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As an SAP MM (Materials Management) consultant with over 18 years of experience, I recognize that proficiency in SAP MM is vital for supply chain professionals in today’s dynamic business environment. SAP MM enables organizations to effectively manage their procurement processes, inventory, and logistics, ensuring optimal resource utilization and cost efficiency. Whether you're gearing up for an interview or looking to deepen your expertise, this collection of interview questions will offer a thorough exploration of essential concepts, practical applications, and problem-solving strategies necessary for advancing your career in SAP MM
1. What is SAP MM?
A: SAP MM (Materials Management) is a core module in SAP ERP that manages procurement and inventory functions, helping organisations streamline material management processes.
2. Explain the procurement process in SAP MM.
A: The procurement process in SAP MM includes determining requirements, creating purchase orders, selecting vendors, sending an RFQ (Request for Quotation), receiving goods, and paying the vendor.
3. What is a purchase requisition in SAP MM?
A: A purchase requisition is an internal request to the purchasing department to procure a specific quantity of a material or service at a particular time.
4. What is a request for quotation (RFQ)?
A: RFQ is a document sent to vendors asking them to provide their pricing and terms for supplying specific materials or services.
5: What is a purchase order (PO)?
A: A PO is a formal request to a vendor to supply goods or services under agreed conditions.
6. Explain what a material master record is.
A: The material master contains essential information for managing materials within an organisation, such as descriptions, units of measure, procurement types, and stock levels.
7: What are the different types of stock in SAP MM?
A: The main types are unrestricted use, quality inspection, and blocked and reserved stock.
8. What is a goods receipt in SAP MM?
A: Goods receipt is receiving goods from vendors, which updates inventory levels and initiates the invoice verification process.
9. What is invoice verification in SAP MM?
A: Invoice verification matches the purchase order and goods receipt with the vendor's invoice before payment.
10. What is a movement type in SAP MM?
A: Movement types define the type of stock movement, such as goods receipt, goods issue, transfer posting, etc.
11. What is a valuation class in SAP MM?
A: The valuation class helps determine the G/L account for the material's stock posting. It groups materials with the same accounting requirements.
12. What is the use of transaction ME21N in SAP MM?
A: ME21N is used to create a purchase order.
13. Explain the difference between a purchase requisition and a purchase order.
A: A purchase requisition is an internal document requesting the purchase of goods, whereas a purchase order is a legally binding document sent to a vendor.
14. What is the purpose of the goods issue in SAP MM?
A: Goods issues are the process of withdrawing materials from inventory, which decreases stock levels and is generally related to production or customer delivery.
15. What is MRP in SAP MM?
A: MRP (Material Requirements Planning) ensures that the right materials are available for production at the right time by analysing current stock levels and future demand.
16. What is a stock transport order (STO)?
A: STO transfers stock between different plants or locations within the same company code.
17. What is split valuation in SAP MM?
A: Split valuation allows the valuation of a material to be divided based on factors such as batch, procurement type, or production cost.
18. What is a scheduling agreement in SAP MM?
A: A scheduling agreement is a long-term agreement with a vendor to supply materials based on scheduled deliveries.
19. What are the steps involved in the procurement cycle?
A: The steps include identifying requirements, creating purchase requisitions, selecting vendors, creating purchase orders, receiving goods, and verifying invoices.
20. What is batch management in SAP MM?
A: Batch management manages and tracks materials with specific attributes, such as production lots or manufacturing batches.
21. What is the importance of a material type in SAP MM?
A: Material types control which views can be maintained in the material master and determine the procurement process and account determination.
22. Explain consignment stock in SAP MM.
A: Consignment stock refers to materials stored at a company's premises but remaining the property of the vendor until they are used or sold.
23. What is a release strategy in SAP MM?
A: A release strategy is a procedure for approving or releasing purchase requisitions or purchase orders based on certain conditions, such as value or material type.
24. What is the role of a source list in SAP MM?
A: A source list defines which vendors can supply specific materials and can be used to block or allow procurement from certain vendors.
25. What is subcontracting in SAP MM?
A: Subcontracting is a process in which a company provides raw materials to a vendor, who manufactures the finished product.
26. How is a vendor master record structured in SAP MM?
A: The vendor master record contains data for managing vendor transactions and is divided into three segments: general data, company code data, and purchasing organization data.
27. What is automatic account determination in SAP MM?
A: Automatic account determination ensures that inventory postings are automatically posted to the correct G/L accounts during transactions like goods receipts or issues.
28. What are the types of special stocks in SAP MM?
A: Special stocks include consignment stock, subcontracting stock, project stock, and pipeline material.
29. What is the quota arrangement in SAP MM?
A: A quota arrangement divides the procurement of material among multiple suppliers, specifying the percentage of the total to be ordered from each supplier.
30. Explain LIFO and FIFO in SAP MM.
A: LIFO (Last In, First Out) and FIFO (First In, First Out) are inventory valuation methods for managing stock issues. FIFO assumes materials received are issued first, while LIFO assumes the opposite.
31. What is price control in SAP MM?
A: Price control defines how the price of materials is managed using standard price or moving average price.
32. What is the use of a blanket purchase order in SAP MM?
A: A blanket purchase order is used for recurring procurement over a specific period with a vendor without specifying the quantity or value in advance.
33. What is a plant in SAP MM?
A: A plant is an organisational unit in SAP that represents a physical location where goods are produced, stored, or from which services are rendered.
24. What is external procurement in SAP MM?
A: External procurement refers to procuring goods and services from external vendors.
35. What is internal procurement in SAP MM?
A: Internal procurement refers to transferring stock within the same organisation from one plant to another.
36. What is the procurement type in SAP MM?
A: Procurement type determines whether a material is procured externally or produced internally.
37. What is a purchase group in SAP MM?
A: A purchase group is a key that identifies the buyer or group responsible for procurement activities.
38. What is the difference between planned and unplanned goods receipt?
A: A planned goods receipt is based on a purchase order or scheduling agreement, while an unplanned goods receipt does not refer to any document and is manually posted.
39. What is the importance of storage location in SAP MM?
A: Storage location helps to manage and track the physical inventory of materials within a plant.
40. What is a reservation in SAP MM?
A: A reservation ensures that stock is set aside for a specific purpose and unavailable for other uses.
41. What is a material document in SAP MM?
A: Every material movement (goods receipt, issue, or transfer) generates a material document that records the transaction.
42. What is the difference between a goods issue and goods receipt?
A: Goods receipt increases stock levels, while goods issue decreases stock levels in inventory.
43. What is a stock transfer?
A: A stock transfer is a movement between an organization's storage locations, plants, or company codes.
44. What are the different types of stock transfers in SAP MM?
A: Types include intra-plant transfer, inter-plant transfer, and inter-company stock transfer.
45. What is physical inventory in SAP MM?
A: Physical inventory is the process of counting and verifying the actual stock levels in storage locations.
46. Explain SAP MM integration with other modules.
A: SAP MM integrates with modules like SD (Sales and Distribution), PP (Production Planning), FI (Financial Accounting), and WM (Warehouse Management) for smooth business processes.
47. What is the importance of the pricing procedure in SAP MM?
A: The pricing procedure determines the conditions under which pricing occurs during procurement processes like purchase orders and invoices.
48. What is the role of info records in SAP MM?
A: Info records store information about materials and the vendors supplying those materials, such as pricing, delivery terms, and lead time.
49. What is an outline agreement in SAP MM?
A: An outline agreement is a long-term purchasing agreement between a vendor and a customer for a specific period, which includes contracts and scheduling agreements.
50. What is SAP MM Master Data?
A: Master Data in SAP MM includes the material master, vendor master, purchasing info record, and source list, all of which are essential for processing procurement transactions.
Author Bio:
Mr. Gautham Kumar, the author of this comprehensive guide on the "Top 50 SAP MM Interview Questions and Answers," brings over 18 years of hands-on experience in the field of SAP Materials Management (MM). Throughout his career, he has worked on various real-time SAP projects across multiple industries, providing valuable insights into the complexities and nuances of the SAP MM module.
With a vast background in SAP MM and an extensive track record of training professionals, Mr. Gautham Kumar stands as a trusted authority in the SAP MM training community. His guidance has been instrumental in shaping the careers of many SAP aspirants, making him a reliable source for those preparing for job interviews. This blog article is meticulously crafted to align with the current industry standards and practices in SAP MM, ensuring that the information provided is both accurate and up-to-date.
Tue, 10 Dec 2024
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