SAP S/4 HANA MM — Complete Study Guide Basic to Pro

SAP S/4 HANA

Materials Management (MM)
Complete Study Guide — Basic to Pro

Includes: Core Concepts • T-Codes • Interview Q&A; • Progress Tracker

■ Procurement ■ Inventory ■ Valuation ■ Integration ■ Interview Ready

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Chapter ★ MASTER PROGRESS TRACKER

Use the checkboxes below to track your preparation. Tick each topic once you are confident with it before
your interview.

■ Topic Level Interview Weight

■ SAP Overview & S/4 HANA Architecture Basic ★★★★■

■ Organizational Structure in MM Basic ★★★★★

■ Material Master Basic ★★★★★

■ Vendor Master / Business Partner Basic ★★★★■

■ Purchasing Info Record Basic ★★★■■

■ Source List & Quota Arrangement Intermediate ★★★■■

■ Purchase Requisition (PR) Basic ★★★★★

■ Request for Quotation (RFQ) Intermediate ★★★■■

■ Purchase Order (PO) Basic ★★★★★

■ Outline Agreements (Contract / SA) Intermediate ★★★★■

■ Goods Receipt (GR) Basic ★★★★★

■ Invoice Verification (MIRO/MIR7) Basic ★★★★★

■ Inventory Management Concepts Intermediate ★★★★■

■ Special Stocks & Special Procurement Intermediate ★★★■■

■ Physical Inventory & Cycle Counting Intermediate ★★★■■

■ Material Valuation & Account Determination Advanced ★★★★★

■ Movement Types & Posting Logic Advanced ★★★★■

■ Batch Management Intermediate ★★★■■

■ Serial Number Management Intermediate ★★■■■

■ Logistics Invoice Verification (LIV) Advanced ★★★★■

■ Automatic Account Determination (AAD) Advanced ★★★★★

■ MRP (Material Requirements Planning) Advanced ★★★★■

■ Subcontracting Process Advanced ★★★★■

■ Third-Party Processing Advanced ★★★■■

■ Consignment Process Advanced ★★★■■

■ Pipeline Process Advanced ★★■■■

■ Stock Transport Order (STO) Advanced ★★★★■

■ Release Strategy / Workflow Advanced ★★★★■

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■ MM-FI Integration Pro ★★★★★

■ MM-SD Integration Pro ★★★★■

■ MM-PP Integration Pro ★★★★■

■ MM-WM / EWM Integration Pro ★★★■■

■ SAP Fiori Apps for MM Pro ★★★■■

■ S/4 HANA Specific Changes in MM Pro ★★★★★

■ Output / Message Determination Pro ★★★■■

■ Pricing Procedure in MM Pro ★★★★■

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Chapter 1 SAP Overview & S/4 HANA Architecture

1.1 What is SAP S/4 HANA?

SAP S/4 HANA (Simple Suite on HANA) is SAP's next-generation ERP built entirely on the SAP HANA
in-memory database platform. It replaces the traditional SAP ECC (ERP Central Component) and brings
real-time analytics, simplified data models, and a modern Fiori UX.

• In-Memory Computing: Data stored in RAM, eliminates aggregates and indexes

• Simplified Data Model: EKKO+EKPO merged views, MATDOC replaces MKPF/MSEG
• Real-Time Analytics: Embedded BW, no separate BI layer needed for basic reporting
• Fiori UI: Role-based apps replacing traditional SAP GUI transactions
• Central Finance, Central Procurement, SAP Ariba Integration

1.2 Key Differences: ECC vs S/4 HANA MM

Feature SAP ECC SAP S/4 HANA

Vendor Master Separate LFA1/LFB1 Business Partner (BP) Central

Material Ledger Optional Mandatory

Inventory Tables MKPF + MSEG MATDOC (single table)

MRP Classic MRP MRP Live (embedded)

UI SAP GUI SAP Fiori + GUI

Analytics SAP BW separate Embedded BW + CDS views

Purchasing ME21N etc. Fiori Apps + ME21N

■ Note In S/4 HANA, the Vendor Master is replaced by the Business Partner (BP) concept. You must create a
BP with role FLVN00 (General) and FLVN01 (FI Vendor). This is a very common interview question!

1.3 Interview Q&A; — Chapter 1

Q1. What is SAP S/4 HANA and how is it different from SAP ECC?
Ans: S/4 HANA is SAP's next-gen ERP running on HANA in-memory DB. Key differences: simplified data
model (MATDOC), mandatory material ledger, Business Partner for vendors, MRP Live, and Fiori UX.

Q2. What is the MATDOC table in S/4 HANA?

Ans: MATDOC is the universal journal for material documents in S/4 HANA. It replaces the MKPF (header)
and MSEG (item) tables of ECC, providing a single source of truth for all inventory postings.

Q3. Why is Material Ledger mandatory in S/4 HANA?

Ans: In S/4 HANA, the Material Ledger is the foundation for actual costing and parallel valuations. It
enables multi-currency and multi-valuation, and is required for the simplified accounting model.

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Chapter 2 Organizational Structure in MM

2.1 Enterprise Structure Overview

The SAP organizational structure defines how business processes are mapped to the system.
Understanding the hierarchy is fundamental to MM configuration and usage.

Level Object Key Config Relation

1 (Highest) Client SCC4 Entire SAP system

2 Company Code OX02 1 Client : N Company Codes

3 Plant OX10 1 Company Code : N Plants

4 Storage Location OX09 1 Plant : N Storage Locations

4 Purchasing Org OX08 Can span plants/company codes

5 Purchasing Group OME4 Buyer group within [Link]

5 MRP Area OMIZ Sub-plant planning level

2.2 Purchasing Organization Types

• Plant-level Purchasing Org: Each plant has its own purchasing org
• Cross-Plant Purchasing Org: One org handles purchasing for multiple plants
• Cross-Company-Code Purchasing Org: Spans multiple company codes
• Reference Purchasing Org: Used for price negotiation, referenced by actual org

■ Note Storage Location is the lowest level of inventory management. Physical inventory is always done at
Plant + Storage Location level. A storage location does not have its own accounting — all financials
roll up to Plant/Company Code.

2.3 Interview Q&A; — Chapter 2

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Q1. What is the difference between Plant and Storage Location?

Ans: A Plant is a logistics unit (factory, warehouse, sales office) tied to a Company Code. A Storage
Location is a physical area within a Plant used for storing materials — it has no financial accounting of its
own.

Q2. Can one Purchasing Organization belong to multiple Company Codes?

Ans: Yes — a cross-company-code purchasing org is not assigned to any specific company code. It can
create POs for plants across different company codes, though the invoice is always posted to the specific
company code of the receiving plant.

Q3. What is a Reference Purchasing Organization?

Ans: A reference purchasing org is used to negotiate better prices/terms by combining volumes from
multiple purchasing orgs. The negotiated conditions (PIR) are then referenced by the actual purchasing
orgs.

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Chapter 3 Material Master

3.1 Material Master Overview

The Material Master is the central repository for all material-related data in SAP. It is organized into
Views, each maintained by a specific department, and is tied to organizational levels (Client, Plant,
Storage Location, etc.).

3.2 Key Views and Responsible Departments

View Org Level Key Fields Who Maintains

Basic Data 1&2 Client Material desc, base UoM, material group Materials Planning

Purchasing Plant/[Link] Purchasing group, GR processing time Purchasing

MRP 1-4 Plant MRP type, lot size, reorder point MRP / Planning

Accounting 1&2 Plant Valuation class, price control, std/MAP price Finance/Costing

Costing 1&2 Plant Origin group, costing lot size Controlling

Storage 1&2 Plant/SLoc Warehouse data, hazardous material Warehouse Mgmt

Sales:General/Plant Plant Availability check, delivery tolerance Sales

Quality Management Plant QM procurement active, cert type Quality

Forecasting Plant Forecast model, periods Demand Planning

3.3 Material Types (Key Examples)

• ROH (Raw Material): Procured externally, consumed in production
• HALB (Semi-Finished): Can be procured or produced internally
• FERT (Finished Product): Produced internally, sold to customers
• HIBE (Operating Supplies): Consumables, not production-relevant
• NLAG (Non-Stock Material): No stock management, direct cost posting
• DIEN (Service): No goods movements, used for service POs
• VERP (Packaging Material): Packing materials, returnable containers
• LEER (Empties): Returnable containers (e.g., gas cylinders)

3.4 Price Control: S vs V

ControlName Valuation Used For Price in Accounting 1

S Standard Price Fixed, variances posted to PRD Finished/Semi-finished goods Standard Cost

V Moving Average PriceRecalculates on every GR Raw materials, trading goods Average Purchase Price

3.5 Key T-Codes for Material Master

T-Code Description Module Area

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MM01 Create Material Master Master Data

MM02 Change Material Master Master Data

MM03 Display Material Master Master Data

MM06 Flag Material for Deletion Master Data

MM50 Extend Material to Views Master Data

MMBE Stock Overview Inventory

MM60 Material Where-Used List Reporting

3.6 Interview Q&A; — Chapter 3

Q1. What is the difference between Standard Price and Moving Average Price?
Ans: Standard Price (S) is fixed; all GR postings use this price and variances go to a PRD account. Moving
Average Price (V) recalculates after each GR based on total value / total stock. S is used for FERT/HALB;
V for ROH/trading goods.

Q2. What is a Valuation Class and why is it important?

Ans: The Valuation Class in the Accounting 1 view links the material to G/L accounts via the OBYC
transaction (Account Determination). It determines which G/L accounts are hit during goods movements
and invoice postings.

Q3. What is the MRP Type in the MRP 1 view?

Ans: The MRP Type controls how a material is planned. PD = standard MRP (demand-driven), VB =
reorder point planning, ND = no MRP. In S/4 HANA, MRP Live uses the same MRP types but runs
in-memory.

Q4. Can you change the base unit of measure after a material is created?
Ans: Generally no — changing the base UoM after stock exists or documents are posted will cause
inconsistencies. It requires a complex process of clearing stock, documents, and re-creating the material or
using special correction programs.

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Chapter 4 Vendor Master & Business Partner

4.1 Business Partner in S/4 HANA

In SAP S/4 HANA, the traditional Vendor Master (LFA1, LFB1, LFM1) is replaced by the Business
Partner (BP) object (transaction BP). This is a mandatory architectural change from ECC.

BP Role Description Corresponds To (ECC)

000000 General Role (Person/Org) KNA1/LFA1 General Data

FLVN00 Vendor (General) LFA1 — General Vendor Data

FLVN01 Vendor ([Link]) LFB1 — Company Code Data

MK Vendor (Purchasing) LFM1 — Purchasing Org Data

4.2 Vendor Master Data Segments

• General Data (Client level): Name, address, communication, bank details
• Company Code Data: Reconciliation account, payment terms, payment methods
• Purchasing Org Data: Order currency, incoterms, confirmation control, GR-based IV

4.3 Key T-Codes

T-Code Description Module Area

BP Maintain Business Partner (S/4) Master Data

XK01 Create Vendor (ECC-style) Master Data

XK02 Change Vendor Master Data

XK03 Display Vendor Master Data

MK01 Create Vendor (Purchasing view) Purchasing

XK05 Block/Unblock Vendor Master Data

XK06 Flag Vendor for Deletion Master Data

4.4 Interview Q&A; — Chapter 4

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Q1. What is the Business Partner concept in S/4 HANA?

Ans: In S/4 HANA, vendor and customer master data is managed centrally through the Business Partner
(BP) object. A BP can have multiple roles. For a vendor, you assign roles FLVN00 (general) and FLVN01
(FI vendor). This enables a single record for entities that are both customers and vendors.

Q2. What is GR-Based Invoice Verification and where is it set?

Ans: GR-Based IV (GRIR) means the invoice can only be posted after a goods receipt has been made. It is
set in the Vendor Master at Purchasing Org level. When enabled, the system matches invoice quantity to
GR quantity rather than PO quantity.

Q3. What are Payment Terms and where are they maintained?
Ans: Payment terms define when an invoice must be paid and any early payment discounts. They are
maintained in the Company Code segment of the vendor master (OBB8 for configuration). They default to
the PO and invoice, but can be overridden.

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Chapter 5 Procurement Cycle — End to End

5.1 The Procure-to-Pay (P2P) Process

The core MM procurement cycle follows the Procure-to-Pay flow. Every step creates a document that
links to the next, providing a complete audit trail.

Step Document T-Code Key Points

1. Requirement Purchase Requisition (PR) ME51N/ME52N Internal request; can be auto-created by MRP

2. Source Determination
Source List / PIR / RFQ ME01/ME11/ME41 Find approved vendors and prices

3. Vendor Selection
Quotation Comparison ME49 Compare quotes; award to best vendor

4. PO Creation Purchase Order ME21N/ME22N Legal document with vendor; based on PR/RFQ

5. PO Monitoring PO Status ME2N/ME2M Track confirmations, delivery dates

6. Goods ReceiptMaterial Document MIGO (Mvt 101) Stock increases; GRIR account credited

7. Invoice ReceiptInvoice Document MIRO/MIR7 3-way match: PO + GR + Invoice

8. Payment Payment Document F110 / Manual Vendor account cleared in FI

5.2 Purchase Requisition (PR)

A PR is an internal document requesting the procurement department to purchase a material or service.
• Item Category: Standard (blank), Subcontracting (L), Consignment (K), Stock Transfer (U), Third
Party (S)
• Account Assignment: Cost Center (K), Asset (A), Project (P), Order (F)
• Source of Supply: Can reference PIR, source list, contract, or scheduling agreement
• Release Strategy: PRs may require approval based on value thresholds
• MRP-Generated PRs: Automatically created by MRP run (MD01/MD02)

5.3 Purchase Order (PO)

The PO is the legal commitment to a vendor to supply goods/services at agreed terms.
• Header: Vendor, currency, payment terms, incoterms, document date
• Item: Material, quantity, UoM, delivery date, plant, storage location, price
• Account Assignment: For direct consumption (no stock posting)
• Conditions: Pricing conditions (gross price, discounts, freight, taxes)
• PO Types: NB (Standard), UB (STO), ZNB (custom), FO (Framework Order)

■ Note A PO is a "legal offer" in SAP — once a GR is posted against it, you cannot simply delete the PO. You
must reverse the GR first. POs can be blocked (delivery block, invoice block) at header or item level.

5.4 Goods Receipt (GR)

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The GR is the physical or logical receipt of goods into the plant warehouse. It is posted using MIGO (SAP
GUI) or Fiori apps.

Mvt Type Description Effect

101 GR against PO (Unrestricted) Stock + / GRIR acct Dr, Stock acct Cr

103 GR into Blocked Stock (against PO) Blocked stock increases; no financial posting

105 Release from Blocked to Unrestricted Stock transfer; financial posting triggered

122 Return to Vendor (Reversal of 101) Stock - / Reverse of GR accounting

161 Returns to Vendor against PO Similar to 122 but with PO reference

501 GR without reference (Free issue) Stock + / GR/GI account (no PO link)

521 GR without PO into Unrestricted Stock +; manual account determination

5.5 Invoice Verification (LIV)

Logistics Invoice Verification (LIV) matches the vendor invoice against the PO and GR (3-way matching)
before posting to Financial Accounting.
• MIRO: Post vendor invoice (with or without PO reference)
• MIR7: Park invoice (save without posting — for approval workflow)
• MRBR: Release blocked invoices (price/quantity variance exceeded tolerance)
• MR11: GR/IR account maintenance (clear open GRIR items)
• Tolerance Keys: BD (deadline), BR (item amount), PP (price variance), QT (qty variance)

5.6 Interview Q&A; — Chapter 5

Q1. What is 3-way matching in SAP MM?

Ans: 3-way matching means the system compares the Purchase Order (price, quantity), Goods Receipt
(received quantity), and Invoice (billed price, quantity) before allowing payment. Variances trigger blocks
handled via MRBR.

Q2. What is the difference between MIRO and MIR7?

Ans: MIRO posts the invoice immediately, creating an accounting document. MIR7 parks the invoice — it is
saved but not posted, allowing further review or approval before the accounting document is created.

Q3. What is a GR/IR clearing account?

Ans: The GR/IR (Goods Receipt / Invoice Receipt) is a clearing account. When a GR is posted, the
account is credited. When the invoice is posted, the account is debited. The net should be zero once both
sides are matched. MR11 is used to clear any open items.

Q4. What happens if the invoice price differs from the PO price?
Ans: A price variance is detected. If within the tolerance (configured in SPRO via tolerance keys), the
invoice is posted and the variance goes to a price difference account. If outside tolerance, the invoice is
blocked and must be released via MRBR.

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Chapter 6
Outline Agreements: Contracts & Scheduling
Agreements

6.1 Types of Outline Agreements

Type Code Description T-Code

Quantity Contract MK Total quantity commitment over a period ME31K / ME32K

Value Contract WK Total value commitment over a period ME31K / ME32K

Scheduling Agreement LP/LPA Delivery schedule with release docs ME31L / ME32L

Distributed Contract MK+WK Centrally negotiated, multi-plant ME31K

6.2 Scheduling Agreement Details

• LP (Standard SA): No automatic release; delivery schedules created manually
• LPA (SA with Release Documentation): System creates FRC (Forecast) and JIT (Just-In-Time)
releases
• Delivery Schedule lines specify dates and quantities for planned deliveries
• GR is posted against the SA delivery schedule, not against a separate PO
• Backlog / Immediate requirements tracked by release creation profile

6.3 Interview Q&A; — Chapter 6

Q1. What is the difference between a Contract and a Scheduling Agreement?

Ans: A Contract is a long-term agreement defining total quantity or value to be purchased — actual orders
are placed via Release Orders (POs referencing the contract). A Scheduling Agreement defines actual
delivery dates and quantities in a schedule; releases are sent to the vendor as delivery instructions.

Q2. What is a Release Order (Call-off) against a Contract?

Ans: A Release Order is a standard PO (doc type NB) created with reference to a contract. It "calls off" a
portion of the agreed quantity/value. The contract tracks the cumulative released quantity/value against the
target.

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Chapter 7 Inventory Management

7.1 Stock Types

Stock Type Description Available for MRP? Usable?

Unrestricted Use Normal usable stock Yes Yes

Quality Inspection In QM inspection Configurable No (until released)

Blocked Stock Rejected/disputed goods No No

Restricted-Use Batch-level restriction No Limited

In Transit STO in transit Yes (at destination) No

Consignment Vendor-owned at our site Yes (if configured) Yes (triggers settlement)

7.2 Key Inventory Movement Types

T-Code Description Module Area

201 Goods issue to cost center Inventory Mgmt

261 Goods issue to production order PP Integration

301 Transfer posting plant to plant (1-step) Inventory Mgmt

303/305 Transfer posting plant to plant (2-step) STO

311/312 Transfer within plant (SLoc to SLoc) Inventory Mgmt

343 Transfer: Blocked to Unrestricted Inventory Mgmt

351 Transfer: GI for STO (sending plant) STO

411 K Consignment to own stock Consignment

451 Returns from Customer SD/MM

551 Scrapping from Unrestricted Inventory Mgmt

7.3 Special Stocks

• K — Consignment (Vendor-owned stock at our premises)
• O — Customer Consignment (Our stock at customer premises)
• E — Sales Order Stock (valuated; only for that sales order)
• Q — Project Stock (WBS element)
• W — Vendor Consignment returns
• V — Returnable Packaging with Customer
• M — Returnable Packaging at Vendor

7.4 Physical Inventory

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• MI01: Create Physical Inventory Document

• MI04: Enter Count
• MI07: Post Differences (creates accounting document)
• MI20: Print Count List
• MICN: Batch Input for Cycle Count Documents
• Cycle Counting: Continuous counting based on ABC indicator — A items counted most frequently

7.5 Interview Q&A; — Chapter 7

Q1. What is the difference between a Transfer Order and a Transfer Posting?
Ans: A Transfer Posting is an MM Inventory Management transaction (MIGO/MB1B) that changes stock
type, plant, or storage location, creating a material document. A Transfer Order is a Warehouse
Management (WM/EWM) document that directs physical movement within a warehouse complex.

Q2. What is Consignment stock and how is it settled?

Ans: Consignment stock is material owned by the vendor stored at our plant. No invoice is posted on
receipt (Mvt 101 K). When we consume it (Mvt 201/261 from consignment), a liability accrues. Settlement
is done periodically via MRKO, which creates an invoice to the vendor.

Q3. What is Cycle Counting?

Ans: Cycle counting is a continuous physical inventory method where materials are counted throughout the
year based on their ABC indicator (set in MRP 1 view). A items (high value/turnover) are counted more
frequently. Configured via OMCO.

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Chapter 8
Material Valuation & Automatic Account
Determination

8.1 Valuation Concepts

• Valuation Area: Can be Company Code or Plant level (configured in SPRO)
• Valuation Class: Set in Material Master (Accounting 1); links material to G/L accounts
• Account Category Reference: Groups valuation classes for account determination
• Material Ledger: Mandatory in S/4 HANA; enables actual costing and parallel currencies
• Split Valuation: Allows different prices for batches (e.g., country of origin, quality grade)

8.2 OBYC — Automatic Account Determination

OBYC is the central transaction for configuring which G/L accounts are posted during goods movements
and invoice verification. Key transaction/event keys:

Key Description Triggered By

BSX Inventory Posting Every GR/GI; posts to stock account

WRX GR/IR Clearing Account GR against PO; also IV posting

PRD Price Difference GR if price differs from std; IV variance

GBB Offsetting Entry for Inventory GI, scrapping, free GR — catch-all

KON Consignment Payables Consignment settlement (MRKO)

FRL External Service / Subcontracting Subcontracting GR (service charges)

FR1 Freight Clearing Planned delivery costs (freight)

UMB Revaluation of Stock Material price change (MR21)

■ Note The account determination path for BSX (Inventory Posting): Chart of Accounts → Valuation Grouping
Code → Account Category Reference → Valuation Class → G/L Account. This is a very common
advanced interview question!

8.3 Interview Q&A; — Chapter 8

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Q1. What is the account determination process for a GR against a PO?

Ans: Two postings: (1) BSX — Debit Inventory Account (based on valuation class). (2) WRX — Credit
GR/IR Clearing Account. When invoice is posted: WRX Debit GR/IR + Credit Vendor (AP). Price
differences go to PRD account.

Q2. What is Split Valuation and when is it used?

Ans: Split Valuation allows one material to have different valuation prices for different sub-stocks (valuation
types), e.g., domestic vs. imported raw material, or different quality grades. Configured via MM Split
Valuation (OMWC). Each valuation type gets its own stock and accounting.

Q3. What is the Material Ledger and what does Actual Costing mean?
Ans: The Material Ledger is a sub-ledger that records all goods movements and price differences during
the period. Actual Costing (activated optionally) rolls up all variances at period-end to determine the actual
cost of materials, overriding the standard/MAP price for COGS reporting.

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Chapter 9 Special Procurement Processes

9.1 Subcontracting
In subcontracting, you provide components (materials) to a vendor who processes them and returns a
finished/semi-finished product.
• PO Item Category: L (Subcontracting)
• Components are listed in the PO (explosion from BOM or manually)
• Components issued to vendor: Mvt 541 (GI to subcontractor)
• Finished goods received: Mvt 101 L; components consumed: Mvt 543
• Accounting: Inventory + SC charges (FRL account) Dr; GRIR Cr
• Reconciliation: ME2O shows open components at subcontractor

9.2 Third-Party Processing

A customer orders from you, but you order directly from a vendor who ships to the customer. No goods
movement in your plant.
• PO Item Category: S (Third Party)
• Sales Order triggers PR automatically (account assignment: sales order)
• GR is statistical (no stock posting), triggers invoice ability
• No physical goods movement in your plant

9.3 Consignment Process

• Vendor delivers goods to your premises; you do not own them yet
• GR: Mvt 101 K — no financial posting; consignment stock increases
• Consumption: Mvt 201 K / 261 K — liability to vendor created
• Settlement: MRKO — periodic settlement invoice to vendor
• Returns to vendor: Mvt 122 K
• Transfer to own stock: Mvt 411 K

9.4 Stock Transport Order (STO)

• Used to move stock between plants (within or across company codes)
• Doc Type: UB (standard STO)
• One-step: Mvt 301 (no delivery; stock transferred immediately)
• Two-step with Delivery: GI at sending plant (Mvt 641 or 351), GR at receiving (Mvt 101)
• Cross-company STO: Triggers billing (SD side) and invoice (MM side)
• T-Codes: ME21N (create UB PO), MIGO (GI/GR), VL10B (outbound delivery)

9.5 Interview Q&A; — Chapter 9

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Q1. Explain the Subcontracting process end-to-end.

Ans: Create PO (item cat L) with components listed. Issue components to vendor (Mvt 541). Vendor
processes and returns finished goods. Post GR against PO (Mvt 101 L): inventory of finished goods
increases, components consumed (Mvt 543). Invoice posted via MIRO for processing charges.

Q2. What is the difference between one-step and two-step STO?

Ans: One-step (Mvt 301): Stock is immediately transferred from source to destination plant — no in-transit
stock. Two-step: Sending plant does GI (Mvt 351/641), creating in-transit stock. Receiving plant does GR
(Mvt 101), clearing in-transit. Two-step is needed when delivery is managed via SD (with outbound
delivery).

Q3. What happens during a Consignment GR — does any financial document get created?
Ans: No financial accounting document is created for a consignment GR (Mvt 101 K). The consignment
stock is managed as a special stock type. Financial impact (liability to vendor) only occurs when the
consignment stock is consumed.

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Chapter 10 Release Strategy & Pricing Procedure

10.1 Release Strategy for POs/PRs

Release Strategy is the SAP approval workflow for purchasing documents. It is configured in Customizing
and controls who must approve a document before it can be used.
• Release Group: Defines which document class (PR, PO, Contract) uses the strategy
• Release Class: Classification class used to determine values (plant, value, material group)
• Release Codes: Individual approver IDs (e.g., L1, L2, L3 = levels of approval)
• Release Indicators: Control what is allowed before/after release (block GR, block further changes)
• Release Prerequisite: Which codes must approve before another code can act
• SPRO Path: MM > Purchasing > Purchase Order > Release Procedure

■ Note In S/4 HANA, you can also use SAP Business Workflow or SAP Business Rules Framework plus
(BRFplus) for approval workflows, especially with Fiori-based approvals.

10.2 Pricing Procedure in MM (Condition Technique)

• Condition Types: PB00 (gross price), RA01 (discount %), FRB1 (freight), NAVS (tax)
• Calculation Schema (Pricing Procedure): Sequence of condition types with formulas
• Schema Determination: Based on Schema Group (Vendor + Purchasing Org)
• Access Sequence: Priority order for finding condition records (vendor/material/plant)
• MEK1/MEK2: Create/Change condition records for purchasing
• M/08: Configure pricing procedure; M/06: Condition types; M/07: Access sequences

10.3 Interview Q&A; — Chapter 10

Q1. What is the condition technique in MM pricing?

Ans: The condition technique determines the price in a PO using a combination of: Condition Types (PB00
= price, RA01 = discount), Access Sequences (search strategy for condition records), Calculation Schema
(order and calculation rules), and Schema Determination (which schema to use based on
vendor/[Link]). Records are stored in tables via MEK1.

Q2. Can a released PO be changed? What happens to the release?

Ans: Depends on the Release Indicator configuration. If the indicator allows changes after release, the PO
can be edited but the release may or may not be reset (configurable). Fields that are "release-relevant"
(like value, vendor) reset the strategy; non-relevant fields can be changed freely.

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Chapter 11 MM Integration with FI, SD, PP & WM

11.1 MM — FI Integration
• Every goods movement and invoice posting creates a parallel FI accounting document
• Account Determination (OBYC) links MM operations to G/L accounts
• Reconciliation Accounts: Vendor master points to AP reconciliation account (LFB1)
• GR/IR Account: Clears between GR and Invoice; monitored via MR11
• Period Closing: MM period must be open/closed in sync with FI (MMPV/MMRV)
• Material Ledger (S/4 HANA): Universal Journal (ACDOCA) replaces separate tables

11.2 MM — SD Integration
• Third-Party: SD Sales Order triggers MM PR/PO; vendor ships to customer
• Returns: Customer returns trigger goods receipt (SD) and GI reversal
• Stock Transfer (STO Cross-Company): SD billing from sending company; MM invoice at receiving
• Consignment to Customer: MM manages returnable packaging and customer consignment
• Availability Check: SD checks MM stock levels (MRP data)

11.3 MM — PP Integration
• Production Order GI: Mvt 261 — goods issue to production order
• Production Order GR: Mvt 101 — finished goods receipt from production
• BOM Explosion: PP BOM drives material requirements in MRP
• Backflushing: Automatic GI posting on confirmation of production operation
• Subcontracting: Overlap between PP (process) and MM (procurement)

11.4 MM — WM/EWM Integration

• Each Storage Location can be WM-managed (linked to a Warehouse Number)
• MM GR triggers a Transfer Requirement (TR) in WM
• WM creates Transfer Orders (TO) to put away materials in bins
• EWM (Extended WM): More advanced; handles complex warehouse operations, robotics
• Posting Change in WM: Stock type changes initiated from MM propagate to WM

11.5 Interview Q&A; — Chapter 11

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Q1. What is the link between MM and FI for a GR posting?

Ans: When a GR (Mvt 101) is posted against a PO, SAP creates both a Material Document (MIGO) and an
FI Accounting Document (ACDOCA in S/4). The FI posting: Dr Inventory Account (BSX) / Cr GR-IR
Clearing (WRX). The accounts are determined by OBYC configuration.

Q2. How does MM interact with PP for production?

Ans: MRP (PP/MM) calculates requirements from production orders and creates PRs or planned orders.
When production starts, MM posts GI (Mvt 261) to consume components from stock. When production
completes, MM posts GR (Mvt 101) to receive finished goods into stock.

Q3. What happens in MM when a GR-based STO is done cross-company code?

Ans: Sending plant posts GI (Mvt 601/641): Reduces stock, triggers outbound delivery (SD). An SD billing
document is created to the receiving company. The receiving company posts GR (Mvt 101), and posts an
MM invoice (MIRO) to clear the intercompany payable.

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Chapter 12 S/4 HANA-Specific Changes in MM

12.1 Key Architecture Changes

Area ECC Approach S/4 HANA Change

Inventory Tables MKPF + MSEG Single MATDOC table

Vendor Master LFA1/LFB1/LFM1 Business Partner (BP) central object

Material Ledger Optional add-on Mandatory; foundation of valuation

MRP Classic MRP (MD01) MRP Live (in-memory, real-time)

Analytics SQVI / SAP BW CDS Views + Embedded Analytics

Purchasing Cockpit ME2N/ME2M screens Fiori My Purchase Orders app

Aggregates MARA/MARC/MARD etc. Simplified; no aggregate tables

Price Change MR21 (standard) Still MR21 but ML runs in parallel

12.2 Important Fiori Apps for MM

T-Code Description Module Area

F1048 Manage Purchase Orders Purchasing

F0842 Create Purchase Orders Purchasing

F1048A Monitor Purchase Orders Purchasing

F2610 Manage Purchase Requisitions Purchasing

F0843 Confirm Purchase Orders (Vendor) SRM/Vendor Portal

F1048B Manage Supplier Invoices (MIRO) Invoice Verification

F1369 Stock Overview (MMBE) Inventory

F2096 Post Goods Receipt for PO Inventory

12.3 Central Procurement in S/4 HANA

• Central Procurement Hub: Single S/4 system that manages purchasing for multiple connected
systems
• Operational Purchasing centralized; execution in connected backend systems
• SAP Ariba Integration: P2P processes via Ariba Network; Guided Buying
• SAP SRM: Mostly replaced by Ariba + Central Procurement in S/4 HANA

12.4 Interview Q&A; — Chapter 12

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Q1. What are the top 5 changes in MM when migrating from ECC to S/4 HANA?
Ans: (1) MATDOC replaces MKPF/MSEG. (2) Business Partner replaces Vendor Master. (3) Material
Ledger is mandatory. (4) MRP Live replaces classic MRP. (5) Fiori apps provide new UX, but most
T-codes still work. The data model simplification is the most technically significant change.

Q2. Is ME21N still available in S/4 HANA?

Ans: Yes — ME21N and most classic MM T-codes still function in S/4 HANA. SAP has not removed them,
but Fiori apps are the strategic direction. In practice, most implementations use a mix of Fiori apps and
traditional GUI transactions.

Q3. What is the Universal Journal in S/4 HANA?

Ans: The Universal Journal (ACDOCA) is a single table in S/4 HANA that consolidates all financial
postings: FI, CO, ML (Material Ledger), AA (Asset Accounting) and PCA (Profit Center Accounting). MM
postings that create accounting documents all land in ACDOCA.

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Chapter 13 Material Requirements Planning (MRP)

13.1 MRP Concepts

• MRP calculates material requirements based on demand (planned/actual orders, forecasts)
• Dependent Demand: Components required by parent production orders (driven by BOM)
• Independent Demand: Final product demand (sales orders, PIR = planned independent
requirements)
• MRP Run: MD01 (classic, plant-wide), MD02 (single material), MD01N (MRP Live in S/4)
• Planning Horizon: How far into the future MRP plans (set via planning time fence)

13.2 MRP Types

Type Description Used When

PD MRP (Demand-driven) Standard MRP; calculates from BOM/forecast

VB Reorder Point Planning Simple replenishment when stock < ROP

VM Auto Reorder Point System calculates ROP from forecast

ND No MRP No planning — manual ordering only

PD+S4 MRP Live (S/4 HANA) In-memory real-time MRP; no background job needed

13.3 MRP Results — Procurement Proposals

• Planned Order: Internal production/procurement proposal (not a commitment)
• Purchase Requisition: External procurement request (can be auto-generated by MRP)
• Schedule Line: For materials with scheduling agreements
• MD04: MRP Stock/Requirements List — shows planning situation for a material
• MD06: MRP Exception Messages — shows exception codes (delays, excess stock, etc.)

13.4 Interview Q&A; — Chapter 13

Q1. What is the difference between MRP and Reorder Point Planning?
Ans: MRP (PD type) works backward from demand: it explodes the BOM, nets requirements against stock,
and creates proposals to cover the shortage. Reorder Point Planning (VB) is simpler — when stock falls
below the reorder point, a replenishment proposal is created without considering actual demand.

Q2. What is the Planning Time Fence in MRP?

Ans: The planning time fence (PTF) is a period within which MRP will not automatically change or create
new procurement proposals. Within the PTF, changes must be made manually. The PTF protects
short-term production plans from automatic MRP intervention.

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Chapter 14 Batch Management & Serial Numbers

14.1 Batch Management

• A Batch is a quantity of material produced under the same conditions at the same time
• Batch Level: Client, Plant, or Material level (configurable in OMCT)
• Batch Classification: Batches can carry characteristics (e.g., concentration, expiry date)
• Batch Search Strategy: Rules for automatic batch selection during GI (SPRO > MM)
• Shelf Life / Expiry: SLED (Shelf Life Expiration Date) managed in batch master
• T-Codes: MSC1N (create batch), MSC2N (change), MCHA (batch list)

14.2 Serial Number Management

• Serial numbers uniquely identify individual items within a material
• Serial Number Profile: Configured in Material Master (Plant Data/Storage 2 view)
• Profiles control at which points serial numbers must be entered (GR, GI, delivery)
• Equipment Integration: Serial numbers can create equipment master records in PM module
• T-Codes: IQ01 (create equipment/serial), IQ02 (change), IQ09 (serial number list)

14.3 Interview Q&A; — Chapter 14

Q1. What is the difference between Batch and Serial Number management?
Ans: A Batch manages a group of units of the same material produced together (e.g., a production lot of
1000 tablets). One batch number covers all 1000. A Serial Number uniquely identifies a single individual
item (e.g., one specific machine with SN 12345). Serial tracking is item-level; batch tracking is group-level.

Q2. What is SLED (Shelf Life Expiry Date) and how is it managed in SAP?
Ans: SLED is the date after which a batch should not be used. It is set during GR in the batch master. The
system can block GI of expired batches and FEFO (First Expiry First Out) picking can be configured in WM.
Configured via Material Master > Purchasing view (Min/Total shelf life fields).

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Chapter ★ MASTER T-CODE QUICK REFERENCE

All essential MM T-Codes organized by functional area. Memorize these for interviews!

T-Code Description Module Area

MM01/02/03 Create/Change/Display Material Master Master Data

MMBE Stock Overview Inventory

MB52 Warehouse Stocks of Material Inventory

MB51 Material Document List Inventory

MB50 Valuated Stock List Inventory

BP Business Partner (S/4 HANA) Master Data

XK01/02/03 Create/Change/Display Vendor Master Data

MK01/02/03 Vendor (Purchasing view) Purchasing

ME51N Create Purchase Requisition Purchasing

ME52N Change Purchase Requisition Purchasing

ME53N Display Purchase Requisition Purchasing

ME41 Create RFQ Purchasing

ME47 Maintain Quotation Purchasing

ME49 Price Comparison List Purchasing

ME21N Create Purchase Order Purchasing

ME22N Change Purchase Order Purchasing

ME23N Display Purchase Order Purchasing

ME2N POs by PO Number Purchasing

ME2M POs by Material Purchasing

ME31K Create Contract Purchasing

ME31L Create Scheduling Agreement Purchasing

ME11 Create Purchasing Info Record Purchasing

ME01 Maintain Source List Purchasing

MIGO Goods Movement (Universal) Inventory Mgmt

MB1A Goods Issue Inventory Mgmt

MB1B Transfer Posting Inventory Mgmt

MB1C Goods Receipt (Other) Inventory Mgmt

MIRO Enter Incoming Invoice Invoice Verification

MIR7 Park Incoming Invoice Invoice Verification

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MIR4 Display Invoice Document Invoice Verification

MRBR Release Blocked Invoices Invoice Verification

MR11 GR/IR Account Maintenance Invoice Verification

MRKO Settle Consignment/Pipeline Invoice Verification

MI01 Create Physical Inventory Document Physical Inventory

MI04 Enter Inventory Count Physical Inventory

MI07 Post Inventory Difference Physical Inventory

MI20 Print Count List Physical Inventory

MD01 MRP Run (Plant) MRP

MD02 MRP Run (Single Material) MRP

MD04 Stock/Requirements List MRP

MD06 MRP Exception Messages MRP

MD01N MRP Live (S/4 HANA) MRP

OBYC Account Determination Config

OMJJ Movement Type Config Config

OMWB Account Determination Overview Config

MMPV Open/Close MM Period Config

OME4 Purchasing Group Config Config

OX10 Plant Config Config

OX09 Storage Location Config Config

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Chapter ■ TOP INTERVIEW QUESTIONS — QUICK REVIEW

These are the most frequently asked SAP MM interview questions across Basic, Intermediate, and
Advanced levels. Use this as your final review before any interview.

Basic Level Questions

Q1. What are the main organizational levels in SAP MM?

Ans: Client > Company Code > Plant > Storage Location for inventory. Purchasing Org > Purchasing
Group for procurement. These levels are mandatory for all MM transactions.

Q2. What is a Material Type and give 5 examples.

Ans: Material Type groups materials with same attributes. ROH (Raw), HALB (Semi-finished), FERT
(Finished), HIBE (Operating supplies), NLAG (Non-stock/service).

Q3. What is the difference between Purchase Requisition and Purchase Order?
Ans: PR is an internal request document; it has no legal binding with the vendor. A PO is a legal document
sent to the vendor; it is a commitment to purchase. PRs are converted to POs after approval.

Q4. What is Goods Receipt? What document does it create?

Ans: GR is the physical or logical receipt of goods from vendor (Mvt 101). It creates a Material Document
(in MM) and an Accounting Document (in FI). Stock increases and GR/IR account is credited.

Q5. What is MIGO?

Ans: MIGO (Goods Movement) is the universal transaction for all inventory transactions in SAP MM — GR,
GI, transfer postings, reversals — replacing older MB1A, MB1B, MB1C transactions.

Intermediate Level Questions

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Q1. What is the Purchasing Info Record (PIR)?

Ans: PIR stores vendor-material relationship data: last price, delivery time, conditions. Types: Standard,
Subcontracting, Consignment, Pipeline. Used for automatic price default in POs. T-Code ME11/ME12.

Q2. Explain the Release Strategy for Purchase Orders.

Ans: Release strategy is an approval workflow. Configured using Release Group, Release Class
(classification), Release Codes (approvers), Release Indicators. PRs/POs are blocked until all required
codes have released. Configurable in SPRO.

Q3. What is the Valuation Class and how does it relate to account determination?
Ans: Valuation Class is set in Material Master Accounting 1 view. It maps the material to G/L accounts via
OBYC (Automatic Account Determination). Different materials (raw, finished) post to different G/L accounts
based on their valuation class.

Q4. What is GR/IR Clearing Account?

Ans: GR/IR is a clearing account (liability in nature). GR credits it; IV debits it. If both are for the same
amount, it clears to zero. Open items (mismatch between GR qty and invoice qty) are cleared via MR11.

Q5. What is a Source List and why is it used?

Ans: Source List (ME01) defines approved vendors for a material at plant level. It can make sourcing
mandatory (only listed vendors) and can be linked to scheduling agreements. MRP can use it to determine
the source of supply for planned orders.

Advanced Level Questions

Q1. Explain the full accounting flow for Subcontracting.

Ans: PO (cat L) created. Components issued (Mvt 541): Dr SC Vendor stock Cr Unrestricted stock. GR
(Mvt 101 L): Dr FG Inventory + Dr SC charges (FRL) / Cr GR-IR (WRX) + Cr Component consumption
(GBB-VBO). Invoice (MIRO): Dr GR-IR / Cr Vendor AP.

Q2. What is Split Valuation? Give a business example.

Ans: Split Valuation allows a material to have different prices for different sub-stocks (valuation types).
Example: Steel bars imported (valuation type "IMP") vs. domestically sourced (DOM) — different prices but
same material number. Configured in OMWC.

Q3. How does MRP Live in S/4 HANA differ from Classic MRP?
Ans: MRP Live runs in HANA memory using HANA-optimized algorithms. It is faster (can run in minutes vs.
hours), supports parallel planning, and uses real-time stock data. No need for time-consuming background
jobs. Triggered via MD01N or automatically.

Q4. What is the difference between Outline Agreement types?

Ans: Contract (MK=Qty, WK=Value): Long-term agreement; released via separate POs (call-offs).
Scheduling Agreement (LP/LPA): Has delivery schedule lines; vendor receives schedule releases
(FRC/JIT); no separate PO needed for each delivery.

Q5. Explain the Account Determination path in OBYC step by step.

Ans: Chart of Accounts (from PO company code) > Valuation Grouping Code (from Valuation Area config)
> Transaction/Event Key (e.g., BSX) > Account Category Reference (from Valuation Class) > Valuation
Class (from Material Master) > G/L Account.

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Study Tips for SAP MM Interviews

1. Master the Procure-to-Pay flow cold — draw it from memory 2. Know T-Codes for all key
transactions (see master list) 3. Understand OBYC account determination — always asked at
advanced level 4. Be ready to explain Business Partner vs Vendor Master (S/4 vs ECC) 5. Know
movement types: 101, 122, 201, 261, 301, 541, 543, 551 6. Understand the 3-way match: PO +
GR + Invoice 7. Know special processes: Subcontracting, Consignment, STO, Third-Party 8. Be
able to explain integration with FI, SD, PP 9. Use the Progress Tracker — tick off topics you are
confident in 10. Review Top Interview Questions 24 hours before your interview

Good luck with your SAP MM interviews! ■

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