Q1: What is SAP MM?
Answer: MM means Material Management. It is a functional module in SAP. It deals with the procurement process and the management of materials. It has master data, material valuation, invoice verification, material requirement planning, etc.
Q2: What are the advantages of SAP material management?
- Multi-location inventory
- Inventory replenishment
- Product life cycle management
- Material valuation
- The lot and serial traceability
- Bin management
- Scheduling and resourcing
Q3: What are the necessary components of SAP material management?
- Vendor Selection
- Order Processing
- Order follow up
- Invoice Verification
- Source determination
- Determine requirements
- Goods receipts and Inventory management
Q4: Name the different types of stocks
Answer: There are three different types of stocks;
- Valuated Stock
- Non-valuated stock
- Special Stock
Where the valuated stock is further divided into three parts- Unrestricted stock, Blocked stock, and Quality Inspection Stock, and Special Stock is classified as Stock Transport Order, Subcontracting, Consignment, Returnable Transport Packaging, Stock Transport Order, Pipeline Handling, and Third Party Processing.
Q5: What is Consignment Stock?
Answer: Consignment stocks mean those materials that are still available in the store premises, but it belongs to the owner or seller. When the buyer uses the consignment stocks, he has to pay for it.
Q6: What is Special Procurement?
Answer: Special Procurement in SAP MM means those stocks that do not belong to a company. These are kept at different locations.
Q7: Name some common assignment types in the SAP Material Management system?
- Purchasing organization to company code
- Standard purchasing organization to plant
- Plant to Company code
- Purchasing organization to Plant
Q8: Name different Info record types?
Q9: What is a Purchase Order?
Answer: A purchase order is sent a buyer to his sender to final confirm the requirements. Instead of having the names and quantity of materials, purchase order also has valuable information like details of purchasing company with a company code, name of material along with the corresponding plant, and date for delivery of material.
Q10: What is Internal Procurement?
Answer: In large organizations, there are different separate businesses. With an internal procurement process, the requirements of material and services are gathered from an identical company. However, each of identical company has to maintain a completer bookkeeping system along with separate Profit and Loss statements, Balance Sheets.
Q11: What is External Procurement?
Answer: When the procurement of products or services is done from external vendors, it is known an external procurement. It has three primary forms, such as:
One time orders: This term is used for those goods that are needed irregularly.
Longer-term contracts: This term is used for those materials that are ordered regularly in large quantities.
Longer-term scheduling agreements: This term is used for that material, which is ordered regularly and also in large quantities.
Q12: What is RFQ?
Answer: RFQ is a Request for quotation. It is an invitation that is sent to sellers to submit quotes showing pricing and also terms and conditions. RFQ also has details regarding the date of delivery, goods and services, quantity, and date of submission also.
Q13: How is the document type used in the SAP system?
Answer: The document type is used to indicate different procedures for a transaction in the SAP system.
Q14: How can we use Purchase Info Record?
Answer: It is used to store information about the material and also about that vendor who is supplying that material.
Q15: Name the different Procurement types that you can establish Purchase requisition in SAP MM?
Answer: A purchase requisition is created for the following procurement types;
Stock transfer: Transfer of material within the organization.
Subcontracting: Sending raw material to the seller and getting back finished material.
Standard: Getting back finished material from the seller.
External service: Availing services from third-party sellers like maintenance.
Consignment: Paying to the seller regarding the procuring material that is available on the company’s premises.
Q16: Name some features of SAP material management?
- Non-production stores
- Production and material control
- Material handling
Q17: What do you mean by material requirement planning (MRP)?
Answer: Material requirement planning or MRP is a module in SAP ERP (Enterprise Resource Planning). It is a sort of planning tool to assist procurement and production planners in establishing realistic and possible plans which help to initiate procurement and production procedures swiftly.
Q18: What do you mean by consumption-based planning (CBP)?
Answer: Consumption-based planning or CBP is depended upon past consumption values. It is used to forecast to find out future requirements. These processes in CBP do not rely on the master production schedule. It is activated either when the stock level comes below a particular reorder point or when forecast needs calculating with past consumption values.
Q19: Explain the terms production order and purchase order?
Production order: It decides which material needs to be prepared at which time and location and also concern about the quantity required. It also determines about components and sequence of operations that need to be involved. Moreover, it also concerns about the order costs need to be resolved.
Purchase order: It is issued by a vendor or a factory to supply a certain quantity of products and services at a particular time and location.
Q20: What is the process order in SAP MM?
Answer: When thorough planning and execution of process manufacturing is determined, it is known as process orders. It identifies the production of materials in a production run.
Q21: What is a transaction code in SAP MM or material management?
Answer: T-code is a term used for transaction code. It has numbers of letters or both which are used to enter the command field that is available at the top of the SAP GUI screen. Kindly note that every function in SAP ERP equips with SAP transaction code that is related to it. We can directly look at any function in SAP with the assistance of the transaction code.
Q22: How can you differentiate the terms MRP and CBP?
Answer: The primary difference between CBP and MRP is that when we plan material, we use MRP to predict the requirements of materials based on SOP (sales and operations planning). Moreover, in CBP, we have to forecast the MM (material management) depended upon the historical demand for materials.
Q23: What do you mean by the Master production schedule (MSP)?
Answer: MSP is used to plan for individual commodities that need to produce in each time, such as production, inventory, staffing, etc. It is linked to manufacturing, where the plan shows how much and when each product will be demanded.
Q24: Name the different types of Basic Procurement?
- External vs. Internal Procurement
- Procurement for Stock vs. Consumption
Q25: How can you differentiate procurement for stock vs. consumption?
Procurement for Stock: It means the storage of material in stock. In it, the material gets stored once it received from the seller. The quantity of stock material depends upon the demand for the material. To record all information about the stock, we maintain the master record in the system.
Procurement for Direct Consumption: When the storage of material is used or consumed once it received, it is known as procurement for direct consumption. Before ordering material for consumption, a master record is maintained within the system.
Q26: How can we use SAP MM or Material Management module?
SAP MM is the backbone of the logistics area, which has modules like sales and distribution, project system, plant maintenance, production planning, and material management that is obsessed with the MM Module.
MM module supports all sorts of material management like control, planning, etc.
MM module assists in managing the procurement activity of a company from procurement.
Q27: What steps are involved in Procurement Lifecycle?
Check about the requirements: The procurement process starts with gathering information about the goods and their quantity. Once gathered all the information, the necessary steps are taken to find out the suppliers to satisfy the requirements.
Contact suppliers: After gathering all the information, the next will be to look for suppliers to get the requirements. Then, quotation requests are sent to suppliers to get the best rates.
Review about the background: Once you get known about the suppliers, necessary steps are taken to investigate the suppliers like warranties, maintenance services, etc. that he can offer along with supply.
Negotiation: After reviewing the background, negotiation is done by the buyer. Whatever negotiation is made, it is finalized by an agreement along with other information like delivery date, the quantity of material, etc.
Fulfilment of Order: Finally, the order becomes delivered to the supplier accordingly ordered.
Consumption, Maintenance, and Disposal: Lastly, necessary steps are initiated to consume, maintained, and dispose of the material.
Q28: What is MIRO?
Answer: MIRO means movement in receipt out. It deals with invoice verification activities in terms of bills that raised from the vendor’s end. MIRO is basically used by MIRO.
Q29: What is invoice processing?
Answer: It is used by a company’s account payable to manage supplier invoices. Invoice processing is initiated when an invoice is accepted and ends when it becomes clear, and it becomes shown in the general ledger.
Q30: What is MIGO?
Answer: MIGO means movement in goods out. It is used for those goods that are moving out like from plant to plant transfer, goods receipt, storage location to storage location transfer, etc. The term MIGO is used by the logistics departments.
Q31: What is an RFI?
Answer: RFI means a request for information. It is used for the business process that assembles written information about the competencies of sellers.
Q32: What is an RFP?
Answer: RFP means Request for Proposal. It is a document where a proposal is sent by a company or agency for the acquisition of some goods and services to any potential seller to send business proposals.
Q35: Which steps are used in the RFQ process?
Answer: There are a number of steps used to process RFQ:
First, enter the t-code (transaction code) as ME41, then enter the RFQ type as ‘AN.’
After this, write down the location, i.e., the late date when the seller submits the quotation. Now, enter the purchasing group, delivery date, and other information, and press on the click button.
After this, you will be able to watch a new screen wherein you have to fill the item codes. Now enter the item codes and also the vendor’s details.
Moreover, more requests can be made as per vendors’ details.
Q36: What do you mean by contracts in MM?
Answer: A contract is a document in terms of a long term agreement. It is issued to supply services for a particular period to the vendor. This document is used to release orders when the buyers required.
Q37: What is a purchase requisition?
Answer: It is a primary document to launch a product or supply purchase. It is used as part of the accounting method. With this document, the buyer is able to get an idea about the purchases and also identifies the business requirements.
Q38: What is RTP?
Answer: RTP means returnable transport packaging. It is a multi-trip packaging medium where goods or products are transported more than a single time between customers and retailers.
Q39: How can purchase requisition is created and released in SAP MM?
Answer: With the help of T-code ME51N, a purchase requisition is created with the help of this process:
First, execution of ME51N transaction.
Then, arrange purchase requisition document type: NB
Now source determination: OFF or ON
Now enter heater note, material number, UoM, Quantity, and storage location.
Then, the vendor is automatically decided with source determination.
Now add the tracking number, valuation prices, and final save the transaction data.
Q40: What is the stock population?
Answer: In an inventory sampling, the total of all stock management units is known as the stock population.
Q41: What is a goods receipt and post goods receipt?
Answer: When the physical inbound transfer of material and goods are made into the warehouse is known as Goods receipt. It includes the transfer of those goods that have received from in-plant production or external vendors. Issuing of goods receipt always results in a hike in stock in the warehouse.
When the receipt of goods are posted with reference to the purchase order with which products or goods were ordered are known as a post-goods receipt. When the material is sent with reference to a purchase order, then all departments must make an entry in the system references.
Q42: Why is Material type in SAP MM?
Answer: It is used to group different materials as per some common properties.
Q43: What do you mean by the Outline agreement?
Answer: Outline agreement is a purchase agreement that is made for a long term basis. It is made with the seller having terms and conditions about the goods or material that is needed to send by the seller. This agreement is valid for a particular time, and it covers a specific predefined quantity or value.
Q44: What is Material Master in SAP? How can it be maintained in the SAP system?
Answer: Material master has information regarding different sorts of material such as raw material, finished product. It is used to identify a product, goods issue, goods receipt, purchase material, production confirmation, and MRP.
Use T-code for material master data. Go to logistics, then to production, then master data, then material master, then material, then create, and then immediately.
Q45: How is Posting Period in a company?
Answer: The term posting period in a company is used to define five fields such as;
- Maintain Fiscal Year Variant
- Define Variants for Open Posting Periods
- Open and Close Posting Periods
- Assign Variant to Company Code
- Assign Fiscal Year Variant to Company Code
Q46: What is a Contract in SAP, MM?
Answer: In SAP MM, the contract is a long term agreement that is made between the seller and ordering party for predefined material for a specific framework. Basically, there are two types of contracts.
Quantity Contract: In quality contract, the entire value is mentioned in terms of quantity needed to be supplied by the seller.
Value Contract: In value contract, the entire amount that is needed to be paid by the vendor.
Q 47: What is the difference between the terms RFQ, RFI, and RFP in SAP MM?
Answer: When an invoice is processed, then RFI assembles sellers’ information, RFQ gets the best price for the whole project while RFP creates the best project.
In a case of status of the solution, RFI doesn’t define anything, RFQ defines the details and project clearly, while RFP understands the entire situation.
Moreover, RFI offers information about the sellers, RFQ provides the statement of work regarding a project, while RFP defines pricing details.
Q48: What is the significance of the batch record?
Answer: A batch is used to get about the quality of a particular product that is needed to process or produced simultaneously. It should be noted that the material that is produced in such a batch must have the same attributes and values. Moreover, the batch record ensures information about a specific batch product. It also assists in letting know whether the product has gone through Good Manufacturing Process (GMP) or not.
Q49: How can we amend the standard price in the master material?
Answer: The fact is, we cannot amend or update the standard price for the material data directly. Moreover, when we need to change the standard rate in master material, then some steps need to be followed like:
- Fill up the future field price (MBEW-ZKPRS).
- Fill up useful data (MBEW-ZKDAT) in terms of materials.
- Now select logistics, then material management, then valuation, then valuation price, then determination, then future price.
Q50: What is the purpose of SAP Movement types?
101 Movement Type: It is used for Goods Receipt against the Purchase Order.
102 Movement Type: It is used as a reverse of the material document that was created in 101 movement type.
122 Movement Type: It is used to return goods to the seller.
123 Movement Type: It is used to cancel movement 122 documents.
161 Movement Type: It is used to return products to the seller against a purchase order for
162 Movement Type: It is used to cancel the movement 161 documents.
201 Movement Type: It is used to process Goods issue against the cost center.
202 Movement Type: It is used to cancel the 201 movement document.
221 Movement Type: It is used to process Goods issue against projects.
222 Movement Type: It is used to cancel the 221 movement document.
261 Movement Type: It is used to process Goods issue against the order.
262 Movement Type: It is used to cancel the 261 movement document.
311 Movement Type: It is used when there is a need to transfer posting between storage locations.
312 Movement Type: It is used to cancel the 311 movement document.
321 Movement Type: It is used to transfer goods or products from quality to unrestricted stock.
322 Movement Type: It is used in case of a reverse of 321 movement type.
343 Movement Type: It is used to transfer goods or products from unblocked to unrestricted stock.
344 Movement Type: It is used in case of a reverse of 343 movement type.
349 Movement Type: It is used to transfer goods or products from blocked to quality stock.
350 Movement Type: It is used in case of a reverse of 349 movement type.
411 Movement Type: It is used to transfer their own stock or goods to own.
412 Movement Type: It is used in case of a reverse of 411 movement type.
501 Movement Type: It is used to issue Goods Receipt without any purchase order.
502 Movement Type: It is used in case of a reverse of 502 movement type.
511 Movement Type: It is used to issue free of charge goods receipt.
512 Movement Type: It is used in case of a reverse of the 511 movement type.
551 Movement Type: It is used to process Goods Issue for scrapping.
552 Movement Type: It is used in case of a reverse of 551 movement type.
561 Movement Type: It is used to show the initial entry of stock.
562 Movement Type: It is used in case of a reverse of 561 movement type.
601 Movement Type: It is used to issue Good’s Issue against delivery.
602 Movement Type: It is used in case of a reverse of the 601 movement type.
641 Movement Type: It is used to transfer or send goods to stock in transit.
642 Movement Type: It is used in case of a reverse of 641 movement type.
651 Movement Type: It is used in case of return delivery of goods.
652 Movement Type: It is used in case of a reverse of 651 movement type.
If you want to clear SAP MM interview, then reading and learning the above questions will be enough as these cover the maximum parts of the interview. Hence, go for these before your SAP MM interview.