ABC analysis
ABC analysis is analysis that classifies the materials in a company by their consumption value. The consumption value is calculated by multiplying current price by quantity. Each material in the analysis is given an ABC indicator which provides information about the consumption value of the material.
The following consumption values are possible
Ø A: important part/high consumption value
Ø B: less important part/medium consumption value
Ø C: relatively unimportant part/low consumption value
Account assignment category
Account assignment category indicates if an item is to be assigned to an auxiliary account (such as a
cost center). The account assignment category determines which account assignment data (for
example, cost center, account number, and so forth) are required for the item.
Account group
Account group is the key that can be used as part of account assignment when posting to G/L accounts in financial accounting.
Alternative unit of measure
Alternative unit of measure is the unit of measure that is defined in the SAP R/3 System along with the base unit of measure. Examples of alternative units of measure are:
Order unit (purchasing)
Sales unit
Unit of issue
Base unit of measure
Base unit of measure is the unit of measure in which the stock of a material is kept. The system converts all quantities entered in other units into the base unit of measure.
Consignment
Consignment is a business transaction in which a vendor maintains a stock of material at a customer
(purchaser) location. The vendor retains ownership of the materials until they are withdrawn from the consignment stores. Payment for consignment stock is only required when the material is withdrawn.
For this reason, the vendor is informed of withdrawals of consignment stocks on a regular basis.
Consignment material
Consignment material are goods from one or more vendors handed over to a company for storage or
sale on a consignment basis. It is stored in this company’s storage facilities. Consignment material
is not included in the company’s valuated stock until it is withdrawn. As a result of such withdrawals,
the company incurs a liability towards the vendor. Such liabilities are settled at certain intervals.
Consignment stock
Consignment stock is stock made available by the vendor which is stored on the purchaser’s
premises. It remains the vendor’s property until withdrawn from stores or transferred to the purchaser’s own valuated stock.
Consumable material
Consumable material is procured material or service which is settled on a value basis through cost
element accounts or asset accounts. There are several categories of consumption materials:
Ø Without a material master record
Ø With a material master record without inventory management
Ø With a material master record with inventory management on a quantity basis only
Cost center
Cost center is the unit within a company distinguished by area of responsibility, location, or
accounting method.
Date required
Date required is the date in a reservation when the material is to be withdrawn from the warehouse.
Delivery costs
Delivery costs are costs that are incurred by the ordering user along with pure material costs.
Delivery costs include:
Ø Freight costs
Ø Duty costs
Ø Miscellaneous delivery costs, including packaging, Delivery, and so forth
Delivery date
Delivery date is the date when goods are delivered or a service is rendered.
Delivery schedule
Delivery schedule is the time plan for successive delivery of parts of the total quantity of a material, which are agreed upon in an item of a scheduling agreement. You can specify the exact delivery time in the delivery schedule.
Effective price
Effective price is the price calculated by taking all existing price conditions into account (for example,. taxes, delivery costs, discounts, and miscellaneous provisions).
Exchange rate
Exchange rate is the relationship between two currencies. This rate is used to translate an amount into another currency.
External procurement
External procurement is the procurement of raw materials, operating supplies, trading goods, or
services from an external supplier for organizational units within a company which require these items.
Final delivery
Final delivery is the last goods receipt of a particular material regarding an order item. No further
deliveries are expected for this item. The order item is regarded as closed.
Forecast
Forecast is the estimation of the future values of a time series. In the SAP System, a forecast is carried out based on a first-order exponential smoothing procedure (Winter’s procedure).
Forecast model
Forecast model states the most obvious structure of a time series. The following forecast models exist:
Ø Constant model
Ø Trend model
Ø Seasonal model
Ø Seasonal trend model
Goods receipt
Goods receipt is the term in inventory management which refers to the acceptance of goods from a
company. Goods receipts are entered with or without reference to a purchase order.
Goods receipt blocked stock
Goods receipt blocked stock is the quantity of a material delivered/supplied by a vendor that has
been received. It is subject to conditional acceptance and has not yet been placed in final storage. Goods receipt blocked stock is not yet regarded as part of the receiving company’s own stock, but is
considered in the purchase order history.
Gross price
Gross price is the price that does not include discounts or surcharges.
Inventory Management
Inventory management is the area of logistics which includes the following tasks:
Management (recording and tracking) of stocks of a material on both quantity and value basis
Planning, entering, and documenting all stock movements including goods receipts, goods issues, stock transfers, transfer postings Physical inventory (stocktaking)
Invoice Verification
Invoice verification encompasses the entering and checking of vendor invoices. Vendor invoices are
compared with the purchase order and goods receipt. They are checked in three ways:
Ø Content
Ø Price
Ø Quantity
Issuing plant
The issuing plant is the plant from which the materials are withdrawn for a stock transfer.
Material
Material is the term used for all objects processed in materials management. A material master record is usually created for each material in the SAP System and each material is assigned a material number.
Material group
Material group refers to a group of several materials with the same characteristics.
Material master
Material master contains all the materials used in a company and their data.
Material type
Material type is the indicator which subdivides materials into different groups. For example:
Ø Raw materials
Ø Semi-finished materials
Ø Finished materials
Ø Operating supplies
The material type determines the material’s procurement type and controls the following:
Ø Screen sequence control
Ø Field selection
Ø Type of number assignment in material master maintenance
Ø Type of inventory management
Ø Account determination
Material valuation
Material valuation determines the material stock value. Valuation-relevant data for a material
Includes:
Ø Valuation price
Ø Valuation class
Ø Valuation procedure: standard price, moving average price
Multiple account assignment
Multiple account assignment is the assignment of an order item to several accounts. The
distribution of costs can be made based on percentages, quantity, or amount.
Net price
Net price is the price which includes all vendor surcharges and discounts.
Number assignment
Number assignment is the allocation of numbers to objects (for example, materials). There are two types of number assignment:
Internal - number assigned automatically by the system External - number assigned manually by you
One-time vendor
One-time vendor is a vendor master record used for processing transactions involving miscellaneous
vendors that are not part of a customer’s regular suppliers. If an RFQ or PO is sent to a one-time
vendor, you must enter the one-time vendor’s address manually.
Order
Order describes a task to be performed within a company. The order specifies:
Ø Which task is to be performed
Ø When the task is to be performed
Ø What is needed to perform the task
Ø How the order costs are to be settled
Order price history
Order price history refers to the series of prices representing the purchase prices charged by a
vendor for a material or service over a certain period extending to the present.
Order price unit
Order price unit is the alternative unit of measure that can be used by the purchasing department for ordering purposes. The order price unit allows you to express the order price in a unit that differs from the order unit.
For example:
Ordered: 100 m2; Price: $24.20 for each 10 kg. The order unit is m2, whereas the order price unit is kg.
Order unit
Order unit is the unit of measure that permits a material to be ordered (by purchasing) in a unit that differs from the base unit defined for the material.
Organizational level
Organizational level is the hierarchy level on which certain data in the material master record is entered. Examples of organizational levels include company code, plant, and storage location levels.
Price comparison list
Price comparison list is the method for comparing prices in quotations. The price comparison list also directly compares a quotation with the minimum, average, or maximum price on an item-by-item
basis.
Price control
Price control is the indicator which determines the material valuation procedure. In the standard SAP System there are two procedures:
Ø Standard price valuation
Ø Moving average price valuation
Price unit
Price unit is the unit which the valuation price refers to in the material master record.
Pricing conditions
Pricing conditions refers to the terms of payment negotiated with a vendor, such as surcharges or
discounts. Pricing conditions determine, for example, how the system calculates the net price.
Procurement lead time
Procurement lead time is the time it takes for the ordered material to be available in stock after the purchase order has been released.
Procurement type
Procurement type is the classification which determines whether a material is produced in-house, whether it is procured externally, or whether both are possible.
Purchase order
Purchase order is a request to a vendor to supply certain materials or perform certain services. A purchase order contains general data including:
Ø Terms of delivery
Ø Terms of payment
Ø Items with detail such as:
Ø Material description
Ø Order quantity
Ø Delivery date
Ø Price
Purchase requisition
Purchase requisition is a request or instruction to the purchasing department to procure a certain
quantity of a material or service on, or by, a certain date.
Purchasing document
Purchasing document is the instrument used by the purchasing department to procure a material or
services. The standard SAP R/3 System includes the following purchasing documents:
Ø Purchase requisition
Ø RFQ
Ø Quotation
Ø Purchase order
Ø Contract
Ø Scheduling agreement
Purchasing document type
Purchasing document type is the identifier that allows a distinction to be made between the
various forms of a document category. It determines, for example, the relevant number range and the fields for maintenance.
Purchasing document category
Purchasing document category is the identifier forthe classification of purchasing documents.
Purchasing document categories include the following:
Ø Requests for quotation (RFQs)
Ø Purchase requisitions
Ø Purchase orders
Ø Contracts
Ø Scheduling agreements
Purchasing document categories can be subdivided into purchasing document types.
Purchasing group
Purchasing group is the key organization for a buyer or group of buyers responsible for certain
purchasing activities. A purchasing group is:
Ø Internally responsible for the procurement of a material or class of materials
Ø As a rule, the principle channel for a company’s dealings with its vendors
Purchasing info record
Purchasing info record is the source of information for the purchasing department regarding a certain material/vendor relationship. The purchasing info
record contains the following data:
Ø General data
Ø Quotation data
Ø Order data
The purchasing info record permits the purchasing department to obtain the following information:
Ø For which materials a certain vendor has submitted quotation or supplied to date
Ø Which vendors have quoted prices for or supplied a certain material
Purchasing organization
Purchasing organization is the organizational unit that negotiates general conditions of purchase for
several plants.
Purchasing value key
Purchasing value key is the key defining the valid reminder days and tolerance limits applicable to the material (in the material master record) for the purchasing department. The purchasing value key serves as an input aid.
Quantity contract
Quantity contract is the contract in which the purchase quantity of goods or services is agreed
upon. To create a quantity contract, you must enter the agreed quantity.
Quota arrangement
Quota arrangement is the method for dividing the total requirements for a material among certain
sources of supply by allocating quotas to each source. The quota specifies which portion of the requirement should be procured from a given source of supply. The system uses the quota to propose a source in requisitions and purchase orders.
Rejection letter
Rejection letter is the communication addressed to an external supplier informing them that their
quotation (bid) submitted has not been accepted.
Release point
Release point is the person, department, or other organizational unit of a company that must release (approve) the items in a purchase requisition before the ordering process can be initiated. Several release points can be specified by a release strategy.
Release strategy
Release strategy is the term used in purchase requisition processing. The release strategy specifies
which release points must approve the items of a purchase requisition and in which order. A certain
release strategy can, for example, be specified for all purchase requisitions whose value exceeds a
certain amount.
Requirement tracking number
Requirement tracking number is the number that facilitates monitoring the procurement of required materials or services. This number can relate to a requisition note (requisition document or
requirement slip) that was not generated in the system.
Scheduling agreement
Scheduling agreement is a type of outline agreement. A scheduling agreement is a long-term
agreement between a vendor and a customer. It involves the subsequent creation and regular update of schedules for delivering materials specified in the line items of the agreement.
Source list
The source list specifies the allowed (and/or not allowed) sources of supply for a material in a plant.
It also indicates the period for which the source is valid. The source list of material is composed of
source list records, each of which identifies a possible source of supply for the material.
Source of supply
Source of supply is the procurement option for a material. A source of supply can be an external
source (vendor) or an internal source (for example, a company’s plant). The preferred source at any one time can be determined by the system based on quota arrangements, source list records, outline agreements, or info records that have been defined for the material.
Stock
Stock is a materials management term for part of a company’s current assets. It refers to the quantities of raw materials, operating supplies, semi-finished products, finished products, and trading goods in the company’s stores/warehouse.
Stock material
Stock material is material that is always kept in stock (for example, a raw material). A stock material has a material master record and is managed on a value basis in a material stock account.
Storage location
Storage location is the organizational unit that allows the differentiation of material stocks within
a plant.
Unit of issue
Unit of issue is the unit of measure that expresses the quantity of materials issued from the warehouse.The unit of issue allows you to record material usage/consumption, stock transfers, transfer postings, and physical inventories in a unit of measure other than the stock-keeping unit.
Unit of measure
Unit of measure is a unit that allows you to determine the dimension or quantity of a material.
The SAP System contains several units of measure, including:
Ø Base unit of measure
Ø Unit of entry
Ø Unit of issue
Ø Order unit
Ø Sales unit
Valuation area
Valuation area is the organizational level on which stocks of a material are managed based on value.
The valuation area is either:
Ø A plant
Ø Several plants in a company code
Ø All plants in a company code
Valuation category
Valuation category is the criterion for the separate valuation of different stocks of a material. Reasons for split valuation include:
Ø Quality
Ø Batch
Ø Degree of purity
Value contract
Value contract is the contract in which the purchase of goods or services is agreed up to a certain total value. The goods to be released against the contract are specified in contract release orders. Criterion for the performance of a value contract is its agreed total value.
Vendor
The vendor is the external source from whom materials or services can be procured.
Volume-based rebate
Volume-based rebate is the cumulative, period-end discount granted by a vendor to a customer. It is usually based on the volume of business done with the customer within a specified period. The
volume-based rebate is defined with the help of condition records
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