Posted by: ahmedashfaque | April 13, 2014

All about material master in SAP


Any material can be defined in many ways in SAP. This is the most useful feature in SAP. This makes SAP very flexible. How this feature helps users? Let us see in depth analysis.

A company operates at many levels. It can be a global player. It can have many independent legal entities. It can operate in many geographies and legal constituencies. It can have global and local suppliers. It can produce goods for local and global markets. So all kinds of materials this company buys or produces and markets will have varying attributes. Some materials are produced only for local markets. While some other materials are produced for global markets. Similarly it can procure materials from local suppliers or global suppliers. Thus a need arises to define each material differently and at different level.

In SAP it is possible to define material at different levels of the organization. In SAP the highest level is the client level. The company codes are the next in hierarchy. Then plant and at the bottom are the storage locations.

When you define a material, you are actually defining it at the client level. Thus the material definition is available at any level and at any entity within the client. This same material can have different attributes at different levels and different entities. For example, when the material is procured from a vendor then the important consideration is its purchase price. When the same material is being sold by the company to customers then the consideration is at what sales price it is being sold. Similarly when a material is being sold at one location then it will have price and currency of the local market. If the same material is sold at a different location then it will have a different price and currency. Taxes will also be different.

All these aspects are taken care of in the material master definition.

How these aspects are taken care of in SAP? After creating a material definition at the client level, the material definition is extended for the particular location. When you extend the material, you define the plant or combination of plant/storage location for the material. Similarly if you are extending the material for sales then you provide sales organization and distribution channel.

After you extend the material for a location then this material definition becomes available for that location with the specific information about the material like price, currency etc. , which you provide at the time of extending the material.

 

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Responses

  1. Hi ashfaque
    Very informative article. I have never seen such article anywhere. Thanks for posting.

  2. Interesting observation. Please discuss more about material master in future.

  3. Loved your post. Good. Keep posting.

  4. Thanks ashfaque
    I am avid reader of your blog. I have also read your SAP MM book. Everything you write is simply amazing

  5. Nice and informative. Good article


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