SAP S4 HANA MM

SPECIAL PROCUREMENT-Related to MRP

 SPECIAL PROCUREMENT-Related to MRP
What is meant by Special Procurement?
Apart from standard or normal procurement methods there are some specific
procurements which involves movement types with special indicator to full fill
unique business Requirements. This is referred as Special Procurement.
What are all the special procurement scenarios?
➢ Direct procurement
➢ Stock transfers (interplant transfers)
➢ Withdrawals from an alternate plant
➢ Subcontracting
➢ Consignment
➢ Pipeline materia
What is the Role of SPECIAL PROCUREMENT TYPE KEY?
Special procurement key is a control function used in Special procurement in
which system will look whether the material is procured normally or under
special procurement during Planning run.
Special procurement key is PLANT SPECIFIC and it can be Maintained in
➢ MRP 2 VIEW-Material master
➢ BOM-detailed overview of component

How can we configure SPECIAL PROCUREMENT KEY?

Materials Management -Consumption-Based Planning - Master Data -Define
Special Procurement
➢ The special procurement type key for direct procurement is 51
➢ The special procurement type key for stock transfer is 40
➢ The special procurement type key for withdrawal from an alternative
plant is 70.
➢ The special procurement type key for subcontracting is 30.
➢ The special procurement type key for consignment is 10

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 1.DIRECT PROCUREMENT
What is meant by Direct Procurement in Special Procurement?
➢ Direct Procurement in the context of Special Procurement in SAP MM
refers to a specific procurement scenario where materials are sourced
directly from a supplier without following the standard procurement
process, which typically involves creating purchase requisitions,
purchase orders, and other formal documents.
➢ In direct procurement, the company communicates directly with the
supplier to place orders, specifying the quantity, delivery schedule, and
any other relevant details. This direct communication allows for
flexibility and agility in responding to changing requirements.
➢ Direct procurement is commonly used when there are long-term
agreements or contracts in place with suppliers.
The direct Procurement is interrelated during MRP and Production order.
What are the PRE-REQ before performing DIRECT PROCUREMENT IN
SPECIAL PROCUREMENT?
➢ Maintain special procurement key in MATERIAL MASTER

➢ Maintain one check box in DIRECT PROCUREMENT SETTINGS IN T-

CODE: OPPB
Production - Material Requirements Planning -Planning Direct
Procurement -Settings for Direct Procurement.

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 STEP-1 Create one production order in T-code:CO01

The production order contains one finished (359) product with two BOM
products among two products 1st (360-id tag) should be produced internally
and 2nd (361-id holder)one is procured externally.

STEP-2 Run MRP:

While running MRP for whole finished product 359 the system will create
only one procurement proposal for the externally procured material which is
361-id card holder.
We can convert that PROCUREMENT PROPOSAL TO PR which will be
reflected in DISPLAY PRODUCTION ORDER and PR will hold “F” as the
ACC ASS CAT which denotes the PRODUCTION ORDER.

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 2.SUBCONTRACTING
In this procurement the company will provide materials or child components
to the sub-contractor, then Subcontractor should manufacture the required
product and give it to the Company. The company will pay vendor only for
the service done to the material.
INITIAL MASTER DATA REQUIREMENTS:
➢ Maintain BP
➢ Maintain material & sales view must
➢ Child components or BOM byCS01
➢ Production version-T-code:SE38,
PROGRAM=CS_BOM_PROVIDE_MIGRATION.
(Allow BOM to explore we can check it in MRP 4 view)

STEP-01 CREATE SUB-CONTRACTING P.O:

➢ Fill vendor, item category(L), plant, Storage location.
➢ File icon-Material data-component (we can add child components) or
If we maintained BOM it will display automatically.
STEP-02 PROVISION OF COMPONENTS:
I)BY SUB-CONTRACTING COCKPIT: ME20N
ii)TRANFER POSTING-one step=541+O
-Two step= 30A/ 30C+O
iii)Third part vendor and Subcontractor Scenario:

➢ We will create P.O for the components and sent to the third-party
vendor and Subcontractor will receive the components and we will do
GR for that by 101+O
(Mention third party vendor in supplier address of P.O).
➢ Finally Sub-contractor will give back us FINISHED PRODUCT then
we will do GR as 101.
STEP-03 POST GOODS RECEIPT FOR SUB-CONTRACTING P.O:
➢ Received product will be as 101
➢ Consumed products as 543 O (-)

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 ACCOUNTING ENTRIES TAKES PLACE DURING SUB-
CONTRACTING PROCESS:
PROCESS GL ACC NAME TRANSACTION KEY WITH
ACC ENTRY
Goods issue (541+o) DEBIT- GBB
Consumption
CREDIT-Semi BSX
finished goods
Goods received (101) DEBIT-Finished BSX
&543(o) for consumption goods
CREDIT-Sub BSV
contracting cost
Gr for service DEBIT-Purchased FRL
services
CREDIT-GR-IR WRX

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 3.VENDOR CONSIGNMENT

Consignment means the material provided by vendor is stored in the

company premises but the vendor remains the legal owner.
STEP-1: Master data requirements:
➢ Create material master
➢ Create Vendor master record-ERS enabled.
➢ Purchase info record-Tax code(Mandatory).
STEP-2: Create Consignment Purchase order: ME21N
Create Consignment P.O using ME21N and Item category ”K” and Quantity
(Net price will be shaded in P.O)
EFFECTS OF ITEM CATEGORY ‘K’
➢ Material number must be entered.
➢ Cannot enter P.O price and condition for item.
➢ GR is non valuated
➢ Cannot enter invoice for Consignment item

(We can also use K as item category in Outline Agreements and Purchase
requisition. we can also include the Vendor Consignment procurement in
demand planning by adding SPECIAL PROCUREMENT TYPE KEY in
Material master record)
STEP-3 GOODS RECIEPT FOR CONSIGNMENT P.O:
We can enter GR’S in our Consignment store with or without P.O reference.
All GR’S in Consignment Stock are non-valuated.
We can do GR in the following possible ways:
1.With P.O reference: 101+K
2.Wihtout P.O: 501+K, 503+K, 505+K
3.Initial Stock entry: 561+K, 563+K, 565+K
STEP-4 MATERIAL USAGE:
1.Consume directly to production or cost centre.

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2.Post to Own stock and using for Consumption.
I)GOTO MIGO screen: GOODS ISSUE: OTHERS
Then we have to mention the QUANTITY and MOVEMENT TYPE as 201+K
and enter VENDOR.
Accounting Entries:
GR-IR (Payment KON Credit (-)
Consignment)
Consumption GBB Debit (+)

ii)GOTO: MIGO SCREEN: TRANSFER POSTING: OTHER.

Here we have to maintain MATERIAL, QUANTITY, DESTINATION,
STOCK TYPE, and MOVEMENT TYPE AS 411+K and Vendor also.
Accounting Entries:
GR-IR (Payment KON Credit (-)
Consignment)
Stock Account BSX Debit (+)

STEP-5 VENDOR SETTLEMENT:

T-code -MRKO
We can display and also, we can settle in this screen.

Note:
MMBE-Stock Overview
MB54-Consignment Stock Display

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 4.PIPELINE PROCUREMENT
The material that enters the production process directly from a pipeline (oil,
Water) and via Cable (electricity) which can be consumed. It is represented by
PIPE.
Characteristics of Pipeline Material:
➢ There is no planning, storage, inventory activities
➢ Only we can post withdrawal for the Material consumed through that
posting vendor liability is raised and settled periodically.

Step-01: Create Master data

Create Material (MM01) with Material type as Pipeline material and we need
vendor also a pre-requisite.
Step-02: Create Purchase info record:
For Pipeline procurement Purchase info record is mandatory (ME11) where we
have to maintain TAX CODE and Price for the Pipeline material.
Step-03: Issuing of Pipeline Material:
We can issue the pipeline material in MIGO screen by selecting “GOODS
ISSUE----OTHERS”
The possible movement types for issuing the pipeline material as follows:
201 P Mvt - Consumption for cost centre from pipeline
261 P Mvt- Consumption for order from Pipeline
281 P Mvt- Consumption for network from Pipeline
291 P Mvt- Consumption for all Acc assignment from pipeline
Step-04: Vendor settlement
Finally, we can make settlement to Vendor by using T-code =MRKO

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 4.WITHDRAWAL FROM ANOTHER PLANT
A Company has two manufacturing Facility PLANT-A as major one and
PLANT-B as sub-one whenever a material deficit occurs, while creating
Production order for the material the system itself suggest the supplying plant as
PLANT-B which is known as WITHDRAWAL FROM ALTERNATIVE
PLANT.
The special procurement type key for withdrawal from an alternative plant is
70.
This special procurement type key works well when some components of the
BOM or assembly are procured or withdrawn from another plant that is in close
physical/geographical proximity
During the Configuration of special procurement type key (Production-Material
requirements planning-Master Data-Special procurement types) we have to
assign the issuing plant and enable the WITHDRAW FROM ALT PLANT
checkbox here,

Finally, the Component Overview screen of the production order, in which the
Component will show the issuance Plant (withdrawal plant)

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 6.STOCK-TRANSFER (INTER PLANT TRANSFER)
➢ The special procurement type key for stock transfer is 40.
➢ components produced in one plant may be required for the assembly in
another plant, which requires a stock transfer of components.
➢ The special procurement type key requires that a supplying plant as well
as receiving plant. Additionally, Special Procurement U is assigned to the
special procurement type key.

supplying plant
After the MRP run, by using the above procurement key 40 the system directly
creates the Stock transport requisition then we can convert those requisition to
Stock transport order in which the Materials, quantity, supplying plant and
Receiving plant in it.
STEP-01: Create STO in receiving plant:
ME21N: Document type-UB:
Enter Material, supplying plant receiving plant, quantity.
STEP-02 Perform Goods issue from supplying Plant:
In the MIGO-Screen we have to perform Goods issue against the STO (Mvt351-
) from the receiving plant, the moment good issue done from the issuing plant
same time the same stock qty will be reflected in the receiving plant.

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T-code involved:
MB5T-Display Stock in transit
MB5TD-view stock in transit on a key date
MB5SIT-offers more parameters selection options as well as greater detail about
the stock in transit.

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