Classification of Material Types
Materials with similar properties are grouped into different material types to facilitate consistent management. Some of the key material types in SAP MM include:- Raw Materials (ROH): Essential for manufacturing, these are procured externally and used in production.
- Semifinished Products (HALB): Partially completed products that require further processing.
- Finished Products (FERT): Ready-to-sell products manufactured within the company.
- Externally Procured Materials (FREMD): Materials acquired from third-party suppliers.
- Process Materials (PROC): Used in manufacturing processes but not stored as inventory.
- Trading Goods: Items purchased for resale without any additional processing.
- Operating Supplies: Materials used in operations but not directly involved in production.
How Material Type Controls Costing
Material types influence several key aspects of costing and valuation in SAP MM. They define:1. Costing View Availability
- Determines whether a costing view can be created in the material master record.
- If the Costing indicator is enabled, the system automatically generates a costing view.
2. Cost Estimation Approach
- Defines whether materials are costed using a quantity structure (BOMs & routings) or through manual unit costing.
3. Financial Accounting (FI) Impact
- Controls how a material’s value and quantity are recorded for a specific plant.
- Assigns materials to appropriate stock and consumption accounts in Financial Accounting (FI).
Customization of Material Type in SAP
In Logistics General Customizing, you can configure material type parameters:- The With Quantity Structure Indicator is set by default for material types that typically require material costing.
- If this indicator is not active, SAP attempts to find an existing cost estimate without a quantity structure. If none exists, the material is costed as raw material.
SAP Standard Material Types & Costing Defaults
SAP’s default settings ensure that raw materials, semifinished products, and finished products are costed using material costing. However, users can override this by manually resetting the With Quantity Structure Indicator in the costing view of the material master record.SAP MM Material Type - Questions
1) You want to set up an account determination that groups several material types under the same accounts. What must you do?
a. Assign the same account category reference to the material types
b. Assign the same valuation grouping code to the material types
c. Assign the same account modification to the material types
d. Assign the same valuation class to the material types
2) What does the material type influence in the material master in SAP MM?
a. MRP type and Account group
b. Procurement type and Quantity and value update
SAP MM Material Type - Answers
1) Correct Answer:
a. Assign the same account category reference to the material types.2) Correct Answer:
b. Procurement type and Quantity and value update.By understanding the role of material types in
SAP MM, businesses can optimize their procurement and costing processes
while maintaining financial accuracy. Proper configuration ensures that
material valuation and cost estimation align with organizational requirements.
