of the Procurement ProcessOrganizational Elements 45 MinutesPurchase Order Basics 1.5 HoursExercise 5: Purchase Order Basics Minutes

Goods Receipts Basics 60 MinutesExercise 6: Goods Receipts Basics Minutes

Invoice Verification Basics 45 Minutes

November 2001 © 2003 SAP AG. All rights reserved. vii

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Course Overview LO020

Exercise 7: Invoice Verification Basics Minutes

Unit 3: Master DataMaterial Master Records 2 HoursExercise 8: Create Material Master Minutes

Vendor Master Records 60 MinutesExercise 9: Create Vendor Master Record Minutes

Unit 4: Procurement of Stock MaterialRequests for Quotation (RFQ) 60 MinutesExercise 10: Request for Quotation (RFQ) Minutes

Purchasing Information Records 2.5 HoursExercise 11: Purchasing Information Records Minutes

Purchase Orders for Stock Material 60 MinutesExercise 12: Purchase Orders for Stock Material Minutes

Stocks, Valuation, and Goods Receipt 60 MinutesExercise 13: Posting Goods Receipts into Quality

Inspection MinutesInvoice Verification for Stock Materials 30 MinutesExercise 14: Invoice Verification for Stock Materials Minutes

Unit 5: Procurement of Consumable MaterialPurchase Requisitions 1.5 HoursExercise 15: Purchase Requisitions Minutes

The Procurement Process for Consumable Materials 60 MinutesExercise 16: Purchase Order with Reference to

Purchase Requisition MinutesExercise 17: Goods Receipt MinutesExercise 18: Invoice Verification Minutes

Blanket Purchase Orders 60 MinutesExercise 19: Blanket Purchase Orders Minutes

Unit 6: Procurement of External ServicesThe Procurement Process and Master Data in

External Services 2 HoursExercise 20: External Services Purchase Order and

Service Entry Sheets Minutes

Unit 7: Automated ProcurementAutomated Procurement, Master Data and

Contracts 1.5 HoursExercise 21: Master Data and Contracts Minutes

Material Requirements Planning and Generation ofPurchase Orders 60 Minutes

Exercise 22: Single-Item Planning and AutomaticGeneration of Purchase Orders Minutes

Shipping Notification and Goods Receipt 45 Minutes

viii © 2003 SAP AG. All rights reserved. November 2001

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LO020 Course Overview

Exercise 23: Shipping Notification and GoodsReceipt Minutes

Evaluated Receipt Settlement (ERS) 30 MinutesExercise 24: Evaluated Receipt Settlement Minutes

Unit 8: Reporting in Materials ManagementTransaction-Based Reporting 45 MinutesExercise 25: Transaction-based Reporting Minutes

Reporting with Logistics Information System 60 MinutesExercise 26: Reporting with Logistics Information

System Minutes

Unit 9: mySAP.com ImplementationmySAP.com Implementation 20 MinutesExercise 27: Creating a New Plant MinutesExercise 28: Assigning a Plant to a Company Code Minutes

Unit 10: Supplemental MaterialsBusiness Process Review MinutesExercise 29: Business Processes Minutes

Course GoalsThis course will prepare you to:

� Understand the purpose and function of procurement processes� Use the basic procurement process functionality of the SAP System

Course ObjectivesAfter completing this course, you will be able to:

� Identify and use the log on, navigation, personalization, and helpfeatures of the SAP System

� Define the basic steps of the procurement process� Create, display and maintain material and vendor masters, and list

the required organizational levels� Create, display and maintain purchase requisitions, requests for

quotation, contracts, and purchase orders� Process goods receipts and basic receipt-related stock transfers� Explain the financial and valuation effect of basic procurement

transactions� Display stock balances� Post vendor invoices� Generate purchasing list displays and basic LIS standard analyses

November 2001 © 2003 SAP AG. All rights reserved. ix

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Course Overview LO020

� Explain the SAP methodology of support for the SAP product lifecycle

� Identify where additional procurement information can be found indocumentation and subsequent training

SAP Software Component InformationThe information in this course pertains to the following SAP SoftwareComponents and releases:

Contacts

In Walldorf: Michael Schmidt, Global Owner; Corina Duerholt, EME

In North America: Kelley Webb-Lamour, NA Owner; Mark Tarallo, EPM

Revisions to Previous Instructor Guide

This Instructor Guide is an amended and updated version of the 4.6BInstructor Guide to accommodate changes as of R/3 4.6C. The majorchange is that the Arbortext Epic Editor has been used to integrate theinstructor guide with the student manuals. The Instructor Notes aredispersed throughout the instructor�s manual, but they are not printed inthe student�s manual.

Some slides have been removed from the lessons, and some have beenchanged to a different place in the presentation. Screen captures andprocedures are now printed in the student manuals. At the end of eachlesson, in addition to the exercises, there are sample discussion questionswith answers in the appendix section of the manual. Exercises andsolutions are placed at the end of each appropriate lesson. (We now usethe term lesson instead of topic.)

Course Details

Duration: This course is designed to last 5 days.

What�s new in LO020 Arbortext (Compass) version

x © 2003 SAP AG. All rights reserved. November 2001

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LO020 Course Overview

The new Arbortext version of LO020 includes these new features for theInstructor:

� Course Duration Details� An �About this Handbook� section defining icons and course contents� Table of Contents with page numbers. ·� Instructor �Hints� to guide the instructor during demos and lecture� Instructor �Notes� designed to address possible �pit-falls� during

class� A name and an e-mail address of the SAP employee who designed

the each Lesson� Lesson Duration times

The new Arbortext version of LO020 changed:

� The course is no longer held in a SAPShow format. It is pulled fromthe Web

� The old PowerPoint slide to introduce the class is not included inthe Web version

� Overall concepts are no longer introduced in each unit, instead logicalideas are grouped together as lessons and introduced separately

� A Course Content slide; this is now a �Table of Contents� with pagenumbers to reference each Unit

� Units are broken in to logical topics called �Lessons�� Each Lesson include its own set of Prerequisites, Objectives, Overview,

and Business Example. · Business Scenarios are now called �BusinessExamples� but no slide is included in the presentation of the class, soinstructors should encourage students to read the examples or readthe examples together as a group as each lesson begins.

� Student handbook pages will not match Instructor handbook pagesdo to the added contents in the Instructor�s guide

November 2001 © 2003 SAP AG. All rights reserved. xi

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Course Overview LO020

The new Arbortext version of LO020 added:

� Screen prints of application transaction from R/3·� Generic procedures detailing and including icon reference for each

application transactions� An Index for reference� A Glossary� �Test Your Knowledge� questions with detailed answers design to

challenge the theoretical understanding of the student� Solutions following each exercise showing menu paths and icon

details� An Appendix of frequently-used Material Management Menu Paths� A Unit of Supplemental Materials� A �related information� area in each lesson·� More reference text per topic for student reference

xii © 2003 SAP AG. All rights reserved. November 2001

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LO020 Course Overview

Summary of changes by unit:

� Old LO020 Chapter 1 class introduction� this chapter is gone The newLO020 begins with: Unit 1 - Navigation: This unit is a little different

� Unit 2 - Basic of the Procurement Process: This is chapter 3 in theold version of LO020. The only major change to this Unit is the Unitbreaks the Procurement Cycle (purchase order, goods receipt, andlogistic invoice verification) and the Organization Elements intoseparate lessons. The slides have been re-arranged to facilitate theseparation of ideas.

� Unit 3 - Master Data: This is chapter 4 in the old version of LO020.The old chapter in LO020 used to introduce both the Material Masterand the Vendor Master together. The new Unit introduces twoseparate lessons, Material Master and Vendor Master. The slides havebeen re-arranged to facilitate the separation of ideas

� Unit 4 � Procurement of Stock Material: This is chapter 5 in the oldversion of LO020. RFQ, Information records, creation of purchaseorders with reference, goods receipt, and logistics invoice verificationare all introduced as separate lessons

� Unit 5- Procurement of Consumable Material: This is chapter 6 inthe old version of LO020. Creation of purchase requisitions and thefollowing handling of purchase requisitions are divided into twoseparate lessons. The blanket order concept is moved to the end ofthe unit and introduced as a separate concept/lesson. The slides havebeen re-arranged to facilitate the separation of ideas

� Unit 6- Procurement of External Services: This is chapter 7 in the oldversion of LO020. The purchase order history slide was moved to fallafter the service specifications slide.

� Unit 7- Automatic Procurement: This is chapter 8 in the old version ofLO020. Master data requirements, creation of contracts, and creationof source list have been pulled together to create one lesson. MRP andcreation of purchase orders is now grouped into one lesson. Shippingnotice and good receipt is one lesson. ERS is it�s own lesson. Theslides have been re-arranged to facilitate the separation of ideas

� Unit 8- Reporting in Materials Management: This unit defines thestandard reports within its own lesson called Transaction-BasedReporting. The LIS reports are broken into their own lesson. Theexercise is broken into two parts so the student works on standardreports in one exercise and LIS report in another exercise.

� Unit 9- mySAP.com- This unit is different. It includes an exercise.� Unit 10- Supplemental Materials- This unit is completely new. It

includes an exercise designed to address all of the concepts learnedfrom the other units

Other comments:

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Course Overview LO020

Although the basic contents of LO020 did not change, it is important tonote the teaching style of the course did change. Instructors should spendtime introducing the contents of the book. Explain the book was designedto be a reference tool. Point out the new features: the screen prints, theglossary, the index, and the generic application processes.

Course Materials and other Materials

� SAP System, including the link to online documentation installedon every participant�s PC

� Overhead slides� Participant handbook

Course Instructor Profiles; Level of Knowledge Required

The instructor should have a good knowledge of the procurement process,particularly purchasing, inventory management, and invoice verification.Knowledge of Financial Accounting is beneficial. The instructor shouldalso have a basic knowledge of Customizing for Materials Management.

Courses Recommended as Preparation

� LO510 Inventory Management� LO515 Invoice Verification� LO520 Optimization of the Purchasing Process� LO540 Procurement of External Services� LO550 Cross-application Customizing in MM

Online Help Recommended as Preparation

Read the online help on MM Purchasing, MM Inventory Management,MM Invoice Verification and Material Valuation, and MM Logistics InvoiceVerification, as well as MM External Services.

Hints on Preparing This Course

� Attend the course first.� Make notes on your copy of the participant handbook.� Carefully read the instructor notes for each slide.� Carry out and practice all the exercises in the system. Detailed

solutions are available, with the menu paths.� Practice your entire presentation.� Practice all demonstrations.� If possible, co-teach your first time with a seasoned instructor.

Training System

xiv © 2003 SAP AG. All rights reserved. November 2001

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LO020 Course Overview

The demonstrations and exercises for LO020 run on a weekly copy of theIDES system, ID3. It will be your responsibility to look up the specificsystem that is assigned to your class. To find your assignment, log on toyour SAP Web page and go to Temself via the tab Aliases.

Figure Training Online Registration

After clicking on the word instructor, you should get the Temself display ofyour courses and system assignments.

November 2001 © 2003 SAP AG. All rights reserved. xv

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Course Overview LO020

Figure Common Training Information Lounge

Caution: If you do any setup work in your assigned system duringthe week before your scheduled class, it will be gone after theweekly Friday night refresh.

Data Required

Materials and vendors from IDES are used for the exercises and SAPSystem demonstrations. The participants create most of the data duringthe course. The remaining data has been created in ID3, client 400.

Fields Data in Training SystemCompany Code 1000

Vendors 1000, T-K12A##, T-K12C##,T-K12D##

Purchasing Organization 1000

Purchasing Groups T## (01–30)

Plants 1000, 1200

Storage Location 0001

Materials T-RM1##, T-RM3##, T-HM1##

Info Records Vendor T-K12A##, MaterialT-RM1##

xvi © 2003 SAP AG. All rights reserved. November 2001

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LO020 Course Overview

Since there is rarely the need to assign more than 16 logons to a class,recommend that the instructor use data that ends in 20 wherever you seethe ## group indicator.

User ID and Passwords for Course Participants

The standard format for User IDs is the course ID, followed by thegroup number. Use transaction ZUSR to copy these User IDs from thereference User ID LO020-99. Please consider and instruct the participantsaccordingly.

The standard procedure is:

� Copy from: LO020-99� Course name: LO020� Number of exercise groups: 20� Initial password: INIT� Country of training location:

Preparation in the System

In the training system, rename the following organizational units if youwish:

Company code 1000 �IDES AG 1000�: Change description to IDES usingtransaction OX02.

Purchasing organization 1000 �IDES Deutschland�: Change description toIDES using transaction OX08.

Hint: For training purposes the transaction ME21N was includedin activity group SAP-MM-BUYER. The descriptions are availablein German and English only.

Example ABAPs

If required, run ABAP program ZDEBLAN with transaction SE38 in thetraining system. This program changes the language in vendor mastersfrom German to any other valid IDES language (currently English, French,Spanish, Portuguese, and Japanese).

If you work with a language other than German, make sure that yourmaterial master records have their descriptions translated to your vendors�language, otherwise you will run into errors when creating purchaseorders.

CATTs

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Course Overview LO020

There are CATTs for compiling the data, which have already beenprocessed in ID3, 400 (and therefore do not have to be started again beforethe start of the course).

The CATTs created for course LO020 include:

� ZT_LO020_01 Master Data� ZT_LO020_02 Transaction Data� ZT_LO020_03 Master Data� ZTR_LO020_01 Translation CATT� Groups: 01 � 20

Master Data (## = Group number):

� Materials: T-RM1## (Reference material T-RM2)� T-RM3## (Reference material 400-141)� T-HM1## (Reference material LB-1000)

Vendors:

� T-K12A## (Reference vendor: 1000)� T-K12C## (Reference vendor: 1000)� T-K12D## (Reference vendor: 1000)

Info Records:

� Vendor T-K12A##, Material T-RM1##

You should not have to run these prior to class. However, should it benecessary to teach the course at a customer site with a customer IDES, youmay have to check if the above data is there or usable. Plan time for doingthis beforehand. The following CATTsmight have to be executed:

� ZT_LO020_01 Master Data� ZT_LO020_02 Transaction Data� ZT_LO020_03 Master Data� ZTR_LO020_01 Translation� Groups 00-20

xviii © 2003 SAP AG. All rights reserved. November 2001

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LO020 Course Overview

Course Schedule

Hint: The course schedule is approximate. But these tables are hereif you plan to teach the entire course and need some guidelines fortiming. The breaks indicated in these tables might not come right atthe end of a lesson as implied. You have to make some judgmentsabout when the students need a break.

Also, some units may take longer than you expect. Remember, youhave more time on Friday if you feel you�re getting behind.

Day OneApproxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

30 min. Starting the course

� Introduction� Training center

logistics

Instructor and participantsintroduce themselves, Instructorasks participants what are theirgoals in attending this course, etc.

30minutes

Unit � Navigation Instructor: Slide presentation,System demos

Participants: 4 exercises

Together: Assessments15minutes

Break

45minutes

Unit � Basics of theProcurement Process

Lesson- OrganizationalElements

Instructor: Slide presentation,System demos

1.5 hours Unit � Basics of theProcurement Process

Lesson � PurchaseOrder Basics

Instructor: Slide presentationSystem demo

Participants: One Exercise

Together: Assessments1 hour Lunch Break (Usually staggered, so the lunch

hour will vary)

November 2001 © 2003 SAP AG. All rights reserved. xix

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Course Overview LO020

Approxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

1 hour Unit � Basics of theProcurement Process

Lesson � Goods ReceiptBasics

Instructor Slide presentation,System demo

Participants: One Exercise

Together: Assessments25minutes

Unit � Basics of theProcurement Process

Lesson � InvoiceVerification Basics

Instructor Slide presentationSystem demo

15minutes

Break

20minutes

Unit � Basics of theProcurement Process

Lesson � InvoiceVerification Basics

Participants: One Exercise

Together: Assessments

6 hours 30minutes

Total time � day one,including breaks

Additional notes: Breaks can be combined with exercises. Try to havebreaks after a maximum of 1 hour 20 minutes.

Day TwoApproxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

2 hours Unit � Master Data

Lesson � MaterialMaster Records

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments15minutes

Break

1 hour Unit � Master Data

Lesson �VendorMasterRecords

Instructor: Slide presentation,System demo

Participants: Exercise

Together: Assessments

xx © 2003 SAP AG. All rights reserved. November 2001

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Approxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

1 hour Lunch Break1 hour Unit � Procurement of

Stock Material

Lesson � Requests forQuotation (RFQ)

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments15minutes

Break

2.5 hours Unit � Procurement ofStock Material

Lesson � PurchasingInformation Records

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments8 hours Total time � day two,

including breaks

Additional notes: Breaks can be combined with exercises. Try to havebreaks after a max. of 1 hour 20 minutes.

Day ThreeApproxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

1 hour Unit � Procurement ofStock Material

Lesson �PurchaseOrders for StockMaterial

Instructor: Slide presentation

Participants: One Exercise

Together: Assessments

15minutes Break1 hour Unit � Procurement of

Stock Material

Lesson � Stocks,Valuation, and GoodsReceipt

Instructor: System demo

Participants: One Exercise

Together: Assessments

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Approxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

30minutes Unit � Procurement ofStock Material

Lesson � InvoiceVerification for StockMaterials

Instructor Slide presentationSystem demo

Participants: One Exercise

Together: Assessments1 hour Lunch Break1.5 hours Unit � Procurement of

Consumable Material

Lesson � PurchaseRequisitions

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments15 minute Break1 hour Unit � Procurement of

Consumable Material

Lesson � TheProcurement Processfor ConsumableMaterials

Instructor: Slide presentation,System demo

Participants: Three Exercises

Together: Assessments

1 hour Unit � Procurement ofConsumable Material

Lesson � BlanketPurchase Orders

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments7 hours 30minutes

Total time � day three,including breaks

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Day FourApproxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

2 hours Unit � Procurement ofExternal Services

Lesson � TheProcurement Processand Master Data inExternal Services

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments

15 min Break2 hours Unit � Automated

ProcurementLesson - AutomatedProcurement, MasterData and Contracts

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments1 hour Lunch Break1 hour Unit � Automated

Procurement

Lesson- MaterialRequirements Planningand Generation ofPurchase Orders

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments

15 minutes Break

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Approxi-mate Du-ration

Content: Units andLessons

Activities: Instructor andParticipant

30 minutes Unit � AutomatedProcurement

Lesson � ShippingNotification and GoodsReceipt

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments

30 minutes Unit- AutomatedProcurement

Lesson � EvaluatedReceipt Settlement(ERS)

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments

7 hours 30minutes

Total time � day four,including breaks

Day FiveApproxi-mate Du-ration

Content: Units andLessons

Activities: Instructor and

1 hour Unit � Reporting inMaterials Management

Lesson - Transaction-based Reporting

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments1 hour Unit � Reporting in

Material Management

Lesson - Reportingwith the LogisticsInformation System

Instructor: Slide presentation,System demo

Participants: One Exercise

Together: Assessments

15 minutes Break

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Approxi-mate Du-ration

Content: Units andLessons

Activities: Instructor and

20 minutes mySAP Implementa-tion

Lesson - mySAPImplementation

Instructor: Slide presentation,System demo

Participants: Two Exercises

Together: Assessmentsoptional Lunch break if anyone

staysNote that sometimes the coursewill go over the estimatedtimes, and lunch break must beconsidered on Friday.

2 hours 35minutes

Total time � day five,including breaks

Additional notes: Breaks can be combined with exercises. Try to havebreaks after a maximum of 1 hour 20 minutes.

Inform the students that you will be going through all the basic steps ofthe procurement process more than once. The first PO, GR, and Invoicewill be very simple and basic in order for the students to get a feel for theprocess. After that, there will be added complexity and knowledge asthe course progresses.

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Unit 11 Navigation

For many students, this is the first SAP class they have taken. For some itis even their first exposure to the SAP system. This unit is important forthem so that they will feel comfortable doing the subsequent units. Try tobe aware of anyone who is struggling with this, as your presentation of theunit will be their first impression of the class, and of SAP in general.

Unit OverviewThe Navigation unit is designed to help the participant feel comfortablewith the windows of the SAP system, navigation in the SAP system, andindividualizing the SAP system using personal settings.

Unit ObjectivesAfter completing this unit, you will be able to:

� Log on to the SAP system� Navigate a basic path and personalize an SAP system� Search for information and obtain help using the different help

methods in the SAP system

Unit ContentsLesson: Navigation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Demonstration: Logging on to the SAP System.... . . . . . . . . . . . . . . . . . . . . . . .5Demonstration: Navigation: Accessing Transactions... . . . . . . . . . . . . . . . . . .6Demonstration: Creating Favorites.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Demonstration: Role-Based User Menus .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Demonstration: Creating a New Session... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Demonstration: System-Level Help Options .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Demonstration: Field-Level Help Options .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Exercise 1: Logging On to SAP Systems ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Exercise 2: Navigating Menus .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Exercise 3: Personalizing the System .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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Exercise 4: Creating Web Site Links in the Favorites List .. . . . . . . . . . . . 29

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Lesson:2

NavigationLesson Duration: 30 Minutes

Lesson OverviewThis lesson explains and demonstrates how to log on to the SAP system,and allows you to become familiar with the layout and navigation of thesystem. It also discusses some of the options available for personalizingthe system based on your requirements or preferences. Lastly, it introducesthe various types of online help available in the SAP system and developsan understanding of how to search for information.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Log on to the SAP system� Navigate a basic path and personalize an SAP system� Search for information and obtain help using the different help

methods in the SAP system

The Navigation unit will be the first exposure to a SAP System for many,if not all, of the participants. Therefore, the main focus of this lessonis to explain how to log on and navigate within the system. You shouldconsider this one of the main objectives of this course; therefore, ensurethat participants are comfortable with the overall layout and navigationbefore moving on. You should also discuss how to limit the complete rangeof services provided by SAP to those specifically required by the user.

Business ExampleYou are a new user. In order to efficiently use the SAP system, you need tofamiliarize yourself with the screens and navigation in the SAP system.You also need to define your own personal settings based on your ownindividual business requirements.

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Logon Process

This section explains the logon process and prepares participants to logon to the system.

Establish that the SAP system is a client system. Define the clientwithin the SAP system as a separate entity with its own master data,configuration, transactions, and databases.

Note: Users can have up to six sessions open at a time, but cautionparticipants about leaving documents open and blocking out otherusers� access.

Before you log on for the first time, your system administrator will giveyou an initial password. During the logon process, you should createa new password, one that you alone will know. After that, use yourown password whenever you log on. (These procedures may differsomewhat at your company. For more information, contact your systemadministrator.)

Figure 1: Logging in to a SAP System

The SAP logon icon now appears in both the task bar (together with theSAP Release number) and the system tray (that is, the bottom right-handcorner of your desktop).

When you select the tab key after you have entered data in a field, thecursor moves to the beginning of the next field. However, if you enter themaximum number of characters possible in a field, you do not have to

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press the tab key. For example, the maximum number of characters youcan enter in the Client field is three. If you enter 001 in the Client field, thecursor automatically moves to the beginning of the next field.

If there are system-wide messages, the System Messages dialog boxappears. After you have read the messages, choose Continue (or chooseEnter) to close the dialog box.

Demonstration: Logging on to the SAP System

PurposeDemonstrate and guide the participants through logging on to a SAPsystem.

System DataSystem: R/3 Standard Training System requiredClient: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/3training system.1. Demo the Exercise Logging on to SAP Systems

Refer to the Solution Logging on to SAP Systems for the requiredsteps and data.

Layout, Navigation, and Personalization

In this section, you will familiarize the participants with the navigationof the SAP system and the options available for personalizing the systemto the participants� requirements or preferences.

Explain that the SAP Easy Access screen is the system default screen afterlogging on. This default can be changed to any desired start transactionusing Extras → Set start transaction. Explain navigation in SAP using theSAP standard menu, the menu bar, and the command field (transactioncodes). Point out that transaction codes can be found by selecting System→ status.

Menus allow you to find a specific transaction when you do not knowthe transaction code. The menu is organized according to the task youare performing in the SAP System.

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The menus are drop down; therefore, when you choose a menu item,further options appear. Sometimes not all of the available menus fit onone line in the menu bar. In this case, they wrap to the next line. Thedropdown principle stays the same.

Figure 2: General Screen Layout

Demonstration: Navigation: Accessing Transactions

PurposeDemonstrate how to navigate the SAP standard menu and explainthe principles of the screen structure. Assume the role of an accountsreceivable accountant and display a Customer master record using theSAP standard menu.

System DataSystem: R/3 Standard Training System requiredClient: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/ 3training system.1. Access a Customer Master Record by selecting: Accounting→Financial

accounting→ Accounts receivable→Master records→ Display

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2. Enter Customer: 1000

3. Enter Company Code: 1000

4. Select Continue or Enter

5. Explain the layout of the screen structure

System Function � User ProfileYou can use the menu option System → User profile → Own data to setyour own personal profile. You can choose between the Address, Defaultand Parameters tabs.

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Figure 3: Maintaining a User Profile

� Address: You can create and maintain personal data here, forexample, name, function, room number, telephone number, e-mailaddresses, and so on.

� Defaults: Defaults include the date display format, the decimalnotation format, the default printer, the log on language, and so on.

� Parameters: Use this to assign entries to commonly used fields. Thisis only available for input fields that have been allocated a parameterID. Procedure for finding out a field�s parameter ID:

� Go to the input field to which you want to assign a value.� Choose F1 and then the Technical Info button. This opens a

window that displays the corresponding parameter ID (if onehas been allocated to the field) in the Field data section.

The User Profile menu also contains, among others, the following options:Hold data, Set data and Delete data. Use Hold data to keep data values thatyou have entered in fields in an application for the duration of a usersession. When you call up the application again, you can overwrite thesevalues. Once you have Set data, you can no longer overwrite these valuesand have to use Delete data if you want to enter different values.

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Demonstrate some Default settings, especially the decimal notation anddate format. Participants will be asked to do this in the exercise.

Navigation Tree

Discuss the option of creating and maintaining personal favorites(frequently used transactions, files, andWeb addresses) using the Favoritesmenu. Explain that these are items you wish to access in one step versushaving to navigate through a menu path.

In SAP Easy Access, you can create a favorites list containing:

� Transactions� Files� Web addresses

Figure 4: Navigation Tree

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Demonstration: Creating Favorites

PurposeDemonstrate to the participants how to create a Favorites menu.

System DataSystem: R/3 Standard Training System requiredClient: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/ 3training system.1. Demo the exercise Create Favorites Using the Menu Bar and Create

Website Links in the Favorites List.

Refer to the exercises and solutions, Create Favorites Using theMenu Bar and Create Website Links in the Favorites List, for therequired steps and data.

Role-Based Menus

Explain that role-based menus allow for limiting the wide rangeof functionality provided by SAP to the user�s own requirements �corresponding to the user�s role. Point out that when a user is assigneda role, they are assigned not only the menu, but also the authorizationsthey require to access the information. Point out that users can be assignedto multiple roles.

Note: Favorites can still be maintained with role-based menus.

Note: Mention that SAP currently delivers over 1200 predefinedroles.

Roles or user menus are collections of activities used in business scenarios.Users access the transactions, reports, or Web-based applications throughuser menus. Users can change aspects of assigned roles, for example, bycreating their own favorites list.

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When assigned a role, users are assigned not only the menu, but alsothe authorizations they require to access the information, ensuring thatthe business data is always secure. Authorization profiles are generatedaccording to the activities contained in the role, thus restricting theauthorizations of each user in the SAP system to only those activities.

In the mySAP.com Workplace, the user uses a Web browser to view andexecute the required tasks and activities. Roles can be assigned here aswell.

The system administrator can tailor the user menu to the personalrequirements of each user by adding or deleting menu entries.

Figure 5: Role-Based Menus

Demonstration: Role-Based User Menus

PurposeDemonstrate how to access and use the role-based user menus.

System DataSystem: R/3 Standard Training System requiredClient: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/ 3training system.

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1. From the SAP Easy Access menu, select Other menu.

2. Use the Find function and search for Activity group name *accountsreceivable*.

3. Select the Accounts Receivables Accountant activity group.

4. Display the Customer Master record again using the role-basedmenu: Account Master Data → Display Customer.

Emphasize the simpler navigation and quicker access of therole-based menu.

5. Demonstrate how to return to the SAP standard menu by selectingSAP standard menu.

Multiple Sessions

Note: Users can have up to six sessions open at a time, but this canimpact system resources so the system administrator can limit thenumber of sessions per user. Also, caution the participants aboutleaving documents open and blocking out other users� access.

You can create a session at any time and you do not lose any data insessions that are already open. You can create up to six sessions. Eachsession is independent of the others. For example, closing the first sessiondoes not cause the other sessions to close.

Too many open sessions can result in slower system performance. Forthis reason, your system administrator may limit the number of sessionsyou can create to fewer than six. You can move between sessions as oftenas you like without losing any data. As long as you remain logged onto the SAP System, you can leave a session open for as long as you like.Moving to a different session is like putting a telephone call on hold: Youcan resume the call whenever you are ready.

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Figure 6: Multiple Sessions

To move between sessions, click any part of the window that contains thesession you want to use (or use the keys ALT + TAB).

The window you choose becomes the active window by moving in front ofall the other windows on your screen.

If you have several sessions open, you can minimize the sessions you arenot using. When you need to use one of these sessions later, you canrestore it by selecting the appropriate symbol in the status bar, making itthe active session. By minimizing the sessions you are not using, you cansignificantly reduce the system load.

After you are done using a session, it is a good idea to end it. Each sessionuses system resources that can affect how fast the SAP System respondsto your requests. Before you end a session, save any data you want tokeep. When you end a session, the system does NOT prompt you tosave your data.

Demonstration: Creating a New Session

PurposeDemonstrate how to create multiple sessions once the user has initiallylogged on.

System DataSystem: R/3 Standard Training System required

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Client: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/ 3training system.1. Create multiple sessions using the Standard toolbar by selecting the

Creates a new session icon on the Standard toolbar

2. Create multiple sessions using the menu path System→ Create Session

3. Create multiple sessions using the transaction box and typing /o

Status BarThe status bar provides general information on the SAP system and thetransaction or task on which you are working. At the left of the status bar,system messages are displayed. The right end of the status bar containsthree fields: one with server information, the other two with statusinformation.

Figure 7: Status Bar

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Discuss and demonstrate the location of the different types of informationavailable on the status bar. Explain the difference between the followingtypes of system messages: informational, warning, and error.

� Left end of status bar: Error and other system messages are displayedhere.

� First status field:

� System� Client� User� Program� Transaction� Response time

� Second status field: This field tells you what server you are connectedto.

� Third status field: This field displays the data entry mode. Choosethis field to switch between Insert (INS) and Overwrite (OVR) modes.

Note: To hide the status fields, choose to their left; to display them,choose to their right.

Help Features

This section introduces the participants to the various types of onlinehelp available in SAP. You will distinguish between system-level help(Application Help, SAP Library, Glossary) and field-level help (F1, F4).

Point out that the Helpmenu is available on the menu bar of every screen.

The R/3 System provides comprehensive online help. You can displaythe help from any screen in the system. You can always request helpusing the Help menu or using the relevant icon. The Help menu containsthe following options:

Application helpDisplays comprehensive help for the current application. Selectingthis menu option in the initial screen displays help on getting startedwith R/3.

SAP LibraryAll online documentation can be found here.

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GlossaryAllows a search for definitions of terms.

Release notesDescribe functional changes that occur between R/3 releases.

SAPNetEnables you to log on to SAPNet.

FeedbackEnables you to send a message to the SAPNet R/3 front-end, SAP�sservice system.

SettingsEnables you to select settings for help.

Figure 8: Getting Help

Demonstration: System-Level Help Options

PurposeDemonstrate the various system-level help options.

System DataSystem: R/3 Standard Training System required

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Client: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/ 3training system.1. Access the Help menu and demonstrate each of the various types of

help available.

Use F1 for help on fields, menus, functions and messages. F1 helpalso provides technical information on the relevant field including, forexample, the parameter ID, which you can use to assign values to the fieldfor your user.

Use F4 for information on what values you can enter. You can also accessF4 help for a selected field using the button immediately to the right of thatfield. If input fields are marked with a small icon with a checkmark, thenyou can continue in that application only by entering a permitted value.

You can flag many fields in an application to make them either requiredentry fields or optional entry fields. You can also hide fields usingtransaction or screen variants or Customizing.

Figure 9: Field Help � Using F1 and F4

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Demonstration: Field-Level Help Options

PurposeDemonstrate the field-level help options available (F1 and F4).

System DataSystem: R/3 Standard Training System requiredClient: 400�404User ID: trainingPassword: monthly instructor passwordSet up instructions: This demo will run on any standard SAP R/ 3training system.1. Access the Customer Master Display transaction by selecting:

Accounting → Financial Accounting → Accounts Receivable → Masterrecords → Display

2. Place the cursor on the Customer field and select F1

Note: F1 provides information about the field.

3. Choose Technical info.

Note the technical information available for that particular field.

4. Place the cursor on the Company code field, choose F4, and chooseStart search.

Demonstrate the use of the F4 help option. Note: F4 provides a listof field values or an option to search for the information in the caseof an extensive list.

5. Place the cursor on the Customer field and select F4. Select the tab,Customers (by company code). Enter Company code 1000 and NameBecker 20. Choose Start search.

Demonstrate the use of the search functionality.

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13 Exercise 1: Logging On to SAP SystemsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Understand the basics of creating a log on entry� Log on to a SAP System

Business ExampleAs an employee of a company that manages its business with SAP,you need to gain access to an SAP system to do your daily businesstransactions.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task:In this exercise, you will first create a logon entry to identify which systemyou would like to gain access to. You will then access that system with theappropriate client, user ID and password.

Note: In the classroom, the logon entry may have already beencreated for you. Your instructor can tell you whether or not youneed to do Step 1.

1. Create an entry in the SAP GUI logon screen based upon theinformation provided by the instructor.

Field InformationDescription LO020 Class

Client

Continued on next page

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Field InformationApplication ServerSAP Router StringSystem Number

2. You have now created a logon entry. You will use this entry to gainaccess to the SAP system you have identified with the informationprovided.

Field InformationUser <to be provided by the

instructor>

Password <to be provided by theinstructor>

Client <to be provided by theinstructor>

Language EN

New Password

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Solution 1: Logging On to SAP SystemsTask:In this exercise, you will first create a logon entry to identify which systemyou would like to gain access to. You will then access that system with theappropriate client, user ID and password.

Note: In the classroom, the logon entry may have already beencreated for you. Your instructor can tell you whether or not youneed to do Step 1.

1. Create an entry in the SAP GUI logon screen based upon theinformation provided by the instructor.

Field InformationDescription LO020 Class

ClientApplication ServerSAP Router StringSystem Number

a) Locate the SAP Logon program from your desktop. Thereare a variety of ways to find it and a variety of places it couldreside on your desktop. These variables depend on how theGUI software was installed. Consult your technical support ifyou cannot find the application.

b) Choose New.c) Enter Description: LO020 Class.d) Enter Application Server: <to be provided by the

instructor>.e) Enter SAP Router String: <to be provided by the

instructor>.f) Choose R/3 as the SAP system.g) Enter System Number: <to be provided by the

instructor>.

h) Choose OK.

2. You have now created a logon entry. You will use this entry to gainaccess to the SAP system you have identified with the informationprovided.

Continued on next page

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Field InformationUser <to be provided by the

instructor>

Password <to be provided by theinstructor>

Client <to be provided by theinstructor>

Language EN

New Password

a) Choose the entry you created in the above exercise step.b) Choose Log on.c) Enter Client: <provided by the instructor>.d) Enter Password: <provided by the instructor>.e) Enter Language: <Instructor will provide

appropriate language code>.f) Select Enter.

Note: You might be asked to change your password,if so, continue with the following steps. If you are notasked, skip to solution step J.

Note: A password change dialog box displays.

g) Enter New Password: <enter your own new password>.h) Enter Repeat Password: <repeat the entry again to

confirm the password change>.i) Select Enter.j) Enter as many times as needed reading any system messages that

might be displayed until you get to the SAP Easy Access screen.

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17 Exercise 2: Navigating MenusExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Locate specific folders in the SAP Easy Access Menu� Navigate the SAP Easy Access Menu to locate specific transaction

Business ExampleAs a new user working on a SAP system, you need to locate the specifictransactions in the SAP System that you will need to use for your job.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task:In this exercise, you will locate example transactions by navigating theSAP Easy Access Menu.

1. What are the names of the transactions that are located under thefolder Order in Sales and Distribution?

FIELD TRANSACTION NAMETransaction

TransactionTransaction

2. What are the names of the transactions that are located under thefolder Document Entry in General Ledger?

Continued on next page

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FIELD TRANSACTION NAMETransactionTransactionTransactionTransactionTransactionTransactionTransactionTransaction

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LO020 Lesson: Navigation

Solution 2: Navigating MenusTask:In this exercise, you will locate example transactions by navigating theSAP Easy Access Menu.

1. What are the names of the transactions that are located under thefolder Order in Sales and Distribution?

FIELD TRANSACTION NAMETransaction

TransactionTransaction

a) Choose SAP Standard Menu (the triangle to the left of theSAP Menu folder).

b) Choose Logistics (the triangle to the left of the logistics folder).c) Choose Sales and Distribution (the triangle to the left of the

Sales and Distribution folder).d) Choose Sales (the triangle to the left of the Sales folder).e) Choose Order (the triangle to the left of the Order folder).f) Record your results:

FIELD TRANSACTION NAMETransaction Create

Transaction Change

Transaction Display

2. What are the names of the transactions that are located under thefolder Document Entry in General Ledger?

FIELD TRANSACTION NAMETransactionTransactionTransactionTransactionTransaction

Continued on next page

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Unit 1: Navigation LO020

TransactionTransactionTransaction

a) Choose Accounting (the triangle to the left of the Accountingfolder).

b) Choose Financial Accounting (the triangle to the left of theFinancial Accounting folder).

c) Choose General Ledger (the triangle to the left of the GeneralLedger folder).

d) Choose Document Entry (the triangle to the left of theDocument Entry folder).

e) Record your results:

FIELD TRANSACTION NAMETransaction Enter G/L Account

Document

Transaction Cash Journal Posting

Transaction Edit or Park G/Ldocument

Transaction Post with Clearing

Transaction Incoming Payments

Transaction Outgoing Payments

Transaction Valuate ForeignCurrency

Transaction General Posting

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LO020 Lesson: Navigation

21 Exercise 3: Personalizing the SystemExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Navigate to transactions you would like to save as favorites� Use the Menu bar to create and store a favorite transaction

Business ExampleAs an SAP user, you will have specific transactions, files, or Web sites thatyou access frequently. In addition, you will likely desire to make personalsettings.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task:In this exercise, you will create two sample transactions as favorites thatwill appear on your SAP Easy Access menu. You will also make settingsin your user profile.

1. Create a favorite for the transaction Post Incoming Payment in AccountsReceivable. This is transaction code F-28.

2. Create a favorite for the transaction Display Vendor (Centrally) inMaterials Management. This is transaction code XK03.

3. In your user profile, set the decimal notation and date format thatyou desire.

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Unit 1: Navigation LO020

Solution 3: Personalizing the SystemTask:In this exercise, you will create two sample transactions as favorites thatwill appear on your SAP Easy Access menu. You will also make settingsin your user profile.

1. Create a favorite for the transaction Post Incoming Payment in AccountsReceivable. This is transaction code F-28.

a) Choose Accounting→ Financial Accounting→ Accounts Receivable→ Document Entry

b) Choose Incoming Paymentc) Choose Favorites → Add

Note: This Menu path is at the top of your window.

2. Create a favorite for the transaction Display Vendor (Centrally) inMaterials Management. This is transaction code XK03.

a) Choose Logistics→Materials Management→ Purchasing→MasterData → Vendor → Central → Display

b) Choose Displayc) Choose Favorites → Add

Note: This menu path is at the top of your window.

3. In your user profile, set the decimal notation and date format thatyou desire.

a) Choose System → User profile → Own data.b) Choose the Defaults tab.c) Set the decimal notation and the date format you desire by

choosing the correct radio buttons.

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LO020 Lesson: Navigation

23 Exercise 4: Creating Web Site Links in theFavorites ListExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Understand how to create Websites as favorites� Create and store three favorite Websites in your favorites list

Business ExamplePeriodically you need to access Web sites as part of your job functions. Youwould like to be able to store the Web sites as favorites for quick accessright from your SAP system.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task:You will create and save two Web sites as favorites in the navigation areaof your SAP system.

1. Create as a favorite a link to www.sap.com

2. Create as a favorite a link to www.yahoo.com

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Unit 1: Navigation LO020

Solution 4: Creating Web Site Links in theFavorites ListTask:You will create and save two Web sites as favorites in the navigation areaof your SAP system.

1. Create as a favorite a link to www.sap.com

a) Choose Favorites → Add Other Objectsb) Choose Web address or filec) Choose Enterd) Enter Text: sape) EnterWeb address or file: http://www.sap.comf) Choose Enter

2. Create as a favorite a link to www.yahoo.com

a) Choose Favorites → Add Other Objectsb) Choose Web address or filec) Choose Enterd) Enter Text: yahooe) EnterWeb address or file: http://www.yahoo.comf) Choose Enter

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LO020 Lesson: Navigation

Lesson Summary

You should now be able to:� Log on to the SAP system� Navigate a basic path and personalize an SAP system� Search for information and obtain help using the different help

methods in the SAP system

Related Informationhttp://help.sap.com

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Unit Summary LO020

Unit SummaryYou should now be able to:� Log on to the SAP system� Navigate a basic path and personalize an SAP system� Search for information and obtain help using the different help

methods in the SAP system

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LO020 Test Your Knowledge

27Test Your Knowledge

Direct the learners to complete the following self-assessment.

1. You can have only one SAP R/3 session open at a time.Determine whether this statement is true or false.□ True□ False

2. Which of the following is not part of the information required to logon to the SAP system?Choose the correct answer(s).□ A Enter a specific client number□ B Enter your User ID□ C Enter your password□ D Customize your settings

3. What menus are standard on all SAP screens?Choose the correct answer(s).□ A System□ B Help□ C Both A and B□ D None of the above

4. Which of the following provides general information on the SAPsystem and transaction or task you are working on?Choose the correct answer(s).□ A Status Bar□ B Menu Path□ C Role Bar□ D None of the above

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Test Your Knowledge LO020

5. In the SAP Easy Access menu, you can create a favorites listcontaining:Choose the correct answer(s).□ A Web addresses□ B Transactions□ C Files□ D All of the above

6. List three different types of online help that are available in the SAPsystem.

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LO020 Test Your Knowledge

29Answers

1. You can have only one SAP R/3 session open at a time.

Answer: False

You can create up to six sessions. Each session you create is as ifyou logged on to the system again. Each session is independent ofthe others.

2. Which of the following is not part of the information required to logon to the SAP system?

Answer: D

You do not customize your settings until you are already logged onto the SAP system.

3. What menus are standard on all SAP screens?

Answer: C

The Systemmenu contains functions that affect the system as a whole,such as Create session, User profile, and Log off. The Help menuprovides various forms of online help.

4. Which of the following provides general information on the SAPsystem and transaction or task you are working on?

Answer: A

The Status bar contains information on system messages, as wellas system information such as client, user, transaction codes, andresponse time.

5. In the SAP Easy Access menu, you can create a favorites listcontaining:

Answer: D

Favorites can consist of URL Web links, standard and customertransaction codes, and links to other files such as Word documents orPower Point files.

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Test Your Knowledge LO020

6. List three different types of online help that are available in the SAPsystem.

Answer: Following are the types of system-level help that areavailable in the SAP system:

Application help:Displays comprehensive help on the current application;selecting this menu option in the initial screen displays help ongetting started with R/3

SAP Library:This is where all online documentation can be found

Glossary:Enables you to search for definitions of terms

Release notes:Displays notes that describe functional changes that occurbetween R/3 releases

SAPNet:Enables you to log on to SAPNet

Feedback:Enables you to send a message to the SAPNet R/3 front-end,SAP�s service system

Settings:Enables you to select settings for help

F1:Field level help-Provides information about the field

F4:Field level help-Provides a list of field values or an option tosearch for the information if the list is extensive

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Unit 231 Basics of the Procurement Process

SAP terminology for the elements of the R/3 organizational structure mightnot match what our customers currently use. Therefore, it is important toprovide clear glossary definitions and clear visual relationships for theelements used in the procurement process.

Unit OverviewThis unit will introduce the concept of organizational levels in a businessenterprise and their importance in both master data and in transactiondocuments. The basic steps of the procurement cycle will also be presented.

Unit ObjectivesAfter completing this unit, you will be able to:

� List the organizational levels in the R/3 System that are relevant tothe procurement process

� Explain the relationship between these organizational levels� Identify the basic procurement process� Create and process a purchase order� Display the purchase order and purchase order output� Explain the purpose and function of a goods receipt and its

relationship to goods movement� List the most important effects of a goods receipt for a purchase order

in the R/3 System� Post a goods receipt with reference to a purchase order� Explain and demonstrate the document concept at goods receipt� Explain and demonstrate the use of Logistics Invoice Verification

(LIV) to post a vendor invoice� Explain the effects of Logistics Invoice Verification (LIV) on the

purchase order

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Unit 2: Basics of the Procurement Process LO020

Unit ContentsLesson: Organizational Elements .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Lesson: Purchase Order Basics ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Procedure: Creating a Standard Purchase Order ... . . . . . . . . . . . . . . . . . . . 64Procedure: Displaying the Purchase Order .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Procedure: Message Output for Purchase Order .. . . . . . . . . . . . . . . . . . . . . . 70Demonstration: Create a Standard Purchase Order.. . . . . . . . . . . . . . . . . . . 71Demonstration: Display a Purchase Order.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Demonstration: Update Favorites ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75Exercise 5: Purchase Order Basics.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Lesson: Goods Receipts Basics ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Procedure: Goods Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94Procedure: Display Material Document .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Demonstration: Goods Receipt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96Demonstration: Display Material Document for Goods Receipt.. . . . . . 97Demonstration: Maintain Favorites list . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Exercise 6: Goods Receipts Basics.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Lesson: Invoice Verification Basics... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108Procedure: Logistics Invoice Verification ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117Demonstration: Post a Logistics Invoice Verification ... . . . . . . . . . . . . . . .119Exercise 7: Invoice Verification Basics .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121

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LO020 Lesson: Organizational Elements

Lesson:33

Organizational ElementsLesson Duration: 45 Minutes

Lesson OverviewIn this lesson participants will familiarize themselves with theorganizational levels essential to the procurement process and obtain aninsight into the organizational structure of the IDES company.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� List the organizational levels in the R/3 System that are relevant tothe procurement process

� Explain the relationship between these organizational levels

In this lesson participants will familiarize themselves with theorganizational levels essential to the procurement process and obtain aninsight into the organizational structure of that IDES company. Explainthe IDES is the training company.

It is important not to use abbreviations when explaining SAP concepts tostudents. Normally, this class is a student�s first or second exposure to SAP,so be sensitive to using abbreviations during lecture.

During this lesson, encourage students to think about their corporatestructure and how it relates to the R/3 environment.

Create the organizational structure on the board as you discuss this lesson.Make the drawing resemble the organizational graphic: OrganizationalLevels in Inventory Management. Leave this drawing on the board to refer toin other lessons.

Business ExampleIn your company the responsibilities of purchasing, goods receipt,and invoice verification are organized by regional and functionalconsiderations. The project team is testing how it can map this enterprisestructure in the R/3 System, using the relevant organizational levels.

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Unit 2: Basics of the Procurement Process LO020

Organizational Levels in the Procurement Process

This is an overview graphic. The following graphics give more detailsfor each level.

Explain that organizational elements are the building blocks of the R/3System. Each organizational level must be defined and assigned in theImplementation Guide (IMG). Explain the define and assign process asyou explain each level of the MM organizational structure. Every moduleuses organizational element to define its structure. Application processesuse organizational levels in their processing.

Defining and assigning organizational levels are one of the first steps whenimplementing R/3. Explain the importance of defining and assigning theorganizational levels correctly during implementation.

Encourage the students to think about their own company�s structure andrelate its structure to the levels in R/3.

Figure 10: Organizational Levels in the Procurement Process

In the SAP R/3 System, organizational levels are structures that representthe legal or organizational views of a company. Defining organizationallevels is an essential step in your project and is vital for all subsequentactivities.

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LO020 Lesson: Organizational Elements

Analyze the organizational structures and process structures in yourcompany and match them with SAP structures. Once you have decidedon an organizational structure, it can be changed only with a great dealof effort.

Organizational levels are defined and assigned in the ImplementationGuide (IMG).

Client

Begin drawing an organizational diagram on the board.

In commercial, organizational, and technical terms the client is aself-contained unit in an R/3 System with separate master records.

Often the students think the client is the hardware; this is incorrect.Explain that it is possible to have systems with multiple clients. Examplesof multiple clients during implementation are: testing, development, andproduction. Explain that users using different clients (for example, oneuser is using client 400 and the other user is using client 401) are not seeingthe same master data records.

Give the students examples for the kinds of data held at a client level, forexample, user logons.

Note: There are Application Link Enabling (ALE) processes tosynchronize clients.

Figure 11: Client

The client is a commercial, organizational unit within the R/3 System, withits own data and master records.

From a business perspective, the client forms a corporate group.

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Examples of client-specific data includes:

� User master data - such as parameters, authorization, and user groups� Customizing data - such as organizational units, assignments, and

document types� Application data - such as business transaction data and material

master data

A client is assigned a unique three-character alphabetic, alphanumeric,or numeric key.

Company Code

Add two company codes to the organizational diagram you are creatingon the white board. Name them company 0001 and 0002.

The company code is the smallest organizational unit for which acomplete self-contained set of accounts can be drawn up for purposes ofexternal reporting. Normally the FI group defines the company code.The company code is important to the Materials Management groupbecause the inventory value can be assigned at a company code level.SAP recommends the inventory value be assigned at the plant level.Assignment of inventory value at the plant level allows more flexibility.

A company code represents a separate legal entity within a client, orcorporate group. Accounts are balanced and Profit and Loss statements arecarried out at company code level. Example: A group of companies mayhave several company codes in the different countries in which it operates.

There can be more than one company code in a client.

Figure 12: Company Code

The company code is the smallest organizational unit for which you canhave an independent Accounting department for the purposes of externalAccounting. A company code represents an independent accounting unit,for example, a company within a corporate group (client). Balance sheetsand Profit and Loss statements, required by law, are created at companycode level.

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LO020 Lesson: Organizational Elements

You can set up several company codes in one client in order to managevarious separate legal entities simultaneously, each with their ownbalanced set of financial books. You can use a special Customizing functionin the Implementation Guide (IMG) to copy a company code. This copiesthe company code specifications to your new company code.

A defined company code must be assigned to a client to be used inapplication processes. A company code is assigned a unique four-characteralphabetic, alphanumeric, or numeric key.

Plant

Add plants to the organizational diagram you are creating on the whiteboard. Add two plants to company code 0001, name them 1000 and 1100and one plant to company code 0002, name it 2000. Add one plant tocompany code 0002, name it 2000.

As the next organizational level within R/3 after client and company code,the plant is especially relevant for logistics.

A plant can belong to only one company code.

A plant is a place where either materials are produced, or goods andservices are provided. Planning either MRP or MSP takes place at theplant level.

A plant does not have to be a warehouse or a factory. Any locationwhere materials planning takes place can be defined as a plant. It is notnecessarily a production facility, although the name may suggest this.Point out that a plant can also be a sales office, or a central delivery unit,or a corporate headquarters, depending on the need of the individualcustomer.

Value-based inventory transactions take place at plant level.

Figure 13: Plant

A plant is an organizational logistics unit that structures the enterprisefrom the perspective of production, procurement, plant maintenance, andmaterials planning.

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A plant can be one of the following locations:

� Central delivery warehouse� Regional sales office� Manufacturing facility� Corporate headquarters� Maintenance plant

A plant has the following attributes:

� A plant has an address.� A plant has a language.� A plant belongs to a country.

The plant plays an important role in the following areas:

� Material Valuation: If the valuation level is the plant, the materialstocks are valuated at plant level. If the valuation level is the plant,you can define the material prices for each plant. Each plant can haveits own account determination.

� Inventory Management: The material stocks are managed withina plant.

� MRP: Material requirements are planned for each plant. Each planthas its own MRP data. Analyses for materials planning can be madeacross plants.

The plant is an operating area or branch within a company. The plant isembedded in the organizational structure as follows:

� The plant is assigned to a single company code. A company codecan have several plants.

� Several storage locations in which material stocks are managed canbelong to a plant.

� A plant can be defined as a maintenance planning plant.

When creating a new plant, you can use the plant copying function withinthe Implementation Guide (IMG). When you use this function, the systemprocesses the entry in the plant table and in all dependent Customizingand system tables in which the plant is included as a key.

A unique four-character alphabetic, alphanumeric, or numeric key isassigned to a plant.

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LO020 Lesson: Organizational Elements

Storage Location

Add storage locations to the organizational diagram. Add two storagelocations to plant 1000, name them 0001 and 0002; add three storagelocations to plant 1100, name them 0001, 0002, and 0003.

Multiple storage locations can be defined for a plant.

Physical inventory is carried out at storage location level.

Materials Management uses this organizational level. WarehouseManagement allows for another organizational level not defined inMaterials Management, the storage bins.

The R/3 System does not automatically create storage locations. A storagelocation must be assigned to a plant before it can be used.

Figure 14: Storage Location

The storage location is an organizational unit allowing the differentiationof material stocks within a plant.

A storage location has the following attributes:

� Physical inventory is carried out at storage location level.� There may be one or more storage locations within a plant.� A storage location has a description and at least one address.� It is possible to store material data specific to a storage location.� Stocks are managed on a quantity basis only and not on a value basis

at storage location level.� Storage locations are always created for a plant.

A unique four-character alphabetic, alphanumeric, or numeric key isassigned to the storage location.

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Unit 2: Basics of the Procurement Process LO020

Organizational Levels in Inventory Management

If you have been creating an organization diagram on the white board,your diagram should resemble this graphic.

Explain how the R/3 System allows unique keys to be assigned to eachlevel of the structure. Note that some of the names can be re-used in theorg. levels (that is the storage location names).

Point out the 1-to-n relationship between the organizational levels, client,company code, plant, and storage location.

Figure 15: Organizational Levels in Inventory Management

The client is uniquely defined in the system by a three-character alphabetic,alphanumeric, or numeric key.

A unique four-character alphabetic, alphanumeric, or numeric key definesthe organizational levels: company code and plant. A unique four-digitalpha , alphanumeric, or numeric key uniquely defines the storage location.

Organizational structures are assigned to each other in the ImplementationGuide (IMG). For example, several plants may be assigned to one companycode. However, a plant can be assigned to one company code only in theR/3 System.

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LO020 Lesson: Organizational Elements

Purchasing Organization and Group

Add the purchasing org. 1000 to your diagram on the white board.

The purchasing organization is the highest level of aggregation (afterthe organizational unit client) for purchasing statistics. The purchasingorganization negotiates conditions for one or more plants. It is legallyresponsible for concluding contracts.

The purchasing organization serves as a possible selection criterion forlists of all purchasing documents.

From the Materials Management and Purchasing view, the purchasingorganization is responsible for all purchasing activities (including theprocessing of requests for quotations and purchase orders). A purchasingorganization can be divided into several purchasing groups that areresponsible for different operational areas allowing:

� Each purchasing organization to have its own info records andconditions for pricing

� Each purchasing organization to have its own vendor master data� Each purchasing organization to evaluate its own vendors using MM

Vendor Evaluation.

Authorizations for processing purchasing transactions can be assignedto each purchasing organization.

The purchasing group is a defined list of the buyer or group of buyernames and/or assigned buyer numbers. The list is maintained in the IMG.A purchasing group is responsible for purchasing operations for one ormore purchasing organizations, and consists of one or more purchasers.

The way a purchase organization is assigned in the organizational structurewill depend on the customer�s business processes. Explain the three waysa purchasing organization can be assigned to an organization�s structure.

Figure 16: Purchasing Organization and Purchasing Group

A purchasing organization is an organizational level that negotiatesconditions of purchase with vendors for one or more plants. It islegally responsible for completing purchasing contracts. A purchasingorganization is assigned a unique four-character alphabetic, alphanumeric,or numeric key.

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Unit 2: Basics of the Procurement Process LO020

A purchasing group is the business defined key for a buyer or groupof buyers responsible for certain purchasing activities. Internally, thepurchasing group is responsible for the procurement of a material or aclass of materials. Externally, it is the medium through which contactswith the vendor are maintained.

The purchasing organization is responsible for the company�s purchasingrequirements.

You can incorporate purchasing into the company structure by assigningthe purchasing organization to company codes and plants. This meansthat you can determine whether purchasing is organized centrally ordecentrally in your company. You can have a combination of centralizedand decentralized purchasing organizations. You can organize yourpurchasing function in the following ways: corporate group-widepurchasing, company-specific purchasing, or plant-specific purchasing.All of these forms can co-exist within a single client.

Plant-Specific Purchasing Organization

A plant-specific purchasing organization buys for only one plant. Theplant and purchasing organization are assigned to the same companycode. Example: You have two plants, one in Dallas, Texas, and one inSeymour, Connecticut. Each plant is independent and buys products andservices for itself.

Figure 17: Plant-Specific Purchasing Organization

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LO020 Lesson: Organizational Elements

In plant-specific procurement, a purchasing organization is responsible forprocuring materials for one plant only. In this case, you assign the plantand the company code of the plant to the purchasing organization.

Cross-Plant Purchasing Organization

A cross-plant purchasing organization buys for several plants withina company code. Example: You have two plants, one in Dallas, Texas,and one in Seymour, Connecticut. They have products and services theyuse in common such as coaxial cable. Both plants are assigned to thesame purchasing organization so contracts for the common products andservices can be negotiated together.

Figure 18: Cross-Plant Purchasing Organization

You can set up a cross-plant purchasing organization for each companycode. This purchasing organization procures material and services for allplants assigned to the company code. In this case, you assign a companycode to the purchasing organization.

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Cross-Company Code Purchasing Organization

A cross-company code purchasing organization can buy for several plantsin different company codes. In this case it is important that the purchasingorganization is not assigned to a company code in Customizing practice,there are various ways of organizing purchasing organizations. A mixtureof organizations and responsibilities is also possible using referencesbetween purchasing organizations. In this way, certain purchasingorganizations can access more advantageous terms and conditions.Example: You have three plants and three company codes. A plantin Texas, a plant in Mexico, and a plant in Canada. The purchasingorganization negotiates the contracts for all plants and companies, forexample coaxial cable is purchased for all three plants from the samesupplier. Advantage: price of the product. If you buy 200 feet of coaxialcable for one plant versus 200,000 feet of coaxial cable for all three plants.

The way a customer assigns purchasing organizations depends on theirbusiness needs.

Figure 19: Cross-Company Code Purchasing Organization

If you want to organize purchasing on a cross-company code basis, you donot assign a company code to the purchasing organization in Customizing.When you create a purchase order, for example, the system asks you toenter the company code for which you want to procure the material. In this

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LO020 Lesson: Organizational Elements

case, you do not assign a company code to the purchasing organization,but specify the company code concerned for each individual purchasingtransaction.

Organizational Levels at IDES

Explain the training system using the student�s bullet points to aid youin your explanation.

Figure 20: Organizational Levels at IDES

IDES is the R/3 International Demo and Education System. The IDESgroup comprises several model companies that map the business processesof the R/3 System. The example of the IDES group structure shows youhow the organizational levels relevant to procurement processes can bemapped in the R/3 System.

The IDES system is delivered along with the standard R/3 System. Itcontains sample data that you can use for internal and external training.

IDES: Overview

Explain the organizational structure the students will be using in theirlessons. Suggest they use this graphic as a reference for their exercises.All of the organizational levels are already configured for this class, thestudents will not need to set up any organizational levels to completethe exercises.

Explain: The class is assigned to company code 1000, Deutschland. Theclass will be using the organizational levels assigned to company code1000 during their application processes.

Make sure the students understand the organizational structure of theIDES company. Subsequent exercises will assume an understanding ofthe IDES organizational structure.

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Figure 21: IDES Overview

IDES is a multinational group, with companies in Europe, Asia, and NorthAmerica. In Europe, IDES has companies in Germany and Great Britain.Due to different legal regulations concerning the balancing of accountsand Profit and Loss statements, IDES needs two company codes in Europe.

IDES has five manufacturing plants in Germany. The motor bikes areassembled in the Hamburg plant, the Berlin plant manufactures thecrankcases, the Dresden plant manufactures the gearboxes, the Frankfurtplant is responsible for producing the brake systems, and the electriccomponents are made in the Stuttgart plant.

IDES has four storage locations in its Hamburg plant. These enable theplant to differentiate its material stocks.

Purchasing at IDES

Explain how the purchasing organization is assigned in the trainingsystem.

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Figure 22: Purchasing at IDES

IDES Germany has centralized purchasing for tires, steel, electronics,accessories, and equipment.

The central Purchasing department is based in Hamburg and is responsiblefor procuring all the above materials for all of the company�s plants inGermany.

Each plant also has its own local Purchasing organization. This local,decentralized purchasing organization is responsible for procuring officeequipment and goods for which central procurement would not beeconomical (for example, due to transportation costs).

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Facilitated DiscussionReemphasize the importance of organizational structures in the R/3environment.

Discussion QuestionsUse the following questions to engage the participants in thediscussion.Feel free to use your own additional questions.

How is your company structured?

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Lesson Summary

You should now be able to:� List the organizational levels in the R/3 System that are relevant to

the procurement process� Explain the relationship between these organizational levels

Related Informationhttp://help.sap.com

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Lesson:45

Purchase Order BasicsLesson Duration: 1.5 Hours

Lesson OverviewIn this lesson you will gain an understanding of the procurement cyclewith a focus on the purchase order process and the data required to createand issue a purchase order.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Identify the basic procurement process� Create and process a purchase order� Display the purchase order and purchase order output

Most students will have an understanding of a procurement cycle but thismight be their first exposure to the R/3 processes. Explain the trainingenvironment has been configured with a basic procurement process.

This lesson discusses the whole procurement cycle, then discusses eachstep in more detail.

Business ExampleYou need to use the procurement process at your company. Theprocurement process at your company for a stock material generallyincludes creating a purchase order, posting the goods receipt, andprocessing the vendor invoice.

Procurement Cycle

Discuss each step in the procurement cycle. Re-create the process cycle onthe board as you discuss for reference for other lessons. The followinglessons will focus on steps 4, 6, and 7.

Note: Some students will express concern that the R/3 cycle doesnot reflect their current purchasing cycle. If there is concern explainthat the cycle presented in this lesson reflects a basic R/3 cycle. TheR/3 process can be configured to incorporate other cycle needs,such as bar coding.

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Figure 23: Procurement Cycle

The typical procurement cycle for a service or material consists of eightphases:

1. Determination of requirements: Materials requirements areidentified either in the user departments or via materials planningand control. (This can cover both MRP proper and the demand-basedapproach to inventory control. The regular checking of stock levels ofmaterials defined by master records, use of the order-point method,and forecasting on the basis of past usage are important aspects ofthe latter.) You can enter purchase requisitions yourself, or theycan be generated automatically by the materials planning andcontrol system. A purchase requisition is a request or instruction toPurchasing to procure a certain quantity of a material or a service sothat it is available at a certain point in time.

2. Determination of the source of supply: The R/3 System helpsthe buyer determine possible sources of supply. You can usedetermination of the source of supply to create requests for quotation(RFQs) and then enter the quotations. You can also access existingpurchase orders and conditions in the system.

3. Vendor selection: The system simplifies the selection of vendorsby making price comparisons between the various quotations. Itautomatically sends rejection letters.

4. Purchase order processing: The system facilitates data entry byproviding entry aids when you are entering purchase orders.The Purchasing system adopts information from the requisitionand the quotation to help you create a purchase order. As with

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purchase requisitions, you can generate POs yourself or have thesystem generate them automatically. Vendor scheduling agreementsand contracts (in the SAP System, types of longer-term purchaseagreement) are also supported.

5. Purchase order monitoring: The buyer can monitor the processingstatus of the purchase order online at any time and can determinewhether goods or an invoice have been received for the relevantpurchase order item. The system also supports reminder procedures.

6. Goods receipt: The system compares the goods receipt quantity withthe purchase order quantity. Goods receiving personnel can confirmthe receipt of goods simply by entering the PO number. By specifyingpermissible tolerances, buyers can limit over- and underdeliveriesof ordered goods.

7. Invoice verification: Vendor invoices are checked for accuracy ofprices and contents. The system supports the checking and matchingof invoices. The accounts payable clerk is notified of quantity andprice variances because the system has access to PO and goods receiptdata. This speeds the process of auditing and clearing invoices forpayment.

8. Payment processing: Financial Accounting normally deals withvendor payments.

Purchase Order

Discuss where data can be obtained from in the R/3 System. A requisitionor an RFQ contains the quantity and delivery date of the material to besupplied or the quantity of the service to be performed and can be usedas reference for creating the purchase order. The quantity and requesteddates are copied into the purchase order when the purchase order iscreated with reference to a requisition or an RFQ. Master data: such as thevendor master record payment data is also populated in the copy process.The purchase order is being created for an external vendor or to sell theproduct to another plant.

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Figure 24: Purchase Order

A purchase order is a formal request to a vendor to supply certain goodsor services under the stated conditions. The buying entity�s request orinstruction to a vendor (external supplier) to supply certain materialsor render or perform certain services or works formalizes a purchasetransaction.

You can create purchase orders without reference or with reference to apurchase requisition, a request for quotation, or another purchase order.

When you enter the purchase order data, the system suggests defaultvalues. For example, it suggests the ordering address, as well as the termsof payment and freight (incoterms) from the vendor master record. Ifyou have maintained a material master for a given material in the R/3System, the system suggests the material short text or the material group,for example. If a purchasing info record already exists in the system, thesystem copies a price proposal to the purchase order.

You either send the purchase order to a vendor or you carry out a stocktransport order in another plant belonging to your company or group.With a stock transport order, you can take into account the associatedfreight costs in the purchase order.

Note: For more information about stock transport orders, referto the Materials Management documentation on the topic ofInventory Management: Special Stocks and Special Forms ofProcurement in Materials Management.

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Purchase Order Creation

Discuss the different ways one can place a purchase order in the system.If you create a purchase order with reference to a RFQ, a requisition, ora purchase order, the data you entered on the initial screen of referencedocuments is also adopted in the document being created. If you createa purchase order with reference to a RFQ, the RFQ document numberwill be captured and referenced in the purchase order. This allows thesystem to build a document history for each item referenced on anotherdocument. You can also create a purchase order on the system withouta reference to another document.

The system also supports receipt and invoice history for each item. Thishistory gives the user access to detailed information about each item on adocument. This information includes: the type of transaction, the time ofthe transaction, the user who processed the transaction, and the quantityand value of the transaction.

A question that is often asked (you may want to discuss this with yourstudents at this point) is: Does the price from the material master recordcopy into the purchase order document? The answer is no, the price fromthe material master does not copy into the purchase order document.R/3 will obtain the price of the material on a purchase order from one ofthe following (depending on the programming in the IGM): the RFQ, acontract, another purchase order, or an information record. Later in theclass you will discuss information records so you might want to discussprices on purchase orders when you discuss information records.

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Figure 25: Purchase Order

A purchase order is a formal request to a vendor to supply you with goodsor services at the conditions stated in the purchase order. You specifyin the purchase order whether the material is delivered for stock or fordirect consumption (for example, cost center, asset or project). The goodsreceipt and invoice verification are usually carried out on the basis of thepurchase order.

You can minimize data-entry time by creating purchase order items withreference to an existing purchase requisition, RFQ or purchase order. Youcan also enter a purchase order without reference to preceding documentsin the system.

If you want assistance choosing a vendor when you create the purchaseorder, you can use the source determination function in the R/3 System.The system suggests possible vendors on the basis of the defined sourcesof supply (outline agreements, info records) and, if required, on the basisof other master data (source list entries, quota arrangements).

You can determine the current processing status for each purchase orderitem. For example, you can determine whether goods receipts or invoicereceipts have already been posted for an item. You can display thefollow-on documents (material document and invoice document) fromthe purchase order history screen.

Note: In version 4.6 the purchase order history tab is not displayeduntil a goods receipt or invoice process has been posted.

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Figure 26: Purchase Order Screen

Purchase Order Format

You can maintain all relevant data on one central screen. This single screenis divided into three parts:

HeaderHere you can enter all the data that affects the entire requisition orpurchase order (e.g. the partner roles your vendor can assume, texts,or conditions).

Item overviewHere you can enter your items with the most important data (forexample: material, services, material group, quantity, ordering plant).

Item DetailsHere you can enter additional data on a particular item (for accountassignment and expediting data or limits and individual services).

You can expand and collapse all three screen areas individually, therebyalso influencing their size.

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Purchase orders as well as other purchasing documents can beprogrammed to require a release strategy. Release strategies are discussedin class LO520.

Figure 27: Purchase Order Format

Like other purchasing documents in the R/3 System, the purchaseorder consists of a document header and one or more items. You canprocure materials or services for all plants attached to your purchasingorganization.

The document header contains information that refers to the entirepurchase order. Examples of this include the document currency, thedocument date, the terms of payment, and the purchasing organization.

In the item overview area you can enter the items with the most importantdata relating to them (for example: material, services, material group,order quantity, and ordering plant).

The item details of the document contain data describing the materials orservices ordered. You can maintain additional information for each item(for example, delivery schedules or item-based text).

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51Creating a Standard Purchase Order

1. Logistics → Materials Management→ Purchasing→ Purchase Order →Create → Vendor/Supplying Plant Known.

2. Enter the following data:

� Vendor� Document date

3. Choose Enter.

4. To open the item header area, choose Header.

5. On the Org. data tab page in the header data area, use the F4 inputhelp to enter the following data:

� Purchasing org.� Purchasing group� Company code

6. To open the item overview area, choose Item overview.

7. Enter the following data:

� Material� PO quantity� Delivery date� Plant� Storage location

8. Choose Enter.

9. Choose Save.

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Figure 28: Example: Purchase order creation

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53Displaying the Purchase Order

1. Choose Logistics → Materials Management → Purchasing → PurchaseOrder → Display.

Caution: If your purchase order is not displayed on theStandard PO XXX Created by User screen, choose OtherObject. In the Select Purchase Order dialog box, enter your POnumber, then choose Other document.

3. Choose Back to return to the overview tree.

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Item Categories

Item categories are introduced as part of this lesson to aid the student�sunderstanding of a Standard or Blank item category. Discuss the differenttypes of item categories.

Note: You will use item category again in more detail in theconsumable lessons.

The item category determines whether the material defined in a purchaseorder:

� Requires a material number� Requires an account assignment� Is to be managed as a stock item� Requires a goods receipt (GR) or an invoice receipt (IR)

We are going to use the Blank or Standard item category type when creatingour purchase order in this lesson.

Figure 29: Item Category

The item category defines whether an item requires or can have a materialnumber, account assignment, goods receipt, or invoice receipt. The itemcategories displayed depend on the document type. In Customizing, youcan define which item categories are allowed for which documents.

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The item categories that are defined include the following:

� Standard: Used for materials that are to be procured externally.� Subcontracting: The finished product is ordered from a vendor. The

components that the vendor needs to manufacture the finishedproduct are entered as material to be provided items.

� Consignment: The vendor makes material available, which you thenmanage as consignment stock. A liability arises only when material iswithdrawn from consignment stock, not when the stock is placed inthe consignment stores.

� Stock transport orders: The material is transferred from one plantto another.

� Third-party order: The ordered material should be delivered directlyto a third party (for example, a customer). The vendor sends yourcompany an invoice for the material.

Note: Subcontracting, consignment, stock transfer orders andthird-party orders are covered in the Materials Managementdocumentation on Inventory Management: Special Stocks andSpecial Forms of Procurement in Materials Management.

Issuing Messages

In MM Purchasing, the term message is used within the context ofcommunication between a buying entity and its vendors. A message is adocument in output format, allowing transmission of the informationcontained therein to vendors via various media (printer, e-mail, EDI, orfax, for example). (This type of message should not be confused with error,warning, or informatory messages issued by the SAP system in responseto user activities, which are properly termed system messages.)

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Figure 30: Issuing Messages

You can issue purchase orders, changes to purchase orders, and orderacknowledgements as messages via printer, fax, EDI or e-mail.

You can configure which header texts and item-based texts the systemissues. The header text is printed at the top of the purchase order andcontains general information. Item texts describe a purchase order item inmore detail. You can also include and issue standard texts. The layout of aprinted document is determined by SAPscript.

You can display the print preview directly from within the purchase ordercurrently being processed. This also applies to documents that have notyet been released. You can use the print preview only when you first printa PO, and when you use the media fax or printout.

Note: You will find more detailed information aboutprinting purchasing documents in the Materials Managementdocumentation on Purchasing: Entering Texts, Print Functionsand Information Transmission.

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57Message Output for Purchase Order

1. Choose Logistics → Materials Management → Purchasing → Purchaseorder → Messages → Print/Transmit.

2. Enter the following data:

� Document number� Purchasing Organization� Purchasing Group

3. Choose Execute.

The system lists all of the documents found for your selection that stillhave messages to be processed. Your PO document is now displayedaccording to the PO number.

Caution: Steps 4 to 8 are optional.

4. Select your document item, then chooseMessage Detail. The systemdisplays all the message records for the selected purchasingdocument.

5. Select your message record, then choose Communication method. Youcould also change the print parameters at this point. Use the settingsentered in the previous activity.

6. Check the following data:

Field DataLogical destination Name of your printerNumber of messages 1Print immediately SelectRelease after output Select

7. Choose Back.

8. Choose Save.

Continued on next page

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9. Select your item, then choose Display message. The system displaysyour print form. Check that the data and the item are correct for the:

� Header text� Material PO text� PO Info text� Item text

If required, use the scroll bar or the , icons to scroll withinyour form.

10. Choose Back.

11. Select your item, then choose Output message. The symbol appearsto the left of the item to confirm the message output. The message isnow printed out on the printer assigned to your workplace.

12. Choose Back until the overview tree appears.

Message determination represents the classic interface to businesspartners. It is used across applications in Materials Management(Purchasing, Inventory Management, Invoice Verification), Sales andDistribution (Shipping, Delivery, Picking), Production Planning andControl, Plant Maintenance, Project System (Order Confirmation), andFinancial Accounting (Document Printing). In addition to print outputwith subsequent dispatch, which we describe here, you can also transferrequirements to vendors via fax, EDI or SAPOffice.

Demonstration: Create a Standard Purchase Order

PurposeCreate a standard purchase order for a material master.

Important. This is the first materials management demo of the class so itis important to lay the ground work for all the other demos. Encouragethe students to watch you while you present the demo. Tell them they willhave time to practice the procedure presented in the demo in the exercise.Express to the students the importance of understanding the procedure.Let them know they will have other opportunities to create documentsduring the class.

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Caution: Allowing students to attempt to follow you while you aredemoing a procedure is highly discouraged.

Note: Use role menu LO020_Buyer to demo this lesson.

Please be aware that the design and name of some buttons in the documentoverview have changed from 4.6B to 4.6C.

Note: Approximate time of this demo: 20 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose LO020_Buyer → Purchase Order → Create / Change / Display

Purchase Order.

2. Enter the following:

Field DataVendor 1000Document date Today�s date

3. In the Header area in the Org. Data, tab enter the following:

Field DataPurchasing org. 1000Purch. group T20Company code 1000

4.Note: The students� exercise has them choose the to movebetween the screens or to have data automatically appear asdefault value. For consistency you may wish to use thewhen are moving between screens.

5. In the Item overview, area enter the following:

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Field DataMaterial M-01PO quantity 10Plant 1000Storage Location 0001

The price and the delivery date will appear as default values fromsystem master records .

6. Save the purchase order . Write down the purchase order numberas you will use it in other demos.

To reduce the amount of data you have to key in, you can make entries incertain fields in the Default data area of the item overview or by using thepersonal setting button. You can enter the receiving plant and storagelocation or the delivery date, for example, if they are the same for most orall items in the purchase order. The system automatically adopts theseentries in all items on the subsequent PO item overview. You may wish todemo setting defaults within the purchase order document.

Demonstration: Display a Purchase Order

PurposeTo show the different ways in which a purchase order can be displayed

To briefly explain how a purchase order is structured

Note: Use role menu LO020_Buyer to demo this lesson.

Approximate time for demo is 10 minutes.

System DataSystem:Client:User ID:Password:Set up instructions:1. The students� exercise has them display a purchase order using the

Document Overview. LO020_Buyer→ Purchase Order→ Create / Change/ Display Purchase Order.

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2. Select the Document Overview button from the Application toolbar.

3. Select the Selection variant icon.

4. Select from the listMy purchase orders.

5. Select the purchase order you created from the last demo bydouble-clicking on it.

6. Within the Header details area:

� Select the Delivery/invoice; tab point out the payment conditionsand incoterms.

� Point up in the Title bar who entered the purchase order.� Select the Status tab and point out statistics of the purchase order.

7. Within the Item details area:

� Select the Quantities/weight tab. Show how the systemautomatically calculated the weights.

� Select the Conditions tab. Discuss from where the default valuefor the cash discount came.

� Select the Purchase Order History tab. Discuss why the tab isnot available. The tab will appear when the first goods receiptis posted.

� Select the Print Preview button from the Application toolbar.Display the output of the purchase order.

8. Demo the second way one can display a purchase order by selectingthe icon from the Applications toolbar.

9. The purchase order number from the last demo will appearautomatically in the purchase order field. Demonstrate how to finda purchase order number using the F4 help.

10. Select from the F4 choices Purchasing Documents per Vendor and enterthe following:

Field DataVendor 1000Purchasing group T20

11. Select Enter. Double click on the purchase order number to pullthe number back into the purchase order Select document dialog box.

12. Select theOther document button within the Select document dialog box.

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Demonstration: Update Favorites

PurposeCreate a favorite for the new purchase order transaction ME21N. Showthe options to create a favorites list.

System DataSystem:Client:User ID:Password:Set up instructions:1. For details on how to demonstrate a favorites list, refer to the demo in

the navigation unit, Unit 1.

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59 Exercise 5: Purchase Order BasicsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create and process a purchase order� Display and output the purchase order

Business ExampleFor stock material, the procurement process at your company generallyincludes creating a purchase order, posting the goods receipt, andprocessing the vendor invoice. The Purchasing department is responsiblefor procuring the materials. Familiarize yourself with purchase orderprocessing for stock material.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Create a Purchase OrderUse the Purchasing composite role LO020_Buyer for the tasks below. Whenyou use this role, the system provides only the menu entries relevant toPurchasing.

1. Order 100 pieces of the standard taillight-## material masterT-RM1## for immediate delivery from vendor T-K12A##MotoluxGmbH Gr.##.

Hint: The Purchase Order screen is divided into three areas:the Header, the Item overview, and the Item Details. Eachof these areas require separate data entry. The Item Detailsarea will not open or be available for data entry until there isdata in the Item overview area.

Continued on next page

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2. You have determined the purchase order is for PurchasingOrganization 1000, Purchasing group T##, and Company code1000. Enter the relevant organizational levels in your purchase orderin the Org data tab.

3. The purchase order is for material master T-RM1##. 100 pieces ofthis material have been requested for this order. The Hamburg planthas requested immediate delivery of the taillights. The warehousehas requested the product be stored in storage location 0001.

Note: The description, the unit of measure, the delivery date,the price, and the material group will appear as default valuein the purchase order from system master data records.

4. Save the Purchase Order. Write down the Purchase Order numberfor further use.

Field: Data:Purchase Order Number

Task 2: Display the Purchase Order1. Using the document overview for your purchasing group, display

the purchase order you created in Task 1. Confirm you entered thedata requested in Task 1 correctly.

Field: Data:PO quantityPlantStorage Location

Hint: When the document overview is open, you must usethe icons within the overview section to open the requestedpurchase order lists.

Task 3: Issue a Message1. Using the Document overview, display the Print Preview for your

purchase order from Task 1.

Continued on next page

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Task 4: Maintain a List of FavoritesSince you work with the purchase orders frequently, include the purchaseorder transaction in your list of favorites.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate your favoriteslist.

1. Maintain your favorites list.

2. Change the description of the purchase order transaction within yourfavorites list to read Create Purchase Order.

Task 5: Return to the Main SAP Menu1. Since you work with several groups within the SAP system, you need

access to theMain SAP Easy Access menu. Leave the LO020_Buyermenu and return to the Main SAP Easy Access menu.

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Solution 5: Purchase Order BasicsTask 1: Create a Purchase OrderUse the Purchasing composite role LO020_Buyer for the tasks below. Whenyou use this role, the system provides only the menu entries relevant toPurchasing.

1. Order 100 pieces of the standard taillight-## material masterT-RM1## for immediate delivery from vendor T-K12A##MotoluxGmbH Gr.##.

Hint: The Purchase Order screen is divided into three areas:the Header, the Item overview, and the Item Details. Eachof these areas require separate data entry. The Item Detailsarea will not open or be available for data entry until there isdata in the Item overview area.

a) Select the Other menu button from the Applications toolbar, Selectfrom the choices within the role list LO020_Buyer role buyerfor LO020.

b) Select Role LO020_Buyer → Purchase Order →Create/Change/Display/Purchase Order.

c) Enter the vendor master number:

Field: Data:Vendor T-K12A##

2. You have determined the purchase order is for PurchasingOrganization 1000, Purchasing group T##, and Company code1000. Enter the relevant organizational levels in your purchase orderin the Org data tab.

a) Within the Header area of the purchase order, select the Org. datatab. Fill in the required data:

Field: Data:Purchasing org. 1000 IDES DeutschlandPurch. group T## (LO020�##)Company code 1000 IDES AG 1000

Continued on next page

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3. The purchase order is for material master T-RM1##. 100 pieces ofthis material have been requested for this order. The Hamburg planthas requested immediate delivery of the taillights. The warehousehas requested the product be stored in storage location 0001.

Note: The description, the unit of measure, the delivery date,the price, and the material group will appear as default valuein the purchase order from system master data records.

a) Within the Item Overview area, Enter the requested data:

Field: Data:Material T-RM1## standard taillightPO quantity 100

Plant 1000 Plant HamburgStor. loc 0001Material Warehouse

b) After you have entered the requested data, choose the GreenCheck Mark from the Options toolbar so the default data from thesystem master records will populate.

4. Save the Purchase Order. Write down the Purchase Order numberfor further use.

Field: Data:Purchase Order Number

a) Save your purchase order by choosing the Save icon fromthe Options toolbar.

Task 2: Display the Purchase Order1. Using the document overview for your purchasing group, display

the purchase order you created in Task 1. Confirm you entered thedata requested in Task 1 correctly.

Continued on next page

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Field: Data:PO quantityPlantStorage Location

Hint: When the document overview is open, you must usethe icons within the overview section to open the requestedpurchase order lists.

a) Select Role LO020_Buyer → Purchase Order →Create/Change/Display/Purchase Order.

b) Select the Document overview on button from the Applicationstoolbar.

c) Select the Selection variant icon.d) From the list selectMy Purchase Order.e) A list of purchase order(s) created for your purchasing group

will appear in the Document overview area. Select the correctpurchase order number from list created in Task 1.

f) Confirm you correctly entered the data requested from Task 1.

Task 3: Issue a Message1. Using the Document overview, display the Print Preview for your

purchase order from Task 1.

a) Select Role LO020_Buyer → Purchase Order →Create/Change/Display/Purchase Order.

b) Select the Document overview on button from the Applicationstoolbar.

c) Select the Selection variant icon.d) From the list selectMy Purchase Order.e) A list of purchase order(s) created for your purchasing group

will appear in the Document overview area. Select the correctpurchase order number from list created in Task 1.

f) Select the Print Preview button from the Applications toolbar.g) Display the print preview.h) Use the Green Arrow button from the Options toolbar to return

to the purchase order screen.

Continued on next page

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LO020 Lesson: Purchase Order Basics

Task 4: Maintain a List of FavoritesSince you work with the purchase orders frequently, include the purchaseorder transaction in your list of favorites.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate your favoriteslist.

1. Maintain your favorites list.

a) You can maintain a favorites list either by:

� Drag and Drop: Select the purchase order transaction.Holding the left mouse button down, drag the transactionup and into the Favorites folder.

� Right mouse click: Select the purchase order transaction.Click the right mouse button. Select add to favorites.

� Using the Add to favorites icon: Select the purchaseorder transaction. Select the Add to favorites icon from theApplications toolbar. Click on the icon to move the purchaseorder transaction into the favorites list.

� Using the Menu Bar: Select the purchase order transaction.Select from the Menu Bar Favorites /Add.

2. Change the description of the purchase order transaction within yourfavorites list to read Create Purchase Order.

a) Select the purchase order transaction. Select the Change Favoritesicon from the Applications toolbar.

b) A Text screen will open. Type the new name of your purchaseorder Create Purchase Order in the Text field.

c) Select the Green Check Mark within the Text dialog box.

Task 5: Return to the Main SAP Menu1. Since you work with several groups within the SAP system, you need

access to theMain SAP Easy Access menu. Leave the LO020_Buyermenu and return to the Main SAP Easy Access menu.

a) Select the SAP menu icon from the Applications toolbar.

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Lesson Summary

You should now be able to:� Identify the basic procurement process� Create and process a purchase order� Display the purchase order and purchase order output

Related Information

� For more information detailing purchasing documents and theirprocessing, refer to the SAP Library.

http://help.sap.com

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LO020 Lesson: Goods Receipts Basics

Lesson:66

Goods Receipts BasicsLesson Duration: 60 Minutes

Lesson OverviewIn this lesson you will gain an understanding of the basic goods receiptprocess and its related effects.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Explain the purpose and function of a goods receipt and itsrelationship to goods movement

� List the most important effects of a goods receipt for a purchase orderin the R/3 System

� Post a goods receipt with reference to a purchase order� Explain and demonstrate the document concept at goods receipt

Refer back to the procurement process cycle so the participants can seewhere they are in the process. The goods receipt process normally is awarehouse function. We address goods receipt as part of the procurementprocess because of its effect on inventory levels.

Business ExampleAs an employee in the warehouse, you are responsible for entering goodsreceipts. You enter the goods receipt with reference to a purchase order sothat you can check whether the delivery matches the purchase order. Thegoods delivered are posted to the plant�s valuated stock material.

Goods Receipt

Emphasize the importance of referencing a purchase order when postinggoods receipts. Explain the effects of the goods receipt on invoiceverification and the purchase order history. Point out that during thegoods receipt process R/3 creates two different documents: the materialdocument records the quantity received into stock, while the accountingdocument records the value posted to the G/L accounts. The goodsreceiving clerk will see the material document displayed in the status barwhen posting is processed. The accounting document will be created atthe same time but the document number will not be displayed.

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Figure 31: Goods Receipt

All transactions that bring about a change in stock are entered real time inR/3. Stock is updated real time at the time of posting of a goods receipt.

Posting a goods receipt to stock with reference to a purchase order has anumber of advantages for you, including:

� The goods receiving point can check whether the delivery is the sameas the purchase order data; that is, whether the goods that wereordered have been delivered.

� The system suggests data from the purchase order when you enterthe goods receipt (for example, items and quantities). This makesit easier to enter the goods receipt and check overdeliveries andunderdeliveries when goods arrive.

� Among other things, the purchase order history is automaticallyupdated as a result of the deliveries. The Purchasing department cansend a reminder about late deliveries.

� When you post a goods receipt to the warehouse, the system createsa material document containing information such as the materialdelivered and the quantity delivered. The system also records thestorage location in which you place the material into stock in theplant concerned.

� In transactions relevant for material valuation, the system creates atleast one accounting document, which records the effects of the goodsmovement on the value of the stock.

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Goods receipts are processed against the open purchase order quantity.The open purchase order quantity is the quantity still to be delivered foran ordered item. It is calculated as the difference between the quantityordered and the quantity delivered to date. If the entire order quantityor more has already been delivered, the open purchase order quantityequals zero. The open purchase order quantity is automatically adjustedwhenever goods are received for an order item or when the order item ischanged. The Delivery Completed indicator specifies whether a purchaseorder item is considered closed. This means that no more goods receiptsare expected for this item. If the Delivery Completed indicator is set, theopen purchase order quantity becomes zero, even if the full quantity hasnot been delivered. It is still possible to post goods receipts of remainingquantities, but these no longer change the open purchase order quantity.

Goods Receipt for Stock Material

This lesson explains receiving materials with reference to a purchase orderusing the new receipt transaction screens, MIGO. As of release 4.6 you canpost goods receipts in EnjoySAP transaction MIGO. MIGO replaces thesetransactions: MB01, MB0A, MBRL, MBSF, MBNL, MBST, MB02, MB03.Explain to students that receiving can be done for non-stock material usingthe same transaction. There are advantages to receiving materials withreference to a purchase order as the system will update data automatically.Explain what type of data is automatically updated. See the student bulletpoints for details.

In release 4.6 the option to print a Goods receipt slip is new. The GR slipnumber can be assigned externally as well as internally. You can definedifferent number ranges for each plant, storage location, and movementtype.

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Figure 32: Goods Receipt for Stock Material

If you entered a purchase order to procure a material, you have toreference the purchase order when you enter the goods receipt. Thesystem can check, for example, whether the material delivered is the sameas the material ordered, whether the order quantity matches the goodsreceipt quantity, or whether the shelf life is still guaranteed for highlyperishable goods (when the shelf life expiration date check is active forthe relevant material).

The purchase order history for a purchasing document item is alsoupdated when a goods receipt is posted with reference to a purchase order.This allows the buyer to send the vendor a reminder about outstandingdeliveries, for example.

Several goods receipt items can be entered for a purchase order item in oneoperation. This is advisable if, for example, the material is delivered inbatches or is distributed among several storage locations. You enter thegoods receipt data in a single material document.

If the delivery note accompanying the goods receipt does not contain apurchase order number, you can use the material number or the vendornumber to search for the corresponding purchase order number.

As of release 4.6, you can print goods receipt slips to facilitate physicalmovements and monitor the individual stocks in the warehouse.

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A goods receipt could have the following results in the system:

� When you post a goods receipt, the system automatically creates amaterial document, which serves as proof of the goods movement.

� Parallel to the material document, the system creates an accountingdocument. The accounting document contains the posting lines (forthe corresponding accounts) that are necessary for the movement.

� When you enter the goods receipt, you can print the goods receiptor goods issue slip (for example, goods receipt slip or pallet note) atthe same time. This is new as of release 4.6.

� If the GR message indicator has been set in the purchase order, thebuyer automatically receives a message that the delivery has beenmade. This does not tell the buyer what line was received. This islocated in the Header area of the purchase order document.

� Stock consumption is updated in the material master recorddepending on the destination of the goods.

� When the goods receipt is posted, the system automatically updatesthe G/L accounts by the value of the goods receipt. Updates can alsooccur in other related applications. In the case of a goods receipt toconsumption, for example, the account assignment object (such as acost center, order, asset) is debited.

� When a goods receipt is posted, a purchase order history record isautomatically created. If the Delivery Completed indicator is set in thematerial document, the order item is considered closed, and the openpurchase order quantity is set to zero.

� Depending on the characteristics of the material, movement, andcomponents used, additional updates are carried out in othercomponents: vendor evaluation data in Purchasing , inspection lots inQuality Management, and transfer requirements and quantaties inthe Warehouse Management System.

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Figure 33: Goods receipt screen example

Movement Types

Goods movement type 101 is used to receive product into stock. It canalso be used to receive product into quality stock or blocked stock.Goods movement 122 is a return to vendor goods movement type. Thismovement type is used to return product that has already been receivedinto stock using the 101 or other goods receipt movement. Movementtype 102 is a cancel or reversal movement for 101. Movements of type 102show in R/3 as if you never received the product. Movement types can becustomized in the IMG, if deemed necessary. Each movement type has itsrespective cancellation movement type, which corresponds to the numberof the movement type + 1. If you are going to customize movement types,SAP recommends the new movement type begin with a �9�.

Note: LO510 explains goods movement in detail. If a student hasan interest in obtaining more detailed insight, suggest they attendLO510.

Write several movement types on the board and explain to the studentshow they affect both the inventory and the accounting. Make adetermination from the class interest as to which movement you shoulddiscuss. Listed below are some of the more common movement types.

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For detailed information on each movement type, refer to the help inthe IMG: Tools → AcceleratedSAP → Customizing → SPRO - Edit Project→ SAP Reference IMG → Materials Management → Inventory Managementand Physical Inventory→Movement Types→ Copy, Change Movement Types.Choose the IMG activity document icon.

101 Goods receipt for purchase order or order:

� If the purchase order or order has not been assigned to an account, astock type (unrestricted-use stock, stock in quality inspection, blockedstock) can be entered during goods receipt.

� If the purchase order or order has been assigned to an account, thegoods receipt is not posted to the warehouse, but to consumption.

� In the case of non-valuated materials, the goods receipt is posted tothe warehouse, although the purchase order has not been assignedto an account.

201 Goods issue for a cost center: The goods can be withdrawn fromunrestricted-use stock only.

301 Transfer posting plant to plant in one step.

551 Scrapping from unrestricted-use stock.

561 Initial entry of unrestricted-use stock. During initial entry of stockbalances, when the R/3 System is active, you enter the physical warehousestock figures or the book inventory from your old system into R/3 MaterialsManagement . This data entry usually takes place by means of batch input.

Movement types can be configured to require the user to enter a reasoncode, for example, defective.

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Figure 34: Movement Type: Examples

The movement type is a three-digit key used to differentiate betweengoods movements in the R/3 System. Examples of these goods movementsare goods receipts, goods issues or transfer posting.

For each goods movement a document is created which is used by thesystem to update quantities and values and serves as proof of goodsmovements.

The movement type has important control functions in InventoryManagement. It plays a central role in automatic account determinationin the R/3 System. Together with other influencing factors, the movementtype determines which stock or consumption accounts are updated inFinancial Accounting. The movement type also determines the format ofthe screen when you enter documents and how the quantity fields areupdated.

The movement type also has important control functions in InventoryManagement. For example, the movement type plays an important rolein the following:

� Updating of quantity fields.� Updating of stock and consumption accounts.� Determining which fields are displayed during entry of a document

in the system

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When you enter a goods movement, you start the following chain ofevents in the system:

� A material document is generated, which is used as proof of themovement and as a source of information for any other applicationsinvolved.

� If the movement is relevant for Financial Accounting, one or moreaccounting documents are generated.

� The stock quantities of the material are updated.� The stock values in the material master record are updated, as are the

stock and consumption accounts.

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72Goods Receipt

1. From the Inventory Management menu, choose Logistics→ MaterialManagement → Inventory management → Goods movement → Goodsreceipt → For purchase order → MIGO_GR - GR for Purchase Order(MIGO). This takes you to the initial screen for this function.

2. Enter the data on the initial screen:

� Enter the header data.� Select the movement type.� Enter the purchase order number. In addition, you can enter the

plant and a purchase order item, in order to restrict selectionof the purchase order items.

If the quantity delivered is intended for the warehouse or forconsumption or usage, select Movement type 101, PO to warehouse.The item selection list is displayed. This list contains all of thepurchase order items that satisfy the criteria entered.

3. Select the purchase order items to be copied. If necessary, you canchange data in the selected items on this screen.

4. Check the Item OK button by placing a in the box.

5. Post the document.

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73Display Material Document

1. From the Inventory Management menu, choose Logistics →MaterialManagement → Inventory management → Goods movement → Goodsreceipt → For purchase order → MIGO_GR - GR for Purchase Order(MIGO). This takes you to the initial screen for this function.

2. Select Display from the goods receipt pull-down menu. The systemwill display the last material document for you, otherwise, you candisplay the list of material documents for a material by choosingLogistics → Materials Management → Inventory Management →Environment→ List Displays → Material Documents.

3. Select the Green Check Mark.

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Demonstration: Goods Receipt

PurposeA goods receipt is posted for the material ordered. The goods deliveredare posted to the plant�s valuated stock material. Enter the goods receipt.

System DataSystem:Client:User ID:Password:Set up instructions:1. Post the goods receipt with reference to the purchase order created in

the Purchase Order lesson. Select Role LO020_GOODS_RECEIPT→MIGO - Goods Movement (MIGO).

� Enter the purchase order number in the purchase order field

Hint: Do not use the document overview in the goodsreceipt; turn it off.

� Select the so the data from the purchase order fillsautomatically.

2. Point out the details in the tabs within the Detail data area of thegoods receipt.

� Select the WK tab from the Detail data area. Point out to theparticipants the significance of the movement type.

� Within theWK tab, select the Stock Overview icon. Explain Stockoverview.

� Select the PO data tab. Select the History icon. Explain Historyicon.

Note: There will not be history until you save the goodsreceipt posting.

3. Point out the OK field, which is used to post the goods receipt. It canbe preset for all items of a PO.

4. Post the goods receipt.

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Demonstration: Display Material Document for GoodsReceipt

PurposeTo display the material document created by the goods receipt process andto explain the effect of the update to other R/3 documents.

System DataSystem:Client:User ID:Password:Set up instructions:1. Select Role LO020_GOODS_RECEIPT → MIGO - Goods Movement

(MIGO)

Note: Approximate timing of this demo � 10 mins.

Hint: You do not need to back out of the goods receipt screento display the material document number.

2. Select Display.

You can use this function if you know the number of the materialdocument you want to display. The system will display the lastmaterial document for you, otherwise, you can display the list ofmaterial documents for a material by choosing Environment → ListDisplays → Material Documents.

3. Select the so the data from the goods receipt will fill automatically.

4. Select the Doc. info in the header area. Point out the Entered by,Entered on, and Transaction code field within the tab.

5. Show the location of the FI document within the Doc. info tab andexplain the system created the accounting documents during thegoods receipt posting.

Note: If you wish to demo executing the FI Documentfunction in the goods receipt, you experience a system delayor clocking while the system loads the required FI tables inthe system buffer. To avoid this, execute the FI Documentfunction before the demo.

6. Select the PO data tab.

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7. Select the History icon within the PO data tab. Explain the PO historyupdate.

8. Select theWK tab. Point out the storage location, the plant, and themovement type.

Demonstration: Maintain Favorites list

PurposeYou may want to demo adding the MIGO receiving transaction to thefavorites list.

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LO020 Lesson: Goods Receipts Basics

75 Exercise 6: Goods Receipts BasicsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Check that the purchase order was updated as a result of the goods

receipt� Enter goods receipts for existing purchase orders

Business ExampleAs an employee in the warehouse, you are responsible for entering goodsreceipts in the R/3 System. You enter the goods receipt with reference to apurchase order so that you can check whether the delivery matches thepurchase order. When you enter the goods receipt, the system updates thepurchase order history, thus allowing the buyer to get information on thestatus of the delivery directly from the purchase order document.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Post the Goods ReceiptUse the warehouse composite role LO020_Goods_Receipt for the tasksbelow. When you use this role, the system provides only the menuentries needed for Inventory Management.

1. The standard taillights you ordered for the Hamburg plant aredelivered complete and undamaged. Post the goods receipt withreference to the purchase order you created in the last exercise450000####. Post the purchase order into unrestriced-use stockinto storage location 0001.

Continued on next page

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Using the delivery note provided, enter the delivery note numberLS-A1##, post the goods receipt, and write down the materialdocument number.

Field: Data:Material Document Number

Figure 35:

Task 2: Display the Material Document

Hint: You can display the material documents from the sametransaction (MIGO) as you can post a goods issue by changing thepull-down default to display.

1. Display the material document created as a result of the goods receipt.

Task 3: Display the Purchase Order History1. Using the same display material document function from Task 2,

display the purchase order history resulting from the goods receipt.Write down the quantity received and the value resulting from thereceipt.

Continued on next page

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Task 4: Maintain a List of Favorites1. Add the goods receipt transaction MIGO to your list of favorites.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate yourfavorites list.

2. Change the description of the goods receipt transaction within yourfavorites list to read Goods Receipt.

Task 5: Return to the Main SAP Menu1. Since you work with several groups within the SAP system, you need

access to the Main SAP Easy Access menu. Leave the LO020_GoodsReceipt menu and return to the Main SAP Easy Access menu.

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Solution 6: Goods Receipts BasicsTask 1: Post the Goods ReceiptUse the warehouse composite role LO020_Goods_Receipt for the tasksbelow. When you use this role, the system provides only the menuentries needed for Inventory Management.

1. The standard taillights you ordered for the Hamburg plant aredelivered complete and undamaged. Post the goods receipt withreference to the purchase order you created in the last exercise450000####. Post the purchase order into unrestriced-use stockinto storage location 0001.

Using the delivery note provided, enter the delivery note numberLS-A1##, post the goods receipt, and write down the materialdocument number.

Field: Data:Material Document Number

Continued on next page

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LO020 Lesson: Goods Receipts Basics

Figure 36:

a) Select the Other menu button from the Applications toolbar, andSelect LO020_Goods_Receipt from the role menus list.

b) Select LO020_Goods_Receipt → Goods Movement (MIGO).c) Type the purchase order number you created in the prior

exercise (450000####) in the purchase order number field.

Hint: Your cursor will already be in the correct field bysystem default. The field will be highlighted in yellow.

d) Select the Green Check Mark from the Options toolbar.e) Type the delivery note number provided from the delivery note:

Field: Data:Delivery note LS-A1##

f) Enter a check mark in the Item OK field located at the bottomof the Goods receipt screen.

g) Save your goods posting by selecting the Save icon from theOptions toolbar.

h) Make note of your material document number.

Continued on next page

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Task 2: Display the Material Document

Hint: You can display the material documents from the sametransaction (MIGO) as you can post a goods issue by changing thepull-down default to display.

1. Display the material document created as a result of the goods receipt.

a) Select LO020_Goods_Receipt→ Goods Movement (MIGO).b) Select the Goods receipt pull-down within the goods receipt

transaction. Click on goods receipt.

Hint: The pull-down is located just below the Hold iconon the Applications toolbar.

c) Using the Scroll bar within the pull-down, scroll up until youfind Display and click on display.

Note: The system will display the number of the lastmaterial document in the material document numberfield.

d) Verify that the material document number in the materialdocument field is the same document number created in Task 1.Select the Green Check Mark from the Options toolbar.

Continued on next page

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LO020 Lesson: Goods Receipts Basics

Task 3: Display the Purchase Order History1. Using the same display material document function from Task 2,

display the purchase order history resulting from the goods receipt.Write down the quantity received and the value resulting from thereceipt.

a) Select LO020_Goods_Receipt → Goods Movement (MIGO).b) Select the Goods receipt pull-down within the goods receipt

transaction by moving your mouse into the field and clicking theleft mouse button once.

c) Using the Scroll bar within the pull-down, scroll up until youfind Display and click on display.

Note: The system will display the number of the lastmaterial document in the material document numberfield.

d) Select the PO Data tab within the Detail Data section of thegoods receipt.

e) Select the History icon located within the PO Data tab. Clickon the icon.

f) Note the quantity and value.g) Select the Cancel button in the dialog box to return to the

goods receipt screen.

Continued on next page

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Task 4: Maintain a List of Favorites1. Add the goods receipt transaction MIGO to your list of favorites.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate yourfavorites list.

a) You can maintain a favorites list either by:

� Drag and Drop: Select the goods receipt transaction.Holding the left mouse button down, drag the transactionup and into the Favorites folder.

� Right mouse click: Select the goods receipt transaction.Click the right mouse button. Select add to favorites.

� Using the add to favorites icon: Select the goods receipttransaction. Select the Add to favorites icon from theApplications toolbar. Click on the icon to move thetransaction into the favorites list.

� Using the Menu Bar: Select the goods receipt transaction.Select Favorites/Add from the menu bar.

2. Change the description of the goods receipt transaction within yourfavorites list to read Goods Receipt.

a) Select the goods receipt transaction. Select the Change Favoritesicon from the Applications toolbar.

b) A text dialog box will open. Enter the new name of your goodsreceipt in the Text field.

c) Select the Green Check Mark within the dialog box.

Task 5: Return to the Main SAP Menu1. Since you work with several groups within the SAP system, you need

access to the Main SAP Easy Access menu. Leave the LO020_GoodsReceipt menu and return to the Main SAP Easy Access menu.

a) Select the SAP menu icon from the Applications toolbar.

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Lesson Summary

You should now be able to:� Explain the purpose and function of a goods receipt and its

relationship to goods movement� List the most important effects of a goods receipt for a purchase order

in the R/3 System� Post a goods receipt with reference to a purchase order� Explain and demonstrate the document concept at goods receipt

Related InformationFor more detailed information on movement types, refer to theImplementation Guide: Tools → AcceleratedSAP → Customizing → SPRO- Edit Project → SAP Reference IMG → Materials Management → InventoryManagement and Physical Inventory → Movement Types → Copy, ChangeMovement Types. Choose the IMG activity document icon.

http://help.sap.com

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Lesson:84

Invoice Verification BasicsLesson Duration: 45 Minutes

Lesson OverviewIn this lesson you will learn the basic process for posting an invoiceverification and the effects of the posting on other R/3 documents.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Explain and demonstrate the use of Logistics Invoice Verification(LIV) to post a vendor invoice

� Explain the effects of Logistics Invoice Verification (LIV) on thepurchase order

This lesson should give the participants a basic understanding of theLogistics Invoice Verification process. Logistics Invoice Verification wasdeveloped to take into account requirements that were technically notpossible in the conventional Invoice Verification component, such asdistributing MM and FI to separate systems. Logistics Invoice Verificationis closely integrated with Financial Accounting (FI) and Controlling (CO).It passes on the relevant information about payments or invoice analysesto these components.

In Materials Management, Logistics Invoice Verification has the followingfeatures:

� It completes the material procurement process, which started withthe purchase requisition and resulted in a goods receipt.

� It allows invoices that do not originate in materials procurement(such as services, expenses, course costs) to be processed.

� It allows credit memos to be processed, either as invoice reversalsor return deliveries.

The process step of verifying an invoice can be replaced with the EvaluatedReceipt Settlement (ERS). Introduce the idea of ERS here, ERS is discussedin detail in a later lesson.

Business ExampleThe final step in a typical procurement process is to enter the vendorinvoices for the material.

In doing so, you check the invoiced items against the purchase order andthe goods receipt.

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LO020 Lesson: Invoice Verification Basics

Hint: Often participants might not understand why invoiceverification is part of MM. You may want to discuss this concept.

Invoice Processing

In Logistics Invoice Verification � as in other applications � the SAP systemoften needs to retrieve stored data at many points, change this data wherenecessary, or add new information. Depending on the type of information,the data in the SAP system is stored in different master records, suchas the material master record or the vendor master record. This centraldata storage function avoids redundant data and ensures that differentdepartments use the most up-to-date information from various functions(Material Requirements Planning, Purchasing, Inventory Management,Quality Management, Logistics Invoice Verification, and so on). Theimportant data for Invoice Verification is: master data and transactiondata. Discuss the importance of each kind of data required to post aninvoice verification.

Figure 37: Invoice Processing

Logistics Invoice Verification is a part of Materials Management (MM). It issituated at the end of the logistics supply chain that includes Purchasing,Inventory Management, and Invoice Verification. In Logistics Invoice

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Verification incoming invoices are verified in terms of content, prices, andarithmetic. When the invoice is posted, the invoice data is saved in thesystem. The system updates the data saved in the invoice documents inMaterials Management and Financial Accounting.

In Materials Management, the procurement process is concluded bythe invoice verification process, during which invoices and creditmemos are entered and the contents and prices are checked for accuracy.However, payment and evaluation of invoices is not part of InvoiceVerification; the appropriate information for these tasks is passed on toother departments. Invoice Verification therefore creates a link betweenMaterials Management and external or internal accounting.

When you enter an invoice with reference to a purchase order, the systemsuggests data from the purchase order and the goods receipts for thepurchase order (for example, vendor, material, quantity still to be invoiced,terms of payment, and so on). In Logistics Invoice Verification � as inother applications � the SAP system often needs to retrieve stored data atmany points, change this data where necessary, or add new information.Depending on the type of information, the data in the SAP system isstored in different master records, such as the material master recordor the vendor master record. This central data storage function avoidsredundant data and ensures that the different departments use the mostup-to-date information from various functions (Material RequirementsPlanning, Purchasing, Inventory Management, Quality Management,Logistics Invoice Verification, and so on). The important data for InvoiceVerification is: master data and transaction data.

Master data includes:

� Material data: Information on the materials bought by or produced inthe company. This includes the material number, material name, unitsof measure, stock data, overdelivery and underdelivery tolerances,reminder keys, price control data, and prices. Different departmentsin Materials Management maintain material data.

� Vendor data: Information on the suppliers that a company deals with.Vendor data includes the address, bank data, possibly also the nameof the bank head office, the currency of the vendor, as well as theterms of payment and terms of delivery. The Purchasing departmentand Accounting department maintain vendor data.

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Transaction data includes:

� Purchasing document: A purchasing document contains informationsuch as the vendor number, the purchase order date, the terms ofdelivery, the material number, and the order quantity.

� Material document: A material document is created when a goodsreceipt is posted. It includes the posting date, the quantity delivered,and perhaps also the delivery note number and the purchaseorder number that the goods receipt refers to. It documents thequantity-based changes.

� Accounting document: An accounting document is created whena goods receipt (unless the goods receipt is not valuated) or aninvoice is posted. It contains details of the individual posting withthe account number, posting key, and the amount. It documents thevalue-based changes.

If there are discrepancies between the purchase order or goods receipt andthe invoice, the system warns the user, and depending on how the systemis configured, blocks the invoice for payment.

The posting of the invoice completes the invoice verification process. Thesystem updates the purchase order history and Financial Accountinginitiates payment for the open invoice items. Invoice Verification creates alink between Materials Management and external or internal accounting.

Information in an Invoice

An invoice document from an invoicing party contains the payments tobe made based on business transactions performed in Purchasing andInventory Management.

An invoice contains various information, such as:

� Who issued the invoice? See the Vendor master record.� Which transaction does the invoice refer to? See the Purchase order

number.� How much tax do you have to pay? Such as on training (1I).

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One of the basic questions is the invoice reference, which enables you toclearly allocate the invoice to a business transaction. If such a referenceexists, the system uses information that it already has and proposes theappropriate values when verifying the invoice, for example:

� Agreed terms of payment pulled from the vendor master record.� Quantities to be invoiced pulled from the goods receipt documents.� Amounts expected for each item pulled from the purchase order

documents.

Figure 38: Information in an Invoice

In Invoice Verification, you enter all the relevant data for the vendorinvoice (for example; gross amount, tax, invoice date). The system checksthis data in subsequent processing steps and compares it with data thatalready exists in the system, such as the purchase order document andthe goods receipt document.

The invoice document can be optically archived and sent via workflow tothe department responsible for invoice verification. This is an importantstep towards realization of the paperless office.

The Logistics Invoice Verification interface has been reduced to a singlescreen. Features of the Logistics Invoice Verification screen include:Transaction, Header Data, Balance, Allocation, Vendor Data, Invoice items,and Messages.

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LO020 Lesson: Invoice Verification Basics

Figure 39: Parts of the LIV entry screen

Invoice Verification with Reference to POWhere possible, invoices should be posted with reference to a purchaseorder. The advantage of this procedure is that the system suggests theorder prices from the order document and the goods receipt quantitiesfrom the GR documents for the purchase order.

Figure 40: Invoice Verification with Reference to PO

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You can also assign the invoice items to a purchase order using the numberof the delivery note or bill of lading, provided that these numbers wereentered at goods receipt.

The new Logistics Invoice Verification screens allow you to determinethe type of invoice based in the transaction. You choose whether thetransaction is an invoice, a credit memo, or a subsequent debit or credit.

Reference to Purchase Order

In this part of the lesson, discuss the effects of goods receipt-based invoiceverification. The buyer can decide at the time of order if an item levelrequires an activated goods receipt-based Invoice Verification or not. Ifgoods receipt-based Invoice Verification is active for a particular orderitem, each invoice item can then be matched up uniquely with the goodsreceipt item. It makes sense to work with goods receipt-based InvoiceVerification when you expect a delivery to be made and posted in severalparts.

The effect of goods receipt-based Invoice Verification on Invoice Allocation(if an allocation was made via purchase order) is an item that is created onthe item list for every goods receipt for the order item. If several goodsreceipts were posted for one purchase order item, the same purchase orderitem appears more than once on the item list.

You may choose to discuss this with the students: In goods receipt-based(GR-based) invoice verification, the invoice relates not to the purchaseorder, but to individual deliveries. That is to say, the reference documentfor the invoice is not the PO but the delivery note or the goods receiptdocument. Whether you use this approach depends on your billingarrangement with the vendor. This method can be advantageous, forexample, when you know the order will be fulfilled by means of manypartial deliveries. Prerequisites: Before you can use GR-based invoiceverification, the following prerequisites must be satisfied:

� The indicator for GR-based invoice verification (GR-based IV) mustbe selected for the relevant item in the purchase order (item detailscreen).

� A goods receipt must occur before the invoice is entered in the system.

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Figure 41: Reference to Purchase Order

If the indicator for goods receipt-based Invoice Verification was not set inthe purchase order, the vendor invoice can be entered before or after thegoods are received.

If the invoice is entered with reference to a purchase order, only theamount that has already been delivered but not yet invoiced appears onthe selection screen as the default value if you are working with standardsettings. You can overwrite the default value and consequently settle theentire purchase order quantity when partial deliveries have been received.The system automatically blocks the invoice for payment if tolerancesdefined in the system are exceeded (for example, if the invoice price variesgreatly from the purchase order price).

With goods receipt-based Invoice Verification, invoice entry is based onthe goods receipts. If you have entered several partial deliveries for anorder item, the system displays them as separate invoice items. Invoicesfor quantities greater than the goods receipt quantity cannot be posted.You must set this type of Invoice Verification in the purchase order.

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Figure 42: The LIV entry screen

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LO020 Lesson: Invoice Verification Basics

91Logistics Invoice Verification

1. Enter the Header Data. Select Logistics → Materials Management →Logistics Invoice Verification→ Document Entry→ Enter Invoice.

2. Enter the required document header data on the tab pages listedbelow:

� Basic data: On this tab page, you enter information such as thedocument date, the posting date, the gross invoice amount, andthe tax information.

� Payment: On this tab page, you enter information such as thebaseline date for payment, the terms of payment, and the bankdetails.

� Details: On this tab page, you enter information such asunplanned delivery costs and a different invoicing party.

� Tax: On this tab page, you enter information such as the taxamounts and the tax code or you select Calculate tax. If you selectCalculate tax, the system calculates the tax amount based on thetax codes in the invoice items.

� Contacts: After you have allocated the invoice, the systemdetermines the processors of (or who performed) the businesstransactions that have taken place so far.

� Note: On this tab page, you can enter a memo that could beuseful for further processing of the invoice.

� Amount split: You can divide up the final amount of an invoiceor credit memo here, for example, according to differentpayment methods or terms of payment. If you have entereda payment method here, this entry takes priority over thepayment method in the terms of payment. Maintain the settingsfor amount splitting in the Implementation Guide (IMG) forFinancial Accounting under the Financial Accounting GlobalSettings→ Company Code→ Enter Global Parameters.

3. Enter the Allocation data. In this screen area, you allocate apurchasing transaction to the invoice so the system suggests theinvoice items to be processed.

4. Select the . The system proposes the default data from thepurchase order and the purchase order history. The system updatesthe purchase order history when you post the invoice.

5. Verify that the balance area has a green light . In this screen area,the system displays the document balance and the correspondinginvoice status, for example, if an invoice can be posted.

Continued on next page

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The traffic light icon beside the Balance field shows whether theinvoice document can be posted.

� Red � The invoice document contains errors and cannotbe posted.

� Yellow � The invoice document is correct, but is blockedfor payment.

� Green � The invoice document is correct and is posted.� Choose the Post icon.

Note: You can display the Help beside the application. Helpcontains instructions and short explanations of the user interfacefor the applications Enter Invoice, Park Invoice, Enter Invoice forInvoice Verification in the Background, and the Invoice Overview.Use Help to familiarize yourself with the layout of the userinterface. It explains the following elements of the user interface:

� Screen areas� Application toolbar buttons� Menu functions� More functions in Logistics Invoice Verification

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LO020 Lesson: Invoice Verification Basics

Demonstration: Post a Logistics Invoice Verification

PurposePost the vendor invoice for your material using the Logistics InvoiceVerification.

Note: Approximate time for Demo is 15 minutes.

Note: Use the role menu LO020_INVOICE_VERIFICATION forthis demo.

Hint: The dollar amounts in this demo depend on the Purchaseorder used. Before the demo, determine the dollar amount youwill be invoicing.

Hint: With 4.6C only the Logistics Invoice Verification is left; the�old� Invoice Verification is no longer included in the easy accessmenu, but is still accessible via transaction code (MR01).

System DataSystem:Client:User ID:Password:Set up instructions:1. Select Role LO020_INVOICE_VERIFICATION→MIRO - Enter Invoice.

Note: You may have to enter the company code: 1000.

2. Enter today�s date.

3. Enter reference data RE-A##. This is an open text field so you cantype any information. What kind of information will depend on thecustomer�s business processes.

4. Enter the total amount from the purchase order including the taxes.

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5. Enter the tax amount or check the calculate tax box. Explain thedifference in the choices to the students. Choosing between enteringthe tax or allowing the system to calculate the tax is a businessprocess decision.

Hint: Make sure the Tax entry is 1I (input tax training) and thetax is 10% if you enter the tax amount. You can not enter a taxamount and check the calculate tax box. You must select eitherentering the tax amount or checking the tax box.

6. Enter the purchase order number. This field is located in the centerpart of the MIRO transaction.

7. Select the Green check mark icon.

8. Note if the balance field has a green light . Select the Simulatebutton from the Applications toolbar. Explain the different postingsbeing made by the system.

9. Choose the Post icon in the dialog box to post the verification ofthe invoice.

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LO020 Lesson: Invoice Verification Basics

93 Exercise 7: Invoice Verification BasicsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Use Logistics Invoice Verification to enter an invoice and check that it

is correct.� Explain the effects of invoice verification on the purchase order data

Business ExampleIn Invoice Verification, you enter the invoice you have received from thevendor. In doing so, you compare the invoice price with the purchaseorder price, and the invoiced quantity with the quantity already delivered.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

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Task 1: Enter the Vendor InvoiceUse the Invoice Verification composite role LO020_Invoice_Verificationfor the exercises below. The system provides the menus relevant toInvoice Verification.

The vendor T-K12A## invoices you for the delivery of the standardtaillights T-RM1##. Using the Logistics Invoice Verification, enter theinvoice with today�s date for Company code 1000. Review the copy ofthe vendor�s invoice below. Use the information provided on the vendor�sinvoice to process the invoice.

Figure 43:

1. Enter the vendor�s invoice. Compare the invoice price and the invoicequantity with the data the system proposes from the purchase orderand goods receipt.

Write down the invoice document number.

Field: Data:Invoice Document Number

Continued on next page

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LO020 Lesson: Invoice Verification Basics

Task 2: Display the Invoice Document1. Display the invoice document created as a result of posting the

invoice. Analyze the purchase order history. Verify the invoicinghas been updated in the history.

Task 3: Maintain a List of Favorites1. Add the Logistics Invoice Verification transaction MIRO to your list

of favorites.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate yourfavorites list.

2. Change the description of the invoice transaction within yourfavorites list to read Logistics Invoice Verification.

Task 4: Return to the Main SAP Menu1. Since you work with several groups within the SAP system,

you need access to theMain SAP Easy Access menu. Leave theLO020_Invoice_Verification menu and return to the Main SAP EasyAccess menu.

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Solution 7: Invoice Verification BasicsTask 1: Enter the Vendor InvoiceUse the Invoice Verification composite role LO020_Invoice_Verificationfor the exercises below. The system provides the menus relevant toInvoice Verification.

The vendor T-K12A## invoices you for the delivery of the standardtaillights T-RM1##. Using the Logistics Invoice Verification, enter theinvoice with today�s date for Company code 1000. Review the copy ofthe vendor�s invoice below. Use the information provided on the vendor�sinvoice to process the invoice.

Figure 44:

1. Enter the vendor�s invoice. Compare the invoice price and the invoicequantity with the data the system proposes from the purchase orderand goods receipt.

Write down the invoice document number.

Continued on next page

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LO020 Lesson: Invoice Verification Basics

Field: Data:Invoice Document Number

a) Select the Other Menu button from the Applications toolbar. SelectLO020_Invoice_Verification role invoice verification for LO020from the role list.

b) Select Role LO020_Invoice_Verification→ Enter Invoicec) Type the following information:

Field: Data:Invoice date Today’s Date

Reference RE-A1##

Amount 5500

Tax amount 500

Caution: Verify that the tax type is 1I (input tax(training)10%). If the tax is not 10% change it to 10%before moving on.

d) Type the purchase order number from the prior exercise(450000####) in the purchase order number field.

Hint: This field is located in the middle of the screen nextto the Purchase order/scheduling agreement field.

e) Select the Green Check Mark from the Options toolbar. This willpull in the information from the purchase order and the goodsreceipt. Verify the information.

f) Verify there is a Green light in the Balance field.g) Select the Simulate button from the Applications toolbar.h) A Simulation dialog box will open showing the different General

Ledger accounts. Choose the Post button within the dialogbox.

Note: The Post button is located at the bottom of thedialog box.

i) Note the invoice document created by the system.

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Task 2: Display the Invoice Document1. Display the invoice document created as a result of posting the

invoice. Analyze the purchase order history. Verify the invoicinghas been updated in the history.

a) Select LO020_Invoice_Verification→ Further Processing→ DisplayInvoice.

b) Type the invoicing document number 51######in the Invoicedoc. number field. Type the current year in the Fiscal year field.

Hint: The last document number created will displayin the Invoice doc. field.

c) Select the Green Check Mark from the Options toolbar.d) Select the Purchase order field. Double click on the purchase order

number.e) Click on the Purchase order history tab within the Item details

section of the purchase order. Verify the invoice information wasupdated in the history of the purchase order.

f) Select the Green Arrow from the Options toolbar to return tothe invoice screen.

Continued on next page

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LO020 Lesson: Invoice Verification Basics

Task 3: Maintain a List of Favorites1. Add the Logistics Invoice Verification transaction MIRO to your list

of favorites.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate yourfavorites list.

a) You can maintain a favorites list either by:

� Drag and Drop: Select the invoice transaction. Holdingthe left mouse button down, drag the transaction up andinto the Favorites folder.

� Right mouse click: Select the invoice transaction. Click theright mouse button. Select Add to favorites.

� Using the add to favorites icon: Select the invoicetransaction. Select the Add to favorites icon from theApplications toolbar. Click on the icon to move thetransaction into the favorites list.

� Using the Menu Bar: Select the invoice transaction. SelectFavorites /Add from the menu bar.

2. Change the description of the invoice transaction within yourfavorites list to read Logistics Invoice Verification.

a) Select the invoice transaction. Select the Change Favorites iconfrom the Applications toolbar.

b) A Text dialog box will open. Type the new name of yourLogistics Invoice Verification in the Text field.

c) Select the Green Check Mark within the Text dialog box.

Task 4: Return to the Main SAP Menu1. Since you work with several groups within the SAP system,

you need access to theMain SAP Easy Access menu. Leave theLO020_Invoice_Verification menu and return to the Main SAP EasyAccess menu.

a) Select the SAP menu icon from the Applications toolbar.

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Lesson Summary

You should now be able to:� Explain and demonstrate the use of Logistics Invoice Verification

(LIV) to post a vendor invoice� Explain the effects of Logistics Invoice Verification (LIV) on the

purchase order

Related InformationRefer to the SAP Library under the topic: Logistics Invoice Verification(MM-IV-LIV) for more detailed information.

http://help.sap.com

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LO020 Unit Summary

Unit SummaryYou should now be able to:� List the organizational levels in the R/3 System that are relevant to

the procurement process� Explain the relationship between these organizational levels� Identify the basic procurement process� Create and process a purchase order� Display the purchase order and purchase order output� Explain the purpose and function of a goods receipt and its

relationship to goods movement� List the most important effects of a goods receipt for a purchase order

in the R/3 System� Post a goods receipt with reference to a purchase order� Explain and demonstrate the document concept at goods receipt� Explain and demonstrate the use of Logistics Invoice Verification

(LIV) to post a vendor invoice� Explain the effects of Logistics Invoice Verification (LIV) on the

purchase order

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LO020 Test Your Knowledge

103Test Your Knowledge

1. Name at least three of the procurement organizational levels.

2. You can set up several company codes in one client.Determine whether this statement is true or false.□ True□ False

3. Physical inventory is carried out at theorganizational

level.Fill in the blanks to complete the sentence.

4. A plant can be one of the following types of locations:Choose the correct answer(s).□ A Central delivery warehouse□ B Regional sales office□ C Manufacturing facility□ D Corporate headquarters□ E All of the above

5. Can you create purchase orders with reference to a purchaserequisition?Determine whether this statement is true or false.□ True□ False

6. A is a formal request to a vendor tosupply goods or services.Fill in the blanks to complete the sentence.

7. and are two ways the R/3 System allowsfor the purchase order to be output or issued.Fill in the blanks to complete the sentence.

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8. When a goods receipt is posted with reference to a purchase order,the purchase order history is updated at the time of receiving.Determine whether this statement is true or false.□ True□ False

9. The plays a central role in automaticaccount determination in the R/3 System.Fill in the blanks to complete the sentence.

10. When you post a goods receipt for a valuated material, what twotypes of documents are created in the R/3 System?

11. When you enter an invoice with reference to a purchase order, thesystem suggests data from the andthe .Fill in the blanks to complete the sentence.

12. The system can not display partial deliveries as separate invoice items.Determine whether this statement is true or false.□ True□ False

13. Whenever possible, invoices should be posted with reference topurchase orders.Determine whether this statement is true or false.□ True□ False

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LO020 Test Your Knowledge

105Answers

1. Name at least three of the procurement organizational levels.

Answer: The client, the company code, the plant, the storage location,and the purchasing organization are all considered to be procurementorganizational levels.

2. You can set up several company codes in one client.

Answer: True

Since the company code is the smallest organizational unit for whichyou can have independent accounting, you can have more than onecompany code in a client.

3. Physical inventory is carried out at the storage location organizationallevel.

Answer: storage location

The storage location is an organizational unit that allows thedifferentiation of material stocks within a plant. The physicalinventory is carried out at the storage location level.

4. A plant can be one of the following types of locations:

Answer: E

The plant is the organizational level unit in which materials planningtakes place; therefore, a plant can be any location were planning formaterials takes place.

5. Can you create purchase orders with reference to a purchaserequisition?

Answer: True

You can create purchase orders with reference to purchaserequisitions as well as with reference to a request for quotation andan another purchase order. You can determine which documenttypes are allowed as reference to other document types in theImplementation Guide (IMG).

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6. A purchase order is a formal request to a vendor to supply goodsor services.

Answer: purchase order

A purchase order is a formal request for the purchase of goods orservices. The purchase order can be used for a variety of procurementpurposes. You can procure materials for direct consumption or forstock. You can also procure services. The purchase order can detailthe quantities requested, the delivery dates, the shipping method,and the pricing conditions.

7. Printing and EDI are two ways the R/3 System allows for the purchaseorder to be output or issued.

Answer: Printing, EDI

There are several methods you can use to output or issue a purchaseorder document: printer, telefax, EDI, or E-mail. The automaticissuing message types should be configured in the ImplementationGuide.

8. When a goods receipt is posted with reference to a purchase order,the purchase order history is updated at the time of receiving.

Answer: True

The purchase order history for a purchase order item is updatedwhen a goods receipt is posted with reference to a purchase order.

9. The Movement type plays a central role in automatic accountdetermination in the R/3 System.

Answer: Movement type

Together with other influencing factors, the movement typedetermines which stock or consumption accounts are updated inFinancial Accounting.

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LO020 Test Your Knowledge

10. When you post a goods receipt for a valuated material, what twotypes of documents are created in the R/3 System?

Answer: When you post a goods receipt to the warehouse, the systemcreates a material document containing information such as thematerial delivered and the quantity delivered.In transactions relevant for material valuation, the system creates atleast one accounting document, which records the effects of the goodsmovement on the value of the stock.

11. When you enter an invoice with reference to a purchase order, thesystem suggests data from the purchase order and the goods receipt.

Answer: purchase order, goods receipt

When you enter an invoice with reference to a purchase order thesystem suggests data (for example; vendor, material, quantity, termof payment). This data is derived from the purchase order and thegoods receipt documents.

12. The system can not display partial deliveries as separate invoice items.

Answer: False

If you have entered several partial deliveries for an order item, thesystem will display them as separate invoice items.

13. Whenever possible, invoices should be posted with reference topurchase orders.

Answer: True

The advantage of posting invoices with reference to a purchase orderis the system suggests the order prices from the order document andthe goods receipt quantities from the GR documents for the purchaseorder.

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Unit 3109 Master Data

Even though the purchasing info record is not introduced in this unit, oneslide shows it along with the material master and the vendor master. Beprepared to talk about it briefly (perhaps as a record of the relationshipbetween a specific material and a specific vendor in order to set up uniquepricing.) More detail comes in later units.

Unit OverviewThe focus of this unit will be the maintenance of the material and vendormasters, with emphasis on the impact of organizational levels on theindividual records.

Unit ObjectivesAfter completing this unit, you will be able to:

� Explain the significance of the material master� Create and maintain material master records� Explain the impact of organizational levels on material masters� Create and maintain a vendor master record� Explain the impact of organizational levels on vendor masters� Explain the concept of partner roles in the vendor master

Unit ContentsLesson: Material Master Records .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139

Procedure: Create Material Master . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152Procedure: Displaying a Material Master Record .. . . . . . . . . . . . . . . . . . . . .153Procedure: Changing a Material Master Record .. . . . . . . . . . . . . . . . . . . . .154Demonstration: Create Material Master .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154Demonstration: Display Material Master . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157Procedure: Extending Material Master Records ... . . . . . . . . . . . . . . . . . . . .160Demonstration: Extend Material Master by adding a new view ... . . .160Demonstration: Extend the Material Master to a New Plant . . . . . . . . . .162

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Demonstration: Change accounting view for plant 1200.. .. . . . . . . . . . .163Demonstration: Display Change Documents for Material . . . . . . . . . . . . .164Demonstration: Enter Material Data for Several Storage Locations .167Demonstration: Materials List.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168Exercise 8: Create Material Master . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169

Lesson: Vendor Master Records... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .187Procedure: Create Vendor Master Record.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .197Procedure: Change Vendor Master Record .. . . . . . . . . . . . . . . . . . . . . . . . . . .199Procedure: Display List of Vendors ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200Demonstration: Create Vendor Master .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201Demonstration: Change Vendor Master . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203Exercise 9: Create Vendor Master Record.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .205

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Lesson:110

Material Master RecordsLesson Duration: 2 Hours

Lesson OverviewIn this lesson you will obtain an understanding of the basic materialmaster structure.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Explain the significance of the material master� Create and maintain material master records� Explain the impact of organizational levels on material masters

It is important that the students understand the organizational levels inR/3. You might want to create a basic organizational structure the board asa reference while discussing the material master record: client/companycode/plant. This unit aims to inform about the master data relevant to theprocurement process and used in the documents for procurement.

Business ExampleYour company has decentralized responsibilities affecting the materialmaster. You need to add and maintain records for a new material.

Master Data in the Procurement Process

The material master and vendor master records are important masterdata in the procurement process. Without these you would not be ableto procure stock material. Information from the master records appearas default values in the purchasing documents. Also, depending on theinfo update key, they can be used to create purchasing info records inorder to store information on vendor-material combinations, for example,conditions for a certain material from a certain vendor.

The concept of info records will be discussed in another unit in moredetail. Introduce the info record here as master data allowing the systemto join the material master record and the vendor master record. Without

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an info record or another reference document, the system will not displaya default price into the purchase order. The system will not pull the pricefrom the material master record for use in the purchase order.

Note: There are other types of master data within the procurementprocess. For example: Source list, Quota arrangement, Conditionsand Vendor evaluation. Source list will be discussed in anotherlesson.

Figure 45: Master Data in the Procurement Process

Master data contains data records that are stored in the database for a longperiod of time. These are stored centrally and used and processed on across-application basis. This prevents the multiple storage (redundancy)of data.

The material master record and vendor master record are the mostimportant master data in the procurement process.

When you create purchasing documents, the R/3 System facilitates dataentry by copying the data from existing master records as default valuesinto the purchasing documents. The R/3 System also copies data such asunits of measure and material short texts from the material master record.The data in the vendor master record includes addresses and paymentdata. You can store data for a particular material (for example, deliverytime and purchase price) on a vendor basis in info records.

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Info record is short for information record. You use an info record ifyou want to store information on a vendor and a material as masterdata at purchasing organization or plant level. The info record containsconcise information about a vendor and a material that Purchasingalready procures from that vendor. An info record thus represents amaterial-vendor relationship. For example, the info record indicates theunits of measure in which materials are ordered from the vendor andthe applicable reminder levels. It also shows price changes affecting thematerial in question. This information can be useful in the process ofevaluating quotations to determine the successful bidder.

Material Master Data

Material master data contains information on the materials the companyuses. Each department, based on the customer�s business process, canbe responsible for maintaining its own view, thus preventing dataredundancy. Material master maintenance can also be centralized. Eachuser department in the company is interested in different data in thematerial master and is responsible for maintaining it. However, each viewof the material master record can contain data at various organizationallevels. Note: This slide is a combination of two former slides, MaterialMaster and Material Master Views.

Explain the different views and the kind of data populated in each. Askthe students to give examples of what kinds of data they think is held ineach view. The basic data view is a required view. The system will notallow you to setup a material master record without basic data.

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Figure 46: Material Master Data

The material master record is a company�s main source of material-specificdata. It is used by all components in the R/3 Logistics system.

The integration of all material data in a single database object preventsthe problem of data redundancy. The Material Master in the R/3 Systemconsists of a number of components that are completely integrated withone another. This integration allows the various departments and unitsof an enterprise to share and maintain the same information. The viewswithin the Material Master record allow the integration of the materialmaster record in the various departments.

The data contained in the material master record is required for manyfunctions within the R/3 Logistics system, for example:

� Purchasing data for ordering� Inventory management data for posting goods movements and

managing physical inventory� Accounting data for material valuation� MRP data for Material Requirements Planning

Since materials are processed by various user departments within acompany and each department stores different information for thematerials, the material master is subdivided into information groupedby user departments. Each user department has a different view of thematerial master record and is responsible for maintaining the data tosupport its function.

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The data maintained within a view may be valid for more than oneorganizational level.

Material Master: Organizational Levels

Explain how the material master is organized. Its structure ensuresthe material master can be managed centrally, thus preventing multiplestorage of data. Company information or basic data is held at a clientlevel. Changes made to this kind of data will effect all the users within aclient. Plant and storage level data will depend on the views selected forpopulation within the material.

Figure 47: Material Master: Organizational Levels

Some material data is valid for all organizational levels, while some isvalid for certain levels only. The material master is designed to reflect thestructure of your enterprise so you can manage the material data in yourenterprise centrally, without overloading your datasets with redundantinformation.

Data at client level: General material data that is valid for the wholecompany is stored at client level.

Data at plant level: All data that is valid within a plant, and for all storagelocations in it, is stored at plant level.

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

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Maintaining a Material Master Record: Screens

Explain the data required in each dialog box during the creation of amaterial master. Note the views chosen from the first dialog box willdictate the data requested in the second dialog box.

It is possible to customize the look of the material master record in theIMG. The system can be set to default required organizational level data aswell as required views. These defaults can be set at the user level.

Figure 48: Maintaining a Material Master Record: Screens

When editing material master data, you go through a number of screens.From the initial screen, you go to two successive dialog boxes. In the firstdialog box, you specify the views you want to process. In the second, youspecify the relevant organizational levels. You then go to the data screens.

You can change the standard screen sequence by changing the defaultvalues.

Some screens are not integrated in the standard screen sequence. You canaccess these screens only by specifically choosing them from the menu bar.

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Figure 49: The Select Views dialog box

Material Type

The material type is a key element of the material master record. Itdetermines a variety of attributes of the material master record. Discusswith the class each area determined by the material type. Material typescan be customized in the IMG. Often customers will customize rawmaterial (ROH) to allow for Sales views. Write several material types onthe board and discuss how each one is used in the system. Ask the classwhich views they think will be proposed for each material type. Materialtypes can aid users in reporting. A material master record can not becreated without a material type. Once a material master record is createdchanging the material type is very difficult.

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Figure 50: Material Type

You can assign materials with the same characteristics to the samematerialtype. Material types include raw materials, semi-finished products, andfinished products, for example.

The material type controls:

� The type of number assignment (internal or external)� Whether the material is intended for a specific purpose, for example,

as a configurable material or process material� 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 whetherboth options are allowed

Along with the plant, the material type determines a material�s inventorymanagement requirement; that is, whether the system updates quantitychanges in the material master record or updates changes in value in thestock accounts in Financial Accounting.

The material type also determines which accounts are posted when amaterial is posted to stock or leaves the warehouse.

Various material types are provided in the standard SAP R/3 System. Ifyour company needs additional material types, you can define these inCustomizing according to your requirements.

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Among others, the standard R/3 System comes with the following materialtypes. The ID used to identify the material type internally appears inparentheses. It is sometimes necessary to know this ID, for example, whendefining the attributes of material types.

� Finished products (FERT): Finished products are produced in-house.Since they cannot be ordered by Purchasing, a material master recordof this material type does not contain purchasing data.

� Nonvaluated materials (UNBW): Nonvaluated materials are managedon a quantity basis, but not by value.

� Operating supplies (HIBE): Operating supplies are procuredexternally and required for the manufacture of other products. Amaterial master record of this material type can contain purchasingdata, but not sales data.

� Raw materials (ROH): Raw materials are always procured externallyand then processed. A material master record of this type containspurchasing data, but not sales data since they cannot be sold.

� Trading goods (HAWA): Trading goods are always procuredexternally and then sold. A material master record of this materialtype can contain purchasing data and sales data.

SAP recommends using internal number assignment. Since you can usematchcodes to select materials according to any desired criteria, it isnot normally necessary to use a mnemonic external number. However,external number assignment can be advantageous if you want to use yourmaterials not only in the SAP R/3 System.

Industry Sector

The industry sectors can be customized in the IMG. They can determinethe screens displayed to a user as well as the required fields. Industrysectors can be used in reporting of materials.

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Figure 51: Industry Sector

Like the material type, the industry sector has a control function in the R/3System. When you create a material master record, the industry sectordefines:

� Which screens are displayed and in which order� Which industry-specific fields are displayed on each screen

The industry sector you assign to a material cannot be changed later.

In Customizing, you can define new industry sectors andmaintain the fieldreference for field selection control according to your company-specificrequirements.

The industry sector groups together companies according to their activities(for example, plant engineering and construction, mechanical engineering,the chemical industry, and the pharmaceutical industry).

The standard SAP R/3 System comes, for example, with the followingindustry sectors:

� A for plant engineering and construction� C for the chemical industry� M for mechanical engineering� P for pharmaceuticals

You can change the name of the industry sector (plant engineering andconstruction, and so on) and, if necessary, the field input control too (viathe field reference).

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Figure 52: Create Material Master: Initial screen

Data Screens in Material Master Maintenance

In the initial level of the material master record, the user enters the materialmaster number, the material type, and the industry sector. These arerequired fields.

Dialog boxes in the initial level require selection of views and populationof organizational data. The views selected determine the tabs displayed inthe main work area.The main work area is where departmental information is stored. Eachdepartment, depending on the type of material master, populates datarelated to their department�s needs, for example, sales tax data.

In the additional data level, data related to the material master at a clientlevel is populated, for example, material descriptions in alternativelanguages. Data in the additional data level can be used by all users withina client.

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Figure 53: Data Screens in Material Master Maintenance

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

� Main work level: These screens are for each user department, suchas basic data, materials planning, and so on.

� Additional data level: These screens are used to maintain additionalinformation, such as units of measure, material descriptions,consumption values, and forecasting data.

Most data in the material master record can be maintained directly by theuser. But some information is automatically updated by the system. Whenyou enter goods movements, for example, the system updates the stockand consumption data. Via the Information on material icon, you can call upstatistical information (for example, the date on which the data was firstcreated and when it was last changed).

Some data in the material master is used for information purposes only(for example, description, size, and dimensions).

Other types of material data have a controlling function in an application.For example, the MRP type controls the MRP procedure, and the pricecontrol indicator determines which material valuation procedure is used.

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Figure 54: Example of the additional data level: Units of measure tab

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122Create Material Master

1. Before creating a material master record, you need the followinginformation: the material type and industry sector; the units ofmeasure, such as the base unit (stockkeeping unit) and the orderunit; the purchasing group (buyer group) responsible for the materialAccounting data, such as the valuation class, price control, andstandard or moving average price.

2. Choose Logistics → Materials Management → Material Master →Material → Create (general) → Immediately.

3. Enter the material, industry sector, and material type in the dialogbox: Material: 001; Industry sector: mechanical engineering; Materialtype: finished product.

Caution: Make sure that the industry sector and materialtype you enter are known in the receiving system. Otherwise,errors will occur when you post the material in the receivingsystem.

4. Choose Select view and then within the dialog box choose therequested/required views.

5. Enter the data required for your material master in the appropriateview, for examply, on the Basic data view enter material short text,material description, base unit of measure, and material group.

6. Save the material.

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123Displaying a Material Master Record

1. Choose Logistics→Materials management→Material Master→Material→ Display → Display current.

2. Enter the material number in theMaterial field. If you do not knowthe material number, use the Possible entries F4 function to search forthe desired material via matchcode.

3. Select the Green Check Mark.

4. Select the views you wish to display.

5. Select the Green Check Mark located within the Select View(s) dialogbox.

6. Enter the required organizational levels.

7. Choose the Green Check Mark located within the organizational leveldialog box.

8. The requested data will display.

Note: You can also display a material master record from theitem overview of any purchasing document. To do so, chooseEnvironment → Material from the menu bar.

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124Changing a Material Master Record

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

2. Choose Logistics → Materials Management → Material Master →Material → Change.

3. Enter the material number in theMaterial field.

4. Select the Green Check Mark.

5. Select the views you wish to change.

6. Select the Green Check Mark located within the Select View(s) dialogbox.

7. Enter the required organizational levels.

8. Choose the Green Check Mark located within the organizational leveldialog box.

9. Make the required change(s) to the view(s) selected.

10. Save your material master record by selecting the Save icon fromthe Options toolbar.

Demonstration: Create Material Master

Purpose

Note: This demo takes approximately 20 minutes. You will usethis material master in the next Unit.

The purpose of this demo is to create a new material master record and toexplain the relationship between each tabbed area to the organizationallevels within R/3. Remind the students that they can use the F1 function ifthey do not know the meaning of a field. Students need to complete theexercise for use in another lesson.

System DataSystem:Client:User ID:Password:Set up instructions:

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1. Create a material master record. Select Logistics → MaterialsManagement → Material Master → Material → Create (general) →Immediately. Explain the difference in the menu paths Create (special)and Create (general).

Note: You will be extending the material master into theAccounting view in the next Demo so be sure not to set upthe Accounting view in the demo. As you are setting up thematerial master, explain to the students each tab and whatorganizational level it affects.

2. Enter the following information on the Initial Screen:

Initial screenField: Data:Material: T-RM2##

Industry Sector: Mechanical Engineering

Material Type: Raw Material

This data is held at a client level. Changes to this area will affect allusers within a client.

3. Choose the Select View(s) button from the Applications toolbarand select following material master views: Basic Data 1,Purchasing, Purchase Order Text, and General PlantData/Storage 1.

4. Select the Green Check Mark located within the Select View(s) dialogbox.

5. Fill in the following organizational levels:

Organizational LevelsField: Data:Plant 1000 (Hamburg)Stor. location 0001 (Materiallager)

6. Choose the Green Check Mark located within the organizational leveldialog box.

7. Select the Basic data 1 tab.

Enter the following basic data:

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Field: Data:Material T-RM2##Description

headlamp extra bright-##

Base unit of measure PC (piece(s))Material group 003 (bulbs)Gross weight 4

Net weight 3.8

Weight unit kg kilogram

Explain to students that fields in the material master record can beconfigured in the IMG to be required. Data in this tab is held at theclient level.

8. Select the Additional data button from the Applications toolbar.

9. Select the Description tab.

Enter the following within the Language table:

Field: Data:Language DE (German)Material description headlamp extra bright-##

German

Explain the other additional data tabs in this area. Point out the Unitsof Measure. Explain the material master record can have alternativeunits of measure. If you use this function, the goods receipt clerk canreceive messages for alternative units during the time of receipt.

10. Select theMain data button from the Applications toolbar to go backto the Basic data tab.

11. Select the Purchasing tab.

Enter the following purchasing information:

Field: Data:Purchasing group T##

Purchasing value key 1

Hint: Enter through the warning messages about thePurchasing value key. Check the data for the purchasing valuekey by choosing Enter.

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Field: Data:GR processing time 1 day

Data within this tab is held at the plant level.

12. Select the Purchase order text tab.

Enter the following text in the open text area:

The delivered material must meet our technicalspecification number 65432.

Hint: This tab requires you to select the Green Check Markfrom the Options toolbar to leave the table.

The text will copy into other related R/3 documents.

13. Select the Plant data/stor.1 tab.

Enter the following information:

Field: Data:Storage bin BL-01

Point out that the system uses bins only if you are using WarehouseManagement in R/3. Also, explain that you do not have to enterthe storage location here because you defined it as part of theorganizational structure.

14. Save your material master record by selecting the Save icon fromthe Options toolbar.

Demonstration: Display Material Master

PurposeTo display the material master record and verify data integrity

Note: This demo takes approximately 10 minutes.

System DataSystem:Client:User ID:

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Password:Set up instructions:1. Select Logistics→Materials Management→Material Master→Material

→ Display → Display Current.

2. Select Select View(s) button from the Applications toolbar. Explain whythe system proposed more views then originally created.

3. Select the views created in the create material master demo.Basic Data 1, Purchasing, Purchase Order Text, andGeneral Plant Data/Storage 1. Point out the icon on each tabshowing the user they selected the tab from the organization dialogbox.

Extending the Material Master Record: Example

The idea of having to extend a material master record is often a difficultconcept for the students to understand. Extending a material masterrecord requires the user to create the new data. Students often want tochange the material master record. Explain why the R/3 System requiresthe user to create new data when extending a material master record.

You extend a material master record in the following cases:

� If a material master record exists for a particular material, but themaster data for your user department is missing. In this case, youextend the material master record.

� If a material master record exists for a particular material and themaster data for your user department has been entered, but not at theappropriate organizational level (for example, if it has been enteredfor a different plant). In this case, you extend the material masterrecord.

How you extend a material master record will determine the kind of datarequired in the organizational dialog boxes. You will demo both ways toextend a material master record and explain why the system promptsfor different organizational data.

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Figure 55: Extending the Material Master Record: Example

Once a department has created data for a material, a material master recordis created for it in the database. If someone from another department thenwants to enter data, he or she has to extend (add) the information from hisor her department. The system also extends a material master record whendata for a material is saved for other organizational levels.

You can add the missing views or organizational levels to the materialmaster by choosing the transaction Create material master record.

You can only change the data for views and organizational levels thathave already been maintained by choosing the transaction Change materialmaster.

Any changes (creation or change) you make to data in the material masterrecord are saved in a change document. This means you can check thechange history at any time.

You can also activate engineering change management for materials.

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126Extending Material Master Records

1. Select Logistics → Materials Management → Material Master → Other→ Extend Material View(s).

2. Enter the material number and choose Execute.

An overview appears of the user departments (indicated by themaintenance status) that still need to extend the material masterrecord.

3. Select the user department(s) for which you want to enter data andchooseMaintain materials. The first user department screen appears,where you can enter your data. You can also define other selectioncriteria, such as the date created, organizational levels, material type,and so on. The system selects those records that satisfy all yourselection criteria. If you want the system to select those records thatsatisfy one of your selection criteria, set the relevant indicator.

4. Save your data. The initial screen for maintaining material masterdata appears because you have not finished maintaining the materialmaster record. To access the next screen you selected in the overview,choose the Green Check Mark.

5. Repeat step 4 until you have entered all the data for the material andhave returned to the overview.

Demonstration: Extend Material Master by adding anew view

Purpose

Note: This demo takes approximately 10 minutes.

You need to create the accounting view for the material master recordcreated in the creation demo by extending the material master record.

Note: This demo does not show the same process as the students�procedure. If there is a question why the demo and the proceduredo not match, explain there are several ways to extend a materialmaster. The procedure is from the SAP Library and shows a verybasic way to extend a material master.

System DataSystem:Client:User ID:

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Password:Set up instructions:1. Select Logistics→Materials Management→Material Master→Material

→ Create (General)→ Immediately.

Enter the following information:

Initial screenField: Data:Material: T-RM2##

Industry Sector: Mechanical Engineering

Material Type: Raw Material

Note the Industry sector and the Material Type will appear as defaultvalues. The material master and the industry sector are very difficultto change once you have created the material master record.

2. Choose the Select view(s) button from the Application toolbar.

3. Select the Accounting 1 view in the dialog box.

If you were to choose a view where data was already created, thesystem would issue a warning message. Choose the Purchasing viewto show the issuing of a message.

4. Select the Green Check Mark located in the Select View(s) dialog box.

5. Enter the organizational level, Plant 1000, within the dialog box.There is no need to enter a value in the Valuation type field; leave thefield blank. Valuation type if used for split valuation. You will discusssplit valuation in detail in another chapter.

6. Enter the following information within the Accounting 1 view:

Field: Data:Valuation class 3000 Raw Material 1Price control V moving average priceMov. avg. price 80 uni

The Valuation class allows determination of automatic posting to G/Laccounts. Price control allows the difference in valuation of inventory.Both of these concepts will be discussed in detail in another chapter.Explain both concepts at a high level. The UNI is a dummy currencycreated for the training system.

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Caution: Use the dummy currency created for the trainingsystem. Tell the students to do the same.

7. Save your material master record by selecting the Save icon fromthe Options toolbar.

Demonstration: Extend the Material Master to a NewPlant

Purpose

Note: This demo takes approximately 10 minutes.

You need to create the views for the material master record created in thecreation demo in another plant by extending the material master recordinto the other plant.

System DataSystem:Client:User ID:Password:Set up instructions:1. Select Logistics→Materials Management→Material Master→Material

→ Create (General)→ Immediately.

2. Choose the following views:

Select View(s)Basic Data 1

Purchasing

Purchase Order Text

General Plant Data/Storage 1

Accounting 1

3. Fill in the following organizational levels:

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Organizational LevelsField: Data: Copy from: Data:Plant 1200 Plant 1000

Stor.location 0001 Stor.location 0001

Caution: You must view each view of the material masterrecord for it to populate to the new plant. Be sure to enterthrough each tab so data will be copied.

4. Save your material master record by selecting the Save icon fromthe Options toolbar.

Demonstration: Change accounting view for plant1200

Purpose

Change the accounting view of the material master record for plant 1200.Explain to the students that changing the valuation class and the pricecontrol allows the system to post to different G/L accounts. The students�exercise will require they make changes to both the purchase and theaccounting view. Demo changing the account view and explain that otherviews can be changed by using the same process.

Note: Approx time for demo - 10 mins

System DataSystem:Client:User ID:Password:Set up instructions:1. Select Logistics→Materials Management→Material Master→Material

→ Change → Immediately.

Enter the following information:

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Initial screenField: Data:Material T-RM2##

2. Choose the Select view(s) button from the Applications toolbar.

3. Select the Accounting 1 views. Make the changes to the Accountingview by entering the following:

Field: Data:Valuation class 3001 Raw material 2Price control S standard priceStandard price 80uni

4. Save your material master record by selecting the Save icon fromthe Options.

Demonstration: Display Change Documents forMaterial

Purpose

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 audittrail of changes to material master records.

Note: Approx time for demo - 10 mins

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Materials Management → Material Master →

Material → Display Changes → Active Changes.

2. Enter the following:

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Display Changes: Initial screenField: Data:Material T-RM2##

Plant 1200

3. Select the Execute icon from the Applications toolbar.

Explain the changes made to the material master. Select each changeto display the details of the data changes.

Entry Aids in Material Master Maintenance

The way a customer uses entry aids will depend on their businessprocesses. Discuss the different ways SAP aids a user in setting up amaterial master record.

Figure 56: Entry Aids in Material Master Maintenance

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The following entry aids facilitate material master maintenance:

� Settings: Quicker data entry by presetting the organizational levelsand views most often used. These default values are user-specific,and you can overwrite them.

� Reference material: Quicker data entry by copying the relevant datafrom existing material master records.

� Profiles: Quicker data entry by copying data from the materialsplanning or forecast profile to the relevant views.

� Collective entry of storage location data: Creation of several storagelocations in one step significantly reduces data entry time.

� Mass maintenance: Changes data in several material master recordsin one procedure.

At most companies, material master records are created in one of thefollowing ways:

� Centrally: A central body enters a minimum amount of all userdepartment data. Users in the individual departments add to thisdata in Change mode. For the central body to create data for alldepartments, it must be authorized to process all user departmentdata.

� Decentrally: Each department creates its ownmaterial master records.Users are authorized to process data for one or more departmentsas required.

You can also create scheduled material master records with reference to achange number. For more information, see Special Features for Materialsin the SAP library documentation, LO Engineering Change Management.

Using a special cross-application tool, you can extend several materialmaster records at the same time. However, this tool must be usedonly by experienced users. For more information, see the SAP librarydocumentation, CA Cross-Application Mass Maintenance.

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Demonstration: Enter Material Data for SeveralStorage Locations

Purpose� To allow the material master record to be used in other storage

locations� To create alternative storage locations

Note: Approx time for demo � 10 mins

Note: The storage locations must already be defined for the plant.The system does not automatically create storage locations for aplant.

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics→Materials Management→Material Master→ Other

→ Enter Storage Locations.

2. Enter the following:

Enter Storage Locations Collectively: Initial ScreenField: Data:Material T-RM2##

Plant 1200

3. Select the Green Check Mark from the Options.

4. Enter the following information:

Field: Data: Field: Data:SLoc 0002 Bin BL-02

SLoc 0003 Bin From-10

5. Save your new storage locations by selecting the Save icon fromthe Options toolbar.

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Demonstration: Materials List

PurposeTo demo how material master records can be displayed for more than oneorganizational level, such as two plants

Note: Approx time for demo - 5 mins

System DataSystem:Client:User ID:Password:Set up instructions:1. Select Logistics → Materials Management → Material Master → Other

→ Material List.

2. Enter the following:

Materials ListField: Data:Material T-RM2##

Plant 1000 to 1200

3. Select the Execute icon from the Applications toolbar.

Explain each field in the report.

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129 Exercise 8: Create Material MasterExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create and maintain a raw material master record.� Explain the impact of organizational levels on material masters

records.

Business ExampleYou are responsible for creating and maintaining raw material masterrecords within your company. Create a material master record for a newheadlamp.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]

Task 1: Create Raw Material Master RecordCoordinating with the other company departments you are asked to createraw material master records. The materials are to be used in plant 1000.

1. Create a new mechanical engineering raw material master recordT-RM2##.

2. The new material master record will be used by several areas withinyour company: company wide, purchasing, and the plant. You willneed to create the required material master views: Basic Data 1,Purchasing, Purchase Order Text, and General PlantData/Storage 1 for the organizational levels Plant 1000 andstorage location 0001.

Note: There are successive dialog boxes within the materialmaster. When there is an open dialog box, one must workwithin the box. There are two dialog boxes, Select Views andOrganization Levels, within the material master record.

Continued on next page

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3. You have been asked to create the Basic Data 1 view of the materialmaster. The Material description is Headlamp extra bright-##.Piece is the base unit of measure.

The headlamp is assigned to material group 003 bulbs. The grossweight is 4 kg and the net weight is 3.8 kg.

4. Because you use the headlamp material master in more than onecountry, you are required to create the material description in morethan one language.

5. The purchasing group T## is responsible for procuring the headlamp.Urging letters about undeliverable goods should be sent after 10,20, and 30 days. Under- or overdeliveries are not accepted. Choosethe relevant purchasing value key 1. It takes 1 day to process goodsreceipts for this material.

Hint: There are four ways to move between the tabs withinthe material master record:

� Enter on the keyboard.� Select the desired tab and click on the tab.� Select the left/right arrow buttons located to the right of

the tabs.� Select the index icon located to the far right of the arrow

buttons.

6. The purchasing group has requested text be included for this materialmaster. Create the requested text, �The delivered materialmust meet our technical specification number 65432�.

7. The headlamp is to be stored in storage location 0001, storage binBL-01.

8. Save your material master record.

Task 2: Display Material Master

Task 3: Extend Material Master Record1. The accounting department has requested they be able to use

material master T-RM2## in their processes for plant 1000. Createan accounting view for this material master record by extending themaster record into the Accounting 1 view. The material is assigned tothe valuation class raw materials 1 and is valuated using themoving average price procedure. The valuation price is 80 UNI.

Continued on next page

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2. Save your material master record.

Task 4: Copy Material Master Record1. Material T-RM2## is also to be used in plant 1200, storage location

0001. Create a new material master record for plant 1200. Use thedata from material T-RM2## in plant 1000 as a reference. Copy yourmaterial master into plant 1200.

Maintain these views for your new material: Basic Data 1,Purchasing, Purchase Order Text, Accounting 1, andGeneral Plant Data/Storage.

Hint: You have to Enter through each view before saving thematerial to make sure all of the data has been copied fromthe reference material.

2. Save your material master record.

Task 5: Change Material Master Record1. Change the purchasing and accounting data for material T-RM2##

in Plant 1200. In plant 1200, the system should always proposethe material be posted to quality inspection stock. Thevaluation class for plant 1200 is 3001 and the material is valuatedusing standard price of 80 UNI. These changes should takeeffect immediately.

2. Save your material master record.

Task 6: Display Change Documents for Material1. Find out when the accounting data for material T-RM2## in plant

1200was last changed. Record the data of the first line within the list:

Date: Time: Changed by: Changenumber:

TCode

Note: To see the details of the changes made to the materialmaster record, select the line you wish to view by placingyour cursor on the line then select the choose icon from theApplications toolbar.

Continued on next page

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Task 7: Enter Material Data for Several StorageLocations1. You store material T-RM2## in plant 1200 in several storage

locations storage location 0002, bin BL-02 and storagelocation 0003, bin From-10. Enter the additional storagelocations using collective entry.

2. Save your new storage locations.

Task 8: Materials List1. Check whether your material master T-RM2## is available for

both plants 1000 and 1200 by displaying the material list. It isparticularly important you verify the valuation data is consistentwith the information from the previous task 3 and task 5.

Hint: Try to limit as much as possible the information youspecify in the materials list, so the system does not have tosearch too many data records.

Task 9: Optional: Add to List of FavoritesAdd to your list of favorites the most important transactions for workingwith material master master records.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate your favoriteslist.

1. Maintain your favorites list.

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Solution 8: Create Material MasterTask 1: Create Raw Material Master RecordCoordinating with the other company departments you are asked to createraw material master records. The materials are to be used in plant 1000.

1. Create a new mechanical engineering raw material master recordT-RM2##.

a) Select Logistics → Materials Management → Material Master →Material → Create (General) → Immediately.

Initial screenField: Data:Material: T-RM2##

Industry Sector: Mechanical Engineering

Material Type: Raw Material

2. The new material master record will be used by several areas withinyour company: company wide, purchasing, and the plant. You willneed to create the required material master views: Basic Data 1,

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Purchasing, Purchase Order Text, and General PlantData/Storage 1 for the organizational levels Plant 1000 andstorage location 0001.

Note: There are successive dialog boxes within the materialmaster. When there is an open dialog box, one must workwithin the box. There are two dialog boxes, Select Views andOrganization Levels, within the material master record.

a) Choose the Select View(s) button from the Applications toolbar.b) Choose the following views:

Select View(s)Basic Data 1

Purchasing

Purchase Order Text

General Plant Data/Storage 1

c) Select the Green Check Mark located within the Select View(s)dialog box.

d) The Organizational level dialog box will appear. Fill in thefollowing organizational levels:

Organizational Levels

Field: Data:Plant 1000 (Hamburg)Stor. location 0001 (Materiallager)

e) Choose the Green Check Mark located within the organizationallevel dialog box.

3. You have been asked to create the Basic Data 1 view of the materialmaster. The Material description is Headlamp extra bright-##.Piece is the base unit of measure.

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The headlamp is assigned to material group 003 bulbs. The grossweight is 4 kg and the net weight is 3.8 kg.

a) Select the Basic data 1 tab.b) Enter the following basic data:

Field: Data:Material T-RM2##Description

headlamp extra bright-##

Base unit of measure PC (piece(s))Material group 003 (bulbs)Gross weight 4

Net weight 3.8

Weight unit kg kilogram

4. Because you use the headlamp material master in more than onecountry, you are required to create the material description in morethan one language.

a) Select the Additional data button from the Applications toolbar.b) Select the Description tab.c) Enter the following within the Language table:

Field: Data:Language DE (German)Material description headlamp extra

bright-## German

d) Select theMain data button from the Applications toolbar to goback to the Basic data tab.

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5. The purchasing group T## is responsible for procuring the headlamp.Urging letters about undeliverable goods should be sent after 10,20, and 30 days. Under- or overdeliveries are not accepted. Choosethe relevant purchasing value key 1. It takes 1 day to process goodsreceipts for this material.

Hint: There are four ways to move between the tabs withinthe material master record:

� Enter on the keyboard.� Select the desired tab and click on the tab.� Select the left/right arrow buttons located to the right of

the tabs.� Select the index icon located to the far right of the arrow

buttons.

a) Select the Purchasing tab.b) Enter the following purchasing information:

Field: Data:Purchasing group T##

Purchasing value key 1

Hint: Enter through the warning messages you willreceive about the Purchasing value key by selecting Enteron your keyboard.

Field: Data:GR processing time 1 day

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6. The purchasing group has requested text be included for this materialmaster. Create the requested text, �The delivered materialmust meet our technical specification number 65432�.

a) Select the Purchase order text tab.b) Enter the following text in the open text area:

The delivered material must meet our technicalspecification number 65432.

Hint: : This tab requires you select the Green CheckMark from the Options toolbar to leave the table.

7. The headlamp is to be stored in storage location 0001, storage binBL-01.

a) Select the Plant data/stor.1 tab.b) Enter the following information:

Field: Data:Storage bin BL-01

8. Save your material master record.

a) Save your material master record by selecting the Save iconfrom the Options toolbar.

Task 2: Display Material Master

Task 3: Extend Material Master Record1. The accounting department has requested they be able to use

material master T-RM2## in their processes for plant 1000. Createan accounting view for this material master record by extending the

Continued on next page

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master record into the Accounting 1 view. The material is assigned tothe valuation class raw materials 1 and is valuated using themoving average price procedure. The valuation price is 80 UNI.

a) Select Logistics → Materials Management → Material Master →Material → Create (General)→ Immediately.

b) Enter the following information:

Initial screenField: Data:Material: T-RM2##

Industry Sector: Mechanical Engineering

Material Type: Raw Material

c) Choose the Select view(s) button from the Applications toolbar.d) Select the Accounting 1 view.

Hint: Remember to work within the dialog boxes.

e) Enter the organizational level Plant 1000. There is no need toenter a value in the valuation type field.

f) Enter the following information within the Accounting 1 view:

Field: Data:Valuation class 3000 Raw Material 1Price control V moving average priceMov. avg. price 80 UNI

2. Save your material master record.

a) Save your material master record by selecting the Save iconfrom the Options toolbar.

Task 4: Copy Material Master Record1. Material T-RM2## is also to be used in plant 1200, storage location

0001. Create a new material master record for plant 1200. Use thedata from material T-RM2## in plant 1000 as a reference. Copy yourmaterial master into plant 1200.

Continued on next page

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Maintain these views for your new material: Basic Data 1,Purchasing, Purchase Order Text, Accounting 1, andGeneral Plant Data/Storage.

Hint: You have to Enter through each view before saving thematerial to make sure all of the data has been copied fromthe reference material.

a) Select Logistics → Materials Management → Material Master →Material → Create (General) → Immediately.

b) Enter the following information:

Initial screenField: Data:Material: T-RM2##

Industry Sector: Mechanical Engineering

Material Type: Raw Material

Copy from...Material T-RM2##

c) Choose the following views:

Select View(s)Basic Data 1

Purchasing

Purchase Order Text

General Plant Data/Storage 1

Accounting 1

d) Fill in the following organizational levels:

Organizational LevelsField: Data: Copy from: Data:Plant 1200 Plant 1000

Stor.location 0001 Stor.location 0001

Continued on next page

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2. Save your material master record.

a) Save your material master record by selecting the Save iconfrom the Options toolbar.

Task 5: Change Material Master Record1. Change the purchasing and accounting data for material T-RM2##

in Plant 1200. In plant 1200, the system should always proposethe material be posted to quality inspection stock. The

Continued on next page

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LO020 Lesson: Material Master Records

valuation class for plant 1200 is 3001 and the material is valuatedusing standard price of 80 UNI. These changes should takeeffect immediately.

a) Select Logistics → Materials Management → Material Master →Material → Change → Immediately.

b) Enter the following information:

Initial screenField: Data:Material T-RM2##

c) Choose the Select view(s) button from the Applications toolbar.d) Select the Purchasing and Accounting 1 views.e) Enter the organizational level, Plant 1200. There is no need

to enter a value in the Valuation type field.f) Make the requested change to the Purchasing view, enter the

following:

Field: Data:Post to insp.stock check mark

g) Move to the Accounting 1 view. Make the requested changes tothe Accounting view; enter the following:

Field: Data:Valuation class 3001 Raw material 2Price control S standard priceStandard price 80uni

Hint: The system will recalculate the price for thismaterial master; go through the message by selectingEnter on your keyboard.

2. Save your material master record.

a) Save your material master record by selecting the Save iconfrom the Options.

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Task 6: Display Change Documents for Material1. Find out when the accounting data for material T-RM2## in plant

1200 was last changed. Record the data of the first line within the list:

Date: Time: Changed by: Changenumber:

TCode

Note: To see the details of the changes made to the materialmaster record, select the line you wish to view by placingyour cursor on the line then select the choose icon from theApplications toolbar.

a) Select Logistics → Materials Management → Material Master →Material → Display Changes → Active Changes.

b) Enter the following:

Display Changes: Initial screenField: Data:Material T-RM2##

Plant 1200

c) Select the Execute icon from the Applications toolbar.

Continued on next page

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Task 7: Enter Material Data for Several StorageLocations1. You store material T-RM2## in plant 1200 in several storage

locations storage location 0002, bin BL-02 and storagelocation 0003, bin From-10. Enter the additional storagelocations using collective entry.

a) Select Logistics → Materials Management → Material Master →Material → Other → Enter Storage Locations.

b) Enter the following:

Enter Storage Locations Collectively: Initial ScreenField: Data:Material T-RM2##

Plant 1200

Leave all other information as defaulted. Select the GreenCheck Mark from the Options toolbar.

c) Enter the following information:

Field: Data: Field: Data:SLoc 0002 Bin BL-02

SLoc 0003 Bin From-10

2. Save your new storage locations.

a) Save your new storage locations by selecting the Save iconfrom the Options toolbar.

Continued on next page

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Task 8: Materials List1. Check whether your material master T-RM2## is available for

both plants 1000 and 1200 by displaying the material list. It isparticularly important you verify the valuation data is consistentwith the information from the previous task 3 and task 5.

Hint: Try to limit as much as possible the information youspecify in the materials list, so the system does not have tosearch too many data records.

a) Select Logistics → Materials Management → Material Master →Material → Other → Material List.

b) Enter the following:

Materials ListField: Data:Material T-RM2##

Plant 1000 to 1200

c) Select the Execute icon from the Applications toolbar.

Continued on next page

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Task 9: Optional: Add to List of FavoritesAdd to your list of favorites the most important transactions for workingwith material master master records.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate your favoriteslist.

1. Maintain your favorites list.

a) You can maintain a favorites list either by:

� Drag and Drop: Select the Material Master transaction.Holding the left mouse button down, drag the transactionup and into the Favorites folder.

� Right mouse click: Select the Material Master transaction.Click the right mouse button. Select add to favorites.

� Using the add to favorites icon: Select the MaterialMaster transaction. Select the Add to favorites icon fromthe Applications toolbar. Click on the icon to move thetransaction into the favorites list.

� Using theMenu Bar: Select the Material Master transaction.Select Favorites /Add from the menu bar.

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Lesson Summary

You should now be able to:� Explain the significance of the material master� Create and maintain material master records� Explain the impact of organizational levels on material masters

Related InformationFor more information on creating, displaying, or changing a materialmaster record, refer to the SAP Library under Purchasing (MM-PUR),Purchasing Documents, Material Master Data, Maintaining PurchasingData in Mat. Master Record.

http://help.sap.com

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LO020 Lesson: Vendor Master Records

Lesson:147

Vendor Master RecordsLesson Duration: 60 Minutes

Lesson OverviewIn this lesson you will gain an understanding of the structure of the vendormaster record.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Create and maintain a vendor master record� Explain the impact of organizational levels on vendor masters� Explain the concept of partner roles in the vendor master

The vendor master record is influenced by organizational levels. Explainthe structure of the vendor master record.

Business ExampleYour company has a business relationship with a new vendor. To enableyou to order from this vendor, you have to create a new vendor masterrecord in the R/3 System.

Vendor Master Record: Organizational Levels

The vendor record contains data on a company�s external vendors. This isan overview graphic. Which department sets up which level of the vendormaster record will depend on the customer�s business processes.

You must set up the vendor master record as complete if you want to usethe master record in a procurement process: purchase, receive goods, andinvoice.

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Figure 57: Vendor Master Record: Organizational Levels

In Accounting, the vendor is regarded as the company�s crediting businesspartner. The vendor master record is therefore maintained by Accountingand Purchasing.

You can use the R/3 System authorization concept to define how datamaintenance should be organized in the vendor master record.

Each user department can maintain both general data and Purchasing andAccounting-specific data centrally or decentrally. In addition, Purchasingoften maintains data at corporate group level.

Vendor Master Data

Explain how the vendor master is organized and give examples of data ateach organizational level.

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Figure 58: Vendor Master Data

Data in the vendor master record is subdivided into three categories:

� General data: This includes the vendor�s address and bank details,for example. This data is valid for the whole client.

� Purchasing data: This includes the purchase order currency,incoterms, and the vendor�s tax data. This data is maintained for eachpurchasing organization. You can also maintain different data on aplant-dependent basis or for vendor sub-ranges.

� Accounting data: This comprises data such as the number of thereconciliation account and the payment methods for automaticpayment transactions. This is maintained at company code level.

You can block a vendor master record, for example, if the quality of thevendor�s products is poor. You can block a vendor for an individualmaterial via the source list.

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Figure 59:

Vendor Master Record: Account Group

The Account group of the vendor master record works like the materialtype, explain the controlling functions of the account group in more detail:The Account group defines allowed number ranges, internal/externalnumber assignment, and is used for controls screens and field selection.

One-time vendor: Term for a collective vendor master record used for theprocessing of transactions involving miscellaneous vendors that are notincluded among a customer�s regular suppliers. This type of vendor hasonly an address screen. If a PO is sent to a one-time vendor, the vendordata must be entered manually. You will not be able to post a liability tothis vendor master record. Explain a one-time vendor master record hereas you will be using a one-time vendor master record in the RFQ lesson.

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LO020 Lesson: Vendor Master Records

When creating a vendor master record, you have to enter an accountgroup. The account group has controlling characteristics. The accountgroup determines:

� The type of number assignment and the number range from whichthe account number used by the system to identify the vendor isassigned. The number can be assigned internally by the system orby the user (that is, externally) when a master record is created.For external number assignment, alphanumeric numbers are alsoallowed. The system ensures that the numbers are always unique.With internal number assignment, the system assigns numbersconsecutively from a given range. With external number assignment,it prevents an already used number from being reused.

� Whether or not a one-time vendor is involved.� Which fields the screens of the vendor master record 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 schemes are valid.

Figure 60: Vendor Master Record: Account Group

Unlike the material type, the vendor account group can be changed easily.You can change the account group of an existing vendor master record byselecting: Logistics → Materials Management → Master Data → Vendor →Central → Account Group Change.

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You can create special master records for vendors from whom you procurea material only once or very rarely. These are called one-time vendormaster records and, in contrast to other master records, you can use avendor master record for several vendors. Therefore, no vendor-specificdata is stored for one-time vendors. You can control this using the relevantfield selection for account groups for one-time vendors. When creating apurchasing document or accounting document with a one-time vendor, thesystem automatically goes to an additional data screen. This is where youenter specific data, such as the vendor�s name, address, or bank details.Like all other master records, you can display, block, or delete one-timevendor master records. Each vendor master record for one-time accountsmust have its own account group.

Reconciliation Account for Vendor Master Record

Explain the function of the control account. You use this field to indicateG/L accounts as being reconciliation accounts. For each subledger account, you must keep at least one reconciliation account in the general ledger.When you post to an account in the subledger, the system automaticallyposts to the corresponding reconciliation account.

Figure 61: Reconciliation Account for Vendor Master Record

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When you create a vendor master record, you need a unique number forthe vendor. Depending on the account group, the system assigns thisautomatically or the person responsible assigns it manually. The vendornumber is also used as the subledger number in Financial Accounting. Insubledger accounting, the total liabilities are updated per vendor.

When you create a vendor master record, you have to maintain areconciliation account. The reconciliation account is a G/L account in G/Laccounting. It maps a company�s liabilities towards several vendors inG/L accounting.

When entering invoices, you enter the vendor and the system uses thereconciliation account from the vendor master record.

Using the reconciliation account procedure, it is possible to create abalance sheet and a profit and loss statement at any time because theamounts posted to subledger accounts are also posted automatically in thegeneral ledger. You define reconciliation accounts by specifying in the G/Laccount master record the account type (such as fixed assets, vendor orcustomer) for which the account is to be used. In this way, the account canbe assigned only to accounts in the corresponding subledger. You set theassignment of the subledger account to a reconciliation account in themaster record of the subledger account. You cannot post to reconciliationaccounts manually.

Partner Roles

Partner Roles are highly configurable. Their usage will vary dependingon the business environment. Explain the concept of partner roles in thevendor master. Point out to the participants that only the role of VD,or vendor (English language system), is required in order to allow forpurchasing with a vendor record.

The partners you can store in the vendor master record in the PartnerRoles view apply to a certain purchasing organization. In addition to thepartners that are valid at purchasing organization level, you can maintaindifferent partners for individual plants or vendor sub-ranges. In this case,the system will determine a different ordering address in a purchase orderfor your Atlanta plant than the one determined in a purchase order foryour Minneapolis plant, for example.

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The data in Partner roles is used in the association downstream of logisticsand accounting functions. These partner roles influence downstreamlogistics and accounting functions:

� Ordering address: If you define another partner for this partner role,a standard PO or release order will not be sent to the address of thevendor but to the ordering address of the partner.

� Goods supplier: If you define a partner from another member state ofthe EU for this partner role, standard POs or release orders will betaken into account when Intrastate declarations are created.

� Invoicing party: If you define another partner for this partner role,the invoicing party�s account will be charged instead of the vendor�s.

Figure 62: Partner Roles

When working with partner roles separate vendor master records mustexist for all the partners of a vendor that are to be entered in that vendor�smaster record.

The vendor can have various functions in its interaction with yourcompany. For example, during the procurement transaction the vendoris the order recipient, then the supplier of goods, the invoicing party, andfinally, the payee.

By maintaining partner roles in the vendor master record, you candistribute one or more of these roles among different vendor masterrecords.

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LO020 Lesson: Vendor Master Records

You can determine which of the partner roles are optional and which aremandatory via the Customizing functions. If no other roles have beenmaintained, the data of the Vendor role applies. This data is used in theassociated downstream logistics and accounting functions.

Figure 63:

Creating a Vendor Master Record with Reference

Explain how to create a vendor with reference to another one.

To help you create a vendor master record, you can use an existing vendoras a reference. The system prompts you to maintain the data (for example,address). The control data is copied from the reference, but you canoverwrite it.

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Figure 64: Creating a Vendor Master Record with Reference

You can block the vendor master record (for example, for vendors whodeliver products of poor quality). Once you have set the block indicator,you can no longer place purchase orders with this vendor.

Note: In the source list, you can block a vendor for a single material.

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LO020 Lesson: Vendor Master Records

155Create Vendor Master Record

1. Choose Logistics → Materials Management → Purchasing → MasterData → Vendor → Central → Create.

2. Enter the Vendor master number (the vendor master numberassignment can be configured to allow either internal assignment orexternal assignment of numbers) purchasing organization,the company code, and the account group. If you want to useanother vendormaster record as a reference, enter the account numberof that vendor in the Vendor (creditor) field (under Reference).

3. Select the Green Check Mark from the Options toolbar.

4. The Create Vendor: Address screen appears. Enter the Vendor nameand address.

5. Select the Green Check Mark from the Options toolbar.

6. The Create Vendor: Control screen appears. On this screen, enter theaccounting data needed by the payment and dunning program, anddata for declarations to the tax authorities. Also populate the debtor(customer) field where necessary (the data in this field is needed inthe case of deliveries to the vendor in connection with returns andsubcontracting components).

7. Select the Green Check Mark from the Options toolbar.

8. Enter the necessary data on the subsequent screens that appear.Required data will be determined by your business processes.

9. Select the Green Check Mark for each screen from the Optionstoolbar.

10. The Create Vendor: Accounting information Accounting screen appears.Enter the Reconciliation account number.

11. Select the Green Check Mark from the Options toolbar.

12. Enter the necessary data on the subsequent screens that appear.Required data will be determined by your business processes.

13. Select the Green Check Mark for each screen from the Optionstoolbar.

Continued on next page

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14. On the Purchasing Data screen, enter purchasing-specific datasuch as the order currency or the key for the terms of payment .

Note: You can record the Terms of Payment that you agree onwith a vendor in the vendor master record. They automaticallyappear as default values in any purchase orders created forthe vendor in question; however, you can change them asneeded. Terms of payment can also be entered in the vendor�sinvoice. These are then applied by the payment program.

15. The Create Vendor: Partner Roles (partner functions) screen appears.Maintain the necessary partner roles on this screen.

16. Select the Green Check Mark from the Options toolbar.

17. Save your vendor master record by selecting Save from the Optionstoolbar.

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LO020 Lesson: Vendor Master Records

157Change Vendor Master Record

1. Choose Logistics→Materials Management→ Purchasing→Master Data→ Vendor → Central → Change.

2. Enter the vendor number, the company code, and thepurchasing organization. Select the area of the data you wishto change by placing a in the appropriate box.

3. Select the Green Check Mark from the Options toolbar.

4. Enter your changes.

5. Save your vendor master record by selecting Save from the Optionstoolbar.

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158Display List of Vendors

1. Choose Logistics→Materials Management→ Purchasing→Master Data→ Vendor → List Displays → Purchasing List .

2. Enter your selection criteria, example purchasing organization.

Note: You can execute this report to show one selected criteriaor a range of selected criteria.

3. Select Execute from the Applications toolbar.

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LO020 Lesson: Vendor Master Records

Demonstration: Create Vendor Master

PurposeTo create a complete vendor master record. Explain the difference increating a vendor master using the central menu path versus using thepurchasing menu path. There will be a number of fields that will not beused or populated in this demo, this often concerns the students. Explaineach screen even if data entry is not required. Remind the students thatthey can use the F1 function to get field level help.

Note: Approximate time for this demo is 15 minutes. You will usethis vendor master in the next Unit.

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Materials Management → Purchasing → Master

Data → Vendor → Central → Create. Explain to create a completevendor master record you need to know the company code and thepurchasing organization.

2. Enter the following data:

Create Vendor: Initial ScreenField: Data:Vendor T-K12B##

Company code 1000 IDES AG 1000Puch. organization 1000 IDES DeutschlandAccount group LIEF Vendor

Explain the Account Group LIEF. Show from the F4 list the one timevendor accounting group.

3. Select the Green Check Mark from the Options toolbar.

4. Enter client-level address information for your vendor master:

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Create Vendor: AddressField: Data:Title Company

Name Rasch Gr.## KFZ-Zubehor

Search term 1/2 LO020–##

Street/House number Daimlerstrasse Street 127HouseNumber

Postal code/City 69134 Heidelberg

Country DE GermanyRegion 08 Baden-WurttembergLanguage English

Note: Use the Green check mark to move to each screen.Point out that the Enter key on the keyboard or the arrowicons also allow movement between screens.

5. Enter the correct reconciliation account number in the relevant field.

Create Vendor: Accounting Information AccountingField: Data:Recon. Account 160000 Trade Payables �

domestic

6. Enter the correct Payment Transaction information in the relevantfield.

Create Vendor: Payment Transaction AccountingField: Data:Payment Methods S Scheck/Check U Bankuber-

weisung/Bank Transfer

Note: This table is still in German so you may want to writethe S/U on the board for reference during the exercise.

7. Enter the correct payment condition and incoterms in the relevantfields.

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Field: Data:Order currency UNI

Terms of paymnt 0002

Incoterms FOB Free on board Mannheim

Caution: Do not demo the partner roles function unless youknow another vendor master record, such as vendor master1000 .

8. Save your vendor master record by selecting Save from the Optionstoolbar.

Demonstration: Change Vendor Master

PurposeChange the accounting data on the vendor master created in the CreateVendor Master demo.

Approximate time for demo is 5 minutes.

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Materials Management → Purchasing → Master

Data → Vendor → Change.

2. Enter the relevant payment conditions in the Company code datafield in the Payment Transaction Accounting view.

Change Vendor: Initial screen

Field: Data:Vendor T-K12B##

Company Code 1000 IDES AG 1000Purch. organization 1000 IDES DeutschlandCompany Code Data Payment Transaction

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3. Enter the payment terms:

Change Vendor: Payment transaction AccountingField: Data:Payment terms 0002

4. Save the changes you made to your vendor master record by choosingSave from the Options toolbar.

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LO020 Lesson: Vendor Master Records

159 Exercise 9: Create Vendor Master RecordExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create and maintain vendor master records.

Business ExampleYour company has a business relationship with a new vendor. To enableyou to order from this vendor, you have to create a new vendor masterrecord in the R/3 System.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Create Vendor Master RecordYou already have the Purchasing and Accounting data for a new vendor.From the perspective of head office, create a vendor master record.

1. Create a vendor master record T-K12B## for company code 1000,purchasing organization 1000, and account group LIEF.

Hint: Leave the remaining fields blank.

2. Enter client level address information for your vendor master:

Create Vendor: AddressField: Data:Title Company

Name Rasch Gr.## KFZ-Zubehor

Continued on next page

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Field: Data:Search term 1/2 LO020–##

Street/House number Daimlerstrasse Street 127HouseNumber

Postal code/City 69134 Heidelberg

Country DE GermanyRegion 08 Baden-WurttembergLanguage English

Hint: You do not have to enter data in these views: Controland Payment transactions. Enter past these screens.

3. The reconciliation account in G/L accounting has the descriptionTrade Payables � domestic. Use your F4 input help to determine thenumber of the reconciliation account. Enter the correct reconciliationaccount number in the relevant field.

4. Automatic payment transactions can be carried out for this vendorvia a check or bank transfer. Enter the correct Payment Transactioninformation in the relevant field.

Note: More than one type of payment transaction can beentered in the payment methods field.

5. The purchase order currency used for the vendor is a UNI. Enter thecurrency in the relevant field. Purchasing has agreed on the termsof payments: within 14 days 3% cash discount, within30 days 2% cash, within 45 days due net. Use your F4input help to assist you in determining the relevant payment term.Enter the correct payment terms in the relevant field. The freightand shipping conditions are FOB/Mannheim. Enter the incoterms inthe relevant fields.

Hint: You do not need to enter data in the Partner functionsview. Enter through this view.

6. Save your vendor master record.

Continued on next page

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LO020 Lesson: Vendor Master Records

Task 2: Change Vendor Master RecordThe payment conditions for vendor T-K12B## agreed by Purchasing arealso valid for accounting transactions.

You have also arranged with the vendor that purchase requisitions can beconverted automatically into purchase orders for some materials. Enablethe system to allow automatic conversion of purchase requisitions topurchase orders by setting the required indicator in the Purchasing screen.

1. The payment conditions 0002 for your vendor T-K12B## are validfor accounting transactions. Enter the relevant payment conditionson the Payment Transaction Accounting view.

2. Save the changes you made to your vendor master record.

3. The vendor�s purchase requisitions can be converted automaticallyinto purchase orders for some materials. Enable the system to allowautomatic conversion by setting the required indicator. Enter therelevant purchasing indicator on the Purchasing view.

4. Save the changes you made to your vendor master record.

Task 3: Optional: Add to List of FavoritesAdd to your list of favorites the most important transactions for workingwith vendor master records.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate your favoriteslist.

1. Maintain your favorites list.

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Solution 9: Create Vendor Master RecordTask 1: Create Vendor Master RecordYou already have the Purchasing and Accounting data for a new vendor.From the perspective of head office, create a vendor master record.

1. Create a vendor master record T-K12B## for company code 1000,purchasing organization 1000, and account group LIEF.

Hint: Leave the remaining fields blank.

a) Choose Logistics→Materials Management→ Purchasing→MasterData → Vendor → Central → Create.

b) Enter the following data:

Create Vendor: Initial ScreenField: Data:Vendor T-K12B##

Company code 1000 IDES AG 1000Puch. organization 1000 IDES DeutschlandAccount group LIEF Vendor

c) Select the Green Check Mark from the Options toolbar.

2. Enter client level address information for your vendor master:

Create Vendor: AddressField: Data:Title Company

Name Rasch Gr.## KFZ-Zubehor

Search term 1/2 LO020–##

Street/House number Daimlerstrasse Street 127HouseNumber

Postal code/City 69134 Heidelberg

Continued on next page

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Field: Data:Country DE GermanyRegion 08 Baden-WurttembergLanguage English

Hint: You do not have to enter data in these views: Controland Payment transactions. Enter past these screens.

a) Select the Green Check Mark from the Options toolbar toadvance to the next screen.

3. The reconciliation account in G/L accounting has the descriptionTrade Payables � domestic. Use your F4 input help to determine thenumber of the reconciliation account. Enter the correct reconciliationaccount number in the relevant field.

a) Enter the correct reconciliation account number in the relevantfield.

Create Vendor: Accounting Information AccountingField: Data:Recon. Account 160000 Trade Payables �

domestic

b) Select the Green Check Mark from the Options toolbar toadvance to the next screen.

Continued on next page

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4. Automatic payment transactions can be carried out for this vendorvia a check or bank transfer. Enter the correct Payment Transactioninformation in the relevant field.

Note: More than one type of payment transaction can beentered in the payment methods field.

a) Enter the correct Payment Transaction information in therelevant field.

Create Vendor: Payment Transaction AccountingField: Data:Payment Methods S Scheck/Check U Bankuber-

weisung/Bank Transfer

b) Select the Green Check Mark from the Options toolbar toadvance to the next screen.

5. The purchase order currency used for the vendor is a UNI. Enter thecurrency in the relevant field. Purchasing has agreed on the termsof payments: within 14 days 3% cash discount, within30 days 2% cash, within 45 days due net. Use your F4input help to assist you in determining the relevant payment term.

Continued on next page

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LO020 Lesson: Vendor Master Records

Enter the correct payment terms in the relevant field. The freightand shipping conditions are FOB/Mannheim. Enter the incoterms inthe relevant fields.

Hint: You do not need to enter data in the Partner functionsview. Enter through this view.

a) Enter the correct payment condition and incoterms in therelevant fields.

Field: Data:Order currency UNI

Terms of paymnt 0002

Incoterms FOB Free on board Mannheim

b) Select the Green Check Mark from the Options toolbar toadvance to the next screen.

Hint: You do not need to enter data in the Partnerfunctions view; Enter through the view.

6. Save your vendor master record.

a) Save your vendor master record by selecting Save from theOptions toolbar.

Continued on next page

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Task 2: Change Vendor Master RecordThe payment conditions for vendor T-K12B## agreed by Purchasing arealso valid for accounting transactions.

You have also arranged with the vendor that purchase requisitions can beconverted automatically into purchase orders for some materials. Enablethe system to allow automatic conversion of purchase requisitions topurchase orders by setting the required indicator in the Purchasing screen.

1. The payment conditions 0002 for your vendor T-K12B## are validfor accounting transactions. Enter the relevant payment conditionson the Payment Transaction Accounting view.

a) Choose Logistics→Materials Management→ Purchasing→MasterData → Vendor →Central → Change.

b) Enter the relevant payment conditions on the Company codedata field in the Payment Transaction Accounting view.

Change Vendor: Initial screenField: Data:Vendor T-K12B##

Company Code 1000IDES AG 1000Purch. organization 1000IDES DeutschlandCompany Code Data Payment Transaction

c) Select the Green Check Mark from the Options toolbar.d) Enter the payment terms:

Change Vendor: Payment transaction AccountingField: Data:Payment terms 0002

2. Save the changes you made to your vendor master record.

a) Save the changes you made to your vendor master record bychoosing Save from the Options toolbar.

Continued on next page

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3. The vendor�s purchase requisitions can be converted automaticallyinto purchase orders for some materials. Enable the system to allowautomatic conversion by setting the required indicator. Enter therelevant purchasing indicator on the Purchasing view.

a) Choose Logistics→Materials Management→ Purchasing→MasterData → Vendor → Change.

b) Enter the relevant purchasing indicator on the Purchasing view.

Change Vendor: Initial screenField: Data:Vendor T-K12B##

Company Code 1000 IDES AG 1000Purch. organization 1000 IDES DeutschlandPurchasingorganization data

Purchasing Data

c) Select the Green Check Mark from the Options toolbar.d) Enter Automatic purchase order.

Note: This field requires only a check mark.

4. Save the changes you made to your vendor master record.

a) Save the changes you made to your vendor master record bychoosing Save from the Options toolbar.

Continued on next page

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Task 3: Optional: Add to List of FavoritesAdd to your list of favorites the most important transactions for workingwith vendor master records.

Note: The formatted text within your favorites list will varydepending on the procedure you choose to populate your favoriteslist.

1. Maintain your favorites list.

a) You can maintain a favorites list either by:

� Drag and Drop: Select the Vendor Master transaction.Holding the left mouse button down, drag the transactionup and into the Favorites folder.

� Right mouse click: Select the Vendor Master transaction.Click the right mouse button. Select add to favorites.

� Using the Add to favorites icon: Select the VendorMaster transaction. Select the Add to favorites icon fromthe Applications toolbar. Click on the icon to move thetransaction into the favorites list.

� Using the Menu Bar: Select the Vendor Master transaction.Select Favorites /Add from the menu bar.

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LO020 Lesson: Vendor Master Records

Lesson Summary

You should now be able to:� Create and maintain a vendor master record� Explain the impact of organizational levels on vendor masters� Explain the concept of partner roles in the vendor master

Related InformationFor more detailed information about vendor master record, refer to theSAP Library online at http://help.sap.com.

http://help.sap.com

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Unit Summary LO020

Unit SummaryYou should now be able to:� Explain the significance of the material master� Create and maintain material master records� Explain the impact of organizational levels on material masters� Create and maintain a vendor master record� Explain the impact of organizational levels on vendor masters� Explain the concept of partner roles in the vendor master

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LO020 Test Your Knowledge

171Test Your Knowledge

1. The material master record is a company�s main source of materialspecific data.Determine whether this statement is true or false.□ True□ False

2. The data maintained within a view may be valid for more than oneorganizational level.Determine whether this statement is true or false.□ True□ False

3. The integration of all material data in a single database object preventsthe problem of data .Fill in the blanks to complete the sentence.

4. and are two examples of organizationallevels where material master data can be stored.Fill in the blanks to complete the sentence.

5. When creating a material master record, remember that the materialtype is the primary controlling function in the R/3 System. Thematerial type can determine:Choose the correct answer(s).□ A The type of number assignment□ B The number range interval□ C The views suggested for entry□ D All of the above

6. If a new view for a material master is requested, the new view isadded to the R/3 System by changing the material master record.Determine whether this statement is true or false.□ True□ False

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7. The industry sector you assign to a material master record duringcreation can be changed at a later date.Determine whether this statement is true or false.□ True□ False

8. List three organizational levels where data within a vendor mastercan be stored.

9. When creating a vendor master record you do not have to enter anaccount group.Determine whether this statement is true or false.□ True□ False

10. When creating a vendor master record, you have to maintain areconciliation account.Determine whether this statement is true or false.□ True□ False

11. in the vendor master record allow thedistribution of multiple roles among different vendor master records.Fill in the blanks to complete the sentence.

12. and are examplesof Partner Roles.Fill in the blanks to complete the sentence.

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LO020 Test Your Knowledge

173Answers

1. The material master record is a company�s main source of materialspecific data.

Answer: True

The material master record is the main source of material specific dataas it is used by all components of the R/3 Logistics system.

2. The data maintained within a view may be valid for more than oneorganizational level.

Answer: True

The data maintained within the Basic Data view is maintained at aclient level; therefore, the data maintained within this view is validfor all organizational levels within the client.

3. The integration of all material data in a single database object preventsthe problem of data redundancy.

Answer: redundancy

Some material data is valid for all organizational levels, while some isvalid for certain levels only. The material master is designed to reflectthe structure of your enterprise so you can manage the material datain your enterprise centrally, without overloading your datasets withredundant information.

4. Client and Plant are two examples of organizational levels wherematerial master data can be stored.

Answer: Client, Plant

Data at client level: General material data that is valid for the wholecompany is stored at client level.Data at plant level: All data that is valid within a plant, and for allstorage locations in it, is stored at plant level.Data at storage location level: All data that is valid for a particularstorage location is stored at storage location level.

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Test Your Knowledge LO020

5. When creating a material master record, remember that the materialtype is the primary controlling function in the R/3 System. Thematerial type can determine:

Answer: D

Material types in the SAP standard version are, for example, rawmaterials, trading goods, semi-finished products, finished products,or services. The material type represents certain features of materialsin the system, and has important control functions: the materialtype is used, among other things, to group field selection functionsfor a material or to define the screen sequence, the type of numberassignment and number ranges during material master recordmaintenance. Depending on the material type, company areasmaintain different data screens. This screen selection applyingspecifically to an application is called a view.

6. If a new view for a material master is requested, the new view isadded to the R/3 System by changing the material master record.

Answer: False

If a new view is requested from another department, the materialmaster must be extended and the view added to the material masterrecord via Create material master.

7. The industry sector you assign to a material master record duringcreation can be changed at a later date.

Answer: False

The industry sector assigned to a material master record at the timeof creation cannot be changed.

8. List three organizational levels where data within a vendor mastercan be stored.

Answer: Data within a vendor master record can be stored in:General data � this is data valid for the whole client; Purchasingdata � this is plant-dependent data; and Accounting data� this iscompany-dependent data.

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LO020 Test Your Knowledge

9. When creating a vendor master record you do not have to enter anaccount group.

Answer: False

When creating a vendor master record you do have to enter anaccount group. The account group determines a number of variablesrequired to enter a vendor master record.

10. When creating a vendor master record, you have to maintain areconciliation account.

Answer: True

When creating a vendor master record you have to maintain areconciliation account. The account records a company�s liabilitiesto a vendor in G/L accounting.

11. Partner Roles in the vendor master record allow the distribution ofmultiple roles among different vendor master records.

Answer: Partner Roles

12. Supplier and Invoicing Party are examples of Partner Roles.

Answer: Supplier, Invoicing Party

Order recipient, Supplier, Invoicing party, and Payee are all examplesof possible partner roles for a vendor master record. Partner Rolescan be configured in the Implementation Guide.

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Unit 4177 Procurement of Stock Material

This is probably the most important unit in the course. Not only dothe students go through the complete procurement cycle (except forrequisitions), but they are also introduced to many new concepts. Be sureto allow plenty of time for questions and for exercises.

Unit OverviewA key unit in this course, Procurement of Stock Material will introducethe creation and maintenance of requests for quotations. The unit alsopresents the establishment of purchasing info records with focus onpricing and conditions. The progression of creating a purchase order,receiving the material into the plant, and finally entering the invoice willbe done at a basic level.

Unit ObjectivesAfter completing this unit, you will be able to:

� Create a request for quotation� Enter and compare vendor quotations� Process and create purchasing info records� Create an info record with reference to an RFQ� Enter prices into info records and enter vendor discounts� Create a purchase order with reference to a quotation� Explain the purpose of documents for goods movements� Perform Stock Overview displays� Analyze the valuation effect from a goods receipt on both standard

and moving average materials� Post a goods receipt into quality inspection stock and release the

quality inspection stock

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� Explain and demonstrate the use of Logistics Invoice Verification(LIV) functionality for invoice posting with both planned andunplanned delivery costs

� Display the accounting document and material document associatedwith LIV invoice posting

Unit ContentsLesson: Requests for Quotation (RFQ) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225

Procedure: Creating an RFQ Manually.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .227Procedure: Entering a Quotation Against an RFQ ... . . . . . . . . . . . . . . . . . .232Procedure: Comparing Quotations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235Demonstration: RFQ / Quotation Processing... . . . . . . . . . . . . . . . . . . . . . . . .246Exercise 10: Request for Quotation (RFQ) ... . . . . . . . . . . . . . . . . . . . . . . . . . .249

Lesson: Purchasing Information Records ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261Demonstration: Demonstration of Info Record Structure.. . . . . . . . . . . . .262Demonstration: Info Record Maintenance .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .263Demonstration: Automatic Info Record Creation .. . . . . . . . . . . . . . . . . . . . . .264Demonstration: Demonstration of Condition Maintenance in InfoRecords ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272Procedure: Creating Info Record for Material with MasterRecord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .274Procedure: Creating Info Record for Material without Master Record.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .279Exercise 11: Purchasing Information Records.. . . . . . . . . . . . . . . . . . . . . . . . .283

Lesson: Purchase Orders for Stock Material. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .291Demonstration: Purchase Order Creation with Reference to aQuotation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .291Procedure: Creating a PO by Copying or Referencing... . . . . . . . . . . . . .294Exercise 12: Purchase Orders for Stock Material . . . . . . . . . . . . . . . . . . . . . .297

Lesson: Stocks, Valuation, and Goods Receipt. . . . . . . . . . . . . . . . . . . . . . . . . . . . .305Demonstration: Valuation Data in the Material Master Record... . . . .314Demonstration: Goods Receipt Into Quality Inspection Stock.. . . . . . .320Demonstration: Transfer Posting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .324Procedure: Goods Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .325Exercise 13: Posting Goods Receipts into Quality Inspection.. . . . . . .327

Lesson: Invoice Verification for Stock Materials .. . . . . . . . . . . . . . . . . . . . . . . . . . .338Demonstration: Optional � Invoice Processing (planned delivery costs).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .342Demonstration: Entering Unplanned Delivery Costs ... . . . . . . . . . . . . . . .342Procedure: Invoice Posting Procedure .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .344Procedure: Entering Invoices with Purchase Order Reference .. . . . .345Exercise 14: Invoice Verification for Stock Materials . .. . . . . . . . . . . . . . . .347

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LO020 Lesson: Requests for Quotation (RFQ)

Lesson:179

Requests for Quotation (RFQ)Lesson Duration: 60 Minutes

Lesson OverviewThis unit discusses the procurement process for a stock material. Wedemonstrate how the Request for Quotation (RFQ) process works and isused to determine which vendor we should buy from. We look at the useof info records to capture conditions and prices which facilitate creatingthe PO. We will review the valuation decision we must make for eachstock material and its impact in accounting. We will add several othermodifications of the basic steps and another inventory transaction, thestock transfer.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Create a request for quotation� Enter and compare vendor quotations

We already introduced the basic purchasing process and the mainprerequisites for the purchasing process, that is, organizational structureand master data. This unit goes deeper into the procurement processfor a stock material. We expand the basics by demonstrating how theRequest for Quotation (RFQ) process works and is used to determine towhich vendor we will send the PO. We look at the use of Info records tocapture conditions and prices which facilitate creating the PO and at thevaluation decisions we must make for stock materials and the impact inof this choice, in accounting, when we buy them. We add several othermodifications to each of the basic steps and another inventory transaction,the stock transfer.

Business ExampleYou need to research vendors for a material your company needs toprocure. You use the RFQ functionality to assist with this task.

The Request for Quotation (RFQ/Quotation) ProcessAfter establishing that a material or service is required, the Purchasingdepartment needs to convert the purchase requisition into a purchaseorder. The R/3 System supports the Purchasing department using requestsfor quotation in the source determination process.

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Figure 65: RFQ/Quotation

First, you create a request for quotation for the relevant material or therequired service. You can enter the request for quotation manually or withreference to a purchase requisition. The second option has the advantagethat the information already in the purchase requisition is copied directlyto the request for quotation. Then you send it to selected vendors. Whenyou enter the vendor�s name, the system retrieves the address from thedata in the vendor�s master record.

You send the RFQs to the chosen vendors, who then send back theirquotations. In Purchasing, the RFQ and the quotation form a singledocument. Prices and conditions quoted by vendors are entered in theoriginal RFQ.

You can determine the most favorable items or overall quotation by meansof a quotation comparison. You also can save the price and conditions ofevery quotation you are interested in as a purchasing info record.

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181Creating an RFQ ManuallyPrerequisites

1. Vendors: Do you have a list of suitable vendors for the RFQ? Thevendor numbers must be available.

2. Deadlines: What are the important deadlines for bidding, if any (forexample, the deadline for submission of quotations)?

3. Number assignment: If your company uses external numberassignment, then you need an RFQ number that falls within the validnumber range.

4. Collective number: SAP recommends that you assign the RFQ acollective number. You enter this number once and the system copiesit into each RFQ you create within a competitive bidding process.This number enables you to easily track all RFQs. The number canbe alphanumeric and up to 10 characters long. You enter it in theheader data of the RFQ.

Procedure1. Procedure

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Figure 66:

1. Choose RFQ/quotation using the path Request For Quotation→Create.

The initial screen appears.

2. Enter the deadline for submission of quotations, the purchasingorganization, and the purchasing group.

� Document data

RFQ type: In the standard system, the default value forthe RFQ type is AN (RFQ). It is the value we assume inclass examples.

Quotation deadline: The date by which all vendors must havesent in their quotes.

RFQ [number]: Enter a number only if you use externalnumber assignment. If you leave the field blank, the systemwill assign a number automatically.

� Organizational data

Enter the key code for your purchasing organization andpurchasing group.

� Default data

If you make an entry in any of these fields, the valuebecomes the default value in each item.

For example, if you enter the delivery date, then this dateis suggested in each item. You can change this value atany time.

3. Press Enter.Note: If you make the Collective number mandatory, thesystem will take you to the appropriate screen now.

Enter the collective number and press Enter to go on tothe next screen.

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Figure 67:

Note: If Collective Number is not mandatory, you will betaken to the overview screen.

Continued on next page

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Figure 68:

The item overview screen appears. For each item, enter:

� The number of the material; if the material has a materialmaster record.

If the material does not have a master record, then leave thefield for the material number blank. However, in this case,entry of the short text, material group, and order unitbecomesmandatory.

� The quantity requested.� The delivery date (day, week, or month - enter the

corresponding date category).� The number of the receiving plant and that of the storage

location, if known.4. To review the detailed information for an item, first select the

item. Then choose Item → Details.To review header information such as the importantdeadlines for the RFQ, choose Header → Details. You canalso enter the collective number on this screen.

5. Choose Header → Vendor address.

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Enter the vendor number and press the Enter key. Thesystem will then take the address data from the vendormaster record.If you enter the number of a one-time vendor, you mustenter the complete address manually.

Note: You may need several one-time vendor records(templates). They can be set up to differentiate vendorsfrom different countries, using different currencies,languages, terms and conditions, or when accountingwants to use a different reconciliation account.

6. Save the RFQ document so that the RFQ message is createdfor the relevant vendor.

7. For each additional vendor to whom you want to send the RFQ,enter the vendor number and Save the document.

ResultThe RFQ document is created in the SAP system. In order for theinformation in the RFQ to be transmitted to the vendor, the system alsogenerates a message. How to set up the system to automatically create andtransmit the proper message to the vendor is described in the configurationcourse, LO550 � Cross-Functional Customizing in MM.

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186Entering a Quotation Against an RFQ

1. Choose RFQ/quotation→ Quotation→Maintain. The initial screen formaintaining quotations appears.

Figure 69:

2. Enter the number of the RFQ and select ENTER. The RFQ itemoverview screen appears. Enter all the data the vendor supplied inthe quote. Price may not be the only data change.

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Figure 70:

Hint: If you don�t remember the number, you can searchusing either the reports function, RFQ/Quotation → RFQ →List displays, or by using the price comparison search function,RFQ/Quotation→ Quotations→ Price Comparison.

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3. You can enter the vendor�s price per item directly on the itemoverview screen or on the item detail screen (see step 4).

Note: Entering Prices: You can enter a vendor�s quoted pricesin either of two ways:

� You enter the net price per unit in the Net price field.This price includes the vendor�s normal discounts andsurcharges only. (Cash discounts for prompt paymentand taxes (e.g. value-added tax) are calculated separatelyand result in the effective price.)

� Or, enter the gross price in the Net price field, andmaintain the conditions for the item by choosing Item→conditions. Then the system automatically replaces thegross price you entered with the calculated net price(see Help files on Maintaining Conditions). If you enterthe net price for an item for which pricing conditionshave been maintained, the system always replaces theprice you enter with the calculated net price. A warningmessage draws your attention to this fact, so that youcan correct the price with which the system overwroteyour input if necessary.

Hint: After you access the conditions screen, the system greysout the Net price field; it becomes display only. All futurechanges must be made through the conditions screen.

4. Choose Item → Details to enter quotation data on the item detailscreen. See Note above.

5. Save your data.

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189Comparing QuotationsPrerequisitesBefore you generate the price comparison list, you need to consider thefollowing:

� If possible, each quotation should have pricing data for the sameitem(s). Only then is the correct interpretation of the mean and totalvalues possible. If quotations 1 and 2 have pricing data for item A,but quotation 3 has price information for item B only, then the systemdoes not have enough information to accurately compare the prices ofall three quotations.

Procedure1. You can compare the prices from all quotations received as a result

of a competitive bidding process using the Price comparison list. Thecomparison list ranks the quotations by item from lowest to highestprice.

Figure 71:

1. Choose RFQ/quotation→ Quotation→ Price comparison list. Theselection screen for the price comparison list appears.

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2. Enter the selection criteria for the quotations that are to becompared.

� You can enter either a range of quotation numbers or,by entering the collective number, select all quotationsbelonging to a certain competitive bidding process. It isalso possible to select by vendor number and by materialnumber. You must specify either a range of quotationnumbers or the collective number.

� Choose the comparison values to be used.

� Reference quotation: You can compare the quotationswithin the list with a sample quotation (perhaps last yearswinning quote). The system displays the percentagedeviation between each quotation in the list and the samplequotation.

� Mean/minimum value quotation: The price comparisonlist can also display a "fictitious" quotation reflecting theaverage or minimum value of all quotations. To type thefictitious quotation,set the √ indicator for either theMean orMinimum value quotation field.

� Percentage basis: The price comparison list displaysthe percentage of each item in relation to the maximum,minimum, or average price. To determine the display type,enter one of the following:

+ Highest value for each item is the 100% value

- Lowest value for each item is the 100% value

"_" Mean value for each item is the 100% value

� Price computations: Select √ the appropriate field to specifywhich of the following should be taken into account indetermining the comparison price:

Cash discount

Delivery costs

Effective price

3. Choose Program → Execute. The price comparison list isgenerated.

Note: The price comparison list displays the price peritem in the base unit stored in the material master record.

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Further Information: From the price comparison list, you can dothe following:

� Display additional information about the material master recordfor a particular material

� Display additional information on the quotations in the pricecomparison

� Display a certain quotation� Display a vendor master record� Invoke vendor evaluation functions

If you position the cursor on:

� A vendor, only the latter�s evaluation is displayed (inrelation to the materials he is able to supply).

� A material, the system generates a ranking list of allvendors that have submitted a quotation.

� The quotation data (e.g. price or rank), the system willcarry out a comparison of evaluations.

� Save the Market Price: The market price is the basis forappraising the vendor�s price level for a material and is usedfor vendor evaluation purposes. A market price can apply to amaterial or a material group.

You can store a price as the market price from within the pricecomparison list. Position the cursor on the price you want tosave and choose Edit → Save market price.

Note: The details of the vendor evaluation process aretaught in the Purchasing Optimization course, LO520.

To find more information about vendors� price behavioron the basis of the market price, refer to the MM VendorEvaluation documentation (sections: Calculating theScore for Price Level (Main Criterion "Price") andCalculating the Score for Price History (Main Criterion"Price").

Conditions, One-time Vendor, Collective Number andthe RFQ/QuotationConditions are used in purchase orders to determine net price.

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The following types of conditions are used in Purchasing:

� Conditions in a contract apply to all contract release orders createdwith reference to this contract.

� Conditions in a purchasing info record apply to all purchaseorder items that specify the material and vendor contained in thepurchasing info record.

� Extended conditions are included in the purchase order only if theitem meets the extended condition criteria. For example, you can useextended conditions to define vendor discounts or include discountsfor a material type. Extended conditions are more flexible thanconditions in info records or contracts in that you can define whichcriteria must be met if the conditions are to apply to purchase orders.

Figure 72: Conditions

Conditions:

Explain what conditions are, what types there are etc. Emphasize the factthat conditions have a validity period.

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Figure 73: One-Time Vendor

You can use a single one-time vendor master record to cover a number ofvendors. You normally use one-time master records for vendors you don�texpect to use again. When you use one you will be required to type in thevendor�s name and address. When the invoice comes in for posting, thevendor�s banking information will also have to be typed in manually.

One-Time Vendor:

Bid invitations can also be carried out for vendors that do not yet have avendor master record in the system. Explain briefly how procurementtransactions are processed for a one-time vendor.

You can create special vendor master records for vendors from whom youprocure goods only once or rarely called one-time vendor master records.

For example, suppose you order goods from a vendor with whom youusually do not place orders because your main vendor was not able tosupply the required items. In this case, you would use a one-time vendormaster record.

In contrast to other master records, a one-time vendor master record isused for several vendors. The purpose of this is to avoid the unnecessarycreation of an excessive number of individual vendor master records. Forthis reason, you may not store any vendor-specific data in a one-timevendor master record.

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When creating a one-time vendor master record, you must assigna one-time account group. This account group determines that thevendor-specific fields are suppressed. You don�t need to enter thesuppressed fields data until the time a purchasing document for example,a PO) is created.

Like all other master records, you can display, block, or delete one-timevendor master records.

Each time you use this type of master a sub-ledger account is created forthe vendor under the umbrella of the Reconciliation account.

Figure 74: Collective Number

You can link a number of RFQs that belong together with the help of thecollective number. You enter the collective number in the header data ofthe RFQ and the system assigns it to each message you send out. Thismeans you have to remember only one number in order to retrieve all ofyour RFQs and quotations during price comparisons or other analyses.

The collective number can have a maximum of ten characters and can bealphanumeric. Its use can be left optional or made required.

Collective Number:

A collective number at header level groups together several relatedRFQs/quotations and makes searching for the related RFQs easier. Itcan also be used to search for RFQs for which quotations have not beenreceived.

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Options for Creating RFQs

Figure 75: Function Process: Creating RFQs

You can create RFQs with or without reference to a purchase requisition,another RFQ, or an outline agreement. You maintain the organizationallevels and the deadline for submission of quotations on the initial screen.

If you want a Collective number it is put on the Header data screen.

Next you enter information about the items you want quoted. You cansend an RFQ to vendors with a master record or to one-time vendors. Witha one-time vendor, you must enter the address in the RFQ.

Function Process: Creating RFQs

Use the slide to explain the structure of an RFQ, as well as the procedureused to create RFQs. Explain the data that is contained at header and itemlevel. Point out that the same RFQ content can be used to create multipledocuments to be sent to multiple vendors. The buyer simply updates eachvendor number and address and saves. Caution them not to exit the RFQscreen until they send out all the RFQs. If they do, they have to start overagain to add additional vendors.

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Quotation Processing

Figure 76: Quotation Processing

A quotation is the vendor�s response to your RFQ. It legally binds them,for a period of time, to the pricing, delivery date, and quantity informationthey provided for the parts they are willing to supply. In R/3 Purchasing,RFQs and quotations are a single document. You enter the data givenby the vendor into the original RFQ, which is hereafter referred to as aquotation (It keeps the same document number).

You can compare quotation data by using the quotation price comparisonlist. The quotation price comparison list shows the most reasonable vendorfor each item individually and also totaled for all items (that is, it showsthe best price if you buy all the items from the same vendor).

While in the quotation price comparison list, you can do several differentthings, including:

� Save the quotation data as a purchasing info record; automatically ifyou set a valid Info update indicator.

� Set a rejection indicator for quotation items you are not interested in.This enables the system to issue rejection letters.

� Change the quotation data.� Save the mean value of the quotations as the market price. Market

price is used as the basis for valuating the price level of a vendor andis called up during vendor evaluation.

You can subsequently create a purchase order with reference to a quotation.

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Quotation Processing:

Explain the process of quotation processing, from price comparison tofollow-up activities (e.g. ordering, creating info records with conditions).

A quotation is the vendor�s response to an RFQ and it is legally bindingon the vendor for a certain period of time. It contains information aboutpricing, total quantities and delivery dates for those items they are offeringto supply.

An item of a quotation may contain a delivery schedule made up of anumber of schedule lines in which the total quantity is broken down intosmaller quantities to be delivered on the specified dates over a certainperiod.

An item of the procurement type External service contains a set of servicespecifications. The latter can be hierarchically structured. The summaryview of such a hierarchical structure is referred to as an outline. Theoutline comprises a number of levels, each representing a level of theservice hierarchy. The quantities of the quotation are set out in servicelines, representing individual jobs or activities. If services cannot bedefined precisely, value limits are stipulated instead of service lines. Valuelimits can be set for certain contracts.

Figure 77: Conditions

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Conditions are stipulations agreed to with vendors, concerning prices,discounts, surcharges, and so on. The net price in purchase orders isdetermined on the basis of these conditions. You can automaticallymaintain conditions when you create quotations, info records, outlineagreements, and purchase orders, or you can do it manually. If a vendor�sprices vary according to quantity, you can enter the pricing data in theform of a price/quantity scale.

Conditions in info records, contracts, and extended conditions aretime-dependent conditions, that is they are usually valid for a certainperiod of time, referred to as the validity period. Conditions in purchaseorders are time-independent conditions because they are valid in thatPO only. If you want to use time-dependent conditions for quotationsand scheduling agreements, you must set the time-dependent conditionsindicator for the document type in Customizing.

There are other files in which you can enter additional conditions,conditions that are not specific to one part, but that may cross many parts.These are called extended conditions. They provide you with the option ofspecifying time-dependent conditions that are independent of outlineagreements and info records. These may apply to an entire materialgroup or to a specific subcategory, or the vendor may apply a discount toeverything you buy during a period of time.

You can enter conditions in the document header or in the item details.Item conditions apply to one item only. Header conditions apply to allthe items in the document.

Conditions:

Explain what conditions are, what types there are etc. Emphasize the factthat conditions have a validity period.

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LO020 Lesson: Requests for Quotation (RFQ)

Figure 78: Calculation Schema

The calculation schema provides a framework for price determination.

The calculation schema defines:

� Which condition types are permitted� The order in which the condition types are taken into account during

the calculation of the net price� The condition types for which subtotals are calculated� The reference step for percentage condition types

Condition types are used to describe conditions. They define howdiscounts or surcharges are calculated (for example, on a percentage basisor by amount). The reference magnitude for price scales is also defined viathe condition type. The scale can refer to the quantity, the item value, orthe freight charges.

You can assign an access sequence to a condition type. The access sequenceis a search strategy used to define the sequence in which condition recordsfor a condition type are read. These tables are set up in the IMG.

Note: Additional information about conditions and how toconfigure them can be found in the course, LO521 � Pricing inPurchasing.

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Conditions:

Explain what conditions are, what types there are and so forth. Emphasizethe fact that conditions have a validity period.

Demonstration: RFQ / Quotation Processing

Purpose

Note: Approximate time is 15 minutes.

Note: Switch back to the role menu for LO020_Buyer.

System DataSystem:Client:User ID:Password:Set up instructions:1. Create a RFQ Logistics → Materials Management → Purchasing →

RFQ/Quotation → Request for Quotation → Create From the InitialScreen Enter Quotation deadline a Purchase Org. 1000,and a Purchase Group T##Don�t enter a plant . Enter

From the Header Data screen: Enter Coll. no. GR##select Enterto move to the next screen.

From the Item Overview screen : Enter10 pieces of materialT-RM2## for Delivery date one month from RFQ date DeliveyDate.

Use the Vendor Address icon form the Tool bar to access the VendorAddress screen. Enter Vendors: T-K12A##, T-K12B##, and 1950(one-time vendor). . Save after each vendor input , the system willcreate seperate RFQ numbers for each vendor. When you have thethree numbers use the Red X icon to leave the RFQ screens.

Note: RFQ documents must be maintained separately somake note of the document number for each vendor.

2. Maintain the RFQ Logistics→Materials Management→ Purchasing→RFQ/Quotation → Quotation → Maintain

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Enter the RFQ document numbers. Find your RFQ numbers by usingthe F4 matchcode help.

Hint: Conditions screen must be accessed by using theConditions icon from the Toolbar

Vendor Net Price ConditionsT-K12A## 79 RA01/15%

T-K12B## 82 RA01/10%

1950 79 RA01/3%FRB1/100uni

During the maintain of each RFQ look at the item details and point outthe info record update field. Set the info update indicator to C Saveyour RFQ.

Note: In release 4.6 the choice of info record update type (A,B, C) can be set in the IMG by plant.

3. Execute a quotation price comparisonLogistics → MaterialsManagement → Purchasing → RFQ/Quotation → Quotation → PriceComparison Enter your collective number GR##

� Flag the √Mean value quotation and the √ Determine effective price(deducts any cash discounts from vendor). Explain that the meanvalue can be saved as the market price, which is used to evaluatevendors according to price in vendor evaluation. Execute

� Make changes to RFQ for Vendor T-K12A## by selecting the RFQnumber and double clicking. Change the delivery date.

� Reject the RFQ�s for Vendors T-K12B## and 1950 by doubleclicking on each RFQ and setting the Rejection indicator.

4. Display Rejection Letter RFQ/Quotation → RFQ → Messages →Print/transmit Enter the RFQ number and Execute. Choose the RFQnumber by entering a check mark in the box to the left of the ASBA.Click on the Radio button Display Message.

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Optional: Reject the most expensive vendor (by setting the rejectionindicator on the item detail screen of the quotation) and display therejection letter. Message type for rejection letters is ABSA.

Note: Show the rejection indicator can also be set:globally using the path edit → Fast change to get thedialog box, then set the Rejection indicator mark √ andpress Enteror in the Item overview screen in the column labelled �R�(you may have to scroll to the right to see it).

Hint: If you get a warning that the message cannot be printed,check if a printer has been specified for the message record.

Choose Purchasing → Master data → Messages → RFQ →Change.

Output type NEU and key combination document type AN.Execute. Select line and click on communication. Enter outputdevice.

The same message may appear as you set the rejectionindicator. The output type for that is ABSA, key combinationdocument type AN. Enter an output device.

The students should now do the Exercise for RFQ/Quotation Processing.

Allow approximately 20 minutes.

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199 Exercise 10: Request for Quotation (RFQ)Exercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a request for quotation� Enter and compare vendor quotations

Business ExampleYour company would like to procure material and use RFQ functionalityto determine a suitable vendor.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Create a Request for Quotation (RFQ)Create an RFQ using GR## for the Collective Number. Ask vendors forpricing and delivery on a base quantity of 100 pieces of material T-RM2##.

You have heard of a prospective new vendor with whom you have neverhad any business dealings (one-time vendor)1950. You send the one-timevendor a RFQ.

You send another RFQ to your previous main vendors T-K12A## andT-K12B##.

1. Create the RFQ.

Use the following information:Field Name DataRFQ date Current dateQuotation deadline Current date + 2 weeksPurch. Organization 1000

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Field Name DataPurchasing Group T## (LO020�##)Delivery date Current date + 1 monthPlant (No Plant!!)

Hint: You should only specify a plant on a RFQ document ifyou do not intend to procure the items for more than one plant.

2. Select the Vendor Address Icon from the Toolbar to access the VendorAddress screen. Enter the vendor address details:

Task 2: Display the RFQLook at the standard layout of an RFQ and learn how to print itimmediately.

1. Display the RFQ for your main vendor T-K12A## as it would look ifyou could print it (Message) on your screen.

Task 3: Maintain QuotationsYou have received the quotations for your RFQs. Maintain the quotationsin the system.

Hint: Make sure that the info update indicator �C� is set on thedetail screen for the quotation items. This ensures that an inforecord is created for each quotation. If an info record already existsfor an item, you will update the info record based on the quotationconditions.

1. Maintain the Vendor�s Data for your RFQ documents. You will needto maintain each RFQ document number separately. Listed beloware the steps and the data required to maintain each of your RFQdocuments. You will need to follow the all of the steps to maintaineach Vendor�s RFQ document number. Remember to save after eachdocument.

Task 4: Price ComparisonUse the system tools to compare vendors� quotes.

1. Compare the prices of the quotations to determine the mostreasonable supplier.

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LO020 Lesson: Requests for Quotation (RFQ)

2. Select the quotations for comparison via the Collective number GR##and Purchasing organization 1000. Display the mean value quotationusing the quotation price comparison list and choose the effectiveprice by placing a check mark in these fields.

Determine and record the most reasonable quotationField name Recorded valuesVendorEffective Price

3. Vendor T-K12A## has just informed you that due to demand thedelivery time is 6 weeks rather than 1 month.

4. Set the rejection indicator √ for the two quotations you do not want toaccept.

Task 5: Simulating the printing/sending of a rejectionletterSee the standard layout and process of printing a Rejection letter.

1. Send one of the two rejection letters. Look at the letter on the screenbefore you print it out. Is the letter marked as a rejection letter? Thatis, does it have the Message type: ABSA? If it is not, re-check therejection indicator set in the Task 4: Compare prices, see above.

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Solution 10: Request for Quotation (RFQ)Task 1: Create a Request for Quotation (RFQ)Create an RFQ using GR## for the Collective Number. Ask vendors forpricing and delivery on a base quantity of 100 pieces of material T-RM2##.

You have heard of a prospective new vendor with whom you have neverhad any business dealings (one-time vendor)1950. You send the one-timevendor a RFQ.

You send another RFQ to your previous main vendors T-K12A## andT-K12B##.

1. Create the RFQ.

Use the following information:Field Name DataRFQ date Current dateQuotation deadline Current date + 2 weeksPurch. Organization 1000

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Field Name DataPurchasing Group T## (LO020�##)Delivery date Current date + 1 monthPlant (No Plant!!)

Hint: You should only specify a plant on a RFQ document ifyou do not intend to procure the items for more than one plant.

a) Logistics→Materials Management→ Purchasing→ RFQ/Quotation→ RFQ → Create Enter the following data:

Initial ScreenField Name DataRFQ date Current date (If needed, it usually

defaults in.)Quotation deadline Current date + 2 weeksPurch. Organization 1000Purchasing Group T## (LO020�##)Delivery date Current date + 1 monthPlant (No Plant!!)

b) Enterc) Header Data Enter the following data:

Header data ScreenField name DataColl. no. GR##

d) Entere) Item Overview screen. Enter the following data:

Item Overview ScreenField name DataMaterial T-RM2##

RFQ quantity 100

f) EnterContinued on next page

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2. Select the Vendor Address Icon from the Toolbar to access the VendorAddress screen. Enter the vendor address details:

a) To enter the vendor addresses, use the path Header → Vendoraddress (or the address(letter) icon on the toolbar) to opena new screen.

Hint: Do not exit the Vendor Address screen until afterall three RFQ document number have been created.If you do exit, you will need to start over, going backthrough all of the RFQ create steps and using the sameCollective number, to finish.

b) Start with the one-time vendor. Enter the template number,1950, in the Vendor field and select Enter. The system issuesa message that you need to type in the Company Name andAddress; it also opens the screen to allow you to do that. Typein the following data.

One-time Vendor AddressTitle Company

Company Schmidt BeleuchtungswerkeGmbH

Street/House Number. Himmelgasse 7

Postal Code/City 67346 Speyer

Country/Region DE/08

c) Save Record your RFQ document number

Record RFQ document numbersRFQ document Vendor

d)

Hint: When you save a RFQ document, the systemreturns you to the Vendor Address screen so you cancontinue creating RFQ documents to other vendors.

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Enter vendor master T-K12A##. The system fills the datain from the Vendor Master record. Select Save and recordthe document number. Repeat this transaction for vendormasterT-K12B##Select Save and record the document number.

Record RFQ document numbersRFQ document Vendor

e) Exit the RFQ Vendor Address Screen by using the Red X icon.When the system asks if you wish to save the document chooseNo.

Task 2: Display the RFQLook at the standard layout of an RFQ and learn how to print itimmediately.

1. Display the RFQ for your main vendor T-K12A## as it would look ifyou could print it (Message) on your screen.

a) RFQ/quotation→ RFQ→Messages → Print/transmitb) In the search screen, enter the RFQ number for vendor

T-K12A##. Select Execute the system will open theMessageOutput screen where documents are listed.

c) To display the actual document, you must first put a √ checkmark in the box at the far left of the line, then choose eitherProgram→Display message or use the radio buttonDisplay messageon the toolbar. Use the Back button to return to theMessageOutput screen, set the choice flag again and selectOutput messageor use the path Program→ Output message to print the RFQ. Notewe are not hooked to a printer in the Training area.

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Task 3: Maintain QuotationsYou have received the quotations for your RFQs. Maintain the quotationsin the system.

Hint: Make sure that the info update indicator �C� is set on thedetail screen for the quotation items. This ensures that an inforecord is created for each quotation. If an info record already existsfor an item, you will update the info record based on the quotationconditions.

1. Maintain the Vendor�s Data for your RFQ documents. You will needto maintain each RFQ document number separately. Listed beloware the steps and the data required to maintain each of your RFQ

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documents. You will need to follow the all of the steps to maintaineach Vendor�s RFQ document number. Remember to save after eachdocument.

a) RFQ/quotation → Quotation → Maintain. Enter the RFQdocument number. Enter.

Note: RFQ documents must be maintained separately.You should complete all of the steps for each vendorindividually.

b) Maintain quotation: Item overview screen. Enter the gross pricedata from list below for each vendor.

c) Maintain the info update indicator, select the item and use thepath Item → Detail or Detail button. Check if the Info updateindicator is set to C, set it if necessary.

d) Enter the pricing conditions, select the relevant item and choosethe path: Item→ Conditions. Enter the Conditions.

RFQ data for the One-time Vendor 1950Field name DataGross price 79 UNI/pc

Condition Type RA01 (Discount from Gross) 3%Condition Type: FRB1 (Absolute freight) 100 UNIDelivery date [Current

date + 6weeks]

RFQ for vendor T-K12A## (Motolux GmbH Gr.##)Field Name DataGross price 90 UNI/pcCondition type Type RA01 (Discount fromGross)

15%

RFQ for vendor T-K12B## (Rasch Gr.##)Field Name DataGross price 82 UNI/pcCondition type Type RA01 (Discount fromGross)

10%

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Task 4: Price ComparisonUse the system tools to compare vendors� quotes.

1. Compare the prices of the quotations to determine the mostreasonable supplier.

a) RFQ/quotation→ Quotation→ Price comparison screen.

2. Select the quotations for comparison via the Collective number GR##and Purchasing organization 1000. Display the mean value quotationusing the quotation price comparison list and choose the effectiveprice by placing a check mark in these fields.

Determine and record the most reasonable quotationField name Recorded valuesVendorEffective Price

a) Select Execute to generate a list. The most reasonable quotation isfrom:

Vendor: T-K12B##Effective price: 71.59 UNI

Hint: If you get the same vendor but a little higher price,check that you are looking at the effective price, not thenet price on your screen.

3. Vendor T-K12A## has just informed you that due to demand thedelivery time is 6 weeks rather than 1 month.

a) Select the quote from this vendor and use the path Edit →Maintain quotation to access the original data screen (or chooseMaintain quotation button or double-click on the quotation).

b) Change the delivery date to the Current date + 6 weeksand Save. You are automatically returned to the Quotation pricecomparison screen.

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4. Set the rejection indicator √ for the two quotations you do not want toaccept.

a) You can set the rejection indicator in the item overview for any orall item(s) or on the detail screen for an item. Go directly fromthe quotation price comparison list to the quotations. Do notforget to Save the changes.

Task 5: Simulating the printing/sending of a rejectionletterSee the standard layout and process of printing a Rejection letter.

1. Send one of the two rejection letters. Look at the letter on the screenbefore you print it out. Is the letter marked as a rejection letter? Thatis, does it have the Message type: ABSA? If it is not, re-check therejection indicator set in the Task 4: Compare prices, see above.

a) Same procedure as in Task 2, Display and print RFQ, above.

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Lesson Summary

You should now be able to:� Create a request for quotation� Enter and compare vendor quotations

Related InformationThe method of configuring the field type in RFQ is taught in the course:LO550 � Cross-Functional Customizing in MM.

For more information on RFQs, see http://help.sap.com

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LO020 Lesson: Purchasing Information Records

Lesson:211

Purchasing Information RecordsLesson Duration: 2.5 Hours

Lesson OverviewParticipants will check a previously created info record. If it doesn�t exist,they will have to create one. Then they will maintain the info record,adding scales to the pricing and other Purchasing Org. level data.

Before presenting the theoretical part of this lesson, give a systemdemonstration. This should show participants that prices from the inforecord are included in subsequent purchase orders. However, you can alsoexplain the theoretical aspects first and demo later.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Process and create purchasing info records� Create an info record with reference to an RFQ� Enter prices into info records and enter vendor discounts

Introduce lesson objectives and business example.

Show and discuss info record. You can configure to have standard,subcontracting, pipeline, and consignment Info records. The data can be atthe purchasing organization or plant level.

Demonstrate how to create an info record with reference to a Quotation.Point out the pricing conditions will be in the Info record, not attached aswhen the record is created by a PO.

Caution: Remind the participants not to try using the RFQ versiondocument, there is no pricing data at that level and no Info Recordupdate flag.

Maintain the info record.

Explain and demonstrate that an info record can be generatedautomatically by the SAP System when posting a PO. This demo can bemade with the PO created in Unit 2, Basics of Procurement Process.

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Business ExampleYour Purchasing department maintains data on material-vendorrelationships. This is necessary because a material can be procuredfrom more than one vendor, and different vendors may have differentconditions, freight costs, and discounts, and so forth.

Your company has received information from a vendor about its pricesand has to update the purchasing info records accordingly.

As a member of the procurement team, you need to determine whetheryou can use the R/3 System to maintain vendor conditions by updatingthe purchasing info record.

Demonstration: Demonstration of Info RecordStructure

Purpose

Display an info record from the list display and explain how it is structured.Point out to participants that there is general data at client level and data atpurchasing organization level or purchasing organization/plant level.

Note: Approximate time: 5 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Go to the List display screen,MM→ Purchasing→Master data→ List

displays → by Material. Input your material number, T-RM2## andselect execute to compile a list.

2. Select an info record, perhaps the one for Vendor T-K12B##. Check√ the selection box on the left of the record, and use the Displaybutton to see the record itself.

3. Point out to participants that there is general data at client level(General data screen) and data at purchasing organization level isaccessed by pressing the Purch. org. data 1 button. Note that there is adisplay field for Plant on the Purch. Organization Data 1 screen if youentered the data for a specific plant when creating the record. This iscalled Purchasing Organization/plant level data.

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4. Press the Conditions button to show where the conditions aremaintained. These are only relevant to the specific Purch. Org/Plantyou are displaying.

5. Show who created the info record and when. Use the path Extras→Administrative data to access the screen.

Demonstration: Info Record Maintenance

PurposeShow how info records supply pricing data when creating a PO. Createa purchase order using a vendor and two materials, one with a standardprice control and the other with moving average price control. Ensure thatyou choose the materials so that an info record exists for one material,but not for the other:

Note: Approximate time 5 minutes

System DataSystem:Client:User ID:Password:Set up instructions: Check list display by materials for AM3�540. Itshould have a valid material master but may not have any Info recordsout there. Adjust demo accordingly.1. Perform a list displayMM→ Purchasing→Master data→ List displays

→ by Vendor of info records for vendor T-K12B##.

2. Point out that pricing conditions have maintained for materialT-RM2##

3. Show that the price comes from the last purchase order. Vendor:T�K12B##; Material T-RM2##; (Standard price 0.30 UNI); 1000 pcs.Also T-RM2##; @ 0.50 UNI; 1000 pcs; Price defaults from info record.

� While in the List display screen, select √ the info record and presstheDisplay Info record button. Point out that there is no price inthe Net price field and the Conditions button doesn�t do anything.There is no conditions pricing data inside the Info record!

� Show them the price comes from the last document; in this casea PO. While still in the Info Record screen use the path GoTo →Purchasing Org. Data 2 and you can see a PO number is listed.We can go one step further and select Environment→ Order pricehistory. Here we see the PO listed as the most recent document.

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4. Create a PO for vendor T-K12B##. Order two different parts. Thefirst should be the one that doesn�t have an Info record; enter just thematerial number and a quantity, 1000 pcs. Then select Enter. Thesystem will display a message:

Net price must be greater than 0

This is because there is no info record from which to transfer the data.Enter a price; the material record price for T-RM2## is 0.30 UNI.

5. Now enter the second item, one with an info record, and a 1000 pc.quantity. Press enter and the system will enter the price for you.

Caution: Do NOT post the purchase order yet! Do it after yougo through the slides.

6. Show the students that the system links the Info record number to theitem information in the PO. The path is different in the new mySAPscreens and the older screens.

Note:

� In the transactions used in Release 4.6C screens, you goto the change/display screens (ME22N and ME23N) youscroll the item overview section to the right. There is acolumn which lists the Info record number.

7. Make it clear that you need an info record for price proposals andstart presenting the slides in this unit.

Demonstration: Automatic Info Record Creation

Purpose

Note: Approximately 5 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Save the purchase order you created before.

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2. Display the list of all info records for the vendor. If necessary, limitthe selection so that only the two info records from the purchaseorder are displayed:

Vendor: T�K12B##; purchasing org: 1000; plant: 1000; Purchasinggroup: 020.

3. Switch from the list display to the purchase order (Environment →Purchase order) and show participants the info update indicator in theitem details; or [Item details, Material data tab] in the new screens.

Figure 79: Purchasing Info Records

Purchasing info records contain concise information on a vendor and thematerial you procure from this vendor. It is therefore an important sourceof information for the buyer, enabling them to determine, via list displays,which vendors offer a particular material, or which materials can beprocured from a particular vendor. They are also mandatory if you wantto automate the input of pricing during PO creation.

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You can store and maintain the following data in info records:

� Current and future prices and conditions (for example, freight anddiscounts)

� Delivery data (for example, planned delivery time and tolerances)� Vendor data (for example, contacts)� Texts, for both inhouse use and those which will be added to the

messages sent to your vendors

Hint: You can learn more about linking texts to message unitsin LO550 � Cross-Functional Customizing in MM.

When you create purchasing documents (for example, purchase orders orcontracts), the system uses the data maintained in info records as defaultvalues.

Figure 80: Structure of the Purchasing Info Record

A purchasing info record contains general data that is valid for everypurchasing organization or every plant.

It also contains data (for example, prices and conditions) that is valid forthe relevant purchasing organization or relevant plant only. You configurewhether conditions are permitted at plant level.

When you create a purchase order, the system searches for an info recordfor the purchasing organization/plant combination. If there is no such inforecord, the system searches for the purchasing organization only.

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In the standard system, the following type of texts are set in the purchasinginfo record:

� Info record memo is an internal note or comment that shows up in thePO item but is not printed out to the vendor

� PO text in the purchasing info record used to describe the PO item. Itis copied to the purchase order item and printed out.

You can configure other types of text.

Explain the organizational levels at which the purchasing info record canbe maintained.

Point out that special arrangements, which are only valid for individualplants in a purchasing organization, are managed at purchasingorganization/plant level.

The SAP convention is to never link text boxes labelled �Notes� or�Memos� to an outbound document (message). Customers shouldestablish some similar convention between the team members.

Figure 81: Options for Maintaining Info Records

You can maintain info records manually or automatically from quotations,purchase orders, or outline agreements.

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Explain how data is automatically updated when a purchase order iscreated. Examples: Conditions can be updated from quotations.

The number of the last purchasing document is adopted from purchaseorders and contracts.

Figure 82: Updating an Info Record Automatically

When you create or change quotations, contracts, and purchase orders,you can use the info update indicator to specify that the info record is to becreated or updated.

The system copies the conditions from the quotations into the info record.

The document number from a purchase order or contract release order isupdated as the last purchasing document.

If no info record exists for the combination of vendor, material, andorganizational level when you create or change a contract, the systemcreates an info record with the conditions from the contract.

Explain that according to the settings in the system, info records can becreated automatically from quotations or purchase orders.

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Figure 83: Info Update Indicator: Quotation, Outline Agreement

The info update indicator determines, whether the purchasing info recordfor this vendor and material is to refer to this PO item, and whether theitem is to be valid for the entire purchasing organization or just for theplant. The different possible entries mean the following:

A � If an info record exists for the plant level, the updating occurs at thislevel. Otherwise the update occurs at purchasing organization level. If noinfo record exists, the system creates one at purchasing organization level.

B � Updating occurs at plant level if plant conditions are allowed forthe plant. This means that the updating is also valid for the purchasingorganization.

C � Updating occurs at purchasing organization level (without plant) ifit is not required that the plant has conditions.

D � No updating of info records.

Example: Suppose an info record has been defined at plant level (morespecific than purchase organization level). You create a PO for this plant.The PO is based on the conditions in the plant info record and not on theconditions that apply to the purchasing organization. (In other words: Themore specific information overrides the more general one.)

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Figure 84: Info Update Indicator: Purchase Order (ME21N)

In the 4.6 purchase order (SAP transactions ME21N, ME22N, and ME23N),the InfoUpdate indicator (found on the Material data tab in the detailssection) has only two possible values, on or off. The results are set inconfig, by plant. Here it determines whether an info record is updated ornewly created. If the indicator is selected, the following cases are possible:

� If just one info record (with or without a plant) exists, the recordis updated.

� If no info record exists and Plant condition requirement has beenspecified in Customizing, an info record with a plant is created.Otherwise an info record without a plant is created.

� If two info records exist, one record with a plant and one without aplant, the info record with the plant is updated.

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The order price history is updated even if the InfoUpdate indicator isnot set.

As you see in these slides, values of the Info Update indicator varyaccording to the type of purchasing document in question. In quotations,contracts, scheduling agreements, and in the conventional purchase order(transactions ME21, ME22, and ME23), the InfoUpdate indicator (found onthe Item details screen) can have one of four different values:

� �_� � The info record is not updated.� �A� � If an info record exists at plant level, it is updated. Otherwise an

info record at purchasing organization level is updated.� �B� � If plant conditions are allowed for the plant, an info record at

plant level is updated.� �C� � If plant conditions are not necessary for the plant, an info record

at purchasing organization level is updated.

Figure 85: Info Records and Prices

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Purchasing info records determine the prices suggested in purchasingdocuments in two ways:

� Conditions: Conditions are included if they have been maintainedfor an info record manually or from a quotation.

� Last purchase order: If an info record does not contain any conditions,the system reads the number of the last purchasing document in theinfo record and then suggests the price from this document.

In the default values for buyers (Customizing), you can define how thesystem handles conditions from the last purchase order.

� You can define that the conditions from the last purchase order:

� Are always copied� Are not copied when the price is entered manually� Are never copied

� IMG Menu path: MM → Purchasing → Environment data → Definedefault values for buyers

Demonstration: Demonstration of ConditionMaintenance in Info Records

Purpose

Approximate time: 10 minutes.

System DataSystem:Client:User ID:Password:Set up instructions:

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1. Maintain the conditions for an info record. Include freight costs asdelivery costs and maintain price scales. List displays: View inforecords by material T-RM2##

� Info record: T-RM2##/T-K12B##, Purchasing org. 1000(conditions valid for all plants).

� Planned delivery time 5 days.� Net price 30 UNI.� Conditions: valid until end of year.� Scale discount RA00: 40 %,

> 500 pcs, 45 %, > 1000 pcs, 50 %.

� Freight costs: FRB1 100 UNI per delivery.

List displays:

� View info records by material T-RM2##

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218Creating Info Record for Material with Master Record

Figure 86:

1. On this screen enter the following:

� Vendor�s planned delivery time (used for scheduling)� Responsible purchasing group� Standard PO quantity (used for price determination in

conjunction with price scales)

Check the control data. The tolerance data and the responsiblepurchasing group are taken as default values from the materialmaster record.

Continued on next page

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Figure 87:

2. Enter the following information on the initial screen:

� Vendor number� Material number� Number of purchasing organization or plant� Enter the number of the info record if external number

assignment is used for info records. If you leave thecorresponding field blank, the system assigns a numberautomatically.

Press ENTER and the general data screen appears.

Press ENTER and the screen showing the purchasing organizationdata is displayed.

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Figure 88:

3. Enter the general data (data on vendor, order unit, origin data, supplyoption). You can enter the customs tariff number without a certificatecategory.

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Figure 89:

4. Enter the net price. You have two options:

� You enter the net price per unit in the Net price field. Thisprice includes the vendors normal discounts or surcharges only;vendor�s cash discounts for prompt payment, for example, arecalculated separately.

� You enter the gross price in the Net price field and thenmaintain the pricing conditions. (To do this, choose Extras→ Conditions.) The system automatically replaces the enteredgross price with the calculated net price. (See also, MaintainingConditions)

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Figure 90:

5. Check the texts. Choose Goto → Texts to display the text overview.You can enter the info memo or the PO text. If the PO text is alreadydefined in the material master record, it appears as a default valuehere.

� If you change the PO text from the material master record, yournew text is stored directly in the info record. The changed text issuggested as the info record PO text when a purchase order iscreated, and can be adopted in the new PO.

� If you store the text in the info record unchanged, subsequentchanges made to the PO text in the material master record willnot be included in purchase orders. To do this, select the PO text,then choose Edit → Texts → Adopt text.

6. Save the info record.

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223Creating Info Record for Material without MasterRecordUseIf you wish to create an info record for a material without a master record,you must create the info record for a material group.

Procedure1. Choose Master data → Info record → Create. The initial screen is

displayed.

2. Enter the following information on the initial screen:

3. Enter the vendor. Do not fill in theMaterial field

Specify the following:

� To specify that the info record applies to a certain plant, enterthe purchasing organization and plant or to specify that the inforecord is plant-independent, enter the purchasing organizationonly

� Enter the info record category; Standard, Pipeline, etc.� Select ENTER and the general data screen appears.

Figure 91:

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4. Enter the general data (data on vendor, order unit, origin data, supplyoption) and also the following mandatory data:

� Short description of the info record or material in the first entryfield

� Material group to which the info record is assigned� Order unit used for the material� Sort string (key) which allows us to distinguish several info

records that belong to a material group

Enter the vendor data (if it is not already input by the system,taken from the vendor master record) the origin data, and thesupply options.

5. Select ENTER and the screen showing the purchasing organizationdata is displayed.

You must enter the following data:

� Vendor�s planned delivery time (used for scheduling)� Responsible purchasing group� Standard PO quantity (used for price determination in

conjunction with price scales)

You can enter data such as tolerances allowed for underdeliveriesand overdeliveries.

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Figure 92:

6. Enter the net price. You have two options:

� You enter the net price per unit in the Net price field. Thisprice includes the vendors normal discounts or surchargesonly � cash discounts for prompt payment, for example, arecalculated separately.

� You enter the gross price in the Net price field and thenmaintain the pricing conditions. (To do this, choose Extras→ Conditions.) The system automatically replaces the enteredgross price with the calculated net price. (See Help files onMaintaining Conditions.)

7. Check the texts. Choose Goto → Texts to display the text overview.You can enter the info memo or the PO text.

8. Save the info record.

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LO020 Lesson: Purchasing Information Records

227 Exercise 11: Purchasing InformationRecordsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� · Create an Info Record with reference to an RFQ� · Create and process purchasing info records� · Enter prices into info records and enter vendor discounts

Business ExampleYour company has a received information from a vendor about its pricesand has to update the purchasing info records accordingly. As a memberof the procurement team, you need to determine whether you can use theR/3 System to maintain vendor conditions by updating the purchasinginfo record for the material.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Display Info RecordLook at an example info record to see the differences between recordscreated from RFQs and those created from POs.

1. The system automatically updated the relevant info records becauseyou set the info update indicator when you maintained yourquotations and created the purchase order. Display the Info recordthat was created forMaterial T-RM2## and Vendor T-K12B## forPurchasing organization 1000.

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Task 2: Info record list display1. Display all info records that are stored in the system for material

T-RM2## and purchasing organization 1000. While doing so,determine the effective prices from the quotations and purchase order.

Record the data hereVendorOrigin of priceEffective price

2. Why was no info record created for the one-time vendor?

Task 3: Change info record1. The vendor T-K12A## sends you new purchasing data and conditions

for material T-RM2##. Change the info record for this vendor andthis material in accordance with this data. The average delivery time(planned delivery time) is 10 days. In addition, the vendor acceptsonly purchase orders for quantities above the minimum quantity of 50pieces. As of today, the conditions will change as follows:

Data Date ValueValidity period: 1 yearGross price: 85 UNIDiscount from Gross (RA01) 15% from 50 pieces upwards and

18% from 200 pieces upwards

Task 4: Questions1. What net price would you have to pay per piece if you wanted to order

the following quantities of material T-RM2## from vendor T-K12A##?

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Fill in the Prices20 pieces 50 pieces 150 pieces 320 pieces

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Solution 11: Purchasing InformationRecordsTask 1: Display Info RecordLook at an example info record to see the differences between recordscreated from RFQs and those created from POs.

1. The system automatically updated the relevant info records becauseyou set the info update indicator when you maintained yourquotations and created the purchase order. Display the Info recordthat was created forMaterial T-RM2## and Vendor T-K12B## forPurchasing organization 1000.

a) Use the path Logistics →Materials Management → Purchasing→Master data → Info record → Display.

b) Enter the following data on the Create Vendor: Initial Screenand then select Enter.

Initial screen entriesField Name DataVendor T-K12B##

Material T-RM2##

Purch. organization 1000

Task 2: Info record list display1. Display all info records that are stored in the system for material

T-RM2## and purchasing organization 1000. While doing so,determine the effective prices from the quotations and purchase order.

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Record the data hereVendorOrigin of priceEffective price

a) Use the path Master data → Info record → List displays → Bymaterial. Enter the number of the material T-RM2## and thepurchasing organization 1000 on the selection screen. SelectExecute button to run the report. Select the Price simulation buttonon the toolbar of the Purchasing Info Records for Materialscreen to determine the effective price.

Vendor T-K12A## T-K12B## T-K12B##Origin of price Quotation Purchase

orderQuotation

Effective price 73.44 UNI 69.84 UNI 71.59 UNI

2. Why was no info record created for the one-time vendor?

Answer: The system does not create an info record because theone-time vendor master record is only a collective master record thatis used for various one-time vendors.

Task 3: Change info record1. The vendor T-K12A## sends you new purchasing data and conditions

for material T-RM2##. Change the info record for this vendor andthis material in accordance with this data. The average delivery time(planned delivery time) is 10 days. In addition, the vendor acceptsonly purchase orders for quantities above the minimum quantity of 50pieces. As of today, the conditions will change as follows:

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Data Date ValueValidity period: 1 yearGross price: 85 UNIDiscount from Gross (RA01) 15% from 50 pieces upwards and

18% from 200 pieces upwards

a) Use the pathMaster data → Info record → Change to access theInfo record in change mode. Enter the data in the followingscreen fields.

Data for the Initial screenVendor T-K12A##

Material T-RM2##

Purch. org. 1000

Data for Purchasing Organization data 1 screenPlanned delivery time 10 daysMinimum quantity 50 pcs

Data for the Conditions screenValidity Current date

To Current date + 1 year

Condition type AmountPB00 gross price 85 UNIRA01 % discount from gross 15%

To maintain the discount scale, select the condition type RA01 andchoose the path Goto→ Scales (or choose the Scales button).

Scales for % discount from gross (RA01)Scale qty Amount50 pcs 15%200 pcs 18%

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Task 4: Questions1. What net price would you have to pay per piece if youwanted to order

the following quantities of material T-RM2## from vendor T-K12A##?

Fill in the Prices20 pieces 50 pieces 150 pieces 320 pieces

a) You can determine the Net prices by using your PO and justchanging the quantities, then select Enter. The system willcalculate the price and display it in the PO. (Or you can go backto the Material List Display report and use the Simulation mode.)

Net price per piece of material T-RM2## is based on the orderquantity:

20 pieces 50 pieces 150 pieces 320 pieces

85 UNI 72.25 UNI 72.25 UNI 69.70 UNI

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Lesson Summary

You should now be able to:� Process and create purchasing info records� Create an info record with reference to an RFQ� Enter prices into info records and enter vendor discounts

Related Informationhttp://help.sap.com

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LO020 Lesson: Purchase Orders for Stock Material

Lesson:234

Purchase Orders for Stock MaterialLesson Duration: 60 Minutes

Lesson OverviewThis lesson will look at the creation of a PO with reference to a quotation.This will minimize errors and save overall processing time. Other topicsinclude: ordering for different plants, monitoring POs, and maintainingchange history.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Create a purchase order with reference to a quotation

There are no graphics for this section. We�ve chosen a winning quotationand will now demonstrate creating a purchase order with reference to thatquotation. Do two materials on the PO, pick a material for the secondone, which has an info record (we will use this later). Also demonstratethe revised document function, how the system monitors certain fields (setin the IMG) in documents already sent to the vendor and automaticallycreates a Revised PO message to the vendor if any of these fields arechanged. In their exercise, the participants will also check if the systemkeeps a record of all changes made to the document.

Business ExampleThe prices and conditions negotiated by purchasing, which are stored inpurchasing info records, are displayed in a purchase order. You need todisplay these prices and conditions both in the PO in the system and theoutput of the PO that is sent to the vendor.

Demonstration: Purchase Order Creation withReference to a Quotation

Purpose

Show how to create a PO with reference to a quotation and that the systemmonitors certain fields so it knows when to create and issue a Revised PO.These fields are selected in the IMG.

Approximate time: 20 minutes.

Note: Use the SAP Standard Menu.

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System DataSystem:Client:User ID:Password:Set up instructions:1. Open one session and show the price comparison. Point out the most

reasonable vendor (should be vendor 1001). Open a second sessionand show the screen where we will create a PO with reference. Followthis path to get to Trans: ME21NMaterials Management→ Purchasing→ Purchase Order→ Create→ Vendor/Supplying plant known.

2. Make sure the left column, Document Overview is open. ( If not,use the Document Overview on button.) Do a search for Requests forquotation (second line down in the dialog box). Your winning quoteshould be on the list that is brought up.

3. Select your winning quote, drag and drop it from the documentoverview to the shopping cart. It will create one line, with a red lightsince there is no plant in the line. Add the plant, 1000.

Hint: Point out to the students that they can drag the sameline to the cart twice. That will create the two line itemsneeded in their exercise. Then they should put in the twodifferent plants. If the system won�t let them use one of theplant numbers, they probably made the RFQ for a specificplant. To recover, they can type the same info into a secondline and order for a different plant.

4. Type in a second item

� Material AM3-540 (or another material with standard pricecontrol. This is important for later demos involving goodsreceipt).

� Price 0.50 UNI� Discount 30%

5. Display the purchase order and briefly explain how it is structured:

� Display header details. Point out the payment conditions andincoterms. In the title of the PO screen you can see who enteredthe purchase order.

� Purchase order history: Does not exist yet (no GR or IR)

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LO020 Lesson: Purchase Orders for Stock Material

6. Stay in the ME21N screen and display an output (message) of thedocument. Use the toolbar button, Print Preview.

� Also show the yellow light indicating the message is not yet sent.Use theMessages button on the toolbar (just to the right of thePrint Preview button).

� Send the printout to the vendor. You must return to the mainscreen and use the path PO→Messages→ Print/transmit (Trans:ME9F). Select your document on the display list and select theOutput message button.

� Return to the PO display screen and show the status has changedto green, indicating the message is sent. Use the message buttonor the pull down path Header → Messages.

� Convert to the PO change screen and change the quantity. Usethe Message status to show that a second message was createdand has a yellow light indicating it is waiting to be sent.

� Leave the PO screen and return to the Print/Transmit screen,look at the wording of the new message. It changed to a RevisedPO, and also has notes of what was changed.

Hint: If students don�t see a Revised PO during the exercise,they probably forgot to send the original.

7. OPTIONAL: Switch to the general item data in the statistics and pointout the reference to the quotation and the info record update flag!This is defaulting from the parameter ID EVO 04, which is maintainedin configuration and can be assigned to Users by administration.Configuration of EVO 04 is in the IMG Purchasing→ Environment data→ Define default values for buyers.

8. Make a new purchase order for material LO020-ROH: quantity 20pieces. Display the printout of changes in the message output. PO→ Messages → Print/transmit. Display the purchase order again toshow the update of the changes at item level in the purchase orderdocument. Select Environment→ Item changes. Display the processingstatus in the purchase order header messages.

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235Creating a PO by Copying or ReferencingUseYou can save time and effort when creating or changing a purchase orderby copying an already existing one or adopting items from an existingrequisition, RFQ, or contract.

Procedure1. Use the path Purchase order→ Create→ Vendor/Supplying plant known

(ME21N). The initial screen appears.

Figure 93:

2. If you know the item number and document number you want toreference you can just scroll the Item Overview section to the rightuntil you find a column with that document name as its heading.Type the numbers in and select ENTER. The system will retrievethe information for you.

3. If you don�t know the document number, you can look it up in theDocument Overview section (left hand column) of the screen.

Note: If it isn�t open, select the button on the left of the toolbar,which is labeled Document overview on.

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When the column is open:

� Click on the Selection variant icon on the left side of theOverview toolbar.

� Click on the category of document you want compiled to openthe search screen.

� Enter the search criteria and select the Execute button. Thesystem will compile a list and display it in the column.

Figure 94:

4. Copy the individual items or entire PO into the PO. There are severalways to do this:

� Drag and Drop: Click on the Item or document and drag it intothe shopping cart in the top left of the work screen.

� Adopt: Highlight the item or document and select Adopt totransfer the data.

5. If required, change the individual items on the item detail or overviewsections of the screen.

6. Save the document.

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The purchase order document is created in the SAP system. So thatthe information in the purchase order can be transmitted to thevendor, the system also generates a message for the PO.

Hint: How to set up messages and to set up for automaticmessage determination is taught in LO550� Cross-FunctionalCustomizing in MM.

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LO020 Lesson: Purchase Orders for Stock Material

239 Exercise 12: Purchase Orders for StockMaterialExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a Purchase Order with reference to a Quotation

Business ExampleThe prices and conditions negotiated by Purchasing, which are storedin purchasing info records, are displayed in a purchase order. Thisinformation should also be displayed in the output of the purchase orderyou send to the vendor.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Create a purchase order with reference to RFQCreate a Purchase order with reference to an RFQ and test how the systemnotifies vendors of changes to the PO.

1. For plants 1000 (Hamburg) and 1200 (Dresden), you need 100 piecesof the material T-RM2##, headlamp extra bright-##.

With reference to the most reasonable quotation (T-K12B##), create apurchase order for the purchasing organization 1000 (IDES) and plant1000 (Hamburg). The system proposes all the data contained in thequotation, such as the quantities and conditions.

2. Change the second line.The quantity for plant 1200 (Dresden) to aquantity of 1000 pieces. The other data is the same as that used foritem 10 (standard headlamp).

3. Make sure that the Info update indicator is set for both order items.

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4. Now Save your purchase order. What document number is assigned?

Document Type Document numberPurchase Order

Task 2: Determine the status of the message1. Display the purchase order and determine whether it has already

been issued as a message. If the message has not yet been sent, outputthe document and then check the status of the message again.

Task 3: Change the Purchase OrderChange the Purchase Order to test how the system monitors change andautomatically creates and sends a Revised PO.

1. The sales employee responsible for this material has informed you byphone that the price has been reduced. The gross price for materialT-RM2## in this purchase order is now 80 UNI. The remainingconditions are unchanged. Change your purchase order accordingly.

Task 4: Display the Purchase OrderDisplay the purchase order and answer the following questions.

1. Which user created the purchase order?

2. Which user changed the order item?

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3. When were the order items changed?

4. What has been changed?

5. Where in the system is the RFQ number linked with the purchaseorder item stored?

6. Is there a purchase order history for both items? Give reasons forthe result.

Task 5: Display the changed purchase order as amessage

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Solution 12: Purchase Orders for StockMaterialTask 1: Create a purchase order with reference to RFQCreate a Purchase order with reference to an RFQ and test how the systemnotifies vendors of changes to the PO.

1. For plants 1000 (Hamburg) and 1200 (Dresden), you need 100 piecesof the material T-RM2##, headlamp extra bright-##.

With reference to the most reasonable quotation (T-K12B##), create apurchase order for the purchasing organization 1000 (IDES) and plant1000 (Hamburg). The system proposes all the data contained in thequotation, such as the quantities and conditions.

a) Use the path Logistics → Materials Management → Purchasing→ Purchase Order → Create → Vendor/supplying plant known toopen the screen.

b) Open the left column by selecting Document Overview On button.c) Now we can choose the Selection variant button; it is the left

most button in the Document Overview toolbar. Select it andyou will get a dialog box listing the different types of documentswe can pull up. Select Request for Quotations. The systemwill take you to a search screen. Enter your Purchasing groupand select Execute.

d) Click on the RFQ number that belongs to your winning quoteand drag it to the shopping cart image in the top left of the workscreen. The data will be transferred into the PO. You can dothis twice, once for each plant.

Hint: You should have a red light on each line, becausethere is no Plant number. If one line has no red light, youprobably put a plant into the quotation and can�t enterthe second plant here.

e) Enter the plant number for each item. See below.

Item Number Plant10 1000

20 1200

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2. Change the second line.The quantity for plant 1200 (Dresden) to aquantity of 1000 pieces. The other data is the same as that used foritem 10 (standard headlamp).

a) Change the qty. of 100 pieces, that appeared as a default value,to 1000. Check the rest of the data.

3. Make sure that the Info update indicator is set for both order items.

a) To check the Info Update indicator, we must look at the bottomsection of the screen, Item detail, and pick the tab labeledMaterial data;

4. Now Save your purchase order. What document number is assigned?

Document Type Document numberPurchase Order

a) Select Save for your Purchase Order. Then record thedocument number.

Task 2: Determine the status of the message1. Display the purchase order and determine whether it has already

been issued as a message. If the message has not yet been sent, outputthe document and then check the status of the message again.

a) Use the path Purchase order→ Display to open the display screen.Use the Document overview section and search for your purchaseorders (My Purchase orders). To display the required document,double-click on the number.

b) To find out whether your purchase order has already been sentas a message, refer to the Header data on the Status tab. In theupper left corner is a printer icon; the words next to it say Notsent or Sent. For more detailed information on the messageprocessing, choose the path Goto → Messages (or choose theMessages button on the toolbar).

c) If you want to display the purchase order as a message or if youneed to send your message, use the Back button to return tothe main screen. Choose the path Purchase order →Messages→Print/Transmit. In the overview, select your document and usethe Output message button to send it.

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Task 3: Change the Purchase OrderChange the Purchase Order to test how the system monitors change andautomatically creates and sends a Revised PO.

1. The sales employee responsible for this material has informed you byphone that the price has been reduced. The gross price for materialT-RM2## in this purchase order is now 80 UNI. The remainingconditions are unchanged. Change your purchase order accordingly.

a) Use the path Purchase order→ Change to access the proper screen.b) Choose the purchase order from the Document overview

display by double-clicking on it.c) Change the price to 80 UNI. You will have to access the gross

price of each item through the conditions table (Item detailstab). Then Save.

Task 4: Display the Purchase OrderDisplay the purchase order and answer the following questions.

1. Which user created the purchase order?

Answer: In the title bar, you can see which user created the purchaseorder.

2. Which user changed the order item?

Answer: If you need more information on the changes made to theorder items, select the required item(s) and use the path Environment→ Item changes. For information on the next item you have selected,use the Next item button (or the path Goto→ Next item).

3. When were the order items changed?

Answer: Follow the directions above to access item details.

4. What has been changed?

Answer: Follow the directions above to access item details.

5. Where in the system is the RFQ number linked with the purchaseorder item stored?

Answer: The RFQ number is stored in the item overview.

6. Is there a purchase order history for both items? Give reasons forthe result.

Answer: Since there have been no transactions against this purchaseorder, none of the items have a purchase order history. History startsbeing recorded when the first goods receipt or invoice is enteredfor a purchase order item.

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Task 5: Display the changed purchase order as amessage

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Lesson Summary

You should now be able to:� Create a purchase order with reference to a quotation

Related Informationhttp://help.sap.com

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LO020 Lesson: Stocks, Valuation, and Goods Receipt

Lesson:247

Stocks, Valuation, and Goods ReceiptLesson Duration: 60 Minutes

Lesson OverviewThis lesson will explore where and how you can set up the system to sendstock to inspection at goods receipt. You will also learn how to transfermaterial between unrestricted, blocked and quality. You will see how thegeneral ledger account postings are handled for both standard valuatedmaterials and moving average items and how the system satisfies the basicdocument concept required by standard accounting principles. You willalso be exposed to more about the stock overview report.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Explain the purpose of documents for goods movements� Perform Stock Overview displays� Analyze the valuation effect from a goods receipt on both standard

and moving average materials� Post a goods receipt into quality inspection stock and release the

quality inspection stock

Show the students the various levels at which we can set a default flag tohave material sent to Inspection. Show them the Stock Overview reportand how a goods receipt posting is handled by the Automatic AccountAssignment system. Make sure they understand the Material/Accountingdocument concept.

Business ExampleMaterial delivered to your company is posted to quality inspection stockfirst. After it has been quality tested, it is released for use.

As goods movements can affect the values of the stock accounts inFinancial Accounting, you will need to test which of the valuationprocedures the R/3 System supports is not appropriate for your company.

IntroductionThe document principle applies in IT-based Inventory Management. Adocument is proof that a transaction involving stock changes has takenplace. It is stored in the system.

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Figure 95: Documents for Goods Movements

What is IT-based Inventory Management? It seems to be an abbreviationof computer supported. The principle is expressed as: Even in acomputer-supported inventory management system, the acceptedaccounting principle of no posting without a document applies. Accordingto the document principle, a document must be generated and stored inthe system for every transaction or event that causes a change in stock.When posting a goods movement in the SAP system, the followingdocuments are created:

Hint: Try to make the student aware of the principle because it isone of their questions at the end of the Lesson.

Material document: In the Inventory Management system, when a goodsmovement is posted, a material document is generated that serves as proofof the movement and as a source of information for any applications thatfollow. A material document consists of a header and at least one item.The header contains general data about the movement (for example, itsdate). Each item describes one movement.

Accounting document: If the movement is relevant for FinancialAccounting (that is, if it leads to an update of the G/L accounts), anaccounting document is created in parallel with the material document. Insome cases, several accounting documents are created for a single materialdocument. This might be the case, for example, if you have two material

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document items with different plants that belong to different companycodes. The G/L accounts involved in a goods movement are updatedthrough an automatic account assignment.

Changing documents: Once you have posted a goods movement, you canno longer change the document. You can enter only additional informationin the document, such as the reference to the original document, or acomment on the event. If you want to reverse the movement or change thequantity of material moved, you must enter a new document.

A material document is created in the R/3 System as proof of a transactioninvolving stock changes. If the goods movement is relevant to valuation,the system creates at least one accounting document in addition to thematerial document.

Goods movements (goods receipts, goods issues, or transfer postings) arerelevant to valuation when your company�s Accounting Department isaffected by them. For example, a goods receipt posting of a raw materialusually results in an increase in the stock value of your current assets.If the raw material is transferred only within one plant, no postings aremade in Financial Accounting.

As soon as a goods movement is posted, the quantities, material,movement type, and organizational level can no longer be changed. Youcan make changes only to some text fields. If you want to correct errors,you have to create a new document. You have to cancel or reverse theincorrect document beforehand.

The material stocks are displayed in the stock overview for each individualorganizational level. Quantities posted for a particular stock type aretotaled for each organizational unit.

Stock OverviewYou can display the stock overview for batches/valuation types and specialstocks (for example, consignment material), as well as for the client,company code, plant, and storage location.

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Figure 96: Stock Overview

The stock overview is a static display of stocks. This means that you canview the current stock situation only. You cannot see future planned goodsreceipts and goods issues in this list.However, you can call up additionalinformation functions via the menu bar.

There are several display versions for stock overviews.Those versionsvary in the way the stock types are listed and in the order they appear. InCustomizing for Inventory Management, the system administrator defineswhich stocks are displayed in each column and the order in which theyare displayed.

The valuation area is the organizational level at which stock is valuated.Plant and company code are two possible valuation areas in the R/3System.

When stock is valuated at plant level, you can valuate a material indifferent plants at different prices.

When you valuate stock at company code level, the valuation price of amaterial is the same in all of a company�s plants (that is, in a companycode).

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Explain that the stock overview is the static display of stocks, showing thecurrent stock situation. Explain how the stocks sum up from the storagelocation level all the way up to the client level.

Note: For future planned goods receipts and goods issues, thesystem provides information in the stock/requirements list (adynamic list). There are several variants in the Stock screen and thebasic information can be changed in the IMG.

Valuation Areas

Figure 97: Valuation Area

SAP recommends that you valuate material at plant level. Valuationat plant level is mandatory if you want to use either of the ProductionPlanning or Product Cost Accounting components, or if your system isa Retail system.

Caution: Defining the valuation level in Customizing is afundamental setting and is very difficult to reverse.

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Explain the difference between valuation at company code level or plantlevel. Emphasize the importance of how the valuation area is configuredand that it cannot be reversed in the IMG alone. Make it clear that SAPrecommends valuation at plant level and explain why.

� Example: If you valuate materials at company code level, you cannotcarry out product or job-order costing.

� Draw a diagram to explain valuation area at plant and company codelevel and the effect on pricing.

You can use the valuation class to combine materials for assigning to G/Laccounts so that you do not have to manage a separate stock account foreach material.

Figure 98: Valuation Class

You maintain the valuation class in the Accounting view of the materialmaster record. The valuation class allowed for a material depends on thematerial type, and can be configured in Customizing.

In automatic account determination, the R/3 System works with valuationclasses. The valuation class is used to determine which stock account is tobe updated upon goods movements.

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Explain the significance of the valuation class in automatic accountdetermination and point out that this is set in the material master recordand depends on the material type.

Material ValuationValuation of goods receipts depends on the price control procedure youset in the material master record. In the R/3 System, material valuation canbe carried out according to the moving average price procedure (V price)or the standard price procedure (S price).

Figure 99: Material Valuation Procedures

In the standard price procedure (price control �S�), the system carries outall stock postings at a price defined in the material master. Variances areposted to price difference accounts.

In the moving average price procedure (price control �V�), the systemvaluates goods receipts with the purchase order price and goods issueswith the current moving average price. The system automaticallycalculates the latter upon every goods movement by dividing the totalvalue by the total stock quantity. Differences between the purchase orderprice and the invoice are posted directly to the relevant stock account ifthere is sufficient stock coverage.

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Explain briefly the difference between materials with moving averageprice control and standard price control.

Moving average price:

� The goods receipt is valuated at price from purchase order.� Goods issues are valuated at current moving average price.

Standard price:

� The valuation price is fixed for a particular period of time.

Hint: For Training in Latin America or other InflationaryEnvironments: Participants in high-inflation countries often thinkthat the standard price procedure makes little sense. Explain that itdoes make sense in countries with low inflation indices, e.g. forlow-value materials with little price variance over time. Especiallywhen using the Actual Costing/Material Ledger it is required touse the standard price as a preliminary valuation during a periodin order to calculate an average price based on actual costs atperiod-end.

Hint: Instructor � price procedures. The following example canhelp you to explain the difference between the two procedures:

Stock Std. price Value MAprice

Value

StartingsituationPO:100pcs @2.40UNI/pc

100 pcs 2 UNI/pc 200 UNI 2 UNI/pc 200 UNI

GR:100pcs

100 pcs 2 UNI/pc 200 UNI 2.20 UNI 440 UNI

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The Document Concept

Figure 100: Material and Accounting Documents

The material document consists of a document header and at least oneitem. The header information includes the posting date and the nameof the person who created the document. At item level, the materialdocument records the quantity, the material, and the storage location towhich the material is posted in the associated plant.

The accounting document records the effects of goods movements onthe accounts. The document header contains general data, such as thedocument date, posting date, posting period, and document currency. TheG/L account numbers and the associated amount posted are recordedat item level.

The material and accounting documents are independent documents. Youcan identify the material document by the material document numberand the material document year. The accounting document can be clearlyidentified by the company code, accounting document number, and fiscalyear. The company code in which the accounting document is posted istaken from the plant in which the goods movement takes place.

Describe the differences between the information contained in materialdocuments and accounting documents. You may want to prepare aflipchart or transparency for putting down the data of the following demofor materials LO020-ROH and AM3-540.

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Demonstration: Valuation Data in the Material MasterRecord

Purpose

Approximate time: 5 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Display the valuation data for the materials from the last purchase

order created and make a note of the price control, stock quantity, andthe stock value on a transparency. Put it on the overhead projector.

� Display the stock overview of materials T-RM2## and T-RM1##,plant 1000 before goods receipt.

Display the material master, accounting view, for the same materials.Write down stock value and price control.

You set the material valuation procedure you want to use in the accountingview of the material master record. In the R/3 System, you can carry outmaterial valuation using the standard price procedure or moving averageprice procedure.

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Figure 101: Valuation of Goods Receipts

Irrespective of the valuation procedure set in the material master record,the system increases the stock quantity by the relevant goods receiptquantity when you post a goods receipt into stock.

Explain the accounting effect of a goods receipt with S and V pricematerials.

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Figure 102: Example: Posting at Standard Price

The initial stock quantity and value are displayed in the Initial situationcolumn.

For statistical purposes, the system also calculates the moving averageprice for materials that are valuated at the standard price. This means thatyou can spot major differences between the current procurement price andthe standard price and react accordingly.

The system calculates the total stock value of materials with standard pricecontrol as follows: total value = standard price (per base unit of measure)x total stock qty.

Give a detailed explanation of the postings to accounting caused by thedifferent transactions with a material valuated according to the standardprice procedure.

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Figure 103: Example: Posting at Standard Price

The system updates the stock value and the stock quantity with thestandard price. It updates the GR/IR clearing account with the purchaseorder price.

It posts the difference between the purchase order price and the standardprice to the price difference account.

Give a detailed explanation of the postings to accounting caused by thedifferent transactions with a material valuated according to the movingaverage price procedure.

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Figure 104: Example: Posting at Standard Price

The system clears the GR/IR clearing account with the purchase orderprice.

It updates the vendor account with the invoice price.

It posts the difference between the purchase order price and the invoiceprice to the Income from price differences account. It does not change thetotal stock value.

Figure 105: Example: Posting at Moving Average Price

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The initial stock quantity and value are displayed in the Initial situationcolumn.

Figure 106: Example: Posting at Moving Average Price

The system updates the stock value, stock account, and GR/IR clearingaccount with the purchase order price.

It recalculates the moving average price on the basis of the new stock value.

Moving average price (per base unit of measure) = total value/total stock

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Figure 107: Example: Posting at Moving Average Price

The system clears the GR/IR clearing account with the purchase orderprice and updates the vendor account with the invoice price. It posts thedifference between the purchase order price and the invoice price to thestock account and recalculates the stock value based on the invoice price.

The system redetermines the moving average price based on the newstock value.

If the stock quantity is less than the invoice quantity, the system posts partof the difference to the Expenditure/income from price differences accountinstead of the stock account

Demonstration: Goods Receipt Into Quality InspectionStock

Purpose

Use role LO020_GOODS_RECEIPT for the demos of this unit. Take the lastpurchase order created and post the goods receipt into quality inspectionstock.

Approximate time: 10 minutes

System DataSystem:Client:User ID:

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Password:Set up instructions:1. Select the item.

On the tab Wk, select storage location 0002 and movement typeQuality inspection.

Evaluate the material document and accounting document andexplain the posting lines. You should point out the provision accountsfor the freight costs in particular and explain the difference betweenposting goods receipts for materials with standard price control andmaterials with moving average price control.

Show the participants the stock overview for both materials andexplain how the list is organized.

� Display and explain material and accounting documents. Branchto stock overview, branch to material masters.

� Display the valuation data for T-RM2## and T-RM1##. Writedown stock quantities and values, and compare them with thesituation prior to goods receipt.

2. Display the purchase order history and PO item information.

Internal Note for the Old GR Transaction: According to informationprovided by the developer, the following stock types (to be found inthe F4 help of the Stock type indicator field) are identical:

� X and 2� S and 3� _ and F

TransfersYou can post only withdrawals for consumption from unrestricted-usestock. From quality inspection stock and blocked stock, you can withdrawonly a sample, scrap a quantity, or post an inventory difference.

If you want to withdraw goods from blocked stock or quality inspectionstock, you have to carry out a transfer posting into unrestricted-use stockfirst. This also applies to stock transfers.

When you carry out a transfer posting, the stock type, batch number, ormaterial number is changed. A transfer posting may also involve an actualphysical stock transfer.

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Figure 108: Transfer Postings

The system creates a material document so that the transaction can beentered. The system only creates accounting documents if a change invaluation is involved (for example, stock transfer from plant to plant).

You use the movement type to control the stock types involved in thetransfer.

For all withdrawals for consumption other than from unrestricted-usestock, a transfer posting is required.

Example: Withdrawal from quality inspection to unrestricted-use stock.

The movement type controls the transfer posting. Note that an accountingdocument is created in addition to a material document for transactionsthat affect valuation only, e.g. plant to plant.

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Effects of a Goods Receipt

Figure 109: Effects of a Goods Receipt

The diagram once again shows an overview of all the key effects of a goodsreceipt referencing a purchase order.

Explain how stock quantities and values are updated in the materialmaster record for materials with moving average price control. Explainhow they are posted in the accounting view of the material master record.Summarize the main effects of goods receipt:

� A material document is created to show the goods movement.� An accounting document is created for valuated goods movements.� Stock quantities and values are updated.� The price is updated in the material master record for materials with

moving average price control.� G/L accounts are updated (debit to stock account, credit to GR/IR

clearing account). Since vendor invoices are not usually available atgoods receipt, the GR/IR account shows the liability to the vendorthat is expected at invoice receipt.

The purchase order history is updated.

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Demonstration: Transfer Posting

PurposeShow how transfer postings are made. Show the Movement type pathand point out the reverse transaction requires you to choose Reverse tfr.mvmt right at the start.

Approximate time: 5 minutes.

Hint: Check your stock levels before you demo.

System DataSystem:Client:User ID:Password:Set up instructions:1. Display the stock overview for both materials again.

2. For each material, carry out a transfer posting for the completequantity into unrestricted-use stock., MVMT MB1B.

� Movement type: 321, plant 1000� T—RM2## 1000 pcs from storage location 0002 -> 0001

� T—RM1## 1000 pcs from storage location 0002 -> 0001

3. Display the stock overview.

4. Display the material document and point out to participants that thesystem did not create an accounting document. Ask them why.

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261Goods Receipt

1. From the Inventory Management menu, choose Logistics →MaterialManagement → Inventory management → Goods movement → Goodsreceipt→ For purchase order→ GR for Purchase Order (MIGO).

This takes you to the initial screen for this function:

Figure 110:

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2. Enter the data on the initial screen:

� Enter the header data; for example, document note number.� Select the movement type you want, if the standard system

default, Movement type 101, is not what you want. You can entermovement type using the Distribute Qty. button.

Note: If you want to do this using the basic defaultsettings, it must be changed before entering the POnumber because this change is not applied to the currentscreen activities, it takes effect on the next start. Enterthe movement type in the field to the right of the POnumber field. In Release 4.6 C you can change default ofmovement type through a new field at the right of thetop line of data, across from the PO number entry field.

Example: If the total quantity is to be posted to GR blockedstock, select Movement type 103 (PO to GR blocked stock).

� Enter the purchase order number. In addition, you can enter theorder item number to restrict selection of the purchase orderitems.

Note: You can also search for your PO number if youdon�t know it. Use F4 or the pull-down arrow to accessthe item selection list.

3. Select the purchase order items to be copied, put a √ in the Items OKbox. If necessary, you can change data in the selected items on thisscreen.

4. If you use a Movement type that has different Stock type choices,select the one you want; for example, Unrestricted use, QualityInspection, or blocked stock.

Hint: It is also possible to split the quantity sending todifferent stock statuses.

5. Enter the storage location to be used.

6. Post the document.

Students should now do the exercises for Goods Receipt

Approximate time: 45 minutes.

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263 Exercise 13: Posting Goods Receipts intoQuality InspectionExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Post a goods receipt into quality inspection stock and release the

quality inspection stock.� Perform Stock Overview displays.� Analyze the valuation effect from a goods receipt on different

valuation types (standard v. moving average).� Explain the material and financial document concept.

Business ExampleVarious transactions in Materials Management are relevant to FinancialAccounting and, therefore, particular goods movements affect the valuesof the stock accounts in Financial Accounting. The project team is testingwhich valuation procedures the R/3 System supports. Material deliveredto your company is posted to quality inspection stock first. After it hasbeen quality tested, it is released for use.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Tables for the ExercisesIn the exercises in this section, you will make a note of, compare, andanalyze the different data for the material stocks and valuation prices.Work through the exercises in order, using the tables on the next pageto make your notes.

Continued on next page

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Table (1): Stock overview T-RM2##

Plant 1000 Hamburg Plant 1200 (Dresden)

Unre-str.- use

Qualityinsp.

Openorderqty.

Unre-str.- use:

Qualityinsp

Openorderqty

Task 2(beforeGR)Task 11(After GR)Task 13(Aftertrans.posting)

Table (2): Accounting data T-RM2##, plant 1000Price control:

Moving avg.price

Standardprice

Total stock Total value

Task(beforeGR)Task (afterGR)

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Table (3): Accounting data T-RM2##, plant 1200Price control:

Moving avg.price

Standardprice

Total stock Total value

Task(beforeGR)Task (afterGR)

Task 2: Stock Overview1. Analyze the Stock overview for the material T-RM2## in plants 1000

and 1200. Make a note of the stock levels for plants 1000 and 1200 intable (1) (Stock overview).

Task 3: Display material master record1. Display the view for Plant stock and the Accounting 1 view for

material T-RM2## for plants 1000 and 1200.

2. Compare the plant stock data with the data from the previous task.

3. Use the data from the Accounting view to fill in tables (2) and (3):Accounting data for plant 1000 and plant 1200.

Task 4: Enter goods receipt for plant 10001. In plant 1000, storage location 0001, unrestricted-use stock, enter a

goods receipt for the purchase order from Exercise 12, Task 1. Enterthe vendor�s Delivery Note number, for future reference. Refer to thedelivery note for other data that is required. Ignore the goods receiptfor plant 1200 (Dresden) for the time being.

Write down the material documentnumber:

____________________

Task 5: Display material document (1)1. Display the material document that was created as a result of the

goods receipt. Choose the corresponding accounting document.Which accounts are updated for what amount?

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Item Account Account Short Text Amount1

2

2. Exit the accounting document and go directly from the materialdocument to the material master record. Choose the accounting viewand add to Table (2) the current accounting data for plant 1000.

Task 6: Enter goods receipt for plant 12001. Now enter the goods receipt for plant 1200, storage location 0001, in

accordance with the following delivery note.

Make note of the material documentnumber:

____________________

Task 7: Display material document (2)1. Display the material document that was created as a result of the

goods receipt. Choose the corresponding accounting document.Which accounts were posted for what amount?

Item Account Account Short Text Amount1

2

3

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Task 8: Compare posting results

Task 9: Display purchase order

Task 10: Stock overview

Task 11: Transfer material to unrestricted-use stock

Task 12: Display material document for transferposting1. Check also that the system has updated the stock overview correctly.

You can also fill out table (1) if you wish.

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Solution 13: Posting Goods Receipts intoQuality InspectionTask 1: Tables for the ExercisesIn the exercises in this section, you will make a note of, compare, andanalyze the different data for the material stocks and valuation prices.Work through the exercises in order, using the tables on the next pageto make your notes.

Table (1): Stock overview T-RM2##

Plant 1000 Hamburg Plant 1200 (Dresden)

Unre-str.- use

Qualityinsp.

Openorderqty.

Unre-str.- use:

Qualityinsp

Openorderqty

Task 2(beforeGR)Task 11(After GR)Task 13(Aftertrans.posting)

Table (2): Accounting data T-RM2##, plant 1000Price control:

Moving avg.price

Standardprice

Total stock Total value

Task(beforeGR)Task (afterGR)

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Table (3): Accounting data T-RM2##, plant 1200Price control:

Moving avg.price

Standardprice

Total stock Total value

Task(beforeGR)Task (afterGR)

Task 2: Stock Overview1. Analyze the Stock overview for the material T-RM2## in plants 1000

and 1200. Make a note of the stock levels for plants 1000 and 1200 intable (1) (Stock overview).

a) Use the path Logistics → Materials Management → InventoryManagement → Environment → Stock→ Stock Overview to reachthe Stock Overview selection screen.

b) On the selection screen, first enter the material number T-RM2##and plants 1000 and 1200. Accept the defaults and use theExecute button to carry out the report. In table (1), make a note ofthe stock values.

Hint: You will have to use the scroll arrows at the top ofthe screen to see all of the columns, for exemple, Openorder qty. Many of these columns will have zero quantitysince we are just starting to use this part in our exercises.

Task 3: Display material master record1. Display the view for Plant stock and the Accounting 1 view for

material T-RM2## for plants 1000 and 1200.

a) While in the stock overview, you can go directly to the materialmaster record by placing the cursor on the line for plant 1000 orplant 1200 and choosing the pull down path Extras → Displaymaterial.

2. Compare the plant stock data with the data from the previous task.

a) Select the Plant stock view while you are in the material masterfile.

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3. Use the data from the Accounting view to fill in tables (2) and (3):Accounting data for plant 1000 and plant 1200.

a) Select the Accounting 1 view. Write down the price controlprocedure, moving average price, standard price, total stock, and totalvalue for plant 1000 into (table 2) and plant 1200 into (table 3).

Task 4: Enter goods receipt for plant 10001. In plant 1000, storage location 0001, unrestricted-use stock, enter a

goods receipt for the purchase order from Exercise 12, Task 1. Enterthe vendor�s Delivery Note number, for future reference. Refer to thedelivery note for other data that is required. Ignore the goods receiptfor plant 1200 (Dresden) for the time being.

Write down the material documentnumber:

____________________

a) Use path Goods Movement→ Goods Receipt→ For Purchase Order→ PO Number Known. Search for your PO number via F4 help,or, enter it manually. Copy only the first item from the purchaseorder. Under Header data, tab page General, enter the documentdate and the delivery note number. In the item overview, enter thestorage location 0001.The Item details section must be closedto enter this data in the item overview.

Task 5: Display material document (1)1. Display the material document that was created as a result of the

goods receipt. Choose the corresponding accounting document.Which accounts are updated for what amount?

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Item Account Account Short Text Amount1

2

a) Switch from the goods receipt entry screen to the display mode.Choose your material document from the document overview.The Docmt Info (Header data) tab page contains the FI documentsbutton, which you use to go to the accounting document.

Item Account Account Short Text Amount1 300000 Raw materials 1 7200

2 191100 GR/IR clearing account ext. 7200 (-)

2. Exit the accounting document and go directly from the materialdocument to the material master record. Choose the accounting viewand add to Table (2) the current accounting data for plant 1000.

a) To go to the material master record, select theMaterial field inthe GR display screen, then enter plant number in the dialog box(if required). In table (2), make a note of the values that havechanged in Financial Accounting.

Task 6: Enter goods receipt for plant 12001. Now enter the goods receipt for plant 1200, storage location 0001, in

accordance with the following delivery note.

Make note of the material documentnumber:

____________________

a) Same procedure as Task 4, above.

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Task 7: Display material document (2)1. Display the material document that was created as a result of the

goods receipt. Choose the corresponding accounting document.Which accounts were posted for what amount?

Item Account Account Short Text Amount1

2

3

a) Same procedure as Task 5, above. In Table (3), notice the valuesthat have changed in Financial Accounting.

Item Account Account Short Text Amount1 300010 Raw materials 2 8000

2 191100 GR/IR clearingaccount ext.

7200 (-)

3 281000 Amount from pricediff. ext.

800 (-)

Task 8: Compare posting results

Task 9: Display purchase order

Task 10: Stock overview

Task 11: Transfer material to unrestricted-use stock

Task 12: Display material document for transferposting1. Check also that the system has updated the stock overview correctly.

You can also fill out table (1) if you wish.

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LO020 Lesson: Stocks, Valuation, and Goods Receipt

Lesson Summary

You should now be able to:� Explain the purpose of documents for goods movements� Perform Stock Overview displays� Analyze the valuation effect from a goods receipt on both standard

and moving average materials� Post a goods receipt into quality inspection stock and release the

quality inspection stock

Related Informationhttp://help.sap.com

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Lesson:274

Invoice Verification for Stock MaterialsLesson Duration: 30 Minutes

Lesson OverviewIn this lesson, you will post an invoice for a stock material using LogisticsInvoice Verification functionality (LIV). You will also be introduced toprocessing unplanned delivery costs. You�ll explore the postings that aremade in FI when using standard and moving average materials.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Explain and demonstrate the use of Logistics Invoice Verification(LIV) functionality for invoice posting with both planned andunplanned delivery costs

� Display the accounting document and material document associatedwith LIV invoice posting

Introduce lesson objectives and business example. Show and discussLogistics Invoice Verification functionality, especially for those with aversion prior to 4.0. Demonstrate Logistics Invoice Verification processingsteps. Show how to post Unplanned delivery costs, and perhaps, showhow to see if there are planned costs.

Business ExampleWhen an invoice is received, your company posts it with reference tothe relevant purchase order. This procedure checks that the prices andquantities listed in the invoice are identical to the purchase order pricesand quantities.

Price differences for items with standard price control are then posted to aprice difference account and items with moving average price control areposted to a stock account.

As a member of the procurement team, you will check whether the R/3System supports your requirements.

IntroductionLogistics Invoice Verification creates a separate accounting document inaddition to the invoice verification document. This is used in FinancialAccounting to settle the invoice, but can also be processed by distributedsystems or external systems.

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LO020 Lesson: Invoice Verification for Stock Materials

Figure 111: Logistics Invoice Verification

Note: For further information on Logistics Invoice Verification,refer to the Materials Management Help documentation on InvoiceVerification, Logistics Invoice Verification.

Posting Delivery Costs

The SAP system has functionality to work with planned and unplanneddelivery costs. Explain the difference between both.

The R/3 System differentiates between planned and unplanned deliverycosts.

You arrange planned delivery costs in advance with the vendor, a carrier,or the customs office and enter them when creating the purchase order.At goods receipt, provisional accounts are posted, which are then clearedwhen the invoice is received.

Unplanned delivery costs are delivery costs you do not know about whenyou are creating the purchase order. You do not enter these until youreceive the invoice. If required, the valuation carried out at goods receiptis corrected.

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Figure 112: Delivery Costs

The advantage of planned delivery costs is that they are included in thevaluation of a material at goods receipt or, for purchase orders withaccount assignment, the system can debit the account assignment object.The system carries out subsequent debits when the invoice is received onlyif the delivery costs in the invoice differ from those planned.

Explain in detail which accounts are affected by the posting of planneddelivery costs at goods receipt and invoice receipt.

The system clears the GR/IR clearing account with the purchase orderprice and updates the vendor account with the invoice price.

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LO020 Lesson: Invoice Verification for Stock Materials

Figure 113: Account Postings for Unplanned Delivery Costs

� Material with moving average price control:

� The system posts the difference between the purchase orderprice and the invoice price to the stock account and recalculatesthe stock value based on the invoice price.

� The system redetermines the moving average price based on thenew stock value.

� If the stock quantity is less than the invoice quantity, the systemposts part of the difference to the Expenditure/income from pricedifferences account instead of the stock account.

� Material with standard price control:

� The system posts the difference between the purchase orderprice and the invoice price to an Expenditure/income from pricedifferences account.

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Demonstration: Optional � Invoice Processing(planned delivery costs)

PurposePost the vendor invoice in Logistics Invoice Verification with referenceto the purchase order used in the demonstration of purchase orderprocessing. Enter the planned delivery costs for the vendor, along with thematerial items.

Note: Approximately 15 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Transaction MIGO

� Gross amount: Amounts depend on your PO. Use tax code1I 10%.

� Enter selection vendor: 1001 on the Extras tab and the POdocument number.

� Invoice Verification: When retrieving the Item details for yourreference document, change the selection in the Indicator fieldto either 3 item cost and planned delivery costs, or just 2 Planneddelivery costs. Press enter. If costs were planned they will appearon the item detail.

� View the item list and explain the material costs and deliverycosts per line item as planned in PO.

� Evaluate the invoice verification document or accountingdocument.

� Check the purchase order history.

Demonstration: Entering Unplanned Delivery Costs

PurposePost the invoice for your PO, including unplanned delivery costs fora different freight supplier (that is, different freight supplier from thesupplier in the purchase order).

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LO020 Lesson: Invoice Verification for Stock Materials

Approximate time: 10 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. In Logistics Invoice Verification (Trans: MIRO), enter the document

date and your purchase order number.

2. Gross: Amounts depend on your PO � include an extra 220 UNI forfreight in the amount field and an extra 20 UNI for the tax in the taxamount field (depends on amount used).

3. On the Details tab, enter the amount of the unplanned freight withouttax (200 UNI)

� Select Enter to confirm.� Simulate the document.� Save when you�re done.

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278Invoice Posting Procedure

1. Choose Logistics → Materials Management → Logistics InvoiceVerification → Document Entry → Enter Invoice.

The Enter Invoice screen appears.

2. Enter the required document header data on the tab pages listedbelow:

� Basic data: you enter information such as:

� the document date� the posting date� the gross invoice amount� tax information

� Payment: On this tab page, you enter information such as thebaseline date for payment, the terms of payment, and the bankdetails.

� Details: enter information such as unplanned delivery costsand a different invoicing party.

� Tax: enter information such as the tax amounts and the tax codeor select Calculate tax. If you select Calculate tax, the systemcalculates the tax amount based on the tax codes in the invoiceitems.

� Contacts: After you have allocated the invoice, the systemdetermines the processors of the business transactions that havetaken place so far.

� Note: On this tab page, you can enter a memo that could beuseful for further processing of the invoice.

� Amount split: You can divide up the final amount of an invoiceor credit memo here, for example, according to differentpayment methods or terms of payment. If you have entered apayment method here, this entry takes priority over the paymentmethod in the terms of payment.

Note: Maintain the settings for amount splitting in theImplementation Guide (IMG) for Financial Accountingunder the menu path Financial Accounting → FinancialAccounting Global Settings→ Company Code→ Enter GlobalParameters.

� Withholding Tax: You can find further information in theImplementation Guide (IMG) for Financial Accounting underthe menu path Financial Accounting→ Financial Accounting GlobalSettings → Withholding Tax.

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LO020 Lesson: Invoice Verification for Stock Materials

279Entering Invoices with Purchase Order Reference

1. Choose Logistics → Materials Management → Logistics InvoiceVerification → Document Entry → Enter Invoice.

The Enter Invoice screen appears.

2. Enter the header data from the vendor invoice as required.

3. Allocate the invoice. Choose what kind of document number youwill enter. Choices include:

� Purchase order/scheduling agreement� Delivery note� Bill of lading� Service entry sheet� Vendor Transportation service agent

4. Enter the document number in the next field (to the right) or if youallocate the invoice to a vendor or a transportation service provider,enter the vendor number.

5. Enter data as required.

6. Choose More allocation criteria if you are posting against severaldifferent documents.

7. Choose Execute.

The system displays the invoice items and vendor data that matchthe allocation.

Note: You can overwrite incorrect entries, such as thepurchase order number, without entering new header data orleaving the application. After entering the new purchase ordernumber, choose Enter. The system updates the invoiceitems and vendor data to match the changed allocation.

Have students do the Exercises on Invoice Processing.

Approximate time: 20 minutes

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LO020 Lesson: Invoice Verification for Stock Materials

281 Exercise 14: Invoice Verification for StockMaterialsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� ·Post an invoice using Logistics Invoice Verification (LIV) functionality� ·Display the accounting document and material document� ·Post unplanned freight costs

Business ExampleWhen an invoice is received, your company posts it with reference tothe relevant purchase order. This procedure checks that the prices andquantities listed in the invoice are identical to the purchase order prices andquantities. Price differences for items with standard price control are thenposted to a price difference account and items with moving average pricecontrol are posted to a stock account. As a member of the procurementteam, you will check whether the R/3 System supports your requirements.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Enter an invoice1. Use Logistics Invoice Verification to enter the invoice for the purchase

order for the headlamp extra bright-## with vendor T-K12B##.Use the following vendor invoice as a reference.

Note that freight charges are shown on the invoice. Enter these asunplanned delivery costs.

Hint: Enter unplanned delivery costs on the Detail tab page.

Continued on next page

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2. Choose your purchase order number for vendor T-K12B## via F4Help or enter it directly.

3. Post the invoice.

Invoice Number: __________________

Task 2: Display a material master record

Task 3: Display the invoice document1. Display the invoice document and go from there to the purchase

order history by selecting the PO number. Or call up the purchaseorder directly, select the item and choose PO history tab.

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LO020 Lesson: Invoice Verification for Stock Materials

Solution 14: Invoice Verification for StockMaterialsTask 1: Enter an invoice1. Use Logistics Invoice Verification to enter the invoice for the purchase

order for the headlamp extra bright-## with vendor T-K12B##.Use the following vendor invoice as a reference.

Note that freight charges are shown on the invoice. Enter these asunplanned delivery costs.

Hint: Enter unplanned delivery costs on the Detail tab page.

a) Use the path Logistics→Materials Management→ Logistics InvoiceVerification→ Document Entry → Enter Invoice to access the LIVscreen.

b) Enter the following data:

Basic data tab pageDocument date Current date

Reference RE-B1##

Amount 16060

Tax amount 1460

Detail tab pageUnplanned delivery costs 200

2. Choose your purchase order number for vendor T-K12B## via F4Help or enter it directly.

3. Post the invoice.

Invoice Number: __________________

a) Use the Save or Post key.

Continued on next page

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Task 2: Display a material master record

Task 3: Display the invoice document1. Display the invoice document and go from there to the purchase

order history by selecting the PO number. Or call up the purchaseorder directly, select the item and choose PO history tab.

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LO020 Lesson: Invoice Verification for Stock Materials

Lesson Summary

You should now be able to:� Explain and demonstrate the use of Logistics Invoice Verification

(LIV) functionality for invoice posting with both planned andunplanned delivery costs

� Display the accounting document and material document associatedwith LIV invoice posting

Related Informationhttp://help.sap.com

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Unit Summary LO020

Unit SummaryYou should now be able to:� Create a request for quotation� Enter and compare vendor quotations� Process and create purchasing info records� Create an info record with reference to an RFQ� Enter prices into info records and enter vendor discounts� Create a purchase order with reference to a quotation� Explain the purpose of documents for goods movements� Perform Stock Overview displays� Analyze the valuation effect from a goods receipt on both standard

and moving average materials� Post a goods receipt into quality inspection stock and release the

quality inspection stock� Explain and demonstrate the use of Logistics Invoice Verification

(LIV) functionality for invoice posting with both planned andunplanned delivery costs

� Display the accounting document and material document associatedwith LIV invoice posting

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LO020 Test Your Knowledge

287Test Your Knowledge

1. What is the maximum number of vendors you can send an RFQ to?

2. On which of the three screens we used to create an RFQ did we enterthe Collective number?Choose the correct answer(s).□ A First screen, Initial screen□ B Second screen, Header data□ C Third screen, Item Overview□ D None of the above

3. What are the most important functions of the purchasing info record?

4. How are info records used during purchase order pricing?

5. In the standard R/3 System you can have more than one info recordfor the same material vendor combination.Determine whether this statement is true or false.□ True□ False

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Test Your Knowledge LO020

6. In which of the following levels can we maintain pricing differencesin an info record?Choose the correct answer(s).□ A Client level□ B Purchasing Organization level□ C Plant level□ D Storage Location level□ E A, B, and C□ F Only at B and C

7. The system will monitor changes to selected fields after a PO hasbeen sent to the vendor, and automatically issue a revised PO if thedata is changed.Determine whether this statement is true or false.□ True□ False

8. If you don�t input a specific plant in an RFQ, you can use the quotationpricing to create a purchase order for any plant the purchasingorganization is responsible for.Determine whether this statement is true or false.□ True□ False

9. Which of the following can you not reference when creating a PO?Choose the correct answer(s).□ A Requisition□ B Quotation□ C Purchase order□ D Information record□ E Contract

10. You can set a flag in the master if that materialshould always be received into quality inspection.Fill in the blanks to complete the sentence.

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LO020 Test Your Knowledge

11. What is the material and financial document concept?

12. Which of the following stocks are not displayed in the standard StockOverview?Choose the correct answer(s).□ A Stock in transfer (plant to plant)□ B Unrestricted□ C Quality Inspection□ D Pipeline (PIPE)□ E Consignment

13. At goods receipt, the Standard price valuated material value is postedto stock but might have a variance.Determine whether this statement is true or false.□ True□ False

14. We can enter both anddelivery costs in R/3.

Fill in the blanks to complete the sentence.

15. The transaction code for LIV is MIGO.Determine whether this statement is true or false.□ True□ False

16. How many Accounting documents are made by posting one Invoicefor a PO with nine items on it?Choose the correct answer(s).□ A One□ B Two□ C None□ D Nine

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Test Your Knowledge LO020

290Answers

1. What is the maximum number of vendors you can send an RFQ to?

Answer: There is no limit to how many you can send out.

2. On which of the three screens we used to create an RFQ did we enterthe Collective number?

Answer: B

In the training system, the Collective number field on the headerscreen, is mandatory.

3. What are the most important functions of the purchasing info record?

Answer: Info records hold data such as pricing, text, and deliverytime for a specific material vendor combination. In addition, inforecords can be used to display lists of materials a vendor supplies,or vendors for a specific material, with the extra ability to compareboth net or effective prices. If info records exist, a user can displaypurchase order price history.

4. How are info records used during purchase order pricing?

Answer: If a material has an info record, the system looks to see ifany pricing conditions exist and copies them into the PO. If none arefound in the info record, the system copies the material unit pricefrom the last purchase order. If neither is found you will have toenter the price manually.

5. In the standard R/3 System you can have more than one info recordfor the same material vendor combination.

Answer: True

You can set up in the IMG to use info records for buying stock parts,and also for Consignment, Pipeline or Subcontracting.

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LO020 Test Your Knowledge

6. In which of the following levels can we maintain pricing differencesin an info record?

Answer: F

Client level data exists in an info record but doesn�t include pricing.There is never any pricing listed at the Storage location level.

7. The system will monitor changes to selected fields after a PO hasbeen sent to the vendor, and automatically issue a revised PO if thedata is changed.

Answer: True

Any changes made before the PO message is sent just change thedocument, but after sending, the change causes a revised message tobe created and sent. The fields that are monitored are set up in theIMG.

8. If you don�t input a specific plant in an RFQ, you can use the quotationpricing to create a purchase order for any plant the purchasingorganization is responsible for.

Answer: True

Not entering a plant allows the buyer to create the PO itemreferencing the RFQ for any plant.

9. Which of the following can you not reference when creating a PO?

Answer: D

An info record is not really referenced when creating a purchaseorder. However, the SAP system will copy pricing and otherinformation from the info record automatically.

10. You can set a flag in the material master if that material should alwaysbe received into quality inspection.

Answer: material

We can set a flag in the material master if a particular material shouldalways go to quality inspection.

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Test Your Knowledge LO020

11. What is the material and financial document concept?

Answer: It�s the accepted accounting principle that there should neverbe a posting without proper documents being created. Accordingto that principle, a document must be generated and stored in thesystem for every transaction/event that causes a change in stock.In the SAP Inventory Management system, when a goods movementis posted, a material document is generated that serves as proof ofthe movement and as a source of information for any applicationsthat follow. Furthermore; if the movement is relevant for FinancialAccounting (that is, if it leads to an update of the G/L accounts), anaccounting document is created in parallel to the material document.

12. Which of the following stocks are not displayed in the standard StockOverview?

Answer: D

True Pipeline (PIPE) material can never be in Inventory.

13. At goods receipt, the Standard price valuated material value is postedto stock but might have a variance.

Answer: True

At goods receipt we use our PO pricing to determine total value tobe posted and it could be a different price than the material masterstandard.

14. We can enter both Planned and Unplanned delivery costs in R/3.

Answer: Planned, Unplanned

Remember you have to change the display choice during theallocation process or you won�t know there are planned costs.

15. The transaction code for LIV is MIGO.

Answer: False

MIRO is the transaction for Logistics Invoice Verification. MIGO isthe new transaction for posting a goods receipt.

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LO020 Test Your Knowledge

16. How many Accounting documents are made by posting one Invoicefor a PO with nine items on it?

Answer: A

One is the answer here. The LIV invoice can have an almost infinitenumber of items on it. An invoice can sometimes have two accountingdocuments, but that is taught in LO515 Invoice Verification.

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Unit 5295 Procurement of Consumable Material

Explain to the students that when consumables are purchased, the POwill be set up differently, the GR activity will behave differently, and thefinancial and accounting impact will be different.

Unit OverviewManual purchase requisitions are introduced in this unit. Manual purchaserequisitions are converted into purchase orders, and the procurement cyclewill be completed. The new unit introduces the new type of purchaseorder, especially for consumables.

Unit ObjectivesAfter completing this unit, you will be able to:

� Describe the differences between the procurement of stock materialand consumable material

� Create a purchase requisition for consumables� Create a purchase order with reference to a purchase requisition� Post a goods receipt for a consumable material with reference to the

purchase order� Explain the differences between stock and consumption statistics for

goods receipts into stock and goods receipts into consumption� Post invoices for a consumable material using Logistics Invoice

Verification� Create a blanket purchase order� Enter an invoice for a blanket purchase order using Logistics Invoice

Verification

Unit ContentsLesson: Purchase Requisitions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .363

Demonstration: Purchase Requisitions... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .369

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Procedure: Creating a Purchase Requisition � Consumable Items .376Procedure: Enter the estimated cost of an item without a MaterialMaster .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .383Exercise 15: Purchase Requisitions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .385

Lesson: The Procurement Process for Consumable Materials . . . . . . . . . . .393Demonstration: Purchase Order Creation with Reference to a PurchaseRequisition... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398Demonstration: Goods Receipt .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .399Demonstration: Logistics Invoice Verification .. . . . . . . . . . . . . . . . . . . . . . . . .400Procedure: Creating a PO by Copying or Referencing... . . . . . . . . . . . . .402Exercise 16: Purchase Order with Reference to PurchaseRequisition... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .405Exercise 17: Goods Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .409Exercise 18: Invoice Verification.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .411

Lesson: Blanket Purchase Orders.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .417Demonstration: Blanket Purchase Orders .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .421Procedure: Create blanket purchase order ... . . . . . . . . . . . . . . . . . . . . . . . . . .426Procedure: Post an invoice against a Blanket PO using LogisticsInvoice Verification ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .428Exercise 19: Blanket Purchase Orders .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .431

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LO020 Lesson: Purchase Requisitions

Lesson:297

Purchase RequisitionsLesson Duration: 1.5 Hours

Lesson OverviewIn this lesson you will be introduced to the purchase requisition.Purchase requisitions are different from the other documents becausethey are for internal use. Since this unit also deals with the purchase ofconsumable materials, we will define that term and create the requisitionfor consumable materials.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Describe the differences between the procurement of stock materialand consumable material

� Create a purchase requisition for consumables

This unit deals with the procurement process for consumption purposes.Participants should know how the procurement of consumable materialdiffers from that of stock material in terms of how quantity and valueare updated. In the procurement process, purchase requisitions arecreated (including those created manually), which Purchasing then hasto convert into purchase orders. In Release 4.0, blanket purchase orderswere introduced.

This lesson details the significance of purchase requisitions and emphasizesthat a purchase requisition is an internal request from a user departmentfor materials or services. The Purchasing department then convertsthis into a purchase order. There are several procedures for convertingpurchase requisitions into purchase orders. For teaching purposes, thisunit demonstrates how to manually convert a purchase requisition, as thisdemonstrates more clearly the individual steps involved. But you shouldstill point out that you can also use list processing functions to convertpurchase requisitions (this is dealt with in detail in LO520 � PurchasingOptimization).

Business ExampleYou need to procure consumable materials for you company. These arematerials that do not go into stock.

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IntroductionPurchase requisitions are internal documents you use to request yourPurchasing department to procure a particular quantity of a material or aservice for a particular date.

Figure 114: Purchase Requisitions

Purchase requisitions are either created manually by the person ordepartment responsible or automatically by MRP. When you create apurchase requisition for materials that have a material master record, theR/3 System supports you when you enter data by transferring data in thematerial master record into the purchase requisition.

Purchasing converts the purchase requisition into a request for quotation(RFQ), purchase order, or outline agreement.

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LO020 Lesson: Purchase Requisitions

Consumable Materials

Figure 115: Consumable Material

Consumable materials debit different account assignment objectsdepending on the account assignment category specified. The accountassignment category determines which category of account assignment isto be debited and which account assignment data you have to prepare.

Figure 116: Account Assignment Objects

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If you choose the account assignment object K (cost center) in thepurchase requisition when you procure consumable materials, the systemrequires the G/L account number of the consumption account and the costcenter for which the material is to be charged. This data is entered on theaccount assignment data screen (Item details section of the document). InCustomizing, you can set up to have the system automatically propose thenumber of the G/L account that is to be debited.

If you choose the account assignment object A (asset) in the purchaserequisition when you procure consumable materials, you have to enterthe asset number on the account assignment data screen. The systemautomatically determines the G/L account to be debited from the assetnumber. You cannot enter it manually.

When procuring consumable materials that do not have a material masterrecord, you have to enter the following information, as well as the accountassignment category:

� Short text (description)� Material group� Order unit

Figure 117: Procurement for Consumption

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LO020 Lesson: Purchase Requisitions

Special material types have been set up for consumable materials.Requisitions and POs, and so forth, must have an account assignmententered since the value is not posted into Inventory at goods receipt time.The standard configuration of the R/3 System contains the followingmaterial types for consumable material:

� Non-valuated material (material type UNBW): This type of materialis managed on a quantity basis, but not on a value basis. This isadvisable for materials that are low in value, whose stocks have to bemonitored (example: operating instructions).

� Non-stock material (material type NLAG): You cannot manage thesegoods either on a quantity basis or on a value basis. For consumablematerials that are required frequently, you can store the informationrequired to create purchasing documents (example: texts and units ofmeasure).

Figure 118: Stock Material vs. Consumable Material

When the system creates a purchase requisition automatically, a userprogram (example: MRP or Order management) determines the material,purchase order quantity, and the delivery date. If required, the purchaserequisition is automatically assigned to an account.

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Figure 119: Sources of Purchase Requisitions

Account assignment category U (unknown): If you do not know theaccount assignment object for which the material is being procuredwhen the requirement coverage request is created, you can use accountassignment category U in the purchase requisition. You do not have toenter any further account assignment details.

Figure 120: Creating a Purchase Requisition

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Purchase requisition items with material master record: When you createa purchase requisition item, the system takes the valuation price fromthe material master record if the material is valuated. You can use thisvaluation price for a value-related release procedure. If a release strategyhas been defined, you cannot create a purchase order with reference to thispurchase requisition until the latter has been released.

Purchase requisition items without material master record: The systemcannot suggest a valuation price for materials that do not have a materialmaster record (or for consumable materials with a material master record).The person who creates the purchase requisition has to manually enterthe valuation price.

Figure 121: Multiple Account Assignment (e.g. Cost Centers)

Demonstration: Purchase Requisitions

PurposeApproximate time is 15 minutes.

System DataSystem:Client:User ID:Password:Set up instructions:

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1. Create a purchase requisition Document type: NB

Figure 122:

� Use transactionME51N or path Purchasing→ Purchase requisitions→ create.

� Check the upper left corner of the work area and confirm thatthe screen is set for Purchase req. (NB type, first of the Purch.req. listings)

Hint: If the NB is not displayed in the standard system,you can turn it on in the Customizing of local layout →Options → Expert tab.

2. Show basic entry process by ordering a stock material for stockwithout account assignment.

� Enter Material:T-RM3##, 10 pcs, Plant: 1000

Note: Select Enter and the system will fill in the pricedata, and so forth. You can see that in the Item Detailssection, Valuation tab.

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Figure 123:

� Enter a Requirement tracking number. Exercise uses GR##.� Enter the requisitioner�s name. Exercise uses IH##.

Note: You can enter these in the item details, Contactperson tab.

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Figure 124:

3. The second item will show how to enter data for an item changed toAccount assignment K, a charge to cost center.

� Enter K in the account assignment column.� Material 99-100, 10 Liters, (the system will bring in price of

2 UNI per liter).� Press enter and we will get a red light, indicating some data is

missing. Click on the red light and show the system requires acost center assignment. Enter cost center 1000 on the accountassignment tab [which the system brings to the front of theItem details view]. You can point out the G/L account that wassuggested by the system.

4. A third item with multiple account assignment to cost centers 1000or T-L## and with GR non-valuated, without material master, usingmaterial group 006.

5. Now show an item with multiple cost assignment and no materialmaster number.

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Account assignment KItem description PhotocopierUnit of measure Pc.Material group 006

When you select Enter, the system will ask for an account assignment.

Figure 125:

� Choose whether you will set the Distribution field to distributeby percent or quantity. The default is usually to distribute byquantity; use that in the demo.

NOTE on Release 4.6 C. If you enter more than one accountassignment item, you no longer need to enter the quantity. Thesystem will automatically distribute the requested quantity(from the item overview line) equally among the lines youenter. If you subsequently change the requested quantity onthe item overview, the quantity is modified in the associatedaccount assignment lines. However, if you change the quantityor percentage of the account assignment items, the system canno longer perform the distribution automatically.

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For example, you have requested 90 office chairs that you haveassigned equally to three cost centers. However, because younow require 120 office chairs, you change the requested quantityon the item overview. The system automatically changes thedistribution so that 40 office chairs are now assigned to each costcenter. But if you had set/changed the distribution from equal tosome other, like 45 to one center, 10 to another and the balance,35, to yet another, the system cannot do subsequent changes. Itwill, however, give you a warning that the quantity in the ItemOverview line doesn�t match your distribution.

� You can enter the first cost center in the field or leave it untilyou�re in the Multiple accounting view. (Up through Release4.6B you had to enter a cost center before going into the multiscreen.) Select the Multiple acct. assignment screen buttonlocated several lines above the Cost center field.

Note: After the screen opens the icon changes since it isnow used to go to single assignment.

� Enter the following data for the cost distribution of thephotocopier:

Cost center 1000 and T-L##.

When you press Enter the system will divide the cost 50/50%

� Enter a valuation price of 300 UNI per piece.� Explain the functions of the indicators or buttons:

� Multiple acct. Assignment / Single Account Assignment� Repeat on/off� Distribution indicator� Goods receipt, Invoice receipt, GR non-valuated

� Save the document and record the number.� Display the document. Go to the Valuation tab and show that

the flag for GR non-valuated has been set automatically by thesystem.

Hint: You don�t have to leave the Create req. screen.Select the Other requisition button and check therequisition number there. It should be the one you justmade. If so, press the Enter button. (If not, type in yournumber and press enter). It changes the screen intodisplay mode and opens a button to switch to Changemode.

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6. While the requisition is on Display, show the statistical data on theStatus tab in the item details. Point out the status is N Not processedand that the quantity ordered is 0.

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304Creating a Purchase Requisition � Consumable Items

1. Consumables require an Account Assignment to be entered for theitem.Choose Purchasing→ Requisition→ Create (ME51N). The initial screenappears.

2. Check the document type is set to Purchasing Requisition (NBdocument type), change it if necessary.

Note: There are other types of requisitions you may want touse. Ex: You can specify that Purchasing is to enter into alonger-term purchase agreement with a vendor (these arereferred to in the SAP System as outline agreements) on thebasis of the purchase requisition. If you do so, Purchasingcannot issue a purchase order against the requisition: it canonly set up such an agreement (a contract or schedulingagreement).

To do this, select (RV) Outl. agmt. requisn. document type inthe Order Type (Purchasing) field (located in the top left cornerof the work area).

Hint: The NB (or RV, and so forth) might not show on yourscreen. It depends on the settings made in Customizing of locallayout → Options → Expert.

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Figure 126:

3. Enter (or change) the personal and default settings data, if needed.Use the appropriate button to access your choices. Enter the relevantdata, such as your Purchasing Group, Requisitioner, Requirementtracking number, Account assignment, and, any data you useregularly and would like to avoid typing each time.

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Figure 127:

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4. On the Item Overview section, enter the required data for each item(sometimes you may want to change the default data for an item) inthe appropriate column.

� Account Assignment category� Number of the material to be ordered� Purchasing group (buyer) responsible for ordering the

material (Purch. Group)� Requested quantity� Delivery date

Note: If Purchasing is to set up an outline agreement,you will not be able to specify a delivery date.

� The number of the receiving plant (Plant column) andthe storage location (if known).

� Select Enter.

� Account Assignment category� Name of the item/material to be ordered, entered in the short

text field� Unit of measure� Purchasing group (buyer) responsible for ordering the

material� Requested quantity� Delivery date� The number of the receiving plant (Plant column) and

the storage location (if known).� Select Enter.

5. Since an account assignment was used, a red light signal willdisplay at the left of the line. Virtually every assignment categoryrequires some additional information. In some cases you can set up(in the IMG) to have the G/L account number appear as a defaultvalue; usually you will still need to enter additional information.

Example: In the case of items charged to a cost center you will need toenter the cost center(s). Other codes may require the Project number,Asset number, and so forth. Select the red light , or the Showmessages button on the toolbar to see what problems exist. Enter theappropriate information.

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6. Cost Center assignment-single cost center

� The system assigned the G/L account, 400000 (configured tothe code K cost center).

� Several lines below the G/L field we see the Cost center field.Enter the cost center number in the field.

� Save the purchase requisition.

Figure 128:

7. Cost Center assignment-multiple cost centers

� The system assigned the G/L account, 400000 (which had beenconfigured to the code K, cost center).

� Several lines above the Cost center field, there is a Multiple acctassignment button, select it to open the split accountingscreen.

Note: After the screen opens the icon changes since it isnow used to go to single assignment.

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Figure 129:

� You can enter the first cost center before or after you press theMultiple Assign button.

In the Multiple assignment screen you enter:

1. Distribution type: Are you distributing the item by piecesor percents? Change the Distribution field setting if thedefault isn�t what you want.

2. If you chose 1. Distrib. on quantity basis, you can enter eachof the quantities and cost center numbers in thefields. You can also change open default field data like theG/L account number and so forth.

Hint: If you are going to divide the item equally (byeither quantity or percent) between the cost centers youdon�t have to enter the quantities/percents � the systemwill do it for you. Furthermore, if you change the itemoverview quantity later, the system will redistribute thenew quantity. But, if you create a non-equal distribution,the system can�t do the updating. It will give a warningmessage when changes are made.

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� If you chose 2. Distribution by percentage, you can enter each ofthe percentages and cost center numbers in the fields.You can also change open default field data like the G/L accountnumber and so forth.

8. Enter the estimated cost of items without a material master.

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311Enter the estimated cost of an item without a MaterialMaster

1. You may want to use a release strategy (approval process) on thepurchase requisition process, or want requestors to provide anestimate of the price of new items. For these reasons the standard R/3System is set up to display the default price on the Accounting 1 viewof items with material masters into the requisition. For items thatdon�t have master data, the system requires an estimated price.

Note: This is a configuration item. If you don�t want the priceto be required, you can change it.

If the cost exceeds the level set in a strategy, the system blocks it frombeing processed until it is approved.

2. If the system issues the message, Please enter Valuation price, youcan enter the price on the Valuation tab of the item details.

Figure 130:

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Students should now do the exercises on Purchase Requisitions:

Allow approximately 25 minutes.

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313 Exercise 15: Purchase RequisitionsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create and process purchase requisitions for consumable material� Analyze the current processing status of the purchase requisitions

Business ExampleYou work in internal Plant Maintenance and report material requirementsto the Purchasing department via purchase requisitions. Purchasingprocesses your requisitions and initiates the steps required. Yourdepartment needs sensors and a special testing instrument. You havealready maintained a material master record for the sensors becauseyou require these on a regular basis. You have not created a materialmaster record for the special testing instrument. You need to procure bothmaterials are to be procured directly for cost center(s).

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

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Task 1: Create purchase requisitions for materialsThe Plant Maintenance department at IDES requires 5 pieces of thesensor-## T-RM3## and a Testing instrument-##, for which youhave not created a material master record in the system.

Both materials are to be procured for plant 1000 (Hamburg) and directlyfor cost centers. The requisitioner IH## uses the requirement tracking numberGR##. Create a purchase requisition for the required materials.

Use the following information for the materials.

1. A material master record exists for material T-RM3##. Therefore, youhave to enter only the material number and the required quantity. Thesystem proposes the remaining data from the material master record.

The sensors are to be procured for two different cost centers; thatis, you have to useMultiple account assignment with distributionaccording to quantity: 3 pieces for cost center 4100 and 2 pieces forcost center 4110.

Hint: To go from the single account assignment screen to themultiple account assignment screen, choose the Multipleaccount assignment button (upper left) on the account assignmentscreen.

On the Account Assignment screen for this purchase order item, acceptthe G/L account that is suggested for the consumption posting andenter the cost center.

2. For the second item, enter the description testing instrument-##in the material Short text field, the Purchasing group T## (LO020-##)and the material group for Miscellaneous. Schedule the delivery forthe same date as the delivery of the sensors. The valuation price ofthe testing instrument is 525 UNI.

Hint: You can define release procedures for purchaserequisitions. Among other things, these can be based on itemvalue. The item value is the product of the requested quantityand the valuation price in the material master. Therefore, youhave to specify a valuation price for materials that do nothave a master record.

Accept the G/L account the system proposes. Cost center 4100 isdebited for the costs of the tool.

Write down the purchase requisition number.

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Requisition number _________________

Task 2: Display purchase requisitions for arequirement tracking number1. Display a list of the purchase requisitions for your requirement

tracking number.

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Solution 15: Purchase RequisitionsTask 1: Create purchase requisitions for materialsThe Plant Maintenance department at IDES requires 5 pieces of thesensor-## T-RM3## and a Testing instrument-##, for which youhave not created a material master record in the system.

Both materials are to be procured for plant 1000 (Hamburg) and directlyfor cost centers. The requisitioner IH## uses the requirement tracking numberGR##. Create a purchase requisition for the required materials.

Use the following information for the materials.

1. A material master record exists for material T-RM3##. Therefore, youhave to enter only the material number and the required quantity. Thesystem proposes the remaining data from the material master record.

The sensors are to be procured for two different cost centers; thatis, you have to useMultiple account assignment with distributionaccording to quantity: 3 pieces for cost center 4100 and 2 pieces forcost center 4110.

Hint: To go from the single account assignment screen to themultiple account assignment screen, choose the Multipleaccount assignment button (upper left) on the account assignmentscreen.

On the Account Assignment screen for this purchase order item, acceptthe G/L account that is suggested for the consumption posting andenter the cost center.

a) Use the path Logistics→Materials Management → Purchasing→Purchase Requisition→ Create. Check the screen is set to:

Document Type: Requisition [NB]

Select the Default values button on top of the item overviewsection and enter the following data to appear as default valuesin each line.

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Default data for itemsField name Data entryAcct assgmt cat. K

Plant 1000

Requisitioner IH##

Req. tracking no. GR##

b) Enter the following data for the first item, the Cost center willhave to be entered in the Item Details (bottom of the page)section.

Item 10Material T-RM3##

Quantity 5 pcsCost center 4100

c) In the top left of the Account Assignment tab, there is a buttonlabeledMultiple Account Assignment ; press it to change thedisplay. Now fill in the two lines of data as listed below:

Split the Account AssignmentField name DataQty 3

Cost center 4100

G/L account 400000

Qty 2

Cost center 4110

G/L account 400000

Distribution indicator 1 Distribute on Qty.basis [1]

GR √GR non-valuated √IR √

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2. For the second item, enter the description testing instrument-##in the material Short text field, the Purchasing group T## (LO020-##)and the material group for Miscellaneous. Schedule the delivery forthe same date as the delivery of the sensors. The valuation price ofthe testing instrument is 525 UNI.

Hint: You can define release procedures for purchaserequisitions. Among other things, these can be based on itemvalue. The item value is the product of the requested quantityand the valuation price in the material master. Therefore, youhave to specify a valuation price for materials that do nothave a master record.

Accept the G/L account the system proposes. Cost center 4100 isdebited for the costs of the tool.

Write down the purchase requisition number.

Requisition number _________________

a) Continue entering data, as above.

Item 20Material description Testing instrument-##

Qty 1 pc

Delivery date Same as item 10

Purchasing group Same as item 10

Material group 00107

Valuation price 525 UNIG/L account 400000

Cost center 4100

Item Category K

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Task 2: Display purchase requisitions for arequirement tracking number1. Display a list of the purchase requisitions for your requirement

tracking number.

a) Use the path Purchase Requisition → List Displays → General.Enter your requirement tracking number, GR##, and Executethe report. To display the purchase requisition, double-click onthe requisition item or select the item and choose Environment→ Display requisition.

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Lesson Summary

You should now be able to:� Describe the differences between the procurement of stock material

and consumable material� Create a purchase requisition for consumables

Related Informationhttp://help.sap.com

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LO020 Lesson: The Procurement Process for Consumable Materials

Lesson:320

The Procurement Process for Consumable MaterialsLesson Duration: 60 Minutes

Lesson OverviewIn the procurement process, purchase requisitions are created, whichPurchasing then has to convert into purchase orders. You will test theprocess of creating a PO with reference to a purchase requisition forconsumables. You�ll then run through the standard sequence of goodsreceipt and invoice posting to see what account posting differences occur.Finally, you�ll verify that the system keeps track of how much material isconsumed.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Create a purchase order with reference to a purchase requisition� Post a goods receipt for a consumable material with reference to the

purchase order� Explain the differences between stock and consumption statistics for

goods receipts into stock and goods receipts into consumption� Post invoices for a consumable material using Logistics Invoice

Verification

This lesson deals with the procurement process of consumption materials,PO create, GR, and Invoice posting. Show the participants how theprocurement of consumable material differs from that of stock materialin terms of how quantity and value are updated. In previous versions webroke this process into several sections, now we consolidate the entireprocess into one smooth flow.

Business ExampleThe Purchasing department now has the task of converting the purchaserequisition for the consumable material into a purchase order. A goodsreceipt can also be entered for a consumable material, as well as an invoice.

Converting Purchase RequisitionsThe buyer responsible normally converts purchase requisitions intopurchase orders.

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Figure 131: Converting Purchase Requisitions

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In the R/3 System, you can do the following:

� Create a purchase order with reference to a purchase requisition: Ifyou have not yet entered a valid source of supply for the materialin the system, you can create a purchase order with reference tothe purchase requisition. You can make reference to the purchaserequisition on the initial screen as well as on the item overview forpurchase order entry.

� Convert a purchase requisition into a purchase order: Beforeconverting the purchase requisition into a purchase order, you have todefine sources of supply for the purchase requisition items. You canenter a valid info record or an outline agreement for each requisitionitem. The system can suggest all possible sources of supply if you donot know of any. By means of a price simulation, the system comparesthese sources of supply so that you can decide on the most reasonableone. You then convert the purchase requisition into a purchase ordermanually or the system converts it automatically.

There are several procedures for converting purchase requisitionsinto purchase orders. For teaching purposes, this unit demonstrateshow to manually convert a purchase requisition, as this demonstratesmore clearly the individual steps involved in the conversion. But youshould still point out that you can also use list processing functions toconvert purchase requisitions (this is dealt with in detail in LO520).Think of the top method shown in this slide as the manual methodwe will use.

Figure 132: Processing Purchase Requisitions

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Purchase requisitions are either created manually by the requestingdepartment or automatically (for example, via MRP). You can tell whichprocedure was used to create the purchase requisition from the creationindicator in the status tab display (Item details section) of the purchaserequisition item. When creating a purchase requisition, the requester canspecify a source of supply or preferred vendor for the relevant item.

The Purchasing department is ultimately responsible for determining thesource of supply and converting the purchase requisition into a purchaseorder or RFQ. The buyer first has to assign the purchase requisition; thatis, choose a permitted source of supply. He or she then has to convertthe requisition into a purchase order or request for quotation. You canautomate the process for determining the source of supply (see the unit onautomated procurement or the training course LO520).

You can define release procedures for purchase requisitions to check thecontent of a purchase requisition and ensure that the specified accountassignment and the source of supply are correct. You can define a releaseprocedure very flexibly, according to various elements, such as item value,requester, account assignment, and so on.

After the purchase requisition has been created, the subsequent stepsare source determination and conversion of purchase requisition. Theseprocesses can also be automated.

Optional: Mention possible follow-on steps (approval/release procedures),without going into the topic in detail. Point out that source determinationand release procedures are covered in detail in LO520. Explain thestructure of purchasing documents. All have a header and item levelexcept for the requisition, which exists at item level only. Therefore,requisitions can have an approval strategy at item level.

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Figure 133: Converting Purchase Requisition Data to the PO

Account assignment category U: Although account assignment categoryU is allowed in the purchase requisition, it is not usually allowed in thepurchase order. (Limit items and service items are exceptions.) Whencreating a purchase order, the buyer has to change the U to a valid accountassignment object and enter all the account assignment details.

Purchase requisition items with material master record: If an info recordexists for the vendor and the material, the system suggests the purchaseprice from the info record when you create a purchase order with referenceto a purchase requisition. If no info record exists, you have to enter theprice manually.

The list in the dialog box shows what account categories are permitted.The configuration of this linking process is taught in LO550.

Price comes from info record if one exists. Even though we use theMaterial master price in the requisition so we can facilitate using releasestrategies, that price is never pulled into the PO.

Purchase requisition items without material master record: If the systemcopies a purchase requisition item without a material master into thepurchase order, the system suggests the valuation price from the purchaserequisition as the purchase price. The buyer can change this to thepurchase price that is currently valid.

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Note: With 4.6C you can decide if and how the price in the purchaserequisition will be adopted into the purchase order by using the parameterEFB (Function Authorizations: PO). Details are covered in the LO520.

Demonstration: Purchase Order Creation withReference to a Purchase Requisition

PurposeApproximate time 10 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Use Trans ME21N or chooseMaterials Management → Purchasing →

Purchase Order→ Create→ Vendor/Supplying plant known.

2. Make sure the left column, Document Overview is open. Search forMy Purchase Requisitions (near the bottom of the dialog box list). Yourrequisition should be on the list that is brought up.

3. Drag your req. and drop it in the shopping cart. It will create threeitems. Clear any red light by entering the required data.

4. Enter the Vendor number T-K12C##

5. Go through the pricing of each item showing whether it comes fromthe estimate or Info record, or if no record exists.

� Item 10 � 0.3 UNI per pc (valuation price in requisition only)� Item 20 � 10 UNI per liter (valuation price in requisition only)� Item 30 � 300 UNI per pc (price manually entered in requisition

and adopted in PO)

System asks you to check.

6. Save the PO and record the number.

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7. Display the general statistics for the purchase requisition and pointout the status has changed from not processed to (B) PO created.Also there is a display of the PO number that was created from therequisition.

� While still on the PO display screen, scroll to the right in the ItemOverview until you find the req. number column. Double-clickon the req. no. (or just double-click on the req. number in the leftcolumn, Document overview)

� Now you are in the req. display. Select the Status tab in theItem Details section.

8. Green arrow back and display the purchase order header status anditem information. Point out that there is no purchase order historyuntil a GR or IR have occurred.

Demonstration: Goods Receipt

PurposeApproximate time: 20 minutes.

System DataSystem:Client:User ID:Password:Set up instructions:1. Display the plant stock and consumption data for materials T-RM3##

and 99-100.

2. Post the goods receipt with reference to the first of the two purchaseorder items without account assignment into unrestricted use stock,in storage location 0001.

� Display material document and the plant stock and consumptiondata for material T-RM3##.

� Post a goods issue to cost center 1000 (movement type 201).� Display the plant stock and consumption data for material

T-RM3##.

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3. Post the goods receipt with reference to the second of the purchaseorder items (without storage location). This item is assigned to a costcenter and is not going into stock.

� Display the plant stock and consumption data for material99-100. Compare 1) with 2)

� Display the material and the FI document. Which G/L accountswere updated?

4. Post the goods receipt with reference to the third purchase order item(without storage location). Assigned to multiple cost centers. Displaythe material document. There is no accounting document. The GRfor a purchase order item with multiple account assignment is notvaluated. G/L accounts are not updated until invoice receipt.

5. Display the purchase order history, which is now accessible via atab in the item details of the PO.

Demonstration: Logistics Invoice Verification

PurposeApproximate time: 10 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Using Logistics Invoice Verification, post the vendor invoice with

reference to the purchase order used in the demonstration of purchaseorder processing. Demonstrate how to simulate it.

� Gross amount 1,433.30� Change tax code to 1I (10%)� Tax amount 130.30

2. Analyze the document. Explain how the costs for the photocopiershave been posted to the consumption account and distributedbetween the two cost centers specified in the PO.

3. Display the account assignment data. Point out that there is only onedocument you can evaluate from the Logistics view as well as theAccounting view.

4. Display the vendor�s open items.

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5. Check the purchase order history.

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324Creating a PO by Copying or ReferencingUseYou can save time and effort when creating or changing a purchase orderby copying an already existing one or adopting items from an existingrequisition, RFQ, or contract.

Procedure1. Use the path Purchase order→ Create→ Vendor/Supplying plant known

or Trans ME21N. The initial screen appears.

2. If you know the item number and document number you want toreference, you can just scroll the Item Overview section to the rightuntil you find a column with that document name as its heading.Type the numbers in and press the Enter key. The system willretrieve the information for you.

3. If you don�t know the document number, you can look it up in theDocument Overview section (left hand column) of the screen.

Note: If it isn�t open, press the button on the left of the toolbarwhich is labeled Document overview on.

When the column is open;

� Click on the Selection variant icon on the left side of theOverview toolbar.

� Click on the category of document you want compiled to openthe search screen.

� Enter the search criteria and press the Execute button. Thesystem will compile a list and display it in the column.

4. Change the individual items on the item detail screen. If you wish toadopt the selected items without first changing them, choose Edit→Adopt. The item overview for the newly created PO (with the itemsyou adopted) appears. Save the purchase order.

The purchase order is created in the SAP system. In order that theinformation in the purchase order can be transmitted to the vendor,the system generates a message for the PO. How to set up messagesand to set up for automatic message determination is taught in LO550� Cross-Functional Customizing in MM.

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LO020 Lesson: The Procurement Process for Consumable Materials

Exercise for Purchase Order Processing (Exercise 16): 20 minutes

Exercise on Goods Receipt (Exercise 17): 25 minutes

Exercise for Invoice Verification (Exercise 18): 20 minutes

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LO020 Lesson: The Procurement Process for Consumable Materials

325 Exercise 16: Purchase Order withReference to Purchase RequisitionExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a purchase order with reference to purchase requisition� Check the processing status of purchase requisitions

Business ExampleAs a member of the central Purchasing department, you are responsiblefor processing purchase requisitions for the different departments in yourcompany. Purchase requisitions for consumable materials are also part ofyour responsibilities.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Create purchase orderCreate a PO with reference to a requisition, then process a GR and Invoiceagainst it to see what the differences are when processing consumablematerials.

1. Create a purchase order for the sensors and the testing instrument.Reference the purchase requisition from Task 1, above.

You have already used vendor T-K12C## (C.E.B Berlin Gr.##) forprevious purchase orders. You are ordering for the purchasingorganization IDES (1000) and your personal purchasing group T##.

Display a document overview of the purchase requisitions for yourpurchasing group. Copy both requisition items.

Continued on next page

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According to the vendor, the sensors cost 15 UNI per piece. Theprice of the testing instrument is consistent with the valuation price inthe purchase requisition. Write down the purchase order number:

PO number:

Task 2: Display purchase requisition1. What is the processing status of both purchase requisition items?

Item 10: _______________________Item 20: _______________________

Task 3: Display purchase order1. With which purchase requisition and which item is the purchase

order for the testing instrument linked?

Requisition number/item: _______________________

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LO020 Lesson: The Procurement Process for Consumable Materials

Solution 16: Purchase Order withReference to Purchase RequisitionTask 1: Create purchase orderCreate a PO with reference to a requisition, then process a GR and Invoiceagainst it to see what the differences are when processing consumablematerials.

1. Create a purchase order for the sensors and the testing instrument.Reference the purchase requisition from Task 1, above.

You have already used vendor T-K12C## (C.E.B Berlin Gr.##) forprevious purchase orders. You are ordering for the purchasingorganization IDES (1000) and your personal purchasing group T##.

Display a document overview of the purchase requisitions for yourpurchasing group. Copy both requisition items.

According to the vendor, the sensors cost 15 UNI per piece. Theprice of the testing instrument is consistent with the valuation price inthe purchase requisition. Write down the purchase order number:

PO number:

a) Use the path Logistics → Materials Management → Purchasing→ Purchase Order → Create → Vendor/Supplying Plant Known.Display your purchase requisition in the document overview andconvert it to a purchase order using the drag and drop function.

As an alternative, you can enter the purchase requisition numberand item directly in the item overview. Enter the data below:

PO DataVendor: T-K12C##

Purchasing group: T##

Purchase prices:Sensor-##: 15 UNI / pcTesting instrument-## Same as valuation price in

purchase requisition

Continued on next page

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Task 2: Display purchase requisition1. What is the processing status of both purchase requisition items?

Item 10: _______________________Item 20: _______________________

a) Path Purchase Requisition→ Display. You can see the processingstatus on the Status tab page in the item detail area.

Item 10: PO Created [B]Item 20: PO Created [B]

Task 3: Display purchase order1. With which purchase requisition and which item is the purchase

order for the testing instrument linked?

Requisition number/item: _______________________

a) Path Purchase Order → Display. The item overview contains thepurchase requisition number and item number for each PO item.You have to scroll to the right to see these fields.

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329 Exercise 17: Goods ReceiptExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Post a goods receipt for consumable material� Track consumption in the material master record

Business ExampleThe consumable materials you ordered are forwarded directly to therequesting department instead of being placed in storage.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Enter goods receipt1. Enter the goods receipt for the purchase order from the previous

exercise. Use the following delivery note as a reference. Record theGR document number:

GR document number:

Task 2: Display material document

Task 3: Display purchase order history

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Solution 17: Goods ReceiptTask 1: Enter goods receipt1. Enter the goods receipt for the purchase order from the previous

exercise. Use the following delivery note as a reference. Record theGR document number:

GR document number:

a) Choose Logistics → Materials Management → InventoryManagement→ Goods Movement→ Goods Receipt→ For PurchaseOrder → PO Number Known. Choose your PO number via F4help, the search help, or enter it manually. Press the enter key todisplay the information.

b) Use the information on the vendor�s Delivery note to fill in therequired information on the GR. Enter the vendor�s deliverynote number and set the item OK flags, if required. Save thedocument and record the number assigned by the computer.

Task 2: Display material document

Task 3: Display purchase order history

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LO020 Lesson: The Procurement Process for Consumable Materials

331 Exercise 18: Invoice VerificationExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Carry out invoice verification for consumable materials

Business ExampleYou check the invoice for the consumable materials and the postings thatwere generated in Financial Accounting.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Enter invoice1. Use Logistics Invoice Verification to enter the invoice for the purchase

order for the sensors-## and the testing instrument-## with vendorT-K12C##. Use the following vendor invoice as a reference:

Record the invoice document number:

Invoice document number: ____________

Task 2: Display purchase order history records1. Display the purchase order and check the purchase order history

records of both items.

2. Then, call up the invoice verification document via the purchase orderhistory. Display the accounting document for your invoice and fillout the following table.

Continued on next page

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Itm Account Short text Material CostCenter

Amt

123

456

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Solution 18: Invoice VerificationTask 1: Enter invoice1. Use Logistics Invoice Verification to enter the invoice for the purchase

order for the sensors-## and the testing instrument-## with vendorT-K12C##. Use the following vendor invoice as a reference:

Record the invoice document number:

Invoice document number: ____________

a) Choose Logistics → Materials Management → Logistics InvoiceVerification → Document Entry → Enter Invoice to access thetransaction. Enter the following data in the Enter Invoice screen.

Invoice dataField name dataDocument date Current date (defaults in)Reference RE-C1##

Amount 660

Tax amount 60 at a 10% rate

b) Choose the purchase order document for vendor T-K12C##via F4 help or manually enter the purchase order number. Afterentering the number, select Enter so the system will retrieve thePO data and compare it with your entries.

You should see the green light at the top right of the pageand the balance display should be zero.

c) You can select Simulate to see what accounts will be posted whenyou save. When you�ve finished post the invoice.

Task 2: Display purchase order history records1. Display the purchase order and check the purchase order history

records of both items.

a) Choose Logistics → Materials Management → Purchasing →Purchase Order → Display. Enter your purchase order numberdirectly or use the document overview for your purchase orders.Display the purchase order histories of both items.

Continued on next page

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2. Then, call up the invoice verification document via the purchase orderhistory. Display the accounting document for your invoice and fillout the following table.

Itm Account Short text Material CostCenter

Amt

123

Continued on next page

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Itm Account Short text Material CostCenter

Amt

456

a) To go to the invoice document, double-click on theinvoice document number. In the Invoice screen, click onthe Follow-on documents button to get the documents inaccounting list. Select the Accounting document item, which isusually at the top of the list.

Itm Account Short text Material CostCen-ter

Amt

1 T-K12C## CEB Berlin 660 �

2 400000 ConsumptionRaw materials1

T-RM3## 4100 45

3 400000 ConsumptionRaw materials1

T-RM3## 4110 30

4 191100 GR/IR clearing(external)

Testinginstrument

525

5 154000 Incoming tax 606

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Lesson Summary

You should now be able to:� Create a purchase order with reference to a purchase requisition� Post a goods receipt for a consumable material with reference to the

purchase order� Explain the differences between stock and consumption statistics for

goods receipts into stock and goods receipts into consumption� Post invoices for a consumable material using Logistics Invoice

Verification

Related InformationFor further information on purchasing document output, refer to theMaterials Management Help documentation on Purchasing: OptimizedPurchasing, or the R/3 training course, LO520 Purchasing Details andOptimization.

http://help.sap.com

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LO020 Lesson: Blanket Purchase Orders

Lesson:336

Blanket Purchase OrdersLesson Duration: 60 Minutes

Lesson OverviewThis lesson covers the blanket purchase order, which may be useful inyour procurement of consumables.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Create a blanket purchase order� Enter an invoice for a blanket purchase order using Logistics Invoice

Verification

Introduce topic objectives and business scenario. Demonstrate Blanket PO.

Business ExampleYour company prefers to buy all its office supplies from one vendor. Youdo not need to monitor goods receipts of these materials.

The project team therefore wants to test the extent to which you can useblanket purchase orders in the simplified procurement process for suchareas.

Blanket Purchase OrdersYou can use blanket purchase orders to procure consumable materials orservices for which it is not worth creating a separate purchase order foreach procurement transaction.

Blanket purchase orders are usually valid for a longer period of time. Youcan directly post the invoices for the materials and services procured forthis blanket purchase order.

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Figure 134: Blanket Purchase Orders

In the standard procurement of consumable material, you have to create atleast one purchase order for every procurement transaction. This purchaseorder is used as a basis for invoice verification.

Figure 135: Standard Procurement for Consumable Material

You usually enter goods receipts for each conventional purchase order.

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In some cases, there may be preceding documents, such as purchaserequisitions or quotations.

As of Release 4.0A, you can create a purchase order with an item-relatedvalue limit, which is valid for a longer period of time (for example, a year).

You can use these blanket purchase orders to procure materials or servicesthat you do not want to process individually (purchase order, goodsreceipt, and invoice receipt).

Figure 136: Blanket Purchase Orders

You can use the document type FO for these blanket purchase orders. Inthe standard system, this document type enables you to enter the validityperiod at PO header data level and use the item type for blanket purchaseorder items. (Limit items are sometimes called blanket items.)

Invoice Verification checks whether the invoice lies within the validityperiod and whether the total limit will be exceeded when the invoice isposted.

You do not have to define the account assignment when you create theblanket purchase order. You cannot use RFQs or contracts. You can createa purchase requisition (optional) and then a purchase order.

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Figure 137: Procurement Cycle for Blanket Purchase Orders

There is no goods receipt (for services, there is no service entry or serviceacceptance). Invoices are posted directly for the purchase order.

Blanket purchase orders use the item category �B.� In addition, they usethe document Framework Order (FO) instead of NB.

Blanket purchase orders have the following characteristics:

� New item category� New order type (at field selection)� Validity period in hearder of purchase order� Limits in the item� No material number� No goods receipt or service entry sheet� Account assignment type �unknown� is allowed� Account data for the item suggested in invoices� Additional or multiple account assignment possible for Invouce

Verification� Validity period and limit checked in Invoice Verification

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LO020 Lesson: Blanket Purchase Orders

Blanket purchase orders offer the following advantages:

� They offer low transaction costs.� They have a longer validity period.� You do not require a purchase order for individual procurement

transactions.� No goods receipt or entry of services is performed.� You do not have to specify a material number (material group

instead).� Account assignment can be defined in purchase order, but is not

mandatory.� Account assignment and multiple account assignment can be changed

in Invoice Verification.� Validity period and limilt are checked in Invoice Verification.� They are linked with budget control.

Demonstration: Blanket Purchase Orders

PurposeApproximate time: 30 minutes

System DataSystem:Client:User ID:Password:Set up instructions:1. Create blanket purchase order:

� Go to the Create PO screen (ME21N) change the PO documenttype to (FO) Framework order. Then select Enter.

Note:

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Figure 138:

The system should open the Additional data tab in theHeader data section, so you can enter the Validity Startand End dates.

� Enter the Vendor number 1000.

When you next select Enter, the system retrieves necessarydata from the Vendor master and copies it into the Blanket order.

� Enter a Validity Start and Validity End date.� Go to the Item overview section. Enter the Account assignment

category U (possibly add a second item with K).� Enter a short text description, Office supplies.

Note: When you select Enter after inputting the aboveitems, the system fills in the quantity (1) and the unit ofmeasure (AU), accounting unit.

� Enter the Item category B

Note: The Item cat. B is the key to creating a blanketorder. Up to Release 4.6B you could also use the NBdocument type with Item B and still create a blanketorder.

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� Scroll to the right to find theMaterial group column, enter # 006for office materials.

� Total limit and expected value: 50000� Select SAVE to generate a document. Record the number.

(Blanket PO uses the same range as standard PO, 450000xxxx)2. Enter invoice using Logistics Invoice Verification:

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Figure 139:

� Use transaction MIRO to access the Logistics Invoice Verificationscreen. Make sure it�s set for the function, (1) Invoice.

� Enter the Invoice date, use today’s date. (F4 followed by F2will enter today�s date.)

� Enter 16500 as the Amount total, 1500 of this total is entered inthe Tax amount field. (Make sure it is set to Input tax (training) of10%)

� Choose display variant Acct assignment � asset, order, select Enterto change the display

� You see the Balance is 15000 UNI and shows a Red light ; nodata entry is possible in the quantity or dollar amount receivedfields (display only). This is because the costs have not yet beenassigned to the different cost centers. In the item list, scroll to theright and double click the icon forMulti. account assignment inthe column Acct. assignment.

� In the Account assignment dialog box enter the cost, G/Laccount, and cost center data:

Cost amount #10000, G/L account 400000, cost center 1000

Cost amount #5000, G/L account 400000, cost center T-L##

Caution: Don�t forget to scroll to the right and enter thetax code 1I !

Don�t forget to highlight the new line(s) before usingBack.

� Point out the balance is now zero, and there is a green light.

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Figure 140:

3. Enter other invoice(s) until limit is exceeded.

4. Display purchase order history.

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341Create blanket purchase order

1. Create blanket purchase order:

� Go to the Create PO screen (ME21N): choose Purchasing →Purchase Order→ Create→ Vendor/Supplying plant known.

Note:

Figure 141:

The system should open the Additional data tab in theHeader data section so you can enter the Validity Startand End dates.

� Change the PO document type to (FO) Framework order. Thenselect Enter.

� Enter the Vendor number.Note: When you next select Enter, the system retrievesnecessary data from the Vendor master and copies itinto the document.

� Enter a Validity Start and Validity End date

.

Continued on next page

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� Go to the Item overview section. Enter the Account assignmentcategory.

� Enter a short text description.� Enter the Item category B.� Scroll to the right to find theMaterial group column, enter the

appropriate one.� Enter a Total limit and Expected value.� Select Save to generate a document. Record the number.

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343Post an invoice against a Blanket PO using LogisticsInvoice Verification

1. Use transaction MIRO to access the Logistics Invoice Verificationscreen.

Continued on next page

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Figure 142:

�� Make sure it�s set for the function, (1) Invoice.� Enter the Invoice date.� Enter the Total amount (includes the taxes, and so forth) the

vendor wants in the Amount field. Enter the tax amount in theTax amount field.

� Verify that the tax amount that appeared as a default valuematches the rate used by the vendor. Change it if necessary.

� Choose display variant Acct assignment � asset, order, and selectEnter to change the display.

� You see the Balance field shows the total amount you entered andshows a: Red light. Also no data entry is possible in the quantityor dollar amount received fields. This is because the costs havenot yet been assigned to the different cost centers. In the itemlist, scroll to the right and select the column forMulti. accountassignment icon in the Acct. assignment column.

� In the Account assignment dialog box, enter the cost, G/Laccount, and cost center data:

� Scroll to the right and enter the tax code.� Don�t forget to highlight the new line(s) before using the

Back button, or the data won�t be correct.� The balance should now be zero in the Balance field and there

should be a Green light indicating it is okay to post the document.

Continued on next page

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Figure 143:

Students should now do the exercises on Blanket Purchase Orders,

Approximate time: 30 minutes

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LO020 Lesson: Blanket Purchase Orders

347 Exercise 19: Blanket Purchase OrdersExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a blanket purchase order for consumable materials� Enter an invoice for a blanket purchase order

Business ExampleTo help you to manage low-value consumable materials that are notrequired regularly, you are testing how you can procure consumablematerials using a blanket purchase order. You then enter invoices for theblanket purchase order.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

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Task 1: Create a blanket purchase orderYour Purchasing department has reached an agreement with the officesupplies company, Bürohandel Leifritz Gr.##, that plant 1000(Hamburg) can procure office materials by fax. This arrangementapplies immediately and is valid until the end of nextyear.

Create a framework order for the vendor Bürohandel Leifritz Gr.##.

What is the number of the vendor master record for this company?______________

You are part of purchasing group T## (LO020-##) and purchasingorganization IDES (1000).

Choose the item category for blanket purchase orders (=__________).

As this purchase order is used to procure office materials for differentcost centers, you do not know the account assignment category when youplace the order.

Enter the relevant account assignment category (=___________). Enteroffice materials as a short text.

You do not expect the value of the office materials to exceed 5000 UNI.Define the total limit for Invoice Verification as 6000 UNI.

Choose the material group for office materials.

Record the PO number:

PO number: ________________

1. Use the path Logistics → Materials Management → Purchasing →Purchase Order → Create → Vendor/Supplying Plant Known. Enter thefollowing data.

Document SettingsPO type Framework order

Vendor T-K12D##

Header/Additional data tabValidity start Today (F4 then F2)Validity end

Continued on next page

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LO020 Lesson: Blanket Purchase Orders

Header/Org. data tabPurchasing organization 1000 (IDES)Purchasing group T## (LO020-##Company code 1000 (IDES)

Item data: Item 10Item category B

Acct assgmt category U

Short text Office materials

Material group 006

Plant 1000

Select Enter and the system will issue a warning that you need toenter the limits. It will open the Item details section, Limits tab. Enterthe following data:

Tab: LimitsOverall limit 6000

Expected value 5000

2. Select Save and record the PO number.

Task 2: Enter an invoice for the blanket purchase order1. The Leifritz company sends you the invoice below. Use Logistics

Invoice Verification to enter it.

Continued on next page

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Figure 144:

Task 3: Display the Purchase order1. Display your blanket purchase order.

What is the actual value of the purchase order?______________________________________________

2. Display the purchase order history. Select and display the invoicedocument. Go to the accounting document. Which G/L accountswere posted?

Task 4: Optional: Enter other invoices

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LO020 Lesson: Blanket Purchase Orders

Solution 19: Blanket Purchase OrdersTask 1: Create a blanket purchase orderYour Purchasing department has reached an agreement with the officesupplies company, Bürohandel Leifritz Gr.##, that plant 1000(Hamburg) can procure office materials by fax. This arrangementapplies immediately and is valid until the end of nextyear.

Create a framework order for the vendor Bürohandel Leifritz Gr.##.

What is the number of the vendor master record for this company?______________

You are part of purchasing group T## (LO020-##) and purchasingorganization IDES (1000).

Choose the item category for blanket purchase orders (=__________).

As this purchase order is used to procure office materials for differentcost centers, you do not know the account assignment category when youplace the order.

Enter the relevant account assignment category (=___________). Enteroffice materials as a short text.

You do not expect the value of the office materials to exceed 5000 UNI.Define the total limit for Invoice Verification as 6000 UNI.

Choose the material group for office materials.

Record the PO number:

PO number: ________________

1. Use the path Logistics → Materials Management → Purchasing →Purchase Order → Create → Vendor/Supplying Plant Known. Enter thefollowing data.

Document SettingsPO type Framework order

Vendor T-K12D##

Header/Additional data tabValidity start Today (F4 then F2)Validity end End of next year

Continued on next page

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Header/Org. data tabPurchasing organization 1000 (IDES)Purchasing group T## (LO020-##Company code 1000 (IDES)

Item data: Item 10Item category B

Acct assgmt category U

Short text Office materials

Material group 006

Plant 1000

Select Enter and the system will issue a warning that you need toenter the limits. It will open the Item details section, Limits tab. Enterthe following data:

Tab: LimitsOverall limit 6000

Expected value 5000

2. Select Save and record the PO number.

Task 2: Enter an invoice for the blanket purchase order1. The Leifritz company sends you the invoice below. Use Logistics

Invoice Verification to enter it.

Continued on next page

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Figure 145:

a) Choose Logistics → Materials Management → Logistics InvoiceVerification → Document Entry → Enter Invoice. Enter thefollowing data:

Invoice date Current date

Reference RE-D1##

Amount 550

Tax amount 50

b) Choose your purchase order document for vendor T-K12D## viaF4 help, or manually enter the purchase order number.

c) Choose the item for the office materials. Scroll to the right untilyou find the Account Assignment column. It will have a greenband across it. Click on the band to get a dialog box.

d) Post 100 UNI of the invoice cost to center T-L## and 400 UNI toT-HR7A## (use G/L account 476000 for both). Input the tax rate1I on each line. Select (highlight) both lines and use the Adoptbutton to transfer it into the main document.

Hint: Make sure you check the tax category entries andhighlight both lines before trying to save. If you end upwith ***** in the tax rate field on the main screen, theentries in the dialog box are wrong.

e) Use the Simulate button to see what postings will be made.f) Save your document.

Task 3: Display the Purchase order1. Display your blanket purchase order.

What is the actual value of the purchase order?______________________________________________

a) Use path Purchase order → display.b) Use the document overview to pull up your own personal

purchase orders. Double click to display your document.c) The Limits tab page in the Item detail section contains the

current actual value of the purchase order item.

Continued on next page

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LO020 Lesson: Blanket Purchase Orders

2. Display the purchase order history. Select and display the invoicedocument. Go to the accounting document. Which G/L accountswere posted?

a) Use the Purchase order history tab page to see the Invoice number.b) Select the invoice number to go to that document. Use Follow on

documents button, then Accounting documents line in the dialogbox to see accounting postings.

Task 4: Optional: Enter other invoices

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Lesson Summary

You should now be able to:� Create a blanket purchase order� Enter an invoice for a blanket purchase order using Logistics Invoice

Verification

Related Informationhttp://help.sap.com

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LO020 Unit Summary

Unit SummaryYou should now be able to:� Describe the differences between the procurement of stock material

and consumable material� Create a purchase requisition for consumables� Create a purchase order with reference to a purchase requisition� Post a goods receipt for a consumable material with reference to the

purchase order� Explain the differences between stock and consumption statistics for

goods receipts into stock and goods receipts into consumption� Post invoices for a consumable material using Logistics Invoice

Verification� Create a blanket purchase order� Enter an invoice for a blanket purchase order using Logistics Invoice

Verification

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LO020 Test Your Knowledge

359Test Your Knowledge

1. Consumable material and its value are put into stock.Determine whether this statement is true or false.□ True□ False

2. Which of the following entries are not allowed in the accountassignment field for a consumable material item listed in an NBRequisition?Choose the correct answer(s).□ A K□ B A□ C B□ D U□ E An empty account assignment field

3. What is the advantage of being able to create purchasing documentsby copying from a purchase requisition?

4. You can split the costs of an item between several cost centers.Determine whether this statement is true or false.□ True□ False

5. The blanket purchase order eliminates the need for a goods receipt.Determine whether this statement is true or false.□ True□ False

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Test Your Knowledge LO020

6. Which of the following items are not required entries in an invoiceposting against a blanket PO that has account assignment category U?Choose the correct answer(s).□ A PO Number□ B Account objects□ C Total value (cost)□ D Quantity□ E Invoice date

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361Answers

1. Consumable material and its value are put into stock.

Answer: False

By definition, consumable material is not placed into stock.

2. Which of the following entries are not allowed in the accountassignment field for a consumable material item listed in an NBRequisition?

Answer: E

All of the above assignment categories are allowed in the standardNB document, with the exception of E.

3. What is the advantage of being able to create purchasing documentsby copying from a purchase requisition?

Answer: It saves time and prevents human errors during the POcreation process. It also automatically links the documents so you cantell what requisition was satisfied by which PO.

4. You can split the costs of an item between several cost centers.

Answer: True

You can also split costs for an item between cost centers and otheraccount assignment objects, such as projects or assets.

5. The blanket purchase order eliminates the need for a goods receipt.

Answer: True

The blanket purchase order functionality does not permit a goodsreceipt.

6. Which of the following items are not required entries in an invoiceposting against a blanket PO that has account assignment category U?

Answer: D

Quantity is not required. It could be entered as a comment, but thereare no goods receipts to check it against.

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Unit 6363 Procurement of External Services

This unit is designed to give all the lecture and demos before the studentsdo their exercise. The exercise will go through the complete process, frommaster data to invoice entry. There are two reasons for this: One, this is ashort unit. Two, this will give the students an uninterrupted opportunityto experience the complete cycle.

Unit OverviewSome of the purchases that buyers make are not actually for �things.�Often it is necessary to purchase services, whether it is janitorial services,catering services, consulting services and so forth. This unit exclusivelyaddresses the purchasing of services, including special master datarecords, specific purchase order setup, maintenance of service entry sheets,and invoice entry.

Unit ObjectivesAfter completing this unit, you will be able to:

� Describe the basic steps in the procurement of external servicesprocess

� Name the most important master data used in the procurement ofexternal services

� Display a service master record� Display service conditions for vendor� Create a Purchase Order for a service item� Apply value limits for unplanned services� Create a Service Entry Sheet� Post an invoice for external services using Logistics Invoice

Verification (LIV)

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Unit ContentsLesson: The Procurement Process and Master Data in ExternalServices .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .449

Demonstration: Displaying Master Data for Services... . . . . . . . . . . . . . . .456Procedure: Maintaining Master Data for Services ... . . . . . . . . . . . . . . . . . .458Demonstration: Purchase Order for Services .. . . . . . . . . . . . . . . . . . . . . . . . .458Demonstration: Service Entry Sheets ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .460Demonstration: Second Entry Sheet... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .461Procedure: Creating a Service Entry Sheet... . . . . . . . . . . . . . . . . . . . . . . . . . .463Demonstration: Invoice Verification for Services .. . . . . . . . . . . . . . . . . . . . . .464Exercise 20: External Services Purchase Order and Service EntrySheets.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467

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LO020 Lesson: The Procurement Process and Master Data in External Services

Lesson:364

The Procurement Process and Master Data in ExternalServicesLesson Duration: 2 Hours

Lesson OverviewThis lesson covers the master data involved in creating a service purchaseorder, creating the purchase order with unplanned value limits, creatingservice entry sheets, and entering an invoice for services.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Describe the basic steps in the procurement of external servicesprocess

� Name the most important master data used in the procurement ofexternal services

� Display a service master record� Display service conditions for vendor� Create a Purchase Order for a service item� Apply value limits for unplanned services� Create a Service Entry Sheet� Post an invoice for external services using Logistics Invoice

Verification (LIV)

This unit aims at giving the participants a brief overview of a procurementprocess for external services. It was decided to include this unit in orderto transmit a basic understanding of the three key procurement cyclevarieties supported by SAP. Further instruction is given in LO540.

Business ExampleYour company occasionally requires small maintenance tasks, such aschanging defective lights, to be carried out by external contractors.

You need to maintain a service master record and apply special pricingconditions for the external contractors.

You will then create a purchase order for a service item.

As you are unaware of the exact costs of some of these occasionalmaintenance tasks, you will want to apply a value limit for unplannedservices.

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Finally the contractor invoices you for the services performed.

External ServicesThe procurement cycle for external services is similar to the cycle formaterials. There are some differences in procuring services, and these willbe addressed in this lesson.

Figure 146: Procurement of External Services Cycle

Procurement of External Services Cycle

� Walk through the cycle, describing each step with a simple example.� Note the link to Plant Mainstream (PM) and Project System (PS). (See

appendix for brief demos of PM and PS link to services.)� Note there is no link to Production Planning (PP) . (Subcontract type

PO is used for this purpose.)� Point out that service specifications, service entry, and service

acceptance are similar but not the same steps as in the materialprocess.

A service master record contains a service description and a unit ofmeasure, for example, hour.

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Figure 147: Service Master Record

You can assign a price to each service master record via the conditions.This data can be obtained from various SAP applications.

Service Master Record

Service masters are used to create requisitions in several applications. Theyare very simple compared to the material master and its multiple views.

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Figure 148: Defining Price via Master Conditions

There are several ways of storing long-term prices for services in the formof service conditions:

� At the service level (market price/own estimate)� At the service and vendor level� At the service, vendor, and plant level

Prices stored in the system are automatically proposed in servicespecifications.

Defining Price via Master Conditions

Master service conditions are prioritized from most specific (service,vendor, and plant) to most general (service). On the left side of the slide,service conditions appear as default values for requisitions. On the rightside, conditions with service, vendor, and purchasing organization orservice, vendor, purchasing organization, and plant appear as defaultvalues for a PO.

Note: using Service Conditions→ Other in the menu gives you additionalchoices, such as conditions for a service with or without a purchasingorganization.

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Figure 149: Stock Material vs. Services

Stock materials are subject to inventory management, whereas services areprocured for direct consumption.

In addition to the other account assignment categories, you can usethe account assignment category U (unknown) for service items, as theaccount assignment is often not yet definite when the services are ordered.

When you procure materials, you already know a lot of information, suchas the exact order quantity.

When you procure services, however, you often do not yet know the exactservice description or the order quantity (for example, when a printingpress needs repair, you do not know whether the vendor just needs toadjust settings or whether he or she has to replace parts).

You often do not know how long it will take or can only give an estimate.To control the costs, you can define value limits.

Stock Material vs. Services

The printing press example in the bullets is a good example of thedifferences between the measurable purchase of materials versus theunknown quantity and value of services and supplies. Give anotherexample, such as ordering the lumber for a house versus paying acontractor an hourly rate to build it.

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Purchasing Document LayoutMaterials are procured at item level, but services are procured below itemlevel. The item type D activates the service functions and controls orallows you to create service specifications.

Figure 150: Purchasing Document Layout

An item contains a short text, which is a general description of what youintend to procure. The service specifications are an exact description ofthe service.

Purchasing Document Layout

Emphasize that a major feature is the use of the sub-item level to enterany combination of:

� Service master records� Outlines containing service master records� Value limits if the service is not yet determined

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Figure 151: Service Specifications in the Purchasing Document

You can format complex service specifications clearly using outline levels.You can assign any number of service lines to each outline level. Workthat is not contained in the outline or service lines cannot be covered withvalue limits for unplanned services.

Service Specifications in the Purchasing Document

This slide describes the four levels of outline and unplanned services. Thenotes are not repeated, so discuss them here.

The next two steps of the process, which we will discuss later, are theservice entry sheets and invoice verification.

Purchase Order HistoryThe purchase order history lists all the follow-on activities for a particularpurchase order; that is, all services that have been performed, entered, andwritten off, and all invoices that have been entered.

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Figure 152: Purchase Order History

The purchase order history lists the service entry sheet apart from theresulting GRs. An accepted entry sheet is listed as GR.

Demonstration: Displaying Master Data for Services

PurposeDisplay the required master data for use on an external services PO.

System DataSystem:Client:User ID:Password:Set up instructions: This part of the demo will take approximately 5minutes.1. Display service masters, T-LM120 and T-LM220. Choose Logistics→

Materials Management → Service Master → Service → Service Master→ Display.

Show Basic Data and Long Text.

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2. Display conditions for a vendor without plant. Choose Logistics →Materials Management→ Service Master→ Service→ Service Conditions→ For Vendor Without Plant → Display.

Vendor T-K12E20 has conditions set up for these two services.

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370Maintaining Master Data for Services

1. Follow the menu path for creating a service master: Logistics →Materials Management → Service Master → Service → Service Master→ Create .

2. Fill in the required fields at the top of the screen.

Figure 153:

3. Fill in the Basic Data tab and optionally the Long Text tabs.

4. Save your new service.

Demonstration: Purchase Order for Services

PurposeDemonstrate a service procurement purchase order using the servicemaster just displayed.

System DataSystem:Client:User ID:Password:

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Set up instructions: This part of the demo should take approximately10 minutes.1. Use vendor T-K12E20.

2. Put in the following data for the line item:

� Account Assignment = U� Item Category = D� Short text = Fluorescent light maintenance

Everything else, including Material Group 007 should appearas default values.

3. In the Item Detail section, point out the two new tabs: Services andLimits.

4. In the Services tab, enter service number T-LM120, quantity 100, andT-LM220, quantity 100. The prices should appear as default values.

5. In the Limits tab, set limits for unplanned services as 1000 UNI overalland 300 UNI as the expected value.

6. Explain that the overall limit is the tolerance value. You cannot enterunplanned services beyond that amount in the service entry sheetwithout a warning or an error message. The expected value is usedfor approval limits and is added to the planned services to displayin the line item net price above.

7. Save the PO.

Service Entry and AcceptanceThe system stores services that have been performed in service entrysheets. The relevant postings are made in Financial Accounting and CostAccounting when the service entry sheets are signed off. Service entrysheets can be entered and signed off in one transaction or in two steps.

When entering services, you reference the purchase order. You can copyplanned services directly from the purchase order into the service entrysheet. You do not give an exact description of unplanned services or theirquantity and price details until you enter them. The system checks whetherthe unplanned services adhere to the limit defined in the purchase order.

You can set up release procedures for service entry sheets.

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Figure 154: Service Entry and Acceptance

Service Entry and Acceptance

If a release procedure does not apply, the service entry sheet needs to beaccepted before the GR and accounting documents are created. This can bedone at the same time you are creating the Service Entry document.

Demonstration: Service Entry Sheets

PurposeShow the creation of a service entry sheet for a service item on the PO.

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Materials Management → Service Entry Sheet →

Maintain.

2. Select Other Purchase Order and choose your service PO.

3. Select the Create icon.

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4. Enter header Short Text as Phase one of bulb maintenance.

5. In the Basic Data tab, enter K for account assignment and any numberfor the External number.

6. At the bottom of the screen, choose the Serv. Selection button. Yourown PO should appear as a default value in the selection dialog box.Accept it.

7. Choose only the first line item T-LM120 to copy to the service entrysheet.

8. You will get a dialog box for the cost center. Use T-L20.

9. Change the service quantity to 60.

10. Before saving, click the green acceptance flag icon.

The posting of invoices for external services is dependent upon the servicebeing approved.

Next we will input another service entry sheet for the same PO, this timewith an unplanned service with no service master, and then enter aninvoice to cover both entry sheets.

Demonstration: Second Entry Sheet

PurposeFinish the work remaining on the PO, plus enter unplanned services thathave no service master.

System DataSystem:Client:User ID:Password:Set up instructions:1. Repeat the menu path to create a new entry sheet. Use your same

purchase order number.

2. For the header short text, type Phase two of bulb maintenance.

3. The Basic Data tab is the same as before.

4. When you select services from your PO this time, select both lines.

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5. Again use Cost Center T-L20. Click the Auto Rpt. on AA button, sothat T-L20 will be copied to the next line items as well.

6. Add a third line of services by writing in the Short Text Replacedefective bulbs. Make the quantity 2, and the price 75 UNI.

7. Approve and save, but stay in the maintenance screen.

8. Display your PO from the Entry Sheet via the Display icon nearyour PO number at the top, and look at the history tab for item 10.

9. Comment on the fact that the service entry sheets produce goodsreceipts for the effects of PO history. There is no financial posting(and no GR document) until the service entry sheets are accepted.

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372Creating a Service Entry Sheet

1. Choose Logistics → Materials Management → Service Entry Sheet →Maintain.

Figure 155:

2. Select Other Purchase Order and choose your service PO.

3. Select the Create icon.

4. Enter a short header text. (required)

5. In the Basic Data tab, enter an account assignment and the Externalnumber.

6. At the bottom of the screen, choose the Serv. Selection button. Yourown PO should appear as default values in the selection pop-up.Accept it.

7. Choose the desired line items and copy them to the service entrysheet.

8. You will get a pop-up box for the cost center.

9. Change the service quantity as necessary.

Continued on next page

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10. Add unplanned services if there are any. Remember to use the shorttext description if there is no service master for this added service.

11. Approve and save, or if you do not have approval authority, simplysave.

Figure 156: Invoice Verification for Entry Sheet

The invoice verification procedure is carried out with reference to thepurchase order. This means that all service entry sheets accepted for thispurchase order are suggested for invoice verification.

The system compares the prices on the invoice with the prices from theservice entry sheets. If there are no discrepancies, you can enter and postthe invoice. If the system finds any discrepancies, it blocks the invoicefor payment.

Demonstration: Invoice Verification for Services

PurposeShow how to do Invoice Entry for services and point out the differencesfrom Invoice Entry for materials.

System DataSystem:Client:User ID:

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Password:Set up instructions:1. Choose Logistics → Materials Management → Logistics Invoice

Verification → Document Entry → Enter Invoice.

2. The transaction is left at the default Invoice.

3. Enter today�s date, any number for the reference to the vendor�sinvoice, and an amount equal to 1650.00 UNI, tax 150.00 UNI.

4. There is a choice to select the PO number or the Entry Sheets to bepaid. If you plan to pay everything at once, it is most efficient tochoose entering for the purchase order.

If you plan to pay for only one Entry Sheet, for example, then choosethe Service entry sheet type of document and select the one you wantto pay. The short text search is a convenient way to find the right one.

5. Choose the PO selection and pay for all the entry sheets at once.

6. Display the PO once more and show the invoice document in POhistory.

7. Double-click on the invoice number, and show the resulting FIdocument via the Follow-on Documents button.

The students will now do an exercise that involves displaying the masterdata, creating a service PO, entering service entry sheets, and doing InvoiceEntry. In this exercise they will do the entire cycle to get an uninterruptedfeel for the procurement flow.

Allow one hour for the exercise.

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375 Exercise 20: External Services PurchaseOrder and Service Entry SheetsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Confirm the external services master data� Create an external services purchase order� Maintain and release a service entry sheet

Business ExampleYour company needs to purchase external services for changing defectivelights throughout the plant.

After an external contractor has performed a task, such as changing thedefective lights, and confirmed that the work is complete, the work mustbe approved.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1:Display a service master record

1. Display the service master records T-LM1## (taking down offluorescent tubes) and T-LM2## (delivering of newfluorescent tubes).

Write what is in the long text for each of the services.

In which unit of measure are the services managed?

Continued on next page

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Task 2:Display conditions for vendor master records

Task 3:Create a purchase order

1. Create a purchase order for plant 1000 with vendor T-K12E## forexchanging the lamp ballast.

In the item overview, enter a relevant short text that generallydescribes your service specifications.

Do not forget to choose the appropriate item category D and materialgroup 007 for services.

Because you do not know who will be debited for the goods whenyou order them, you use account assignment category U.

Next maintain the services T-LM1## and T-LM2## on the Servicestab in the item detail area of the screen. Maintain the limit on theLimits tab.

Both services are required in plant 1000 in quantities of 100pieces. Make sure to include an overall limit for unplanned servicesof 200 UNI. The expected value is the same as the amount of theoverall limit. Write down the purchase order number.

Task 4:Service entry and acceptance

1. The service provider T-K12E## sends you a service entry sheet forthe first stage of work. In the service entry sheet, the vendor hasspecified that 60 pieces of each service have been performed.

Maintain the service entry sheet in the system and reference yourservice purchase order from the previous task.

Enter the following short text for the description of the service entrysheet: Service entry stage 1.

Cost center T-L## will be debited for this procurement transaction.

The number of the entry sheet from the service provider is 4700##.

Create the service entry sheet and accept the service at the same time.Write down the document number.

Continued on next page

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Task 5:Service entry and acceptance stage two

1. After finishing stage two of the planned services, the contractorinvoices you for the performed services #.

First the service provider sends you the service entry sheet for thesecond stage. Enter the remaining 40 pieces of your planned services.

The service entry sheet has the description Service entry stage2. The external service provider manages the entry sheet under thenumber 4800##.

The account assignment is the same as in Service acceptance stage 1.

During the renovation work in the second stage, the service providerfinds that two fluorescent tubes are defective and have to be replaced.After authorization from you, the damage is repaired. Enter thereplacement of the two fluorescent tubes as unplanned servicesat a value of 75 UNI per piece.

Hint: Note that a service master record has not been createdfor this service.

Enter the unplanned service and create a short text for it, as there isno service master to use. Enter the planned services and accept theservice entry sheet.

Write down your document numbers.

Document NumbersField DataEntry sheet doc. numberAcceptance doc. number

Task 6:Enter the vendor invoice

1. Enter the following invoice for your purchase order. Take data fromthe sample invoice printed. Note that you can choose only serviceentry sheets that have already been accepted.

Post the document and write down the invoice document number.

Continued on next page

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Unit 6: Procurement of External Services LO020

Figure 157:

Document Number

Field DataInvoice doc. number

Task 7:Check follow-on activities for the purchase order

1. Go to the purchase order history for your service item.

How many service entry sheets already exist?

Which of the service entry sheets have already been accepted?

Is there an FI document for the service entry sheets that have beenaccepted?

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LO020 Lesson: The Procurement Process and Master Data in External Services

Solution 20: External Services PurchaseOrder and Service Entry SheetsTask 1:Display a service master record

1. Display the service master records T-LM1## (taking down offluorescent tubes) and T-LM2## (delivering of newfluorescent tubes).

Write what is in the long text for each of the services.

In which unit of measure are the services managed?

a) Follow the menu path Logistics→Materials Management→ ServiceMaster→ Service→ Service Master→ Screen button Long Text.

b) The first service has the long text �including correct wastedisposal.�The second service has the long text �58 watts, color:warm white, including installation. �Both services are managedin the unit of measure pc (piece).

Task 2:Display conditions for vendor master records

Task 3:Create a purchase order

1. Create a purchase order for plant 1000 with vendor T-K12E## forexchanging the lamp ballast.

In the item overview, enter a relevant short text that generallydescribes your service specifications.

Do not forget to choose the appropriate item category D and materialgroup 007 for services.

Because you do not know who will be debited for the goods whenyou order them, you use account assignment category U.

Next maintain the services T-LM1## and T-LM2## on the Servicestab in the item detail area of the screen. Maintain the limit on theLimits tab.

Both services are required in plant 1000 in quantities of 100pieces. Make sure to include an overall limit for unplanned servicesof 200 UNI. The expected value is the same as the amount of theoverall limit. Write down the purchase order number.

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Unit 6: Procurement of External Services LO020

a) Follow the menu path Logistics → Materials Management →Purchasing→ Purchase Order→ Create→ Vendor/Supplying PlantKnown.

b) Enter the following data:

Initial EntryField DataVendor T-K12E##

Org. DataField DataPurch. organization 1000

Purchasing group T##

Item OverviewField DataAcct assgmt cat. U

Item category D

Short text (any entry)

Material group 007

Plant 1000

Services Tab

Field DataLine 10 Service no. T-LM1##

Qty 100

Price 4.50 Uni

Line 20 Service no. T-LM2##

Qty 100

Price 9.00 Uni

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LO020 Lesson: The Procurement Process and Master Data in External Services

Limits TabField DataOverall limit 200

Expected value 200

Field DataDocument number 450000____

Task 4:Service entry and acceptance

1. The service provider T-K12E## sends you a service entry sheet forthe first stage of work. In the service entry sheet, the vendor hasspecified that 60 pieces of each service have been performed.

Maintain the service entry sheet in the system and reference yourservice purchase order from the previous task.

Enter the following short text for the description of the service entrysheet: Service entry stage 1.

Cost center T-L## will be debited for this procurement transaction.

The number of the entry sheet from the service provider is 4700##.

Create the service entry sheet and accept the service at the same time.Write down the document number.

a) Logistics → Materials Management → Service Entry Sheet →Maintain

b) Use the document preview to choose your service purchaseorder.

The screen displays the PO document number.

Field DataPO Document number 450000____

Choose Entry Sheet→ Create→ Empty Page, or use Create .

Header DataField DataShort text Service entry stage 1

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Unit 6: Procurement of External Services LO020

Basic Data TabField DataAcct assgmt cat. K (cost center)

External number 4700##

Instead of entering service entry items manually, you can choosethe copy function Serv. Selection button at the bottom of thescreen to copy the required data directly from the purchase order.

From the Service Selection dialog box, select your PO and selectEnter.

From the PO screen, Select Services as Reference, choose lineitems 10 and 20, then select the icon Services (adopt services).

A dialog box will prompt you for the cost center to be chargedfor line 10. Fill in T-L##. The same thing will happen for line20. Fill in T-L## again.

Change the quantities for both lines 10 and 20 to 60 pcs per line.

Choose the acceptance button, the green flag icon, and proceed.

The stop light will change from red to yellow. After you save thedocument, it will change to green.

Field DataService doc. number 1000000__

Acceptance doc. number 50000000__

Task 5:Service entry and acceptance stage two

1. After finishing stage two of the planned services, the contractorinvoices you for the performed services #.

First the service provider sends you the service entry sheet for thesecond stage. Enter the remaining 40 pieces of your planned services.

The service entry sheet has the description Service entry stage2. The external service provider manages the entry sheet under thenumber 4800##.

The account assignment is the same as in Service acceptance stage 1.

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LO020 Lesson: The Procurement Process and Master Data in External Services

During the renovation work in the second stage, the service providerfinds that two fluorescent tubes are defective and have to be replaced.After authorization from you, the damage is repaired. Enter thereplacement of the two fluorescent tubes as unplanned servicesat a value of 75 UNI per piece.

Hint: Note that a service master record has not been createdfor this service.

Enter the unplanned service and create a short text for it, as there isno service master to use. Enter the planned services and accept theservice entry sheet.

Write down your document numbers.

Document NumbersField DataEntry sheet doc. numberAcceptance doc. number

a) Proceed as you did in the first entry sheet.b) Change the quantity of the planned services to 40 pieces.c) Maintain a third line in the service entry sheet for the unplanned

service with the short text �Exchange fluorescent tubes�.

d) The quantity is 2 pieces at 75 UNI per piece.e) Accept and save the service entry sheet. Make a note of the

document numbers.

Document NumbersField DataEntry sheet doc. number 10000000__

Acceptance doc. number 50000000__

Task 6:Enter the vendor invoice

1. Enter the following invoice for your purchase order. Take data fromthe sample invoice printed. Note that you can choose only serviceentry sheets that have already been accepted.

Post the document and write down the invoice document number.Continued on next page

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Figure 158:

Continued on next page

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LO020 Lesson: The Procurement Process and Master Data in External Services

Document NumberField DataInvoice doc. number

a) Logistics→Materials Management → Logistics Invoice Verification→ Document Entry → Enter Invoice

b) Enter the following on the Enter invoice screen:

Enter Invoice Screen

Field DataDocument date Current date

Posting date Current date

Reference RE-E1##

Amount 1650

Tax amount 150

Purchasing doc. (PO number from yourservice PO creation)

c) Post the document and write down the document number.

Document NumberField DataDocument number 51056_____

Task 7:Check follow-on activities for the purchase order

1. Go to the purchase order history for your service item.

How many service entry sheets already exist?

Which of the service entry sheets have already been accepted?

Continued on next page

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Is there an FI document for the service entry sheets that have beenaccepted?

a) Two service entry sheets are under category LERF.b) There are two acceptance documents under category WE.c) Yes, there is one that separately references the two accepted

line items under category RE-L.d) Logistics→Materials Management→ Purchasing→ Purchase Order

→ Display

Item Details, Purchase Order History tab.

There is an accounting document because the system updatesthe accounts in FI as a result of the service acceptance. Thesystem also creates a controlling document that debits theaccount assignment object. Secondly, there is another accountingdocument when the invoice is entered.

e) To see the documents involved, select the invoice receiptdocument in PO History.

f) Now select the �Follow-on documents� button in the invoicedocument display.

g) In the dialog box, select the �Accounting document� reference.This will show the FI document that was the result of this invoice.

h) Now go back to PO History and select one of the category WEdocuments.

i) In the Header data section of this document there is a tab calledDoc. info. Choose this tab and then select the button for �FIdocmts�.

j) Select the �Accounting document� reference. This shows the FIdocument that resulted from service entry acceptance beforethe invoice was entered.

k) Back out of the accounting document and take note of the �Costaccounting document� in the dialog box. This is the controllingdocument that debits the account assignment object, cost centerT-L##.

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LO020 Lesson: The Procurement Process and Master Data in External Services

Lesson Summary

You should now be able to:� Describe the basic steps in the procurement of external services

process� Name the most important master data used in the procurement of

external services� Display a service master record� Display service conditions for vendor� Create a Purchase Order for a service item� Apply value limits for unplanned services� Create a Service Entry Sheet� Post an invoice for external services using Logistics Invoice

Verification (LIV)

Related InformationLO540 will give you a more detailed understanding of what ExternalServices Procurement can do in the R/3 System.

For SAP documentation, refer to the following in the SAP Library. Go tohttp://help.sap.com, and follow the menu paths below:

� SAP R/3 → appropriate release → appropriate language → Logistics→ Materials Management (MM) → External Services Management(MM-SRV)→ Procurement of Services: Processes→Master Records fromthe ESM View → Service Master Record.

Maintaining Service Specifications in Purchasing Documents: SAPR/3→ appropriate release→ appropriate language→ Logistics→MaterialsManagement (MM) → External Services Management (MM-SRV) →Procurement of Services: Processes→ Entry of Services Performed.

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Unit Summary LO020

Unit SummaryYou should now be able to:� Describe the basic steps in the procurement of external services

process� Name the most important master data used in the procurement of

external services� Display a service master record� Display service conditions for vendor� Create a Purchase Order for a service item� Apply value limits for unplanned services� Create a Service Entry Sheet� Post an invoice for external services using Logistics Invoice

Verification (LIV)

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LO020 Test Your Knowledge

389Test Your Knowledge

1. Name three pricing levels available for setting up service conditions.

2. Which of the following codes makes your PO uniquely a service PO?Choose the correct answer(s).□ A Account Assignment U□ B Document Type NB□ C Item Category D□ D Service-designated Vendor

3. The system will not allow you to pay more than the expected valueon unplanned services.Determine whether this statement is true or false.□ True□ False

4. You can enter an invoice for external services, even if the service entrysheet has not been approved.Determine whether this statement is true or false.□ True□ False

5. Name the two different internal documents you can reference duringinvoice entry.

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Test Your Knowledge LO020

6. Once you have entered an invoice for an external services PO, whatthree types of documents will you find on the PO history tab?

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LO020 Test Your Knowledge

391Answers

1. Name three pricing levels available for setting up service conditions.

Answer: No Vendor/No Plant, Vendor/No Plant, Both Vendor andPlant.

2. Which of the following codes makes your PO uniquely a service PO?

Answer: C

Item category D alerts the system that this is a service PO. When youindicate a line item with category D, the system automatically addstwo tabs, Services and Limits, to the item detail section of that line.

3. The system will not allow you to pay more than the expected valueon unplanned services.

Answer: False

The expected value limit is used for approval purposes. The overallvalue is for system control, depending on whether you haveconfigured the threshold to give you a warning or an error.

4. You can enter an invoice for external services, even if the service entrysheet has not been approved.

Answer: False

There must be approval, even if you do not have a formal approvalprocess in place.

5. Name the two different internal documents you can reference duringinvoice entry.

Answer: You can reference either the purchase order or the serviceentry sheet.

6. Once you have entered an invoice for an external services PO, whatthree types of documents will you find on the PO history tab?

Answer: There are three types of documents that will alwaysbe present: a goods receipt document (type WE), a service entrydocument (type Lerf), and an invoice receipt document (type RE-L).

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Unit 7393 Automated Procurement

This unit is a �mini� view of LO520�s presentation of automatedprocurement. Most students should be encouraged to take LO520 in thenear future.

Unit OverviewAdditional master data and the effect of contracts on automating theprocurement process are highlighted in this unit. MRP uses this additionalinformation to do automatic sourcing on MRP-generated requisitions.The automatic generation of purchase orders from these requisitions isdemonstrated.

For purposes of accuracy, shipping notifications can be issued by thevendor to update the system with the latest delivery dates and quantities.This unit shows how this effects both the stock/requirements list and theactual goods receipt.

Finally, evaluated receipt settlement (ERS), which eliminates a great dealof manual paper work in invoice entry, will be presented.

Unit ObjectivesAfter completing this unit, you will be able to:

� Enter the materials planning data for a material procured on aconsumption-driven basis using reorder point planning

� Create a quantity contract and enter it in the source list as a fixedsource of supply

� Display the current stock/requirements list for a material� Carry out a single-item planning run for a material and display the

result� Create purchase orders automatically� Enter a shipping notification for a purchase order� Enter a goods receipt with reference to the shipping notification

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� Start the program for evaluated receipt settlement online� Identify how the entry of the invoice affects the purchase order history

Unit ContentsLesson: Automated Procurement, Master Data and Contracts.. . . . . . . . . .487

Demonstration: Material Master and Vendor Master Data .. . . . . . . . . . .491Demonstration: Contract Maintenance .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .496Procedure: Creating a Quantity Contract .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .499Exercise 21: Master Data and Contracts... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .505

Lesson: Material Requirements Planning and Generation of PurchaseOrders ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .517

Demonstration: Requirements Planning with Source Determination 530Exercise 22: Single-Item Planning and Automatic Generation ofPurchase Orders.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .533

Lesson: Shipping Notification and Goods Receipt . . . . . . . . . . . . . . . . . . . . . . . . .541Demonstration: Shipping Notification and Goods Receipt .. . . . . . . . . . .543Exercise 23: Shipping Notification and Goods Receipt .. . . . . . . . . . . . . .545

Lesson: Evaluated Receipt Settlement (ERS) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .551Demonstration: Invoice Processing Using ERS ... . . . . . . . . . . . . . . . . . . . . .556Exercise 24: Evaluated Receipt Settlement .. . . . . . . . . . . . . . . . . . . . . . . . . . .559

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LO020 Lesson: Automated Procurement, Master Data and Contracts

Lesson:395

Automated Procurement, Master Data and ContractsLesson Duration: 1.5 Hours

Lesson OverviewAutomated Procurement focuses on the automation of the procurementprocess. It describes how purchase requisitions are created automaticallyby MRP and assigned to valid sources of supply via source list entries,being then automatically converted to purchase orders. The unit laterexplains the use of delivery notes for purchase orders and the subsequentcreation of goods receipts with reference to delivery notes. The final lessonincludes an invoice creation via automatic receipt settlement.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Enter the materials planning data for a material procured on aconsumption-driven basis using reorder point planning

� Create a quantity contract and enter it in the source list as a fixedsource of supply

For teaching purposes, the previous units focused on manually processingeach step of the procurement process. However, participants should notget the impression that everything has to be done manually. This unit willenable participants to automate the procurement process. The unit doesnot aim to provide a complete overview of all the options available forsimplifying and accelerating the procurement process. Based on selectedexamples, it demonstrates that there are ways of simplifying the process,although it does not cover all the alternatives nor explain in detail some ofthe individual functions that are used during the unit. You should makethis clear to participants before starting the unit.

Business ExampleAs a member of the project team, you need to identify ways of automatingcertain procurement processes.

The project team needs to determine what control parameters for MRP areavailable in the R/3 System.

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Automated Procurement: OverviewIf the material master record has been maintained accordingly, MaterialsPlanning can create purchase requisitions automatically. If source lists withvalid sources of supply exist, the system automatically assigns sources ofsupply to the items in the purchase requisitions, based on the source list.

Figure 159: Automated Procurement: Overview

The system can automatically convert purchase requisitions to purchaseorders if sources of supply are assigned to the requisitions. TheAutomatically generated purchase order indicator must also be set in thematerial master record and vendor master record.

In the purchase order, you can enter that you expect an orderacknowledgement or shipping notification from the vendor. If you haveentered a shipping notification, you can reference it when you post thegoods receipt.

In evaluated receipt settlement (the ERS procedure), the vendor does notsend invoices. Instead, the R/3 System creates the invoice from the datain the purchase order and the goods receipt. The vendor�s permissionmust be given to use the ERS procedure. The indicator to allow it is inthe vendor master record.

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Automated Procurement: Overview

To automatically convert purchase requisitions to purchase orders, thefollowing criteria must be fulfilled:

� You have to allow automatic purchase orders for each material andvendor. You therefore have to set the indicator for automatic purchaseorders in the Purchasing view of the material master record andvendor master record.

� The items in the purchase requisition must have a valid source ofsupply.

� You can carry out the function online or in the background.

Acknowledgements are sent by the vendor to inform customerswhen ordered materials are expected to arrive (for example, orderacknowledgements, loading or transport confirmations, and shippingnotifications).

If you do not use acknowledgements, Materials Planning can go only by thedelivery dates and quantities in the purchase order. Acknowledgementsenable you to plan more accurately by providing you with updateddelivery dates and quantities.

You cannot process planned delivery costs with the ERS procedure.

In Logistics Invoice Verification, you can create a message for the vendor.

Master DataThe materials planning view of your material must define the procedureyou want to use to plan its requirements and other necessary MRP data.

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Figure 160: Material Master, MRP 1

Figure 161: Material Master, MRP2

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LO020 Lesson: Automated Procurement, Master Data and Contracts

Demonstration: Material Master and Vendor MasterData

Purpose

Enter the appropriate planning data for material procured on aconsumption-driven basis.

System DataSystem: Use the R/3 system assigned for this class.Client: Use the client assigned for this class.User ID: Instructor�s user ID, LO020�## (usually 20)Password: Create your own password.Set up instructions: Use the material and vendor you have used inclass so far: Material T-HM120, and Vendor T-K12C20.

(Alternately you can create a new material master , material type ROH,by copying LO020�ROH. Call the new material MRP-ROH.) Maintainviews Purchasing, MRP 1, MRP 2, and Accounting 1 in plant 1000. Demoshould take about 15 minutes.

1. If the MRP 1 and MRP 2 views are not yet created for T-HM120 ,go toMaterial→ Create → Immediately and choose those two screensfor plant 1000.

2. On MRP 1, fill in the following fields with the corresponding data:

� MRP type = VB� Re-order point = 100� MRP controller = 020� Lot size key = FX� Fixed lot size = 500

3. On MRP 2, fill in the following fields with the corresponding data:

� Scheduling margin key = 000� Planned delivery time = 2 days

4. After saving your material, go back into the material master in thechange mode, choosing the Purchasing and the Accounting 1 viewsfor plant 1000.

5. In the Purchasing view, be sure the Automatic PO is selected.

6. In the Accounting 1 view make sure the Valuation class, the Pricecontrol, and the appropriate price fields have been maintained.

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7. Check the Vendor Master for vendor T-K12C20, Purchasing data viewto see if all the appropriate fields have been selected for automatedprocurement. The following fields should be selected:

� GR-based inv. verif.� AutoEvalGRSetmt.Del. (ERS)� Automatic purchase order

8. Display the planning file entries for your material in plant 1000.Choose Logistics → Materials Management → Material RequirementsPlanning (MRP)→MRP→ Planning→ Planning File Entry→ Display.

Explain that your material is there because the MRP view of thematerial master has been maintained.

9. Display the stock/requirements list for this material to see the currentavailability, before running MRP.

10. Carry out single-item, single-level planning (NECH, and createpurchase requisitions).

11. Display the planning file entries and the stock/requirements list againonce MRP has completed. Explain the result.

12. In the stock/requirements list, display the purchase requisitioncreated, paying particular attention to the block for procurementoptions on the item detail screen.

Point out that the system has not been able to assign a vendor becausethere is no source list, contract, or info record.

The system will search for an appropriate vendor in the accesssequence:

� Quota arrangement� Source list� Outline agreement� Purchasing info record

Mention that what we will do next is create a contract so that thesystem can do sourcing for our material.

ContractsContracts are outline agreements. They do not contain details of thedelivery dates for each of the items.

To inform vendors of which quantities you need for which date, you entercontract release orders for a contract. A release order is a purchase orderthat references a contract.

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LO020 Lesson: Automated Procurement, Master Data and Contracts

If an info record with conditions exists for the material and the vendor, thesystem automatically suggests the net price according to these conditionswhen you create the contract item.

Figure 162: Contracts

Types of ContractA contract is a long-term agreement with a vendor concerning the supplyof material or performance of services.

You can create contracts manually. When doing so, you can reference othercontracts, purchase requisitions, and RFQs or quotations.

One of the things you define in the contract header is the validity period.

For each item in a quantity contract, you define the target quantity andpurchase order conditions.

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Figure 163: Types of Contract

Types of Contract

Explain the main differences between a value contract (WK) and a quantitycontract (MK), with emphasis on the quantity contract.

Source ListIn the source list, you can define which sources of supply are allowed ornot allowed for a material in a particular plant.

You can also define fixed vendors or preferred outline agreements.

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LO020 Lesson: Automated Procurement, Master Data and Contracts

Figure 164: Source List

Processing Source ListsSource lists contain information on which sources of supply are definedfor a material in a plant within a particular period. A source of supply(vendor or outline agreement) can be selected as a fixed source of supply.You can also block a source of supply for a material.

In the material master record, you can define that a material is procuredonly for sources of supply that are valid in the source list (source listrequirement).

Source list entries are taken into account in automatic source determinationin Purchasing.

You can also maintain source lists when updating info records or outlineagreements.

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Figure 165: Processing Source Lists

Some tips on automatic processing of source lists follow:

� You can have the system automatically create a source list. Thisallows you to enter or update all of a material�s sources of supply.

� In this procedure, the system creates a source list record for each inforecord or outline agreement item.

� You can create a source list for several materials (collective procedure)or for an individual material (individual procedure).

� There is a preview function for creating source lists automatically.This allows you to simulate the effects of the source list creation.

� After update, the source lists can be restored to their original status.

Processing Source Lists

When creating source lists automatically, a source list record is createdfor each info record and each outline agreement item for one or morematerials.

Demonstration: Contract Maintenance

PurposeThis demo will show how to create a contract and how it will be used bythe system.

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LO020 Lesson: Automated Procurement, Master Data and Contracts

System DataSystem:Client:User ID:Password:Set up instructions: The data will be material T-HM120 and vendorT-K12C20 . Use purchasing organization 1000 and plant 1000.

Demo should take approximately 15 minutes.

1. Choose Logistics → Materials Management → Purchasing → OutlineAgreement → Contract → Create.

2. Create anMK contract for the material T-HM120 and vendorT-K12C20used in the previous demo. Use Purchasing Org. 1000 andPlant 1000. Backdate the validity start date to the first day of lastmonth. Set the end date as the last day of this year.

There will be a warning that the validity start period is in the past.Select Enter to accept the information.

3. Go to the item overview screen, Overview, and set the targetquantity at 10,000. Enter a net price of 10 UNI.

4. Go to the item conditions Conditions and maintain a price scalevia Goto, Scales.

5. Maintain the source list for this material in plant 1000. You cando this while creating the contract by selecting the line item andchanging screens via Item, Maintain Source List. Enter your contract asa fixed source of supply and set the source list record as relevant formaterials planning (MRP indicator 1) . Backdate the validity startdate to coincide with the contract.

6. Point out that the line item number 10 has transferred over to thesource list. Make sure the students understand that the contractnumber has not yet transferred to the source list because we will nothave a system assigned number until we do a Save.

7. Show an alternate way of creating a source list by going through themenu path and creating it manually. Choose Logistics → MaterialsManagement→ Purchasing→Master Data→ Source List→Maintain.

Using the material T-HM120 just added to the source list via thecontract, point out that the contract is now referenced in the sourcelist record.

8. Show the follow-on functions for the automatic generation ofsource lists via the menu path: Logistics → Materials Management →Purchasing → Master Data → Source List → Follow-On Functions →Generate.

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9. Display the stock/requirements list again for your material in plant1000. If you haven�t already done so, close the purchase requisitionfrom the earlier MRP run so you can run MRP again, this time with asource.

10. Carry out single-item, single-level planning for your material in plant1000. Choose purchase requisitions in the control parameters.

11. Save the planning run and display the MRP list. Put the header onand explain that the only time the MRP list and stock requirementslist are identical is immediately after MRP has been carried out. TheMRP list is a snapshot of the stock situation at the time of the planningrun, whereas the stock/requirements list is dynamic.

12. Double click on the requisition to see the fixed vendor. Select theDisplay icon to display the full requisition. In the item detail sectionunder the tab, Source of supply, you can see the contract numberassigned from the source list.

13. Explain the scheduling. The date displayed is the availability date ofthe material. To see the GR date, go to menu items: Settings,Settings,Deadln., Goods receipt date.

Note how the column date changes depending on how many GRdays are set in the Material Master for this material.

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401Creating a Quantity Contract

1. Logistics→Materials Management→ Purchasing→ Outline Agreement→ Contract → Create

2. Create a quantity contract by entering the appropriate vendor,agreement type MK, appropriate purchasing organization,purchasing group, and (if applicable) the plant on the initial screen.Select Enter .

Figure 166: Create Contract: Header Data

3. On the Header Data screen you will automatically get an errormessage regarding required fields. The validity end date is therequired field you need to maintain.

4. Click the Overview icon to get to the Item Overview screen.

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Figure 167: Create Contract: Item Overview

Input your material number, the target quantity, and a net price.

If you need to add various condition types to the price, select theConditions icon.

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Figure 168: Change Gross Price Condition (PB00): ConditionSupplements

5. On the conditions screen, the system will show as the Gross Pricewhatever you input as the Net Price on the item overview screen.

To modify the Gross Price by adding discounts, surcharges, freight,and so forth, choose a condition type and enter it in a free row belowthe gross price. The system will prompt you for an amount or apercentage, depending upon the condition type you choose.

6. To modify the Gross Price or any of the condition types based onquantities of scale, highlight the condition row to be modified, thenclick on the Scales icon (circled in the above screen).

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Figure 169: Change Gross Price Condition (PB00): Scales

7. TheFrom column refers to the threshold quantity that applies to therate. Here are two examples of using scales:

1. Gross Price � The more you buy, the lower the unit price. Oftenreferred to as �quantity breaks.� See the above screen.

2. Discount on Net � The more you buy, the higher the discount.See the screen below.

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Figure 170: Change Gross Price Condition (PB00): Scales Discount %on Net (RA00)

8. Save your contract.

It is now time for the class to do the exercise on Master Data and Contracts.Running MRP will be done in the next lesson. Allow 40 minutes.

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407 Exercise 21: Master Data and ContractsExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Enter the materials planning data for a material procured on a

consumption-driven basis� Create a contract and enter it in the source list as a fixed source of

supply

Business ExampleTo optimize MRP, maintain the materials planning data for a material inthe material master record. To make it easier to determine a source ofsupply, complete some contracts and define them in the system as fixedsources of supply.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1:Maintain materials planning data for a material

1. The material Ballbearing, cylindrical-## is used inproduction in plant 1000. Requirements of this material aredetermined automatically by MRP.

Display this material. Determine the material number via F4 help.

Also determine which views have already been maintained for thismaterial in plant 1000.

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Display MaterialField DataMaterial NumberCreated Views..................................

2. To which material type is this material assigned, and where do yousee this information in the material master?

Field DataMaterial typeWhere displayed

You can identify the material type operating supplies from thetitle bar.

Display the purchasing data for this material and determine whetherthe material is allowed for the �Automatically generated purchaseorder� function.

On the Purchasing tab page, in the General data section, data field Auto.PO is checked √ , so yes, this material is allowed for the automaticallygenerated PO.

CreateMRP data (MRP 1 and 2) for this material in plant 1000. Takeinto account the following information:

Requirements are planned for the material using the manual reorderpoint procedure.

MRP controller 0## is responsible for this material.

The reorder point is 100 pieces.

A fixed lot size of 300 pieces is procured as required.

The standard delivery time is 7 days, and GR processing, whichincludes QI, takes 1 day.

MRP1 Data

Field DataMRP typeMRP Controller

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Field DataReorder PointLot size techniqueFixed lot size quantity

MRP2 DataField DataDelivery timeGR processing time

Task 2:Check the vendor master record

1. In the future, your ballbearing is to be procured by contract from thecompany CEB Berlin GR.##. You have planned to automate theprocurement process for this vendor and want to convert purchaserequisitions into purchase orders automatically. You have alsoarranged with the vendor that you settle deliveries automatically.

Ensure that the relevant control data has been maintained in thevendor master record for purchasing organization 1000.

Record the relevant indicator fields and how your vendor is set.

Vendor Master Purchasing IndicatorsField Data

Task 3:Create a contract

1. Your Purchasing department has arranged a quantity contractwith vendor CEB Berlin Gr.## (T-K12C##) for the materialBallbearing, cylindrical-## (T-HM1##).

Create a contract for your material with this vendor using purchasingorganization 1000, plant 1000, and purchasing group T##.

The validity period for this contract begins the first day of theprevious month and lasts till the end of next year.

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The target quantity is 100,000 pieces, for a price of 10 UNIper piece.

On the detail screen for the contract item, enter the confirmationcontrol key T-LA, the InfoUpdate code of C, and the Tax code 1I(Input tax 10%).

Hint: Unlike the basic indicator for order acknowledgementrequirement, the confirmation control key allows you toconfigure the types of order acknowledgements you expectand which rules are valid for each. The key T-LA in thetraining system is set up in such a way that you cannot post agoods receipt unless you have received a shipping notification.

Document NumberField DataContract number

Task 4:Maintain a source list

1. You procure the material T-HM1## via contract release orders foryour contract with vendor T-K12C##.

Create a source list record for this contract and this material in plant1000.

In the source list record, enter the same validity period as that inthe contract.

The contract is to be the fixed source of supply for purchasingorganization 1000.

The contract should also be taken into account by Materials Planning.Save your data.

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Solution 21: Master Data and ContractsTask 1:Maintain materials planning data for a material

1. The material Ballbearing, cylindrical-## is used inproduction in plant 1000. Requirements of this material aredetermined automatically by MRP.

Display this material. Determine the material number via F4 help.

Also determine which views have already been maintained for thismaterial in plant 1000.

Display MaterialField DataMaterial NumberCreated Views..................................

a) Logistics→Materials Management→ Material Master →MaterialDisplay → Display Current

b) The screen displays the following data:

Display Material

Field DataMaterial Number T-HM1##

Created Views Basic data, Purchasingdata, Accounting data,Plant Stock

2. To which material type is this material assigned, and where do yousee this information in the material master?

Field DataMaterial typeWhere displayed

You can identify the material type operating supplies from thetitle bar.

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Display the purchasing data for this material and determine whetherthe material is allowed for the �Automatically generated purchaseorder� function.

On the Purchasing tab page, in the General data section, data field Auto.PO is checked √ , so yes, this material is allowed for the automaticallygenerated PO.

CreateMRP data (MRP 1 and 2) for this material in plant 1000. Takeinto account the following information:

Requirements are planned for the material using the manual reorderpoint procedure.

MRP controller 0## is responsible for this material.

The reorder point is 100 pieces.

A fixed lot size of 300 pieces is procured as required.

The standard delivery time is 7 days, and GR processing, whichincludes QI, takes 1 day.

MRP1 DataField DataMRP typeMRP ControllerReorder PointLot size techniqueFixed lot size quantity

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MRP2 DataField DataDelivery timeGR processing time

a) Logistics→Materials Management→ Material Master →Material→ Create (General) → Immediately.

b) Enter your material on the initial screen, then select view MRP1and MRP2. For organizational level, choose plant 1000

c) Enter the following data:

MRP1 DataField DataMRP type VB (Manual reorder

point planning)

MRP Controller 0##

Reorder Point 100

Lot size technique FX

Fixed lot size quantity 300

MRP2 DataField DataDelivery time 7

GR processing time 1

Task 2:Check the vendor master record

1. In the future, your ballbearing is to be procured by contract from thecompany CEB Berlin GR.##. You have planned to automate theprocurement process for this vendor and want to convert purchaserequisitions into purchase orders automatically. You have alsoarranged with the vendor that you settle deliveries automatically.

Ensure that the relevant control data has been maintained in thevendor master record for purchasing organization 1000.

Record the relevant indicator fields and how your vendor is set.

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Vendor Master Purchasing IndicatorsField Data

a) Logistics→Materials Management→ Purchasing→Master Data→Vendor → Purchasing → Change (Current)

b) On the initial screen, enter vendor T-K12C##, purchasingorganization 1000, and check the Purchasing data screen.

c) The indicators are in the Control data section of the screen:

Vendor Master Purchasing IndicatorsField DataGR-based inv. verif. √AutoEvalGRSetmt Del. √Automatic purchase order √

Task 3:Create a contract

1. Your Purchasing department has arranged a quantity contractwith vendor CEB Berlin Gr.## (T-K12C##) for the materialBallbearing, cylindrical-## (T-HM1##).

Create a contract for your material with this vendor using purchasingorganization 1000, plant 1000, and purchasing group T##.

The validity period for this contract begins the first day of theprevious month and lasts till the end of next year.

The target quantity is 100,000 pieces, for a price of 10 UNIper piece.

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On the detail screen for the contract item, enter the confirmationcontrol key T-LA, the InfoUpdate code of C, and the Tax code 1I(Input tax 10%).

Hint: Unlike the basic indicator for order acknowledgementrequirement, the confirmation control key allows you toconfigure the types of order acknowledgements you expectand which rules are valid for each. The key T-LA in thetraining system is set up in such a way that you cannot post agoods receipt unless you have received a shipping notification.

Document NumberField DataContract number

a) Logistics → Materials Management → Purchasing → OutlineAgreement → Contract → Create

b) Enter the data as shown in the following tables:

Create Contract: Initial ScreenField DataVendor T-K12C##

Agreement type MK

Purch. organization 1000

Purchasing group T##

Plant 1000

Header DataField DataValidity period start date First day of previous

month

Validity period end date 12/31 of next year

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Item Overview DataField DataMaterial T-HM1##

Target quantity 100000

Net Price 10

Item Detail Data

Field DataInfoUpdate C

ConfContrK T-LA

Tax code 1I

c) The system displays the contract number.

Task 4:Maintain a source list

1. You procure the material T-HM1## via contract release orders foryour contract with vendor T-K12C##.

Create a source list record for this contract and this material in plant1000.

In the source list record, enter the same validity period as that inthe contract.

The contract is to be the fixed source of supply for purchasingorganization 1000.

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The contract should also be taken into account by Materials Planning.Save your data.

a) Logistics→Materials Management→ Purchasing→Master Data→Source List → Maintain

b)

Maintain Source List: Initial ScreenField DataMaterial T-HM1##

Plant 1000

Maintain Source List: Overview ScreenField DataValid from First day of previous

month

Valid to 12/31 of next year

Agreement Your contract number

Itm 10

Fixed √MRP 1

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Lesson Summary

You should now be able to:� Enter the materials planning data for a material procured on a

consumption-driven basis using reorder point planning� Create a quantity contract and enter it in the source list as a fixed

source of supply

Related Information

� For further information on contracts, go to the SAP Library. You willsee the main menu for the SAP Portal. Use the following menu pathafter you have linked to the site below: SAP R/3→ appropriate release→ appropriate language → Logistics→Materials Management (MM)→Purchasing (MM-PUR)→ Outline Purchase Agreements with Vendors

http://help.sap.com

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LO020 Lesson: Material Requirements Planning and Generation of Purchase Orders

Lesson:419

Material Requirements Planning and Generation ofPurchase OrdersLesson Duration: 60 Minutes

Lesson OverviewAfter revisiting the stock/requirements list, the students will run asingle-item, single-level planning run, and then analyze the results in thestock/requirements list. MRP should create purchase requisitions for eachof the student�s materials. They will then run the Auto. PO program to seehow purchase orders are created by the systemwhen all the data is in place.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Display the current stock/requirements list for a material� Carry out a single-item planning run for a material and display the

result� Create purchase orders automatically

We will be working exclusively with manual reorder point procedure inthis lesson. Students should be made aware that there are other types ofMRP planning available in the R/3 system.

Business ExampleThe project team wants to test the following type of procurement scenario:

For material requirements that are planned using the reorder pointprocedure, the MRP run checks whether stock of the material is lowerthan the reorder point and, therefore, whether an order proposal shouldbe created. During this procedure, MRP carries out source determination.Purchase requisitions with a fixed source of supply can be convertedautomatically into purchase orders.

Material Requirements PlanningYou use the MRP type in the Materials Planning view to define theprocedure you want to use to plan requirements of a material.

You can define different materials planning procedures for the samematerial in different plants.

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The main procedures are:

� Reorder point planning� Material requirements planning� Forecast-based planning� Master production scheduling� Time-phased materials planning

Figure 171: Materials Planning Procedures

Material Planning Procedures

For those who need to know more about the different consumption-basedplanning types, recommend LO525 and help them with the scheduleoff-line.

If requirements for a material are planned automatically and MRP is activein the plant, the system automatically carries out planning file entries upontransactions relevant to materials planning (goods issues, reservations,change in a material�s planning data, execution of a forecast for material,etc.). You can also enter planning file entries manually.

You can carry out materials requirements planning online or in thebackground.

Planned orders are proposals used for requirements coverage. They can beconverted to purchase requisitions in a single step.

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You can also create purchase requisitions directly instead of plannedorders.

Figure 172: Overview of Materials Requirements Planning

To automatically convert purchase requisitions to purchase orders, thefollowing criteria must be fulfilled:

� You have to allow the automatic purchase order for each material andvendor. You therefore have to set the indicator for automatic purchaseorders in the Purchasing view of the material master record and inthe Purchasing data view of the vendor master record.

� The items in the purchase requisition must have a valid source ofsupply.

You can carry out the function online or in the background.

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Figure 173: Automated Generation of Purchase Orders

Automated Generation of Purchase Orders

This function enables you to create purchase orders automatically. Youonly have to intervene if an error occurs. This slide shows the prerequisitesfor using the function and the basics of generating purchase ordersautomatically.

The manual reorder point procedure uses the MRP indicator VB.

The reorder point procedure is based on a comparison between thewarehouse stock and the reorder point. If the available warehouse stock isless than the reorder point, the system initiates requirements calculation.

The reorder point comprises the expected average material requirementsduring the replenishment lead time and the safety stock. The followingvalues have to be taken into account when the reorder point is defined:

� The safety stock� Prior consumption or future requirements� The replenishment lead time

The safety stock is used to cover unplanned excess consumption duringthe replenishment lead time and additional requirements in the case ofdelivery delays.

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Figure 174: Reorder Point Planning

Reorder Point Planning

Explain the basics of reorder point planning without going into too muchdetail. It is covered further in LO525.

Reorder Point PlanningIn reorder point planning, the available warehouse stock is calculated fromthe following: Warehouse stock + order quantity (purchase orders, firmplanned orders, and firm purchase requisitions).

If the available warehouse stock is less than the reorder point, there is ashortage of materials.

The shortage quantity is the difference between the reorder point and theavailable warehouse stock. The purchase order quantity is derived fromthe lot-sizing procedure in the material master record.

The system bases the requirement date on the planning date.

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Figure 175: Net Requirements Calculation in Reorder Point Planning

Net Requirements Calculation in Reorder Point Planning

Explain the basic netting calculation: first how MRP determines if there isa shortage, and if there is, how it then determines the purchase quantity.

Static Lot-Sizing ProceduresIn static lot-sizing procedures, the system does not take future shortagesinto account; that is, if it determines shortages, the system creates an orderproposal for the quantity of the static lot size.

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Figure 176: Static Lot-Sizing Procedures

If you have specified that the exact lot size (lot-for-lot order quantity)is to be used, the system uses the exact shortage quantity as the orderquantity in the case of a material shortfall. If there are several goods issuesleading to a material shortfall in one day, the system groups the shortagequantity from this day in one order proposal, rather than creating an orderproposal for each shortage.

If you have specified that the fixed order quantity is to be used, thesystem uses the fixed lot size quantity as the order quantity in the case ofa material shortfall. If this order quantity is not sufficient to cover theshortage, the system generates several order proposals for the same dateuntil the shortage has been covered.

If you have specified that the order quantity �replenishment up tomaximum stock level� is to be used, the system creates an order proposalfor the quantity that is required to reach the maximum stock level definedin the material master record.

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Figure 177: Materials Requirements Planning

Materials Requirements Planning

Mention that the usual way that MRP is run is total planning in thebackground. However, in the classroom we will each be running MRP onour own materials with single-item, single-level processing.

Calculation of DeadlinesFrom the date of the purchase requisition�s creation, the R/3 Systemcalculates the material�s availability date by taking into account the threetime components, purchasing processing time, planned delivery time,and goods receipt processing time.

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Figure 178: Calculation of Deadlines

The processing time for Purchasing is the time required to convert apurchase requisition into a purchase order and issue it. The time requiredis measured in working days according to the factory calendar. It isplant-dependent and set in Customizing for Materials Planning.

The planned delivery time is the time from the issue of the purchase orderto the receipt of the goods at the vendor. You enter this in calendar days inthe material master, info record, and/or contract.

The GR processing time is the time required from the goods receipt untilthe material is available. It is entered in the material master, and/orcontract, in working days according to the factory calendar.

Calculation of Deadlines

This type of scheduling for reorder point planning is known as forwardscheduling.

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Figure 179: Format of the Stock/Requirements List

A stock/requirements list informs you of the available quantity, based onthe stock situation, requirements, and receipts.

The stock/requirements list is dynamic; that is, every time you call up thefunction, the system redetermines the stock elements, receipt elements,and issue elements (for example, plant stock, purchase orders, andreservations).

There is an individual display function and collective evaluation functionfor the stock/requirements list. The MRP list is another function used forevaluation in MRP. This document describes the status of a material atthe time of the planning run. The MRP list is a static report whereas thestock/requirements list is a dynamic report.

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Figure 180: Stock/Requirements List

Format of the Stock Requirements List

Briefly explain the difference between the stock/requirements list and theMRP list. Mention that you will be showing this difference in your nextdemo.

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Figure 181: Purchase Req. with Assigned Source of Supply

The system can carry out source determination in a planning run. Outlineagreements or vendors with a purchasing info record are possible sourcesof supply for external procurement. If the system determines a clearlydefined source of supply (for example, from a contract entered in thesource list) and a purchase requisition is created, the block for procurementoptions on the detail screen for purchase requisition items contains thesource of supply.

If a contract has been entered as a procurement option in the purchaserequisition item, you change this item to a contract release order. Thiscopies the conditions from the contract to the contract release order.

Note: Purchase requisition items that have been assigned a sourceof supply can be converted to purchase orders with the function forautomatic purchase order generation, provided that this is definedin the material master and vendor master record.

Purchase Req. with Assigned Source of Supply

Purchase requisition items with assigned sources of supply (outlineagreements, info records) can be converted to purchase ordersautomatically.

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Figure 182: Release Documentation

Contract release orders are purchase orders that are created with referenceto a contract.

The release order documentation (for example, the quantity released untilnow, and the open quantity) is automatically updated when you create acontract release order. This is used for monitoring the contract.

The release order documentation is contained in the statistics for a contractitem.

Note: You can enter contracts as a source of supply in the purchaserequisition. This ensures that the outline agreement is referencedwhen the purchase requisition is converted into a purchase order.We would also call this a contract release order.

Release Documentation

The statistics of a contract item contains information on release orders,for example:

� Quantity released thus far� Open quantity

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Demonstration: Requirements Planning with SourceDetermination

Purpose

Create a purchase order automatically for your material online. Displaythe changes to the stock/requirements list, the requisition, and the contractas a result of this process.

Allow approximately 20 minutes.

System DataSystem:Client:User ID:Password:Set up instructions:1. Display the �before� stock/requirements list for your material in plant

1000. Point out the requisition number.

2. Create a purchase order automatically for the material online.Logistics → Materials Management→ Purchasing→ Purchase Order →Create → Automatically via Purchase Requisitions

3. Use your own purchasing group, T20 , purchasing org. 1000, andcheck Detailed log.

4. Display the stock/requirements list to show the new purchase order.

5. Click on the detail display of the purchase order. In the item overviewportion of the PO, point out the info record number that was created,the reference to the requisition that MRP proposed, and the referenceto the contract that served as the source assignment.

6. In the item overview portion of the PO, double-click on the requisitionnumber. In the requisition, choose the status tab in the item detailsection of the requisition and show the link to the PO.

7. Green arrow back to the PO and double-click on the contract number.Show the students that in the contract display, they can go to Item,Statistics, Release documentation to see the release history of thecontract.

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For the exercise, allow 40 minutes.

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431 Exercise 22: Single-Item Planning andAutomatic Generation of Purchase OrdersExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� The learner will be able to work with the stock/requirements list.� The learner will be able to carry out a manual single-item planning

run for a material.� The learner will be able to generate purchase orders automatically

via MRP.

Business ExampleYou must familiarize yourself with the stock/requirements list so that youcan improve the procurement process for your materials.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. Material T-HM1##must be created in the system with views MRP 1and MRP2 completed in the material master.

2. Vendor T-K12C## must be set up for automated processing inthe vendor master.

3. A contract and source list must be maintained for your vendorand material.

4. All of these items should be completed in exercise one of this unitby the learners.

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Task 1:Display the stock/requirements list

1. You need information on the availability of material T-HM1##.Display the stock/requirements list for this material in plant 1000.Also display the detail data for the header.

What is the menu path?

_________________________________________

What is the MRP type shown?

�����������������������������������������

What is the reorder point?

�����������������������������������������

Which lot size is procured?

_________________________________________

Task 2:Carry out a single-item planning run

1. Carry out a single-item, single-level planning run for your materialfor plant 1000 as a net change planning run (processing key NECH).You want to create purchase requisitions. You also want to createan MRP list to document the result, but you do not want to displaythe result before saving.

Task 3:Display the stock/requirements list and purchase requisition

1. Display the stock/requirements list for your material in plant 1000again.

How has the available stock changed?

________________________________________

Which procurement proposals does the system suggest?

________________________________________

2. Display the purchase requisition for your material.

What is the delivery date?

______________________________________

Has a source of supply been entered?Continued on next page

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_________________________________________

Task 4:Create purchase orders automatically

1. Carry out online the function for automatically creating a purchaseorder for your purchase requisition.

Select only the purchase requisitions for your purchasing group T##that have been assigned to your vendor T-K12C## in plant 1000.

There should be a new purchase order for each purchasing group.Request a detailed log before running the program, and set the closedindicator for the requisitions.

Hint: This function is contained in the Purchasing menuunder the follow-up functions for purchase requisitions.

It can also be found under Purchase Order→ Create.

2. What message does the system display when the function is complete?

___________________________________________

Task 5:Display the stock/requirements list and the new purchase order

ResultYou should now have successfully run MRP and created an automaticpurchase order.

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Solution 22: Single-Item Planning andAutomatic Generation of Purchase OrdersTask 1:Display the stock/requirements list

1. You need information on the availability of material T-HM1##.Display the stock/requirements list for this material in plant 1000.Also display the detail data for the header.

What is the menu path?

_________________________________________

What is the MRP type shown?

�����������������������������������������

What is the reorder point?

�����������������������������������������

Which lot size is procured?

_________________________________________

a) Select the icon that looks like a funnel with a blue squareattached to see the expanded header details.

b) Logistics → Materials Management → Material RequirementsPlanning (MRP)→MRP→ Evaluations→ Stock/Reqmts list

c)

Expanded Header DetailsField DataMRP Type VB

Reorder Point 100

Lot size Fixed lot size: 300

Continued on next page

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LO020 Lesson: Material Requirements Planning and Generation of Purchase Orders

Task 2:Carry out a single-item planning run

1. Carry out a single-item, single-level planning run for your materialfor plant 1000 as a net change planning run (processing key NECH).You want to create purchase requisitions. You also want to createan MRP list to document the result, but you do not want to displaythe result before saving.

a) Logistics → Materials Management → Material RequirementsPlanning (MRP)→MRP→ Planning→ Single-Item, Single Level

b) Fill in the screen prompts as follows:

Single-Item, Single-LevelField DataMaterial T-HM1##

Plant 1000

Processing key NETCH

Create pur. req. 1

Create MRP list 1

Display the results before you save. (leave blank)

Task 3:Display the stock/requirements list and purchase requisition

1. Display the stock/requirements list for your material in plant 1000again.

How has the available stock changed?

________________________________________

Which procurement proposals does the system suggest?

________________________________________

a) Logistics → Materials Management → Material RequirementsPlanning (MRP)→MRP→ Evaluations→ Stock/Reqmts List

b) Availability has increased at the end of replenishment lead time.c) Based on a purchase requisition, a goods receipt of 300 (fixed lot

size) is expected after the replenishment lead time.

2. Display the purchase requisition for your material.

What is the delivery date?

Continued on next page

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______________________________________

Has a source of supply been entered?

_________________________________________

a) Choose the Add data for element (magnifying glass icon in firstcolumn of purchase requisition row).

b) The delivery date is calculated as follows: Current date +replenishment lead time (RLT = purchasing procurement time(for the plant) + planned delivery time + GR processing time).

c) A vendor has been selected. Your vendor T-K12C## on contractnumber �your contract number� should be indicated.

d) The end of replenishment lead time.e) Yes.

Task 4:Create purchase orders automatically

1. Carry out online the function for automatically creating a purchaseorder for your purchase requisition.

Select only the purchase requisitions for your purchasing group T##that have been assigned to your vendor T-K12C## in plant 1000.

Continued on next page

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LO020 Lesson: Material Requirements Planning and Generation of Purchase Orders

There should be a new purchase order for each purchasing group.Request a detailed log before running the program, and set the closedindicator for the requisitions.

Hint: This function is contained in the Purchasing menuunder the follow-up functions for purchase requisitions.

It can also be found under Purchase Order→ Create.

a) Logistics→Materials Management→ Purchasing→ Requisition→Follow-On Functions → Create Purchase Order → Automaticallyvia Purchase Requisitions or alternatively: Logistics → MaterialsManagement → Purchasing → Purchase Order → Create →Automatically via Purchase Requisitions

b) Enter data as follows:

Field DataPurchasing Group T##

(LO020–##)

Vendor T-K12C##

New Purchase order per purchasing group √Detailed log √Set purchase requisition to closed 1

2. What message does the system display when the function is complete?

___________________________________________

a) Message after completion: Purchase Order 450000####created.

By checking the Detailed Log prompt before running thisfunction, you will get the PO number.

Task 5:Display the stock/requirements list and the new purchase order

ResultYou should now have successfully run MRP and created anautomatic purchase order.

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Lesson Summary

You should now be able to:� Display the current stock/requirements list for a material� Carry out a single-item planning run for a material and display the

result� Create purchase orders automatically

Related InformationThe following SAP Library sites will give more information on thistopic. Follow the suggested menu paths after you have logged intohttp://help.sap.com:

� SAP R/3 → appropriate release → appropriate language → Logistics→ Materials Management (MM) → Consumption-Based Planning(MM-CBP) → Consumption-Based Planning → MRP Procedures inConsumption-Based Planning→ Reorder Point Planning→ Reorder PointPlanning Procedure

� SAP R/3 → appropriate release → appropriate language → Logistics →Materials Management (MM) → Purchasing (MM-PUR)→ OptimizedPurchasing→ Automatic Generation of POs from Requisitions

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LO020 Lesson: Shipping Notification and Goods Receipt

Lesson:439

Shipping Notification and Goods ReceiptLesson Duration: 45 Minutes

Lesson OverviewSetting up shipping notifications in the purchasing document, maintainingnotification correspondence from the vendor, and receiving againstshipping notifications are discussed in this lesson.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Enter a shipping notification for a purchase order� Enter a goods receipt with reference to the shipping notification

When timing and receiving a precise quantity are critical to your business,it is a good idea to set up shipping notifications with your vendor. Thenthe system won�t calculate from the purchase order for delivery date andquantity when circumstances change.

Business ExampleYour company uses shipment confirmation to plan receipts. Goods arereceived with reference to the confirmation.

Order AcknowledgementsYou can enter vendor acknowledgements for purchase orders or deliveryschedules.

Acknowledgements are sent by the vendor to inform customerswhen ordered materials are expected to arrive (for example, orderacknowledgements, loading or transport confirmations, and shippingnotifications).

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Figure 183: Order Acknowledgements

If you do not use acknowledgements, Materials Planning can only go by thedelivery dates and quantities in the purchase order. Acknowledgementsenable you to plan more accurately by providing you with the actualdelivery dates and quantities.

� If you expect an order acknowledgement for your purchase order,you can set a confirmation control key in the purchase order item.You can configure which type of order acknowledgements you expectto receive and whether these are relevant to Materials Planning andgoods receipt.

� You configure your system so that a particular type of orderacknowledgement is referenced (for example, a shipping notification)at goods receipt. The goods receipt cannot be posted without anorder acknowledgement.

� You can post a goods receipt with reference to a shipping notificationor purchase order. If you enter the goods receipt with reference to thepurchase order, the system recognizes from the confirmation controlkey whether one or more order acknowledgements are required,and whether acknowledgements have already been entered in thesystem. The goods receipt can be posted only for the quantities on theacknowledgement.

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LO020 Lesson: Shipping Notification and Goods Receipt

Order Acknowledgements

Shipping notifications are located within the Inbound deliverymenu item.

When doing the goods receipts, you have to select Inbound delivery in thelist of documents for which you are going to perform the goods receipt.

Demonstration: Shipping Notification and GoodsReceipt

PurposeShow how to set up, maintain, and receive a purchase order usingshipping notifications.

System DataSystem:Client:User ID:Password:Set up instructions:1. In the Purchasing Implementation Guide, show the settings for

the confirmation control key T-LA and its confirmation sequence.Explain the parameters. IMG→Materials Management → Purchasing→ Confirmations → Set up confirmation control .

Caution: If the participants are complete beginners, it may bebetter not to go into the IMG at this stage.

2. Display your purchase order from vendor T-K12C20 for materialT-HM120. On the item detail section show the confirmation controlkey T-LA and point out that the rest of the tab is empty. The key wascopied from the contract that was referenced.

3. Display the stock/requirements list to remind the class of the quantityand delivery date for this PO.

4. Create a shipping notification for your purchase order, enteringLO020-R as the External ID. Enter the delivery date for one weeklater. Logistics → Materials Management → Purchasing → PurchaseOrder → Inbound delivery → Create

� Enter a delivery date at least one week later than the PO deliverydate.

� Enter LO020�R as the external ID.

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5. Display the Confirmation tab on the PO again to show the new entrythat resulted from the shipping notification.

6. Display the stock/requirements list again to show the new entry forthe shipping notification.

7. Enter a goods receipt with reference to the shipping notification.Logistics →Materials Management → Inventory Management → GoodsMovement → Goods Receipt → For Purchase Order → PO NumberUnknown.

Change the document type to Inbound delivery. Search thedocument number on the external ID LO020�R.

8. Display the confirmation tab for your purchase order item. Explainthe entries under �Quantity Reduced�.

The students should now do the exercise for Shipping Notification andGoods Receipt. Allow 40 minutes.

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LO020 Lesson: Shipping Notification and Goods Receipt

441 Exercise 23: Shipping Notification andGoods ReceiptExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a shipping notification with reference to a purchase order� Post a goods receipt with reference to a shipping notification

Business ExampleSo that you are always informed of actual delivery dates, you havearranged with several vendors that they send you a shipping notificationas well as an order acknowledgement. This ensures that production is notheld up because of unexpected shortages.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1:Enter shipping notification

1. The vendor confirms that it will stage the complete orderedquantity one week late. The vendor�s identification for the shippingnotification is LA1–##.

Enter this shipping notification as an incoming delivery for yourpurchase order. Change the delivery date and enter the externalidentification number LA1–## for the shipping notification.

Field DataNumber of Shipping Notification

Continued on next page

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Task 2:Display purchase order

1. Can you tell from the purchase order that a shipping notification hasbeen entered for an item?

If yes, where is this information stored, and which data for theshipping notification can be found in the purchase order?

Task 3:Display stock/requirements list

1. Display the stock/requirements list for the material for plant 1000again. How has the available stock changed? Which procurementproposals does the system suggest?

Display the purchase order. What is the delivery date in the purchaseorder item?

Task 4:Enter goods receipt into stock

1. The vendor sends the material you ordered as stated on the orderacknowledgement. Post the goods receipt into storage location 0001in plant 1000.

Hint: You can reference the inbound delivery at goods receipt.You can search for your inbound delivery via the vendor orthe external identification LA1�##.

Field DataMaterial document number

Task 5:Display stock/requirements list

1. Finally, check again the available stock for material T-HM1## in plant1000. What is the actual available quantity, and which MRP elementsdoes the list still contain?

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LO020 Lesson: Shipping Notification and Goods Receipt

Solution 23: Shipping Notification andGoods ReceiptTask 1:Enter shipping notification

1. The vendor confirms that it will stage the complete orderedquantity one week late. The vendor�s identification for the shippingnotification is LA1–##.

Enter this shipping notification as an incoming delivery for yourpurchase order. Change the delivery date and enter the externalidentification number LA1–## for the shipping notification.

Field DataNumber of Shipping Notification

a) Logistics→Materials Management→ Purchasing→ Purchase Order→ Inbound Delivery → Create

b) Enter the following data to create your shipping notification:

Field DataPurchase Order PO number from

Exercise 22/Task4/Step 2a

Delivery Date Delivery Date + 1 week

Ext. Identification LA1–##

Task 2:Display purchase order

1. Can you tell from the purchase order that a shipping notification hasbeen entered for an item?

Continued on next page

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If yes, where is this information stored, and which data for theshipping notification can be found in the purchase order?

a) Logistics→Materials Management→ Purchasing→ Purchase Order→ Display

b) Yes, the information is in Item detail � tab page: Confirmations.c) You can find the following data for the shipping notification

in the purchase order:

� Delivery date� Confirmed quantity� External document number� Date created� Internal document number

Task 3:Display stock/requirements list

1. Display the stock/requirements list for the material for plant 1000again. How has the available stock changed? Which procurementproposals does the system suggest?

Display the purchase order. What is the delivery date in the purchaseorder item?

a) Logistics → Materials Management → Material RequirementsPlanning (MRP)→MRP→ Evaluations→ Stock/Reqmts List.

b) The MRP element now displays ShipNt next to the PurchaseOrder in the stock/requirements list. The system now calculatesthe availability date from the delivery date specified in theshipping notification.

c) The purchase order item still contains the original delivery date.

Task 4:Enter goods receipt into stock

1. The vendor sends the material you ordered as stated on the orderacknowledgement. Post the goods receipt into storage location 0001in plant 1000.

Hint: You can reference the inbound delivery at goods receipt.You can search for your inbound delivery via the vendor orthe external identification LA1�##.

Continued on next page

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LO020 Lesson: Shipping Notification and Goods Receipt

Field DataMaterial document number

a) Logistics → Materials Management → Inventory Management →Goods Movement → Goods Receipt → For Purchase Order → PONumber Known.

b) Enter the goods receipt into plant 1000, storage location 0001 forinbound delivery.

c) To search for the shipping notification number via the externalidentification LA1�##, change the reference document to InboundDelivery, then select the tabbed matchcode list for the documentnumber prompt, and enter LA1–## in the External ID field.

Task 5:Display stock/requirements list

1. Finally, check again the available stock for material T-HM1## in plant1000. What is the actual available quantity, and which MRP elementsdoes the list still contain?

a) Logistics → Materials Management → Material RequirementsPlanning (MRP)→MRP→ Evaluations→ Stock/Reqmts List

b) The screen displays the following data:

Field DataAvailable Quantity 300 pcs

MRP Element Available Stock

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Lesson Summary

You should now be able to:� Enter a shipping notification for a purchase order� Enter a goods receipt with reference to the shipping notification

Related Information

� For more information on Shipping Notifications andAcknowledgements, check the following SAP Library address: SAPR/3→ appropriate release→ appropriate language→ Logistics→MaterialsManagement (MM)→ Purchasing (MM-PUR)→ Vendor Confirmations→Procurement Using Vendor Confirmations

� http://help.sap.com

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LO020 Lesson: Evaluated Receipt Settlement (ERS)

Lesson:447

Evaluated Receipt Settlement (ERS)Lesson Duration: 30 Minutes

Lesson OverviewThis lesson examines the streamlining of the invoicing procedure as partof the procurement cycle.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Start the program for evaluated receipt settlement online� Identify how the entry of the invoice affects the purchase order history

Explain that this procedure is not necessarily for every material that ispurchased. ERS works best when it involves a steady-priced, regularlyordered item.

Business ExampleYour company has agreed with the vendor that you will automaticallysettle delivered quantities at the conditions arranged in the purchase order.

Evaluated Receipt SettlementIn evaluated receipt settlement (ERS), you arrange with the vendor that heor she does not create an invoice for a purchase order transaction. Instead,your system automatically posts the invoice document on the basis of thedata from the purchase order and goods receipts. This ensures that thereare no discrepancies between the goods invoiced and the goods received.

The system determines the amount invoiced for this purchase order fromthe order prices in the PO, the payment conditions, tax information, andthe delivery quantity entered at goods receipt.

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Figure 184: Evaluated Receipt Settlement

If you use the ERS procedure, the conditions arranged with the vendormust be clear and you have to continually update the purchase ordersin the system. You cannot process planned delivery costs with the ERSprocedure.

In Logistics Invoice Verification, you can create a message for the vendor.

Evaluated Receipt Settlement

This slide shows that there will be no invoice receipt from the vendor. R/3creates an internal invoice. Pricing is taken from the PO, and quantityreceived is taken from the GR material document. A message (notification)is then sent to the vendor.

Automatic Payment ProgramThe automatic payment program will choose ERS invoices for payment inthe same way it chooses regular invoices from the vendor.

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LO020 Lesson: Evaluated Receipt Settlement (ERS)

Figure 185: Automatic Payment Program

Automatic Payment Program

The automatic payment program will not be run for this lesson, however,if you wish you can show Vendor Line Item Display, transaction code FBL1Nafter you have run ERS.

ERS Procedure: PrerequisitesTo enable you to settle goods receipts for a vendor automatically, thefollowing prerequisites must be met:

� In the vendor master record, you must set the indicator for ERS andfor goods-receipt-based invoice verification.

� You also have to set the indicators for ERS and goods-receipt-basedinvoice verification in the purchase order item. Additionally, youmust maintain a tax code for the item.

� You must enter the goods receipt with reference to the purchase order.

Note: ERS cannot be carried out if the purchase order price for anitem is only an estimated price (indicator in the purchase orderitem).

Note: If you do not want to automatically settle a particularmaterial for a vendor, you must exclude the vendor and thematerial from the ERS procedure in the info record.

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Figure 186: ERS Procedures: Prerequisites

ERS Procedure: Prerequisites

Emphasize the importance of the prerequisite data in the vendor masterand the info record �no ERS�indicator. The field that often gets overlookedis the tax code.

ERS Procedure: ExecutionIn ERS, you have to determine which procedures are to be processed andthe criteria according to which documents are created.

You can carry out a test run before you carry out an actual settlement. Theresult of the test run is stored in a log informing you which transactionswere settled and which were not.

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Figure 187: ERS Procedure: Execution

In Logistics Invoice Verification, the system creates a message in additionto the log and depending on how your system is configured, it sends amessage to the vendors to inform them about the settlements.

ERS Procedure: Execution

Point out the options for selecting documents to be considered for the ERSrun, and also the options on the format of the output for the run.

This slide explains the selection options of material documents forsettlement via ERS.

For example, you can run ERS

� By vendor� By purchase order� By purchase order item� By goods receipt document

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Demonstration: Invoice Processing Using ERS

PurposeShow the necessary setup for ERS and execute the automatic processing.

System DataSystem:Client:User ID:Password:Set up instructions:1. Display the vendor master for your vendor T-K12C20, and point

out the ERS indicator AutoEvalGRSettmtDel and the GR-based IVindicator.

All material purchased from this vendor will now be based onthe ERS process, unless we cancel the default in our purchasingdocuments, or unless we set an exception in an info record.

2. Create an info record for your vendor T-K12C20 and a completelydifferent material, such asM-20, which will not be subject to ERSprocessing. This material costs around $1000 for your net price.For almost everything else you can put whatever you want in therequired fields. Just make sure you check No ERS on the PurchasingData screen.

3. Create a new PO from your previous contract. In the item detailsection, show the invoice tab. Note that the ERS box and the GR-basedIV box are already checked by default. Note also that the tax code1I has defaulted from the contract (If you forgot to include it in thecontract, be sure to do it now. ERS will not work without it!).

4. Do an Inbound delivery that doesn�t change anything.

5. Run ERS in test mode. Logistics→ Materials Management → LogisticsInvoice Verification → Automatic Settlement → Evaluated ReceiptSettlement (ERS).

Choose Company code 1000, Vendor T-K12C20, Document selection3 , and check √ the Test run box.

6. Run ERS a second time, only this time choose Document selection4, and don�t use the test mode.

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LO020 Lesson: Evaluated Receipt Settlement (ERS)

7. Discuss the documents displayed:

� Ref. doc. is the material document. You can see it bydouble-clicking on the document number.

� Purch. doc. is the purchase order. Double-click on it and observethe new PO history information, which includes the invoicejust created.

� Doc. no. is the invoice created by ERS. Double-click to see theactual invoice. While there, click on the Follow-on documentsbutton to see the accounting entries that were made.

8. Show a print preview of the message that is sent to the vendor.Logistics → Materials Management → Logistics Invoice Verification →Further Processing → Output Messages.

Figure 188: Evaluated Receipt Settlement (ERS) with LIV

The students will now do their exercise on ERS processing. Allow 15minutes.

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LO020 Lesson: Evaluated Receipt Settlement (ERS)

453 Exercise 24: Evaluated Receipt SettlementExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Settle a goods receipt automatically using evaluated receipt settlement� Interpret the information in standard analyses

Business ExampleYou have agreed with the vendor that you will settle delivered quantitiesautomatically using the conditions arranged in the purchase order.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1:Settle a goods receipt automatically

1. Settle the goods receipts you entered today and yesterday for vendorCEB Berlin Gr.## (T-K12C##) in company code 1000. Youshould create a separate invoice for each order item.

Use the test mode first to check that you have selected the correctgoods receipts.

Field DataDocument Number

Continued on next page

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Task 2:Display the invoice document

1. Display the invoice document and the corresponding financialacccounting document.

Write down of the vendor account number and the amount inliabilities incurred towards the vendor.

Field DataAccount No.Amount

Task 3:Display the purchase order

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LO020 Lesson: Evaluated Receipt Settlement (ERS)

Solution 24: Evaluated Receipt SettlementTask 1:Settle a goods receipt automatically

1. Settle the goods receipts you entered today and yesterday for vendorCEB Berlin Gr.## (T-K12C##) in company code 1000. Youshould create a separate invoice for each order item.

Use the test mode first to check that you have selected the correctgoods receipts.

Field DataDocument Number

a) Logistics→Materials Management → Logistics Invoice Verification→ Automatic Settlement→ Evaluated Receipt Settlement.

b) Enter the data from the following table:

Field DataCompany Code 1000

GR Posting Date Yesterday throughToday’s Date

Vendor T-K12C##

Doc. Selection 3

Test Run √

Once you have made the correct selections, carry out ERS again,but without doing a test run.

Task 2:Display the invoice document

1. Display the invoice document and the corresponding financialacccounting document.

Write down of the vendor account number and the amount inliabilities incurred towards the vendor.

Continued on next page

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Field DataAccount No.Amount

a) Logistics →Materials Management→ Logistics Invoice Verification→ Further Processing→ Display Invoice Document

Hint: Alternative path: Display Purchase Order→ PurchaseOrder History (tab)→ Invoice Verification Document (doubleclick)

b) The screen will display the following data:

Field DataAccount No. T-K12C##

Amount 3300 UNI

Task 3:Display the purchase order

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Lesson Summary

You should now be able to:� Start the program for evaluated receipt settlement online� Identify how the entry of the invoice affects the purchase order history

Related InformationAdditional information on ERS can be found in our SAP Library byusing the following menu path after linking to the URL below: SAPR/3 → appropriate release → appropriate language → Logistics → MaterialsManagement (MM)→ Logistics Invoice Verification→ Automatic Settlement→Evaluated Receipt Settlement (ERS)

http://help.sap.com

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Unit Summary LO020

Unit SummaryYou should now be able to:� Enter the materials planning data for a material procured on a

consumption-driven basis using reorder point planning� Create a quantity contract and enter it in the source list as a fixed

source of supply� Display the current stock/requirements list for a material� Carry out a single-item planning run for a material and display the

result� Create purchase orders automatically� Enter a shipping notification for a purchase order� Enter a goods receipt with reference to the shipping notification� Start the program for evaluated receipt settlement online� Identify how the entry of the invoice affects the purchase order history

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LO020 Test Your Knowledge

459Test Your Knowledge

These are questions for assessing student understanding of thislesson.

1. Which of the following fields is essential to automatic PO creation?Choose the correct answer(s).□ A GR-based inv. verif. in the Vendor Master□ B Fixed vendor field in Source List□ C Autom. PO in the Material Master□ D MRP type in the Material Master

2. The time it takes to process a material from the time it is received untilit is considered available to use in stock is time that is considered partof the total lead time for a purchased item.Determine whether this statement is true or false.□ True□ False

3. Name at least three characteristics of an MK type of contract.

4. Reorder point planning takes future sales into consideration whencalculating planned orders.Determine whether this statement is true or false.□ True□ False

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5. The net requirements calculation in reorder point planning uses allbut one of the following figures in determining the planned order.Which item is NOT used?Choose the correct answer(s).□ A Sales orders□ B Available on-hand stock□ C Lot size technique quantity□ D Open purchase orders

6. MRP assigns vendors used by the automatic PO process based on

Fill in the blanks to complete the sentence.

7. In order to enter a shipping notification for a specific purchase order,what must first be done?Choose the correct answer(s).□ A The material must have a shipping code in the material

master.□ B The PO must have a valid confirmation control code.□ C The vendor must have a shipping code in the vendor master.□ D There must be an existing info record for the

vendor/material combination.

8. Once you have received a shipping notification and the informationis in the purchase order, you can change the date or quantity rightin the PO.Determine whether this statement is true or false.□ True□ False

9. If you use shipping notifications on a PO, during goods receipts youcan receive either by PO number or by Inbound Delivery numberDetermine whether this statement is true or false.□ True□ False

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10. Identify where you must set up an ERS vendor.

11. What other field must be checked for ERS to work properly?

12. If a vendor is set up for ERS, everything you buy from that vendormust be subject to ERS processing.Determine whether this statement is true or false.□ True□ False

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461Answers

1. Which of the following fields is essential to automatic PO creation?

Answer: C

As long as both the vendor master and the material master areindicated for automatic PO�s, any requisition with an allocated vendoron it can be run through the automatic PO processing. RunningMRP is not required, even though it is usually desired for an optimalprocurement cycle.

2. The time it takes to process a material from the time it is received untilit is considered available to use in stock is time that is considered partof the total lead time for a purchased item.

Answer: True

For reorder point planning, the total lead time consists of purchasingprocessing time, planned delivery time, and goods receipt processingtime.

3. Name at least three characteristics of an MK type of contract.

Answer: Any three of the following would be correct:It has a validity period;It has a target quantity to be purchased;It has pricing that will be used in the release documents;It can be referenced in the source list;It can be used by MRP for assigning a vendor to a requisition.

4. Reorder point planning takes future sales into consideration whencalculating planned orders.

Answer: False

Reorder point planning is based on prior consumption andreplenishment lead time. The reorder point calculation is based onthese two considerations.

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5. The net requirements calculation in reorder point planning uses allbut one of the following figures in determining the planned order.Which item is NOT used?

Answer: A

With straight reorder-point, future commitments such as salesorders are not considered in the netting calculation. There are somespecial reorder-point MRP types in R/3 that do consider externalrequirements in addition to the reorder-point level, but they were notused in this lesson.

6. MRP assigns vendors used by the automatic PO process based onfinding a suitable source for the material.

Answer: finding a suitable source for the material.

Suitable sources that MRP looks for include quota arrangements,source list fixed sources, and contract agreements.

7. In order to enter a shipping notification for a specific purchase order,what must first be done?

Answer: B

Existing info records CAN have confirmation control codes, and thesewill default into the purchase order for you, but the bottom line is,you must have one in the PO whether it appeared there as a defaultvalue or you put it in manually.

8. Once you have received a shipping notification and the informationis in the purchase order, you can change the date or quantity rightin the PO.

Answer: False

All changes to shipping notifications must be done in the InboundDelivery function.

9. If you use shipping notifications on a PO, during goods receipts youcan receive either by PO number or by Inbound Delivery number

Answer: True

Either way is OK. The only thing you must remember is to indicatethe correct document type in goods receipts.

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10. Identify where you must set up an ERS vendor.

Answer: On the purchasing data screen of the vendor master, there isa check box for ERS. (AutoEvalGRSettmtDel)

11. What other field must be checked for ERS to work properly?

Answer: The GR-based IV box.

12. If a vendor is set up for ERS, everything you buy from that vendormust be subject to ERS processing.

Answer: False

You can set up non-ERS materials in an info record with the ERSvendor, and check the box for No ERS. You can also manuallyuncheck the ERS indicator on the purchase order.

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Summary information on the differences between the document detaillists and the summarized analyses are the most important concepts toemphasize. If you wish, there is an optional demo you can do in standardanalysis using EWS. It is showy, and customers love it, but you may nothave time. Plus it�s one of those things that should be set up ahead oftime so you can just run it.

To set up the demo ahead of time, here is what you need to do:

Choose Logistics → Logistics Controlling → Purchasing Information System→ Early Warning System → Exception → Create.

Name the exception Demo, info structure S012.

Click on the Characteristics button.

Choose Characteristics Purchasing Org. , Vendor, and Month. Click onthe Requirements button. Currency will be UNI, and number of periodswill be 1, including the current month.

The key figure will be Order Value, and the requirements will beThreshold val. anal.with an order value > 50,000 UNI (this will need to bechecked the night before this lesson to see if any of the vendors actuallyachieved this amount, or conversely if all the vendors went over thisamount. Adjust the figure if necessary so that only one or a few vendorswill show an exception of going over a certain amount).

Click on the Follow-up Processing button. Make one change to Color in list.Change it from 1 to 3 (red).

Save for later use in the Optional Demo.

Unit OverviewThe two basic types of reporting are emphasized in this unit. They are thedetailed list displays reported at the document level, and the summarizeddata that comes from the Logistics Information System (LIS).

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The interactive nature of the selection criteria in R/3 reporting gives theend user many choices for creating the actual report that is run.

Unit ObjectivesAfter completing this unit, you will be able to:

� Create basic list displays for purchasing and stock movements� Define the basics of the Logistics Information System� Execute basic standard analysis reports using the purchasing

information system

Unit ContentsLesson: Transaction-Based Reporting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .573

Demonstration: List Displays and Variants.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .576Exercise 25: Transaction-based Reporting ... . . . . . . . . . . . . . . . . . . . . . . . . . .577

Lesson: Reporting with Logistics Information System ... . . . . . . . . . . . . . . . . . .582Demonstration: Demonstration of Standard Analysis .. . . . . . . . . . . . . . . .590Demonstration: Optional Demonstration using EWS ... . . . . . . . . . . . . . . .590Procedure: Choosing Key Figures within a Standard Analysis... . . . .592Exercise 26: Reporting with Logistics Information System .... . . . . . . .595

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Lesson:466

Transaction-Based ReportingLesson Duration: 45 Minutes

Lesson OverviewThere will be an explanation of the differences between standard reportingand standard analysis. The basics of the Logistics Information Systemwill be discussed.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Create basic list displays for purchasing and stock movements

This unit focuses on Reporting and Analysis in the Logistics InformationSystem (LIS). Various list displays have been demonstrated throughoutthe course, some of which participants carried out by themselves. Itis important here that the instructor explain the distinctions betweenstandard list display reporting and standard analysis. Participants canacquire detailed information on LIS by taking course LO930.

Business ExampleThe buyer needs to analyze activity that he has generated during a specifictime period. Information is needed regarding purchase order activityand stock movements.

Standard ReportingIn Purchasing, you enter a variety of documents. The R/3 System updatesthese documents and stores them in database tables. In the R/3 System,you can use Standard Reporting to analyze the information contained inthe documents.

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As the employee responsible in Purchasing, you want to obtain anoverview of your vendors and purchasing organizations. For example,you want to know:

� Which purchase orders were effected at a particular vendor for aparticular period

� The number of purchase orders for which you have already receivedgoods

� Whether a vendor complies with his or her delivery dates� Whether a goods receipt and invoice receipt are correct� The average value of each purchase order for a purchasing group

Figure 189: Standard Reporting

You can also carry out analyses for master data, as well as for documents.For example, you can output a list of all purchasing info records for amaterial or vendor, or you can obtain an overview of the material masterrecords in your enterprise, based on particular criteria.

The analyses in the R/3 System provide you with a quick and convenientoverview, enabling you to act accordingly.

Standard Reporting

You can only carry out detailed reports of document data and master datawhile these records are stored in the system.

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If the documents have been deleted, you cannot obtain any information onthem via List Displays or Standard Reporting.

Figure 190: Scope and List of Selection Parameters

Scope of list parameters determine which data is displayed for a document.You can decide whether you want a list in short form or whether it shouldcontain more information (for example, lines for open purchase orderquantity and value or the validity period of outline agreements). You canconfigure scope-of-list parameters in Customizing for Purchasing.

The selection parameter determines which purchasing documents thereport evaluates. In this example, the system will only evaluate purchasingdocuments for which you have still to receive an invoice. In Customizing,you can define your own selection parameters.

If, at regular intervals, you carry out a particular list display using thesame selections, it is worthwhile creating a variant. This reduces dataentry time and prevents errors during entry. You can store your ownvariants or use existing ones.

You can define any number of variants for a report.

Scope of List and Selection Parameters

Limits the documents to be analyzed.

Selection Parameters and Scope of List can be configured in the IMG.

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IMG → Materials Management → Purchasing → Reporting → MaintainPurchasing Lists.

Demonstration: List Displays and Variants

PurposeDisplay the purchasing documents for vendors T-K12A01 � T-K12D20and demonstrate the selection parameters, scope of list, and variants.

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Materials Management → Purchasing → Purchase

Order → List Displays → By Vendor.

2. Vendors: T-K12A01 � T-K12D20.

3. Scope of list: ALLES.

4. Save the default settings as a variant.

5. Vary the selection parameters and scope of list to show varying lists,for example, compare ALLES to Scope of List KURZ.

Allow 15 minutes for the exercise.

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469 Exercise 25: Transaction-based ReportingExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create basic list displays for purchasing and stock

Business ExampleThe buyer needs to analyze activity that was generated during a specifictime period. Information is needed regarding purchase order activityand stock movements.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1:Open goods receipts

1. Display a list of all the purchase orders for purchasing organization1000 and plant 1000 for which goods receipts are still open. Limitthe search period to the last 24 months.

Hint: To do this, choose the Document date field, andenter From: Current date minus 24 months, To:Current date.

Optional: Define for yourself a variant for the purchase orderdocument overview in accordance with these specifications.

Continued on next page

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Task 2:Goods receipts that have been posted

1. You want a list of all material documents for materials T-RM1##to T-RM4## that were placed into storage in plant 1000 usingmovement type 101 (goods receipt into unrestricted-use stock).

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Solution 25: Transaction-based ReportingTask 1:Open goods receipts

1. Display a list of all the purchase orders for purchasing organization1000 and plant 1000 for which goods receipts are still open. Limitthe search period to the last 24 months.

Hint: To do this, choose the Document date field, andenter From: Current date minus 24 months, To:Current date.

Optional: Define for yourself a variant for the purchase orderdocument overview in accordance with these specifications.

a) Follow the menu path: Logistics → Materials Management →Purchasing→ purchase Order→ List displays→ By Vendor.

b) Enter the following data in the fields:

Field DataVendor (no entry)

Purchasing Organization 1000

Scope of List BEST

Selection Parameter WE101

Purchasing Group (no entry)

Plant 1000

Document Date Period within the last24 months

Continued on next page

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Task 2:Goods receipts that have been posted

1. You want a list of all material documents for materials T-RM1##to T-RM4## that were placed into storage in plant 1000 usingmovement type 101 (goods receipt into unrestricted-use stock).

a) Follow the menu path: Logistics → Materials Management →Inventory Management→ Environment→ List Displays→MaterialDocuments.

b) Enter the data from the table:

Field DataMaterial T-RM1## to T-RM4##

Plant 1000

Movement Type 101

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Lesson Summary

You should now be able to:� Create basic list displays for purchasing and stock movements

Related InformationFor additional documentation, go to the SAP Library:

For Purchasing Reporting �SAP R/3 → appropriate release → appropriatelanguage → Logistics → Materials Management (MM)→ Purchasing(MM-PUR)→ Reporting in Purchasing

For Materials Reporting � SAP R/3 → appropriate release → appropriatelanguage→ Logistics→Materials Management (MM)→Inventory Management(MM-IM) → Inventory Management and Physical Inventory (MM-IM) →Reporting in Inventory Management

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Lesson:473

Reporting with Logistics Information SystemLesson Duration: 60 Minutes

Lesson OverviewWe are going to execute basic standard analysis reports using thepurchasing info system.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Define the basics of the Logistics Information System� Execute basic standard analysis reports using the purchasing

information system

Explain that this reporting is summarized data suitable for analysis. LISreports do not typically list the document level of detail, but rather anaggregation of data by a specific period unit, such as week or month.

Contrary to the transaction-based reports of the last lesson, you can stillsee LIS summary information even if the original documents have beendeleted from the system.

Business ExampleThe director of purchasing needs to analyze the top vendors by certaincriteria.

Logistics Information SystemSAP Logistics offers a range of application-related information systems.All have a standard interface and similar basic functionality. All Logisticsinformation systems have the same type of data retention. A range ofspecial tools and ways of working emphasize the typical character of adata warehouse in the LIS.

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In Logistics, you can distinguish between the following informationsystems:

� SIS: Sales Information System� PURCHIS: Purchasing Information System� INVCO: Inventory Controlling� WMIS: Warehouse Management Information System� PPIS: Shop Floor Information System� QMIS: Quality Management Information System� PMIS: Plant Maintenance Information System� RIS: Retail Information System

Figure 191: Logistics Information System (LIS)

SAP Logistics Information System

Explain what options the LIS offers and what information systems the R/3System supports within Logistics.

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Figure 192: The Logistics Data Warehouse in the SAP System

The information systems in the LIS are continuously supplied withdata from the transaction systems (Sales and Distribution, Purchasing,Production, Plant Maintenance, and so on). This level is also known asOLTP (Online Transaction Processing). The data can come from documentsin the SAP R/2 or SAP R/3 System, or from non-SAP systems.

Important information is stored in the Logistics Data Warehouse�s owndatabase, which is maintained in parallel to the operational systems. Asdata is updated periodically, the data volume is reduced quantitatively andthe information is reduced qualitatively to the sections relevant to statistics.

Convenient analysis and reporting tools are available at OLAP level(Online Analytic Processing) for analyzing data.

The Logistics Data Warehouse in the R/3 System

The information systems in LIS are continually supplied with data from theoperative applications (Sales, Purchasing, Production, Plant Maintenance,etc.). This level is also described asOLTP (Online Transaction Processing).

Above the OLPT level is the Logistics Data Warehouse. When abusiness transaction is carried out in the operative application, importantinformation is updated to the LIS statistical data basis.

The Data Warehouse is supplied with the operative data from the OLTPlevel. This data flows into the information structures and forms the databasis of LIS. User-defined information structures enable you to addindividual enhancements to the LIS information systems.

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Analysis and reporting tools for evaluating data are available at OLAPlevel (Online Analytic Processing), for example, Standard Analysis,Flexible Analysis.

Figure 193: Logistics Data Warehouse

The physical tables in the SAP Information Warehouse are informationstructures, or info structures for short. These have a typical structure.

The objects to be analyzed in the real business world go into info structuresas evaluation groups in the form of characteristics. Statistical informationon characteristics, such as vendor, customer, or material is aggregated.Organizational elements, such as purchasing group, material group,valuation area, plant, or storage location are also used as characteristics ininfo structures.

Time base is another option for aggregation. Data is not only aggregatedper characteristic, but also by period. With regard to periodicity, you canaggregate data on a daily, weekly, monthly, or fiscal period basis.

The system updates Logistics key figures for each characteristiccombination and periodicity. This encompasses quantitative factorsinforming you of measurable subject matters. Key figures can becumulated per evaluation group, for example, order quantity, orproduction order quantity. They can also be a single counter, for example,number of deliveries.

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The standard R/3 System contains various info structures for differentapplication areas. You can use convenient tools to group characteristicsand key figures into individual info structures to meet your requirementsand use separate update programs to fill them with data.

Logistics Data Warehouse

Explain the terms information structure, characteristics, key figure, andperiod unit.

Information Structures are database tables in which data coming fromthe OLTP systems are collected and compressed. They form the basis foranalyses and evaluations.

An information structure consists of :

� A period unit: this gives the structure a time reference. Example:Are the data to be updated daily, weekly monthly, or some fiscalposting period?

� Characteristic: object to be analyzed, such as an organizational levelor specific master data. Examples: Purchasing Organization, Plant,Vendor, Material

� Key figures: information which is cumulated with reference to thecharacteristics. Key figures are mostly calculated values used forperformance measurement. Examples: Order Value, Order Quantity,Invoiced Sales

Figure 194: From Document to Analysis

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When you post a document, as shown here using a purchase order, thesystem updates the key figures of the info structures for the relevantcharacteristic combinations.

If there is no data record for the characteristic combination in thedocument, the system creates a new data record and enters thecharacteristics and key figures (example: vendor 1000, material M-01,month 05/98, purchase order value 11,000).

If the characteristic combination already exists in the info structure, thesystem increases or decreases the key figures in the data line by therelevant values Example: vendor 1000, material M-02, month 05/98,purchase order value (old) 20,000 + purchase order value (document)10,000 = purchase order value (new) 30,000.

In the various analyses, lists can be created for all possible characteristiccombinations on the basis of data in the info structures.

From Document to Analysis

Comment on the example from the update of the info structure to theanalysis.

Figure 195: Reporting in the LIS

The standard analyses in LIS offer numerous ways of analyzing data.Standard analyses offer a multitude of functions that enable a detailedand specific analysis of data.

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In each standard analysis, you can use various selection options todetermine the scope of data to be analyzed. You can preset the selectionof key figures you want to analyze or it can be carried out interactivelyduring the analysis.

You can use the Early Warning System (EWS) to look for any unusualsituations and react to and correct these in much earlier.

Using flexible analyses, you can individually compile and compress keyfigures. You can also structure the layout of your report to meet yourrequirements. For reports, you can also define key figures composedof computing formulas from existing key figures. This means that youcan multiply key figures or calculate the quotient of two key figures, forexample. The data contained in the list can be converted into graphicformat.

The Logistics DataWarehouse is open and therefore allows you to carry outanalyses using external programs, such as Microsoft Excel or native SQL.

Reporting in the LIS

Explain the information structures used for analysis in the LIS. Describebriefly how the EWS and flexible analyses work, though standard analysesare the main focus here.

The Early Warning System (EWS) allows you to make decision-orientedselections and to check weak areas in Logistics, by enabling you to searchfor exceptional situations. This means that you can detect and rectifypotential problems at an early stage.

Flexible analyses allow you to tailor the way data is combined andconsolidated to suit individual needs. Report Writer functionality enablesyou to create reports for a variety of applications. The Report Writer canalso be used in extended general ledger and cost center accounting asa tool for creating reports.

More information on LIS is covered in the course, LO930.

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Figure 196: Reporting in Standard Analyses

Standard analyses provide a wide range of functions for creatingpresentations and analyses for the data basis in the LIS.

The data basis for a standard analysis is established when you determinean object to analyze (for example, purchasing group, vendor, materialgroup) and make selections.

This data is then organized and can be displayed in an initial list and avariety of drill-down lists. Each analysis can be archived.

You can use the standard transactions in the application to display thecomplete master record or document information from the variousdrill-down levels of the list.

A wide range of functions can be used to individually examine the keyfigures and characteristic values on which the analysis is based froma business perspective. All the functions for statistical analyses aregraphically supported.

Reporting in Standard Analysis

Explain the various options on the slide without going into great detail.The demo will show some of the functionality.

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Demonstration: Demonstration of Standard Analysis

PurposeIn the Purchasing Information System, carry out a material analysis inplant 1000, purchasing organization 1000 in order to demonstrate some ofthe features of standard analysis.

System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Logistics Controlling → Purchasing Information

System → Standard Analyses → Material.

2. Input selection criteria: Purch. Organization 1000, Material (blank),Plant 1000.

3. Execute and visually compare the key figures, Order Value, OrderQuantity, and GR Quantity at the Material level.

4. Do a drill down, showing Vendor level, and then month. Then goback to the top.

5. Change the characteristic display, first to key and description, thento key only.

6. Do an ABC Analysis of the materials based on Order Value.

7. Add and rearrange some new key figures.

8. Show that the result can be exported or sent by mail.

Demonstration: Optional Demonstration using EWS

PurposeThis will give the students a glimpse of what can be done in StandardAnalysis when applying an exception.

Caution: You need to have created the exception before class inorder to do this, as it is not a part of the standard class setup. Seethe instructor�s notes at the beginning of the unit, Reporting andAnalysis in MM.

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System DataSystem:Client:User ID:Password:Set up instructions:1. Choose Logistics → Logistics Controlling → Purchasing Information

System → Standard Analysis → Vendor.

2. Input selection criteria: Purch. Organization 1000, Period to analyzecurrent month only, Exception DEMO. All other selection fields areblank.

3. Execute and point out how certain vendor(s) have a red line throughtheir data. It is because they went over the threshold on order valuein one month.

4. Click on Extras, Display Exception, where you can see the criteria forthe exception.

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479Choosing Key Figures within a Standard Analysis

1. Bring up the standard analysis list and determine if the key figuresshown are the ones you wish to analyze.

2. To change the displayed key figures, choose Edit, Choose key figures:

Figure 197:

3. Note the two columns of key figures in the dialog box. Those on theleft represent the key figures that display in the standard analysis.Those on the right represent all the available key figures remaining inthe info structure that you can add to the display column.

Continued on next page

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Figure 198: Choose Key Figures

4. To remove currently displayed key figures, highlight them and clickthe right-pointing arrow. To add key figures from the pool, highlightthe ones you want and click the left-pointing arrow.

5. If you want to move all key figures from one column, use the doublearrows.

Caution: Using new key figures on line in a standard analysisdoes not make them your permanent key figures. To setpermanent key figures for yourself, create user-definedsettings on the selection screen.

Allow 45 minutes for the exercise.

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481 Exercise 26: Reporting with LogisticsInformation SystemExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Define the basics of Logistics Information System� Execute basic standard analyses reports using the purchasing

information system and the inventory controlling system

Business ExampleThe director of purchasing needs to analyze the top purchasing groups bycertain criteria, and the materials manager needs to analyze aspects ofthe storage location stocks.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1:Analyze purchasing values for purchasing groups

1. You want to use the Purchasing Information System to determinea standard analysis for the scope of procurement for purchasinggroups T01 to T18 for the purchasing organization 1000. Limitthe analysis period from last month to the current month.

Task 2:Change characteristic display

1. You want to display both the name of the purchasing group and thekey for the characteristic. Choose the relevant characteristic display.

Continued on next page

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Task 3:Add key figures

1. You need information about the number of purchase order items andthe number of deliveries. Add these two key figures to the standardanalysis. Make a note of the total purchase order value and the totalnumber of purchase order items for your purchasing group T##.

Question AnswerWhat is the total order value?What is the number of POs?What amount has already been settled?

Task 4:Display vendors for a purchasing group

1. With which vendors have you effected purchase orders for purchasinggroup T##? Make a note of the number of vendors and the total ordervalue for those vendors.

Question DataNumber of VendorsOrder Value for these vendors

Task 5:Determine the top 5 purchasing groups

1. Which purchasing groups had the five highest order values duringthe analysis period? Write down the total order value of the toppurchasing group.

Question AnswerTop 5 purchasing groupsOrder value of the toppurch. group

Continued on next page

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Task 6:Perform an ABC analysis

1. Determine the most important vendor in terms of order value forpurchasing organization 1000 and the purchasing groups T01 toT18. To do this, carry out an ABC analysis for the key figure ordervalue.

Choose the percentage total of the order value. Segment A is 70%,segment B is 20%, and segment C is 10%.

Look at the complete list of the ABC analysis of the order value.Which vendor has the highest order value?

Hint: Before you perform the ABC analysis, make sure youstart with the initial list (the purchasing groups). From theinitial list, you must then switch the drill-down to the vendorin order to see all the vendors in the analysis. View→ Switchdrill-down → √ Vendor.

Field DataVendor

Task 7:Display the selection log

1. To interpret the result of your analysis correctly, it is important thatyou know the selection criteria used in the analysis. You shouldtherefore look at the selection log for purchasing group analysis.What is the key and description of the info structure for this analysis?

Field DataInfo Structure KeyDescription

Task 8:Analysis of storage locations

1. You want to use Inventory Controlling to analyze your storagelocation stocks and possibly transfer materials that are stored in thewrong place. Check which stocks are located in storage location 0001of plant 1000.

Continued on next page

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Analysis period: 12 months ago through the current month.

Drill down by material group and display as a graphic the receiptquantities per material group.

Choose the material group with the greatest receipt quantity and drilldown by month. Display the materials for the month that has thegreatest receipt quantity.

Create a top-ten list in terms of the consumption quantities for thesematerials.

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Solution 26: Reporting with LogisticsInformation SystemTask 1:Analyze purchasing values for purchasing groups

1. You want to use the Purchasing Information System to determinea standard analysis for the scope of procurement for purchasinggroups T01 to T18 for the purchasing organization 1000. Limitthe analysis period from last month to the current month.

a) Follow the menu path: Logistics → Materials Management→ Purchasing → Purchase Order → Reporting → PurchasingInformation System → Standard Analyses → Purchasing Group.Alternatively: Logistics → Logistics Controlling → PurchasingInformation System→ Standard Analyses→ Purchasing Group.

b) Enter the following data:

Field DataPurch. Organization 1000

Purchasing Group T01 to T18

Analysis Period (previous and currentmonth)

Task 2:Change characteristic display

1. You want to display both the name of the purchasing group and thekey for the characteristic. Choose the relevant characteristic display.

a) Choose Settings→ Char. Display→ Key and Description.

Hint: If the column width is not sufficient to displaythe characteristics, you can increase the width bydouble-clicking the relevant column and entering ahigher value for the width.

Continued on next page

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Task 3:Add key figures

1. You need information about the number of purchase order items andthe number of deliveries. Add these two key figures to the standardanalysis. Make a note of the total purchase order value and the totalnumber of purchase order items for your purchasing group T##.

Question AnswerWhat is the total order value?What is the number of POs?What amount has already been settled?

a) To answer these questions, choose Edit→ Choose Key Figures.

Task 4:Display vendors for a purchasing group

1. With which vendors have you effected purchase orders for purchasinggroup T##? Make a note of the number of vendors and the total ordervalue for those vendors.

Question DataNumber of VendorsOrder Value for these vendors

a) Select your purchasing group and expand it by vendor.b) To answer these questions, choose View→ Drill-down By Vendor.

Task 5:Determine the top 5 purchasing groups

1. Which purchasing groups had the five highest order values duringthe analysis period? Write down the total order value of the toppurchasing group.

Continued on next page

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Question AnswerTop 5 purchasing groupsOrder value of the toppurch. group

a) To answer these questions, navigate to the original list for allpurchasing groups via View → Basic List.

Select the column that shows the order value and choose the Topn... button. Restrict the number to 5 purchasing groups.

Task 6:Perform an ABC analysis

1. Determine the most important vendor in terms of order value forpurchasing organization 1000 and the purchasing groups T01 toT18. To do this, carry out an ABC analysis for the key figure ordervalue.

Choose the percentage total of the order value. Segment A is 70%,segment B is 20%, and segment C is 10%.

Look at the complete list of the ABC analysis of the order value.Which vendor has the highest order value?

Hint: Before you perform the ABC analysis, make sure youstart with the initial list (the purchasing groups). From theinitial list, you must then switch the drill-down to the vendorin order to see all the vendors in the analysis. View→ Switchdrill-down → √ Vendor.

Field DataVendor

a) To answer these questions, go to the basic list again, and thenswitch the drill-down to display by vendor.

b) Select the Order Value column.c) Choose Edit → ABC Analysis, using Total order value strategy

%. Accept the proposed segment sizes.

In the graphic displayed, you can look at the segment overviewor the individual segments in the list display.

Continued on next page

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Task 7:Display the selection log

1. To interpret the result of your analysis correctly, it is important thatyou know the selection criteria used in the analysis. You shouldtherefore look at the selection log for purchasing group analysis.What is the key and description of the info structure for this analysis?

Field DataInfo Structure KeyDescription

a) To answer these questions, choose Extras→ Selection Log.

Field DataInfo Structure Key S011

Description Purchasing Groups

Task 8:Analysis of storage locations

1. You want to use Inventory Controlling to analyze your storagelocation stocks and possibly transfer materials that are stored in thewrong place. Check which stocks are located in storage location 0001of plant 1000.

Analysis period: 12 months ago through the current month.

Drill down by material group and display as a graphic the receiptquantities per material group.

Choose the material group with the greatest receipt quantity and drilldown by month. Display the materials for the month that has thegreatest receipt quantity.

Continued on next page

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Create a top-ten list in terms of the consumption quantities for thesematerials.

a) Follow the menu path: Logistics → Materials Management →Inventory Management→ Environment→ Inventory Controlling→Standard Analyses → Storage Location.

Alternatively: Logistics → Logistics Controlling → InventoryControlling→ Standard Analyses→ Storage Location.

b) Enter the following data:

Field Name DataPlant 1000

Storage Location 0001

Analysis Period (the past 12 monthsincluding the currentmonth)

c) Switch the drill-down selection by material group by choosingSwitch Drill-down icon or View→ Switch Drill-down.

d) To go to the graphic display, choose the Graphics icon or Goto→Graphics.

e) Select the group with the highest receipt quantity and expandit by month by choosing the Drill-down by icon or View →Drill-down by.

f) Choose the month that has the greatest receipt quantity andexpand it by material.

g) Select the column that shows the Total Usage quantities andchoose the Top n... button. In the number field, enter the value10.

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Lesson Summary

You should now be able to:� Define the basics of the Logistics Information System� Execute basic standard analysis reports using the purchasing

information system

Related Information

� The following SAP Library address will give you more informationon standard analysis in R/3. Follow the suggested menu path.

SAP R/3 → appropriate release → appropriate language → Logistics →Logistics� General (LO)→ Logistics Information System (LO-LIS) →Logistics Information System (LO-LIS)→ Standard Analysis→ Basics

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Unit SummaryYou should now be able to:� Create basic list displays for purchasing and stock movements� Define the basics of the Logistics Information System� Execute basic standard analysis reports using the purchasing

information system

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LO020 Test Your Knowledge

491Test Your Knowledge

1. What is a variant?

2. You can customize the Selection Parameters in the Purchasing ListDisplays.Determine whether this statement is true or false.□ True□ False

3. Which of the following statements is true about the R/3 List Display?Choose the correct answer(s).□ A Information can be displayed only one way.□ B Once documents are deleted, you can still see them on

a List Display.□ C You can choose by category where you want columns to

total.□ D It is interactive.

4. Which reporting tool should be used in the R/3 System to obtain anopen purchase order report?Choose the correct answer(s).□ A The open purchase order report□ B Material documents list□ C Standard analysis by vendor□ D Purchase order list display

5. What are the three main elements of an info structure?

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Test Your Knowledge LO020

6. The data displayed in standard analysis can be displayed in variousgraphics.Determine whether this statement is true or false.□ True□ False

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LO020 Test Your Knowledge

493Answers

1. What is a variant?

Answer: A variant is a saved list of inputs you can populateautomatically into the fields of a selection screen.

2. You can customize the Selection Parameters in the Purchasing ListDisplays.

Answer: True

The R/3 System comes with a number of Selection Parameters alreadydefined. You can customize this list in the IMG.

3. Which of the following statements is true about the R/3 List Display?

Answer: D

List displays are interactive in that you can choose the data to bedisplayed in your list. Once the list is displayed, you can double clickon the document number in the list and go to the original document.

4. Which reporting tool should be used in the R/3 System to obtain anopen purchase order report?

Answer: D

There is no such thing as "The Open Purchase Order Report" inthe R/3 System. The purchase order list display is used via itsselection criteria to create a list of open purchase orders per the user�srequirements.

5. What are the three main elements of an info structure?

Answer: The three main elements are characteristics, key figures,and period unit.

6. The data displayed in standard analysis can be displayed in variousgraphics.

Answer: True

This is one of the management features of standard analysis.

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Unit 9495 mySAP.com Implementation

By the time many students come to this class, their companies havealready decided upon a methodology for implementing SAP® software.Therefore, this unit should stay at a very high level and be kept brief. Theonly tool that they will all have to deal with ultimately is the IMG.

Unit OverviewThe elements of the mySAP.com implementation methodology issummarized in this unit. The implementation roadmaps and majorimplementation tools are discussed.

Unit ObjectivesAfter completing this unit, you will be able to:

� List the four key components of the ValueSAP framework thatsupports the customer�s SAP product life cycle

� Describe how business maps form a blueprint for an organization�sprocesses

� Describe how Accelerated SAP (ASAP) can be used to manage anSAP project implementation

� Create a plant and assign it to a company in the ImplementationGuide

� Differentiate between ASAP and Global ASAP methodologies� Explain how the Continuous Business Improvement tool assists in the

execution of the actual operation of the implementation

Unit ContentsLesson: mySAP.com Implementation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .612

Demonstration: Demonstrating the Implementation Guide (IMG)... .619Exercise 27: Creating a New Plant.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .625Exercise 28: Assigning a Plant to a Company Code ... . . . . . . . . . . . . . . .629

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Lesson:496

mySAP.com ImplementationLesson Duration: 20 Minutes

Lesson OverviewThis lesson introduces the ValueSAP framework, which outlines howSAP focuses its support to its customers as they proceed through theirSAP product life cycle: Discovery and Evaluation, Implementation andContinuous Improvement. Emphasis is on understanding that the goal ofSAP�s lifecycle approach is a cyclical review and adaptation of companystrategy, business processes, and supporting technology that reflects anever changing business environment.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� List the four key components of the ValueSAP framework thatsupports the customer�s SAP product life cycle

� Describe how business maps form a blueprint for an organization�sprocesses

� Describe how Accelerated SAP (ASAP) can be used to manage anSAP project implementation

� Create a plant and assign it to a company in the ImplementationGuide

� Differentiate between ASAP and Global ASAP methodologies� Explain how the Continuous Business Improvement tool assists in the

execution of the actual operation of the implementation

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In this lesson, you will introduce the participants to the ValueSAPframework. Explain that this outlines how SAP focuses its support to itscustomers as they proceed through their SAP product life cycle. Point outthat the ValueSAP approach is broken into the following three phases thatwill be discussed in more detail in the lesson:

� Discovery and Evaluation: This phase helps the customer determinetheir solution strategy and develop a solution map that representstheir company�s business process requirements.

� Implementation: SAP provides implementation methodologies(ASAP and Global ASAP) and tools (Roadmap, Question & AnswerDatabase, accelerators) to support the customer in completing theirimplementation efficiently and reducing the time to benefit.

� Continuous Improvement: Emphasize that this phase is ongoing afterimplementation; companies should continue to monitor performanceagainst benchmarked key performance indicators and implementprocess and system changes as recommended.

Business ExampleAs the newly assigned SAP Project Manager for your company, you havebeen directed to complete the implementation as efficiently and costeffectively as possible, while ensuring the incorporation of best businesspractices into your organization�s processes.

ValueSAPWhile working with SAP, you discover the best mySAP.com solutionfor your business, a solution that is specific to your industry, tuned tobest-in-class business practices and one that delivers real value to yourbusiness now and in the future.

Once you have discovered what you need, SAP can help you evaluateand map out the mix of mySAP.com software, technology, and servicesrequired for your business enterprise solution. The goal is to achieve aclear return on investment, lowest cost of ownership, and real value fromyour mySAP.com solution throughout its life.

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Figure 199: ValueSAP Framework

The ValueSAP framework contains a consistent set of tools, methodologies,content, and programs that all work together in each phase of the lifecycleto provide SAP�s current and future customers with the keys to unlockthe potential of mySAP.com. Used to its full potential, the ValueSAPframework helps organizations use SAP enterprise applications to identifyand adopt agile business practices and achieve the highest business valuefrom their SAP solution.

The ValueSAP framework supports the execution of the lifecycle concept.Used correctly, the ValueSAP framework helps organizations establish anenvironment for performance measurement and continuous improvementof business processes.

Discovery and Evaluation

This is the first phase of the ValueSAP lifecycle approach. Briefly explainthat the purpose of this phase is for SAP to work with the customer todiscover the best mySAP.com® solution for their business and map out themix of mySAP.com software, technology, and services required for theirbusiness enterprise solution. This solution will be specific to their industry,tuned to best-in-class business practices, and deliver real value to theirbusiness now and in the future. Emphasize that the goal is to achieve aclear return on investment, lowest cost of ownership, and real value fromtheir mySAP.com solution throughout its life.

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SAP Solution Maps map out the business processes within anorganization. They present a complete business solution of an industryin a process-oriented way.

� Coverage information shows, for example, whether SAP or partnerssupport the processes.

� Link-to-product lists give further information about particularproducts.

� Link to relevant Collaborative Business Scenarios (CBS) is available.

Figure 200: Discovery and Evaluation

SAP Solution Maps Edition 2001 are now available.

Implementation

The second phase of the ValueSAP framework contains SAP�s tried andtested methodologies, tools, and road maps that can help the customerquickly experience the benefits of a successful implementation. Explainthat the customer should follow the Global ASAP methodology if they aredoing a multi-site or multinational implementation.

The slide provides an overview of the different components of the ASAPsoftware with their function.

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SAP�s tried and tested methodologies, tools, and road maps can help youexperience the benefits of a successful implementation quickly.

You start by performing the following actions:

� Define an implementation plan using the industry-specific metricsand Key Performance Indicators (KPIs) to scope your implementationproject and evaluate progress as the project proceeds.

� Employ total cost ownership modeling covering the evaluationof mySAP.com solutions through acquisition, operation, ongoingmanagement and expansion.

� Roll key performance indicator data into the implementation project,linking KPIs to business processes to prioritize the implementation.KPIs also form the basis for solution review and ongoing evaluationof the implementation project.

� Tried and tested implementation methodologies and tools such asAcceleratedSAP help deliver results on time and to budget.

Figure 201: Implementation with ASAP

AcceleratedSAPAcceleratedSAP (ASAP) is SAP�s rapid implementation solutionspecifically designed to streamline and standardize the implementationprocess to achieve mission critical business functionality as soon aspossible (asap). AcceleratedSAP optimizes time, quality, and efficient useof resources for your implementation. While allowing you to exploitthe value of SAP as quickly as possible, ASAP also lays the foundationfor continuous improvement. That�s why ASAP supports not only theentire life cycle but also the initial implementation. Even if you have not

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used ASAP for the implementation, ASAP can still help you implementadditional business processes in SAP or optimize existing ones. Also,the special Roadmap of ASAP for Upgrades tells you exactly what to doand what to test, ensuring that you update your SAP system in the mostefficient way.

ASAP was released over three years ago, and has since been used inmore than 1000 projects worldwide. More than 18,000 SAP or partnerconsultants have been trained in ASAP. Many of SAP�s implementationpartners have either adopted ASAP as their standard methodology(AcceleratedSAP Partners) or have incorporated it into their ownmethodology (Powered by AcceleratedSAP Partners).

Due to strong positive feedback from experienced consultants and thegreat successes, AcceleratedSAP has been established as SAP standardimplementation approach. AcceleratedSAP has reached such a high levelof maturity and functional richness that it should be considered by everySAP customer. Whether you follow the entire Roadmap or just use certainaccelerators, you will save considerable time and improve quality andrepeatability of your implementation activities.

Most important, ASAP supports the entire team, both internal teammembers (customer) and external (consultants), as well as all aspects of aproject implementation: project management, business process definition,organization change management, training and the technical areas.

Figure 202: ASAP Tools

Elements of AcceleratedSAP

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AcceleratedSAP is SAP�s implementation solution for efficient SAPprojects. ASAP combines a proven methodology with powerful tools,services and quality reviews to optimize SAP implementations.

The Roadmap is a methodology and project plan with detailed descriptionsabout what, why, and how certain activities are performed, and whoperforms them. The Roadmap ensures that nothing is left out and thatproject management plans well in advance for the execution of activitiessuch as end-user training. On the technical side, the Roadmap addressesareas like interfaces and data conversion and of course the usage ofReady-To-Run R/3, SAPs preconfigured basis system to jump start yourtechnical implementation. Wherever possible, ASAP provides examples,checklists, or templates. ASAP calls these documents Accelerators. Theyare used in any type of implementation, even when you do not use allASAP elements.

The Roadmap consists of five phases:

� Phase 1: Project Preparation� Phase 2: Business Blueprint� Phase 3: Realization� Phase 4: Final Preparation� Phase 5: GoLive and Continuous Change

Tools include ASAP-specific tools to support project management,questionnaires to help define business process requirements, checklistsand many other tools to simplify your implementation (Report Navigator,technical guidebooks and so forth). Many accelerator files are providedin Microsoft Project or other Microsoft Office products. ASAP providesthe files, all you need is the software to use them. As of Release 4.6, youcan also access all configuration tools such as the Implementation Guidedirectly from the ASAP tool. Moreover, you can visualize the processes ofthe Reference Model using specific viewers that are free-of-charge withinASAP software.

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Figure 203: Customizing Implementation Guide (IMG)

Service and Training includes all consulting, education, and supportactivities. EarlyWatch, remote upgrade, Quality reviews or GoingLivechecks are just part of the service palette that ensures total quality andallows you to actively tune your SAP system. These services help tostandardize certain consulting tasks to perform them as quickly as possible.

Knowledge Management is also supported by ASAP. For instance, youcan attach your own documents at every level within the Roadmap andthe Question & Answer Database. Moreover, ASAP provides you withmany predefined documentation templates (for example Business ProcessProcedures) and supports the role orientation throughout the life cycleincluding role-oriented training and user authorizations.

Demonstration: Demonstrating the ImplementationGuide (IMG)

PurposeIntroduce participants to one of the implementation tools, theImplementation Guide (IMG). Demonstrate how to create a plan and thenassign the plan to a company code in the IMG. The participants will beasked to complete the same task in the exercises at the end of this lesson.

System DataSystem: T70

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Client: 400�404User ID: TrainingPassword: Monthly PasswordSet up instructions: None Required1. Follow the menu path Tools→ AcceleratedSAP→ Customizing→ Edit

Project.

2. The required steps are detailed in the exercises/solutions entitled,Creating a New Plant and Assigning a Plant to a Company Code.

3. Explain this is an example of simple configuration in the R/3 System.

Global ASAPGlobal AcceleratedSAP delivers a process-oriented, clear, andconcise program plan, project plan, and methodology � the GlobalAcceleratedSAP Roadmap � to provide step-by-step direction throughoutyour global, multi-site SAP implementation.

The Global ASAP Roadmap consists of four phases:

� Phase 1: Global Program Setup� Phase 2: Global Business Blueprint� Phase 3: Global Realization� Phase 4: Global Maintenance & Support

Within those four Phases, Phase 1: Global Program Setup is the mostimportant and crucial phase. Here you lay the foundation for your overallenterprise-wide implementation program.

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Figure 204: Implementation Strategy

Tools and Accelerators leverage the powerful configuration capabilitiesof the SAP system, providing a seemingly limitless toolbox with tools formodeling, implementation, continuous improvement, and documentation.Proven models and industry templates efficiently speed implementationalong with a specially designed Global Question and Answer Databaseand Template Process Master List.

SAP Project Team Training: A three-level approach integrates training intothe implementation process and lets you build an efficient, comprehensivetraining program for faster learning and better retention throughout yourorganization.

SAP Support and Services network can answer the questions that arise andsupport major project activities, both during your implementation andonce your system has gone live. It is your in-flight assistance program, soyou always have the security of an expert in the cockpit.

Continuous Improvement with Global AcceleratedSAP

Implementing and using your SAP system on a global basis gives youongoing knowledge and expertise. This experience is a valuable asset thatcan be used to enhance your global business processes and implementationstrategy. As you see what works best, you can update the Global TemplateSystem that is configured through Global AcceleratedSAP. You can alsoreevaluate your business processes at any time to continually optimizeyour enterprise and existing SAP systems by adding new SAP solutionsfor your changing business needs. Better yet, the Global AcceleratedSAPmethodology can be used on an ongoing basis to keep your system

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and business process optimized, always flying at peak performance.Companies continually reap extraordinary benefits using this continuousimprovement approach.

Continuous Business Improvement

Emphasize that this phase is ongoing after implementation; companiesshould continue to monitor performance against benchmarked KPIsand implement process and system changes as recommended. TheValueSAP approach is a framework for performance tuning and businessimprovement to help customers optimize their investment in mySAP.comsolutions. ValueSAP Continuous Business Improvement Services helpevaluate a company�s current position, revisit their original businessobjectives, and define and exploit new business opportunities.

To help you operate all the stages of implementation through to theongoing performance of your enterprise solution, mySAP.com and SAPpartners represent a powerful network of resources.

Performance measurement and review, end-user training, and knowledgemanagement together with a broad range of customer service and supportall help to deliver a stable, high-value mySAP.com solution.

Figure 205: Continuous Business Improvement

How does continuous business improvement work?

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Continuous business improvement works by:

� Monitoring progress before, during, and after GoLive, using thesolution review techniques built into mySAP.com ImplementationRoadmaps.

� Maintaining productivity with mySAP.com services such as ProjectReview, EarlyWatch, Remote Consulting.

� Building and maintaining skilled usage of your system withmySAP.com�s role-based training and knowledge managementcurriculum. The focus for this is provided by the key performanceindicators (KPI) used to build the original business case.

� Using SAP Business Information Warehouse and SAP StrategicEnterprise Management to build and support knowledgemanagement at every level in your organization. You can ensureongoing monitoring of the performance of your mySAP.com solutionagainst benchmarks and KPIs using techniques such as the balancedscorecard.

How can I continuously improve my business?

Because business never stands still, ValueSAP can help you continue toadopt the best business practices and improve your enterprise system. Byusing industry benchmarks, a framework for performance tuning andbusiness improvement helps you optimize your investment in ValueSAPContinuous Business Improvement Services help you evaluate yourcurrent position, revisit your original business objectives, and define andexploit new business opportunities.

What is the continuous business improvement process?

A four-phased continuous business improvement assessment:

1. Identifies key areas for development and improvement2. Uses industry specific benchmarks and key performance indicators,

to identify and define best practice in key business processes3. Determines recommendations based on a thorough analysis of

organization, people, business processes, information technology,and business strategy

4. Uses training, education, system design improvements, systemoptimization, and recommendations for new functionality to drivebusiness agility, competitiveness, and profitability

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507 Exercise 27: Creating a New PlantExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a new plant in the SAP Implementation Guide

Business ExampleSince your North American division is growing, your company is planningon building a new plant. To account for all interaction from Financials,Sales, and Production, you need to create this new plant in your system.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task:You will create a new plant using the SAP Implementation guide andcreate the associated address for the new plant.

1. Create the Enterprise element Plant in the SAP Implementation Guideusing the information provided.

Field DataPlant 99##

Name Group ## Plant

Street East Main Street

House Number 90210

Postal Code 12306

Continued on next page

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Field DataCity Albany

Country US

Region NY

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Solution 27: Creating a New PlantTask:You will create a new plant using the SAP Implementation guide andcreate the associated address for the new plant.

1. Create the Enterprise element Plant in the SAP Implementation Guideusing the information provided.

Field DataPlant 99##

Name Group ## Plant

Street East Main Street

House Number 90210

Postal Code 12306

Continued on next page

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Unit 9: mySAP.com Implementation LO020

Field DataCity Albany

Country US

Region NY

a) Choose Tools → AcceleratedSAP→ Customizingb) Choose Edit Project

c) Choose SAP Reference IMGd) Choose Enterprise Structure → Definition → Logistics General →

define, copy, delete, check plante) Choose Define plantf) Choose Execute

g) Choose Choose

h) Choose New Entriesi) Enter Plant: 99##

j) Choose

Hint: A window appears where you maintain theaddress for the plant.

k) Enter Name: Group ##l) Enter Street/House number: East Main Street/90210m) Enter Postal Code: 12306n) Enter City: Albanyo) Enter Country: USp) Enter Region: NYq) Choose Copy Enterr) Choose Backs) Choose Backt) Choose Cancel

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LO020 Lesson: mySAP.com Implementation

511 Exercise 28: Assigning a Plant to aCompany CodeExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� You will assign a plant to a company code in customizing.

Business ExampleOnce a plant has been created in the system, you can not use the plantin your day-to-day transactions until you associate this new plant tothe corresponding company that is responsible for the plant from anaccounting point of view.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task:You need to assign the new plant to a corresponding company code incustomizing.

1. Assign the plant you created in Exercise 1 (99##) to the followingCompany Code: 3000

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Unit 9: mySAP.com Implementation LO020

Solution 28: Assigning a Plant to aCompany CodeTask:You need to assign the new plant to a corresponding company code incustomizing.

1. Assign the plant you created in Exercise 1 (99##) to the followingCompany Code: 3000

a) Choose Tools → AcceleratedSAP→ Customizingb) Choose Edit Project

c) Choose SAP Reference IMGd) Chose Enterprise Structure → Assignment → Logistics General →

Assign plant to company codee) Choose Executef) Choose company code: 3000 IDES US INC

g) Choose Assignh) Choose Plant: 99## from the list of plantsi) Choose Adoptj) Choosek) Choose Exit

630 © 2003 SAP AG. All rights reserved. November 2001

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LO020 Lesson: mySAP.com Implementation

Lesson Summary

You should now be able to:� List the four key components of the ValueSAP framework that

supports the customer�s SAP product life cycle� Describe how business maps form a blueprint for an organization�s

processes� Describe how Accelerated SAP (ASAP) can be used to manage an

SAP project implementation� Create a plant and assign it to a company in the Implementation

Guide� Differentiate between ASAP and Global ASAP methodologies� Explain how the Continuous Business Improvement tool assists in the

execution of the actual operation of the implementation

Related Informationhttp://help.sap.com

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Unit Summary LO020

Unit SummaryYou should now be able to:� List the four key components of the ValueSAP framework that

supports the customer�s SAP product life cycle� Describe how business maps form a blueprint for an organization�s

processes� Describe how Accelerated SAP (ASAP) can be used to manage an

SAP project implementation� Create a plant and assign it to a company in the Implementation

Guide� Differentiate between ASAP and Global ASAP methodologies� Explain how the Continuous Business Improvement tool assists in the

execution of the actual operation of the implementation

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LO020 Test Your Knowledge

515Test Your Knowledge

1. Which element is not part of ValueSAP?Choose the correct answer(s).□ A Operations and Continuous Business Improvement□ B Implementation□ C ReEngineering□ D Discovery and Evaluation

2. SAP Solution Maps are used to map out the business processes withinan organization.Determine whether this statement is true or false.□ True□ False

3. AcceleratedSAP is a methodology to implement an SAP product.Determine whether this statement is true or false.□ True□ False

4. Which of the following are tools of the ASAP methodology?Choose the correct answer(s).□ A Customer Message Wizard□ B Implementation Assistant□ C Question and Answer Database□ D Online Service System□ E B & C□ F A & D

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Test Your Knowledge LO020

516Answers

1. Which element is not part of ValueSAP?

Answer: C

Reengineering might be something you do during the implementationof an SAP product but it is not a ValueSAP element.

2. SAP Solution Maps are used to map out the business processes withinan organization.

Answer: True

Solution Maps allow a company to customize how business processeswill be implemented within a company. The Solution Map Composerallows a company to create its own solution map for its business.

3. AcceleratedSAP is a methodology to implement an SAP product.

Answer: True

ASAP and Global ASAP are used as a road map guiding a businessthrough an implementation.

4. Which of the following are tools of the ASAP methodology?

Answer: E

Although the Online Service System and the Customer MessageWizard are tools to help support a customer, they are not part ofthe ASAP tool set.

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Unit 10517 Supplemental Materials

This unit provides participants with an optional comprehensive exercise.There is nothing for the instructor to present in class.

Unit OverviewThis unit contains a comprehensive exercise that will allow you to reviewthe basic procurement processes.

Unit ObjectivesAfter completing this unit, you will be able to:

� Carry out the basic procurement process� Determine your comprehension of the material presented in class by

performing procurement transactions in the system

Unit ContentsLesson: Business Process Review.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .636

Exercise 29: Business Processes... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .637

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Unit 10: Supplemental Materials LO020

Lesson:518

Business Process ReviewLesson Duration: Minutes

Lesson OverviewThis lesson contains a comprehensive exercise that can be used to test yourknowledge of the concepts presented in the class.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Carry out the basic procurement process� Determine your comprehension of the material presented in class by

performing procurement transactions in the system

This lesson contains a review exercise for the participants to complete,time permitting, in class. It can be used to test their understanding ofthe concepts taught in class.

Business ExampleAfter attending training, you�d like to test your knowledge of theprocurement process in the SAP system.

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LO020 Lesson: Business Process Review

519 Exercise 29: Business ProcessesExercise Duration: Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Review the business processes in the procurement cycle

Business ExampleYou have various roles in the following business process scenario. Eachtask is labeled with the role you are to perform.

Note: You may not have time to work through these exercisesduring the training course. You can use these documents to workthrough the exercises yourself after the course.

The instructor will answer any questions.

No solutions are provided for this exercise

In this exercise � unlike the previous ones � you are providedonly with the most important information you need to do theexercises. It is therefore essential that you read the scenariosthoroughly and use them in the correct business processes. Youwill find that it is up to you to provide much of the informationand data.

The knowledge you have acquired in the course is the onlyprerequisite for this exercise. Any extra requirements are marked.

A functional business process is provided so that you can checkwhether you have completed the exercise successfully.

If you have any problems during the exercises, we recommend thatyou look in the appropriate unit first and carry out the exercisestep by step. Please make a note of the data and documents youcreate on this exercise sheet.

System DataSystem: For Future Use. Do not modify this line.Client: For Future Use. Do not modify this line.User ID: For Future Use. Do not modify this line.Password: For Future Use. Do not modify this line.

CATT: [If a CATT is required, enter the CATT name.Delete this tag if not used.]

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Unit 10: Supplemental Materials LO020

Set up instructions:

1. [Enter all instructions necessary for the maintenance of this exercise.]

Task 1: Basic DataYou will need the following master data in this exercise.

1. You are provided with information on all the required data andsettings.

Unless you are told otherwise, work with:

Company code: 1000 (IDES)Purchasing organization: 1000 (IDES)Plant: 1000 (Hamburg)Purchasing group: LO020�## (T##)MRP controller: 0##

Use only vendors T-K12A##, T-K12B##, and T-K12C## for yourprocesses.

This makes it easier for you to find any errors and will not affect theother groups.

Task 2: Engineering/Design DepartmentYou have just finished manufacturing a new product. To manufacturethis product, you need a new component that has never been used beforein your company. This component is to be managed under the numberTeil-## in your company. Teil-## goes into full production and, in thefuture, will be available as a spare part for internal customers.

1. In the Engineering/Design view, enter the data required. Whichmaterial type do you choose?

___________________________

2. The description of the component is:

____________________

3. Which view(s) do you create?

___________________________

4. Which data do you enter?

______________________________________________________

Continued on next page

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LO020 Lesson: Business Process Review

______________________________________________________

Task 3: PurchasingThe Engineering/Design department has informed you that a new materialTeil-## has been created in the system. You are asked to find possiblevendors for the component in the next few days.

1. In your company, the buyer usually maintains the data relevant toaccounting. As you do not yet know what the material costs, donot enter the accounting data until you know the prices of possiblesuppliers. Teil-## is relatively low in value and is not subject toshort-term price fluctuations. You want to valuate it at a fixed price.

2. Which view(s) do you create?

____________________________

Make a note of the most important data:

______________________________________________________

______________________________________________________

______________________________________________________

Task 4: WarehouseMake sure that Teil-## can be placed into storage. There are no particularrequirements.

1. Which view(s) do you create?

____________________________

Make a note of the most important data:

______________________________________________________

______________________________________________________

Task 5: PurchasingYou check in the system if price data for Teil-## has already been enteredin another department.

1. How do you do this (transaction)? Is there price data?

______________________________________________________

______________________________________________________

Continued on next page

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Unit 10: Supplemental Materials LO020

2. You send RFQs to three vendors (T-K12A##, T-K12B##, andT-K12C##). The amount in the RFQ is 10,000 in accordance with yourexpected annual requirements.

As QI wants to check the parts before the vendor is released, informyour potential vendors in your RFQ that you will order 100 parts onthe condition that they are given the order.

RFQ numbers / vendor:

______________________________________________________

______________________________________________________

______________________________________________________

3. You have received the quotations.

T-K12A## offers Teil-## for 12 UNI / pc for quantities above 100 pcswith delivery free of charge. The delivery time is 5 days.

T-K12B## can deliver Teil-## for 10 UNI / pc, but requires a flat-ratelow-quantity surcharge of 250 UNI for quantities below 200 pcs.There is also a flat-rate freight charge of 150 UNI per delivery. Thedelivery time is 1 week.

T-K12C## charges 14 UNI / pc, with no freight charge for quantitiesover 100 pieces and a 2% freight surcharge for quantities under 100pieces. The delivery time is 10 days.

4. According to the information from Production, you will order thematerial about 20 times per year; that is, you expect deliveries of500 pieces a time.

Analyze the quotations and reject those you do not want to include.

Most reasonable vendor:_____________ Effective price / pc ________.

5. Create an info record based on the most reasonable quotation.

6. Extend the material master record of Teil-## with the data that isrequired for the purchase order and account management.

Which view(s) do you maintain? ____________________________

Make a note of the most important data:

______________________________________________________

______________________________________________________

7. Order 100 pieces of the material with reference to the most reasonablequotation.

Continued on next page

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LO020 Lesson: Business Process Review

Also order an inspection gauge for your cost center 4100 fromthe same vendor (material without a master record). The vendorinformed you by telephone that the price is 200 UNI.

As the buyer, you want to be kept informed of the status of yourpurchase orders. Configure the system so that it sends you a messagewhen goods are received for a purchase order.

Issue the purchase order as a message.

PO number:____________________________________________

8. Shortly after you have issued the purchase order, you notice that yourequire another piece of material M-01. You therefore change thepurchase order and add the monitor as a third item. The price is 1000UNI. You send the changed purchase order to the vendor.

9. The vendor calls you because he or she does not know anything aboutitem 3, M-01. You discover that you have ordered the item from thewrong vendor and cancel it. To let the vendor know, you send himor her a message to this effect.

Task 6: WarehouseThe vendor sends you 50 pieces of the ordered material plus the inspectiongauge.

1. Teil-## is inspected first.

2. The QM department makes a positive usage decision. You thereforetransfer Teil-##.

3. The prototype production department requires 25 pieces to preparethe material for repetitive manufacturing. You issue the requiredquantity to the appropriate cost center (4110).

Hint: Goods issue, Movement type: Consumption for costcenter from warehouse

Task 7: Engineering/Design, Manufacturing, MaterialsPlanning and PurchasingIt is decided that the material does not have any defects and shouldbe procured regularly from this vendor. It is also decided that theprocurement process with regard to materials planning, purchasing, andinvoice verification should be as simple and cheap as possible.

1. As the MRP controller responsible, you work out an appropriateplanning strategy.

Continued on next page

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Unit 10: Supplemental Materials LO020

After consulting the warehouse and production, you decide that it isnot advisable to keep more than 800 pieces of the material Teil-## instock (=maximum stock level).

As soon as the stock drops below 300 pieces, the replenishment of thematerial is automatically initiated.

In this case, the stock level should be completely replenished.

To cover possible risks and fluctuations, you plan to hold a safetystock of 50 pieces.

According to the Purchasing Department, the vendor requires adelivery time of 5 days.

As you also want to take future requirements into account inmaterials planning, you decide on an approporiate MRP procedure(choose MRP type V1).

2. Which views and indicators do you maintain? Make a note of theappropriate parameters.

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

Task 8: Invoice VerificationThe vendor charges you for the complete quantity of the sample purchaseorder (100 pc).

1. You enter and post the invoice.

Can the Financial Accounting Department pay the invoice?

Give a reason for your answer.

______________________________________________________

______________________________________________________

Continued on next page

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LO020 Lesson: Business Process Review

Task 9: PurchasingAs you do not want to process every purchase requisition for the vendorand Teil-## manually, you configure the system so that the purchaserequisitions are automatically assigned with sources of supply.

1. These purchase requisitions are to be converted to purchase ordersautomatically via a report. The invoice verification process shouldalso be as simple as possible. You have therefore arranged with thevendor that you settle his or her payments directly after the goodsreceipt is posted. Therefore, the vendor does not issue an invoice.

2. Maintain all the data that is required to do this.

Hint: Material master, vendor master, info record, and sourcelist.

Which entries are essential?

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

Task 10: Start of ProductionAs the person responsible in Production, you require 200 pieces of Teil-##in 2 weeks.

1. You therefore create a reservation to ensure that this component isavailable for the required date.

Hint: ... → Inventory Management→ Reservation→ Create

Base date: Current date +2 weeksMovement type: 201Cost center: 4100Teil-##: 200 pieces

Accept any messages and save

Continued on next page

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Unit 10: Supplemental Materials LO020

2. As the MRP controller, you are currently checking thestock/requirements list for Teil-##.

Are there any requirements and, if so, are these covered?

______________________________________________________

You carry out a planning run for Teil-## and save it.

What is the result?

______________________________________________________

3. In Purchasing, you are processing all purchase requisitions whichhave already been assigned sources of supply. Assign a source ofsupply for Teil-## and display the purchase order that is created.

PO number:_______________________________________

4. A delivery from vendor T-K12B-## arrives in goods receipt. It is theremaining 50 pieces from the sample purchase order and the orderedquantity from the reservation.

5. Using the ERS procedure, the accounts payable clerk settles all thevendor�s invoices for Teil-##.

Invoiced amount: ____________________________

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LO020 Lesson: Business Process Review

Solution 29: Business ProcessesTask 1: Basic DataYou will need the following master data in this exercise.

1. You are provided with information on all the required data andsettings.

Unless you are told otherwise, work with:

Company code: 1000 (IDES)Purchasing organization: 1000 (IDES)Plant: 1000 (Hamburg)Purchasing group: LO020�## (T##)MRP controller: 0##

Use only vendors T-K12A##, T-K12B##, and T-K12C## for yourprocesses.

This makes it easier for you to find any errors and will not affect theother groups.

Task 2: Engineering/Design DepartmentYou have just finished manufacturing a new product. To manufacturethis product, you need a new component that has never been used beforein your company. This component is to be managed under the numberTeil-## in your company. Teil-## goes into full production and, in thefuture, will be available as a spare part for internal customers.

1. In the Engineering/Design view, enter the data required. Whichmaterial type do you choose?

___________________________

2. The description of the component is:

____________________

3. Which view(s) do you create?

___________________________

4. Which data do you enter?

______________________________________________________

______________________________________________________

Continued on next page

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Unit 10: Supplemental Materials LO020

Task 3: PurchasingThe Engineering/Design department has informed you that a new materialTeil-## has been created in the system. You are asked to find possiblevendors for the component in the next few days.

1. In your company, the buyer usually maintains the data relevant toaccounting. As you do not yet know what the material costs, donot enter the accounting data until you know the prices of possiblesuppliers. Teil-## is relatively low in value and is not subject toshort-term price fluctuations. You want to valuate it at a fixed price.

2. Which view(s) do you create?

____________________________

Make a note of the most important data:

______________________________________________________

______________________________________________________

______________________________________________________

Task 4: WarehouseMake sure that Teil-## can be placed into storage. There are no particularrequirements.

1. Which view(s) do you create?

____________________________

Make a note of the most important data:

______________________________________________________

______________________________________________________

Task 5: PurchasingYou check in the system if price data for Teil-## has already been enteredin another department.

1. How do you do this (transaction)? Is there price data?

______________________________________________________

______________________________________________________

2. You send RFQs to three vendors (T-K12A##, T-K12B##, andT-K12C##). The amount in the RFQ is 10,000 in accordance with yourexpected annual requirements.

Continued on next page

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LO020 Lesson: Business Process Review

As QI wants to check the parts before the vendor is released, informyour potential vendors in your RFQ that you will order 100 parts onthe condition that they are given the order.

RFQ numbers / vendor:

______________________________________________________

______________________________________________________

______________________________________________________

3. You have received the quotations.

T-K12A## offers Teil-## for 12 UNI / pc for quantities above 100 pcswith delivery free of charge. The delivery time is 5 days.

T-K12B## can deliver Teil-## for 10 UNI / pc, but requires a flat-ratelow-quantity surcharge of 250 UNI for quantities below 200 pcs.There is also a flat-rate freight charge of 150 UNI per delivery. Thedelivery time is 1 week.

T-K12C## charges 14 UNI / pc, with no freight charge for quantitiesover 100 pieces and a 2% freight surcharge for quantities under 100pieces. The delivery time is 10 days.

4. According to the information from Production, you will order thematerial about 20 times per year; that is, you expect deliveries of500 pieces a time.

Analyze the quotations and reject those you do not want to include.

Most reasonable vendor:_____________ Effective price / pc ________.

5. Create an info record based on the most reasonable quotation.

6. Extend the material master record of Teil-## with the data that isrequired for the purchase order and account management.

Which view(s) do you maintain? ____________________________

Make a note of the most important data:

______________________________________________________

______________________________________________________

7. Order 100 pieces of the material with reference to the most reasonablequotation.

Also order an inspection gauge for your cost center 4100 fromthe same vendor (material without a master record). The vendorinformed you by telephone that the price is 200 UNI.

Continued on next page

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Unit 10: Supplemental Materials LO020

As the buyer, you want to be kept informed of the status of yourpurchase orders. Configure the system so that it sends you a messagewhen goods are received for a purchase order.

Issue the purchase order as a message.

PO number:____________________________________________

8. Shortly after you have issued the purchase order, you notice that yourequire another piece of material M-01. You therefore change thepurchase order and add the monitor as a third item. The price is 1000UNI. You send the changed purchase order to the vendor.

9. The vendor calls you because he or she does not know anything aboutitem 3, M-01. You discover that you have ordered the item from thewrong vendor and cancel it. To let the vendor know, you send himor her a message to this effect.

Task 6: WarehouseThe vendor sends you 50 pieces of the ordered material plus the inspectiongauge.

1. Teil-## is inspected first.

2. The QM department makes a positive usage decision. You thereforetransfer Teil-##.

3. The prototype production department requires 25 pieces to preparethe material for repetitive manufacturing. You issue the requiredquantity to the appropriate cost center (4110).

Hint: Goods issue, Movement type: Consumption for costcenter from warehouse

Task 7: Engineering/Design, Manufacturing, MaterialsPlanning and PurchasingIt is decided that the material does not have any defects and shouldbe procured regularly from this vendor. It is also decided that theprocurement process with regard to materials planning, purchasing, andinvoice verification should be as simple and cheap as possible.

1. As the MRP controller responsible, you work out an appropriateplanning strategy.

After consulting the warehouse and production, you decide that it isnot advisable to keep more than 800 pieces of the material Teil-## instock (=maximum stock level).

Continued on next page

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LO020 Lesson: Business Process Review

As soon as the stock drops below 300 pieces, the replenishment of thematerial is automatically initiated.

In this case, the stock level should be completely replenished.

To cover possible risks and fluctuations, you plan to hold a safetystock of 50 pieces.

According to the Purchasing Department, the vendor requires adelivery time of 5 days.

As you also want to take future requirements into account inmaterials planning, you decide on an approporiate MRP procedure(choose MRP type V1).

2. Which views and indicators do you maintain? Make a note of theappropriate parameters.

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

Task 8: Invoice VerificationThe vendor charges you for the complete quantity of the sample purchaseorder (100 pc).

1. You enter and post the invoice.

Can the Financial Accounting Department pay the invoice?

Give a reason for your answer.

______________________________________________________

______________________________________________________

Task 9: PurchasingAs you do not want to process every purchase requisition for the vendorand Teil-## manually, you configure the system so that the purchaserequisitions are automatically assigned with sources of supply.

1. These purchase requisitions are to be converted to purchase ordersautomatically via a report. The invoice verification process shouldalso be as simple as possible. You have therefore arranged with thevendor that you settle his or her payments directly after the goodsreceipt is posted. Therefore, the vendor does not issue an invoice.

Continued on next page

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Unit 10: Supplemental Materials LO020

2. Maintain all the data that is required to do this.

Hint: Material master, vendor master, info record, and sourcelist.

Which entries are essential?

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

______________________________________________________

Task 10: Start of ProductionAs the person responsible in Production, you require 200 pieces of Teil-##in 2 weeks.

1. You therefore create a reservation to ensure that this component isavailable for the required date.

Hint: ... → Inventory Management→ Reservation→ Create

Base date: Current date +2 weeksMovement type: 201Cost center: 4100Teil-##: 200 pieces

Accept any messages and save

2. As the MRP controller, you are currently checking thestock/requirements list for Teil-##.

Are there any requirements and, if so, are these covered?

______________________________________________________

You carry out a planning run for Teil-## and save it.

What is the result?

______________________________________________________

Continued on next page

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LO020 Lesson: Business Process Review

3. In Purchasing, you are processing all purchase requisitions whichhave already been assigned sources of supply. Assign a source ofsupply for Teil-## and display the purchase order that is created.

PO number:_______________________________________

4. A delivery from vendor T-K12B-## arrives in goods receipt. It is theremaining 50 pieces from the sample purchase order and the orderedquantity from the reservation.

5. Using the ERS procedure, the accounts payable clerk settles all thevendor�s invoices for Teil-##.

Invoiced amount: ____________________________

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Unit 10: Supplemental Materials LO020

Lesson Summary

You should now be able to:� Carry out the basic procurement process� Determine your comprehension of the material presented in class by

performing procurement transactions in the system

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LO020 Unit Summary

Unit SummaryYou should now be able to:� Carry out the basic procurement process� Determine your comprehension of the material presented in class by

performing procurement transactions in the system

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Course Summary LO020

Course SummaryYou should now be able to:

� Identify and use the log on, navigation, personalization, and helpfeatures of the SAP System

� Define the basic steps of the procurement process� Create, display and maintain material and vendor masters, and list

the required organizational levels� Create, display and maintain purchase requisitions, requests for

quotation, contracts, and purchase orders� Process goods receipts and basic receipt-related stock transfers� Explain the financial and valuation effect of basic procurement

transactions� Display stock balances� Post vendor invoices� Generate purchasing list displays and basic LIS standard analyses� Explain the SAP methodology of support for the SAP product life

cycle� Identify where additional procurement information can be found in

documentation and subsequent training

Related Information

654 © 2003 SAP AG. All rights reserved. November 2001

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Appendix 1Frequently-used Menu Paths

Activity Menu PathMaster Data:Material master: Create material Logistics → Materials Management

→ Material Master → Material →Create (Special)

Material master: Create material(alternative)

Logistics → Materials Management→ Material Master → Material →Create (General)→ Immediately

Material master: Display material Logistics → Materials Management→ Material Master → Material →Display → Display Current

Material master: Change material Logistics → Materials Management→ Material Master → Material →Change → Immediately

Material master: Extend materialview

Logistics→Materials Management→Material Master → Other → ExtendMaterial View(s)

Material master: Enter storagelocations collectively:

Logistics → Materials Management→Material Master→ Other→ EnterStorage Locations

Material master: Materials list Logistics → Materials Management→ Material Master → Other →Materials List

Material master: Changedocuments

Logistics → Materials Management→ Material Master → Material →Display Changes→ Active Changes

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Activity Menu PathInfo record: Create / Change /Display

Logistics → Materials Management→ Purchasing→Master Data→ InfoRecord → �

Vendor (all data) Create / Change/ Display

Logistics → Materials Management→ Purchasing → Master Data →Vendor → Central → �

Vendor (purchasing data) Create /Change / Display

Logistics → Materials Management→ Purchasing → Master Data →Vendor → Purchasing→�

Conditions by vendor Logistics → Materials Management→ Purchasing → Master Data →Conditions → Discounts/Surcharges→ By Vendor

Service master Logistics→Materials Management→Service Master → Service → ServiceMaster

Service conditions for service Logistics→Materials Management→Service Master → Service → ServiceConditions→ For Service→ Display

Service conditions for vendorwithout plant

Logistics→Materials Management→Service Master → Service → ServiceConditions → For Vendor WithoutPlant → Display

Service conditions for vendor withplant

Logistics→Materials Management→Service Master → Service → ServiceConditions → For Vendor with Plant→ Display

Documents:Purchase requisition: Create /Change / Display

Logistics→Materials Management→Purchasing → Purchase Requisition→ �

RFQ: Create Logistics → Materials Management→ Purchasing→ RFQ/Quotation→Request for Quotation→ Create

Quotation: Maintain Logistics → Materials Management→ Purchasing→ RFQ/Quotation→Quotation → Maintain

Price comparison Logistics → Materials Management→ Purchasing→ RFQ/Quotation→Quotation→ Price Comparison

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Activity Menu PathRFQ / Rejection: Issue message Logistics → Materials Management

→ Purchasing RFQ/Quotation →Request for Quotation→Messages→Print/Transmit

Purchase order: Create / Change /Display

Logistics → Materials Management→ Purchasing → Purchase Order →Create → Vendor/Supplying PlantKnown

Purchase requisition / Purchaseorder: Assign and process

Logistics→Materials Management→Purchasing → Purchase Requisition→ Follow-On Functions → Assignand Process

Create purchase orderautomatically

Logistics → Materials Management→ Purchasing→ Purchase Requistion→ Follow-On Functions → CreatePurchase Order → Automatically viaPurchase Requisitions

Purchase order: Issue message Logistics → Materials Management→ Purchasing → Purchase Order →Messages → Print/Transmit

Contract: Create / Change / Display Logistics → Materials Management→ Purchasing→ Outline Agreement→ Contract → ...

Shipping notification: Create /Change / Display

Logistics → Materials Management→ Purchasing → Purchase Order →Inbound Delivery → ...

Enter goods receipt Logistics → Materials Management→ Inventory Management → GoodsMovement → Goods Receipt → ForPurchase Order

Enter transfer posting Logistics → Materials Management→ Inventory Management → GoodsMovement→ Transfer Posting

Enter service Logistics → Materials Management→ Service Entry Sheet→Maintain

Enter invoice Logistics → Materials Management→ Invoice Verification → LogisticsInvoice Verification → DocumentEntry → Enter Invoice

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Activity Menu PathEvaluated receipt settlement (ERS) Logistics → Materials Management

→ Invoice Verification → LogisticsInvoice Verification → FurtherProcessing → Execute ERS

Single planning run Logistics → Materials Management→ Materials Requirements Planning(MRP) → MRP → Planning →Single-Item, Single-Level

List Displays, Reporting andInformation:List display: Purchase requisitions Logistics→Materials Management→

Purchasing → Purchase Requisition→ List Displays

List display: Purchase orders Logistics → Materials Management→ Purchasing → Purchase Order →List Displays

List display: RFQ / Quotation Logistics → Materials Management→ Purchasing→ RFQ/Quotation→Request for Quotation→ List Displays

List display: Info records Logistics → Materials Management→ Purchasing→Master Data→ InfoRecord → List Displays→�

List display: Goods receipts Logistics → Materials Management→ Inventory Management →Environment → List Displays →Material Documents

Stock overview Logistics → Materials Management→ Inventory Management →Environment → Stock → StockOverview

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Activity Menu PathStock/requirements list Logistics → Materials Management

→ Inventory Management→ Environment → Stock →Stock/Requirements List

Purchasing group analysis Logistics → Materials Management→ Purchasing → Purchase Order →Reporting→ Purchasing InformationSystem → Standard analyses →Purchasing group

Analysis of storage location Logistics → Materials Management→ Inventory Management →Environment→ Inventory Controlling→ Standard analyses → Storagelocation

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GlossaryABAP

Advanced Business Application Programming(ABAP): SAPs fourthgeneration programming language, which is specifically designedfor integrated standards software applications. ABAP also supportsall of the steps involved in improving the client/server solution,from prototyping through implementation and testing, to finaloptimization. The latest extens of ABAP is ABAP Objects.

AcceleratedSAP (ASAP)Standard methodology for efficiently implementing and continuallyoptimizing your SAP software. ASAP supports the implementationof the R/3 System and of mySAP.com Components and can also beused for upgrade projects. It provides a wide range of tools thathelps you in all stages of your implementation project - from projectplanning to the continual improvement of your SAP System. The twokey tools in ASAP are:The Implementation Assistant, which containsthe ASAP Roadmap, and provides a structured framework for yourimplementation, optimization or upgrade project. The Question &Answer database (Q&Adb), which allows you to set your projectscope and generate your Business Blueprint using the SAP ReferenceStructure as a basis.

Acceptance of Services PerformedProcess of checking and confirming that services performed by avendor (subcontractor) against a purchase order and recorded in aservice entry sheet have been carried out correctly and properly. Theservice entry sheet contains a set of service specifications. Outlinelevels are used to structure these specifications, and service linescontain the service descriptions, quantities, and values that are to bechecked. The service entry sheet can be processed further in InvoiceVerification after acceptance. The costs can be distributed amongvarious Controlling objects via the account assignment.

Account Assingnment CategoryKey indicating whether an item is to be assigned to an auxiliaryaccount (such as a cost center). The account assignment categorydetermines which account assignment data (e.g. cost center, accountnumber, etc.) is required for the item.

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Accounting DataType of Vendor Master Data that describes the number of thereconciliation account and the payment methods for automaticpayment transactions. This is maintained at company code level.

Accounting DocumentAccounting documents record changes in values in a company codearising from accounting transactions. They consist of one or more lineitems (postings) each of which represents an individual transactionposted to an account. When posting an accounting document, thesystem updates the transaction figures in the accounts the documentis posted to. An accounting document is a representation within theR/3 System of the document (an invoice for example) that triggeredthe posting.

ALEApplication Link Enabling(ALE): Expands use of the R/3 Systemwithin a company and within a companys business partners. Itprovides SAPs software products with distribution models andtechnologies for linking business applications across technicallyindependent systems by enabling, among other things, multipledatabase servers to share transaction update information.

APOAdvanced Planner and Optimizer(APO): APO is a software solutionthat enables dynamic supply chain management. This solutionprovides applications for detailed planning, optimization, andscheduling, thus allowing the accurate and global monitoring andcontrol of the supply chain even beyond enterprise boundaries.APO comprises the following modules: "Supply Chain Cockpit,""Demand Planning," "Supply Network Planning and Deployment,""Production Planning and Detailed Scheduling," and "GlobalAvailable-to-Promise",see also: Availability to promise. If SAPcustomers use APO in conjunction with the Business InformationWarehouse,BW, they can optimize performance and costs throughoutthe entire supply chain.

Application HelpContext-sensitive help available in the menu Help. This functionallows users to display documentation about the current transaction,program, or screen. The documentation to be displayed must bepredefined explicitly in the Knowledge Warehouse. If no specificdocumentation has been defined, the SAP Library is displayed. Fromthere, users can navigate to the relevant documentation.

Automatic Reorder Point PlanningSpecial procedure in consumption-based planning. If available stockfalls below the reorder point, then an entry is made in the MRP fileindicating that the material is to be included in the next planning

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run. Then during the next planning run a procurement proposal iscreated. The reorder point and the safety stock level are automaticallydetermined by the forecast program.

Basic DataDescription and specification of activities and measurement units,default values for operations, assignments to cost centers or laborresources, standard values.

Blanket Purchase OrderA purchase order with a validity period and limits for the simplifiedprocurement of materials or services. A longer-term blanket purchaseorder enables you to procure different materials or services froma vendor up to a specified maximum value. The nature of thematerials or services in question is generally such that the cost andadministrative effort involved in processing individual purchaseorders is regarded as disproportionately high in relation to their value.A blanket purchase order contains only a short text and a validityperiod. It does not contain specific materials or services. Blanketpurchase orders have the item category B and document type FO.The account assignment of the individual requirements need not beknown at the time of ordering. It can be entered during the invoiceverification process. If account assignment data was maintained in thepurchase order, it can be changed at the time of invoice verification(for example, single account assignment can be changed to multipleaccount assignment). Neither a goods receipt nor the entry andacceptance of services performed is necessary with regard to blanketpurchase orders. Instead, invoices can be posted directly withreference to the PO provided that the value limit is not exceeded.

BOMBills of Management(BOM): A component used to store material listsor product structures using material numbers and document numbersas a reference to the object that they describe.

CBSCollaborative BusinessScenarios(CBS): Cross-company, Internet-basedbusiness processes used by employees to fulfill different tasksand responsibilities with a common business objective. Theseblueprints for e-business define and clarify the connections betweenmanufacturers, suppliers, customers, and other business partnersthat are necessary for integrated electronic processing of businesstransactions. Companies use a variety of software applications toexchange transaction data over the Internet.

CharacteristicObject to be analyzed such as an organizational level or specificmaster data. Examples: Purchasing Organization, Plant, Vendor,Material, ect.

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Chart of Accounts(FI)A classification scheme consisting of a group of general ledger (G/L)accounts. A chart of accounts provides a framework for the recordingof values, in order to ensure an orderly rendering of accounting data.The G/L accounts they contain are used by one or more companycodes. For each G/L account, the chart of accounts contains theaccount number, the account name and other, technical information.A chart of accounts must be assigned to each company code. Thischart of accounts is the operative chart of accounts and is used in bothfinancial accounting and cost accounting. Other charts of accountsinclude: Country-specific charts of accounts These are structured inaccordance with legal requirements of the country in question Groupchart of accounts This is structured in accordance with requirementspertaining to Consolidation.

ClientIn commercial, organizational and technical terms, a self-containedunit in an R/3 System with separate master records and its own set oftables.

Collective NumberNumber used to group together all the individual RFQs issuedto potential bidders, or the quotations received from bidders, inconnection with a certain proposed procurement of goods or services.

Company CodeLegal, independent accounting unit; the central organizationalelement of Financial Accounting.

Complete Purchase RequisitionPurchase requisition covering several materials that are needed at thesame time and which are therefore requested together. The documenttype determines that the requisition can only be released in its entirety(that is, complete). If the requisition is subject to a release strategy,releasing one item simultaneously causes all the other items of therequisition to be released.

ConditionsTerms of payment (such as surcharges or discounts) that arenegotiated with a vendor. The conditions determine how the systemcalculates the net price or effective price.

Consumable MaterialMaterial or service that is the subject of procurement and whose valueis recorded via the cost element accounts or fixed asset accounts.There are consumable materials: without a material master record,with a material master record without inventory management, andwith a material master record with inventory management on aquantity basis only.

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Continuous Business ImprovementThe ValueSAP Roadmap used in the third phase Operations andContinuous Improvement.

ContractForm of longer-term purchase agreement against which materials orservices are released (ordered, or called off) according to need over acertain timeframe.

Controlling(CO): Instrument that supports management�s decision-makingprocesses. The various phases of controlling, such as planning,monitoring, reporting, consulting, informing, should be implementedcompany-wide in an integrated software solution for the individualcontrolling functions, including financial, controlling, investmentcontrolling, cost and profitability controlling for all business functions(procurement, production, sales, and so on).

CRMCustomer Relationship Management(CRM): Set of methodologies,software, and usually Internet capabilities that help an enterprisemanage customer relationships in an organized way. It includes allbusiness processes in sales, marketing, and service that touch thecustomer. For example, an enterprise might build a database aboutits customers that describes relationships in sufficient detail so thatmanagement, salespeople, people providing service, and even thecustomer can access information, match customer needs with productplans and offerings, remind customers of service requirements,know what other products a customer has purchased, and so on.In contrast to customer care, Customer Relationship Managementtends to be used to deal more specifically with the integration of allbusiness functions with each other. SAP also provides applications forCustomer Relationship Management under the SAP CRM initiative.

Cross-Company-Code Purchasing OrganizationOrganization responsible for purchasing activities for a number ofdifferent company codes.

cXMLCommerce eXtensible Markup Language.

Delivery CostsCosts that are to be borne by the orderer in addition to pure materialcosts. Also referred to as incidental procurement costs. A distinctionis made between: freight charges, duty costs, and miscellaneousdelivery costs (e.g. packing, insurance, and similar).

Discovery & EvaluationFirst phase of ValueSAP, during which a strategy is drawn up forimplementing your SAP software. SAP Solution Maps provide aframework for selecting a range of components and services that aretailored to meet your enterprise�s specific needs. You can measure the

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Return on Investment using the Key Performance Indicators (KPIs)and benchmarks for each process of the relevant SAP Solution Map.Calculating the Total Cost of Ownership also constitutes part of thisphase.

Distribution ChannelChannel through which saleable materials or services reach customers.Typical distribution channels include wholesale, retail and directsales. You can assign a distribution channel to one or more salesorganizations.

DivisionAn organizational unit based on responsibility for sales or profitsfrom saleable materials or services.

EBEnterprise Buyer(EB).

EB Desktop VersionProvides users with a business-wide self-service Web solution forcatalog buying of indirect goods and basic procurement activities.

EB Professional VersionA functional superset of the Desktop Edition; enables indirectprocurement and direct procurement, automating and integratingthe business processes required for buying raw material, parts, andsupplies, including bill of materials, materials management, contractbuying, configured goods buying, plant maintenance, warehousing,and integration with business intelligence.

EDIElectronic Data Interchange(EDI): The electronic communication ofbusiness transactions, such as orders, confirmations and invoices,between organizations. Third parties provide EDI services that enableorganizations with different equipment to connect. Traditional EDIdata formats include X12, EDIFACT and TRADACOMS.

EnjoySAPWith the EnjoySAP initiative, SAP has developed a holistic approachto designing user interfaces that are visual, interactive and personal.The three key facets that simplify software are: the visual aestethics ofsoftware that make its use obvious at first glance, the understandingof how people interact with the software for high-speed usability,and the personalization of software designed for each individualsneeds. These new features and functions of SAP R/3 4.6 are accessiblethrough Web browsers or traditional client/server connections toensure maximum openness and flexibility.

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ERPEnterprise Resource Planning(ERP): An Enterprise Resource Planningsystem is a packaged business software system that allows a companyto automate and integrate the majority of its business processes, toshare common data and practices across the entire enterprise, and toproduce and access information in a real-time environment.

Evaluated Receipt Settlement (ERS)(ERS): A Procedure for automatic settlement of goods receipts.Evaluated receipt settlement involves an agreement between thevendor and the buying company that the former does not issueinvoices for purchasing transactions. Instead, the invoice documentis posted automatically in the buying company�s system based ondata from the PO and goods receipts. Using this procedure precludesinvoice variances (for example, the charging of too high a price bythe vendor).

EWSEarly Warning System(EWS): Component which allow user to makedecision-oriented selections and to check weak areas in Logistics, byenabling them to search for exceptional situations. This means thatthe user can detect and rectify potential problems at an early stage.

F1Field level help-Provides information about the field.

F4Field level help-Provides information about the field values or anoption to search for the information in the case of an extensive list.

Finished ProductsFinished Products (FERT): Finished products are produced in-house.They cannot be ordered by Purchasing, therefore a material masterrecord of this material type does not contain purchasing data.

Flexible AnalysesComponent that allows user to tailor the way data is combined andconsolidated to suit individual needs.

General DataType of Vendor Master Data that includes the vendor�s address andbank details, for example. This data is valid for the whole client.

General LedgerA ledger designed to present the values used in creating financialstatements. It records values at company code level.

Go Live & SupportPhase 5 of the ASAP Roadmap. The purpose of this phase is to movefrom a pre-production environment to live production operation, toset up a Help Desk to provide long-term support for end users and

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optimize overall system performance and the technical environment.You also use this phase to plan follow-up training, upgrades and waysto continually optimize the R/3 System.

Goods Receipt (GR)(GR): Term from the field of inventory management denoting aphysical inward movement of goods or materials. The SAP Systemdifferentiates between the following kinds of goods receipt: goodsreceipt with reference to a purchase order, goods receipt withreference to a production order, and other goods receipts (withoutreference).

GUIGraphical User Interface(GUI): refers to the display of software ona screen using graphics, symbols and icons rather than text alone.An example of a GUI is Microsofts "windows" format. Withinthe EnjoySAP initiative SAP has developed a holistic approach todesigning user interfaces that are visual, interactive and personal.This initiative includes a user friendly GUI. Web browsers have nowemerged as the standard GUI throughout the Internet. Browsers area key enabler of mySAP.com, and SAP will make all SAP businessfunctionality available in browser applications.

HeaderInformation about a folder, distribution list, or document. The headercontains information which is used to identify and describe a folder,distribution list, or document.

IDESInternational Demonstration and Educations System; IDES containsseveral sample companies that typify relevant business processes. Ithas simple user guidance and varied master and transaction data,so extensive scenarios can be enacted. IDES is the basis system forinternal and external training.

IMGTool for configuring the SAP System to meet customer requirements.The Implementation Guide (IMG) explains all the steps in theimplementation process, tells you the SAP standard (factory)Customizing settings and describes the system configurationactivities. The hierarchical structure of the IMG is based on theapplication component hierarchy and lists all the documentationwhich is relevant for implementing the SAP System. The maincomponent of the Implementation Guide is the IMG activities whichgo to Customizing, where the relevant system settings are made. Youcan also document projects in the IMG. The SAP Reference IMGcontains all IMG activities, sorted by application component and intoGeneral settings and Enterprise structure. The Enterprise IMG is asubset of the SAP Reference IMG containing only the IMG activitiesrequired for the application component to be implemented. (Note:

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The Enterprise IMG no longer exists after R/3 Release 4.6A.) TheProject IMG is a subset of the Enterprise IMG (until Release 4.5B)or the SAP Reference IMG (from Release 4.6A) containing the IMGactivities required for the application component to be implementedin a specified Customizing project. Project views can be based on aProject IMG and specified attributes, for use in Release Customizing(Delta Customizing or Upgrade Customizing).

ImplementationImplementation (ValueSAP) The second of three phases of ValueSAP,containing the AcceleratedSAP implementation methodology,Roadmap and tools.

Implementation StrategyPlan for installing and configuring the R/3 System. Based on along-term outlook, it covers all of the planned measures involved inan SAP implementation. Preparing the strategy is an essential part ofproject preparation, and has a considerable influence on the sequenceof the project, paticularly in the case of a global implementation.There are different implementation strategies - Big bang (in which allapplications go live at the same time), a phased approach (in which afew applications or business processes are implemented in each step),or implementation by plant, department, or other organizational units.

Inbound DeliveryProcess of receiving an inbound delivery of goods at a receiving area.This process also includes the subsequent putaway and the actualincrease in stock quantity. The inbound delivery process begins withstaging the goods at the vendor�s shipping point and ends when thegoods receipt posting is made by the goods recipient (ship-to party).In the SAP System, this operation is represented by the inbounddelivery document, which is generated with reference to a: Purchaseorder, Shipping notification, or Customer return.

Industry SolutionsMany customers want SAP software to support business processesspecific to the industry sector in which they are active. For this reason,SAP has founded some 13 Industry Business Units,IBUs, since 1997.These IBUs are responsible for the 17 industry solutions to date. Theseindustry solutions are based on the R/3 System, and are constantlybeing enhanced in close cooperation with customers and partners.One outcome of this cooperation has been the drawing up of so-called"solution maps" for the business processes in specific sectors. Thesesolution maps facilitate the systematic implementation of complex ITsolutions derived from standard and industry-specific components.In its strategic targeting of industry sectors, SAP has managed to meetmarket requirements regarding the individuality and integrationcapabilities of software solutions.

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Information StructureStructure in which data is collected in the Logistics InformationSystem. An information structure defines a group of fields. It is usedfor the collection and reduction of data from an operative application(for example, sales or purchasing). Data relating to events in theoperative applications (such as purchase orders or sales orders) isupdated periodically in the information structures. Informationstructures form the basis for analyses and evaluations. An informationstructure consists of: a period unit: this gives the structure a timereference, characteristics: information (for example, purchasingorganization or sales organization) with reference to which otherinformation is cumulated, and key figures: information (for example,invoiced sales or invoice value) which is cumulated with referenceto c characteristics.

Information Systems (LIS/HIS/FIS)Detail transaction information is stored on the SAP system andaggregated for the Information Systems for statistical purposes. Datafrom other systems can also be input for analytical purposes. Pointout to the participants that the application reporting trees provide anextensive listing of predefined reports. (Standard Analysis) Also notethat users can define their own information structures in the SAPSystem to meet differing business requirements. (Flexible Analysis).

IntegrationAllows data to flow freely from one corporate area to another withouthaving to pass through time-consuming and trouble-prone interfaces.Integration also permits companies to maintain the same data fromvarious sites.

INVCOInventory Controlling

Inventory ManagementAs used in the SAP System, this terms stands for that part of Logisticswhich covers the following tasks: the management (recording andtracking) of stocks of materials on both a quantity and a value basis,planning, entering and documenting all stock movements (goodsreceipts, goods issues, physical stock transfers, transfer postings),carrying out the physical inventory (stocktaking).

Invoice Verification(IV): Term for the entry and checking of incoming (vendor) invoices(also known as invoice matching, invoice validation, and invoiceclearance). In invoice verification, vendor invoices are compared withthe purchase order and the goods receipt, and are checked in threeways: content, price, and quantity.

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Item CategoryIdentifier indicating the characteristics of an item. The item categorydetermines whether the following are necessary or allowed withregard to an item: material number, additional account assignment,inventory management in the R/3 System, goods receipt, and invoicereceipt.

IVInvoice Verification(IV)

KANBANProcedure for controlling production and material flow basedon a chain of operations in production and procurement. Thereplenishment or the production of a material is not triggered until acertain production level actually requires the material. The signal forreplenishment is issued by a card (kanban) that is sent by a consumerto the supplier.

Key FiguresQuantifiable measure of the technical, commercial and personalperformance in a company. Key figures can be used to assessperformance, profitability, productivity, and liquidity both withinan organization and between one organization and another, forexamples, sales per employee and rate of inventory turnover.

Knowledge ManagementArea in which an enterprise consciously and comprehensivelygathers, organizes, shares, and analyzes its knowledge to further itsaims. Some aspects of knowledge management such as data miningand pushing information to users are relatively new. With its SAPBusiness Information Warehouse and SAP Knowledge Warehouse(former Info DB), SAP is delivering solutions for this increasinglyimportant business process.

KPIKey Performance Indicator(KPI): A measurement, or metric, used forevaluating supply chain performance. Key Performance Indicatorsexpress abstract supply chain objectives in financial or physicalunits for comparative purposes. Data pertaining to the variousplanning processes such as demand planning or production planningis collected, measured and transformed into physical or financialinformation that can be used to compare results and thus measureperformance. For example, one of the supply chain flexibilitymetrics is Supplier On-time Delivery Performance which indicatesthe percentage of orders that are fulfilled on or before the originalrequested date. APO KPIs are launched from the Supply ChainCockpit and access data from the Business Information Warehouse(BW).

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Lifecycle ManagementForecasting techniques that take into account the different stages in aproduct�s life: introduction, growth, maturity, saturation and decline.In APO Demand Planning, the planner can model the beginningand end of a product�s lifecycle based on phase-in and/or phase-outschedules. These schedules are stored in phase-in/phase-out profiles.

LISThe Logistics Information System(LIS) is made up of the followinginformation systems: Sales Information System, PurchasingInformation System, Inventory Controlling, Shop Floor InformationSystem, Plant Maintenance Information System, Quality ManagementInformation System. The information systems that belong to LIS havea modular structure, yet have a variety of techniques in commonwhich allow you to analyze data. This type of structure also allows theindividual information systems to retain their special features. Theinformation systems in LIS can be used to plan, control, and monitorbusiness events at different stages in the decision-making process.They are fleixble tools for collecting, aggregating and analyzingdata from the operative applications. The level of detail in whichinformation is displayed is freely definable. Informative key figuresenable you to continually control target criteria and to react in time toexceptional situations. Data can be analyszed using either standardanalyses or flexible analyses. Flexible planning, the Early WarningSystem, and the Logistics Information Library are also integrated inthe information systems. Tools are available in Customizing whichenable you to create a self-defined information system and tailor itto specific requirements.

LIVLogistics Invoice Verification(LIV).

MarketSetA comprehensive Internet marketplace solution ensuring that thee-marketplace is accessible via virtually any buying, selling, andenterprise application on-ramp, ready for marketplace-to-marketplacetransactions and designed for easy integration of services providedby third parties.

Master DataData that remains the same over a long period of time. Masterdata contains information that is needed often and in the sameform. Examples: The master data of a cost center contains the nameof the cost center, the person responsible for the cost center, thecorresponding hierarchy area, and so on. The master data of a vendorcontains the name, address, and bank information for the vendor.The master data of a user in the SAP System contains the user�sauthorizations in the system, the name of their default printer, theirstart transaction, and other information.

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Master RecordData record containing master data, that is, data which remainsunchanged over a reasonably long period of time. A vendor masterrecord contains the vendor�s name, address and bank details, forexample. A user master record in the SAP System includes theperson�s system authorizations, standard printer, start transactions,and so on.

Material DocumentA document that constitutes proof of one or more material movementsand is a source of information for applications further on in the chain.A material document contains one or more items and can be printedout in the form of a slip to accompany physical goods movements(GR/GI slip).

Material Requirements Planning(MRP): Generic term for procedures in materials planning that takeinto account and plan every future requirement during the creationof procurement proposals (independent requirements, dependentrequirements, and so on).

Material StockPart of current assets. Material stock is managed at plant or storagelocation level .

Material ValuationDetermination of the value of a stock of material. Valuation-relevantdata on a material includes: valuation price and assignment to avaluation class. Selection of the valuation method: valuation atstandard price and valuation at moving average price

Materials Management(MM) : Customer Service uses the material master that describes bothphysical products such as spare parts used in repairs and the servicesthat are sold to the customer. Goods movements are used to documentphysical materials such as spare parts used in the repairs. PurchaseRequisitions may be created automatically from a service order andpurchase orders used for materials purchased from others. Materialsmanagement also gives us functionality to purchase subcontractedlabor through the use of the service master.

Materials PlanningGeneric term for the activities involved in creating amaster productionschedule or an external procurement plan for all the materials in aplant or company. Materials planning is also referred to as materialrequirements planning.

Mean/Minimum Value QuotationThe price comparison list can also display a "fictitious" quotationreflecting the average or minimum value of all quotations.

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MESManufacturing Execution System(MES).

MMMaterials Management(MM).

MROMaintenance, Repair, and Operation.

MRPMaterial Requirements Planning(MRP): Generic term for proceduresin requirements planning which take into account and planevery future requirement during the creation of order proposals(independent requirements, dependent requirements, and so on).

my SAP Supply Chain Managementmy SAP SCM: An integration of extended supply chains to enableintelligent e-business processes.

mySAP.comNew SAP solution to integrate all relevant business processes onthe Internet. mySAP.com integrates business processes in SAP andnon-SAP systems seamlessly, and provides a complete businessenvironment for electronic commerce. mySAP.com comprises fourareas: mySAP.com Marketplace, mySAP.com Workplace, mySAP.comBusiness Scenarios, and Application Hosting.

mySAP.com WorkplaceRole-based, personalized Web browser portal to the SAP System. Thescreen that a user sees is specially tailored to the role this user assumesin the company or at his or her workplace. The user only has to log ononce, whereupon he or she can access all of the functions required forhis or her work. The mySAP.com Workplace contains links,URLs, totraditional andWeb-based R/3 transactions, standard R/3 System, NewDimensions, industry solutions, Internet Application Components,Self-Service Scenarios, reports, non-SAP systems, the mySAP.comMarketplace, as well as user-defined Internet and intranet sites.

Nonvaluated MaterialsNonvaluated materials (UNBW): Nonvaluated materials are managedon a quantity basis, but not by value.

OLAPOnLine Analytical Processing(OLAP): Decision support softwarethat allows the user to quickly analyze information that has beensummarized into multidimensional views and hierarchies.

Operating SuppliesOperating Supplies (HIBE): Operating supplies are procuredexternally and required for the manufacture of other products. Amaterial master record of this material type can contain purchasingdata, but not sales data.

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Operations & Continuous ImprovementThe third life-cycle phase covered by ValueSAP. Operations &Continuous Improvement comprises a four-phase approach designedto ensure that a customer�s systems and processes are always in tunewith their business requirements. Data extracted from productionsystems is analyzed and compared against key performanceindicators and best business practices. Conclusions are translated intorecommendations that assist customers in continuously improvingtheir business operations.

Organizational ElementsA company�s enterprise structure is mapped to the SAP applicationsusing organizational elements.

Organizational LevelHierarchical level at which certain data in a material master recordis created. Examples of organizational levels are client, plant, andstorage location.

OutputRepresents a message in the SAP System that can be released eithermanually or automatically. Examples could be faxing purchase ordersto vendors or sending order confirmations to customers.

Period UnitUnit that gives a structure a time reference.

PlantA Plant can manufacture product, distribute product, or provide aservice; the central organizational unit of Production Planning.

Plant-Specific Purchasing OrganizationOrganization responsible for purchasing activities for a certain plant.

PMISPlant Maintenance Information System

Production Planning(PP) - Capacity Planning functionality comes from the ProductionPlanning module and is used by both plant maintenance and customerservice.

Professional PurchasersPersons responsible for processing and issuing purchase orders inthe Enterprise Buyer Professional system. If the requester creates ashopping basket in which the data is incomplete, for example, thevendor is missing for an item, purchasers receive the incompletepurchase order in their worklist. They can complete the data and sendthe purchase order to the vendor.

Purchase OrderRequest or instruction from a purchasing organization to a vendor(external supplier) or a plant to deliver a certain quantity of materialor to perform certain services at a certain point in time.

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Purchase Order HistoryDetails of deliveries effected or invoices received in respect of apurchase order item.

Purchase RequisitionRequest or instruction to Purchasing to procure a certain quantity of amaterial or a service so that it is available at a certain point in time.

PurchasingThe R/3 System consists of a number of components that arecompletely integrated with one another. This integration allows thevarious departments and units of an enterprise to share and maintainthe same information. Purchasing is a component of MaterialsManagement (MM). The Materials Management (MM) module is fullyintegrated with the other modules of the SAP System. It supportsall the phases of materials management: materials planning andcontrol, purchasing, goods receiving, inventory management, andinvoice verification. The tasks of the MM Purchasing componentare as follows: external procurement of materials and services,determination of possible sources of supply for a requirementidentified by the materials planning and control system or arisingdirectly within a user department, monitoring of deliveries fromand payments to vendors, and good communication between allparticipants in the procurement process is necessary for Purchasing tofunction smoothly.

Purchasing DataType of Vendor Master Data that includes the purchase order currency,incoterms, and the vendor�s tax data. This data is maintained for eachpurchasing organization. The user can also maintain different data ona plant-dependent basis or for vendor sub-ranges.

Purchasing DocumentInstrument used by the purchasing department to procure materialsor services. The standard R/3 system includes the following externalpurchasing documents: request for quotation (RFQ), purchase order(PO), contract, and scheduling agreement. In the SAP System,the term purchasing document is often restricted to such externaldocuments (that is, documents other than purchase requisitions).You can use a purchase requisition (an internal document) to notifyPurchasing of your requirements of materials and services.

Purchasing Document TypeIdentifier that allows a distinction to be made between the variousforms of a document category. It determines, for example, the relevantnumber range and the fields that are offered for maintenance.

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Purchasing GroupKey for a buyer or group of buyers responsible for certain purchasingactivities. The purchasing group is internally responsible for theprocurement of a material or a class of materials and usually theprincipal channel for a company�s dealings with its vendors.

Purchasing Info RecordSource of information on the procurement of a certain material from acertain vendor.

Purchasing OrganizationOrganizational unit within Logistics, subdividing an enterpriseaccording to the requirements of Purchasing. A purchasingorganization procures materials and services, negotiates conditions ofpurchase with vendors, and bears responsibility for such transactions.The form of procurement is specified through the assignment ofpurchasing organizations to company codes and plants. Possibleforms are as follows: Enterprise-wide: One purchasing organizationprocures for all the company codes of a certain client (that is,for all the individual companies of a certain corporate group),Company-specific: One purchasing organization procures for just onecompany code, Plant-specific: One purchasing organization procuresfor one plant. Mixed forms are possible, which are replicated inthe system with the aid of reference purchasing organizations. Apurchasing organization may access and use the more favorableconditions and centrally agreed contracts of the reference purchasingorganization assigned to it.

PURCHISPurchasing Information System.

QMISQuality Management Information System.

Quality Management(QM): Overall term for quality-related activities and objectives.Activities for quality planning, quality inspection, quality controland QM representation.

Quantity Contract(MK): Contract (longer-term purchasing arrangement) under theterms of which the purchase of a certain quantity of goods or servicesis agreed. Criterion for the performance of the quantity contract isthe agreed total quantity.

Question & Answer DatabaseTool that allows you to map customer requirements to the functionsavailable in the SAP System you are implementing. The Q&Adbincludes: The SAP Reference Structure, which you can use to setyour project scope by selecting, reorganizing and adding structureitems. Associated items, such as questions, transactions, user roles,and organizational units, which are assigned to structure items.

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These elements help you to draw up your Business Blueprint and toconfigure your SAP System Issue management, where you can collectand manage unsolved problems that may jeopardize the success ofthe project.

Quota ArrangementMechanism enabling the system to compute which source of supplyis to be assigned to a requirement that has arisen for a material. Thequota arrangement facilitates determination of the applicable sourcesof supply for a purchase requisition at a certain point in time. Thesetting of quotas permits the automatic apportionment of a totalmaterial requirement over a period to different sources. A quotaarrangement consists of quota arrangement records identifying thesource (vendor, internal plant etc.), the validity period, and the quota.

Raw MaterialsRaw Materials (ROH): Raw materials are always procured externallyand then processed. A material master record of this type containspurchasing data, but not sales data since they cannot be sold.

Real-TimeRefers to the immediate access to a given piece of data by multipleusers throughout the different departments or divisions of a company.

Reference Purchasing OrganizationPurchasing organization to whose conditions or contracts otherpurchasing organizations linked with this organization have access. Areference purchasing organization can make particularly favorableconditions or contracts available to other purchasing organizations.

Release DocumentLog relating to an item of an outline purchase agreement (contract orscheduling agreement) giving information on existing releases. Inthis context, the term release covers both release orders - standardpurchase orders issued against contracts (also referred to as contractrelease orders) - and scheduling agreement releases (various specialtypes of delivery schedule). The release documentation providesthe following information: target quantity planned for the item,already-existing releases for the item (document number and date),quantity released to date (with corresponding value), and quantitythat is still open. If the documentation relates specifically to a contract,it may also be referred to as release order documentation.

Release NotesDisplay notes that describe functional changes between R/3 releases.

Reorder Point PlanningSpecial procedure in materials planning. If the reorder point is greaterthan warehouse stock, a procurement proposal is created by MRP. Adistinction is made between: automatic reorder point planning andmanual reorder point planning.

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Report on Online TransactionsThe user can request a listing of documents or master datainformation, as well as combinations of these objects (characteristics).Reports/List Displays are reports generated directly from the onlinetransactions or from the other sources of summarized data. Explainthat the lists generated by reports on online transactions allow youto trace back to and change/display the original documents (salesorders, purchase orders, etc.).

Report WriterFunctionality that enables the user to create reports for a variety ofapplications. The Report Writer can also be used in extended generalledger and cost center accounting as a tool for creating reports.

ReportingTransactions, documents and master data are captured and stored inSAP and various different types of analysis can be run at any timein the SAP System.

RFQRequest for Quotation(RFQ).

RISRetail Information System.

Sales OrganizationOrganizational unit within Logistics which structures the companyaccording to its sale srequirements. A sales organization is responsiblefor selling materials and services.

SAP LibraryStandard function in the menu Help for displaying R/3 System onlinedocumentation.

SAPNetSAPNet is the intranet portal of SAP that provides a role-based andpersonal interface, and uses a Web browser as GUI . SAPNet is alsoavailable to SAP partners and customers who have a role-based viewon SAPNet. Employees can personalize SAPNet to their individualneeds and can use SAPNet as personal inbox and central access pointto Employee Self Service and procurement.

SAPNet-R/3 FrontendFormerly: Online Service System, OSS A medium that enablesinformation flow, communications, and services between SAPcustomers and SAP. Customers can use the SAPNet-R/3 Frontendto find solutions to system problems, e.g. Notes, Support Packages,to submit problem messages to SAP, to retrieve information, etc.Customers access the SAPNet-R/3 Frontend via a remote connection.

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SAPofficeElectronic mail and folder system in R/3. You use the mail system tosend documents internally (to other R/3 users in the same system),or externally (to users in other systems). You use the folder systemto manage documents in folders. A distinction is made betweenprivate and shared folders. You can create documents either in anSAP editor or in any other suitable PC editor. You can also attachfiles to documents.

SCMSupply Chain Management: Describes the active management of theentire supply chain from supplier to customer. SAP supports itscustomers with solutions that integrate information and decisionsfrom the entire supply chain into a seamless, automated, andoptimized information infrastructure. It provides the framework forintegrating strategic decision support, data warehousing, planningand simulation, forecasting and execution systems in a closedloop with core enterprise financial, logistics and human resourceapplications. SAP delivers within its Supply Chain Managementinitiative the applications SAP Advanced Planner and Optimizer andSAP Logistics Execution System.

Service Entry SheetList of services performed by a vendor on the basis of a purchaseorder, containing service descriptions and details of quantities andvalues. The descriptions of planned services deriving from thepurchase order appear as default values in the entry sheet. Unplannedservices, which were originally entered in the purchase order withoutdescriptions and only with the aid of value limits, are preciselydefined in the service entry sheet.

Service Master RecordProduct/material master record, in which a service is described in thesame way as a physical product, including pricing information.

SettingsEnables user to select settings from help.

SISSales Information System(SIS).

Solution MapsMap of a complex, tailored industry solution system thatgives a company an overview of its industry-specific businessprocesses. Solution maps were drawn up in a cooperation betweenindustry-specific user groups, partners, and SAP developmentteams in an effort to define the requirements of individual sectors ofindustry. See also: Industry solutions

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Source ListList of available sources of supply for a material, indicating theperiods during which procurement from such sources is possible. Thesource list enables you to determine the source that is valid (effective)at a certain point in time.

Special StockStocks of materials that have to be managed separately for reasons ofownership or factors involving the location at which they are kept (forexample, consignment stocks from vendors).

Static Lot-Sizing ProcedureProcedure where the lot size is calculated using the entered quantitiesin the material�s material master record. Costs incurred from storage,from setup procedures or from purchasing procedures are not takeninto account. There are three different criterion according to whichthe lot size can be calculated: lot-for-lot order quantity (exact lot size),fixed lot size, and replenishment up to maximum stock level.

Status BarElement of the graphical user interface. The system uses one of theoutput fields of the status bar to display messages issued by theprimary window. Other fields in the status bar provide informationon the system status. The status bar extends along the entire width ofthe lower edge of the primary window.

StockMaterials Management term for part of a company�s current assets.It refers to the quantities of raw materials, operating supplies,semifinished products, finished products, and trading goods ormerchandise on hand in a company�s storage facilities. Also known asinventory.

Storage LocationR/3 portrays the commercial aspect of warehousing using storagelocations. Storage locations are allocated to plants. Through thisallocation R/3 links stores indirectly to a specific company. In R/3,inventory is always allocated to a storage location. Warehousesrepresent complex storage and material handling systems.

Three-tier client/server architectureConsists of the database, the applications and the presentation logic.It may run simultaneously on three different physical computers.Distributing these functions among several computers enhancesscalability and performance through parallelism.

Time-dependent ConditionsConditions that are of key importance with regard to purchase orders.The time-dependent (master) conditions are the basis on which thesystem computes the effective price.

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Trading GoodsTrading Goods (HAWA): Trading goods are always procuredexternally and then sold. A material master record of this materialtype can contain purchasing data and sales data.

TransactionsApplication programs that execute business processes in the SAPSystem. Examples are create sales order, change customer master ordisplay a sales orders� list report.

Transder PostingGeneric term for stock postings covering both physical transfers ofstock and book transfers only (that is, changes affecting stock that donot involve physical movement - the actual material remains where itis). Examples of transfer postings involving physical movement: stocktransfer between two storage locations within a plant, stock transferbetween two plants, and transfer of material to customer consignmentstock. Examples of transfer postings without physical movementare release of material from stock in quality inspection, transfer ofvendor consignment stock to company�s own stock, batch splitting,and transfer posting material to material.

URLUniform Resource Locator (URL): Address of a resource on theWeb - typically a hypertext but, in the future, also SAP businessfunctionality. The URL includes a domain name identifying the Website and a hierarchical description of the location of the resource onthe Web server.

Valuation AreaOrganizational unit in Logistics subdividing a company for thepurpose of valuating material stocks in a uniform and consistentmanner.

Valuation ClassAssignment of a material to a group of G/L accounts along with otherfactors, the valuation class determines the G/L accounts that areupdated as a result of a valuation-relevant transaction or event, suchas a goods movement. The valuation class makes it possible to: postthe stock values of materials of the same material type to different G/Laccounts and post the stock values of materials of different materialtypes to the same G/L account.

Value Contract(WK): Contract (form of longer-term purchasing arrangement) inwhich the purchase of goods or services up to a certain total valueis agreed. The goods actually to be released (called off) againstthe contract are specified in contract release orders (also known ascall-offs). Criterion for the fulfillment of a value contract is its agreedtotal value.

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ValueSAPValue SAP integrates methologies, tools and knowledge (f.ex.Accelerated SAP, Team SAP) into a consistent framework to ensurethat SAP solutions create value for customers at the earliest possiblemoment.

VariantChange in the basic version of a product which occurs when details areomitted or added and which can be related to the form, compositionand properties.

Vendor EvaluationProgram that provides a basis for decisions with regard to theselection and control of sources of supply. The main criteria on thebasis of which a vendor is evaluated can be selected and weighted bythe user. The main criteria are: delivery reliability, price, quality, andgeneral service/support. These can each be divided into subcriteria.The system computes a points score for the vendor on the basis of theweightings given to the criteria. The maximum attainable score isspecified by the user.

Warehouse ManagementThe SAP WM component deals with the following tasks: Inventorymanagement in randomly-organized and fixed-bin storage types;Processing all relevant movements and tasks in the warehouse, suchas goods receipt, goods issue, movements within the warehouse;Inventory.

Warehouse Management SystemSystem for defining and managing complex warehouse structureswithin one or several plants. The SAP WM component deals with thefollowing tasks: inventory management in randomly-organized andfixed-bin storage types, processing all relevant movements and tasksin the warehouse, such as goods receipt, goods issue, and movementswithin the warehouse inventory.

WMWarehouse Management: The SAP WM component deals with thefollowing tasks: Inventory management in randomly-organized andfixed-bin storage types; Processing all relevant movements and tasksin the warehouse, such as goods receipt, goods issue, movementswithin the warehouse; Inventory.

WMISWarehouse Management Information System.

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IndexAAcceleratedSAP (ASAP),616EarlyWatch, 619elements, 618Global ASAP, 620implementation, 616knowledgemanagement, 619partners, 617Question & AnswerDatabase, 619Roadmap, 618tools, 618

account assignment, 366accounting document, 313application help, 15automated processing

source list, 496automated procurement,488evaluated receiptsettlement (ERS), 488master data, 489

automatic paymentprogram, 552

Bblanket purchase order, 417

advantages, 421categories, 420

Ccalculation schema, 245client, 41

data, 42Collaborative BusinessScenarios (CBS), 615

collective number, 240

company code, 42accounting document,313

consumable material, 365standard procurement,418types, 367

Continuous BusinessImprovement, 622process, 623

contract release order, 492contracts, 492, 494

contract release order,492creation, 496release order, 529types, 493

Ddeadline calculation, 524delivery costs

account postings, 341planned, 339posting, 339unplanned, 339

EEarly Warning System(EWS), 588

EarlyWatch, 619Easy Access, 9

favorites, 9evaluated receiptsettlement (ERS), 488,551automatic paymentprogram, 552execution, 554prerequisites, 553

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FF1 help, 17F4 help, 17favorites, 9feedback, 16forecast-based planning,518

GGlobal ASAP, 620

Global TemplateSystem, 621implementation, 621Roadmap, 620SAP Project TeamTraining, 621SAP Support andServices network, 621

Global ASAP Roadmapphases, 620

Global Template System,621

glossary, 16goods issue, 92, 307goods movement

goods issue, 307goods receipt, 307transfer posting, 307

goods receipt, 86, 307effects, 323for stock material, 88material valuation, 311movement type, 92posting, 86purchase order, 88results, 89

Hhelp

application help, 15F1 help, 17F4 help, 17glossary, 16online help, 15SAP Library, 15settings, 16

Iimplementation, 616

AcceleratedSAP(ASAP), 616Global ASAP, 621

Implementation Guide(IMG), 41, 619company code, 43customizing, 619organizational levels, 41plant, 44

industry sector, 148info record, 141info update indicator, 269International Demo andEducation System(IDES), 51purchasing, 53

Inventory Controlling(INVCO), 583

inventory management, 44issuing messages, 69item category, 67

defined, 68Kknowledge management,619

Llogistics data warehouse,584aggregation, 585structure, 585

Logistics InformationSystem (LIS), 582Inventory Controlling(INVCO), 583logistics datawarehouse, 584Plant MaintenanceInformation System(PMIS), 583Purchasing InformationSystem (PURCHIS),583

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Quality ManagementInformation System(QMIS), 583reporting, 587Retail InformationSystem (RIS), 583Sales InformationSystem (SIS), 583Shop Floor InformationSystem (PPIS), 583standard analyses, 589WarehouseManagementInformation System(WMIS), 583

Logistics InvoiceVerification, 109, 112,338evaluated receiptsettlement (ERS), 552features, 112goods receipt-based,115help, 118purchase order, 113

logon process, 4lot-sizing

static lot-sizing, 522Mmaster conditions, 452master data, 110

analysis, 574collective entry ofstorage location data,166data screens, 144info record, 141material data, 110material master, 142procurement, 140profiles, 166transaction data, 111vendor data, 110

master productionscheduling (MPS), 518

material document, 313

goods movement, 307material master, 142

additional data level,150automatedprocurement, 488creating, 166cross-application tool,166data screens, 150entry aids, 166extending, 159industry sector, 148main work level, 150mass maintenance, 166material type, 146organizational levels,143reference material, 166settings, 166valuation class, 310

material requirementsplanning (MRP), 44, 517procedures, 518reorder point planning,520�521

material type, 146attributes, 147

material valuation, 44, 311procedure, 311

Materials Management(MM), 109Logistics InvoiceVerification, 109master data, 110procurement process,110

materials planningmaterial requirementsplanning (MRP), 517

menus, 5movement type

goods issue, 92goods receipt, 92stock transfer, 322transfer posting, 92

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multiple sessions, 12mySAP.com solution

Continuous BusinessImprovement, 622implementation, 616ValueSAP, 613

mySAP.com Workplaceroles, 11user menu, 11

Nnavigation tree, 9Oone-time vendor master,239

online help, 15order acknowledgement,541

organizational levels, 40client, 41company code, 42International Demoand Education System(IDES), 51optional, 46plant, 43purchasing group, 48purchasingorganization, 47storage location, 45

Ppartner roles, 194planning

forecast-basedplanning, 518material requirementsplanning (MRP), 517reorder point planning,518time-phased materialsplanning, 518

plant, 43company code, 44inventory management,44

material requirementsplanning (MRP), 44material valuation, 44storage locations, 44

Plant MaintenanceInformation System(PMIS), 583

procurementcycle, 57external services, 450master data, 140phases, 57supply source, 528

procurement cycledetermination ofrequirements, 57goods receipt, 58invoice verification, 58payment processing, 58phases, 57purchase ordermonitoring, 58purchase orderprocessing, 57source of supply, 57vendor selection, 57

purchase order, 59automated generation,520blanket, 417creating, 61, 65, 294document header, 63evaluated receiptsettlement (ERS), 551format, 63goods receipt, 86, 88,418history, 455invoice verification, 419issuing messages, 69item category, 67item-related value limit,419monitoring, 58order acknowledge-ment, 541

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processing, 57processing status, 61purchase requisition,395purchasing info record,265release order, 492service entry sheet, 459

purchase order history, 455purchase requisition, 364

account assignment,366, 368consumable material,365converting, 395, 397,488creating, 364, 369processing, 396purchase order, 395, 519release procedures, 396

purchasingconditions, 238

purchasing document, 454service specifications,455

purchasing group, 48purchasing info record, 265

info update indicator,269options, 267pricing, 272structure, 266updating, 268

Purchasing InformationSystem (PURCHIS), 583

purchasing organization,47cross-company code, 50cross-plant, 49plant-specific, 49

QQuality ManagementInformation System(QMIS), 583

Question & AnswerDatabase, 619

quotation price comparisonlist, 242

quotation processing, 242RR/3 System

Easy Access, 9F1 help, 17F4 help, 17glossary, 16help settings, 16International Demoand Education System(IDES), 51logon process, 4menus, 5multiple sessions, 12navigation tree, 9online help, 15organizational levels, 40release notes, 16SAP Library, 15status bar, 14system messages, 5user profile, 7

release notes, 16release order, 529releast order, 492reorder point planning,518, 521net requirementscalculation, 522

reportingLogistics InformationSystem (LIS), 587scope of list parameters,575standard reporting, 573variants, 575

request for quotation(RFQ), 225calculation schema, 245collective number, 240conditions, 244creating, 226, 241process, 226

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Index LO020

quotation pricecomparison list, 242quotation processing,242

Retail Information System(RIS), 583

roles, 11SSales Information System(SIS), 583

SAP Library, 15SAP Project Team Training,621

SAP Support and Servicesnetwork, 621

SAPNet, 16feedback, 16

scope of list parameters,575

service entry sheet, 459acceptance, 460invoice verification, 464

service master record, 450master conditions, 452

service specifications, 455Shop Floor InformationSystem (PPIS), 583

solution maps, 615source list, 494

automated processing,496processing, 495

standard reporting, 573static lot-sizing

procedures, 522status bar, 14stock material, 453stock overview, 307

valuation area, 308stock transfer, 321stock/requirements list, 526

format, 526storage location, 45supply source, 528

system messages, 5Ttime-phased materialsplanning, 518

transaction data, 111accounting document,111material document, 111purchasing document,111

transfer posting, 92, 307stock transfer, 321

Uuser menu, 11user profile, 7Vvaluation area, 308valuation class, 310ValueSAP, 612�613

Continuous BusinessImprovement, 622framework, 614solution maps, 615

vendor account groupchanging, 191

vendor master dataaccounting data, 189general data, 189purchasing data, 189

vendor master record, 188one-time vendormaster, 192organizational levels,188partner roles, 194reconciliation, 193reference, 195vendor account group,191vendor master data, 189vendor number, 193

vendor number, 193

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WWarehouse ManagementInformation System(WMIS), 583

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FeedbackSAP AG has made every effort in the preparation of this course toensure the accuracy and completeness of the materials. If you have anycorrections or suggestions for improvement, please record them in theappropriate place in the course evaluation.

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