SAP Products and Services

Use

Products and services are combined in the SAP R/3 System under the term material. All information necessary for the management of a material and its stocks, as well as its use, is maintained in the so-called material master record. This includes, for example, data on purchasing, on sales and on storage.

Different company areas and SAP modules access the material master records, which therefore must meet a wide variety of requirements. During sales processing, the system repeatedly accesses the material master records. It is one of the basic sources of data for sales processing. The material master record is accessed, for example, in the inquiry, in the quotation and in the sales order. Data in the material master record is also of great importance for shipping and billing. However, the data required for shipping, for example, is not the same as that required for sales or billing.

SAP Material Types

Use

Material types in the SAP standard version are, for example, raw materials, trading goods, semi-finished products, finished products, or services. The material type represents certain features of materials in the system, and has important control functions: the material type is used, among other things, to group field selection functions for a material, or to define the screen sequence, the type of number assignment and number ranges during material master record maintenance. Depending on the material type, company areas maintain different data screens. This screen selection applying specifically to an application is called a "view".

The following are examples of possible material types in the SAP standard version:

• Trading Goods

• Non-stock Material

• Services

• Packaging Material

Trading Goods

Trading goods are movable goods intended for commercial exchange. Examples of trading goods are market goods, consumption goods and durable goods. Trading goods are always bought and re-sold by your company. The material master record for trading goods therefore always contains purchasing data and sales data. Trading goods are managed in the SAP R/3 System using the key HAWA.

Non-stock Material

Non-stock material includes materials that are not managed on an inventory basis (for example, small parts such as nails) though physically in stock. Non-stock materials are managed in the SAP System using the key NLAG.

Services

Services are represented and managed in the SAP System as materials. Services are immaterial goods that differ from other goods, particularly in that their production and consumption coincide. Services are generally regarded as non-transportable and non-stockable. Typical services are commercial services, transport services, bank and insurance services, goods from cultural organizations and the mass media, as well as services provided by the public security forces or the education and health sectors.

Since services cannot be stored, a material master record of this material type does not contain inventory data or inventory management data. No fields for gross weight, net weight or unit of weight are included in the basic data for a service, as are for other material types. Services are managed in the SAP R/3 System with the key DIEN.

Packaging Material

This material type includes all materials needed for packaging. For example, boxes or crates. Packaging materials are managed in the SAP R/3 System with the key VERP.

Other Material

Materials which cannot be assigned to any of the standard material types, can be maintained, as "Other material". Thus, besides standard material types (trading goods, finished products, services etc.) you can also create additional material types. When creating such a material, note that a material type must be entered on the first data screen. For standard material types, this entry is not necessary because the material type is selected in the menu.

SAP Industry Sectors

Industry sectors indicate the assignment of a material to a certain branch of industry (for example, plant engineering and construction, chemical industry, mechanical engineering, and pharmaceuticals industry).

Use

Like the material type, the industry key also has important control functions. It determines, for example, the selection of data fields on screens or the screen sequence. The subdivision into different industry sectors is necessary because, for example, a material in the chemical industry, such as a chemical solution, differs from a material in mechanical engineering in its basic characteristics.

In the standard version of the SAP R/3 System, the following industry sectors have been defined for the material master record:

Industry Sectors in the Standard Version of the SAP R/3 System:

Industry key	Industry sector
A	Plant engineering and construction
C	Chemical
M	Mechanical engineering
P	Pharmaceutical

SAP Organizational Structure of the Material Master Record

Use

Each company has a specific structure and a typical organization. This is represented in the SAP R/3 System as an organizational structure. A certain part of the organizational structure is relevant for every company area.

Organizational Levels

An organizational structure consists of several organizational levels. These are used by different company areas. The organizational levels sales organization and distribution channel are, for example, used exclusively by sales and distribution while plant and storage location are shared by sales and distribution and materials management.

The sales and distribution data for a material is managed at the organizational levels client, plant, sales organization and distribution channel. Therefore, you have to enter the plant, the sales organization and the distribution channel for which you want to change a material master record.

If a material which is available both in plant 1 and plant 2 is to be changed in plant 1, enter only that plant number. You then only get the plant data for this material in plant 1. If you only enter the sales organization and the distribution channel, then you get the sales-specific data without plant data.

Using the organizational level distribution channel, you can, for example, sell materials with different conditions. The prices agreed for distribution channel wholesale trade, for example, are not the same as those for distribution channel retail sales.

SAP Data Structure of the Material Master Record

Use

All data and information entered for a material is stored in the data structure of the material master record. For sales and distribution, general data and sales and distribution data in the material master record are relevant.

General data

General data in a material master record is identical for every sales organization, plant and storage location. General data, which is of importance for all departments, is always entered by the department which creates the first part or view of the master record. General data contains, for example, the material number that identifies it, the material description, units of measure, value, weight, volume and divisions.

Sales and Distribution Data

Sales and distribution data in a material master record is defined for a specific sales organization and distribution channel. The delivering plant, the assignment to the sales group, grouping terms for price agreements and sales texts, for example, are included in sales and distribution data. The fact that a material is linked to a distribution channel allows the material to be sold with different conditions through the various distribution channels.

Sales and distribution data is divided into data that depends on the sales organization and data that depends on the plant:

• Sales organization/distribution channel data

This data includes the delivering plant, the sales unit, the minimum order quantity and the minimum delivery quantity.

• Plant data

This data applies to a plant and all its storage locations. Examples of plant data are MRP data, such as the safety stock quantity, the reorder level, or the shipping processing time.

SAP Maintenance Status in the Material Master Record

Use

Every material master record has a maintenance status that indicates the department-specific view from which a master record is maintained.

The maintenance status is automatically updated and managed by the system.

As soon as a material master record, is maintained, for example, by sales and distribution, the indicator in the maintenance status is automatically set to V. If it is also maintained by purchasing, the system adds E to the maintenance status indicator. The same material master record can be maintained, for example, by sales and distribution and by purchasing, but not by accounting. The master record then would have the maintenance status V and E but not B (accounting).

You can display which departments have not yet maintained a material master record. For further information on this, see Maintaining a Material Master Record.

SAP Sales and Distribution Screens in the Material Master Record

Four screens in the material master record are relevant for sales and distribution:

• Sales 1

• Sales 2

• Sales/Plant Data

• Texts in Sales and Distribution

Use

The following overview includes a short description of the individual sales and distribution screens, and lists the important data fields found on these screens.

Sales and distribution screens	Description and important data fields
Sales 1	Basic data and units of measure (e.g. sales units, order quantities)
Sales 2	Material groupings and tax classification (e.g. product hierarchy, material pricing group)
Sales/Plant Data	Sales and shipping data (e.g. gross weight, loading group)
Texts in Sales and Distribution	Single-line or multi-line texts for sales documents, in several languages

SAP Grouping Materials

Use

Materials can be grouped according to different criteria. This allows for easier management and better evaluation of materials with similar features. The standard version of the SAP R/3 System does not provide exact criteria to differentiate between individual groupings. These result from company-specific applications. The materials can therefore be grouped by the company to meet their specific demands. The groupings are determined and defined by the system administrator. Contact him, if you have questions concerning the existing groupings.

In the standard version of the SAP R/3 System the following groupings are possible, for example:

• Material Group

• Material Pricing Group

• Product Hierarchy

Material Group

Goods with the same features (for example, nails) can be grouped using the field Material group. Unlike the product hierarchy, the material group does not contain different levels or possible combinations of goods. You can, however, use the material group to carry out different analysis functions.

The material group is defined by a nine-digit, alphanumeric key. It is not primarily of importance for sales and distribution, but is used mainly in materials management.

Material Pricing Group

A further option for grouping materials is represented by the material pricing group. This can be used both for pricing as well as for evaluation and analysis. The material pricing group is defined by a two-digit, numeric key.

Product Hierarchy

The product hierarchy is used to group materials by combining different features. It is used for analyses and pricing. A product hierarchy can consist of up to eighteen characters. Its features can be combined in various ways. The following figure gives an example of how materials can be grouped using product hierarchies.

In this case, a dishwasher can be described by product hierarchy 00010000200000002. This series of characters states that dishwashers belong to the category electrical appliances (series of characters 00001, position 1-5), and also to wet appliances (series of characters 00002, position 6-10) and, finally, to dishwashers (series of characters 00000002, position 11-18).

SAP Units of Measure and Quantity Specifications

Units of Measure

A material can be stored, transported and sold in various units of measure. In the SAP R/3 System, you can therefore define various units of measure which are maintained in the sales and distribution screens. However, you only need to maintain the fields of the units of measure if they deviate from the base unit of measure. If no other fields with units of measure are maintained, the system automatically takes the base unit of measure as a basis for its calculations. You can enter the following units of measure in the sales and distribution screens:

• Base Unit of Measure

• Alternative Unit of Measure

• Sales Unit

• Delivery Unit

Base Unit of Measure

Stocks of a material are managed in the base unit of measure. All quantity movements in other units of measure are converted automatically by the system into the base unit of measure.

Alternative Unit of Measure

As soon as units of measures other than the base unit of measure are used in a material master record, the system prompts you in a dialog box to enter a calculation factor to the base unit of measure, the so-called alternative unit of measure. The alternative unit of measure does not refer to an entry field in one of the sales and distribution screens. It is either requested in a dialog box or entered on a secondary screen, which you can access by pressing F5 (Unit of measure). Several alternative units of measure can be defined.

If, for example, a product is managed in the base unit of measure "Piece" but is sold in the sales unit "Box", you must define the conversion factor. The alternative unit of measure can define, for example, that 1 box of this material contains 12 pieces.

Sales Unit

The unit of measure in which materials are sold is referred to as a sales unit (for example, piece or bottle). The value you define in the material master record is proposed during business transactions relevant for sales, such as the sales order. You can replace them with other alternative units of measure in the sales order.

Delivery Unit

The delivery unit refers to the unit in which materials can be delivered. Only exact multiples of the delivery unit can be delivered. For example, with a delivery unit of 30 bottles, 30, 60 or 90 bottles can be delivered, but not 100 bottles.

Quantity Specifications

Two different quantity specifications are used:

• Minimum Order Quantity

• Minimum Delivery Quantity

Minimum Order Quantity

The minimum order quantity refers to the minimum quantity the customer must order. A warning message appears if the minimum order quantity is not reached during order entry. The order can be entered in spite of the warning message.

Minimum Delivery Quantity

The minimum delivery quantity refers to the minimum quantity you must deliver to the customer. The minimum delivery quantity is automatically checked during delivery processing. A warning message appears during delivery processing if you enter a delivery quantity lower than the minimum delivery quantity. The delivery can be created in spite of this warning message.

SAP Delivering Plants

The delivering plant refers to the plant from which the goods are to be delivered to the customer, within a specific sales organization and distribution channel. The plant can be automatically proposed by the system when processing a sales order, if it has been maintained in one of the master records. It can be derived from:

• the customer/product info record

• the customer master record of the ship-to party

• the material master record.

The order of priority is as in the list above.

SAP Item Category Groups

Use

The item category group determines how a material is processed in the sales order. It defines, for example, that pricing does not take place for a free of charge item, such as a business gift; or that inventory management is not carried out for a service. When processing sales and distribution documents, the system uses the item category group to determine the item category. The system determines the item category based on the item category group of the material and the current business transaction, and proposes it in the respective document.

When creating the material types non-stock material and services, DIEN is proposed in both cases for the item category group, because the order processing for both material types is identical: for example, pricing is carried out for both, but no availability check.

SAP Number Assignment for Material Master Records

Use

The material number can either be entered externally by the user, or assigned internally by the system. Both internal and external number assignment is possible. If you do not enter a material number when creating a material master record, the system automatically carries out internal number assignment.

SAP Creating a Material Master Record

There are two ways of creating a material master record:

• A new material master record is created with or without reference. It is mainly the responsibility of materials management to create new material master records in the system.

• An existing material master record is extended by creating new segments for other company areas. Thus, a view which has not yet been maintained is added to the material master record.

This documentation describes the material master record exclusively from the sales view. Therefore, the following description refers to adding new views to already existing material master records.

Steps:

Using the example of trading goods (HAWA), the section below describes how to extend a material master record. You proceed in the same way for other material types.

1. In the
SD Master Data Screen select, Products ® Material ® Trading goods ®Create.

The Create Material: Initial Screen.

2. Enter the number of the material whose sales and distribution screens you want to maintain.
3. Press ENTER.

The system issues a message telling you that the industry sector has automatically been transferred from the master record.

4. Press ENTER.

A dialog box appears from which you can select the views which you want to work with.

5. Select the sales views you want to maintain.

By selecting views you define an individual screen sequence. If you do not select any new views you receive a system error message:

Material already maintained for this transaction/event.

6. Press ENTER.

Another dialog box appears in which you specify the organizational level at which you want to carry out the change.

7. Enter a valid combination of plant, sales organization and distribution channel to define the organizational level.
8. Press ENTER to reach step by step the data screen you want to edit.

Edit these data screens. You must at least enter data in the required fields.

After you have edited the last data screen, a dialog box appears in which you see the system message that the editing process will end. Select Yes to save your material data.

9. You return to the screen Create Trading Goods: Initial Screen, where the following system message is displayed:

Material created.

This concludes the processing. You have extended the material master record by adding new sales views.

Sales prices are determined by conditions. You will find a detailed description of how material prices and sales prices are calculated in the SD Guide to Pricing and Conditions. In the material master record you can access the price condition screen by selecting Extras ® Sales Details ® Price in the menu and maintain the material price.

SAP Deleting a Material Master Record

A material may have to be marked for deletion, if it is no longer offered as a product. If a material has been marked for deletion, an error message appears during order entry or delivery processing, which blocks these transactions.

Steps:

You can mark a material of the material type "trading goods" for deletion by using the following steps:

1. In the
SD Master Data Screen select, Products ® Material ® Trading goods ®Change.

You reach the Change Material: Initial Screen.

2. In the menu bar, select Material
® Set deletion flag ® Immediately.

You reach the screen Flag Material for Deletion: Initial Screen, in which you enter the material, as well as the data on the organizational level.

3. Press ENTER.

You reach anotherDisplay screen.

4. In the left column mark the material and the organizational level at which you want to mark the material for deletion.
5. Press ENTER.

The material is marked for deletion.

A deletion flag cannot be cancelled. However, a material is only deleted during archiving, if all business transactions depending on it have been concluded.

SAP Blocking a Material Master Record Sales Status

If a material has technical defects or is to be discontinued, you can block the material.

If you set a block, orders, deliveries and invoices containing this material cannot be created at all, or only with a warning message. The system reactions to a blocked material depends on the type of block set.

Steps:

You use the same procedure to block all material types. To block trading goods, for example, use the following steps:

1. In the
SD Master Data Screen select, Products ® Material ® Trading goods ®Change.

You reach the Change Material: Initial Screen.

2. Enter the trading goods you want to block.
3. Press ENTER.

A dialog box appears in which you can select a view.

4. Select view Sales 1
5. Press ENTER.

Another dialog box appears in which you must define the organizational level.

6. Enter a valid combination of plant, sales organization and distribution channel.
7. Press ENTER.

You reach the Change Material: Sales (1) screen.

8. Enter a blocking reason in the Sales status field.
9. Press ENTER.
10. Save the data record and return to the initial screen. You receive a message informing you that the material has been changed.

Maintaining a Material Master Record

Since different company areas access a material master record, it can happen that a material master record already exists for other company areas, but has not yet been maintained for your area.

You can use the function Maintain material to add new views to an existing material master record. In contrast to changing a material master record, you add new views to the data records when maintaining. The main difference between maintaining a material master record and creating it, in the sense of adding another view, is that, when maintaining, more selection criteria are available to you. These selection criteria are not available for the function Change and Create.

The maintenance status tells you which department has already maintained the material master record. For more information on the maintenance status of a material master record, see Maintenance Status in the Material Master Record.

Steps:

Use the following steps to maintain a material master record:

1. In the
SD Master Data Screen select, Products ® Material ® Maintain material.

You reach the Extendable Mat.view(s): Initial Screen, on which you can enter various selection criteria, such as maintenance status, plant, sales organization, etc. The entries in the fields displayed offer you a flexible way of searching. You can limit the search by combining criteria and select specifically: you can search for all materials, for example, which have not yet been maintained from a certain view and belong to a certain industry sector. You can combine any criteria.

2. Enter the sales organization for whose materials you want to maintain certain views.
3. Select Execute.

You receive a list of all materials which have not yet been maintained from the view entered (i.e. sales).

4. Select the material you want to edit, by marking it at the left screen border.
5. Press Actions
® Maintain materials.

You reach the department-specific data screens of the material master record, which you can now maintain.

6. When you want to exit the material master record, the system prompts you to save the data.
7. Save your work.

You return to the initial menu where you see the system message

Material exists and is being extended.

Defining Defaults for a Material Master Record

If you want to always work with the same views (for example, the sales screens), at the same organizational level or within the same industry sector, you do not need to enter all these specification every time you carry out a transaction in the material master record. You can define defaults for each user.

Steps:

If you want to define a certain view selection as a default, you must select a material type such as trading goods, to reach the data screen in which you define the defaults. Defining defaults other material types is done in the same way. Proceed as follows:

1. In the
SD Master Data Screen select, Products ® Material ® Trading goods ®Change.

You reach the Change Material: Initial Screen.

2. In the menu bar, select Defaults.

You see a pull-down menu with the options Industry sector, Views and Organizational levels.

3. Select the menu option Views.

A dialog box appears from which you can select the views which you want to work with.

4. Select your views as required. In addition, mark the field View selection only on request.
5. Press ENTER.

You have now defined a default for view selection. When you edit a material master record, the dialog box for view selection is no longer displayed and you automatically access the predefined views.

In the same way, you can suppress the selection of the organizational level or the industry sector for processing a material master record. The use of defaults speeds up access to material master records.

Cancelling Defaults

To cancel a default, repeat the described procedure and delete the check mark in the View selection only on request field.