SAP MM Glossary-1

ABC Classification

Web Item to classify objects (Customers, Products or Employees) based on a particular measure (Revenue or Profit) using certain classification rules. Three categories: Important, Less Important, and Relatively Important.

Client

A grouping or combination of legal, organizational, business and/or administrative units with a common purpose.

Example: a corporate group.

Company code

This level represents an independent accounting unit within a client. Each company code has its own balance sheet and its own profit and loss statement.

Example: a subsidiary company, member of a corporate group.

Framework Order

A purchasing document used to procure materials or external services. Instead of stipulating a delivery date, this type of purchase order has an extended validity period. A framework order covers multiple procurement transactions over a longer period.

Goods Receipt

A term from inventory management denoting a physical inward movement of goods or materials.

Invoice Verification

The matching of documents created during the purchase order process, the goods receipt process, and the accounts payable process that is part of the internal controls system within an organization

Material Group

A grouping of materials and services according to their characteristics.

Material Master Record

A data record containing all the basic information required to manage a material.

Material requirement Planning (MRP)

A term for procedures in requirements planning that take into account and plan every future requirement during the creation of order proposals such as independent requirements, and dependent requirements

Outline Agreement

A longer-term arrangement between a purchasing organization and a vendor for the supply of materials or provision of services over a certain period based on predefined terms and conditions

Plant

In Logistics a plant is an organizational unit for dividing an enterprise according to production, procurement, maintenance, and materials planning.

Purchasing Organization

An organizational unit in Logistics, subdividing an enterprise according to the requirements of Purchasing. A purchasing organization procures materials and services, negotiates conditions of purchase with vendors, and is responsible for such transactions.

Purchasing group

The purchasing organization is further subdivided into purchasing groups (buyer groups), which are responsible for day-to-day buying activities.
A purchasing group can also act for several purchasing organizations

Release Strategy

A plan defining the release codes with which a purchase requisition item, a complete purchase requisition, or a complete external purchasing document must be released (that is, approved) and the sequence in which release is to be effected using these codes. For example, you can establish a release strategy for all purchase requisitions with a value in excess of a certain figure

Replenishment

A Method of replenishing stock.

Replenishment Element

The elements in the system that trigger material replenishment for production.

Stock Reservation

The sum of all quantities of a material reserved for withdrawal from stock.

Scheduling Agreement

An outline agreement against which materials are procured at a series of predefined points in time over a certain period.

Stock Transfer

The removal of materials from storage at one location, and their placement in storage at another.

Storage Location

One or more storage locations are assigned to a location of this type.

Source List

The Source List identifies preferred sources of supply for certain materials. If the Source List has been properly maintained, it will identify both the source of a material and the period of time in which you can order the material from the source.

Subcontracting

Subcontracting is the process in which a material or product consisting of certain components is procured from a vendor, whereby these components are provided by the ordering enterprise, either directly or through a third party (another vendor).

Vendor Master

The collective term for all vendor master records. The vendor master contains the data of all vendors with which a company conducts business.

Vendor Master Record

A data record containing all the information necessary for any contact with a certain vendor, in particular for conducting business transactions.