MM & SD Module Introduction (Technical Prospective)

MM & SD Module Introduction (Technical Prospective)

When there is a requirement of some material or service from a User, then the user inquires whether that is available with the company’s internal resource or not. When the material/service is not available, then the responsible person of the company finds a vendor who can provide the same. If the buyer and vender agree upon the deal then the material/service is purchased from the Vendor and payment processing is done for the Vendor.

MM Module is basically Purchasing/Procuring the material/Service.

The main steps of MM are as follows:

1.       Determine the requirement.

Whenever there is any requirement of material/service an INTERNAL PURCHASING DOCUMENT called as PURCHASE REQUISTION (ME51N) is created which is used to give notification to the responsible department about the requirement. This document also keeps the track of the requirement.

2.       Determine the Source.

Potential source of supply should be determined (ME57).

3.       Vendor Selection.

After determining the potential sources, invitations are sent to prospective vendors for bidding. The invitation document is an external purchasing document and is termed as REQUEST FOR QUOTATION (RFQ - ME41) which requests the vendor to provide a quotation which contains information about price, delivery conditions, payment terms etc.

Then the RFQs are compared to choose the vendor (ME47T).

4.       Purchase Order Processing.

When the vendor agrees upon the RFQ then a purchase order is issued by the company to the vendor. PURCHASE ORDER (PO - ME21N) is a legally binding document which contains information such as description, quantity, date of delivery, agreed price, terms of delivery, and terms of payment. When vendor provides partial delivery partial GR posting is done.

5.       Purchase order follow-up.

6.       Goods Receipt and Inventory management.(MIGO)

When the vendor delivers the material or performs the service, the responsible person of the company performs GR transaction which will update the PO history which in turn increases the material stock level in the inventory.

7.       Invoice Verification.(MIRO)

After the vendor delivers the material/service, the vendor sends an invoice to the company. Invoice is a formal document issued by vendor to company to request for payment for the material/service. It is normally attached with the GR document.

8.       Payment Processing.

When Invoice Receipt (IR) is posted to MM the PAY TO partner of the PO is credited with the amount.  Payment Posting is done in FI module where the vendor’s account payable is debited and the corresponding bank account is credited.

Few MM tables are as follows –

·         MAKT - Material description

·         MARA -  General Material data

·         MARC - Plant data

·         MARD - Storage Data

·         MSEG – Material document  segment

·         MVKE – Sales data for material

·         EBAN – Purchase Requisition

·         EKKO – Purchase Document Header

·         EKPO – Purchase Document Item

·         LFA1 – Vendor master

·         T024 – Purchase Group

·         T023 – Material Group

SD Module refers to Sales and Distribution.

The main steps of SD are

1.       Inquiry       (IN - VA11).

Customer inquiries about the products/ services provided by a company.

2.       Quotation (QT - VA21).

Company provides quotation for products/services to customers.

3.       Sales Order (OR - VA01).

Customer gives a purchase order to the company against which a sales order is raised to customer.

Tables VBAK and VBAP contains sales document header and item data. These also contain enquiry and quotation data. These gets distinguished using field VBTYP (Document Type: Enquiry A, Quotation B, and Order C).

4.       Delivery     [ (LF – VL01)  Picking VL36, Packing VL02, Shipping VT01]

It includes picking, packing, post goods issue, shipment. Company sends material after picking it from the inventory and packing it in handing unit and issues the goods.

Delivery data are stored in LIKP and LIPS.

Delivery and sales tables are related as follows:

LIPS-VBBEL = VBAK-VBELN.

LIPS-VGPOS = VBAP-POSNR.

5.       Billing          (MN - VF01, VF21).

Company bills to the customer for the deliveries and an FI accounting document is created.

Billing data are stored in VBRK and VBRP.

The table relation is as follows:

VBRP-AUBEL = VBAK-VBELN.

VBRP-VGBEL = LIKP-VBELN.

Apart from this conditions for transaction are stored in KONV. Pricing conditions are stored in KONH and KONP. Shipping data are stored in VTTK. Inbound Delivery (Vendor Delivery for incoming goods or returned or rejected delivery) transaction: VL31N/VL10B. Outbound Delivery (Picking, Packing, Goods Issue) transaction: VL01N/VL10A.

Organizational structure for reference :