What is SAP Material Master?
SAP Material Master is a repository of data related to the material. The Material Master serves as a single source of information for each material and it maintains and access all information about a material.
We use Material Master throughout the SAP system and by different business users.
Controlling Functions of SAP Material Master
Material types have many controlling functions including the following:-
- Number assignment
- Number range
- Procurement type
- Screen setup. (allowed views, field selection etc.)
- Price Control
- Account Determination
- Quantity and Value updating in plants
Material Types in SAP Material Master
A Material Type can group materials that are purchased or produced internally or that have no value. SAP delivers a set of standard, predefined material types but you can also create new types.
What is a Material Type?
A material type is the definition of a group of materials with similar attributes, such as raw material, semi-finished material, finished material or consumable material. We must assign a material type to each record entered into the Material Master.
Pre-Configured Material Types in SAP
SAP provides preconfigured material types. However, you can also create new material types by copying a standard material type and making the required changes.
Some SAP-provided material types include:-
- ROH- Raw Material
- HALB- Semi Finished material
- FERT- Finished material
- HAWA- Trading material
Let us understand them in detail.
Standard Material Types in SAP Material Master
Several SAP-delivered material types can be used without needing to configure any new material types. The standard material types include the following:-
CONT- Kanban Container
This material type is delivered by SAP for creating Kanban containers. A Kanban container is used in a kanban container-based system. Sometimes implemented at a specific manufacturing plant for just-in-time (JIT) replenishment of parts on the production line. A kanban container is used to transport the material from the supply area to the manufacturing location. Materials used as kanban containers only have the basic data view.
DIEN -Services
Services are either internally or externally supplied by a vendor. Services can involve activities such as consulting, garbage collection or legal services. Service material master records don’t have storage information.
Read related: Vendor Master Data in SAP
ERSA- Spare Parts
Spare parts are materials used for equipment maintenance in the plant. The material is purchased and stored like any other purchased item but a spare part is not sold and therefore does not contain sales information. If a maintenance item is sold, then the material should use a different material type, such as material type HAWA for trading goods.
FERT- Finished Goods
A finished good is a material that has been manufactured by some form of production from items, such as raw materials. A finished product is not purchased and this does not contain any purchasing information. However, a finished good is sold and thus does contain sales information.
FHMI- Production resources/ tools
Production resources/tools are purchased and used by the plant maintenance department. This material type is assigned to items used in the maintenance of plant equipment such as test machines, drill bits or calibrating tools. The material type for PRT does not contain sales information because the PRTs are not purchased to sell. In addition, PRTs are only managed on a quantity basis.
HALB: Semi Finished goods
Semi Finished products are often purchased or produced and then completed and sold as finished goods. Semi-finished products could come from another part of a company or a vendor. The semi-finished material type allows for purchasing and work schedules but not sales. If a company also sells its semi-finished products then sales views can be activated.
HAWA: Trading goods
Trading goods are generally materials that are purchased from vendors and sold. This kind of material type only allows purchasing and sales information because no internal operations are carried out on these materials. An example of trading goods can be found at many computer manufacturers who sell their manufacturing goods but also may sell printers and routers. These trading goods are not manufactured by the company but are instead bought from other manufacturers and sold alongside their own manufactured computers.
HERS: Manufacturer parts
Manufacturer parts are materials that can be supplied by different vendors who may use different part numbers to identify the material. This type of material can be found in any retail store. For example, a DIY retail store may sell a three-step ladder for USD 20, but the ladder can be made by three different manufacturers, each of which uses a different part number. The store will then have three part numbers for the ladder, but the consumer won’t be aware of this fact.
HIBE: Operating Supplies
These materials are vendor-purchased operating supplies used in the production process. This type of product includes lubricants, compressed air, or solder. The HIBE material type can contain purchasing data but not sales information.
LEIH: Returnable packaging
Reusable packaging is used to pack finished goods to send to the customer. When the finished product is unpacked, the customer is obligated to return the returnable packaging material to the vendor.
NLAG : Non Stock material
The stock material type is used for materials that are not held in stock and are not inventoried. These materials can be called “consumables” and include items such as maintenance gloves, safety glasses or grease. Items in this material type are usually purchased only when needed.
PIPE: Pipeline Material
The pipeline material type is assigned to materials that are brought into the production facility via pipelines. These materials are not usually planned because they are always on hand. This type of material is used. For example oil, water, electricity or natural gas.
ROH: Raw Materials
The raw material is purchased material that is fed into the production process and may result in a finished product. No sales data exists for a raw material because this material type is not sold. To reclassify a raw material for sale then the material type would be changed to HAWA for trading goods.
VERP: Packaging material
Unlike material type, the packaging material type is for materials that are packaged but free of charge to customers in the delivery process. Although free, the packaging material may still have value and physical inventory recorded.
Views in SAP Material Master
User departments such as purchasing, sales and production are referred to as views in the material master. This setting determines which view can we select for the material type. For example in sales, the idea is essential for finished goods because the sales department needs to maintain data specific to selling materials. Similarly, a purchasing view is necessary for raw materials and packing materials to enable their purchase.
Also Read: Production Order Calculation in SAP S/4HANA
Ext.Purchase order/Int.Purchase Order
This is a type of procurement. This setting determines whether internal procurement, external procurement or both are allowed.
Price Control
Select either Standard Price or Moving Average Price/Periodic Unit Price for a material type. When users create a material master record, they have to select the moving average or standard cost. It is also changeable.
Number Range in SAP Material Master
When creating a material master record, each material must have a unique number. Two ways of defining a number range exist.
Internal number assignment– The SAP system assigns a number within the defined number range.
External number assignment– A number is externally assigned within the defined number range interval. The intervals for external number assignments can be defined as numerical as well as alphanumeric values.
In real-world scenarios, most companies use internal number assignment when they want numerical number ranges for materials so that system automatically assigns the unique material number serially and incrementally.
Define Field Selections under SAP Material Master
The following controls the field status of a field in material master data:-
- Material Type
- Transaction Code
- Industry sector
- Plant
- Procurement type (internal/external)
Similar fields are organized under different groups called field selection groups.
Material Group
The benefits of using material groups can be seen in reporting, such as spend analysis in the distribution of roles and responsibilities in purchasing and inventory departments and so on. For example, some companies have buyers based on the material group.
One buyer may be responsible for procuring only materials under material groups for “Stationery” and “Repairs”. Another buyer may be responsible for procuring materials under the material group “Steel” etc.
SAP Material Master Creation
Material Master #585 is created under Material Type – ROH, Plant – S004, storage Location S004.
Accounting Information
Below is the accounting information for Material Master # 585.
Purchase Order Creation
Purchase order # 4500000254 has been created for purchase Organization S004 belonging to company code S004.
Goods Received
Goods against this PO will be received in plant S004 and storage location S004.
Conclusion
In this blog, I explained Material Master components such as material types, material number range, purchase date etc.
SAP logistics super users are responsible for creating a material master for posting different documents like purchase orders, purchase info recurred, etc. Thus, if you are thinking of this role, you must understand this topic thoroughly.
It is also important for Finance consultants to understand this as SAP S/4HANA Finance is integrated with Logistics.
Also Read: What is SAP S/4HANA Finance?
