Here we have mentioned most frequently asked SAP MM Interview Questions and Answers specially for freshers and experienced.
1. Explain what is SAP MM?
Ans:
SAP MM (Material Management) is a functional module in SAP that deals with procurement handling and material management. The MM module contains master data, system configuration and transactions to complete the procure to pay process.
2. What are the essential components in SAP MM?
Ans:
- Determine requirements
- Source determination
- Vendor Selection
- Order Processing
- Order follow up
- Goods receipts and Inventory management
- Invoice Verification
3. Mention what are the types of special stock available?
Ans:
The types of special stock available are subcontracting, consignment, project, pipeline, sales order, stock transfer, returnable packaging with customer, etc.
4. List out important field in purchasing view?
Ans:
The critical fields in purchasing view are
- Base unit of measure
- Order unit
- Purchasing group
- Material group
- Valid from
- Tax indicator for material
- Manufacturer part number
- Manufacturer, etc.
5. Explain the importance of the batch record?
Ans:
A batch tells about a quantity of a particular product, which is processed or produced at the same time with the same parameters. The materials produced in such batch have the same values and characteristics. While, the batch record gives the information about a particular batch product and helpful in knowing whether the product has gone through GMP (Good Manufacturing Process).
6. Explain how you can link a document to a vendor master record?
Ans:
To link the document with the vendor master record by using the XK01 transaction code or by using the following menu path
SAP Menu -> Logistics -> Material Management -> Purchasing -> Master Data -> Vendor -> Central -> XK01- Create.
7. Mention what are the major purchasing tables? List the transaction codes for them?
Ans:
Purchase requisition -> EKBN
Purchase requisition account assignment -> EBKN
Release documentation -> EKAB
History of purchase documents -> EKBE
8. Mention what are the data contained in the information record?
Ans:
The information record contains data related to the units of measurement, such as the products, vendor price, materials used by specific vendors, etc. It also contains information on the tolerance limit of the under delivery of data, vendor evaluation data, planned delivery time, availability status for goods.
9. Mention what is the transaction code to delete a batch?
Ans:
The transaction code MSC2N is used to delete a batch. By flagging the batch master record, you can delete a batch record alternatively.
10. Mention what is the transaction code used to extend the material view?
Ans:
To extend the material view transaction, code MM50 is used.
11. Explain how you can change the standard price in the master material?
Ans:
The standard price for the material data cannot be updated or changed directly. However, to change the standard price you can perform the following steps
Fill in the future fields price ( MBEW-ZKPRS ) and the effective data ( MBEW-ZKDAT) for the materials
Select Logistics -> Material Management -> Valuation -> Valuation Price Determination -> Future Price
12. What is Source List and what is the transaction code for creating Source List?
Ans:
To identify sources of supply for materials a source list is used. To create a source list the transaction code used is ME01.
13. For creating a purchasing info record what are the pre-requisites?
Ans:
The pre-requisites for creating a purchase info record are
- Material Number
- MPN ( Manufacturer Part Number )
- Vendor Number
- Organizational level code
14. Explain the terms Planned delivery and GR processing time?
Ans:
Planned delivery means number of calendar days required to obtain the material, and GR processing means number of workdays required after receiving the material for inspection and placement into storage.
15. What is purchase requisition as related to SAP? Mention the document types that are used in purchase requisition?
Ans:
Purchase requisition in SAP determines both stock and non-stock items to the purchasing department. It can be done either manually or automatically, the document types used in purchase requisition are
- RFO ( Request For Quotation )
- Outline Agreement
- PO ( Purchasing Order )
16. Explain how consignment stocks are created?
Ans:
In the normal purchase order or requisition, consignment stocks are created. While creating consignment stocks things to be considered is that you must enter K category for the consignment item. As a result, the goods issued are posted to consignment stores and invoice receipt is not generated.
17. Explain how is the vendor return processed without a purchase order reference?
Ans:
First you have to observe the return column and then select — Item Detail > MIGO_GR > Goods Receipt for Purchase Order. Use movement type 161 if the intention is to deduct the stock otherwise, 162 is used to undo the changes. In the end, you have to ensure that the document is a return purchase order, and then the document is saved.
You can also use transaction code M21N for this purpose
18. Explain how you can create a vendor account group in SAP?
Ans:
To create vendor account group in SAP
Select display IMG -> Financial Accounting -> Accounts Payable/Receivable ->Vendor Accounts -> Master Records -> Preparation of creating vendor master records -> Define Accounts groups with Screen Layout
19. Explain what are the accounts created in SAP MM?
Ans:
Assignment of account is necessary for the purchase order item, it is important in SAP MM as it determines following things
- Account assignment type
- Account that will be charged when you post the invoice or goods receipt
- Account assignment data that you should provide
20. Explain what MRP (Material Requirement Planning) list is and what is the transaction code to access MRP list?
Ans:
MRP list is the initial working document from which the MRP controller starts working, and it consists of planning results information for the material. For an individual item, you can access the MRP list by using the transaction code MD05. You can also access the MRP list by navigation path
SAP Menu -> Logistics -> Materials Management -> MRP -> Evaluations -> MRP List- Material
21. What is SAP MM?
Ans:
SAP MM (Material Management) is a functional module in SAP that deals with procurement handling and material management. The MM module contains master data, system configuration and transactions to complete the procure to pay process.
22. What is SAP? How is it used in industries?
Ans:
- SAP is the most popular enterprise resource planning (ERP) software application used to provide enterprise business solutions. It was first introduced in 1972 in Mannheim, Germany.
- SAP stands for Systems, Applications, and Products in Data Processing.
- SAP provides complete business solutions by integrating various business tasks such as sales, purchase, and production. SAP takes information from one business process and incorporates it into another business process, thereby speeding up all business processes. For example, information about the raw material in stock is used by the production department to determine how to prepare products.
- SAP is widely used in various industries because as it updates and processes important data very quickly, it can automate business processes and provide real-time solutions for businesses.
23. What are the essential components in SAP MM?
Ans:
- Determine requirements
- Source determination
- Vendor Selection
- Order Processing
- Order follow up
- Goods receipts and Inventory management
- Invoice Verification
24. What is the organisational structure in the MM module?
Ans:
The organizational structure in the MM module is a hierarchy in which various organizational units are arranged according to their tasks and functions. The different organizational units that constitute the organizational structure of the company are as follows:
Client— A self-contained unit in the SAP system with separate master records and its own set of tables.
Company code— The smallest organizational unit. You can create an independent set of accounts for this unit for the purpose of external reporting.
Plant— An organizational unit where materials are produced or goods and services are provided. You can divide an enterprise into various plants according to production, procurement, maintenance, and materials planning.
Storage location— An organizational unit where the goods produced in the plant are stored.
Warehouse number— An alphanumeric key that represents a warehousing system, which is made up of different organizational and technical storage areas.
Storage type— An area such as a goods receipt area, goods issue area, or picking area. Also the physical or logical division of a complex warehouse.
Purchasing organization—An organizational unit that procures materials and services and negotiates with vendors to purchase materials or goods.
Purchasing group— An alphanumeric key for a buyer or a group of buyers who are involved in purchasing activities. The purchasing group is responsible for materials procurement and dealing with vendors.
25. What is Purchase Order?
Ans:
Purchase order is the formal and final confirmation of the requirements which is sent to vendor to supply material or services. Purchase order will include important information like name of material with its corresponding plant, details of purchasing organization with its company code, name of vendor, and date for delivery of material.
26. What is the use of Purchase Info Record?
Ans:
Purchasing info record stores information on material and vendor supplying that material. For Example: Vendors current price of a particular material is stored in info record.
27. What is the last step in Procurement cycle?
Ans:
Invoice verification marks the end of procurement after purchase order and goods receipt.
Invoice posting will update all related documents in financial and accounting.
Blocked invoice that vary from actual invoice can be processed through invoice verification.
28. What do you understand by Goods Receipt in SAP system?
Ans:
After processing of purchase order by vendor, material is delivered to ordering party and this process is called as goods receipt. So, goods receipt is the phase in which the material is received by the ordering party and the condition and quality are verified. Once material is verified against quality then goods receipt is posted.
29. Mention what is the transaction code used to extend the material view?
Ans:
To extend the material view transaction, code MM50 is used.
30. Mention what is the transaction code to delete a batch?
Ans:
The transaction code MSC2N is used to delete a batch. By flagging the batch master record, you can delete a batch record alternatively.
31. How do you post goods receipt?
Ans:
Path to post Goods Receipt –
Logistics -> Materials Management -> Inventory management -> Goods movement -> Goods movement
T-Code: MIGO
32. What is Source List and what is the transaction code for creating Source List?
Ans:
To identify sources of supply for materials a source list is used. To create a source list the transaction code used is ME01.
33. For creating a purchasing info record what are the pre-requisites?
Ans:
The pre-requisites for creating a purchase info record are
- Material Number
- MPN ( Manufacturer Part Number )
- Vendor Number
- Organizational level code
34. Explain the terms Planned delivery and GR processing time?
Ans:
Planned delivery means number of calendar days required to obtain the material, and GR processing means number of workdays required after receiving the material for inspection and placement into storage.
35. Explain what MRP (Material Requirement Planning) list is and what is the transaction code to access MRP list?
Ans:
MRP list is the initial working document from which the MRP controller starts working, and it consists of planning results information for the material. For an individual item, you can access the MRP list by using the transaction code MD05. You can also access the MRP list by navigation path
SAP Menu -> Logistics -> Materials Management -> MRP -> Evaluations -> MRP List- Material
36. What is Request for Quotation RFQ?
Ans:
Request for quotation is a form of invitation that is sent to vendors to submit quotation indicating pricing and their terms and conditions.
RFQ contains details about goods or services, quantity, date of delivery and date of bid on which it is to be submitted.
37. What do you mean by reservation?
Ans:
Sometimes, stock need to be blocked in advance so that it can be available at a particular point of time. This is known as reservation. Reservation ensures that stock is available and it can be used when required. Reserved quantity can be viewed by tcode MMBE.
38. Explain what is CBP? What is the difference between CBP and MRP?
Ans:
CBP is the past consumption values of stock; it is used to forecast future requirements. On the basis of past consumption values, the net requirement of goods is calculated.
The difference between CBP and MRP is that when you plan materials using MRP, you have to predict the materials requirement based on sales and operations planning (SOP). While in CBP you have to predict the material requirement based on historical demand for materials.
39. What is the movement type for Goods issue reversal?
Ans:
Movement type is 262 in Goods issue reversal.
40. How do you check Quota Rating?
Ans:
Quota rating = (Quota Allocated Quantity + Quota Base Quantity)/Quota
41. What is the last step in Procurement cycle?
Ans:
Invoice verification marks the end of procurement after purchase order and goods receipt.
Invoice posting will update all related documents in financial and accounting.
Blocked invoice that vary from actual invoice can be processed through invoice verification.
42. What are some of the movement types for stock transport order?
Ans:
One step transfers of materials can be posted using movement type 301. Other movement types are 303, 351, 641, or 643 in the stock transport order.
43. What is difference between purchase requisition and purchase order?
Ans:
Purchase requisition is an internal document and it is a request that is made to purchasing organization to procure certain list of material while purchase order is formal document that is given to vendor containing list of items to be procured from vendor.
44. How do you perform an Invoice Verification?
Ans:
If the Invoice refers to an existing document (PO, etc.), then the system pulls up all of the relevant information like Vendor, Material, Quantity, Terms of Delivery, and Payment Terms etc. When the Invoice is entered, the system will find the relevant account. Automatic posting for Sales Tax, Cash Discount, Corrections etc. When the Invoice is posted, certain data such as Average Price of Material and Price History are updated. Use Transaction MIRO.
45. How do you display parked documents?
Ans:
There are two possible transactions to use here. They are FB03 and FBV3. The first shows all posted document types. This is the best choice if you think the document has been posted to you actual balance. The later shows only parked documents that have not yet posted to your expenditure balance. These documents are still encumbrances. It is the best choice if you are trying to find which documents are still awaiting completion or approval. This transaction is very similar to the FBV2 transaction used with P-Card reconciliation and marking parked documents complete.
46. Explain what is CBP? What is the difference between CBP and MRP?
Ans:
CBP is the past consumption values of stock; it is used to forecast future requirements. On the basis of past consumption values, the net requirement of goods is calculated.
The difference between CBP and MRP is that when you plan materials using MRP, you have to predict the materials requirement based on sales and operations planning (SOP). While in CBP you have to predict the material requirement based on historical demand for materials.
47. What is SAP? How is it used in industries?
Ans:
1. SAP is the most popular enterprise resource planning (ERP) software application used to provide enterprise business solutions. It was first introduced in 1972 in Mannheim, Germany. SAP stands for Systems, Applications, and Products in Data Processing.
2. SAP provides complete business solutions by integrating various business tasks such as sales, purchase, and production. SAP takes information from one business process and incorporates it into another business process, thereby speeding up all business processes. For example, information about the raw material in stock is used by the production department to determine how to prepare products.
3. SAP is widely used in various industries because as it updates and processes important data very quickly, it can automate business processes and provide real-time solutions for businesses.
48. Briefly describe the history of the SAP software?
Ans:
The SAP software was developed by a company of the same name. SAP (the company) was founded in 1972 by five former IBM employees: Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus Tschira, and Claus Wellenreuther. SAP released its mainframe product, called SAP R/2, in 1979. The client/server version of the SAP software, called SAP R/3, was released in 1992. Today, SAP is the largest vendor of standard business-application software. SAP constantly delivers scalable solutions to its customers, allowing them to respond to dynamic market conditions and helping them to maintain an advantage over their competitors. Some of the major SAP applications presently available are defined in question 4 and include SAP R/3, my SAP ERP, mySAP Customer Relationship Management (CRM), mySAP Supplier Relationship Management (SRM), mySAP Supply Chain Management (SCM), and mySAP Product Lifecycle Management (PLM), to name a few.
49. What is mySAP ERP? What business components can it be classified into?
Ans:
mySAP ERP is the next-generation ERP application from SAP AG in Germany, and was first launched in 2003. The mySAP ERP application has all the features of previously released SAP ERP software, such as SAP R/3 and SAP Strategic Enterprise Management (SEM), along with its own extensions. The mySAP ERP application provides e-commerce solutions by using Web technology. The mySAP ERP application has the following advantages:
1. Mobile infrastructure, which improves workforce mobility
2. Transparency through a business intelligence framework
3. Delivery of people-centric services
4. Faster access to information, which facilitates quick decision making
5. Seamless integration of processes throughout the business
mySAP ERP includes the following products:
1. mySAP Enterprise Resource Planning (ERP)
2. mySAP Supply Chain Management (SCM)
3. mySAP Supplier Relationship Management (SRM)
4. mySAP Customer Relationship Management (CRM)
5. mySAP Product Life Cycle Management (PLM)
mySAP R/3 can be classified into the following business components:
1. Financial applications
2. Human resource applications
3. Logistics
4. Sales and distribution applications
50. What are the industry-specific solutions available in mySAP?
Ans:
The mySAP ERP application provides business solutions for almost every industry, including automotive, chemical, and media. Various industry-specific solutions available in mySAP include the following:
1. mySAP Automotive
2. mySAP Aerospace and Defense
3. mySAP Consumer Products
4. mySAP Banking
5. mySAP Chemicals
6. mySAP High Tech
7. mySAP Engineering and Construction
8. mySAP Healthcare
9. mySAP Higher Education and Research
10.mySAP Insurance
11. mySAP Media
12. mySAP Oil and Gas
13. mySAP Mill Products
14. mySAP Mining
15. mySAP Public Sector
16. mySAP Pharmaceuticals
17. mySAP Service Providers
18. mySAP Retail
19. mySAP Telecommunications
20. mySAP Utilities
51. What is SAP R/3?
Ans:
SAP R/3 is an ERP software that was officially launched in 1992. It is a replacement for the SAP R/2 mainframe computing-based ERP software and is based on client-server computing. With the advent of client-server computing, SAP AG in Germany (founder of the SAP ERP software) launched SAP R/3 to provide client-server-based real-time business solutions. The letter “R” in SAP R/3 represents the real-time business data processing, while the number “3” represents the three tiers in client-server computing.
1. The three tiers in client-server computing are: presentation (client), application (business logic), and database (stores the actual business data).
2. SAP R/3 integrates various business areas, such as sales, purchase, and procurement, by using different functional modules, such as Materials Management (MM), Sales and Distribution (SD), Financial (FI), Controlling (CO), and Human Resource (HR).
3. Different versions of SAP R/3 include 3.1i, 4.0b, 4.5b, 4.6b, and 4.6c; the latest version is 4.70.
52. How did different versions of SAP evolve?
Ans:
Since its inception, SAP has continued to support changing business processes and to adapt itself to the needs of organizations. In order to support the most current business strategies, SAP has evolved over time and progressed through the following versions:
1. SAP R/1—This was the first version of SAP and was developed for financial accounting systems. This version is no longer available.
2. SAP R/2—This was the second version of SAP. It replaced the R/1 version in the 1970s and was a mainframe-based business application. SAP R/2 supported multiple currencies and languages to help internationalize business management. This version is also no longer available.
3. SAP R/3—This version replaced SAP R/2, adding support for client-server-based distributed systems. This new version of SAP is multi-platformed, meaning it can be installed and used on multiple platforms, such as Windows or UNIX.
53. Why are industry-specific solutions used in SAP R/3?Industry-specific solutions are used in the SAP R/3 ERP application in order to automate various business processes for almost every industry, including automotive, oil and gas, and chemical. By automating business processes, the SAP R/3 application helps organizations meet the following challenges:
Ans:
1. Emerging markets—Earning revenue in emerging markets
2. Competition—Maintaining successful business operations in a world of fierce competition
3. Increasing demands—Handling increasing and varying customer demands
4. Labor issues—Solving the problems that arise for business operations requiring efficient skilled labor
5. Workforce shortages—Solving the problem of a shortage of skilled personnel
– The importance of industry-specific solutions comes from a very basic foundation of thought: every type of business is unique and therefore needs to be catered to accordingly. The same philosophy may not be applicable for automotive businesses and integrated steel plants, because both require entirely different approaches to business planning. The automotive industry is based on the assembling of equipment and parts–discrete manufacturing, whereas the integrated steel plant is a continuous manufacturing unit. Therefore, each business’s functionalities are different in areas such as production and inventory management.
54. What benefits will be realized after implementing SAP in any organization?
Ans:
After the installation of SAP R/3 in an organization, the following changes will occur:
1. Improvement in project management and project execution capabilities
2. Integration of suppliers and subcontractors
3. Optimization of sales-order capabilities
4. Comprehensive business support specific to a particular industry type
5. Minimal cost of ownership
6. Uniformity of business processes
7. Ability to make safe strategic choices
55. What are the different modules in SAP R/3?
Ans:
These modules are further grouped into various business-functional areas. The functional areas and the SAP R/3 modules in those functional areas are as follows:
– Financial applications—Deals with an organization’s financial matters, such as preparing and analyzing financial documents and reporting the document output to the appropriate authorities for further processing. To manage all these concerns, the following SAP R/3 modules are grouped in this functional area:
- FI—Financial Accounting
- CO—Controlling
- EC—Enterprise Controlling
- IM—Investment Management
- TR—Treasury
Human resources—Deals with documents related to an organization’s human resources department. The SAP R/3 modules grouped in this area help an organization to manage processes such as salary creation and distribution, employees’ payroll across the organization, and transferring data to other relevant departments, such as finance. This area consists of the following modules:
- Personnel Management
- Time Management
- Payroll
- Training and Event Management
- Organizational Management
Logistics applications—This is the largest area covered by SAP R/3. This area helps manage broad-level business processes such as sales and distribution of products, materials management, production planning, and quality management. This area consists of the following modules:
- MM—Materials Management
- SD—Sales and Distribution
- PP—Production Planning
- PM—Plant Maintenance
- LO—Logistics
- QM—Quality Management
- PS—Project System
- WM—Warehouse Management
56. What are the core functionalities of the SAP system?
Ans:
The core functionalities of the SAP system are Sales and Distribution (SD), Materials Management (MM), Financial Accounting (FI), and Production Planning (PP). In the first phase, companies implement the SAP software with these core functionalities. Later, in the second and third phases, they may also introduce other functionalities, such as Controlling (CO), Warehouse Management (WM), and Human Resource (HR). However, the types of modules and the phasing of implementation depends solely on the type of industry in which the client works, as well as the organization’s readiness and the urgency with which the integrated enterprise system, such as SAP, must be adopted.
57. How can we define an MM module? What is its importance in SAP R/3?
Ans:
MM stands for Materials Management and is a part of the Logistics functional area of SAP R/3. It is an important SAP R/3 module because it helps manage broad-level business activities, such as procurement, valuation and assignment, batch management, and materials storage. Since materials are the most precious resource of an organization, extreme care needs to be taken in all the processes related to materials management. Efficient materials management is the essence of the MM module of SAP R/3.
58. How is the MM module integrated with other modules of SAP?
Ans:
- The MM module deals with materials procurement on the basis of the production required; therefore, it is linked with the PP module.
- The SD module is proportionally related to the MM module, because it uses information about the quantity of material sent for production.
- The WM module is related to the MM module, because the MM module maintains information about materials storage and materials transfers inside an organization.
- The FI module is also related to the MM module, because every operation performed in the MM module directly impacts the financial processes of the organization.
59. What are the main components of the MM module? How are these components used in SAP?
Ans:
The MM module of SAP R/3 is used for materials procurement and management. This is the largest of all the SAP modules and is divided into the following subcomponents:
– Purchasing—Allows users to control the entire purchasing process.
– Inventory management—Allows users to keep track of the materials in stock. It also helps users to perform operations, such as goods receipts, goods issues, and physical stock transfers.
– Invoice verification—Allows users to verify invoices from vendors. The invoices are compared with the purchase order and the goods receipts in the following three ways:
- Content
- Price
- Quantity
Physical inventory—Allows users to keep track of the materials stored in an organization. Inventory is taken on the basis of measurement units, such as number or weight of items, at a given storage location at a specific time.
– Valuation—Allows users to calculate the value of all fixed and current assets, along with all payables, at a certain time and with the appropriate legal requirements.
– Materials requirements planning—Helps users to create a materials procurement plan for a plant or company.
– Materials master—Helps users to manage all of the materials-related data.
– Service master—Helps an organization keep records of the services that it procures.
– Foreign trade/customs—Allows users to manage the export and import of merchandise among different customs territories.
60. What is the organizational structure in the materials management (MM) module?
Ans:
The organizational structure in the MM module is a hierarchy in which various organizational units are arranged according to their tasks and functions. The different organizational units that constitute the organizational structure of the company are as follows:
Client—A self-contained unit in the SAP system with separate master records and its own set of tables.
Company code—The smallest organizational unit. You can create an independent set of accounts for this unit for the purpose of external reporting.
Plant—An organizational unit where materials are produced or goods and services are provided. You can divide an enterprise into various plants according to production, procurement, maintenance, and materials planning.
Storage location—An organizational unit where the goods produced in the plant are stored.
Warehouse number—An alphanumeric key that represents a warehousing system, which is made up of different organizational and technical storage areas.
Storage type—An area such as a goods receipt area, goods issue area, or picking area. Also the physical or logical division of a complex warehouse.
Purchasing organization—An organizational unit that procures materials and services and negotiates with vendors to purchase materials or goods.
Purchasing group—An alphanumeric key for a buyer or a group of buyers who are involved in purchasing activities. The purchasing group is responsible for materials procurement and dealing with vendors.
61. What are the levels of organizational units in Enterprise Structure in SAP R/3?
Ans:
The client is the highest level unit of the organizational units in Enterprise Structure in SAP R/3. The client is followed by the company code, which represents a unit with its own accounting, balance, and profit and loss (P&L). The next level of organizational units in Enterprise Structure is the plant, which represents an operational unit of a company.
62. Define “client.” What is its importance in SAP?
Ans:
A client can be defined as a person, company, or organization that purchases goods from another person, company, or organization. In terms of SAP, a client is defined as a unit that has its own master records and a set of tables. The client is important in SAP because it stores and maintains data about the organization where SAP is implemented.
63. How do we create a client in the MM module?
Ans:
You can create a client in the MM module either by using the transaction code SCC4 or by performing the following steps:
Select SAP Menu -> Tools -> Administration -> Administration -> Client Administration.
Double click SCC4–Client Maintenance. The display view Clients: Overview screen appears.
Select Display -> Change. The information dialog box appears.
Click Continue. The change view Clients: Overview screen appears, where you can create a new client.
64. Define “company.” How is it different from a client? What are the data in the MM module that are maintained at the company code level?
Ans:
A company is an organizational unit for which individual financial statements are drawn per the relevant commercial laws. A company consists of one or more company codes. Within a company, all company codes must use the same transactions in addition to the same fiscal year breakdown; however, company code currencies can vary.
A company is different from a client because a client can itself be a company, or an organization that has multiple companies. For example, the owner of the entire SAP system is a client. The system will have only one operational client, but the client may further have a group of companies. The following data are held at the company code level.
65. What are Features of SAP ERP?
Ans:
SAP is an enterprise resource planning software which is produced by the German corporation. SAP is a enterprise information software that was basically designed to manage resources, information and activities that are required to complete business processes like procurement and managing orders, billing of orders and management of human resources.
66. What are the organizational levels in SAP R/3?
Ans:
The top level of the organizational structure is the client, followed by company code, which represents a unit with its own accounting unit. The next level down is plant where procurement activities take place. A plant will produce goods and makes goods available for the company. The purchasing organization is the legally responsible for procurement transactions. This group is further subdivided into purchasing groups.
67. What are important steps in procurement life cycle?
Ans:
Procurement Process starts with gathering requirements, then creating a purchase requisition and then we create a formal document that has to be sent to vendor i.e. purchase order. After this goods will be supplied by vendor and goods receipt is done along with invoice verification. Then vendor is paid for supplied goods and services.
68. What do you mean by special stocks?
Ans:
Special stocks are stocks that are managed differently as these stocks did not belong to company and these are being kept at some particular location.
69. How stock is being transferred from one plant to another plant?
Ans:
Stock within plants is transferred with the help of stock transport order. One plant order the goods internally from another plant(receiving plant/issuing plant) with the help of stock transport order.
70. What are some of the movement types for stock transport order?
Ans:
One step transfers of materials can be posted using movement type 301. Other movement types are 303, 351, 641, or 643 in the stock transport order.
71. What is difference between purchase requisition and purchase order?
Ans:
Purchase requisition is an internal document and it is a request that is made to purchasing organization to procure certain list of material while purchase order is formal document that is given to vendor containing list of items to be procured from vendor.
72. What is a RFQ and how it is different from quotation?
Ans:
RFQ is request for quotation and it is a form of invitation that is sent to vendors to submit quotation indicating pricing and their terms and conditions while quotation is a reply by a vendor in response to request for quotation.
73. What are transactions that will cause change in stock?
Ans:
Goods receipt and goods issue will cause change in stock as goods receipt will increase warehouse stock and goods issue will decrease warehouse stock.
74. What do you mean by reservation?
Ans:
Sometimes, stock need to be blocked in advance so that it can be available at a particular point of time. This is known as reservation. Reservation ensures that stock is available and it can be used when required. Reserved quantity can be viewed by tcode MMBE.
75. Can you manually create purchase requisition with reference to documents such as purchase order or scheduling agreement?
Ans:
No, purchase requisition cannot be created with either of these as it is an internal document which is controlled by purchase organization.
76. Is material and vendor data available at all organizational levels?
Ans:
Yes, material and vendor data is available at all levels as it is normally created for company and it is valid for the levels below company.
77. What do you mean by release procedure?
Ans:
Release procedure means approval of documents like purchase orders and purchase requisition manually by the criteria defined in the configuration.
78. If you have multiple line items in purchase order, can you release line by line that purchase order?
Ans:
No, release is done only at header level in a combined way for all line items in case of purchase order.
79. What do you mean by material type?
Ans:
Materials with some common attributes are grouped together and they are assigned to a material type. This will differentiate materials and allow organization to manage different materials in systematic manner in accordance to company’s requirement.
80. What is a source list?
Ans:
Source list include list of possible sources of supply for a material over a given framework of time. A particular material can be ordered from different vendors in different time intervals. This information can be maintained in a source list.
81. What do you mean by consignment stock?
Ans:
In Consignment, material is available at our store premises, however it still belongs to the vendor(seller)/Owner of the material. If you utilize the material from consignment stocks, then you have to pay to the vendor.
82. What is invoice verification?
Ans:
Once goods are procured from vendor and placed in company’s premises through goods receipt then we need to pay to vendor for acquired goods and services. The amount to be paid along with details of material is provided by vendor in form of document that is known as invoice. Before paying to vendor we need to verify the invoice. This process of verifying invoice and paying to vendor is known as invoice verification.
83. What do you mean by outline agreement?
Ans:
Outline agreement is a long term purchasing agreement with vendor containing terms and conditions regarding the material that is supplied by vendor. Outline agreement are valid up to certain period of time and cover a certain predefined quantity or value.
84. What is difference between contract and scheduling agreement?
Ans:
Contract is a long term outline agreement between vendor and ordering party over predefined material or services over certain framework of time whereas scheduling agreement is a long term outline agreement between vendor and ordering party over a predefined material or service which are procured on predetermined dates over a framework of time.
85. What is quota arrangement?
Ans:
A particular material can be procured from different vendors depending upon the requirement. So, total requirement of a material is distributed to different vendor’s i.e. quota is assigned to each source of supply. This is known as quota arrangement.
86. What is difference between planned and unplanned services?
Ans:
In planned services at the time of procurement specifications like quantity and price are known in advance. It means nature and scope of service is clear before procurement whereas in unplanned services at the time of procurement specifications like quantity and price are not known in advance. It means nature and scope of service is not clear before procurement. These services can be extended as per the requirement.
87. What do you understand by posting period?
Ans:
Various documents like purchase order, request for quotation, goods receipt are essential documents in a business. These documents need security i.e. if any of documents is posted incorrectly then business can be affected at various concern levels. So, to secure these documents we have a concept of posting period. Posting period means it will allow you to post and make changes in the documents only in a specific time period.
88. Problem is that after goods receipt and AFTER invoice verification, reversal of goods receipt is being done. Client wants this more controlled as the GRIR account is being affected. So no reversals to be done after Invoice verification. How to approach this?
Ans:
Make this setting: SPRO -> Materials Management -> Inventory Management and Physical Inventory -> Goods Receipt -> For GR-Based IV, Reversal of GR Despite Invoice
– Here remove the tick against Mvt 102 & 122.
– Now the system will not allow to return the Good at any case.
89. I have created a new vendor. Later I found that there were some mistakes and that I want that the system should not allow me to make any PO or post any entries to this vendor. How to deactivate this vendor?
Ans:
You can block a vendor at the following levels:
All company code
Single company code
All Purchase org
Single Purchase org
90. Where to Get the Goods Movement Type List?
Ans:
Step 1) Run spro command/TC
Step 2) Then move to “SAP Reference IMG” screen
Step 3) Then navigate following path:
IMG –> Materials Management –> Inventory Management and Physical Inventory –> Movement Types –> Copy, Change Movement types
Here with “Copy, Change Movement types” option a help tutorial is available (rectangular blue colour icon). In that go to “Further information” section where you can find a big list of movement types with some brief explanation.
91. Where the schedule margin key is customized?
Ans:
You define the order float in the scheduling margin key, The scheduling margin key is copied from the material master. The float before production or float after production and the release period are defined in the scheduling margin key
– For Customizing for Shop Floor Control, by choosing Operations –> Scheduling –> Define Scheduling Margin Key .
The scheduling margin key is assigned to the material ( MRP area in the material master) and is transferred when the production order is created. These values can be changed in the production order.
92. What is the function of OBYC?
Ans:
Function of the OBYC stand for Configure Automatic Postings. In this step, you enter the system settings for Inventory Management and Invoice Verification transactions for automatic postings to G/L accounts.
– Postings are made to G/L accounts automatically in the case of Invoice Verification and Inventory Management
transactions relevant to Financial and Cost Accounting.
– For example, Posting lines are created in the Stock account and Consumption account.
93. Tell me what is *make to order*?
Ans:
Make-to-order production is a process in which a product is individually manufactured for a particular customer. In contrast to mass production for an unspecified market where a material is manufactured many times, in make-to-order production a material is created only once though the same or a similar production process might be repeated at a later time.
– In global trade, you often need to process several different kinds of transactions at the same time. The Trading Execution Workbench (TEW) provides a central cockpit where traders can process trading contracts and their subcomponents, such as purchase orders and sales orders and follow-on documents. In addition, TEW automates a large part of the data entry, making processing quicker, easier, and more error-free.
94. How to delete a material completely?
Ans:
Try MMDE transaction but be careful this will remove all material from Client.
95. What is the use of Tables in MM. i.e. How the tables get created?
Ans:
Through SE11 you can create a new Table. In MM if you create a Material Master MARA, MARM, MARC,MARD, MBEW & MVKE will updated. In Vendor Master LFA1, LFB1 & LFM1 will be updated. The same applies to EKKO,EKPO for P.O, MSEG & MKPF for MIGO & RBKP for MIRO.
96. If in any error, only the message no. ! or the table no. is shown , then how to resolve the error using message no. or table no.?
Ans:
Contact ABAP or BASIS person to resolve this.
97. How to create new transaction codes?
Ans:
In transaction code SE93 you can create, Change & Display a Transaction Code.
98. What is SAP MM?
Ans:
SAP Material Management is a useful module in SAP that arrangements with acquirement taking care of and material administration. This module primarily manages the Procurement Process, Master Data (Material and Vendor Master), Inventory Management, Valuation of Material and Account Determination, Material Requirement Planning, Invoice Verification.
99. What are the fundamental segments in SAP MM?
Ans:
– Determine necessities
– Source assurance
– Vendor Selection
– Order Processing
– Order development
– Goods receipts and Inventory administration
– Invoice Verification
100. What are the kinds of uncommon stock accessible?
Ans:
The kinds of unique stock accessible are subcontracting, dispatch, venture, pipeline, deals arrange, stock exchange, returnable bundling with client, and so on
101. Tell me about the subcontracting cycle?
Ans:
The Po is created with item category L , the goods is transferred to subcontractor by 541 movemet. for this movement note no accounting docs take place. When GR is done automatically, 543 movemnt takes place which take care of the consumption of components from stock.
102. How are the byproducts taken care of in subcontracting?
Ans:
You can add these by products in the BOM for the header matl.
103. What is meant by scales?
Ans:
Can scales be used in standard purchase order? You can fix a price in the info record for a say qty from 1-100 price RS150 & if the order qty is 101- 500- the prices is 140 . Scales cannot be used directly in PO but can be pulled into the PO from various master data like info record, quota arrangement.
104. What is the difference between a contract and a scheduling agreement?
Ans:
With regard to Outline Agreement:
1. You can create the centrally contract (cross-plant) where you can maintain different pricing conditions for each and every plant
2. You have to create the Release Order with reference to Outline Agreement.
3. No detailed delivery schedule can be made in the Release Order.
4. No Release documentation is created.
5. Only time-dependent conditions can be created.
6. Some Item Category ‘M’ and ‘W’ can be used.
With regard to Scheduling Agreement:
1. The Plant Location must be entered in the Scheduling Agreement.
2. We do not have to create any other purchasing document except for delivery schedule line via Transaction ME38 or MRP running (with the appropriate setting of Source List).
3. Delivery Schedule line items are created subject to your specific requirement.
4. Can create both Scheduling Agreement with and without Release Documentation (subject to the Document Type LP or LPA) with the selection of either FRC or JIT delivery schedule.
5. Either time-dependent or time-independent conditions can be created subject to the customizing in the Document Type of the Scheduling Agreement.
6. Item Category ‘M’ and ‘W’ can not be used.
105. What is meant by batches? How can the batches be searched?
Ans:
A batch is a subdivision of your stock of a material having the same characteristics.
For instance:
– food production uses batches to indicate the day of production.
– paint production uses batches based on production date and the used ingredients. It is very hard to reproduce the same color in exactly the same way at two different moments.
– ore may be divided in batches based on their mineral content.
You can search batches using the standard search facility (match code, key F4) based on the naming convention of the batches or, if you use batch classification, based on the characteristics of the batches.
106. What are the settings required for quota arrangement?
Ans:
To set up a quota arrangement for the procurement of a material, proceed as follows:
Master data -> Quota arrangement -> Maintain, enter the material and plant number, press ENTER to display the overview screen for the quota arrangement periods, Enter a validity period for quota arrangement, Enter date until which the quota arrangement is valid. The start date is calculated by the system. Press ENTER .
Select the quota arrangement and choose Goto -> Item overview to display the item overview screen of the quota arrangement. Enter a quota arrangement item for each source of supply you want to include in the quota arrangement.
You must enter the following data.
– Procurement type
– Special procurement type, Enter k in the S column, for example, if a consignment arrangement for the material exists with the vendor.
– Vendor number
– Procurement plant (supplying plant):
– Quota column, enter the quota assigned to each item.
Press ENTER .
The percentage distribution of the quotas is calculated and displayed automatically by the system.
Save the quota arrangement. The system assigns a number to the quota arrangement item automatically
107. What are the differences between release procedure with classification and release procedure without classification? When are they used?
Ans:
Release procedure with classification means the Purchase requsition can be released both at item level & at the header level. Release procedure with out classification can also be used for PR which is used for item level release only. all other external documents cannot be relesed with classification. The two procedures are mutually exclusive (that is to say, you must decide in favor of one of them only – you cannot use both).
108. Is it possible to have a release procedure without classification for a PO?
Ans:
No
109. Is it possible to have scales in a quotation?
Ans:
No
110. What is GR blocked stock? When it can be used?
Ans:
Whenever you are not sure about the quality of the product received, you can put in GR blocked stock.
111. How to give specifications for developments?
Ans:
We normally prepare a business requirement document in which we specify what is required. what field & tables have to be referred for the required development.
112. How to create PR or PO by MRP?
Ans:
The PR is created according to the safety stock mentioned for the material or can be triggered from a requirement . For creating a PO, you need to have the scheduling agreement in place .After the MRP is run the schedule lines are generated which are nothing but the PO.
113. What is the use of SAP Material Management module?
Ans:
- SAP Materials Management (MM) is a part of Logistics area and helps to manage the procurement activity of an organization from procurement.
- It supports all aspects of material management (planning, control etc).
- It is the backbone of the Logistics area which incorporates modules like Sales and Distribution, Production Planning, Plant Maintenance, Project Systems, Warehouse Management which are extremely obsessed on Materials Management module.
114. What do you understand from Procurement process in SAP MM?
Ans:
Every organization acquires material or services to complete its business needs. The process of buying materials and obtaining services from vendors or dealers is procurement.
115. Explain steps in Procurement Lifecycle?
Ans:
Requirement and Information Gathering
Procurement process starts with gathering information about product and its quantity. Then for required products and services, it is necessary to look for suppliers who can satisfy the requirements.
Supplier Contact
After gathering requirements one will look for the suppliers who can fulfill the requirements. Based on that quotation request or information request can be made to suppliers or direct contact can be made with them.
Background Review
Once the supplier is known product/service quality is checked, and any necessities for services such as installation, warranty and its maintenance are investigated. Some samples of the products can be obtained for quality examination.
Negotiation
Some negotiations with suppliers is made regarding price, availability and delivery schedule of the products/services. After this a contract is signed that is a binding legal document between supplier and ordering party. A contract will include all necessary information like price and quantity of material, delivery date, etc.
Order fulfillment
Ordered material will be shipped, delivered to the ordering party and supplier is paid accordingly. Training and Installation of product or services may also be included.
Consumption, Maintenance and Disposal
As the products/service is consumed the performance of the products or services is evaluated and any follow up service support if required is analyzed.
116. A Purchase requisition is an internal document or external document?
Ans:
Internal document, it is the phase in which purchasing department is informed about the requirement of items or services required for business purpose.
117. What are the different type of Basic Procurement?
Ans:
There are 2 types of Basic procurement which are shown below –
Procurement for Stock vs Consumption
External vs Internal Procurement
118. What is the difference between Procurement for stock vs consumption?
Ans:
Procurement for Stock – A stock material is a material that is kept in stock. These materials are kept in stock once received from the vendor. The stock of this material keeps on increasing or decreasing based on amount of the quantity received or issued. To order a material for stock, the material must have a master record within the system.
Procurement for Direct Consumption – When procurement is for direct consumption i.e. it will be consumed as soon as it is received, the user should specify the consumption purpose. To order a material for consumption, the material may have a master record within the system.
119. What is External Procurement?
Ans:
External procurement – It is the process of procuring goods or services from external vendors. There are 3 basic forms of external procurement generally supported by the Purchasing component of IT system.
One time orders are generally used for material and services that are ordered irregularly.
Longer-term contracts with the subsequent issue of release orders – For materials that are being ordered regularly and in large quantities, we can negotiate deal with the vendor (seller) for pricing or conditions & record then in a contract. In a contract you also specify the validity date.
Longer-term scheduling agreements and delivery schedules – If a material is ordered on an everyday basis and is to be delivered according to an exact time schedule, then you set up a scheduling agreement.
120. What is Internal Procurement?
Ans:
Internal Procurement – Large corporate organizations may own multiple separate businesses or companies. Internal Procurement is process of getting material and services from among identical company. So, each of these companies maintains a complete bookkeeping system with separate Balance, Profit & Loss Statements so that when trade occurs between them it will be recorded.
121. What is Special Procurement?
Ans:
Special Procurement
Special stocks are stocks that are managed differently as these stocks did not belong to company and these are being kept at some particular location.
122. What is Consignment Stock?
Ans:
Consignment Stocks
Material that is available at our store premises, however it still belongs to the vendor (seller)/Owner of the material. If you utilize the material from consignment stocks, then you have to pay to the vendor.
123. What are the common assignment types in SAP MM system?
Ans:
Plant to Company code
Purchasing organization to company code
Purchasing organization to Plant
Standard purchasing organization to plant
124. What are the different Info record types?
Ans:
Standard
Consignment
Subcontracting
Pipeline
125. How do you flag a material for deletion?
Ans:
A deletion flag can be set at client level, plant level or storage location level. Transaction MM06 is used to mark a material for deletion.
126. What is the use of Purchase Info Record?
Ans:
Purchasing info record stores information on material and vendor supplying that material. For Example: Vendors current price of a particular material is stored in info record.
127. Where do you maintain Purchase Info Records in SAP MM?
Ans:
Purchase info record can be maintained at plant level or at purchasing organization level.
128. What is Purchase Order?
Ans:
Purchase order is the formal and final confirmation of the requirements which is sent to vendor to supply material or services. Purchase order will include important information like name of material with its corresponding plant, details of purchasing organization with its company code, name of vendor, and date for delivery of material.
129. What do you understand by Goods Receipt in SAP system?
Ans:
After processing of purchase order by vendor, material is delivered to ordering party and this process is called as goods receipt. So, goods receipt is the phase in which the material is received by the ordering party and the condition and quality are verified. Once material is verified against quality then goods receipt is posted.
130. How do you post goods receipt?
Ans:
Path to post Goods Receipt –
Logistics ? Materials Management -> Inventory management -> Goods movement -> Goods movement
T-Code: MIGO
131. What are the different Procurement types that you can create Purchase requisition?
Ans:
Purchase requisition can be created for the following procurement types –
Standard – Getting finished material from vendor.
Subcontracting – Providing raw material to vendor and getting finished material.
Consignment – Procuring material that is kept in company’s premises and paying to vendor for that.
Stock transfer – Getting material from within the organization.
External service – Getting services like maintenance from third party vendor.
132. How can you create a Purchase Order from Purchase Requisition?
Ans:
Purchase Order from purchase requisition can be created by following below steps –
T-Code: ME21N
133. What is Request for Quotation RFQ?
Ans:
Request for quotation is a form of invitation that is sent to vendors to submit quotation indicating pricing and their terms and conditions.
RFQ contains details about goods or services, quantity, date of delivery and date of bid on which it is to be submitted.
134. What is the use of document type in SAP system?
Ans:
In SAP system, you use Document Type to define different methods or procedures for a transaction.
135. What is free item in SAP system?
Ans:
The Price will be marked zero for free item. We can tick the item as free item while creating PO in system.
136. Why do you use Material type?
Ans:
Material type in SAP system is used to group various materials based on some common properties.
137. What is Material Status?
Ans:
It is 2 digit code and is used to determine the material usability.
138. What are the different stock types in SAP system?
Ans:
Restricted Stock
Unrestricted Stock
Quality Inspection Stock
Blocked Stock
GR Blocked Stock
139. What do you understand by GR Blocked stock?
Ans:
This is conditionally accepted stock and not the unrestricted stock.
140. Is it possible that you can use scales in Quotation?
Ans:
No
141. What do you understand by Material Master? How Material master is maintained in SAP system?
Ans:
Material master contains information related to different material types like finished product, raw material. Material master can be used for identifying a product, purchase material, goods issue or good receipt, MRP and production confirmation.
For Material master data, use T-code: MM01 or go to Logistics ? Production ->Master Data ->Material Master ->Material ->Create (General) ->immediately
142. What is the use of BOM usage type 1 in SAP system?
Ans:
It is used for Production
143. How do you create Purchase Order or Purchase Requisition from Material Requirement Planning?
Ans:
The PR is created according to the safety stock mentioned for the material or can be triggered from a requirement. For creating a PO, you need to have the scheduling agreement in place. After the MRP is run the schedule lines are generated which are nothing but the PO.
144. What is MRP run in SAP system?
Ans:
MRP run or planning run is an engine which is used to fill demand and supply gap. Issues & Receipts are called MRP Elements. Issues include PIRs, Dependent Requirements, Order Reservations, Sales Orders, Issuing Stock Transfer Orders, etc. and receipts include Production Orders, Purchase Requisitions, Purchase Orders, Open Production Orders, Receiving Stock Transfer Order, Schedule lines, etc.
145. How do you check Stock Requirement List in SAP system?
Ans:
This is used to see current stock and planned receipts. Use T-code: MD04
Enter Material and Plant to see list.
146. What is the use of MRP list?
Ans:
MRP List is used to generate static report that contains planning run material wise and it displays time of MRP run at the top.
Use T-Code: MD05
147. What is the Production Order?
Ans:
A Production order is used to define the material to be produced, plant location where production has to be done, date and time of production, quantity of goods required. A Production Order also defines which components and sequence of operations are to be used and how the order costs are to be settled.
148. How do you check the available stock at any point of time?
Ans:
You can use Stock overview to check the available stock at any point of time. Stock overview can be checked using T-Code: MMBE
149. What is a Contract?
Ans:
Contract is a long term outline agreement between vendor and ordering party over predefined material or services over certain framework of time. There are two types of contract –
Quantity Contract –
In this type of contract overall value is specified in terms of total quantity of material to be supplied by vendor.
Value Contract –
In this type of contract overall value is specified in terms of total amount to be paid for that material to the vendor.
150. What is the movement type for Goods issue reversal?
Ans:
Movement type is 262 in Goods issue reversal.
151. What is the use of Material Document List?
Ans:
Material document list is used to generate any goods movement such as goods receipt, goods issue for a production order, etc.
152. What is a Scheduling agreement?
Ans:
Scheduling agreement is a long term outline agreement between vendor and ordering party over a predefined material or service which are procured on predetermined dates over a framework of time.
153. What is Quota Arrangement in SAP system?
Ans:
A particular material can be procured from different vendors depending upon the requirement. So, total requirement of a material is distributed to different vendor’s i.e. quota is assigned to each source of supply. This is known as quota arrangement.
154. How do you check Quota Rating?
Ans:
Quota rating = (Quota Allocated Quantity + Quota Base Quantity)/Quota
155. What is the use of Posting Period in SAP system?
Ans:
SAP ERP systems were designed so that business can be conducted in an efficient way. Various documents like purchase order, request for quotation, goods receipt are essential documents in a business. These documents need security i.e. if any of documents is posted incorrectly then business can be affected at various concern levels. So, to secure these documents we have a concept of posting period. Posting period means it will allow you to post and make changes in the documents only in a specific time period.
156. How do you define Posting Period in a company?
Ans:
Posting period for a company can be defined using five fields which are as follows –
Maintain Fiscal Year Variant
Assign Fiscal Year Variant to Company Code
Define Variants for Open Posting Periods
Assign Variant to Company Code
Open and Close Posting Periods
157. What are the different Stock transfer types in SAP system?
Ans:
Inter Company
Intra Company
Intra Plant
158. What is Intra plant stock transfer type in SAP MM?
Ans:
Storage Location to Storage Location
159. What is an Outline agreement?
Ans:
Outline agreement is a long term purchasing agreement with vendor containing terms and conditions regarding the material that is supplied by vendor.
Outline agreement are valid up to certain period of time and cover a certain predefined quantity or value.
160. Can you generate packing/picking lists for goods issue in SAP MM?
Ans:
In SAP EWM you can generate packing list.