Any kind of business process, if you want to perform any transaction if you want to know profitability, so, first of all you should have some type of masters now masters like good material masters when to master customer master. Now if you have a master data then after that what you can do to perform some transactions on this master data. Now, what are these transactions like your purchase order is your transaction will be our acquisition is your transaction your sales order is a transaction fine now, you have a master data on basis of masters you perform through transactions. Now you have a complete detail about your business now on basis of these two we can get so many different kinds of reports like what is your what was my purchase price gradients? What was the difference between my last purchase price, what is my current inventory aging The vendor classification ate last winter beat last fantasy class vendor in a similar way if we talk about the inventory part specifically, then different inventory analysis like ABC analysis excellence and analysis, we can have a listing of our slow moving item fast going out item.

So, basically if I were these details, so, you can get your report very easily. Like I said, initially, first thing we need a master data. So here we'll see that what are the masters required for our procurement process? This is an example of open purchase order. Suppose if you want to purchase a material, first thing What do you need initially, first of all you need material DDL, which you want to block you. Then you need a source source.

Here your sources vendor master. So initially, we need a material master vendor master. Now on basis of this material master vendor Master, we can generate some kind of purchase info record which will help us during our transaction data like if you want to know the previous purchase price of material then you can get this detail by using purchasing for a god this is a one by Dale master you see material master will have a so many different views. It again depend on module to Module few wheels are important for your purchasing while others are important for sales and distribution in a similar way. Quality Management and production planning SAP is one integrated software. So, whenever we talk about a module like Mmm, so there will be integration between other modules amendment FA MSD this way, so initially in my Delmas We enter DDL which is required for the procurement first.

Second, if you want to monitor the quality of your product, then we'll enter details related to quality. So here, your M and qm quality management comes into picture, the integration comes in picture. In a similar way, we'll enter our financial details. So the FAA will comes in picture. So here is the screen. The first part, this is a material master for flat screen TV makes Sony fine now, simply I'll enter a short description of a project based setup measurement upper unit enrich, this metal will be handled and metallic grouping.

Now, SAP we have a very beautiful function of to get the reports suppose if you want to know the summary board about your product key so one way is that you can enter your material numbers individually okay? Other ways that you simply enter one single p that is your material group. So, basically ngmodel group is a grouping offer similar kind of product. Now, this zipper is in blue as far as M is concerned purchasing goods very important. So, in purchasing glue this is our purchasing group as I said earlier also purchase group is the person responsible for this document all we can say it is a buyer code Okay. Now, apart from this we have other functions like plant is perceived my daily status, what happened in industries, suppose industries running since a long time so, they have a very large database for their material, but there are few materials which are considered as an activity, the rest all materials are in active material.

So, in that case, we can block materials for procurement For inventory management for quotation and all this function, so, this purchase to plant is present material status is about blocking off material then dancer purchase well you can see if I talk about the role of buyer what is the role of buyer. So, the role of buyer is to get firstly to get material right time then correct price and required quantity This is a three primary objective offer buyer. Now, to achieve this objective there are a few tools which you can use suppose, if I talk about delivery parts so this purchase were lucky. This one helped him in smooth delivery How? Suppose you arranged one purchase order to a vendor now, bad we'll have to perform some kind of duties Delivery follow up so that delivery follow up can be automated by using this purchase lead up what we can do, we can send it some kind of expenditures or reminder to our vendor suppose I'll say that my first level of reminder will go 10 days prior to delivery date, it means if my delivery date is on 10th, then on first system will automatically generate one email alert to my vendor by saying that your material is deliberate is about to reach be prepared for dispatch in a similar way.

Suppose if bender missed that delivery, then a second level of reminder can be triggered automatically, which will have a certain detail about the penalty clause and all that in in this way we can use this reminder. Basically, it will help the buyer to reduce his workload Accounting see any type of material what we create in SAP see the business has one prime objective the business prime objective is to know or generate the profit okay. So, to lower profitability, we have to use some kind of accounting practices. So, here we have one resolution Class C this resolution class is a one key, which is which act as a bridge between your mn and F fi whatever you are procuring in mm for those item cost will be booked in FA also the books of account. So, this is achieved by using this valuation class. If we talk about the material types, see, when we want to purchase the material, so, we can divide material on basis of data Nature like raw material packaging semi finish finished this parent tells you So, let us understand that what is need of this material type.

Now, I'll just tell you the example between raw material and semi finished, why it is called raw material, because, we will only procure from outside market that So, it is called as raw material or this product will be consumed for my production process, while if I say semi finished material. So, the nature of semi finished material is that I can procure from outside market as well as again produce in households it means, in case of raw material, there will be only external procurement while in case of a semi finished material. I'll have both the functions external procurement as well as internal production. So, if I talk about the production so I needed certain setup related to production. That's why data here is different material type. Secondly, suppose you want some kind of number assignment.

Suppose you want that your raw material should start from one zero, well packaging should start from 207 finish three zero in this way. So, we can separate different number ranges for different material types. Okay, apart from that there are some kind of enhancements suppose purchase value key should be used as a mandatory filter for raw material, but it shouldn't be considered as a mandatory field for semi finished material. So, these type of validations and an assessment can also be achieved by using different material types. The first was material second, a vendor master. Okay, so vendor is stable Play a master or a particular supplier from which we want to get material or we want to purchase this material.

So, in vendor master we simply enter the communication detail the address, bank detail control detail. Apart from that there are some transaction related details like payment transaction whenever we discuss or negotiate with vendors. So, first of all we'll talk about pricing. Then we'll talk about delivery of material. And finally, we'll talk about the payment terms like vendor will ask me that I want payment 30 days after of delivery date. Okay, this is one payment example.

In a similar way, we can have a so many payment in SAP there are some standard payment terms which are available but if you want to create your own momentum as per the need of your business, then we can create a payment. Now, as I said, that is In case of a material we can block certain material then that thing is applicable to vendor also. Suppose you have a large base of vendor, okay and if you have a large base of vendor then it is very difficult to manage all these factors. So, what we can do we can set up a one benchmark let's say I'll have only 400 vendor active at a time Okay, rest all will be in blog the condition it means I can block and block by vendor as per my need. So here, this is about buy the master record, initially general data then comes purchasing organization related data.

Then comes purchasing in accounting data. This is one screen about enter master. As I said, this screen will have all the communication details like name of the company system Address postal code country and all that I mean a detail on where you want to send some kind of email alert or some kind of automatic SMS This is the one screen which is telling about the purchasing data okay. So, first of all here first thing is order currency order currency is the currency in which this vendor is going to deal with us. Secondly come terms of payment. Here I have mentioned Sita dc 30 simply means 30 days after delivery.

But suppose if I enter any payment I mean my vendor master then at the time of purchase or the creation this vendor master will be copied in my purchase. So, naturally this payment will also get copied. Now, we'll have option that we can follow this payment term or we can enter a new payment dumb act purchase order level also This'll this will be considered as a one benchmark for vendor payment, but you can change it at the time of purchase or the next master contains your source rates simply a source list is a relationship between your friend and material pieces of this source list we can control a pyramid of our material, how suppose your company wants to purchase some kind of air conditioner okay and as per their previous understanding, they figured out that let's say that the GMAT conditions are very good okay, but they have other suppliers also.

So what they can do here, they can maintain a source list in this way for this item for this client, during this validity period, you can purchase from this vendor on the If we want to purchase from any other vendor then system will simply give you an error message that purchasing is not allowed it or source is not defined. What we are doing here we are putting a restriction on our buyer or we are making our system for this source list is also used for automatic purchase order creation because in SAP if we have suppose for what we need for automation, for automation, we need a certain prerequisites. If you're pleased with that matching, then we can automate any process so, for purchase order creation, your prerequisite is, what material you want to purchase. Then, from which vendor you want to purchase and what price you want.

Then, so here by using this source list, we'll have a vendor and behind it we'll have a one purchase info record in purchasing for record will have a price Basically the source list is used to for late contract procurement or scheduling agreements.