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SAP ERP Material Management Module Overview & Basics

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What is Material Management Module in SAP ERP

Materials Management is the module where (finished goods, raw materials, and consumables) are managed for quantity, price, month end inventory cutoffs, and balance. Materials Management is inventory management, purchasing, invoice verification, warehouse valuation, Material master, and materials planning.

Organizational Elements (Structures) – Procurement

  • Company Code: Represents an independent accounting unit with Balance Sheets and P&L Statements
  • Plant: An organizational element within a company. A plant produces goods and/or services. A plant can be manufacturing for a distribution facility.
  • Storage Location: Unit that allows the differentiation of material stocks within a plant
  • Purchasing Organization: Unit structured to negotiate the general conditions of purchase for one or more plants or companies. Pricing conditions are set at this level
  • Purchasing Group key for a buyer or buyer group responsible for certain purchasing activities. Note: this element cannot be assigned to a purchasing organization.

Documents related to Material Management

Procurement Master Data

  • Material Master: Contains and defines all data to manage materials. Used as a source of purchasing information and inventory valuation.
  • Vendor Master: General, Accounting and Purchasing data necessary for processing business transactions and corresponding with vendors

Defining Production Resource/Tool as a material

A Production Resource / Tool can be defined as material if purchasing and inventory functions are to be carried out for that material. The information required to be input is dependent upon which department views are being created. Thus, material master information is typically entered at different times by numerous system users.

Note that to add a view, the “Create Material” transaction is used rather than the “Change Material” transaction.

How to assign materials to the vendor?

Information Record links materials to the vendor, thus facilitating the process of selecting quotations. Use Transaction Code ME11 or Logistics –> Material Management –> Purchasing and then Master Data –> Info Record –> Create.

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