SAP MM

Part-2
payment 30 days a er delivery), trading terms (in two
incoterms fields – for example EXW Wien).

Step 4)
Organiza onal data holds the informa on on the purchasing
organiza on, purchasing group and company code. You could
choose another purchaseing group if you needed to.

Other tabs

In Condi ons tab, you can find data about prices and
condi ons on header level.
Texts tab is used to maintain header level texts.
Address tab holds the vendor address data.
In the Addi onal Data tab, you can find Collec ve
number and VAT registra on number of the vendor.

At the item level purchase order contains addi onal

informa on on items

On the delivery schedule tab, we can enter the desired

delivery schedule and quan es that are to be delivered
at a certain date.
 Materialdata tab contains informa on about vendor
material number, batch, vendor batch, EAN code etc.
Some of the data is populated from purchase info record.
On the delivery tab, you can set delivery tolerance
percentages (over and under delivery), set delivery
status, delivery remainder se ngs and other
informa on.
Invoice tab holds informa on on invoice related data and
a field “Tax” that should be filled if applicable (in our
case the tax code is V1 for both items).
Condi ons tab is used to specify condi ons on item
level.
Delivery address – our company address, it can be
changed if we want the material delivered elsewhere.

Confirma on tab holds data specific for the item

confirma on control and rejec on indicator.

When all the data is double-checked for mistakes and entered

accurately we can save the purchase order.
How to create Purchase Order
with Reference
Purchase order with reference

Purchase orders can be created with reference to a purchase

requisi on, RFQ, quota on, another purchase order, contract,
sales order etc. To reference a PO to a previous document you
can use the appropriate func on. You can create a PO
referencing a previous document in 2 ways

1. Using ME58
2. Using ME21N

Referencing through ME58

In our case if we want to create a PO for a purchase

requisi on, we can use the transac on code ME58. I will
demonstrate the process star ng from ME58 as it calls the
ME21N and you can see that actually we create a PO in
ME21N anyway.
Step 1)

1. Enter t-code ME58.

2. Choose Vendor and purchasing organiza on and
3. Select document types.
4. Execute.
Step 2)

1. Choose the line for your vendor.

2. Select process assignment.

Make sure that on the next screen the selected order

Step 3)
type is NB (or other appropriate type which you wish to use at
this moment). Date, purchasing group and organiza on also
need to be checked before clicking the check bu on.
 You will be redirected to the transac on ME21N by the
Step 4)
system where you will be able to choose the requisi on you
want to use as a reference document for PO.

1. Choose PR number you want to use as a reference

document.
2. Select the Adopt bu on.

You can see that our item has been transferred to new
Step 5)
purchase order. You can now save it, and it will be assigned a
document number.
Referencing through ME21N

Crea ng a PO directly from ME21N referencing to any suitable

document is the fastest and least complicated way to do so. If
you want to skip the ME58 or any other not needed step, you
can create a PO using ME21N directly. This is mostly used by
the MM users, and the process is as it is described below -
Step 1)

1. Enter the transac on ME21N.

2. Choose the “Document Overview ON” (if document
overview isn’t open already).

In the document overview screen, you can choose

Step 2)
which document you will use for referencing purposes.

1. Choose the Selec on Variant bu on.

2. Choose the document type for which you want to
reference your PO.
Step 3)

On the selec on screen enter your PR name (or find it by any

other data – e.g. vendor, material number).
Execute the search.
 You are presented a screen with the documents relevant
Step 4)
to your search.

1. Click the document number you want to use as a

reference document.
2. Choose to Adopt the document.

You are done, now you can save your PO or make addi onal
changes. The referencing process is the same for any other reference
document type. Just follow the steps above except choosing the appropriate
document type in Step 2.
How to change a Purchase
Order
Step 1) For changing an exis ng purchase order you can use
transac on code ME22N (or ME22 - the old version).

Immediately a er execu ng transac on code, system will take

you to the most recent purchase order you have created,
changed or viewed. If you need to change some other
purchase order, you can use the op on which appears in the
menu
Purchase order = > Other Purchase Order.

Step 2)
You will be presented a screen to enter the document you
want to process.
We can add another item and save our purchase order.

A er saving we will be informed by the system that our PO is

saved with changes. Note: Displaying of purchase orders can
be reached through t-code ME23N (or ME23 – old version).
Everything looks and works the same as in change mode
except that data isn’t changeable, you can only display it.
 Chapter 5: Invoice
How to Post Goods receipt
Step 1) You can post the goods receipt for a purchase order
using transac on code MIGO. Let’s say we want to do a goods
receipt for our purchase order 4500018386.

1. Choose A01 - Goods Receipt.

2. Choose R01 - Purchase Order.
3. Enter your purchase order number.
4. Press ENTER.

Step 2) You can see that items from the purchase order have
been transferred to the screen.

1. Here you can enter document data, pos ng date and

choose the appropriate prin ng message type.
2. If you look at the Stock Type for both items, you can see
that the first item is posted to quality inspec on, and the
second is posted directly to Unrestricted stock so it can
be used before quality check.This is the example of the
influence of the material master data on further
processing in MM module. This is due to the Purchasing
view check box “Post to inspec on stock”, which is
checked for LCD TV 40” but isn’t checked for LCD TV 32”.
Step 3) Now we can check if items are OK, and post the goods
receipt (PGR).

1. These check boxes are used to confirm that items are OK,
otherwise you won’t be able to do a PGR.
2. A er cking the check boxes check if the document is
ready for pos ng. If there are warnings or errors, system
will show them in a pop-up screen. In our case,
everything is ready for pos ng.
3. Post the document.

Document is saved and assigned a number.

How to perform Invoice
Verifica on
Invoice verifica on is done via MIRO transac on.
Step 1)

1. Enter transac on code MIRO.

2. Choose invoice as a transac on type.
3. Enter the invoice date.
4. Enter the purchase order number.
5. Hit ENTER.

Step 2)
On Payment tab choose R - invoice verifica on.
You can always check if the document has any problems.

1. Click Messages bu on.

2. Review the messages and fix the problems if there are
any.

As it is shown on the below screen, I have a warning message

that my price is too low, below tolerance limit. It is only a
warning message, and it will not stop me from further
processing.This message appeared as informa onal because I
manually changed the item 1 price from 28.000 to 22.000! Err,
just to show you the message.

When I correct the price back to 28.000 for item 1 my

message will disappear. Note the amount entered is 30.4 =
(28.000 for Item 1 + 2.400 for Item 2)
We can simulate the invoice by clicking bu on
number Simulate.

Simula on results are shown on the below screen.

Saving is successful.
How to Release an Invoice
An invoice request is blocked for payment un l its manually
released. You can release the invoice by using t-code MRBR.
Step 1)

1. Execute t-code MRBR.

2. On the ini al screen enter the company code and invoice
number.
3. Check the release method (release manually if you want
to process it in the second screen). This can be done
choosing Automa cally (please note the difference with
automa c release in MIRO transac on being blocked and
automa c release in t-code MRBR as those are two
different things).
4. Our document has a manual payment block, so we will
select that op on. Execute.
Step 2)

1. Select the invoice you want to release.

2. Click on the flag icon - release.

You can see that now the invoice has Status field filled with
green flag – it means,it is released to FI.

Financial department should now be able to see the invoice

ready for payment.
Service Purchase Order
Service purchase orders are entered for services that are
procured internally or externally. These purchase orders are
different from standard ones as they don’t require a goods
receipt since they have no stock. Other than that, there are a
few small differences in PO crea on. First is the document
type for these orders. It should be FO – Framework Order. To
procure a service directly for a cost center, we will follow the
below procedure.
Step 1) Go to transac on ME21N.

1. Choose document type FO – Framework Order.

2. Choose vendor.
3. Choose validity start for PO.
4. Choose Account Assignment Category - K and Item
Category – D.
5. Enter the descrip on for the service.
6. Enter the quan ty and unit of measure.
7. Enter the price for the service (e.g. 900 EUR per 1 AU –
ac vity unit).

Step 2) On item level, there are few fields you need to

maintain in order to create a valid PO for service. On the
“Services” tab, enter the informa on about your service,
quan ty and price.
You might be prompted for Account assignment informa on.
Step 3) Here, you can enter the G/L account (it will be
proposed in most cases), and cost center for service cost to be
assigned.

1. G/L account.
2. Cost Center.

Step 4) On the Limits tab, you can enter the limit for
unplanned services. Expected value that services should not
exceed.
Step 5) Now choose the Delivery tab and uncheck the Goods
Receipt check box. Services do not have goods receipt as they
are not relevant for inventory management (they don’t have
stock).

Step 6) Account assignment tab shows the informa on we

were asked to enter in pop-up window. If you are not asked to
enter via pop-up you can enter informa on here.

Step 7) We don’t need storage loca on for our item as it’s not
stock relevant.

You can save your changes and get the document number.
Change and display mode are accessed through the same
transac ons as for a standard purchase
order,ME22N and ME23N.
All About Outline agreement
Outline agreement is a long-term purchase agreement
between vendor and customer. Outline agreement are two
types:

1. Contract
2. Scheduling Agreement

Contract The contract is dra agreement, and they do not

include delivery dates for the material. Contract is two types :

1. Quan ty Contract: This contract considered to fulfilled

when the company supplied an agreed total quan ty of
materials against the contract.
2. Value Contract: This contract considered to fulfilled
when the company supplied agreed total value of
material against the contract.

Quan ty Contract
Step-1

1. Enter T-code ME31K in the command field.

2. Enter Vendor / Agreement Type (MK- Quan ty Contract)
/ Agreement Date.
3. Enter Purchase Org., Purchasing Group in organiza onal
data.
Step-2 Enter Validity End date of contract in header data
screen.

Step-3

Enter Material ,Target quan ty (A quan ty for which

quan ty contract being created) and net price
Click On Save Bu on.
A message as will be
displayed.
2. Scheduling agreement The scheduling agreement is a
long-term purchase agreement with the vendor in which a
vendor is bound for supplying of material according to
predetermined condi ons. Details of the delivery date and
quan ty communicated to the vendor in the form of the
delivery schedule.
Step-1

1. Enter T-code ME31 in command field.

2. Enter Vendor / Agreement Type (LP- Scheduling
agreement) / Agreement Date.
3. Enter Purch. Organiza on / Purchasing group.

Step-2 Enter Validity End Date in header screen.

Step-3 Enter Material / Target Quan ty / Net Price / Plant in
Item Overview Screen.

Step-4 Enter Exclusion in next screen .

Step-5 Get back previous screen item overview and click on

save bu on. A message as below -
Release procedures for
purchasing documents
Releasing a purchasing document means approving it. For
this, our MM consultant can create release procedures to be
used. There is a vast number of op ons that can be used for
controlling the release of the documents.
Important informa on to know is that a purchasing document
cannot be changed a er it is released. That means that only
the final version should be released. Unreleased documents
(RFQ – request for quota on, PO – purchase order, scheduling
agreement, contract) cannot be processed further (convert
RFQ to quota on, PO to goods receipt, invoice verifica on).
Process flow:

Release strategy

We can have a lot of different strategies for different

situa ons. For example, you can define a release strategy that
is dependent on document type, you can define a release
strategy based on the purchasing organiza on, purchasing
group, or any other crucial informa on for a purchasing
document.
In most of the cases, one of the most used release strategy is
based on the value of the purchase document.

Defining a Release Strategy

Step 1) Lets define a release strategy such that will only

request a manual release for purchasing documents with
value greater than 100 Eur. For example if we have a PO of the
value of 50 Eur, it will be autoreleased (will not require a
release to be processed further). A purchase order for more
than 100 Eur would require a release.
For this, in the background, there needs to be specified a
characteris c.

1. We can do this in CT04 transac on.

NETVALUE characteris c is defined.

2. It’s Value to be more than 100 Eur.

Step 2) Assigning fields to a characteris c on the addi onal
data tab. We are assigning field CEKKO-GNETW to the
characteris c, because that field is a purchase document
value.

Step 3) There also needs to be specified a class that holds the

characteris c.

1. T-code to accomplish that is CL02.

2. For this class, we need to set a class name, class type,
3. Descrip on and Status,
4. Validity period,
5. Same classifica on.
Step 4) Assigning a characteris c to a class. A erwards, we
can assign NETVALUE to a class called REL_PUR.

Step 5) Following steps need to be done in customizing.

Create release groups (you assign them a class – in our

case REL_PUR).
Create release codes (assigning them release groups).
Create release indicators (e.g. 1-Blocked, 2-Released).
 Crea ng a release strategy.
Assigning a release group and release code to a release
strategy.
Defining release statuses for the strategy (blocked and
released).
Maintaining classifica on (set a NETVALUE value for
which the release strategy will apply – we can set this to
>100, it means that all the purchasing documents with
value bigger than 100 Eur will be subject to this release
strategy).
You can also perform a release strategy simula on to see
if it works correctly (op onal).

A erwards, your strategy is set and ready for live system

tryout.
Step 6) We can see that our purchase order is created to a
value of more than 100 Eur. If we create a PO for less than 100
Eur, it will be autoreleased.

1. These two statuses mean that our PO is in release (it’s

subject to release process indica ng that it should be
approved before further processing can be possible). The
other indicates the current status – Blockedmeans that it
isn’t released yet.
2. Value is 24,000 Eur, which is more than 100 Eur.

Now we have a purchase order that needs to be released

(approved) to be valid for further processing.

Releasing purchase order

For the actual release of the purchasing document, we can

use t-code ME28.
Step 1)

1. Execute the transac on code.

2. Enter release code (mandatory) and release group
(op onal).
3. Op ons – keep it as default like on the below screen.
4. You can choose the appropriate scope of the list and
purchasing document category (if we only want to see
the purchase orders available for release we will choose
“F“).
5. Execute.

Step 2) On the next screen, we can see the purchase orders

selected by our criteria.

1. Choose the purchase order you want to release by

clicking on it.
2. Click on the release bu on.
Status of the purchase order has changed to released.

Step 3) You can see in the ME23N or ME22N transac on that

our purchase order has altered statuses.“Release
completed” and “Released” statuses are now shown in the PO
header data.

Process flow is the same for all of the purchase documents

(RFQ, PR, quota on etc).

Cancelling a release

Step 1) Purchasing document release has to be reversed in

order for already released document to be changed.

You can do that from the same transac on ME28.

Choose the Cancel release check box and execute the
transac on.
Step 2) You will see the list of purchase documents available
for release cancela on.

1. Choose the appropriate document.

2. Click on the Cancel release bu on.
3. Save and you are done.

Cancelling a release isn’t possible if your release strategy

doesn’t allow the release to be reversed. This is a se ng
maintained on the release indicator and release strategy level.
You can test a release strategy used by the purchasing
document by clicking the “Release Strategy” bu on on the
above screen. You can also simulate the strategy output with
Simulate release bu on.
 Chapter 6: Pricing
Overview of Pricing Procedure
Pricing procedure in MM module is a way to determine prices
in purchasing documents. It give us func onality to assign
different calcula on types for different needs. Defining a
pricing procedure can be done by crea ng an access
sequence, and assigning it to condi on types. Access
sequence tells the system where to look for the condi on
values. It can search mul ple condi on tables based on our
se ngs. Tables have different priority, and different key fields.
Determina on of the pricing procedure is prac cally assigning
the calcula on schema to a combina on of vendor schema
group and purchasing organiza on schema group. So, you
need to enter the vendor schema group on vendor master,
and assign schema group to purchasing organiza on, in order
for the system to find the calcula on schema to be used in
the document.

In order to setup a pricing procedure in purchasing

documents, you need access to the customizing features.
IMG path to the available func ons:
Transac on SPRO => Materials Management => Purchasing
=> Condi ons => Define Price determ.process
Following func ons can be used to maintain the pricing
procedure. There are more se ngs concerning the pricing
procedure, but we will cover the most used ones.
How to Define Access
Sequence & Condi on Table
Define Access Sequence

To define and maintain access sequences, you need to follow

a few simple steps.
Step 1) Go to SPRO > Materials management > Purchasing>
Condi ons> Define price determina on process> Define
access sequences.
As shown below , you will find a dialog structure of Access
sequences, Accesses and Fields.

1. Choose the Access sequence you want to maintain

(PB01 gross price).
2. Double click the Accesses folder in the dialog structure.

Step 2) In the next step you define access methods for the
access sequence. You can see that several access methods are
present for one sequence.
Every one of them is exclusive. It means that if a record is
found in first access (Contract item), meaning that if the
system finds a condi on available from the Contract item, it
will not search further, and that value will be used. If not,
system will follow the other accesses in order to find
appropriate entry.
You can also set a requirement for an access method to be
used. For example, there is a requirement 35 assigned to
access 10, which uses condi on table 17 - Material Info
Record (Plant-Specific).

A requirement for access number 10 is 35 - Plant info record.

If there is no plant info record for the combina on of the
values in table 17, access 10 will not be used at all.
Step 3)

1. Select the access you want to modify.

2. Choose the lowest level folder in dialog structure - Fields.

Step 4)

1. You can see we are located on the details screen for

access sequence PB01, access 20 and table 18.
 2. The key fields of a condi on table used in the condi on
access are showed here.

Condi on table consists of condi on fields which have certain

a ributes assigned to them. When the system tries to access
a condi on record it uses these a ributes.

Special value source – this field contains a value to be

used as default while accessing (e.g. using a fixed info
record category for the access sequence)
Init – if this box is checked system will allow ini al value
for this field while accessing the condi on table. If not
system will not process the condi on table lookup.
Atyp – processing type in access. You can specify if the
field is relevant for condi on access if it is part of a free
or fixed key type. Default is le blank (fixed key type).
Priority – priority of a field (characteris c), it can be set
from 01 to 99. Most of the me this field is le blank.

Define condi on tables

Now, when we know what is a condi on table, what it is used

for, we can see where a condi on table can be defined, and
what op on we have while crea ng it.
As you have seen in the previous topic, we have used table 18
– Material Info Record in our example.
Let’s see where and how it is defined.
Step 1)
 1. Execute the transac on code V/05 and on the ini al
screen enter our table number - 18.
2. In the sec on 2, you can see our table defini on, table
number, descrip on, and two op ons that can be
selected. First means use of the validity period (always
recommended) and the other is a check for release
status of the record. If checked, only released info
records will be taken into account while searching for the
condi on.
3. Here is the list of fields you have already seen in the
Define access sequence topic.

You can see how is the table defined for later use in
customizing the access sequence.

V/05 transac on is used for displaying a condi on table.

V/04 transac on is used for changing a condi on table.
V/03 transac on is used for crea ng a condi on table.
Now you can define a new condi on table if it is required, in
order to use it in the access sequence defini on. Most of the
mes new access tables aren’t required since a vast number
of predefined tables.
Step 1)

1. Enter t-code M/03 and execute it.

 2. Choose your new table number (must be unused, e.g.
818).
3. If you want to copy an exis ng table into your new table,
you can select the source table here. This is useful if your
table is similar to another exis ng table, and needs only
a simple change to fulfill the requirements.

Step 2) On the next screen, you can do all of the se ngs for a
condi on table, and generate it.

1. Click this bu on if you want to edit the descrip on.

2. Choose if your table should check validity periods and
release statuses.
3. List of current fields. You can select any field you want to
remove (by single clicking it) and choose the remove icon
(List icon with a red minus sign).
4. You can add fields from field catalog by double clicking
them.
5. You need to generate the table in order for it to be used
by pricing func ons.
You can also use right click to delete or add a field to your
table, as well as to navigate the Field catalog on the right side
of the screen. Not all of the fields can be shown in a single
page of field catalog.
A er successful crea on, you will be prompted to create a
change request and a erwards, you will be presented a log
screen like you can see on the following screen.

You have successfully generated a condi on table let’s see if

we can see it in the access sequence maintenance screens.
It’s there, so now we can create an access using this table. We
will not cover this in detail as it is extremely straight forward
process.
On the accesses node of our access sequence, choose New
entries bu on. You can create access like in the below screen
for tes ng purposes.

Fields should also be assigned to our access PB01 – 96 in

order for it to work properly
A How to Define condi on
types
Defining of condi on types can be done in few simple steps.
Step 1) In the IMG, click on the define condi on types op on.

Step 2) Choose Define Condi on Type op on.

Step 3) You can find all of the exis ng entries for condi on
types.

1. Click on the desired condi on you would like to change.

2. Click this icon to choose the selected condi on and enter
the change mode.
 3. If you want to create a new entry click on New entries. In
this case, you don’t have to select any exis ng entries.
4. If you want to create a new condi on type by copying an
exis ng condi on type (it will inherit it’s se ng which
you can change – just like copying a condi on table in
the previous topic), you can choose this icon – copy
condi on type.

You have several more ac ons at your disposal: dele on,

selec ng all condi on types, deselec ng all condi on types.

If you select mul ple condi on types, you can edit them all by
naviga ng through them in the following screen (arrow le
and right or F7 and F8).
This screen has a lot of se ngs for a condi on type, let’s
review the most important.
Step 4) First sec on of the screen contains condi on type
PB00, descrip on, and access sequence used for condi on
determina on.
A) Control data 1 sec on contains the following:

1. Condi on class (e.g. prices, discounts, taxes)

2. Calcula on type (e.g. quan ty, percentage, fixed
amount, formula)
3. Condi on category (e.g. basic price, input tax)
4. Rounding rule (e.g. commercial, round up, round down)
5. Plus/minus (indicates if a condi on can be posi ve,
nega ve or both)

B) Group condi on sec on:

1. Group condi on (indicates if a condi on calculates its

value by more than one item in the document)
2. RoundDiffComp (rounding difference comparison)
3. Group condi on rou ne (rou ne that calculates the
value)

C) Changes which can be made sec on:

1. Manual entries (e.g. no limita ons, not possible, manual

entry has priority)
2. Header condi on (indicates if a condi on can be used at
header level)
3. Item condi on (indicates if a condi on can be used at
item level)
4. Delete (indicates if a condi on can be deleted)
5. Amount/percent (can amount/percentage be changed)
6. Value (can value be changed)
7. Qty. rela on (can conversion factor between UoMs be
changed during processing)
8. Calculat. Type (can calcula on type be changed during
processing)
Step 5) The other sec on on the lower end of the same
screen are:
D) Master data sec on:

1. Valid to (default date to use)

2. Pricing Proc. (pricing procedure to be used for this
condi on type)
3. Pricing Proc. (pricing procedure to be used for this
condi on type)
4. Delete fr. DB (dele on procedure for this condi on type)

E) Scales sec on:

1. Scale basis (e.g. quan ty scale, value scale)

2. Check value (default blank)
3. Scale type (controls the validity of the value/quan ty)

F) Control data 2 sec on:

1. Currency Conv. (indicates if currency conversion is

allowed)
 2. Accruals (if you check this box you indicate that it is a
sta s cal condi on)
3. Promo on condi on (is this condi on relevant only for
promo ons)
4. Quan ty conversion (controls how quan ty conversion
will be processed)
5. Exclusion (condi on exclusion indicator – e.g. gross
price, tax code, delivery cost)
6. Rel.Acc.Assig (determines if the condi on type is
relevant for account assignment)

When you are done with crea ng, changing or copying of the
condi on type, you can save your changes.
How To Define Calcula on
Schema
As you saw in the previous topic, a condi on type is assigned
a calcula on schema. It is defined in customizing.
Step 1) In IMG, Choose Define Calcula on Schema op on.

Step 2)

1. You can see that the ini al screen contains a dialog

structure with Schemas as the top level.Addi onally, you
can drop down to Control data.
2. Right por on of the screen shows Usage and Applica on
data.We can see that usage is to A – Pricing, and
applica on is set to M – Purchasing.
3. Contains a list of schemas and its short descrip on
Step 3)

1. Click on the schema you want to change

2. Double click the Control data node.
Step 4)
The following table of condi on types (reference steps) is
used in this calcula on schema. There are a number of
op ons for condi on types that can be set for this calcula on
schema (different se ngs could be set for the same condi on
type in the other calcula on schema). List of possible op ons
with a short descrip on:

1. Step (indicates the sequence of the procedure)

2. Counter (counts the number of condi ons in a step)
3. Condi on type (one of the already defined condi on
types - previous topic)
4. From (reference step to be used as a base for calcula ng
percentage condi ons)
5. To (up to which step the condi ons should be used as a
base for calcula ng percentage condi ons)
6. Manual (allowed to be entered manually)
7. Required (required condi on)
8. Sta s cs (only sta s cal condi on)
9. Print (prin ng control for condi on)
10. Subtotal (how to calculate the subtotal)
11. Requirement (custom rou ne for the requirement)
12. CalType (calcula ng rou ne - if custom rou ne is
needed)
13. BasType (custom rou ne for base condi on value)
14. AccKey (G/L account key)
 15. AccrualAccKey (G/L account key for accruals or
provisions)

A er the right se ngs are applied to all of the condi ons in a

procedure you can save the transac on data.
How to Define Schema Group
We can create schema groups for purchase organiza on or
vendor.
Schema groups are then assigned to purchase organiza ons in
customizing and to vendors in vendor master record. They are
used to map the pricing determina on process based on the
vendor or purchase organiza on.

Step 1)

1. Choose Define Schema Group from SPRO IMG path like

in the previous topics.
2. From the menu below, choose Schema Groups: Vendor.
Step 2)
On the next screen, you can define schema group for use in
vendor master & maintain a descrip on of your vendor
schema groups.
You define only schema group number and descrip on. There
are no se ngs as this is used to be assigned to the vendor
master record.
For example, we might need to create a new group 02 –
Schema vendor 02.
Step 3) Next, choose schema groups for purchasing
organiza ons from main schema group menu.

Define your schema groups per your requirement. You define

only schema group number and descrip on. No se ngs
either, just an indicator assigned to a purchasing organiza on.

Step 4) Choose Assignment of Schema Group to Purchasing

Organiza on from schema group menu.

Assign desired schema group to purchasing organiza on. As

you can see on the below screen, the field on the right is le
blank, that is because if you leave it blank, it means that the
default purchase organiza on schema should be used.

If you want to use a standard schema for group organiza on,

leave the field in the previous screen blank, and if you want to
choose the Schema 0001 enter 0001 in the field marked in the
upper screen. Screen with the available schemas for
assignment to purchasing organiza on is available in the
previous step (same as on below screen).

Step 5) Assigning a schema group in the vendor master.

Go to the purchasing data view. You will see Schema group,
Vendor field. You can choose whichever schema group is
suitable for this vendor, default is le blank for standard
schema vendor.
You can see that this field is maintained at purchasing
organiza on organiza onal level (0001), so in combina on
with schema group for that purchasing organiza on, if we
check tables, the selected calcula on schema will be RM0000
– Purchasing Document (Big), as you can see in the next
topic.
Define Schema Determina on
Determina on of calcula on schema is a customizing ac vity.
You have to assign a pricing procedure to a schema group
purchasing organiza on / schema group vendor combina on.
Se ngs are located in Define schema determina on op on.

Step 1) Choose Determina on Calcula on schema for

Standard Purchase Orders.

Step 2)

Choose schema group for purchasing organiza on.

Choose schema group for vendor.
Choose calcula on schema to be assigned to the
purch.org/vendor schema group combina on.

Let’s analyze two records on this screen.

1. In case 1, we have chosen default schema group for

purchasing organiza on (first field is empty), also, default
schema group for vendor (second field is empty), for this
combina on of both default schema groups, we assigned
a RM0000 (Purchasing document - Big) calcula on
schema.
2. In case 2, we have chosen schema group for purchasing
organiza on as 0001, and schema group for vendor as
01, and assigned an RM1000 calcula on schema to the
combina on.
How does it work?
Let’s say that we have a purchase
organiza on 0001 with blank (default) schema group assigned
to it, and a purchase organiza on 0002 with schema
group 0001 assigned to it (not default).
We also have a vendor 1 with assigned schema group
as blank (default), and vendor 2 with schema group defined
as 01 (not default).

In case we are crea ng a purchase order through

purchasing group 0001 for vendor 1, our calcula on
schema is going to be determined as RM0000.
If we are crea ng a PO for vendor 2 through purchasing
organiza on 0001, calcula on schema RM1000 will be
determined.
If we are crea ng a PO for any of the two vendors in
purchasing organiza on 0002, in both cases there will be
determined calcula on schema RM1000.

The below table clarifies the calcula on schema

determina on.

You are done. Your pricing procedure is now fully func onal.
You can use some advanced features like condi on exclusions,
copy control, define limits for condi on types etc.
 Chapter 7: Inventory
Management
Overview of Inventory
Management
Inventory management is used to manage the inventory for
the goods. It is based on several key processes. Defini on of
movement types, reserva ons, goods issue and goods receipt.
We have already done basic goods receipt process in the
purchase order topic, referencing it to a PO.
There are a number of func ons and transac ons used in the
Inventory management processes, and we will cover the most
important in this tutorial.

Movement types

Movement types are used as indicators of what is the purpose

of the goods movement (e.g. from storage loca on to a
storage loca on, receipt from purchase order, issue for the
delivery, receipt from produc on).
Movement types have its predefined se ngs in standard SAP
system, and they can be customized according to your needs.
Also, you could use the same movement type for different
processes if you use movement indicatorsproperly. For
example, movement type 101 with movement indicator B is
used for goods receipt from purchase order. The same
movement type 101 with movement indicator F is used for
produc on order goods receipt.
You can see on the next screen how the movement type
maintenance screen looks.
Huge number of op ons are available to set up the movement
type properly, and it’s access by the OMJJtransac on code.

1. Execute OMJJ transac on, and on the ini al screen

choose Movement type, on the next screen enter the
movement type range you wish to edit.You will be
presented a screen that looks like the next screen.
2. You can see a dialog structure on the le . These op ons
are used for se ng up our movement types according to
our needs.
3. When you select any of the op ons the details screen on
the right is updated with se ngs for that node.

This is not in a scope of this tutorial, as configuring the

movement type requires extremely deep knowledge of the
processes in MM module (inventory management
component).
You just need to understand for now what does the
movement type, and movement indicator represent.
Feel free to take a tour around the OMJJ transac on to get a
bit more insight on the actual se ng that can be made on
movement type, and movement type/movement indicator
level.
To summarize the lesson, movement types are used for
dis nc on how the goods will be moved in our inventory.
For example,

We will set up our movement type 101 to be used for

goods receipt.
Movement type 311 to be used for stock transfer from
one storage loca on to another in one step.
Movement type for goods issue for outbound delivery..

Another thing to know is that every movement type needs to

have a reversal movement type defined (if we need to
cancel 311 we have to define 312 as a reversal movement
type, 101 => 102, 601 => 602). Material document Material
document is a document in SAP that contains informa on on
processing of goods movements (receipt, issue, transfer).
When you create a material document you are actually
moving stock quan ty in a certain way as defined by
movement type.
If movement type 311 is stated in the material document,
material will be transferred from one loca on to another
(transfer process). If it’s 101, material document will not have
a source storage loca on but will have a des na on (receipt
process). If it’s movement type 601, material document will
only have source storage loca on but will not have a
des na on (issue process).

Goods receipt scenarios

As I said in the previous topic, goods receipt can be done

referencing a purchase order, produc on order, inbound
delivery or without reference for other kinds of receipt
processes.
We can set up our movement types behavior according to a
movement indicator.
I men oned in the previous topic that there are several
indicators that can be used to specify the referencing
document type, and create se ngs for every one of them in
combina on with movement type.

B – purchase order
F – produc on order
L – inbound delivery
Blank – no reference

Other – not that significant for now

How to create Goods Receipt
To create goods receipt, you can
use MIGO or MB1C transac on.
Mostly people use MIGO as it’s designed to have all the
op ons for all of the movement scenarios.
Step 1)

1. Execute the MIGO transac on.

2. Choose A1 – Goods receipt process.
3. Choose R01 – Purchase order.
4. Enter your purchase order number here.
5. Click on execute bu on.

Step 2)
Our material is transferred to the item overview sec on.
Choose pos ng and document date (recommended t stay as
today like it’s default).
Step 3)

1. You can choose on the header level – Vendor tab to view

vendor informa on.
2. If you click on the line item number, you will see several
tabs in the bo om of the screen appear, and you can
choose any of those to view some specific informa on
about the item.
3. If you choose Material tab, you will see the general
material data.

Step 4)
Check the Quan ty informa on in this tab. You can do goods
receipt for less than the ini al value if you change it. You will
s ll see the ordered quan ty in the bo om of the screen.
Step 5)
The next tab contains informa on about the des na on for
the goods.

1. You can see the movement type used for receipt process,
2. des na on plant and storage loca on,
3. as well as stock type upon receipt. We can see that this
material is going to be posted to quality inspec on (this
indicator is set in material master and has been
referenced in earlier topics), so it will not be available for
use un l confirmed to be in sa sfying quality.
4. There’s also informa on about goods recipient and
unloading point.

If you need to change the storage loca on, or override the

stock pos ng type, you can do it here..

Step 6)
You can find purchase order related data in this tab.

1. You can change the update type for delivery completed

indicator (on the purchase order). It is set to be
automa cally updated upon pos ng, but you can change
it if your process requires a different approach.
 2. A er review of all of the tabs, and a er you have assured
that your data is accurate, you can flag the items as OK.
Now you can post the document.

Upon pos ng, you will see that material document has been
generated.

Now you can check the material document by using

transac on code MB03.

1. Execute the transac on MB03.

2. Enter material document and document year.
3. Press ENTER.

You can see some basic informa on about the document and
items.
Double click the item.
On item details, you can see some addi onal item
informa on.

You are done with pos ng the goods receipt. The process is
the same for the produc on order, as well as for the inbound
delivery.
How To Cancel Goods Receipt
A er you have posted the goods receipt in MIGO, you can
check stock levels in MMBE transac on code.

1. Execute the transac on.

2. For the requested material you will be shown stock levels
for plants, storage loca ons and stock types
(unrestricted, quality, blocked).
3. In the Quality inspec on column, you can see that our
material is posted there 2 PAL = 24 PCS.We also have
unrestricted stock from some of the previous receipts.

Let’s say that we have made a mistake, we wanted in this

special case, our material to be posted directly to unrestricted
stock. Therefore, we need to cancel the pos ng to reverse the
process and do it again properly.
We can use MIGO transac on to cancel a pos ng.
Step 1)
Choose A03 Cancella on, R02 Material document, enter the
material document that has been created a er pos ng the
goods receipt from purchase order. Execute.
Step 2)

1. Check the indicator that item is OK.

2. Post.

Step 3)
Check in MMBE if our goods receipt cancella on is in effect.
As you can see, the quality inspec on column is empty. It
means that we have successfully reversed/cancelled our
goods receipt pos ng.

It also means that we can use the purchase order number

in MIGO to post the goods receipt again, this me with the
correct se ngs.
Reserva on of Inventory
Reserva ons are system documents that show a requirement
for a certain amount of good for produc on, cost center and
any other need.
Reserva ons are important in planning/MRP/ATP as the
system reserves needed quan es before they are posted. If
there weren’t reserva ons in the system, we might encounter
a problem that we need to use the goods for produc on
order, but we can not post the goods issue because a sales
order has taken the goods just few minutes ago. When we
create the reserva on, system doesn’t allow any other
document to reserve the goods for other purpose. This also
depends on the system se ngs for MRP/ATP. You might give
reserva ons a privilege to always take the goods off the stock,
even if it is already reserved by the sales order or delivery
(not quite good solu on). But you can also customize the
system that sales orders don’t check the reserva ons when
performing availability check.
You can create a reserva on for the material for a number of
reasons. System can also create the reserva on if the MRP
se ngs imply that kind of system behavior.
This is done either by the system automa cally or by
using MB21 transac on code.
Step 1)

1. Execute the transac on MB21.

2. Fill in the fields as needed.
Reserva on can be made for consump on for a cost center
(movement type 201), produc on order (movement type
261), stock transfer (311), sales order, project, network etc.
Choose the appropriate movement type according to your
needs. Choose movement type 201.
If you entered movement type 321 (from the above screen),
you surely got the error message. It means that this
movement type cannot be used for crea ng a reserva on.
It also means you aren’t following my steps closely. Please
read the text above it says that we are going to use
movement type 201.
Step 2)

1. Enter cost center.

2. Fill in the item data. Material number, quan ty, source
storage loca on.
Save the document. You will get the reserva on number you
need to use in the next step.

Now we have to create a material document for the

reserva on. We can do that through MIGO, but this me let’s
learn another transac on.
We can use the transac on code MB1A to create a goods
issue with reference to material reserva on.
Step 1)

1. Execute the transac on.

2. Choose bu on To Reserva on…
Step 2)

1. Enter reserva on number.

2. Confirm.
Step 3)

1. If you need to change any of the fields, quan ty, storage

loca on etc. do it and save the document.
You will get the material document number in the status bar
message.

Let’s say that we want our reserva on cancelled.

Of course, it can be done using MIGO transac on, but let’s
find out about another transac on.
Step 1)

1. Execute the MBST transac on code.

2. Enter the document number created in the previous
step.Hit ENTER.
Step 2)
You can see that for this purpose system uses movement
type 202 – reversal for cost center.
That is because we have defined it as a reversal movement
type for Mvt.type 201 in OMJJ transac on.
Save the transac on data and your previous document is
reversed.

Now you can create material document for the same

reserva on again, or cancel the reserva on itself by using t-
code MB22.
Step 1)

1. Execute the transac on.

2. Enter reserva on number.Hit ENTER.
Step 2)
Click the check box to mark the reserva on completed (it
means that it isn’t expected to be any more goods pos ngs
for this reserva on).

You have successfully dismissed the reserva on from further

processing.
How to issue goods
Another important process in inventory management is goods
issue pos ng. Reserva ons are considered a specific process
on their own, but essen ally reserva on use a goods issue
logic. When we created a material document for reserva ons,
we have issued goods from warehouse to the cost center,
produc on order etc.
Now, we can talk about other goods issuing processes. The
most important of all is for outbound delivery. The process
works as follows -

1. We have an inbound delivery for our material 10599999

incoming from sales department.
2. A er the goods are loaded in the truck we should do a
goods issue pos ng for the delivery.
3. We are sent the delivery number 80072673 created for
out material 10599999 and we need to process the
delivery in inventory management by pos ng the goods
issue.

It is done in sales transac on VL02N mostly used by the MM

users in logis cs. Departments that use this transac on can
vary depending on the organiza onal structure in the
company.
Step 1)

1. Open VL02N transac on.

2. Enter the delivery number you need to
process.Hit ENTER.
Step 2)

1. Enter the Plant and Storage Loca on.

2. Enter picked quan ty. If full quan ty has been picked and
loaded, enter 20 PCS but if for some reason loaded
quan ty is 12 PCS (e.g. truck already full) you will enter
12 in Deliv. Qty field and in the Picked Qty fields.
3. Post Goods Issue.

You are done

If for some reason you need to reverse/cancel goods issue for
outbound delivery, you can use the transac on VL09.
Step 1)

1. Execute transac on VL09.

2. Enter the appropriate delivery number.
3. Press the execute bu on.As you can see, you can use this
func on for inbound deliveries too.
Step 2)

1. Select the line with the delivery you want to process.

Click the Reverse bu on.

Confirm if asked. If you get the message that the goods issue
is reversed successfully, you are done.
If not, there’s a problem in the processing which has to be
iden fied by superuser or consultant.

Other types of processes where pos ng a goods issue is

needed
You can see the MIGO transac on for reference to more
op ons for pos ng a goods issue.
Choose A07 - goods issue, and in the next drop-down menu
you will find several op ons. To give you a li le “homework”,
you can explore the op ons by yourself, here’s just a short
look on them.
R02 - Material Document (post goods issue for a
material document)
R08 - Order (post goods issue for a produc on order)
R10 - Other (without the reference document)
R01 - Purchase Order (PGI for a purchase order)
R09 - Reserva on (PGI for reserva on – I have
demonstrated this process by using MB1C transac on)
Transfer Pos ng of Goods
Transferring a quan ty from one storage loca on to another
can be accomplished by either using MIGO transac on
or MB1B.
I will demonstrate the transfer pos ng process using MB1B as
you have already seen MIGO in ac on.
Step 1)

1. Execute the transac on MB1B.

2. Enter movement type (311), source Plant and Storage
loca on. Hit ENTER.

Step 2)

1. Enter receiving storage loca on,

2. material number,
3. quan ty,
4. unit of measure.

Save the document and the transfer pos ng will be

completed.
The material document number is assigned.

If you need to cancel this pos ng, you can use

either MBST or MIGO transac on.
All About Physical Inventory
What is Physical Inventory?

Physical inventory is a process of determining that the

inventory quan es are exact, or if there are differences in
quan ty men oned physically present and that men oned in
the SAP system. Basically, a er you are finished with physical
inventory, your system and physical stock levels must be the
same.
It is mandatory for legal reasons, and in the most of the mes
it is conducted once a year.
To simplify the process, check the below diagram, these are
the most common steps for doing physical inventory (not only
in SAP ERP).

Besides the legal reasons it is extremely helpful having the

correct stock quan es in the system matching the physical
stock. Management can have the correct informa on on the
value of stock materials. ATP for sales is correct. MRP is done
using the correct input parameters (material stock quan es).
Not having the correct stock levels in the system means quite
the opposite. Management has the wrong picture on the
financial aspect of the stock in possession. ATP uses the
wrong data (sales might not be able to sell something
physically on stock but not exis ng in the system, or system
might allow selling something that isn’t physically present in
the warehouse). MRP is inaccurate (produc on planning and
other material planning processes might be in a big problem
as they are required to calculate the needs for
produc on/procurement based on stock levels and several
other informa on).
Now you see that having a clear and correct stock levels is of
immense importance for a lot of processes in a company. Now
you will see how physical inventory is done in MM module.

Types Of Physical Inventory

The following physical inventory procedures can be used in

SAP system:

Periodic inventory
Con nuous inventory
Cycle coun ng
Inventory sampling

Periodic inventory Most of the me companies use this kind

of inventory. In most cases, it is done once a year, and this
kind of inventory is called annual physical inventory. That
means that material stock is counted once a year. Most of the
mes at the end of the year or a er the season ends (in
seasonal industries).
Con nuous inventory All materials are counted at some point
in the year, but that can be at any day appointed for. So we
can count some material in February, others in April and so
on. A single material can be counted on a single date. This
type of inventory is mainly u lized in warehouse management
based warehouses, but it can be done in inventory
management too.
Cycle coun ng This type of inventory allows us to set a period
for regular intervals for physical inventory on the material
level. So a fast moving and high value material can be counted
four mes a year while slow moving and low value material
can be counted once a year. The indicator for this is set in
material master in the Plant/Storage Loca on 1 View, in the
field
CC phys. Inv. Ind. Inventory sampling Only a number of
randomly selected materials are counted on the balance
sheet key date, and if those materials show small enough
differences, the other materials can also be considered to
have a correct stock levels. Not really used that o en, as it is
essen ally an approxima on, but in some cases it can be used
if material and warehouse structure imply that.
We will explore the most common – annual inventory op on
in the following topic.

Crea ng Physical Inventory Document

The following procedure can be used in crea ng and

processing of the physical inventory document.
Step 1)

1. Execute the transac on MI01.

2. Enter document date and planned date for coun ng
(leave the default for today).
3. Enter Plant/Storage loca on/Special stock indicator.
4. Choose if you want Pos ng Block (if there is a possibility
that someone will do a pos ng while physical inventory
is in progress enable this – material level), Freeze book
inventory (current book inventory balance will be
recorded in the physical inventory document if this
op on is enabled), and if you want to count batches with
dele on flag (self explanatory). Press ENTER.
Step 2)

1. Enter the material number(s) you want to include in this

physical inventory document.
2. Save the transac on data.
You will be informed of the newly created physical inventory
document number.

Step 3)
Op onal step.

1. Execute the transac on MI02 to make changes to the

document (if needed).
2. Double click the item if you want to check if the coun ng
has already been done.ž
3. If you need to delete the document, you can set the
dele on indicator.

Step 4)
Op onal step.

1. You can see in the item level that our material has not
yet been counted.
Step 5)
Op onal step.

1. On header level, you can edit the data entered during

the crea on of the physical inventory document.

You are now finished with crea ng (and changing the physical
inventory document). You can display the document
with MI03 transac on code.

Entering the Coun ng Results

In the following topic, I will show you how you can enter the
coun ng results in the physical inventory document.
The process is fairly easy, but it needs to be accurately
executed because the error in entering the coun ng results in
poor stock balances later. So, there is high need that the
coun ng process as well as entering process both be accurate.
Step 1)
 1. Execute the transac on code MI04.
2. Enter physical document number and fiscal year.
3. Enter the coun ng date if it differs from the one
suggested.
4. Enter the variance percentage. This means that if you
had 100 pcs on stock before the physical inventory
process, and you enter 107 pieces as a coun ng result,
you will be informed with a warning message of the
difference between the previous stock quan ty and the
counted quan ty.

Press ENTER.

Step 2)

1. Enter the quan ty that is counted for this material.

2. Press ENTER.
You will be informed that there is a quan ty difference of 20
pcs, if you haven’t made a mistake while entering the
quan ty, you can bypass the warning by pressing ENTER. If
you made a mistake while entering the quan ty, you can
correct the entry (124 pcs in my case) and hit ENTER again.

If you get the warning message, and you think that there
might be a mistake in the coun ng process, you can recount
the item again and correct the results (check
out MI05 transac on code, and MI11 if needed).
A er I have corrected my entry to 124 pcs, I will save the
transac on data.

Pos ng the Differences

A er you have possibly recounted and reentered quan ty

informa on for problema c materials, you can post the
differences by using the transac on MI07.
Step 1)

1. Execute the transac on MI07.

2. Enter your physical inventory and fiscal year.
3. Enter pos ng date. Goods pos ng will be done according
to this date. Some companies use 31.12. In the annual
physical inventory as the last day of fiscal year.
4. You can use the threshold value to enter the maximum
allowed differences value in local currency. If you don’t
 want a limit leave this field blank. In order for this to
work, materials need to have the standard or variable
price maintained.
5. Press ENTER.

Step 2)

1. You can see the difference quan ty. This means that we
have found 4 pieces more than it was previously stated in
the system.
2. Value isn’t shown as our controlling/accoun ng
department didn’t yet release the prices for this
material.This needs to be done in a produc on
environment. You cannot post a difference of 4 pieces
with the respec ve value of 0,00 Eur.
We can see that our pos ng is done by crea ng the resul ng
material document 4900547510.

Step 3)
Op onal.
We can check the material document in MB03.

1. We can see a quan ty of 4 pcs in the material document.

2. Movement type used for goods receipt from physical
inventory difference pos ng is 701.

This means that 4 pieces are added to the inventory.

For a reference of standard movement types, used for
physical inventory, see the below table.
 701 – Goods Receipt for unrestricted stock
702 – Goods Issue for unrestricted stock
703 – Goods Receipt for quality inspec on stock
704 – Goods Issue for quality inspec on stock
707 – Goods Receipt for blocked stock
708 – Goods Issue for blocked stock

You are done with physical inventory. You can now con nue
with regular warehouse ac vi es.
Special stock and Special
procurement
In some cases, logis c processes require special procurement
types to be used:

Consignment
Subcontrac ng
Stock Transfer Using Stock Transport Order
Third-Party Processing
Returnable Transport Packaging
Pipeline Handling

For the purposes of the special procurement types, there are

special stock types.

Item categories you can use in purchasing documents.

We will see how theses special procurement types and special
stock types are used in the following processes.

Consignment

Consignment means that the goods procured are s ll in

vendors ownership, but our company is keeping the material
on stock and is able to sell it directly. Goods become the
property of our company only in the case of consuming.
You can see two possible consignment scenarios / processes
in the diagram below.
In both cases, the base of the process is a goods receipt for
vendor consignment goods. A er that, we will have
consignment goods in our warehouse. If we want to sell the
goods from consignment stock, we can do a stock transfer
from warehouse to store consignment stock and sell directly
from consignment stock.
If on the other hand, we choose not to keep the goods as
consignment stock, we can do a transfer pos ng to own stock.
A erwards, we can send it to our store and sell it as own
stock.
In the consignment process, we should create a purchase info
record for the vendor/material combina on, in order to
predefine some informa on later used in the processes.
In the system, receiving the consignment stock is done in a
few simple steps. RECEIVING CONSIGNMENT GOODS
Step 1)
Create a purchase order for the material
using ME21N transac on.

1. Enter item category K - consignment goods.

Step 2)
Post goods receipt in MIGO transac on.

1. You can see that movement type is 101, and the special
stock indicator is K - consignment stock (vendor).
2. Check items as OK, and Post.

A er you have posted the goods receipt for vendor

consignment goods, you can see the stock overview for the
material has changed.
There are 120 pcs now in the Vendor Consignment row, as
unrestricted.

Step 3)
Branching into two different scenarios from the process
diagram.

From this point, we can create a stock transfer to a store

storage loca on with MIGO transac on. We can then sell
the goods from the consignment stock (payment
obliga on is generated at the point of sales).
In the second scenario, we can create a transfer pos ng
to own stock (payment obliga on at this point). Later on
we can do whatever we like with the goods.

Let’s say we have created a transfer pos ng to own stock

upon goods arrival. We can do that by using MB1Bwith
special stock type indicator K, and movement type 411.
We can see a erwards that our stock level is 244 pcs all on
0001 unrestricted. Our 120 pcs were transferred from
consignment to own stock.
Step 4)
We are not crea ng an invoice using MIRO transac on for
consignment goods. Instead, liabili es are se led
inMRKO transac on for the appropriate period.

1. Execute MRKO transac on.

2. Enter Company Code and Vendor.
3. Enter the date range (you can use document date, per
your preferences).
4. Choose special procurement type you want to se le
for. Consignment.
5. Choose if you want to display available document or
se le. Choose Display.
6. Show only withdrawals not se led or only se led
withdrawals, or both.You can also restrict the
displayed/se led records by material.Execute.
Step 5)

First we will choose to display the available documents

for our selec on.
We can see that the document is Not se led.

Go back to the ini al screen and choose Se le instead of

Display. Execute.
You can now see the message that a document
5100000001 was created.
 Go back and choose to display documents, and choose to
see Se led withdrawals.
Now there is a record matching your request. You can
see that the status is now Se led.

This completes the process for consignment stock.

Stock Transport Order

In stock transfer process, goods are procured and supplied

within a company. One plant orders the goods from another
plant (they are called the receiving plant/issuing plant).
We can use a special type of purchase order - the stock
transport order. The delivery process can be done either in
Inventory Management or in the shipping component of
logis cs execu on.

Step 1) Create a purchase order using ME21N.

1. Choose document type UB - Stock Transp. Order.

2. Choose Supplying Plant – 001.
3. Choose Receiving Plants Purchasing organiza on – 0002.
4. Purchasing group and Company Code.
5. In the item overview screen, enter material number and
quan ty.
6. Choose the receiving plant and Storage Loca on.
Save the document.

Step 2) Post goods issue from the issuing plant

using MIGO transac on.

1. Choose A07 – Goods Issue.

2. Choose R01 – Purchase Order.
3. Enter the storage loca on from which goods are being
issued.
4. Save the transac on – Post goods Issue.

A er pos ng, you will get a material document.

Step 3) Do a goods receipt to a receiving plant for the stock
transfer order - in MIGO.

1. Choose A01 – Goods Receipt.

2. Choose R01 – Purchase Order.

Post the Goods Receipt.

Now the stock transfer from plant to plant is done.

You can see the plant stock now. Obersdorf plant now has 12
pcs of material 10599999.
Stock transport order can also be done using the delivery
process. You are able to create an outbound delivery based on
your purchase order (stock transport order) in
transac on VL10B. Then you can post the goods issue using
the VL02N transac on (change outbound delivery). Finally
you can do a PGR (post goods receipt) for delivery from the
receiving plant.

Subcontrac ng

In subcontrac ng, you give components to a vendor from

which a product is produced. The product is then ordered by
your company through a purchase order. The components
required by the vendor to manufacture the ordered product
are imported in the purchase order through the BoM (Bill of
Materials), and they are provided to the vendor. A er the
contractor has produced the finished product, we can post
the goods receipt.
Step 1)
Create a standard purchase order for the material that has a
BOM maintained.

1. Create a PO with item category L.

2. Enter the storage loca on where the material should be
placed upon goods receipt.
Step 2)
On the Material Data tab, click the Components or Explode
BOM icon.

On the component screen, enter storage loca on from which

the components should be issued.
I have created a fake BoM for our material (we sure can’t
create LCD TV 40” from two components called
semiconductors and plas cs), but it’s enough to serve the
purpose (you can create a BoM in CS01 transac on if you
don’t have it for your test material).

Save the PO.

If your PO needs to be released, release it by using ME29N.

Step 3)
In stock monitoring transac on, we will provide the
components for vendor.

1. Execute the transac on ME2O.

 2. Enter Vendor.
3. Enter Plant.Execute.

Step 4)
You will get a list of open item for transfer towards the
vendor. You can see the components from our purchase order.

1. Select the components (click the boxes next to

components material numbers).
2. Post goods issue.

Step 5)
You will be prompted to confirm the items being PGI’d.
Just confirm the right storage loca on and quan ty. Do that
for all of the components.

Step 6)
You should see this kind of screen confirming that your PGI
was done successfully for 2 items.

Step 7)
The next screen should look like this.
You can see that there is a material document for the
components, with movement type 541.

Step 8)
You can post a goods receipt against a purchase order to
receive the finished goods from the vendor.

Now you have issued the components to subcontractor,

received the finished product.
You could have also created an outbound delivery for the
components using ME2O transac on, and then pos ng goods
issue through VL02N. Most of the me this type of processing
is done in subcontrac ng.