Materials Management

Materials management

Materials management is the branch of logistics that deals with the tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in ordering, shipping, and warehousing the said parts.

• 1 Areas of Concentration
• 1.1 Goals
• 1.2 Quality Assurance
• 1.3 Standards
• 1.4 Promoting Sustainability
• 1.5 Improving circulation infrastructure
• 1.6 Materials Management Week
• 1.7 Benefits
• 1.8 Dredged Material Management
• 1.9 Beneficial Use

Areas of Concentration

Goals

The goal of materials management is to consolidate and efficiently handle core services. It creates truck deliveries and service vehicle routes that reduce conflicts for vehicles and pedestrians. Delivery sites and loading docks are more effective and reduce redundancy. Cost is reduced when it comes to solid and hazardous waste removal, storage, and recycling. Utility infrastructure and service equipment relocation can improve aesthetics.

Quality Assurance

A large component of materials management is ensuring that parts and materials used in the supply chain meet minimum requirements by performing quality assurance (QA). While most of the writing and discussion about materials management is on acquisition and standards, much of the day to day work conducted in materials management deals with QA issues. Parts and material are tested, both before purchase orders are placed and during use, to ensure there are no short or long term issues that would disrupt the supply chain. This aspect of material management is most important in heavily automated industries, since failure rates due to faulty parts can slow or even stop production lines, throwing off timetables for production goals.

Standards

The other major component of materials management will be gradual movement toward compliance. There are standards that are followed in supply chain management that are important to a supply chain's function. For example, a supply chain that uses just-in-time or lean replenishment requires clarity. in the shipping of parts and material from purchasing agent to warehouse to place of destination. Systems reliant on vendor-managed inventories may begin to acquire up-to-date computerized inventories and begin to explore robust ordering systems for outlying vendors to place orders on.

Promoting Sustainability

Many business and institutional campuses have cluttered, noisy, and oftentimes inefficient service environments. Delivery trucks compete with pedestrians, loading docks are in plain sight, trash dumpsters sprout up, and lobbies, hallways, and stairwells are cluttered with unplanned storage. With forethought and creativity, these systems can reduce energy use and carbon emissions, minimize traffic congestion, streamline operational flows, and enhance esthetics.

Improving circulation infrastructure

Redundancy can be reduced and effectiveness is increased when service points are clustered to reduce the amount of redundancy. An effective materials management program can also resolve “island” approaches to shipping, receiving, and vehicle movement. Solutions can include creating a new central loading location, as well consolidating service areas and docks from separate buildings into one. Developing better campus circulation infrastructure also means re-evaluating truck delivery and service vehicle routes. Vehicle type, size, and schedules are studied to make these more compatible with surrounding neighborhoods. This will reduce truck traffic, creating a safer environment for pedestrians and a more attractive environment for other uses.

Materials Management Week

Each year, an entire week is dedicated to celebrating resource and materials management professionals for their outstanding contributions to healthcare and the overall success of the supply chain. Sponsored by the Association for Healthcare Resource & Materials Management (AHRMM), National Healthcare Resource & Materials Management Week (MM Week) provides an opportunity to recognize the integral role materials management professionals play in delivering high-quality patient care throughout the health care industry. In 2010 Material Management Week is October 4-10 October.

Benefits

An effective materials management plan builds from and enhances an institutional master plan by filling in the gaps and producing an environmentally responsible and efficient outcome. An institutional campus, office, or housing complex can expect a myriad of benefits from an effective materials management plan. For starters, there are long-term cost savings, as consolidating, reconfiguring, and better managing a campus’ core infrastructure reduces annual operating costs. An institutional campus, office, or housing complex will also get the highest and best use out of campus real estate.

An effective materials management plan also means a more holistic approach to managing vehicle use and emissions, solid waste, hazardous waste, recycling, and utility services. As a result, this means a “greener,” more sustainable environment and a manifestation of the many demands today for institutions to become more environmentally friendly. In fact, thanks to such environmental advantages, creative materials management plans may qualify for LEED Innovation in Design credits.

And finally, an effective materials management plan can improve aesthetics. Removing unsafe and unsightly conditions, placing core services out of sight, and creating a more pedestrian-friendly environment will improve the visual and physical sense of place for those who live and work there.

Dredged (a machine in the of form of a bucket ladder, grab or suction device used to remove material from river riverbed, channel etc) Material Management

Three management alternatives may be considered for dredged material: open-water disposal, confined (diked) disposal, and beneficial use. Open-water disposal is the placement of dredged material in rivers, lakes, estuaries, or oceans via pipeline or release from hopper dredges or barges. Confined disposal is placement of dredged material within diked nearshore or upland confined disposal facilities via pipeline or other means.[3]

Potential environmental impacts resulting from dredged material disposal may be physical, chemical, or biological in nature. Because many of the waterways are located in industrial and urban areas, sediments often contain contaminants from these sources. Unless properly managed, dredging and disposal of contaminated sediment can adversely affect water quality and aquatic or terrestrial organisms. Sound planning, design, and management of projects are essential if dredged material disposal is to be accomplished with appropriate environmental protection and in an efficient manner.

Beneficial Use

Ten broad categories of beneficial uses have been identified, based on the functional use of the dredged material or site. They are:

• Habitat restoration/enhancement (wetland, upland, island, and aquatic sites including use by waterfowl and other birds).
• Beach nourishment.
• Aquaculture.
• Parks and recreation (commercial and noncommercial).
• Agriculture, forestry, and horticulture.
• Strip mine reclamation and landfill cover for solid waste management.
• Shoreline stabilization and erosion control (fills, artificial reefs, submerged berms, etc.).
• Construction and industrial use (including port development, airports, urban, and residential).
• Material transfer (fill, dikes, leaves, parking lots, and roads).
• Multiple purpose.

MATERIAL FLOW

Efficient and Stream-lined processes are required to remain competitive in today's marketplace. Material flow, distribution, logistics, purchasing and planning are all important factors for success and competitiveness. Inventory Solutions can help you by optimizing your material flow.

Material flow involves Production Planning, Purchasing, Just-In-Time (JIT), and Inventory Management / Inventory Control.

Optimization (to take full advantage of) of Material Flow can have the following benefits:

Inventory Solutions can help to train the following personnel and help your company reduce costs:

What is Inventory Control?

Inventory or stock represent a large portion of the business investment and must be well managed to maximize profits. The most common problems with inventory are that they are:

Companies usually lean towards keeping inventory levels on the high side to insure stock is available when needed. However, this is a high investment which yields a lower return on the dollar invested. Inventory Solutions can help you improve your inventory control so that you:

What Is The Data-Flow Of MM?

The dataflow as functional process below are the points:

1) Purchasing Requisition -> sent by inventory dept to purchasing dept
2) Request for Quotation(RFQ)-> Purchasing Dept shall ask the vendors to give the quotation for the requested materials by inventory.
3) Quotation -> Quotation is sent by vendors to the company
4) Purchase order-> Based on all parameters of a quotation sent by vendors. Vendors are selected from whom the material has to be obtained. The company gives purchase order to the vendor.
5) Good's receipt -> vendors sends the goods to the company with goods receipt
6) Invoice verification -> this done based on good's receipt. this means that the ordered goods have reached or not.
7) Payment -> payment is done based on invoice verification. this is (FI/CO

Full MM Transaction Codes Flow:

RFQ to Vendor - ME41
Raising Quotation - ME47
Comparison of Price - ME49
Creation of PO - ME21N
Goods Receipt - MIGO
Invoice (Bill PAssing) - MIRO
Goods Issue - MB1A
Physical Inventory - MI01( Create doc)
MI04 (Enter Count)
MI07 (Post)

The FI - MM integration:

First you define the g/l master records.
1) Inventry raw material a/c
2) GR/IR clearing a/c
3) Raw material consumption a/c
Above like this you define all required g/l accounts then you will go to T.CODE - OBYC
Double click BSX (this is transaction key)
" GBB
" WRX
" PRD
These are transaction keys important.
Then you go to T CODE - OMSY (this is also important) then
Material creation T Code MM01
then
1) Purchase order T.code ME21N
2) Goods received " MIGO
3) Invoice verification " MIRO

The FI - MM integration finished.

Common SAP MM Questions

Can any one tell me what is MM closing and what is FI closing? How can I know if period is closed?

MM closing means that you can not post materials document. In MM area you have two open periods current and previous.
If you do not set other in MMRV - here you can check which are the open MM periods for company code. If you check Allow posting to previous period - it will forbid MM posting in previous period.

FI open period (ob52) allow to post FI documents. As I know you can allow postings for some accounts - for example forbid material accounts for previous period in order to prevent MM posting until you finish all FI documents.
*--Monika Hubanova

Related:

• Movement Error - Posting Only Possible Between
• Movement Type Posting Error In Delivery

How to add an attachment to a Purchase Order in SAP?

You can attach manually any document to PO without using Document Management System ( DMS ) in SAP 4.6C.

But you cannot attach document while you create PO in T/Code ME21N
Save you PO ( ME21N ) and again open with change ( ME22N ) then you can attach document through Service for Object button. Service for Object button available down side of Command screen ( in your PO screen ME22N )
Click your Service Object button -> Create -> Create attachment
then select your window directory ( which file you need to attach) select your file Now your system shows message Service "Create attachment" is started.
Save again your PO. You can see (open) your attachment in same field ( Service for Object ) select and Create and check attachment list. You can attach as many document in your PO.

Note: This is only information for internal or you can print separately this document for sending to vendor ( fax ) System will not print automatically along PO print out.

SAP MM Tips

What is the difference between Blanket Purchase Order and the Framework Order.

In general the Blanket POs are used for consumable materials such as Xerorx papers with a short text (does not need to have Master Record) with Item Category ' B' i.e.limit, where in the PO validity period as well as the limits are to be mentioned for the simplicity of procurement.The doc type is 'FO' (Framework Order).
The GR or Service Entry for the PO are not necessary in case of Blanket POs as well as one need not to mention the account assignment category during creation of PO it can be 'U'-unknown & can be changed at the time of IR.

I have two issues:
1) Auto P.O.: In MMR & Vendor Master Record (Control data) I have checked 'Auto PO'....I have created the Purchase Req for the Material.....Now I want to know how the automatic PO will come into force...I mean what steps to do after creating PReq.

2) Source List: I have checked 'Source List' In Purchasing view of MMR...Have two vendors for this material for which source list is also maintained(ME01)....While creating PO..the system takes by default the first vendor....I tried to assign the second vendor (made sure that validity period are in range)..but couldn't do so...Can you suggest how the system will tell me to select one of the vendor I want to assign to the PO.

1. For Auto PO , yo should proceed as follows:
* Auto P.O.: In MMR & Vendor Master Record - checked(MM02/XK02)
* Maintain Source List & select the indicator for source list record as MRP relevent.(ME01)
* If more than one source list records are generated, make one of them as fixed.
* Run MRP , the PR's generated will be preassigned with the source of supply.(MD01)
* Enter T Code ME59 for automatically creating PO's from PR's.

2.* Check if the assigned Source in PR is not fixed in Source List.
* Check if the info record for source not assigned, is having valid conditions.

Prem Bhardwaj

Why system giving me only warning message instead of error message when I am trying to make GR with a material which already tick for deletion flag. Is there any configuration mistake ?

Through OMCQ , set message no M7 430 for error.

Supian

When I want to settle Framework order. On Information Text, I had a message "Invoicing plan: No message was found for partner 100454/company code 2000" I had investigate that error on message determination and still the
error occurs. Maybe I miss the setting in message determination. Can you tell me how to set Framework order Settlement message determination.

According to SAP Notes, when an invoicing plan is settled, you can create a document/e-mail or etc to notify your supplier or internal personnel. The IMG setting (SAP 4.7) can be set in Material Mgmt --> Logistic Invoice Verification --> Message determination.
Another way is if the creation of these docs are not required, turn off the message by setting the message display from 'Error' to 'Information'. The IMG setting can be set in Material Mgmt --> Logistic Invoice Verification --> Define Attributes of System Messages. This is what I did on my side.

Charlie

Have any one you done this in IM: Inactivating the standard Movement Types. Say for eg. I don't want to end user to use this MType 501- Receipt without ref to PO.
I don't want to delete this movement type, being an SAP standard one. One option what I thought of is to control in the authorisation profile, profile to exclued selected movement types.
Is there any other way we can do this?

You can delete the accounts assignments which are used for 501 movement type, in T030 table. Transaction code is OBYC.

or

1. Use transaction OMJJ
2. Enter movement type 501
3. Remove MB01 from allowed transactions

SAP Material Management Frequently Asked Question

Material Master

Q: How can I extend all material to a new plant? A: The SAP program - RMDATIND is used to create /update material master record.

Q: How can we delete materials permanently from Material master? A: Use transaction MM70 - Material Master->Other->Reorganization->Material->Choose. Build variant with selection range of material master records to be selected for deletion and maintain run parameters. Execute. Use transaction MM71 - Material Master-> other-> Reorganization->Material->Reorganization Build a second variant Maintain run parameters and execute. It is also important to remove the records manually from info record, POs, PRs, reservation etc for successful deletion of the material.

Q: SAP only provides moving average value for current, previous period, and previous year. SAP does not provide transactions/reports that will provide moving average value for a given date. How can I report moving average price for material number 10000000 at plant 0001 on July 4, 1998. A: Try any of these solutions: 1. Change the updating level of the structure (S031) to "daily". In LIS the total value and the total stock are available. Divide value by the stock. It is possible to calculate this dynamically when the analysis is run and to display the result. 2. Create your own structure in LIS and populate it by copying the Moving Average Price from the material master every time there is a transaction. You will have data on those days when there was a transaction.

Q: We have defined all the variables for the materials. However, when I attempt to use Material Matchcode object MAT1, I get the response "No possible entries found". Why? A: Matchcode i.d. "B", "Material by bill of material" has a selection condition for field STLNR NE ' '. STLNR is the BOM number associated with a material in table MAST. Hence the message - "no possible entries..." pops up if there are no bills of materials associated with your material numbers. You get the matchcodes as long as the material referred by you has BOM number associated with it.