15 SAP MM Interview Questions and Answers

SAP Material Management (MM) is a crucial module in the SAP ERP system, designed to facilitate the procurement and inventory functions within an organization. It integrates seamlessly with other SAP modules like Finance (FI), Sales and Distribution (SD), and Production Planning (PP), ensuring a streamlined and efficient workflow. Mastery of SAP MM can significantly enhance operational efficiency and is highly valued in industries ranging from manufacturing to retail.

This article offers a curated selection of interview questions tailored to SAP MM, aimed at helping you demonstrate your expertise and problem-solving abilities. By familiarizing yourself with these questions, you can confidently navigate the technical aspects of SAP MM and showcase your proficiency to potential employers.

SAP MM Interview Questions and Answers

1. Explain the procurement process.

The procurement process in SAP MM involves several steps:

• Requirement Determination: Identifying the need for materials or services, which can be triggered automatically through MRP or manually.
• Source Determination: Finding potential sources of supply by checking existing contracts, source lists, or conducting an RFQ process.
• Vendor Selection and Comparison of Quotations: Comparing quotations from vendors to select the most suitable one based on criteria like price and delivery time.
• Purchase Order Processing: Creating and sending a purchase order to the selected vendor, detailing material specifications, quantity, price, and delivery date.
• Purchase Order Monitoring: Tracking the status of the purchase order to ensure timely delivery.
• Goods Receipt: Posting a goods receipt upon receiving materials, updating inventory levels, and allowing for quality inspection if needed.
• Invoice Verification: Verifying the vendor’s invoice against the purchase order and goods receipt to ensure accuracy.
• Payment Processing: Processing payment to the vendor as per agreed terms, completing the procurement cycle.

2. Describe the material master data and its importance.

Material master data in SAP MM is core data used across various modules. It contains information needed to manage a material, such as part numbers, descriptions, and units of measure. This data is essential for business processes like procurement and inventory management.

The material master data is divided into different views, each relevant to a specific business function. For example:

• Basic Data: General information about the material, such as description and base unit of measure.
• Purchasing Data: Information related to procurement, such as purchasing group and order unit.
• Sales Data: Data relevant to sales and distribution, including sales organization and distribution channel.
• Accounting Data: Financial information, such as valuation class and price control.
• Warehouse Management Data: Information for managing materials in the warehouse, including storage bin and stock placement strategies.

Accurate material master data ensures data consistency, reduces redundancy, and improves business process efficiency. It plays a role in reporting and analytics, enabling better decision-making.

3. What are the different types of purchasing info records?

In SAP MM, purchasing info records store information about a material and a vendor. There are four main types:

• Standard: Used for standard purchase orders, containing information about the material, vendor, and conditions like prices and delivery times.
• Subcontracting: Used when a material is sent to a vendor for further processing, including details about components and the final product.
• Consignment: Used when materials are stored at the buyer’s premises but remain the vendor’s property until withdrawn for use.
• Pipeline: Used for materials supplied through a pipeline, such as water or electricity, including details about the pipeline material and conditions.

4. What are the key tables used in SAP MM?

In SAP MM, several key tables manage various aspects of materials management. Here are some of the most important ones:

• MARA: General Material Data
• MAKT: Material Descriptions
• MBEW: Material Valuation
• MKPF: Material Document Header
• MSEG: Material Document Segment
• EKPO: Purchasing Document Item
• EKBE: History per Purchasing Document
• EBAN: Purchase Requisition
• RESB: Reservation/Dependent Requirements
• EBKN: Purchase Requisition Account Assignment

5. Differentiate between a purchase requisition and a purchase order.

A purchase requisition is an internal document requesting the procurement of materials or services, typically created by a department within the organization. It includes details like material type, quantity, and required delivery date.

A purchase order is an external document sent to a vendor to procure materials or services. Once the purchase requisition is approved, it can be converted into a purchase order, which includes detailed information such as the vendor’s name, pricing, and delivery instructions.

6. What is the purpose of a movement type in inventory management?

Movement types in SAP MM differentiate between various material movements, such as goods receipt, goods issue, and stock transfer. Each movement type is represented by a three-digit code and has predefined settings that determine how the system should handle the movement, including stock quantity updates and accounting document generation.

For example, movement type 101 is used for goods receipt against a purchase order, while movement type 201 is used for goods issue for a cost center.

7. Outline the invoice verification process.

Invoice verification in SAP MM involves several steps:

1. Invoice Receipt: The process begins when an invoice is received from a vendor.

2. Invoice Entry: The received invoice is entered into the SAP system, either manually or through automated processes like EDI.

3. Three-Way Match: The system performs a three-way match to ensure the invoice matches the purchase order and goods receipt.

4. Invoice Posting: Once the three-way match is successful, the invoice is posted in the system, creating an accounting document.

5. Payment Processing: The posted invoice is scheduled for payment according to the agreed terms.

6. Discrepancy Handling: If there are discrepancies, the system flags the invoice for review, requiring resolution before posting.

7. Reporting and Analysis: Generating reports and analyzing data to ensure compliance and identify areas for improvement.

8. What is the use of MRP (Material Requirements Planning)?

Material Requirements Planning (MRP) in SAP MM ensures that the right materials are available at the right time for production and delivery. It helps in planning and controlling inventory levels, production schedules, and procurement activities. MRP analyzes demand for finished products and breaks it down into requirements for raw materials and components, scheduling procurement and production activities accordingly.

The primary objectives of MRP are to:

• Ensure material availability for production and customer delivery.
• Maintain optimal inventory levels to reduce carrying costs.
• Plan manufacturing activities, delivery schedules, and purchasing activities efficiently.

9. How do you handle consignment stocks?

In SAP MM, consignment stock refers to materials stored at your premises but owned by the vendor. You only pay for the materials when you use them. Handling consignment stocks involves several steps:

• Consignment Info Record: Create a consignment info record with vendor and material information.
• Purchase Order: Create a consignment purchase order specifying the materials as consignment items.
• Goods Receipt: Perform a goods receipt when the consignment stock arrives, receiving it into the consignment stock segment of inventory.
• Consignment Withdrawal: Perform a consignment withdrawal when using the stock, moving it from consignment to your own stock and creating a liability to the vendor.
• Settlement: Settle the consignment liabilities with the vendor, generating an invoice for the consumed stock.

10. How do you configure pricing procedures?

Configuring pricing procedures in SAP MM involves several steps and components. Pricing procedures determine the conditions under which prices are calculated for materials and services. Here are the main steps involved:

• Define Condition Types: Represent different pricing elements such as discounts, surcharges, and taxes.
• Create Access Sequences: Determine the order in which the system searches for valid condition records.
• Define Condition Tables: Store the condition records based on fields required for pricing, such as material and vendor.
• Create Pricing Procedure: A sequence of condition types used to calculate the final price.
• Assign Pricing Procedure to a Purchase Organization: Ensures the correct pricing procedure is used during the procurement process.

11. How do you perform physical inventory?

Performing physical inventory in SAP MM involves several steps to ensure inventory records match actual physical stock:

• Create Physical Inventory Document: List materials and storage locations to be counted using transaction code MI01.
• Enter Count Results: Perform the actual counting and enter results into the system using transaction code MI04.
• Post Differences: Compare counted quantities with book quantities and post discrepancies using transaction code MI07.
• Reconcile Inventory: Ensure all discrepancies are addressed and inventory records are accurate.

12. Explain the integration points between SAP MM and other modules.

SAP MM integrates with several other SAP modules to ensure seamless business processes. Key integration points include:

• SAP SD (Sales and Distribution): Manages sales orders and deliveries, triggering material requirements in MM.
• SAP PP (Production Planning): Ensures material availability for production, generating material requirements managed by MM.
• SAP QM (Quality Management): Allows for quality inspections of materials, with results recorded in MM.
• SAP FI (Financial Accounting): Records financial transactions related to procurement.
• SAP CO (Controlling): Tracks and manages costs associated with procurement and inventory management.
• SAP WM (Warehouse Management): Ensures efficient warehouse operations, facilitating inventory management and order fulfillment.

13. Describe the process of handling subcontracting.

Subcontracting in SAP MM involves sending raw materials or components to a subcontractor for processing. The process includes:

• Create a Subcontracting Purchase Order (PO): Specify the finished product and components to be provided to the subcontractor.
• Transfer Components to Subcontractor: Transfer required components from the company’s inventory to the subcontractor’s location.
• Goods Receipt for Finished Product: Receive the finished product back into the company’s inventory and post a goods receipt.
• Invoice Verification: Verify and process the subcontractor’s invoice for the service provided.
• Settlement: Account for the costs of components sent to the subcontractor and service charges.

14. How do you manage stock transport orders?

Managing stock transport orders (STOs) in SAP MM involves several steps to ensure efficient material transfer between plants or storage locations:

• Creation of Stock Transport Order (STO): Initiate the transfer of materials using transaction code ME21N, specifying sending and receiving plants, materials, and quantities.
• Goods Issue at Sending Plant: Post the goods issue at the sending plant using transaction code MIGO, reducing stock and generating a material document.
• Goods Receipt at Receiving Plant: Post the goods receipt at the receiving plant using transaction code MIGO, increasing stock and generating a material document.
• Stock Transport Order Monitoring and Reporting: Monitor the status of the STO and ensure successful transfer completion using reports and transaction codes like MB5T.
• Invoice Verification (if applicable): Perform invoice verification for inter-company billing to ensure correct billing for transferred materials.

15. What is the significance of the purchasing organization in SAP MM?

In SAP MM, the purchasing organization is an organizational unit responsible for procuring materials and services, negotiating terms with vendors, and managing procurement activities.

Key points about the purchasing organization:

• Vendor Negotiations: Responsible for negotiating prices, delivery terms, and other conditions with vendors.
• Procurement Process: Oversees the entire procurement process, ensuring streamlined and efficient activities.
• Legal Entity: Can act as a legal entity, entering into contracts and agreements with vendors on behalf of the company.
• Reporting and Analysis: Important for tracking procurement performance, analyzing spending patterns, and identifying cost-saving areas.
• Integration with Other Modules: Integrated with other SAP modules like Finance (FI), Controlling (CO), and Warehouse Management (WM) for seamless information flow.