SAP EWM Drive for Consultants

SAP EWM Drive for Consultants
SAP EWM Drive for Consultants, Also SAP server access for MM/SD/PP/QM/EWM/S4 Hana - Technical and Functional

SAP MM / EWM Content

Wednesday 31 July 2019

Difference between Purchase Organisation/Standard/Referenced along with Mass maintenance

Purchase Organisation-Standard and referenced Purchase Organisation

For Videos Explanation, please go to YouTube and Subscribe -  Studyuuu  SAPMM

1.Purchase Organisation:

            Purchase organisation main responsibility is to maintain the proper purchase related activities and they will take care of all requirements for that plant/Company code as you assigned in the organisation structure.

Each purchase organisation has been linked to 1 plant (Plant wise) or 1 company code (Company code wise) or Client wise (1 purchase organisation for the client).

When do we maintain 1 Purchase organisation?

When we have the company worldwide and even vendors are also in worldwide who is supplying for all countries then we can maintain the centralised purchase organisation-where it controls all terms and negations for all the plants in the world.

This is the normal way for all the companies maintaining purchase organisation.

Cons: we cannot get the individual data of one country and if getting its too hard to calculate purchasing activities.

This is called centralised purchasing- once purchase organisation controls centrally for all the company codes.

When do we maintain 1 purchase organisation for 1 company code?

We will maintain the purchase organisations as per the company code, it means 1 purchase organisation = 1 company code.

Where we have many vendors, but they can provide with in the country and there was no import and export then we can maintain individual purchase organisation as per the company code.
In this case each company will be having 1 company code.

This purchase organisation will manage the all the plants in the respective company code, it means all the purchasing activities.

Same purchase organisation needs to be maintained for all the plants in that company code, in this case reporting will be easy and managing also easy but you will not get more discounts.

When do we maintain 1 purchase organisation for 1 plant?

We will maintain 1 purchase organisation for 1 plant, where purchase activities will take in the plant itself and it can control only that plant.

If we have 1000 plants around worldwide then we can have 1000 purchase organisations.
This is called distributed purchasing

When do we maintain 1 purchase organisation for 2 plants with different company codes?

As we know we cannot maintain 1 purchase organisation for 2 company codes.
Then we can get succeed through plant level, where company code A contains 1 and 2 plant with purchase organisation controlled by X.

Now, company B contains 3 and 4 plants with purchase organisation controlled by Y.
Now we need to assign 1 purchase organisation for 2 plants which was controlled by 2 company codes.

Assign plant wise, as systems allows that 1 plant can be controlled by 2 purchase organisations, then in plant wise maintain the 2-purchase organisation (Setup in enterprise structure)
So that 2 purchase organisations controls different plants with different company codes.

2.Standard Purchase organisation:

Standard purchase organisation is same as normal purchase organisation, where in normal purchase organisation the plants will not be used to other activities like consignment and pipeline procurement.
If the plants are using different procurement activities like consignment and pipeline then the plant should me maintained by other purchase organisations, in that case we can define that as standard purchase organisation.

Standard purchase organisation will control mainly for consignment, pipeline and other special procurement activities.

3. referenced Purchase Organisation:

Referenced purchase will be used for contracts and scheduled agreements purposes.
Lets think we have a contract that is having some company code and all the plants in that company code, now even some other purchase organisation also use this contract because you have some less prices in contract, then in that case we need to maintain the different purchase organisation, different company code plants we should use in contract.

We cannot maintain directly in that contract, because it will allow only 1 company code and 1 purchase organising plants only, now we need to maintain the referenced purchase organisations with purchase organisation.

Once we maintain that linking in enterprise structure then system will allow to maintain those plants in contract, and it can be released through contract to orders.

We need to do all this setting in enterprise structure.

Basics in Enterprise Structure for Learners

As a MM consultant we will not define full implementation, here client and company code will be created and maintained by FI Consultant

MM consultant will define only Plant, Storage location, Purchase organisation, Purchase group.
Plant: while we are defining new plant, system will ask for factory calendar settings number- defined by PP consultant.

Once we maintain all the assignment then we can check the flow in EC02, whether the flow has been maintained correctly or not.

If we are creating plant then we will create few plants which will be used for STO purposes then we need customer number to be maintained for Intra STO, in that case SD consultant will prepare and send it to us.

Plant: we must copy the plant as always from pre-defined plants by SAP, because we have many settings backend if we have created new but knowing is good for your knowledge.

Material Statues and Mass maintenance in SAP:

As we are creating material master will create many materials and all the tabs related to MM needs to be updated by us, in this case we have few tabs -controls the materials for many activities. For example, purchasing block, inventory block and many more.

We have options in 2 levels

1.     Purchasing level
2.     Client level

First, we need to define our own material status as per the client requirements in the path below.

SPRO-Logistics general- settings for key fields- define material status

Define our own name and select the level of block like only for purchasing or only for inventory or else both.

Its goods to have individual blocking codes, so that there is no clubbing.
Basic data- always in client level and if we maintain X-plant material status then it applies for whole plants in the client.

Purchasing tab- when we maintain X-plant material status then its will be applicable for only 1 plant as we maintained.

Mass Maintenance

We will create lot of materials and if we get requirement to update certain fields for all those materials then we cannot do all those manually.

For those things we have mass maintenance, where we have certain T-codes from where we can do that activity.

For these things we should aware of table names MM, so that we can maintain at a time.
As per tab wise table name will get change – Material master try -MM17
For vendor master try – XK99
Note: if we don’t know that from which table, we need to maintain these things then try for T-code MASS, where select the activity as per that and process accordingly.

Tuesday 30 July 2019

Organization Structure/Enterprise Structure in SAP MM

Organization Structure/Enterprise Structure in SAP MM

For Videos Explanation, please go to YouTube and Subscribe -  Studyuuu  SAPMM

Organization structure:

Organization structure explains their structure/Hierarchy of the company they follow to run there business on daily basis, Every company will follow the same structure up to some level but every company which are in SAP family then they have 90% same structure and 10% may differ as per there rules/regulations/standards.

Organization structure contains may levels, where each level is having their own tasks/rules and no one can by-pass the hierarchy, because SAP is having those features where we cannot process further even, we miss one small hierarchy (Assignment).

Every level in the organization structure are inter linked with one other having relationship like Example below.

A=B=C=D (Just overview) as same as (D=B=A=C) (Just overview)


Let’s think A company is having ERP tool (Non-SAP) and thinks that production and sales activities are not as per the standards and profit centers are not calculating properly which may leading to losses in sales and business.

Now company would like to move to ERP-SAP, in which all the things should be correct to maintain the proper daily activities and even higher management no needs to ask anyone for reports or goods inventory or sales management details from the departments.

Higher management can see the reports/stocks/profit centers/sales in the SAP directly, with no support from anyone, and even employees and customers need to follow the process for sales as well as production from the organization. There is no such deviation in the company to flow the profits outside, so many companies are moving to SAP to increase the standards of there company even SAP is cost effective.

Now SAP consultants will come into picture, where SAP provides the standard settings to their customers once you buy the ERP-SAP to your company, now consultants in the company sit with higher management for the discussion for the flow and the process.

MM/FI/SD/PP will be supporting for functional process of SAP, ABAP/Basis will be supporting for technical and even we have many but company follows other modules as per there requirements, whereas mentioned modules are very important for them to design and make settings properly as per there company conditions.

Backend Settings:

SPRO- It’s the T-code for backend settings.
SAP reference IMG will take you to the path of the settings.

Defining Requirements:

As we spoke above enterprise structure contains many levels and each level will be having their own roles and responsibilities, they may maintain all these levels as per there business requirements or legal reasons.


1.     Client/Company
2.     Company Code
3.     Plant
4.     Storage Location
5.     Purchase Organization (Will speak in depth below)
6.     Purchase group

1.     Client/Company (FI Consultant will define this)

                                    A client is the highest level in the organization and its independent with having their own master data and can pull reports of all company codes under that client.
Whatever Master data maintained in the client level is valid for all the levels in the organization structure. Under one client we can have N number of company codes as per there requirements.

2.     Company Code (FI Consultant will define this)

                        Company code is maintained under the client, where company code is an independent accounting unit in the entire organization structure, where all the profit, loss and balance sheet accounts has been maintained by the company code.

Eg: let’s think for 1 country = 1 company code
If the client would like to know the profit loss accounts for one country Eg: India, then they can pull reports within few minutes you can have the exact data of profit loss balance sheets.

3.     Plant (MM Consultant will define this)

A plant is an organization unit within the company code, where all the production activities and make finished goods available in the plant for the sales purpose.
All the logistics will be taken place in the plant and even warehouse activities will take place. Every material valuation will take place at plant level only.

4.     Storage location

Storage location is the place where stock gets separated, where we have many types of stocks in plant and we need to separate the stocks as per there nature, like raw materials, packaging, semi-finished goods.

Each material types will take place one storage location and we can maintain N number of storage locations in one plant, and main thing is we can stock the physical stock. Material data can be maintained at storage location level and as well plant level also.

5.     Purchase Organization:

Purchase organization is the part of hierarchy, where they will be responsible for purchasing activities in the respective plants or Company.

Here we can assign 1 purchase organization to 1 company code and needs to assign to all the plants, so that that purchase organization will be responsible for all the plants in that company code.

Or else, we can assign the purchase organization to plant and every plant will be having their respective purchase organization, so that every plant is independent with their own purchase organization
****Purchase organization is responsible for all the purchasing activities in the respective plant, if we assign as decentralized-plants wise****

Even we can do like, 1 company will have 1 purchase organization, where it’s called centralized purchasing.

1.     Centralized purchasing
2.     Company specific
3.     Plant specific- decentralized


 lets think we have a company IIIM- where its having centers in all the countries like US, UK ,Germany(plants) and some countries, now we have company codes, plants and respective storage locations, as we have all these we need the production to be taken place on daily basis and so we need purchase organization to fulfill this activity, for example we need today some engines and required immediately for production purpose and 1) If we have centralized purchasing then headquarters in US company-Purchase department will take up the decision to buy that engine and 2) if we select company specific then let think each country will have 1 company code and respective department will take up the decision and last one 3) plant specific- lying in your plant and will provide approvals for purchase.

Cross purchase organization (1 Scenario):

As I told in above scenario, each company code will be having their own purchasing organization (Company specific), in this case if suppose you want 1 purchase organization to be responsible to 2 company codes.

Its not possible to link 1 purchase organization to 2 company codes but we have something like cross purchase organization, its possible in plant level, where we can link purchase organization to plant with 2 different company codes.

Reference purchase organization:

Reference purchase organization will come into picture only if your company is using centralized purchasing.

We can create a one referenced purchase organization, and we can link to company specific purchase organizations, such that we can use this purchase organization when you will create contract with different plants with different purchase organizations.

Reference P.Organization-----Contract---different P.Organizations-Different plants

Example: let’s think we are managing a company where we have 5 plants with different locations and every time we use to purchase individually let think monitors we will buy for 10000 and each plant individually buys for around 9900-10000 as per the purchasing organizations and markets in the state. Now lets think reference purchasing organization will come –we have contract with reference purchase organization where will create only 1 contract with 1 big vendor and maintain all the plants in the contract that which are belonging to different purchase organizations, will order in bulk for all the plants whenever its required, so that will get for less price. so that we can procure that monitors for only 9500-9900(Quantity scaling will come into picture if we buy more monitors).

Better negotiations will be possible with reference purchase organizations.

****Behalf of other purchase organizations referenced purchase organizations will come into picture for all activities for better production/pricing.

6.     Purchasing group

Purchasing group is an independent entity, where it explains the responsible buyer/ responsible group of buyers for those materials.
We can manage this in MM01, there was no assignment for the purchase group and MM persons will define this purchase group.

Backend settings-Definition and Assignment


SPRO-Enterprise Structure-Definition-Define Company-New entries and maintain the client
Mention all the details in client like address and other things and save.

Company code:

            SPRO-Enterprise Structure-Definition-Edit, Copy, Delete, Check company code-New entries.

Mention all the details and save.


            SPRO-Enterprise Structure-Definition-Logistics general-define plant

Maintain all the plant details as shown in their screen.
Always take copy org from 1000 plant, which is predefined by SAP.

Storage Location:

SPRO-Enterprise Structure-Definition-materials management-define storage location

We are maintaining plant while creating storage location and no need of other linking.

Purchase organization:

SPRO-Enterprise Structure-Definition-materials management-Define purchase organization

Assignment of all above Hierarchy:

Plant to Company code:

SPRO-Enterprise Structure-Assignment-Logistics General-Assign plant to company code

Purchase organization to company code:

SPRO-Enterprise Structure-Assignment-materials management-Assign Purchase organization to company code

Purchase organization to plant:

SPRO-Enterprise Structure-Assignment-materials management-Assign Purchase organization to plant code

Standard Purchase organization to plant

SPRO-Enterprise Structure-Assignment-materials management-Assign standard Purchase organization to plant code

Note: Next Blog will be Account Determination.

Monday 22 July 2019

Over and Under Consumption along with all Movement types in SAP MM

Over and Under Consumption along with all Movement types in SAP MM:

For Videos Explanation, please go to YouTube and Subscribe -  Studyuuu  SAPMM


As we all know, when we order for a finished product with subcontracting order. We need to send the stock to the vendor, or we need to procure from the same vendor.

Let’s think we have sent the stock to vendor through MB1B- 541 movement, now vendor should prepare the final product with your child materials.

The overview of concept explains vendor consumption for subcontracting (More/less), all queries will be related to this only.

Example: Under Consumption: 

let’s take a simple example, we have ordered the final product as shirt and for that we have sent the cloth and thread for making the final product, let see -we have sent cloth of 100 pieces and for making 100 shirts and we sent 100 KG of thread. Now the vendor made 100 shirts with 100 clothes, but he used only 90 kg of thread. Here 10 KG of thread is under consumption.

Step1: Now we post the MIGO 101 for the received goods.

Subcontracting PO- 100 shirts (Post fully), Now check for the remaining materials which are over/under consumed by the vendor. As per our scenario vendor used only 90 kg of thread, Now check how to post for remaining 10kg of thread and how to take back from vendor.

Now we need to make sure that subsequent posting has been done in MIGO-Subsequent adjustment and select the PO and line item, once you enter the subcontracting PO, the line items will be shown in the item overview along with the child materials.

Select the material and make 10 kg in quantity and check the under consumption (In this case we have under consumption) and post the subsequent adjustment.

Now go to MB1B and select the movement type 542, and post for the 10 KG of quantity to bring back the stock of 10 kg from vendor.

Example: Over Consumption:

let’s think we have ordered 100 shirts in subcontracting order by entering components as 100 cloth and 100 kg thread, now vendor has been delivered 95 shirts by consuming 100 cloth and 100 kg thread and for extra 5 shirts we need to send the material to vendor and it can be considered as Over consumption.

We need to follow the same process as I mentioned above, up to MIGO you can follow and next you can check below.

Go to MIGO- Subsequent Adjustment- PO number-Execute
Select the child material which is over consumption and maintain the value of 10 KG
Check the option Over consumption.
Go to MB1B- 541 Movement
Transfer the 10 clothes and 10 KG threads and post.

Even in this quantity if there is over and under consumption follow the same process, please focus on the quantity and logical, so that we can post in MIGO- Subsequent correctly.

Movement Types in SAP MM series Wise:


Note: Anything cancellation will be 1+(E.g.: for 101 cancellation is 101+1=102)

101- Posting goods receipt for the purchase order, when we receive goods normally from the vendor.
102-Cancellation for 101, we need to cancel the movement type fully and repost if any changes required.
103-Posting goods receipt of PO into GR Blocked stock, GR blocked stock means when we receive the excess quantity from supplier, we can move to GR blocked stock and make decision after on this.
104- cancellation of GR blocked stock.
105-release of GR blocked stock to unrestricted stock, directly it will post to unrestricted when we use movement 105.
121- Subsequent adjustment for the subcontracting stock, over consumption and under consumption.
122- return delivery posting
123-cancellation of return delivery posting.
124-Return delivery to vendor from GR blocked stock
125-cancellation of return delivery to vendor from GR blocked stock
161-return purchase order to vendor


We can perform in MB1A
We will use these 2 series movement for issuing goods
201- Goods issue for the cost center
221-Goods issue for Project
251-Goods issue for sale
261-Goods issue for production order
281-Goods issue for Network
291-Goods issue for Account Assignment


301- Transfer posting from plant to plant in one step
302-cancellation of transfer posting for 301.
303-transfer posting from plant to plant in 2 steps-In this case material will be moved to plant stock and not directly to transfer plant stock
304-cancellation of 303
305-we can get the 303-material moved to plant by using movement 305
309- Transfer posting from Material to material
311- transfer of storage location to other storage location one step
313-transfer of storage location to other storage location two step
315-Put away the stock from 313
321- Quality inspection stock to unrestricted
322-unrestricted to Quality inspection stock
349-Blocked stock to Quality inspection
350- Quality inspection to Blocked stock
343-Blocked stock to unrestricted stock
344- unrestricted stock to Blocked
331-sample from Quality inspection
333- sample from unrestricted stock
335- sample from Blocked stock

We can process all the above movement types by using T-code MB1B
We can view all this stock transfers in MB51, all material movement with Quantity.
MB51- Material -plant

History of that material in the plant X, report will be generated accordingly to know the exact stock present in the plant.

4XX- Series

411- Transfer of special stock to Unrestricted Stock
               We have special stocks like consignment, where once GR is posted for Consignment PO stock will be moved to vendor consignment stock
Once we receive to vendor consignment stock, then we need to move to our own stock, with movement type 411 K
412- cancellation of 411-K
413- Transfer posting to sales order stock
451-returns from customer
453-transfer of blocked stock returns to unrestricted use stock
455- returns stock transfer
457-transfer of blocked stock returns to quality inspection stock
459-transfer of blocked stock returns to blocked stock

5XX Series

501- Goods receipt without p.order to unrestricted stock
503- Goods receipt without p.order to quality inspection stock
505- Goods receipt without p.order to blocked stock
521-Goods receipt without order to unrestricted stock
523- Goods receipt without order to quality inspection stock
525- Goods receipt without order to blocked stock
541- Transfer of unrestricted use stock to subcontracting stock
543-consumption by sub-contracting vendor
545-by product (Scrap)
551-unrecericted stock to scrap
553- quality inspection stock to scrap
555-blocked stock to scrap
561-Initial entry to unrestricted use
563-Initial entry to Quality inspection stock
565-nitial entry to blocked stock


601- Goods issue for delivery
603- Goods issue for STO with additional item.
605- Goods receipt for STO
641- Goods issue for STO

7XX Series

701- Inventory difference in unrestricted use stock
703- Inventory difference in Quality inspection stock
707- Inventory difference in blocked stock
711- Inventory difference in unrestricted use stock-LE WM
713- Inventory difference in Quality inspection stock MM-IM
715- Inventory difference for returns
717- Inventory difference in blocked stock LE WM

Please follow and Comment on the Blog, Next week post will be MM Tables and Automatic Account Determination (MM-FI)

Wednesday 17 July 2019

Contract Management and Scheduled Agreements- SAP MM

Contract Management and Scheduled Agreements:

For Videos Explanation, please go to YouTube and Subscribe -  Studyuuu  SAPMM


Contract is the word we use normally for different scenarios in real life, but coming to procurement contract management will be agreement between the vendor and the client(ordering party), they may have different purposes but one thing common is Contract to maintain their business up to the mark or else they need to struggle on daily basis to see the production things manually and its very risky.

***It’s a legal agreement between the vendor and client***

Importance of Contract: 

Every company they have contract but the main importance for maintaining contract is fallows.

·        Price negotiations
·        Supplier relationships
·        Lead time management
·        Payment terms
·        TAT

Example for understanding:

Without Contract:

Let’s think you have a company where you see the production activity(TV Spare parts Company) and every time you need to order the material from vendor when there is a requirement and your company is growing big and you have more production(produce more TV’s for sales), even in this case you need to order the material whenever is required and here there is no confirmation that vendor can deliver those within time, he may take his sweet time for delivery because your orders are spot(whenever required) and even the price is also same for everyone in market.

With Contract:

Let’s think you hold a big company as above example and you have a contract with vendor for those required materials, when ever the production is increased(I mean sales) then you can place the order with contract(No need to contact any distributor), once the order is placed vendor is having agreed lead time like 2 days, where he should deliver within the time or else vendor may get fine around 20-30%, even the price and payment terms also will be favor to you and production will be done very smoothly.

Creation of contract and their requirements in SAP:

When we will create contract: 

when there is a requirement of large production that you observed in your company, then you can recommend maintaining the contract with vendor for saving money, time, and to maintain relationship (Supplier relationship).


Each company have their own requirements to create contract and here I will explain the basic methods to follow the requirements/rules.

        1. Sign- Off (Vendor Approval form)
2. Proposal for contract to create (Always from Stakeholders/Clients)
3. Form with vendor details (Company Specific)
4. Price, Net terms, Material, vendor, payment terms, Contract period

Step 1: Sign-Off Process:

Almost every company fallows the signoff process, which explains about agreed terms and condition from the vendor side and client side.

The document contains the information like Statement of work details and Quality/Quantity details, Payment terms and any violations from vendor side/client side.

All this information will be available in the signoff documents and both the parties needs to sign in the document and once this done step 2.

Step 2: Maintaining vendor in Approved vendor list for the company:

Once the signoff process is done the QAC team should get the details of the vendor and he can maintain those vendors in there approved vendor list and each company will be having there customized T-codes to save this data in SAP and contract management team can access those T-codes and get the information of the vendor has been approved vendor list or Not.

Basically, Quality management team will be updating this data in SAP, each plant will be having once QAC team for quality checkup.

Once the step 2 is completed we can go ahead with step 3.

Step 3: Getting details from Sourcing/Stakeholder:

Once we have above details, we can ask more details from sourcing like price, pay terms, MOQ, Total value of contract, Partner Functions, total Quantity of contract, Approvers, any other material texts that needs to maintain in contract.

Once we get all the details with form, then we can process further.

Step 4: Contract creation:

First thing we need to consider is, whether your company is fallowing value-based contract or Quantity based contract.

Value based: the total value of contract will be provided to buyer to update in contract, such that we can access only to that value in that period of time for that contract to procure from that vendor and for additional value we need to go for access.

Quantity based: same as value based, here we must go with Quantity, and we cannot order more than that quantity in that period for contract and if requires more we need to go for access.

Step 5:

Now start creating the contract in ME31K
Input the vendor -Agreement type
ZDMK- Quantity based
ZDWK-value based
Others- Mention as required like services, Cost center
Purchase organization
Purchase group

Step 6:

Now we need to enter the header details for the contract
Validity start/End
Payment terms
If it is value-based contract-Enter total value

Step 7:

Here we go with item overview screen- where we need to maintain the material that we are going to order in future from this vendor.

Target Quantity-overall quantity if required
Plant/Sto Location

Step 8

Now maintain the partners where all orders from this contract will have the same details as you are maintaining in contract and even the partners also.

Maintain the partners OA,GS,PI,Z5 and few are as per your company rules.

Click on couples’ symbol in the above picture to go to Partners

Step 9:

Item details- maintain the tax code and remaining required information.

Step 10:

Maintain the output printout- such that every order will reach to supplier directly


·        Here we have done with contract creation, now every month we will receive the updates for the contract like changing the prices for the material contract, Payment terms, Etc

·        We can maintain N number of materials in one contract but only one vendor and we can use N number of plants also.

·        We have only one purchase organization in one contract, so that plant belongs to that purchase organization we should maintain, or else system will through error.

·        Once we have contract, company will negotiate with vendor for price decrement every monthly or Quarterly or half early.

·        Once the requester creates the PR with respect to contract, the PO will generate automatically within 30 seconds and if there is any error Batch report will be generated to resolve the issues.

Scheduled Agreements:

Scheduled agreements have the same concept as contract, whereas here we need to give the       scheduled specific dates to vendor that we are going to order the material.

Every company will prefer to go to contract, because we can order the material whenever its required.

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