Material Master Overview in SAP ERP
The material master contains all the information on all materials that a company procures, produces, stores, and sells. It is the company’s central source for retrieving material data.
For every material that your company uses, you must create a material master record in the material master. This record is uniquely identified by a material number.
Functions and Use of the Material Master
The integration of all material data in a single database object eliminates redundant data storage. Areas such as purchasing, inventory management, material requirements planning (MRP), invoice verification, and so on, can all use the same data.
The data in the material master is used to perform the following functions in the SAP Logistics system:
- Purchasing for purchase order processing
- Inventory management for goods movement postings and physical inventory management
- Invoice verification for posting invoices
- Sales for order processing
- Production planning and control for material requirements planning, scheduling, and work scheduling
Material Master Data
All the information your company needs to manage a material is stored in a data record in the material master, the material master record. A material master record, therefore, contains all the main data on material, sorted by various different criteria. You can enter and change the majority of data in a material master record yourself.
However, some information can only be updated by the system. For example, the system updates the administrative data when you process a material master record, and stock balances when goods receipts or goods issues are posted. Moreover, the data in a material master record can be divided into two categories:
- Data of a purely descriptive nature
- This is data with an information content such as name, size, or dimension.
- Data that the system uses to perform a control function
- This is data such as MRP type and price control.
Since different departments in a company work with the same material, but each department uses different information on that material, the data in a material master record can also be subdivided in terms of the departments to which it belongs.
Data required for production scheduling. Examples: tolerance data and in-house production times.
Data relating to material valuation and automatic account determination. Examples: price control, standard price or moving average price, valuation class.
MRP (MATERIAL REQUIREMENTS PLANNING)
Information on MRP. Examples: MRP type, safety stock, and planned delivery or production time for material.
Material data provided by the purchasing department. Examples: purchasing group responsible for the material, permissible over-delivery and under-delivery tolerances, and purchase order text.
Information on the use of a material as a production resource/tool. Examples: use in particular task list types, grouping keys, default values for task lists and production orders.
Data needed for costing purposes. Examples: product/unit costing, costing lot size, default valuation data.
Typical material classification data. Examples: assignment to one or more classes, characteristic value assignment, standard class.
Technical information on the engineering/design of material. Examples include document management data, International Article Numbers (EANs), and dimensions.
Information on storage and transportation. Examples: storage conditions and packaging sizes.
Information on stock placement and stock removal. Examples: storage type for stock placement and stock removal, and loading equipment quantities.
Information used to predict material requirements. Examples: forecast model and forecast period.
Data relating to quality management. Examples: technical delivery terms, certificate type requirement, QM inspection data (one type for each event).
Information on sales and shipping. Examples: product hierarchy, account assignment group, pricing reference material, sales text.
Understanding Material Types
When creating a material master record, you must assign the material to a material type. The material type determines certain attributes of the material and has important control functions. Materials with the same basic attributes are grouped together and assigned to a material type. This allows you to manage different materials in a uniform manner in accordance with your company’s requirements. Examples of material types are raw materials, semi-finished products, and finished products.
The material type you choose determines:
- which screens appear and in what sequence
- which departmental data you may enter
In addition, the material type determines t the material’s procurement type, that is, whether material is manufactured in-house or procured externally, or whether both are possible
When do you create a Material Master Record
You must create a material master record in the following cases:
- If the material you need is not defined in the material master; in other words, if there is no material master record for that material. In this case, you create the material master record.
- If the material you need is already defined in the master record but the data for a specific user department is missing. In this case, you extend the material master record by selecting the Create function.
- If your user department data has already been entered for the material you need but not at the appropriate organizational level (for example, a different plant). In this case, you extend the material master record by selecting the Create function.
There are three different approaches to creating material data in the system:
- Creating a Material Master Record
- Creating a Material Master Record with a Reference
- Extending a Material Master Record
The approach you adopt depends on what data is already in the system. In all cases, you use the Create function
Checklist for Material Master Creation
Before you create a material master record, consult the following checklist:
Are you sure there is no material master record in the system for this material?
Is there already a similar material in the system that you can use to enter data?
Which industry sector does the material belong to?
What is the material’s material type?
What description do you want to give the material?
In what unit of measure do you want to manage the material?
If you enter basic data or if you enter purchasing data, to which material group does you want to assign the material?
If you enter MRP data, which procedure will be used to plan the material?
If you enter forecasting data, which model do you want to use to forecast material requirements?