Availability Check

What is the difference between the Availability check 01 (Daily requirement) and 02  (Individual Requirement) in material master?

01 and 02 are the checking group. Availability check is carried out with the help of these checking group and checking rule. Checking group 01 and 02 are maintained on the material master. 

01 – Individual requirement -For this system generates transfers the requirement for each order to the MRP .So that MM can either produce or procure.

02- Collective requirement.-In this all the requirements in a day or in a week are processed at a time. System stores all req and passes on to the MRP in MRP run. In this system performance is high however you can not do the backorder processing whereas in other you can do.

What is a Reservation?

A Reservation is a document used to make sure that the warehouse keeps a certain amount of a material or materials ready for transfer at a later date.  It contains information on what, quantity, when, where from and to. Reservations help effective procurement by utilizing the MRP system to avoid out of/lack of stock situations. If we create a production order automatically reservation document is created in parallel. Even though the reservation is made we issue the same stock for another production order.

What is Blanket Purchase Orders ?

Blanket Purchase Orders for Consumable Materials

Blanket PO's are often appropriate for low value materials and are used to procure consumable materials and services that are frequently ordered from the same supplier. Blanket PO's are valid for a longer term-such AS for a year or two-and with a value limit.

Business Scenario

Consider, for example, a business that supplies their offices with general cleaning and janitorial supplier ordered on a bi-weekly or monthly basis. This company should use a blanket PO rather than creating a separate PO each time they need,supplies. When the material is consumed or services are performed, an invoice is posted in the system reference to the PO, and no goods receipt are posted. 

The blanks PO process has several business advantages that result in lower transaction costs, as follows:

►  Blanket PO's are valid for the long term; therefore, you don't need to create them every time you reorder supplies.

►  A goods receipt isn't required.

►  Material master records aren't required.

Process Steps

The process steps in a blanket PO are similar to those in the indirect material procurement process, but there is no goods receipt posting. Proceed as follows: 

1. Create the purchase requisition. 

Create the purchase requisition via Transaction code ME51N and select document type FO ( framework order ). Enter item "B - Limit", quantity, UoM, plant, material group, overall limit, and any one of the account assignment categories such as cost center.

2. Create the PO

Create the PO. via Transaction code ME2lN with reference to the purchase requisition. Enter the vendor, validity start date and end date.

3. Post the invoice

On receipt of the invoice from the vendor, post the invoice in the system via transaction code MIRO. Enter the document date. posting date and PO number. The PO will copy the item and quantity. Enter the amount and save. Before saving you can check the account posting via Simulation button.

Difference between GR Blocked stock and Blocked stock ?

GR Blocked stock - Conditional acceptance of material e.g. vendor supply excess material earlier to delivery date or material damaged in transport and you wanted to take decision after some time. Whenever you are not sure about the quality of the product received, you can put in GR blocked stock.  It is only recorded in the purchase order history. This stock is NOT valuated until actual receipt 103 is GR Blocking , then 105 is Releasing GR Blocked to Quality or Unrestricted stock .

Blocked stock - Material rejected by quality or in production.

What is the function of OBYC?

Function of the OBYC stand for Configure Automatic Postings. 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.

SAP MM Interview Question

1. What is the difference between a Purchase Order and a Purchase Requisition?

A Purchase Requisition is a document type that gives notification of a need for materials or services. 

A Purchase Order is a document type that is a formal request for materials or services from an outside vendor or plant.  Procurement types may be defined at the line item and can be standard, subcontracting, consignment, stock transfer, or an external service. 

2. Under what conditions are “Planned Orders” created?  What may planned orders be converted to and how is that conversion accomplished?

Planned orders are always created when the system creates an internal procurement proposal.  In the case of vendor procurement, the MRP Controller may create a planned order or directly create a PR.  The next step for a planned order is to be converted to a PR so it goes to purchasing and is to eventually become a PO.  A planned order can be converted to a PR using transaction code MD14. 

3.What is an Indirectly or Directly created Purchase Requisition?

An Indirectly created Purchase Requisition has been initiated by CBP, the PS Project System, PM Maintenance, and Service Management, or PP Production Planning and Control.

The Directly created Purchase Requisition, is created by a person manually in the requesting department specifying what materials/services, units, and a delivery date.

Negative Stock in Plant ?

The Neg.stocks indicator can be set if there is a requirement to allow stocks of this material to be in a negative stock situation. The negative stock occurs when there is actual physical stock, but that stock has not been receipted into inventory. If a goods issue is made from inventory, then the stock will go negative until the missing goods receipt is made. This allows stock to be shipped without waiting for paperwork to be completed. However, this situation is dependent on the policy of the company.

Configuration Steps:

SPRO > MM > inventory management and physical inventory > goods issue / transfer posting > allow negative stocks select your plant and storage location and make tick mark for the check box

Batch Entry

The Batch entry key is used to identify where the batches have to be entered

in the production process. 

Three options are available for the Batch entry field:

► Manual Batch Determination at release of order

► Batch Not Required in Order; confirmation required

► Automatic Batch Determination upon release of order

What is RTP ?

Returnable transport packaging (RTP) is a multi-trip packaging medium (for example, pallets or containers) in which goods can be transported more than once between vendors and customers. 

Returnable transport packaging from a vendor that is stored at a location on your premises is managed as special stock and clearly assigned as belonging to the vendor. It is the property of the vendor and is therefore not included in the customer’s valuated stock. 

To enable you to manage the returnable transport packaging stocks of material belonging to different vendors separately, special stock data is required in addition to material master data.This special stock data is defined for every vendor at the storage location level.Special stock data is created automatically when the first receipt is posted into the returnable transport packaging stock. This data cannot be maintained directly by the user but is updated automatically with every goods movement (or physical inventory). 

RTP stocks from vendors are externally owned and are not valuated.
RTP stock is always unrestricted-use stock. 

The stock can neither be in quality inspection nor blocked. Depending on the system configuration, returnable transport packaging stock can also be negative. Negative stocks occur when you return an RTP quantity to the vendor before you have entered the goods receipt in the system (i.e. the goods issue is posted before the goods receipt).

A quantity of returnable transport packaging can be entered at goods receipt for a purchase order as follows:

1. From the Inventory Management menu, choose Goods movement ® Goods receipt ® For purchase order ® PO number known or PO number unknown.
2. On the initial screen enter the movement type (usually 101) and the order number (or the selection criteria for the purchase order).
3. Select the required items and copy them.
4. From the overview screen, choose Edit ® W/o purchase order ® Enter...
A window appears in which you can enter the movement type and the special stock indicator (e.g. 501 M) for the quantity of returnable transport packaging.
5. Enter the returnable transport packaging items.
6. Post the goods movement.

 

SAP MM Interview Questions II

What are the types of info records ? 

    - Standard

    - Pipeline

    - Consignment

    - Subcontracting

What is meant by access sequence? When it is used?

Condition type has an access sequence assigned to it which determines which tables to access for data and in what sequence. This has a sequence of table based on the most specific to most generic. It can be used for any new condition type creation.

How does the PO pick up the pricing schema?

The pricing procedure assigned to a vendor has a calculation schema attached to it. This schema defines the various conditions pre-requisite, calculation & sequence in the PO. Generally, only one type of pricing procedure is followed for all the vendors.

 

What is Consignment Stock ?

It is a business arrangement in which you order material from vendor and keep it in your premises and you are liable to the vendor as per the consumption i.e. you pay to the vendor only then you consume the stock. 

 

 

Goods Movements

A goods receipt (GR) is a goods movement in which the receipt of goods from both an external vendor and from production is posted. A goods receipt leads to an increase of warehouse stock.

A goods issue (GI) is a goods movement in which a material withdrawal, goods issue, material consumption, or goods shipment is posted to a customer. A goods issue leads to a decrease of warehouse stock.

A stock transfer is removal of materials from a particular storage location and placement into another storage location. Stock transfers can take place both within the same plant and between two plants.

 

A transfer posting is a superordinate term for stock transfers and changes the stock identification or qualification of a material, regardless of whether the posting is linked to a physical movement or not. Examples of a transfer posting include the release of the stock for quality inspection, the transfer posting from material to material, or the transfer of consignment material

What is Inventory management ?

Inventory management provides information to MRP which takes into account not only physical stock but also planned movements (requirement and receipts). Requirements calculated by MRP are acquired externally or internally.

When a material is ordered from a vendor, goods receipt takes place in inventory management with respect to the purchase order. The vendor invoice is later processed by invoice verification. Amongst other checks, verification is made as to whether the quantities and values from the purchase order and the goods receipt agree with those on the invoice.

If a material is acquired internally by means of production, inventory management provides for provision of components. Receipt of the finished products into the warehouse is also posted in inventory management in the same way.

On the other hand the material has not been withdrawn from the warehouse for internal production, but for the delivery of sales orders. A dynamic availability check can already give you information about whether the required material is available in sufficient quantity at the time the sales order is entered. (The availability check may also be used in conjunction with reservations and production orders.) When the delivery is generated, the quantity to be delivered is marked as "delivery to customer" and deducted from the total stock when the goods issue is posted.

Inventory Management includes the following tasks:

•     Managing the material stocks by quantity and value
•     Planning, creating, and verifying all goods movements
•     Carrying out the physical inventory

Evaluated Receipt Settlement (ERS)

It is particularly suitable for creating settlement documents at regular
intervals.

ERS has the following advantages over the Logistics Invoice Verification done by MIRO
     •  Purchasing transactions are closed more quickly. 
     •  Communication errors are avoided. 
     •  There are no price and quantity variances in Invoice Verification. 

In test mode, the system can issue a list of goods receipts that can be settled and goods receipts that cannot be settled. The system makes no postings; it only lists the invoices selected. 

It is recommended to implement ERS only if a clear agreement exists with the vendor on the applicable conditions. The purchase order has to be updated for any price condition changes and has to be current.

What is a Movement Type?

The movement type enables the system to find predefined posting rules determining how the accounts of the financial accounting system (stock and consumption accounts) are to be posted and how the stock fields in the material master record are to be updated.

1. Key for a specific goods movement (incomplete)
2. Quantity update (stock tables)
3. Value update (FI document, account determination)
4. Screen layout (dialog only)
5. GR/GI slip print
6. Checks (min. shelf life, dynamic availability, etc.)
7. Link to WM, QM, serial numbers