SAP - MM

Quota arrangement

*Apportions* material requirement among several vendors.

Purposes of invoice verification

*Completes* materials procurement process Allows *invoices not started* in materials procurement to be processed Allows *credit memos and invoice cancellations* to be processed

Finished goods

*Produced* goods sold to customers

Material master record

*Tracks* materials in SAP. Contains information about materials. The *most integrated* data record within SAP.

Vendor

Business *partners* that are *suppliers* of materials or services.

Vendor master record

Contains *all information* about a vendor

What happens when goods receipt is entered

Creation of Material Document (proves that goods have moved from receiving to warehouse) Creation of an Accounting Document Creation of a Goods/Receipt/Issue Slip Sending a Mail Message to Purchasing Stock Update Update of General Ledger Accounts Updates in the Purchase Order Other updates

Invoice verification tasks

Entering received invoices and credit memos Checking invoice accuracy Executing account postings Updating certain SAP data (open items, material prices, etc.) Checking invoices that were blocked for payment b/c they varied too greatly from the purchase order

Purchasing info record

Establishes *link* between material and one vendor

MM module

Function: Materials Management Process: Procurement Logistics Functional Areas: Purchasing, invoice verification, inventory management, warehouse management

Raw materials

Goods purchased to be used in *manufacturing* process.

Trade goods

Goods/materials purchased with intent of being *resold*

Purchase order

Instruction to a vendor to *deliver* a good or service. Can include storage location (for purchasing organization).

Purchase requisition

Internal document that *instructs* purchasing department to buy a material/service.

Contract

Longer-term buying arrangement. *Commitment* to procure material/service from vendor over a specific period.

Scheduling agreement

Longer-term buying arrangement. Creates *delivery schedules* over specific period.

MRP system

Materials Requirement Planning system. *Anticipates future demand* for stock items through statistics.

Vendor number

Number that helps *track transactions* with vendor.

Storage location

Place where material is stored.

View

Presents only selected material *pertinent* to a particular area

Process flow of procurement logistics processing

Purchase requisition-->Purchasing-->Goods receipt-->Invoice verification

Goods receipt

Records material being received into inventory

Tolerance limits

Set *allowable deviation* between PO and goods receipt (for amounts) or goods receipt and invoice (for price). Invoice is still posted, but needs to be investigated before paid. Provides balance between *accuracy* and *efficiency*.

Types of stock

Unrestricted-use stock Stock in quality inspection Blocked stock