Mm

SAP Materials Management (MM)

This skill enforces correct MM configuration, procurement discipline, and inventory accuracy. Every procurement transaction depends on complete master data — incomplete material masters, missing info records, or bypassed three-way match create downstream failures in FI, CO, and PP that are expensive to unwind.

Content Routing

Topic	Section
Procure-to-pay process	Procure-to-Pay (P2P)
Material master data	Material Master Data
Vendor / Business Partner master	Vendor Master
Source determination	Source Determination
Inventory management	Inventory Management
Invoice verification (MIRO)	Invoice Verification
MRP (Material Requirements Planning)	MRP
Integration with FI / PP / SD / EWM	Integration Points

Iron Laws

1. NEVER SKIP THREE-WAY MATCH VERIFICATION. Every vendor invoice (MIRO) must be matched against the purchase order (price, quantity, conditions) and the goods receipt (quantity, delivery date) before payment is approved. Bypassing three-way match — even for "trusted" vendors or urgent payments — removes the fundamental financial control against overpayment, duplicate payment, and fraud.
2. ALWAYS COMPLETE REQUIRED MATERIAL MASTER VIEWS BEFORE PROCUREMENT BEGINS. A material master missing the Purchasing view, MRP view, or Accounting view will block purchase order creation, MRP planning, or goods receipt valuation respectively. Incomplete material master data is the most common root cause of procurement failures in go-live.
3. NEVER CREATE A PURCHASE ORDER WITHOUT SOURCE DETERMINATION OR DOCUMENTED JUSTIFICATION. Purchase orders should reference a contract, scheduling agreement, source list, or quota arrangement. An undocumented PO without a source bypasses purchasing controls, makes price validation impossible, and creates audit findings.
4. ALWAYS RUN MRP WITH VERIFIED MASTER DATA. MRP (MD01/MD02) reads BOM, routing, purchasing info records, and planning parameters. Running MRP with incomplete or incorrect master data generates thousands of incorrect procurement proposals that take hours to correct manually. Verify master data completeness before any MRP run in production.
5. NEVER POST A GOODS RECEIPT WITHOUT REFERENCE TO A PURCHASE ORDER. Unplanned goods receipts (free GR without PO reference) bypass all purchasing controls including price, quantity, and vendor validation. Always post GR via MIGO with reference to the PO (movement type 101).

Rationalization Table

Agent Will Try To...	Why It Seems Reasonable	Why It Fails	Counter
Post a manual FI invoice instead of using MIRO for a PO-referenced purchase	"It's faster and gets the payment out today"	Manual FI posting does not clear the GR/IR clearing account; the PO remains open; three-way match is bypassed; quantity and price tolerances are not checked	Always use MIRO for PO-referenced invoices; use FB60 only for non-PO invoices with a documented exception
Create a material master with only the Basic Data view	"We only need it for display purposes right now"	A material with only Basic Data cannot be ordered (missing Purchasing view), planned (missing MRP view), or received into stock (missing Accounting/Valuation view)	Define which views are required for the intended business process before creating the material master; create all required views in one session
Skip the source list and create POs directly from PRs	"The buyer knows which vendor to use"	Source determination (source list, quota arrangement, contract) enables automatic source assignment in MRP, enforces preferred vendor agreements, and simplifies PO creation at scale	Maintain source lists (ME01) for all regularly procured materials; define quota arrangements for multi-source procurement
Run MRP (MD01) without first checking the planning file (MD21)	"MRP always runs correctly"	If the planning file has inconsistencies (materials with change indicators not cleared), MRP produces incorrect results silently	Check MD21 (planning file entries) and resolve inconsistencies; run MDRE (planning file reconstruction) if needed before MRP
Approve invoice price tolerance exceptions without reviewing the PO	"The system allowed it within tolerance"	Within-tolerance exceptions are automatic — but tolerances can mask systematic pricing errors (wrong condition type, missing rebate deduction) that accumulate significantly over time	Review all tolerance exceptions in the invoice verification log; investigate systemic patterns, not just individual invoices
Use a single material master price control type (S = standard) for all materials	"Standard price is simpler"	Moving average price (V) is mandatory for materials without a standard cost estimate (raw materials, trading goods). Using standard price for these requires maintaining correct standard prices manually — a control risk	Use standard price (S) for finished and semifinished goods with product costing; use moving average price (V) for raw materials, trading goods, and purchased parts without standard cost estimates

Red Flags

Watch for these in your own reasoning — each signals an Iron Law violation:

• "We can create the PO now and add the source list later..." → Source determination should precede PO creation in a controlled procurement environment. Retroactive source lists do not control already-created POs.
• "Let's post the GR without a PO reference and match it up later..." → Movement type 501 (GR without reference) bypasses all PO controls. Use 101 with PO reference unless a documented exception process exists.
• "MIRO is taking too long — let's just post an FI invoice..." → MIRO is not optional for PO-referenced invoices. FI-only posting leaves the PO and GR/IR account in an incorrect state.
• "The material master only needs Basic Data and Purchasing for now..." → MRP will fail to plan it; valuation will fail at GR; invoicing will fail at MIRO. Define all required views from the start.
• "MRP ran last week, let's reuse those results..." → MRP results must be regenerated after any master data change, BOM update, or demand change. Stale MRP results cause procurement of wrong quantities.
• "This vendor doesn't have an info record but we know the price..." → Without a purchasing info record, MIRO price tolerance checks have no reference price. Create the info record (ME11) before the PO.

<HARD-GATE> Before advising on MM configuration or procurement process design: confirm the system version (ECC or S/4HANA), whether Extended Warehouse Management (EWM) is deployed (replacing WM), and whether the Business Partner model is active (mandatory in S/4HANA — vendor master managed via BP transaction, not MK01). These flags change master data transactions, inventory management behavior, and integration architecture significantly. </HARD-GATE>

Key Concepts

• Procure-to-Pay (P2P): The end-to-end procurement process: Purchase Requisition → RFQ (optional) → Purchase Order → Goods Receipt → Invoice Verification → Payment.
• Material Master: Central master data object with views by organizational level. Key views: Basic Data 1/2, Purchasing, MRP 1–4, Accounting 1/2, Costing 1/2, Storage, Warehouse.
• Business Partner (BP): In S/4HANA, vendors are managed as Business Partners with role FLVN01 (vendor) via transaction BP. Classic vendor transactions (MK01, XK01) are deprecated.
• Purchasing Info Record (ME11): Defines vendor-material relationship: price, conditions, delivery time, tolerance. Required for automated price proposals in PO and three-way match in MIRO.
• Source List (ME01): Defines valid supply sources for a material in a plant. MRP uses source list for automatic source determination in planned order conversion.
• GR/IR Clearing Account: GL account that records the liability between goods receipt (debit stock, credit GR/IR) and invoice receipt (debit GR/IR, credit vendor). Must balance at period-end.
• Movement Types: Control how stock quantities and values are updated. Key types: 101 (GR vs. PO), 201 (GI to cost center), 261 (GI to production order), 301 (stock transfer), 501 (GR without reference — restricted use).
• MRP (Material Requirements Planning): Calculates net requirements from gross demand minus available stock and supply, and creates procurement proposals (planned orders, purchase requisitions).

Transaction Codes

Transaction	Purpose
ME21N / ME22N / ME23N	Create / change / display purchase order
ME51N / ME52N	Create / change purchase requisition
ME11 / ME12	Create / change purchasing info record
ME01 / ME03	Create / display source list
ME31K / ME32K	Create / change contract
ME31L / ME32L	Create / change scheduling agreement
MIGO	Goods receipt, goods issue, transfer posting
MIRO	Logistics invoice verification
MR11	Maintain GR/IR clearing account
MD01 / MD02	MRP run (total / individual, regenerative)
MD04	Stock/requirements list (MRP situation)
MD21	Planning file entries (MRP)
MMBE	Stock overview (multi-level)
MB52	Warehouse stocks of material
MM60	Inventory turnover
MI01 / MI04 / MI07	Create / enter / post physical inventory
BP	Business Partner master (S/4HANA)
MK01 / XK01	Create vendor (ECC — deprecated in S/4HANA)
MKVZ	Vendor list / evaluation

Key Tables and CDS Views

Object	Type	Description
EKKO	Table	Purchase order header
EKPO	Table	Purchase order items
EBAN	Table	Purchase requisition items
EKET	Table	PO delivery schedule lines
EINA / EINE	Table	Purchasing info record general / purchasing org data
MSEG	Table	Material document line items (goods movements)
MKPF	Table	Material document header
RSEG	Table	Invoice document line items (MIRO)
RBKP	Table	Invoice document header (MIRO)
MARA / MARC / MARD	Table	Material master general / plant / storage location
MBEW	Table	Material valuation (per plant)
I_PurchaseOrder	CDS	Released VDM — purchase order header
I_PurchaseOrderItem	CDS	Released VDM — purchase order items
I_PurchaseRequisitionItem	CDS	Released VDM — purchase requisition items
I_MaterialDocumentItem	CDS	Released VDM — goods movement line items
I_SupplierInvoiceItemAPI01	CDS	Released VDM — supplier invoice items
C_PURCHASEORDERITEMQ	CDS	Consumption VDM — PO analytics

Procure-to-Pay (P2P)

Standard P2P Flow

1. Purchase Requisition (ME51N): Internal demand signal — generated manually or by MRP
2. Source Determination: Assign vendor from source list, contract, or quota arrangement
3. RFQ / Quotation (ME41/ME47): Optional — competitive bidding for non-contracted items
4. Purchase Order (ME21N): Legal commitment to vendor; references PR and source
5. Goods Receipt (MIGO, MT 101): Physical receipt; debits stock, credits GR/IR account
6. Invoice Verification (MIRO): Three-way match; debits GR/IR, credits vendor payable
7. Payment (F110): AP payment run clears vendor open items

Three-Way Match Logic (MIRO)

• Price match: Invoice price vs. PO conditions — tolerance checked per tolerance key
• Quantity match: Invoice quantity vs. GR quantity — over/under delivery tolerance
• If within tolerance: Invoice posts automatically
• If outside tolerance: Invoice blocked for payment; requires approval workflow (MRBR release)

Material Master Data

Required Views by Business Process

Business Process	Minimum Required Views
Purchasing only	Basic Data 1, Purchasing
MRP / Planning	+ MRP 1, MRP 2
Goods receipt / inventory	+ Accounting 1 (valuation)
Production	+ MRP 3, MRP 4, Work Scheduling
Product costing	+ Costing 1, Costing 2

Valuation Classes and Price Control

• Valuation class links material type to GL accounts (automatic account determination)
• Price control S (standard) — recommended for finished/semifinished goods with product costing
• Price control V (moving average) — recommended for raw materials and trading goods

MRP

MRP Run Types

Parameter	MD01	MD02
Scope	All materials in plant (total MRP)	Single material or BOM explosion
Processing key	NEUPL (regenerative) / NETCH (net change)	Material-specific
Use case	Period-end full planning run	Ad-hoc demand changes, new materials

MRP Parameters (MRP 1 View)

• MRP type: PD (MRP), VB (reorder point), ND (no MRP)
• Lot size: EX (exact), WB (weekly), MB (monthly), FX (fixed)
• Safety stock: Buffer against demand/supply uncertainty
• Reorder point: Triggers procurement when stock falls below threshold (VB type only)

MD04 — Stock/Requirements List

Real-time view of supply and demand situation for a material. Shows: opening stock, planned orders, purchase requisitions, purchase orders, sales orders, production orders, planned independent requirements.

Inventory Management

Physical Inventory

1. Create inventory document (MI01) — freezes book inventory
2. Count physical stock
3. Enter count results (MI04)
4. Post inventory differences (MI07) — adjusts book inventory to physical count

Key Movement Types Reference

MT	Description	Effect
101	GR for PO	+ unrestricted stock, - GR/IR
201	GI to cost center	- unrestricted stock, + cost center expense
261	GI to production order	- unrestricted stock, + production order
301	Plant-to-plant stock transfer	- sending plant, + receiving plant
551	Scrapping	- unrestricted stock, + scrap expense

Integration Points

Module	Integration Description
FI	Goods receipt posts to stock account and GR/IR clearing (automatic account determination via OBYC). Invoice verification (MIRO) clears GR/IR and posts to vendor payable. Price differences post to price difference account or update moving average price.
PP	MRP-generated planned orders drive production. Goods issues to production orders (MT 261) consume stock. Production order completion (MT 101 from PP) posts finished goods to stock.
SD	Intercompany procurement: SD sales order in selling company triggers MM purchase order in supplying company. Delivery and billing flow between company codes. Goods issue for SD delivery uses MT 601.
EWM / WM	Physical stock managed in Extended Warehouse Management. MM posts logical goods movement; EWM/WM handles physical warehouse tasks (put-away, picking, transfer orders).
CO	Purchase price variances on standard-priced materials post to price difference accounts in CO. Activity allocation for warehouse operations can be linked to MM movements via internal orders.

Best Practices

1. Maintain purchasing info records proactively — they are the price reference for POs, MIRO tolerance checks, and vendor comparison reports.
2. Use outline agreements (contracts/scheduling agreements) for repeat procurement — reduces PO creation effort and enforces negotiated prices.
3. Configure tolerance keys (OMR6) aligned with business risk appetite — too tight creates excessive blocking; too loose loses the control value.
4. Implement evaluated receipt settlement (ERS) for high-volume, trusted vendors — system auto-creates MIRO from GR without paper invoice; eliminates invoice processing overhead.
5. Monitor GR/IR clearing account aging weekly — items older than 30 days indicate process failures (GR posted, invoice not received, or vice versa) that require resolution before period close.

Procurement Scenarios

Standard Procurement (PR → PO → GR → IR)

Complete P2P flow:

• PR creation (ME51N), account assignment (cost center/asset/order)
• RFQ optional (ME41) for new materials
• PO creation (ME21N), release strategy approval
• Goods receipt (MIGO, movement type 101) posts to stock + GR/IR clearing
• Invoice verification (MIRO), three-way match: PO qty = GR qty = IR qty
• Document types: NB (standard), FO (framework), UB (stock transfer)

Contract Release Order

Outline agreements with release orders:

• Value contract (ME31K) — e.g., "€500,000 for Q1 services"
• Quantity contract — e.g., "10,000 units of material X"
• Scheduling agreement (ME31L) with delivery schedule
• Release order references the contract, tracks consumption against target
• No re-approval per release once contract approved

Third-Party Order

Direct vendor-to-customer delivery (no inventory touch):

• Sales order with item category TAS
• Schedule line category CS triggers PR automatically
• PR converted to PO with shipping address = customer
• Vendor ships directly to customer, sends ASN
• IR creates vendor payable; customer invoice from SD billing
• No goods movement in MM

Consignment

Vendor-owned stock held at buyer's plant:

• Consignment info record (ME11) with consignment conditions
• Consignment PO (ME21N, item category K)
• Goods receipt (MIGO, MvT 101) — stock held as K (consignment)
• Consumption triggers KB movement (consignment to plant stock) + liability
• Monthly settlement (MRKO) generates vendor invoice

Subcontracting

Vendor processes buyer-provided components:

• BOM for subcontracted material (CS01)
• PO with item category L (subcontracting)
• Provide components: MB1B movement type 541 (transfer to vendor stock O)
• GR of finished material: MIGO 101 auto-consumes components (MvT 543)
• Three-way match on PO value (service fee, not material value)

Release Strategy Configuration

Release strategies control procurement approval workflow:

• Release group — document class (M3 for PR, M1 for PO)
• Release code — approver role (K1 = Dept Head, K2 = Plant Manager)
• Release indicator — effect of release (can change, locked, etc.)
• Release prerequisite — sequence of approvals

Typical PR release strategy by value:

PR Value	Approvers Required
< €1,000	None (auto-release)
€1,000 - €10,000	Department Head
€10,000 - €100,000	Dept Head + Plant Manager
> €100,000	All above + Finance Director

Configuration: OMGS (characteristic values), OMGQ (classification). Assignments via PFCG role.

Material Master Views Detail

View	Purpose	Required For
Basic Data 1	General attributes, base UoM	All materials
Basic Data 2	Additional descriptions	All materials
Purchasing	Purchasing group, order unit	Procured materials
Purchase Order Text	Free text shown on PO	Optional
Foreign Trade	Export/import commodity code	International
MRP 1	MRP type, controller, lot-sizing	MRP-relevant
MRP 2	Procurement type, scheduling margins	MRP-relevant
MRP 3	Forecasting, planning strategy	MRP-relevant
MRP 4	BOM selection, repetitive mfg	Production
Forecasting	Forecast models, history	Deterministic
Work Scheduling	Production scheduler	Made-in-house
Plant Data/Storage	Storage conditions, temperature	All materials
Warehouse Management	Bin, storage type	WM/EWM managed
Accounting 1	Valuation class, price control	All valuated
Accounting 2	Standard price, moving avg	All valuated
Costing 1	Costing variant, lot size	Product costing
Costing 2	Cost component split	Product costing

MRP Parameters Reference

Parameter	Option	Meaning
MRP Type	PD	Deterministic MRP
MRP Type	VB	Manual reorder point
MRP Type	V1	Automatic reorder point
Lot-Sizing	EX	Lot-for-lot (exact)
Lot-Sizing	FX	Fixed lot size
Lot-Sizing	WB	Weekly lot
Planning Strategy	10	Make-to-stock
Planning Strategy	20	Make-to-order
Planning Strategy	40	Planning with final assembly
Planning Strategy	52	Planning without final assembly
Safety Stock	Quantity	Buffer against variability
Reorder Point	Quantity	Replenishment trigger

Common MM Issues

• Material ledger activation is irreversible — Changes costing/valuation approach; evaluate carefully before turning on
• Batch management activation is one-way — Cannot be deactivated once active; impacts all processes
• Split valuation complications — Multiple valuation types per material multiplies config complexity
• Source list mandatory (OME5) — If mandatory, PO creation blocked without a valid source; check OME5 config
• Output determination failures — Check NAST table for output status, MN04 for condition records, MN21 for output type config

Verification

This skill is complete ONLY when ALL of the following are true:

• Material master views confirmed complete for all intended business processes before procurement begins
• Three-way match configuration reviewed — tolerance keys, blocking reasons, and release workflow confirmed
• Purchase orders reference source determination (contract, source list, or documented exception)
• MRP master data (BOM, routing, info record, planning parameters) verified complete before MRP run
• GR/IR clearing account monitoring process defined and assigned to an owner for period-end
• Business Partner model confirmed active in S/4HANA (BP transaction) vs. ECC (MK01/XK01)

Evidence required: Material master view list, MIRO tolerance key configuration, MD04 stock/requirements list showing correct MRP output — not generic MM descriptions.

Next Skill

After completing MM work, invoke:

• fi — For GR/IR clearing, invoice posting to FI, and period-end close
• co — For purchase price variances, material ledger, and cost object assignments
• verification-before-completion — Before closing any MM deliverable

Related Skills

• fi — Financial Accounting: GR/IR clearing, invoice verification postings, AP payment
• co — Controlling: purchase price variances, material ledger, production order costs
• sd — Sales and Distribution: intercompany procurement, goods issue for delivery
• ewm — Extended Warehouse Management: physical goods movements, put-away, picking
• analytics — MM reporting: purchase order analytics, inventory analysis CDS views
• abap-cloud — Custom MM enhancements: BAdIs for pricing, output, and GR processing