I am sure all of us know how important is the master data for proper functioning of the end to end business process in any industry segment. The correctness of master data is becoming more and more important in a truly challenging business word. Big organizations with global operations are increasingly realizing the need of master data integrity and trying to harmonize, govern the data in order to avoid redundancy, duplicate in SAP ERP system.
Material Master is one of the key pillars of Master data in SAP ERP landscape which is used across all process areas. Very often this becomes reality in post go-live scenario when master data issues creep in which contributes bottleneck in process areas.
In a typical engineering manufacturing company (Engineer to Order, Make to Order, Make to Stock scenarios) the material master is very crucial in defining correct structure covering the all aspects of engineering, manufacturing, Sales / customer service etc. More so this is important for finished materials which the company sells as end product to customer. In this blog, will share how we achieved the material master structuring in a global template implementation project across geographies.
Most of the time, the consultant collects requirements for the material master from legacy system and decides the how that can be structured within SAP defined material master object. In doing so, we come across numerous challenges when finalizing the material master through Blueprinting while incorporating the legacy system information which sometimes become unnerving (e.g. Material description lengths going 100 characters in legacy) along with getting the business consensus on new structure by making use of standard SAP functionality. As company spends money in implementing SAP, business process owners are also becoming more responsible in putting together correct structure for data integrity and uniqueness. Though we try to achieve through standard SAP, but require enhancements in many cases to define unique structuring and add custom engineering requirements to ensure data integrity supporting the business.
In a typical Engineering to Order ( ETO ), Make to Order ( MTO )and Make to Stock ( MTS ) environment for large organizations covering manufacturing plants, warehouses, sales distribution centers crossing boundaries- the Sellable Finished Parts structure need to be defined correctly which can be identifiable across the process areas uniquely. The Variant Configuration ( VC ) achieves the purpose of Engineer to Order ( ETO ) / Make To Order ( MTO ) processes for complex Parts with various object dependencies wherein the configuration characteristic are defined in Sales orders uniquely with all engineering requirements. This can be achieved by defining Top level VC Part number for each Product Family. The VC requirements from Sales order configuration will go through the process of defining Sales Order BOM for ETO scenarios which will then move through the standard SAP ETO/ MTO process of Production order ( with routings etc) and production of Part number with linkage to Sales Order stock.
The Main focus is the MTS family without VC involvement wherein each stock able SKU (Finished Part –Material Type FERT) needs to be defined clearly with typical engineering abbreviations to suffice organization requirements. The same can also apply when VC is not defined for ETO/ MTO scenarios due to complexity or project scope but material master description needs unique identification for correct maintenance.
In doing so, we adopted the following approach by taking inputs from Business SMEs across geographies to develop the template for sellable FERT material structure for usage across the plants without creating any duplicate ( with in 40 character length of Material description). There can be various other ways to achieve clear precise material description for sellable finished products based on industry requirements and business processes- In many existing product catalogues need to be restructured to align with new naming convention in SAP which many product managers would not be inclined for overnight change.
Here is how we defined this in one my recent engagement – these are only the some of the important parameters influencing material description. Other than that, various other fields in material master are equally important influencing various functions which is beyond the scope of this write up.
Key Noun: (4 digits alphabetical Key defining the engineering key term): Key Nouns are short codes that describe a material engineering generic attributes. This 4 letter code is mandatory in material master creation process and is used as first 4 character of material description. These codes also become the basis for product search in system.
ACEQ: ACTUATOR ELECTRIC QUARTERTURN
SOLM: SOLENOID MODULAR MOUNTING
PLVE: PLUG VALVE ECCENTRIC
SAVT: SAMPLING VALVE TANK
This way the list of valid Key nouns are defined and stored in customizing Table with validation for Material Type.
So when defining a sellable Finished Product, the first parameter is to define the engineering 4 digit abbreviation from approved list of dropdown.
Brand: This is an identifier under which the sellable unit is being sold to customer. This being a very crucial parameter as it also influences sales pricing. This 3 digit alphabetical key will be part of description and will be used for product searches, product identification and reporting.
E.g. (KEY- in this way 3 letter word identifying the brand internally). The list of valid values will be configured in the system to select from pull down menu.
So following this guideline the total length taken is 9 characters (with one space after Key noun and one space after Brand).
Both these fields are made mandatory under global fields in SAP material master for Finished Product Part numbers.
Uniqueness Key: Catalogue Number – This is a unique identification that every sellable finished part number will have in global view. This a unique identification that can be used to not only describe a material but is also used in the intra/intercompany system process to ensure the correct material requirements transferred throughout the system. The Product catalogues are used as base for deriving the unique identification. The maximum length is 31 characters to fit total SAP short text within 40 characters.
A typical example of engineering catalogue for customer ordering which forms the basis for uniqueness key.
SAP Description: Once above three fields are maintained, the material description is generated automatically by the enhancement and updates MAKTX field. So in the above example, the material description of finished Product will look like:
ACEQ KEY E006A0W5000
How to generate the unique identifier?
The Uniqueness key values are defined as characteristics values. The Material class (type 001) isdefined for each product family. The Class will have characteristics defined as per the catalogue structure. The possible values are defined as dropdown values of characteristics.
The Material master Classification view will contain the proper Class and Characteristics assignment for defining the attributes as per the catalogue structure. The custom extension reads the characteristics value in memory and generate the unique identifier which is stored in a separate field in material master.
As user moves through the next screen, the extension generates the material description following the structure as mentioned above within 40 characters.
This enforces the unique material description for the sellable FERT products.
Sales Text generation:
The details of characteristics from material classification are transferred in Sales text view of material master (through enhancement in material master creation). This captures details of material classification which in turn shows the details of uniqueness key values. The sales text is populated in sales documents showing the details of sellable product.
In short, we define material master unique structure policy for sellable finished goods and enforce this through various custom SAP extensions in material creation and change process. More tighter control is needed as sellable Finished Products are shared across locations for end to end margin analysis, search and traceability.
Typical flow of material master in manufacturing environment covering multiple sites where the main product owning plant will set up the sellable finished product in SAP and other plants will pull the same part for local extensions in a global SAP landscape to support intra/ intercompany processes. Henceforth, managing clean set up of master data is more crucial for global operations.
Below few SAP screen shots provide the illustration of what I talked about: (example only)
The details of Unique ID with characteristics description is passed onto the sales text view of product.
Having articulating the design and getting the key business buy in is one part of typical implementation project. The challenging part is of course enabling the business owners to define the proper data (through data cleansing, catalogue structuring etc) along with change management across the entire chain of process flow to reap the maximum advantage of SAP ERP system- which all of us know become stumbling block if not addressed properly!
In my next article, I would like to share more on material master governance approach.
I would also like to get inputs on your experiences for defining material master structures (especially FERT) in a shared environment for typical engineering manufacturing industry with proper control and uniqueness.