SAP MM Interview Questions

1. What are the key submodules in SAP MM, and why are they important?

Answer: The key submodules include:

• Purchasing: Handles procurement and supplier management.
• Inventory Management: Tracks goods movements and stock levels.
• Logistics Invoice Verification: Ensures vendor invoices match purchase orders and goods receipts.
• Material Master: Maintains centralized information on materials.
  These submodules ensure seamless procurement and inventory operations, crucial for large enterprises like Deloitte and IBM.

2. How do you configure the release strategy for purchase orders in SAP MM?

Answer:

• Define release codes and groups.
• Create release indicators and conditions.
• Assign release strategy to document types via classification (SPRO -> Materials Management -> Purchasing).
  This configuration helps enforce procurement approvals, a key process for MNCs like Infosys and TCS.

3. How do you handle stock transfers between plants in SAP MM?

Answer:
Stock transfers can be handled using:

• One-Step Transfer (movement type 301)
• Two-Step Transfer (movement type 303 and 305)
  Alternatively, Stock Transport Orders (STOs) can be used with or without billing, frequently adopted by HCL and Wipro for large-scale operations.

4. Explain the subcontracting process and its business application.

Answer:
The process includes:

• Creating a subcontracting purchase order (ME21N).
• Sending components to the subcontractor (MB1B, movement type 541).
• Receiving finished goods (MIGO).
• Invoice verification (MIRO).
  Subcontracting is essential for companies like EY and PwC when outsourcing part production.

5. What is GR/IR clearing, and how do you manage discrepancies?

Answer:
GR/IR (Goods Receipt/Invoice Receipt) clearing ensures correct postings for goods receipts and vendor invoices.
To manage discrepancies:

• Check GR/IR reports.
• Reconcile or post adjustments using transaction MR11.
  This process helps maintain accurate financial reporting, a priority for financial consulting giants like Deloitte and PwC.

6. How do you perform vendor evaluation in SAP MM?

Answer:
Vendor evaluation considers price, quality, and delivery using a scoring mechanism.
Steps include:

• Maintain criteria in transaction ME61.
• Assign weights and scores.
• Analyze results to rank vendors.
  Infosys and IBM use this process for optimal vendor management.

7. What are the differences between contracts and scheduling agreements?

Answer:

• Contracts: Long-term agreements without a specific schedule.
• Scheduling Agreements: Time-bound delivery schedules with predefined quantities.
  TCS and Accenture leverage scheduling agreements for project-based procurement.

8. How do you handle goods movement in SAP MM, and what are the common movement types?

Answer:
Goods movements include goods receipts, issues, and stock transfers.
Common movement types:

• 101: Goods receipt for a purchase order
• 201: Goods issue to cost center
• 301: Stock transfer
  Effective inventory handling, like in IBM and HCL, depends on proper movement management.

9. How do you configure automatic account determination in SAP MM?

Answer:
Steps include:

• Maintain valuation grouping codes.
• Assign account category references.
• Link G/L accounts to valuation classes in OBYC.
  This ensures seamless financial integration, critical for Wipro and Accenture.

10. What is split valuation, and when is it used?

Answer:
Split valuation allows tracking material costs differently based on origin or batch.
It is used when materials have different procurement sources or quality.
MNCs like EY and Deloitte implement this for cost control in global operations.

11. What is the difference between a Purchase Requisition (PR) and a Purchase Order (PO)?

Answer:

• Purchase Requisition (PR): Internal document requesting material or services.
• Purchase Order (PO): Legally binding document issued to a vendor for procurement.
  MNCs like HCL and TCS rely on these documents to streamline procurement processes.

12. How do you perform invoice verification, and what are the common errors?

Answer:
Steps for invoice verification:

• Use transaction code MIRO.
• Match vendor invoices with GR and PO data.
  Common errors:
• Quantity Mismatch: GR and invoice quantities differ.
• Price Mismatch: Invoice price differs from PO.
  Resolution involves clearing discrepancies in GR/IR accounts, essential for Deloitte and EY for financial accuracy.

13. How do you handle consignment stocks in SAP MM?

Answer:

• Goods receipt: Post without taking ownership (movement type 101 K).
• Consumption: Pay vendor only for consumed stock using MRKO.
  Consignment helps IBM and Wipro reduce procurement risks by holding vendor stock.

14. What is a reservation, and how is it created in SAP MM?

Answer:
A reservation ensures material availability for specific needs.
Steps to create:

• Use transaction code MB21.
• Specify material, quantity, and movement type.
  MNCs like Infosys use this for production planning and project requirements.

15. How does SAP MM integrate with SAP SD and SAP PP modules?

Answer:

• Integration with SD: Availability checks and stock transfers for sales orders.
• Integration with PP: Material availability checks for production orders.
  Accenture and TCS leverage this integration for seamless operations between supply chain and sales functions.

16. What are outline agreements, and how do you manage them?

Answer:
Outline agreements are long-term agreements with vendors.

• Contracts: No specific delivery dates (ME31K).
• Scheduling Agreements: Predefined delivery dates (ME31L).
  Wipro and IBM use these agreements for better supplier relationship management.

17. How do you perform a stock transfer between storage locations within the same plant?

Answer:

• Use transaction code MB1B with movement type 311.
• Specify source and destination storage locations.
  MNCs like HCL manage internal logistics using stock transfers.

18. What is RTP, and how is it managed in SAP MM?

Answer:
RTP stands for Returnable Transport Packaging, reusable packaging materials.
Management involves tracking RTP using movement types like 561 for initial stock.
Deloitte and EY prioritize RTP for sustainable supply chain practices.

19. How do you configure and use source lists in SAP MM?

Answer:
Source lists specify approved vendors for procurement.
Steps:

• Maintain source lists using transaction ME01.
• Mark as fixed source if needed.
  Source lists ensure compliance with procurement strategies at companies like Infosys and IBM.

20. How does batch management help in SAP MM?

Answer:
Batch management tracks and identifies specific batches of materials for quality control and traceability.

• Activate batch management at material master level.
• Post batch-specific goods movements.
  MNCs like EY and Accenture use batch management for regulated industries like pharmaceuticals.

21. What is the process for creating a purchase order automatically from a purchase requisition?

Answer:

• Use transaction ME59N for automatic conversion of purchase requisitions into purchase orders.
• Ensure source list and vendor assignments are maintained in the system.
  This automation is widely adopted by companies like Infosys and HCL to reduce manual errors.

22. What is the importance of material valuation in SAP MM?

Answer:
Material valuation determines the material cost in financial accounting.

• Methods: Standard Price and Moving Average Price.
• Integration: Direct impact on cost of goods sold (COGS) and inventory valuation.
  Accenture and IBM prioritize accurate valuation for financial reporting.

23. How do you configure and manage pricing procedures in SAP MM?

Answer:

• Define condition types (PB00, PBXX).
• Maintain access sequences and schema determination.
• Assign pricing procedures to vendors via document types.
  MNCs like Wipro and Deloitte rely on pricing procedures for dynamic procurement pricing.

24. What are special procurement types in SAP MM?

Answer:
Special procurement types include:

• Subcontracting: External processing.
• Consignment: Vendor stock without immediate ownership.
• Stock Transfer: Internal movement between plants.
  These types are essential for HCL and EY to handle complex supply chain processes.

25. How do you resolve blocked invoices in SAP MM?

Answer:

• Analyze invoice block reasons (quantity, price, or GR/IR discrepancies).
• Use MRBR to release blocked invoices after corrections.
  This process is critical for companies like IBM to avoid payment delays.

26. What is the process for physical inventory management in SAP MM?

Answer:

• Create a physical inventory document (MI01).
• Enter count results (MI04).
• Post inventory differences (MI07).
  Infosys and TCS implement this process for accurate stock control.

27. What are item categories in SAP MM, and how do you use them?

Answer:
Item categories define the procurement process for different materials. Examples:

• Standard (N): Regular materials.
• Consignment (K): Vendor-owned stock.
• Subcontracting (L): External processing.
  MNCs like Deloitte and PwC use item categories to tailor procurement processes.

28. How does SAP MM handle backorders?

Answer:

• Use transaction code CO06 or ME2O to monitor and prioritize pending purchase orders.
• Manage deliveries based on stock availability.
  Backorder management is crucial for ensuring timely project deliveries in Wipro and Accenture.

29. What is the role of MRP (Material Requirements Planning) in SAP MM?

Answer:
MRP ensures materials are available for production while maintaining optimal stock levels.

• Run MRP using MD01 or MD02.
• Analyze planned orders and convert them into purchase requisitions.
  This process is widely adopted by IBM and Infosys to optimize inventory and reduce costs.

30. How do you handle third-party procurement in SAP MM?

Answer:

• Create a third-party purchase order with item category S.
• Track goods delivery directly to the customer.
• Perform invoice verification in MIRO.
  Third-party procurement is commonly used by companies like HCL and TCS to streamline direct vendor-to-customer shipments.

31. What are the different types of stock in SAP MM?

Answer:

1. Unrestricted Stock: Available for use.
2. Quality Inspection Stock: Awaiting quality checks.
3. Blocked Stock: Not available for use or sale.
4. Reserved Stock: Held for a specific purpose.
   These classifications help EY and Infosys maintain proper stock visibility.

32. How do you configure document types in SAP MM, and why are they important?

Answer:

• Define document types in configuration (SPRO).
• Assign number ranges, field selection, and permissible item categories.
  Document types like NB for purchase orders are critical for managing procurement in Deloitte and HCL.

33. How do you configure automatic postings in SAP MM?

Answer:

1. Assign valuation grouping codes and valuation classes.
2. Configure account determination in OBYC.
3. Map G/L accounts to stock and consumption accounts.
   Accurate financial posting is crucial for MNCs like IBM and PwC.

34. What are the common reports used in SAP MM for procurement?

Answer:

1. ME2N: Purchase orders by material.
2. MB52: Stock overview.
3. ME80FN: Analysis of purchase orders.
4. MB51: Goods movement history.
   These reports help Accenture and Wipro track procurement and inventory performance.

35. How do you handle material shortages in SAP MM?

Answer:

• Run MRP (MD04) to analyze shortages.
• Expedite open purchase orders or create stock transfer orders.
• Prioritize procurement via backorder processing.
  MNCs like Infosys use this approach to prevent production downtime.

36. How do you manage free goods in SAP MM?

Answer:

• Use condition type NR00 to manage free goods.
• Maintain free goods data in pricing procedures.
  This helps companies like Deloitte incentivize vendors during negotiations.

37. How do you ensure data accuracy during material master creation?

Answer:

• Use mandatory field checks during data entry.
• Maintain material templates for standard fields.
• Conduct periodic audits using report MM17 for mass updates.
  Data accuracy is critical for operational efficiency in companies like TCS and EY.

38. What is the use of batch determination in SAP MM, and how is it configured?

Answer:
Batch determination automates batch selection based on predefined criteria.
Steps:

1. Maintain batch search strategies (OMJJ).
2. Define batch sorting rules.
   This helps companies like IBM ensure proper inventory management.

39. How do you handle multiple currencies in SAP MM purchasing?

Answer:

• Maintain vendor-specific currency data in vendor master records.
• Configure exchange rates using OB08.
  Handling multiple currencies is essential for global operations at Wipro and HCL.

40. What is dynamic availability checking in SAP MM, and when is it used?

Answer:
Dynamic availability checks the stock situation during the order process.

• Configured via OVZ9.
  This feature is widely used by MNCs like Deloitte and PwC for real-time inventory visibility.

41. What are purchasing value keys, and how do you configure them?

Answer:
Purchasing value keys are used to define default procurement parameters like delivery reminders and tolerance limits.

• Configure them in transaction code OMWD.
• Assign them to material masters.
  These are essential for automating procurement operations in companies like Wipro and HCL.

42. How do you handle over-deliveries and under-deliveries in SAP MM?

Answer:

• Define tolerance limits in the material master or vendor master.
• Use transaction codes ME21N/ME22N to set delivery tolerances manually.
  Managing delivery tolerances ensures smoother operations for Deloitte and Accenture.

43. What is the significance of price control indicators in SAP MM?

Answer:
Price control indicators determine how materials are valued:

• Standard Price (S): Fixed price regardless of fluctuations.
• Moving Average Price (V): Updated based on goods receipts and invoices.
  Companies like Infosys and TCS prefer moving average prices for volatile raw materials.

44. What is account assignment in SAP MM, and what are the types?

Answer:
Account assignment links procurement activities to cost objects.
Types:

• K (Cost Center)
• F (Order)
• A (Asset)
• P (Project)
  IBM and EY use this for accurate financial tracking in procurement.

45. How do you handle procurement of services in SAP MM?

Answer:

• Create a service purchase order with item category D (Services).
• Maintain service entries using ML81N.
• Perform invoice verification using MIRO.
  Service procurement is crucial for consulting giants like Deloitte and PwC.

46. What is the purpose of material groups, and how are they managed?

Answer:
Material groups classify materials with similar characteristics to simplify reporting and procurement.

• Maintain material groups in SPRO -> Logistics General -> Material Master.
  Accurate grouping helps streamline procurement in MNCs like HCL and Infosys.

47. What are blanket purchase orders, and when are they used?

Answer:
Blanket purchase orders are used for procurement of unspecified services over a period.

• No predefined quantities or delivery schedules.
• Typically used for facility management or recurring services.
  Widely adopted by companies like TCS and Wipro for vendor agreements.

48. How do you manage procurement for capital goods in SAP MM?

Answer:

• Use account assignment category A (Asset).
• Maintain asset numbers in purchase orders.
  This helps IBM and Infosys track capital expenditure efficiently.

49. What is message control in SAP MM, and how is it configured?

Answer:
Message control automates the generation of procurement documents like purchase order printouts or email notifications.

• Maintain message types in SPRO -> MM -> Purchasing -> Messages.
  Automated communication is essential for streamlined operations at Deloitte and EY.

50. How do you configure partner functions in SAP MM?

Answer:
Partner functions define roles associated with vendors (e.g., invoicing party, forwarding agent).

• Maintain partner determination in SPRO -> Materials Management -> Purchasing -> Partner Roles.
  Accurate role management helps Wipro and Accenture handle complex vendor interactions.

51. What are split valuations in SAP MM, and why are they used?

Answer:
Split valuation allows materials to be valued differently based on conditions such as origin, procurement type, or quality.

• Configure it using transaction OMW0.
• Define valuation categories (e.g., Domestic vs. Imported stock).
  This feature is crucial for companies like EY and IBM to maintain accurate cost structures for multi-source materials.

52. How do you configure and manage vendor evaluation in SAP MM?

Answer:
Vendor evaluation measures vendor performance based on criteria such as price, delivery, and quality.
Steps:

1. Define criteria using transaction ME61.
2. Assign scoring weights and maintain vendor scores.
   Vendor evaluation is widely implemented at Deloitte and Accenture for strategic supplier management.

53. What is the purpose of movement types in SAP MM? Can you explain key movement types?

Answer:
Movement types define goods movement activities in SAP MM, such as receipts, issues, and transfers.
Key types:

• 101: Goods receipt for purchase order.
• 201: Goods issue to cost center.
• 301: Stock transfer between plants.
  Movement types help HCL and Infosys maintain precise inventory control.

54. What is Automatic Account Determination in SAP MM, and how is it configured?

Answer:
Automatic account determination links material movements to G/L accounts.
Steps:

1. Define valuation classes in material master.
2. Map G/L accounts in OBYC.
   This configuration ensures accurate financial postings for Wipro and TCS operations.

55. How do you handle subcontracting procurement in SAP MM?

Answer:

1. Create a subcontracting purchase order with item category L.
2. Issue components to the subcontractor using 541 movement type.
3. Receive finished goods using movement type 101.
   Subcontracting is essential for Deloitte and IBM to handle outsourced manufacturing.

56. What are info records in SAP MM, and what information do they store?

Answer:
Info records store data related to materials and their vendors.
They contain:

• Current pricing conditions.
• Delivery lead times.
• Last purchase history.
  Accurate info record management is crucial for Infosys and PwC to optimize procurement operations.

57. How do you implement source determination in SAP MM?

Answer:

1. Maintain source lists (ME01).
2. Define quota arrangements (MEQ1).
3. Configure MRP to automatically select the best vendor based on quotas.
   This automation helps IBM and EY optimize vendor selection and procurement efficiency.

58. What is stock transport order (STO) in SAP MM, and how is it different from stock transfer?

Answer:

• Stock Transport Order (STO): Involves a formal purchase order between plants.
• Stock Transfer: Simple transfer using movement types (301, 311).
  STOs are critical for TCS and Accenture to track inter-plant logistics.

59. What is the importance of material types in SAP MM? Can you give examples?

Answer:
Material types determine how materials are managed in procurement and inventory.
Examples:

• ROH: Raw materials.
• HALB: Semi-finished products.
• FERT: Finished products.
  Material types help HCL and Wipro maintain material classifications for smooth operations.

60. How do you handle mass changes to purchasing documents in SAP MM?

Answer:

• Use transaction MEMASSPO for mass maintenance of purchase orders.
• Maintain changes like delivery dates or order quantities in bulk.
  This feature is widely adopted by companies like Infosys and Deloitte to save time and reduce manual errors.

61. What is the difference between a scheduling agreement and a contract in SAP MM?

Answer:

• Scheduling Agreement: Contains delivery schedules for a material over a specific time.
  • Reduces paperwork for frequent deliveries.
• Contract: Outline agreement with no detailed delivery schedules; only target quantity or value is maintained.
  • Used for long-term supplier agreements.
    Companies like Infosys and IBM leverage scheduling agreements for JIT supply.

62. How do you perform material-to-material transfer in SAP MM?

Answer:

• Use movement type 309 for material-to-material transfers.
• Update material numbers for both issuing and receiving materials in the system.
  This process is critical for handling product upgrades at Deloitte and HCL.

63. How do you set up the release strategy for purchase requisitions in SAP MM?

Answer:
Steps:

1. Define release codes and characteristics.
2. Create release classes and strategies in SPRO.
3. Assign strategy based on document types and approval levels.
   EY and Accenture use release strategies to control spending limits efficiently.

64. How does SAP MM integrate with SAP SD and SAP PP?

Answer:

• SAP SD (Sales & Distribution): Integration through availability checks and stock movement for sales orders.
• SAP PP (Production Planning): Integration via material requirement planning (MRP) and stock reservations.
  IBM and TCS rely on this integration for end-to-end supply chain visibility.

65. How do you handle foreign currency procurement in SAP MM?

Answer:

• Maintain vendor-specific currency in vendor master.
• Configure exchange rates in transaction OB08.
• Post procurement transactions with dynamic currency adjustments.
  Global players like PwC and Wipro use this configuration to handle international purchases.

66. What is the purpose of the GR/IR (Goods Receipt/Invoice Receipt) account?

Answer:

• Temporary clearing account for goods received but not yet invoiced.
• Reconciles differences between GR and IR quantities.
  Accurate GR/IR management is essential for Deloitte and Infosys to ensure proper accounting controls.

67. What are the key features of Consignment Procurement in SAP MM?

Answer:

1. Goods remain vendor-owned until consumed.
2. No immediate payment on receipt; payment made upon consumption.
3. Use movement types 101 K and 201 K for GR and issue, respectively.
   This model is preferred by HCL and Wipro for managing vendor stocks efficiently.

68. How do you manage invoice discrepancies in SAP MM?

Answer:

• Analyze reasons for invoice blocks using MRBR.
• Resolve discrepancies by correcting GR quantities or prices.
• Use variance checks in MIRO for systematic corrections.
  Companies like TCS and EY prioritize automated handling of invoice discrepancies.

69. What is the significance of quota arrangement in SAP MM?

Answer:
Quota arrangements distribute procurement quantities among multiple vendors.
Steps to configure:

1. Maintain quotas using transaction MEQ1.
2. Define split percentages for each vendor.
   Accenture and Deloitte use this to diversify risk and maintain vendor relationships.

70. How does SAP MM support material requirement planning (MRP)?

Answer:

• SAP MM supports MRP by managing stock levels and procurement schedules.
• Key transactions include MD01 (MRP run) and MD04 (stock overview).
  Infosys and IBM rely on MRP to automate procurement and production scheduling.

71. What are the steps for physical inventory process in SAP MM?

Answer:

1. Create physical inventory document (MI01).
2. Count stock and enter results (MI04).
3. Post inventory differences (MI07).
   Companies like HCL and Wipro conduct periodic inventory checks for accurate stock reconciliation.

72. What is the difference between goods issue and goods receipt in SAP MM?

Answer:

• Goods Receipt (GR): Posting the receipt of goods against a purchase order (movement type 101).
• Goods Issue (GI): Posting the consumption or sale of goods (movement types 201, 261).
  Effective GR/GI management helps ensure real-time inventory tracking at Deloitte and IBM.

73. How do you manage return deliveries to vendors in SAP MM?

Answer:

• Use movement type 122 to post a return against a purchase order.
• Ensure proper documentation for credit memos.
  Return processes help companies like Infosys handle defective material efficiently.

74. What is stock determination, and how is it configured in SAP MM?

Answer:
Stock determination automatically selects stock types (e.g., unrestricted, consignment) for goods movements.
Steps:

1. Define strategies in transaction OMJJ.
2. Configure rules for priority stock types.
   This feature is essential for complex inventory operations at Wipro and TCS.

75. How do you handle material shortages in a production scenario?

Answer:

1. Analyze stock requirements using MD04.
2. Expedite open purchase orders or transfer stock between plants.
3. Maintain alternate vendors for critical materials.
   Infosys and EY use these strategies to minimize production downtime.

76. How do you configure material valuation for different plants in SAP MM?

Answer:

• Maintain valuation areas for each plant using transaction OMJJ.
• Set plant-specific valuation types if required.
• Assign separate G/L accounts for different valuation classes.
  This setup is crucial for MNCs like HCL and Wipro operating across multiple locations.

77. What are the types of special stocks in SAP MM?

Answer:

• Consignment stock: Vendor-owned until consumed.
• Subcontracting stock: Components issued to subcontractors.
• Stock in transit: Between two plants.
• Project stock: Reserved for a specific project.
  Special stocks are commonly used by consulting firms like Deloitte and Accenture for diverse supply chains.

78. How do you manage batch management in SAP MM?

Answer:

• Activate batch management at the material master level.
• Assign batch numbers during goods receipt using transaction MSC1N.
• Use batch determination strategies for picking and issuing stock.
  Batch management is critical for industries like pharmaceuticals and manufacturing handled by companies like Infosys and IBM.

79. How do you configure price determination in SAP MM?

Answer:

• Define pricing procedures using transaction M/08.
• Assign calculation schema to vendor schemas and purchasing documents.
• Maintain condition records for discounts, surcharges, and taxes using MEK1.
  This setup helps companies like EY and TCS optimize procurement costs.

80. How do you automate procurement using MRP in SAP MM?

Answer:

1. Configure material master with proper MRP type and procurement type.
2. Run MRP using transaction MD01.
3. Automatically generate purchase requisitions for materials below reorder levels.
   Automation is a preferred practice for Accenture and Wipro to reduce manual intervention.

81. How do you configure and use service entry sheets in SAP MM?

Answer:

1. Create a service purchase order with item category D (Service).
2. Use transaction ML81N to record service entries.
3. Post invoice verification using MIRO.
   Service entry management is crucial for service-heavy operations at Deloitte and PwC.

82. What are the key differences between ERS (Evaluated Receipt Settlement) and standard invoice verification?

Answer:

• ERS: Invoices are automatically generated based on goods receipts, reducing manual work.
• Standard Invoice Verification: Requires manual entry of invoices.
  ERS is commonly adopted by Infosys and IBM to streamline vendor payments.

83. What is the purpose of the Purchase Info Record in SAP MM?

Answer:

• Stores data specific to vendor-material combinations.
• Contains information like pricing, delivery terms, and lead times.
• Supports automated source determination during procurement.
  This feature helps TCS and EY optimize vendor relationships.

84. What is Dynamic Availability Check, and how is it configured in SAP MM?

Answer:
Dynamic availability check determines stock availability during order creation.
Steps:

1. Configure availability checks in SPRO.
2. Assign check rules to material masters.
   Accurate availability checks are essential for HCL and Wipro for real-time stock visibility.

85. How do you perform intercompany stock transfers in SAP MM?

Answer:

1. Create a stock transport order with document type UB.
2. Perform goods issue using movement type 641 and goods receipt with 101.
   Intercompany stock transfers help global companies like IBM and Infosys optimize logistics.

86. How does source determination work in SAP MM?

Answer:

• Maintain source lists and vendor quotas.
• Use ME57 to assign sources automatically during purchase requisition processing.
  This feature is critical for supply chain automation at Accenture and Wipro.

87. What is the purpose of the material ledger in SAP MM?

Answer:

• Provides multi-currency valuation and actual costing for materials.
• Helps track material movements with financial implications.
  Deloitte and IBM use material ledger for accurate cost accounting.

88. How do you manage purchasing limits in SAP MM?

Answer:

• Configure document types with value limits in SPRO.
• Assign release strategies based on value thresholds.
  Managing purchasing limits ensures controlled spending at TCS and EY.

89. How do you handle procurement for capital goods in SAP MM?

Answer:

1. Create a purchase order with account assignment category A (Asset).
2. Specify the asset number in the order.
3. Perform GR and asset capitalization using FI-AA module integration.
   This process is crucial for managing large investments at Wipro and IBM.

90. What are MRP Controllers, and why are they important?

Answer:
MRP Controllers are responsible for planning and controlling procurement activities.

• Assign MRP controllers to materials in the material master.
• Use MRP evaluations to monitor stock requirements.
  Infosys and HCL rely on MRP controllers for effective planning and inventory management.

91. How do you configure a release strategy for purchase orders in SAP MM?

Answer:
Steps:

1. Create characteristics using transaction CT04 (e.g., purchase order value).
2. Create a release class using CL02 and assign characteristics.
3. Define release groups and codes in OMGQ.
4. Create release strategies using OMGS.
   This configuration is widely used by Accenture and IBM for multi-level approval workflows.

92. How do you handle third-party procurement in SAP MM?

Answer:

1. Create a sales order in SAP SD.
2. Generate a purchase requisition automatically linked to the sales order.
3. Process the third-party purchase order and billing.
   Third-party procurement is essential for consulting firms like Deloitte and EY for direct shipments.

93. What is the role of condition types in pricing procedures?

Answer:
Condition types define pricing elements such as gross price, discounts, and surcharges.
Examples:

• PR00: Basic price
• RA01: Discount
• MWST: Tax
  Companies like Infosys and PwC rely on condition types to optimize procurement pricing structures.

94. What is the purpose of movement type 561 in SAP MM?

Answer:
Movement type 561 is used to enter initial stock balances during system go-live or data migration.
This is a critical setup step for MNCs like HCL and TCS during SAP implementation.

95. How do you manage blocked invoices in SAP MM?

Answer:

1. Analyze the blocking reason using transaction MRBR.
2. Release invoices for payment or correct discrepancies in quantity or pricing.
   Invoice blocking control is essential for IBM and Wipro to ensure accurate payment processing.

96. What is a consignment settlement, and how is it processed?

Answer:

1. Perform GR for consignment stock using movement type 101 K.
2. Process settlement using transaction MRKO.
   Consignment settlement helps companies like Accenture and EY manage vendor payments efficiently.

97. How do you use split valuation for materials in SAP MM?

Answer:

• Enable split valuation using OMW0.
• Define valuation categories (e.g., procurement type or quality level).
• Maintain separate valuation types for each stock category.
  Split valuation is commonly adopted by manufacturing giants managed by Infosys and IBM.

98. What is the importance of a Purchase Value Key in SAP MM?

Answer:
A purchase value key defines procurement-specific parameters, such as:

• Delivery tolerances
• Reminder periods
• Order acknowledgment requirements
  These keys are crucial for companies like HCL and TCS to automate procurement processes.

99. How do you handle procurement for consumable materials?

Answer:

1. Create a purchase order with an appropriate account assignment category (e.g., K (Cost Center)).
2. Record goods receipt without stock posting.
   Consumable procurement is widely practiced by Deloitte and Wipro to handle operational materials.

100. What is SAP MM Invoice Verification, and why is it critical?

Answer:
Invoice verification ensures that vendor invoices match purchase orders and goods receipts.

• Transactions: MIRO (Invoice Entry), MRBR (Invoice Release).
  Accurate invoice verification helps MNCs like EY and PwC maintain financial accuracy.

101. How do you configure automatic PO creation in SAP MM?

Answer:

1. Set auto PO indicators in the vendor and material masters.
2. Configure default document types in SPRO.
3. Automate purchase requisition conversion.
   Auto PO creation is used by Infosys and Accenture for efficiency gains.

102. How do you perform vendor consignment settlement in SAP MM?

Answer:

1. Use transaction MRKO for consignment settlement.
2. Generate a settlement document for consumed consignment stock.
   Consignment settlements are crucial for MNCs like IBM and Deloitte handling vendor stocks.

103. How do you define and configure procurement types in SAP MM?

Answer:
Procurement types define whether materials are procured internally or externally.

• Configure in the material master (MRP views).
• Options include E (In-house) or F (External) procurement.
  Proper procurement types help Wipro and Infosys optimize resource allocation.

104. What is External Service Management in SAP MM, and how is it handled?

Answer:

1. Create a service purchase order with item category D (Service).
2. Record service entry sheets in ML81N.
3. Perform invoice verification in MIRO.
   Service management is a key requirement for consulting firms like PwC and EY.

105. How do you maintain source lists in SAP MM, and why are they important?

Answer:

1. Create source lists using transaction ME01.
2. Specify valid vendor-material combinations.

Assign source lists to MRP to automate vendor selection.
Source lists help companies like HCL and Accenture streamline procurement operations.