Material Master
SAP MM Material Master is an important element of master data in SAP which is used by most of the departments in a company. SAP MM material master enables the company to store all the information about a particular material (or product). The material master data is uniquely identified by a material number which can be internal or external. Internal numbers are automatically generated by SAP system while external numbers can be explicitly chosen by users.
The material master is the central source of information for a material related to several application area (Purchasing, storage, accounting, sales, etc) based on material type.
Material Master data is maintained at plant level and accounting information is maintained at valuation area level. The valuation is an organization level at which material are valuated. The valuation are can be a plant or a company code.
Material Type: Material type assigns a material to a group of materials (for example, raw materials or spare parts). Material type defines certain attributes of the material and has important control functions. It also determines whether the material will be valued at a standard price or a moving average price.
Industry Sector: Industry sector specifies the branch of industry to which the material is assigned.
Valuation class allows to group together different materials with similar properties from the financial valuation point of view in order to avoid management of a separate stock account for every single material.
Valuation types are used for split valuation. A separate accounting view of the material master will be maintained for each valuation type as required.
In Accounting view of material master represent how FI and material are integrated base on below point
Valuation class:
depending on your system settings, but valuation class is in most times influenced by material type, so you will have a valuation class for finished goods, and another for trading goods. In our case valuation class, 7920 is SAP default class for finished goods. For HALB, this class is 7900 by default, and for ROH we can use 3000.
Valuation Class for sales order stock:
We use a valuated sales order stock if we want the goods movements to have corresponding postings in Financial Accounting (FI). A sales order stock is assigned exclusively to a sales order and sales order item and cannot be used for other sales orders or sales order items.
If you want to assign the valuated sales order stock in FI to a different account than the make-to-stock-inventory, enter an additional valuation class in Sales order stock VC field
you can assign a valuation class for sales order stock to override the default valuation class defined in field 1 - Valuation Class. Not recommended.
Price control:
This indicated which type of internal price will be used for the material. It can be set to S – standard cost, or V moving average price (variable price). In most cases, S is used for finished goods while V is used for trading goods, but the settings depend on your SD/FI/CO teams preference.
Moving price:
This field populate if price control is set to V.
Standard price:
This field populated if price control is set to S. Your controlling team can use transactions for generating these prices based on the information contained in production orders, purchase orders, so that these prices don't have to be entered manually for each material. We can also maintain Valuation Category field, which determines whether stocks of the material are valuated together or separately.
This view isn't used very often in production environment, the most common setting for this view is leaving all the fields empty. Basically, it consists of special tax information in Accounting which is hardly ever relevant.
Determination of the lowest value of the material, material devaluation through its status (moving, slow moving) etc.
Do Not Cost:
No costing is estimated. Neither material cost nor sales order cost is created, just as procurement alternatives can't be created as well. If you want costing at all, leave the field blank.
With quantity structure:
Indicates if we want to use quantity structure data for cost estimating (lot size and other quantity information).
Material origin:
This indicates if material number should be assigned to cost element item in CO module.
Variance key:
Determines how cost variance is calculated.
Costing lot size: it is only useful if check box "With Qty structure" is checked. It determines the lot quantity used for a cost estimate calculation.
In figure 1 – Valuation data, we can see fields already covered in previous views (Accounting 1 view). Other than that, there are fields to maintain planned prices (Standard cost estimate will be copied to Planned price if standard cost estimate is checked and created).
PS - These are the fields in a SAP S/4 HANA Material master along with its explanation.
IF you have any suggestions or queries for me, do let me know.
SAP MM Material Master is an important element of master data in SAP which is used by most of the departments in a company. SAP MM material master enables the company to store all the information about a particular material (or product). The material master data is uniquely identified by a material number which can be internal or external. Internal numbers are automatically generated by SAP system while external numbers can be explicitly chosen by users.
The material master is the central source of information for a material related to several application area (Purchasing, storage, accounting, sales, etc) based on material type.
Material Master data is maintained at plant level and accounting information is maintained at valuation area level. The valuation is an organization level at which material are valuated. The valuation are can be a plant or a company code.
Material Type: Material type assigns a material to a group of materials (for example, raw materials or spare parts). Material type defines certain attributes of the material and has important control functions. It also determines whether the material will be valued at a standard price or a moving average price.
Industry Sector: Industry sector specifies the branch of industry to which the material is assigned.
Valuation class allows to group together different materials with similar properties from the financial valuation point of view in order to avoid management of a separate stock account for every single material.
Valuation types are used for split valuation. A separate accounting view of the material master will be maintained for each valuation type as required.
- Basic Data – Client Level
- Purchasing, MRP, Costing Data – Plant Level
- Sales Data – Sales Organization Level (Tax indicator is at country level)
- Storage Data – Storage Location Level
- Accounting Data – Valuation Area Level
- Basic Views: Basic views are views with general information about a material.
- Material Description: LCD TV 40″ – this can be maintained in various languages.
- Base unit of measure(often referred to as Base UOM😞 PCS – this is the unit of measure in which material stock is managed.
- Material Group: It is used to group together several materials or services with the same attributes. Each Material or Service is assigned to a particular material group.
- General Item category group: The item category group NORM is defined for materials kept in stock and the group DIEN for services and non-stock material, this indicator has an effect on sales and stock transfer processing.
- Weight Unit: Kg – unit in which product weight is entered.
- Gross weight: 26,988 – gross weight of 1 unit of product in weight unit.
- Net weight: 24,651 – net weight of 1 unit of product in weight unit
- Classification View: Materials can be classified in order to be found later by their class, batch characteristics etc.
- Material Class: By choosing Material Class – 001 you are extending material for this class type. Now we have to add a class we want to use for our material. A class called ZMATERIAL could consist of two characteristics: ZColorand ZDimension.
- Sales Organization Data 1: When we choose this view, a screen with organizational levels will appear. Here, we can choose for which Plant, Sales organization and Distribution channel we want to extend our material.
- Sales Organization Data 2:
- Account assignment group: this field represents the accounting requirements for the material. Often different types of materials require different accounting requirements (finished goods, trading goods, services aren’t accounted in the same way). This is a point of integration with FI/CO modules.
- Item category group: It enables to group the related item categories in a sales document. It is assigned to a master material record through material types and linked to SD through an item category determination rule.
- Sales General / Plant View:
- Availability check: It is used to define the stock availability check method. These methods are defined by customizing team, and can include stock on storage locations, can be also set up to include quantities on process and production orders, planned orders, quantities in the transfer towards the plant from which sales is being processed, etc.
- Loading group: extremely significant field as it is used in shipping point determination.
- Transportation group: It is a way of grouping materials with same transportation needs. It is used in SD module for route scheduling in sales orders and deliveries.
- Material Group – Packaging Materials: This field is used for grouping the materials with similar packaging materials requirements.
- Foreign Trade / Export View: This view contains information about freight, foreign trade, exporting of materials.
- Commodity Code/Import Code Number for Foreign Trade: This field contains either a commodity code or a tariff number. It is a unique standardized coding value for a certain type of goods.
- Country of origin: it represents the country where this material has been produced. If it’s finished goods produced in-house you will enter your country code here.
- CAS number: this field is only used for pharmaceutical products.
- PRODCOM no. – used only in EU countries for statistical purposes in production.
- Sales Text View: We can define a sales item text for this material for various languages to be used in the sales documents. This could be some general explanation about the material, or explanation maintained on distribution channel level. If you maintain this text it will show up on the item level in all sales documents, and also in the printing version of sales documents.
- Purchasing View:
- Purchasing group: you can define various purchasing groups like raw material purchasing, trading goods purchasing, service purchasing etc. This value will be the default value for all the items entered in purchasing documents.
- Order unit: default unit used for ordering this material.
- Purchasing value keywhich is maintained in customizing consisting of all the values you can see in this section (under delivery tolerance, over delivery tolerance). When you define the key in customizing, the values from the key are transferred to all the fields in this section
- Foreign Trade Import View: Exactly the same view as a foreign trade export view.
- Purchase order text View: Exactly the same view as a sales order text view.
- MRP View 1: MRP views are maintained mostly for production purposes. This information is supplied by the appropriate MRP controller or someone else from production planning team. The only mandatory field in MRP 1 View is Planning type. We will cover the most important fields used in a productive environment in more detail.
- MRP type: there are various types of MRP that can be utilized. In this case, our MRP controller signaled that it should be PD – default MRP for most of the SAP installations.
- MRP controller: MRP controller responsible for production of this material, he manages all the data in these MRP views, along with the MRP results itself, production planning for this material etc. It is usual that the MRP controller provides the data for MRP views, or even in some organizational structures MRP controllers are maintaining these views on their own.
- Lot size: defines the procedure used by the system in order to calculate the procurement or production quantity of the material.
- Reorder Point: indicates at which stock level MRP should create a new order (either procurement or production order).
- Minimum and Maximum lot size, Fixed lot size: It is used to indicate the boundaries for lot size, or a fixed quantity to be used.
- MRP View 2: MRP view 2 contains data about Procurement, Scheduling, and Net requirements calculation.
- Procurement type: here you can choose if your material has internal production (our case), external procurement, or both types of procurements are possible. It also mightn’t have procurement at all.
- Production storage location: here you will maintain the storage location that is copied throughout the production documents. If this is a production component this marks the location from which the goods issue is posted, or if it’s produced material it annotates a location to which the material receipt is posted.
- Goods Receipt Processing Time in Days: you can set up this value that represents needed time in days for goods to be inspected and placed into appropriate storage location.
- Schedule margin key: this represents a key used for determination of the floats required for scheduling an order. It is defined in customizing and is supplied by your MRP controller or PP administrator.
- Safety stock: quantity in base UOM to use as a safety stock.
- Minimum safety stock: Safety stock in never allowed to drop below this value.
- MRP View 3: MRP view 3 contains several valuable fields mostly used by planning functions.
- Period indicator: indicates if material is to be planned/forecast monthly, weekly, yearly, daily etc. This is in most cases set to monthly.
- Strategy group: used for grouping the planning strategies, for example, this can be set to Make to Order, Make to Stock etc. There are a number of options, and this must be defined by the production planning management. In most cases, material types and/or material ABC classification influences the decision which strategy group material should be assigned.
- Consumption mode: this controls how system will consume requirements. In backward mode sales, orders, dependent requirements or material reservations consume planned independent requirements that lie beforethe requirements date while in forward mode they consume planned independent requirements that lie after the requirements date.
- Forward consumption period: number of days used as a consumption threshold in forward consumption mode. Can be set from 1 to 999 days but usually not longer than several days. We are using 0 since we are utilizing backward consumption mode for this material.
- Backward consumption period: Same as previous except it is used for backward consumption mode.
- Mixed MRP: defines if material is available for subassembly planning and gross requirements planning.
- MRP 4 View: This is the only MRP view that is maintained on Plant / Storage location organizational level. It doesn’t contain as much valuable fields as previous, but there are three handy indicators that can be used to optimize processes in some modules.
- Selection method: if you are using BOMs (Bill of Materials) for your production, you could govern with the selection of alternative BOMs with this field. You can set selection type by order quantity, production version, explosion date.
- Discontinued indicator: you can select the indicator for discontinued part as per requirements.
- Work Scheduling View: This view is used by the production to control the scheduling of production and process orders. A production schedule determines how capacity requirements are calculated for all the materials during a scheduling run. Here, you can also activate batch management if material is to be handled in batches (certain quantities of material with slightly different characteristics). Batch management can be activated in several other views.
- Production schedule profile: define how the process will flow in PP or PP-PI, some additional controls about automatic goods receipt etc. Customized by your PP consultant.
- Under delivery tolerance: define allowed percentage of quantity to be underdelivered.
- Over delivery tolerance: allowed percentage for quantity exceeding for production or process order. For overdelivering, you can check the unlimited box – in that case we are allowing unlimited over delivery.
- Setup time: time needed to setup and teardown work center resources (lot size independent).
- Processing time: processing time for the base quantity.
- Base quantity: used for processing and inhouse production time. In our case, processing time is the time needed to process 48 pieces of our material.
- Plant data / Storage 1 View: Warehouse administration team should supply the data for maintenance of this view. These are mostly storage data valid on the plant level. Let’s go through all the essential fields for this view.
- Unit of issue: this is the unit in which material is issued from any storage location within the plant (except for the warehouse managed locations which have a setting that overrides this field value).
- Temperature conditions: temperature (and atmospheric) conditions in which the material must be stored.
- Storage conditions: storage conditions required by material.
- Container requirements: type, and conditions in the container in which the material is shipped.
- Storage period: maximum period of time for which a material can be stored.
- Minimum remaining shelf life: minimum remaining time for the material to be allowed to be stored (in case the remaining time is shorter than minimum – system will deny goods receipt).
- Period indicator for SLED: used as a unit of time for Minimum remaining shell life. If this field contains D, then minimum remaining shelf life is maintained in days. Indicator M is for months etc.
- Plant data / Storage 2 View: These fields are repeating from Basic view 1 (Weight/Volume section), and Sales – General (General Plant parameters section), we had described them when we covered those views.
In Accounting view of material master represent how FI and material are integrated base on below point
- GL integration with Material Master
- Valuation of material master
- Accounting 1
Valuation class:
depending on your system settings, but valuation class is in most times influenced by material type, so you will have a valuation class for finished goods, and another for trading goods. In our case valuation class, 7920 is SAP default class for finished goods. For HALB, this class is 7900 by default, and for ROH we can use 3000.
Valuation Class for sales order stock:
We use a valuated sales order stock if we want the goods movements to have corresponding postings in Financial Accounting (FI). A sales order stock is assigned exclusively to a sales order and sales order item and cannot be used for other sales orders or sales order items.
If you want to assign the valuated sales order stock in FI to a different account than the make-to-stock-inventory, enter an additional valuation class in Sales order stock VC field
you can assign a valuation class for sales order stock to override the default valuation class defined in field 1 - Valuation Class. Not recommended.
Price control:
This indicated which type of internal price will be used for the material. It can be set to S – standard cost, or V moving average price (variable price). In most cases, S is used for finished goods while V is used for trading goods, but the settings depend on your SD/FI/CO teams preference.
Moving price:
This field populate if price control is set to V.
Standard price:
This field populated if price control is set to S. Your controlling team can use transactions for generating these prices based on the information contained in production orders, purchase orders, so that these prices don't have to be entered manually for each material. We can also maintain Valuation Category field, which determines whether stocks of the material are valuated together or separately.
- Accounting 2
This view isn't used very often in production environment, the most common setting for this view is leaving all the fields empty. Basically, it consists of special tax information in Accounting which is hardly ever relevant.
Determination of the lowest value of the material, material devaluation through its status (moving, slow moving) etc.
- Costing 1
Do Not Cost:
No costing is estimated. Neither material cost nor sales order cost is created, just as procurement alternatives can't be created as well. If you want costing at all, leave the field blank.
With quantity structure:
Indicates if we want to use quantity structure data for cost estimating (lot size and other quantity information).
Material origin:
This indicates if material number should be assigned to cost element item in CO module.
Variance key:
Determines how cost variance is calculated.
Costing lot size: it is only useful if check box "With Qty structure" is checked. It determines the lot quantity used for a cost estimate calculation.
- Costing 2
In figure 1 – Valuation data, we can see fields already covered in previous views (Accounting 1 view). Other than that, there are fields to maintain planned prices (Standard cost estimate will be copied to Planned price if standard cost estimate is checked and created).
PS - These are the fields in a SAP S/4 HANA Material master along with its explanation.
IF you have any suggestions or queries for me, do let me know.
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