Create a material master: MM01 - SAP ERP Tutorial

- [Instructor] Manufacturing in SAP relies on well-defined master data. Now, let's take a look at the importance of material master records for production planning. Material masters are created for any products the company will want to keep in inventory. For example, they can be created for raw materials, packaging materials, semi-finished goods, or the finished products that will be sold to our customers. Material masters are typically set up by the departments that focus on the materials management module in SAP, but there are certain views in certain fields that are critical for the production planning processes to take place. We're going to create a material master for a finished product, and we'll look specifically at the important views in the fields from a production planning perspective. To create a material in our system we'll use transaction code MM01 and press enter. The first field we have available is material. We're going to leave this blank and allow the system to assign a material number for us. Next, under material type we'll select finished product. Our material type is going to dictate the views we have available to edit. We'll press enter and now we can select our views. We'll choose basic data one, sales org data two, MRP one, MRP two, MRP three, MRP four, and finally work scheduling. Next we'll click organizational levels. We want to extend this material to a plant as we create it. So we'll enter Plant 1710, and press continue. We can see that our material has been assigned a number by the system. It's material number two, three, four. Next, we need to enter our descriptions. We're creating a pack of pencils so we'll call this pack of pencils. Next, we need to enter our basic unit of measure. We'll sell these packages as eaches so we'll enter EA in this field. Now we'll press enter to move to the next view. This brings us to sales organization two view. Here, we need to enter our general item category group. Let's look at our options by clicking the match code button. We're creating a standard item so we want to select norm, we'll press enter again to move to MRP one view. MRP stands for material requirements planning. In this view, the first field we want to look at is MRP type. This field is crucial because here we're telling the system generally how we want to plan for this material. Let's look at our options. We'll choose option PD forecast consumption, no planning time fence. we're choosing PD because it takes into account all incoming sales orders and any stock transfer requirements, and then plans based on that information. Basically, this setting is telling the system, look at all of our upcoming needs and to plan to meet the requirements. As we can see, there are many options here. Alternatively, we could set this up based on our historical sales data. We'll scroll down and next we'll look at the MRP controller field. The MRP controller is responsible for ensuring we have all the right materials at the right time to meet the needs of the business. We'll choose MRP controller 001. Next we'll look at lot sizing procedure field. Lot sizing helps specify the quantity that should be proposed by the system when it sees a shortage. Let's look at our lot sizing procedure options. We'll use EX, which is an exact match lot for lot order quantity. That means if this system sees will be 10 units short, it'll propose exactly 10 more to meet that demand. Now we'll press enter. This takes us to the MRP two view. Here, we'll look at the procurement type field. This is how our material is procured. We'll look at our options by clicking the match code button. We can see that we could choose that our material can be produced in-house, bought externally, or both. We'll change this to E for in-house production. Now we'll scroll down to the scheduling area. In scheduling, we'll look at the in-house production field. This is the number of days required to produce the material. This is based on workdays specified in the factory calendar. We're going to say, once we initiate the process, it's going to take one Workday to produce our pack of pencils. Now we'll press enter to advance the MRP three screen. In the MRP three screen, we will look at the strategy group field. To do this, we'll click the magical button and look at our options. The planning strategy is a really important field for the demand management side of our production planning because it denotes whether we have a make to stock, a make to order or a different kind of material. Again, we'll click the magical button in our strategy group field, and we'll choose make to stock. Make to stock is when we're making a product so we can put it in inventory and then sell it to customers as needed. Make to order is when we manufacturer specifically to meet our sales orders. Now we'll click the check mark to adopt this. We'll again press enter and we advanced to the MRP four screen. An important field on our MRP four view is the component scrap percentage field. When producing some products, some of the components may become scrap. In that case, we have to order more material. This is the field where we tell the system that percentage. We're going to keep it simple, and we're not going to enter any scrap here. We'll scroll down and look at the repetitive manufacturing area. If this was a product using repetitive manufacturing, we would click the check box and enter a profile here. Now we'll press enter and that brings us to our work scheduling view. This view controls production orders and how they're executed. We can designate our storage location after we produced the finished goods. We'll do that in a production storage location field. We'll choose storage location 171A. The serial number profile field allows us to let the system know this material should have a serial number associated. We're now ready to save our material. To do this, we'll click save in the bottom right corner. We can see that our material 234 has been created in the system. This material master is available across many modules of SAP, and we're now able to use this finished product in our production planning business processes.