SAP MM (Materials Management) handles purchasing and inventory. These SAP MM interview questions cover the procure-to-pay cycle, master data and organisational structure for freshers, then pricing, release strategies, inventory valuation, MRP and integration with FI for experienced MM consultants.
30 questions · Updated
Fundamentals, definitions and simple scenarios. Good for freshers and warm-ups.
SAP MM manages procurement and inventory.
Procure to pay runs from a purchase requisition (ME51N), to a request for quotation and quotation if needed, to a purchase order (ME21N), goods receipt (MIGO), invoice verification (MIRO) and finally payment to the vendor in FI.
Each step updates stock and finance automatically.
Client, company code, plant (a factory, warehouse or branch where materials are stored or produced), storage location (a place within a plant where stock is kept), purchasing organisation (negotiates with vendors) and purchasing group (a buyer or group of buyers). A purchasing organisation can be assigned to one plant, several plants or across company codes.
The material master stores all information about a material in one record, organised into views such as Basic Data, Purchasing, MRP, Sales, Plant Storage, Accounting and Costing.
Each department maintains its own views.
The material type, such as ROH for raw materials, HALB for semi-finished and FERT for finished goods, controls which views and settings are allowed.
In S/4HANA, vendors are created as Business Partners with transaction BP, using roles such as FI vendor (FLVN00) for company code data and supplier (FLVN01) for purchasing organisation data.
The system synchronises the Business Partner with the vendor master through customer-vendor integration.
Key data includes address, bank details, tax numbers such as GSTIN and PAN, payment terms and reconciliation account.
A purchasing info record (ME11) stores information about a specific material and vendor combination, such as the vendor's material number, price and conditions, planned delivery time, tolerance limits and order unit. When a purchase order is created for that vendor and material, these values are proposed automatically, which speeds up purchasing and keeps prices consistent.
A source list (ME01) defines the allowed sources of supply for a material in a plant over a period, such as specific vendors or outline agreements.
Sources can be marked fixed (preferred) or blocked, and MRP uses the source list to assign vendors automatically to planned requirements.
Making the source list mandatory forces purchasing only from approved vendors.
A request for quotation (ME41) is sent to several vendors for a material or service.
Their quotations are entered against the RFQ (ME47), and the quotation price comparison (ME49) ranks them by price, including discounts and delivery costs.
The best quotation can be accepted, rejection letters sent to the others, and the purchase order created with reference to the chosen quotation.
Requisitions created manually (ME51N) or by MRP can be converted into purchase orders by referencing them in ME21N, through the assignment list (ME57) after assigning sources, or automatically with ME59N when a fixed source and price exist.
Fiori apps such as Manage Purchase Requisitions support the same process.
Released requisitions are required when a release strategy is active.
In MIGO you choose Goods Receipt for a purchase order, enter the PO number, check quantities and storage location, and post with movement type 101, which increases stock and posts the inventory and GR/IR entries in finance. The receipt can go to unrestricted, quality inspection or blocked stock, and a material document and accounting document are created.
Unrestricted-use stock can be used freely.
Quality inspection stock is awaiting inspection and cannot be consumed.
Blocked stock cannot be used, for example damaged goods.
Goods receipt blocked stock is received conditionally and not yet valued.
Stock in transit appears in stock transfers.
Transfer postings move stock between types, such as 321 from quality inspection to unrestricted.
ME51N (create requisition), ME21N, ME22N and ME23N (create, change and display PO), ME2M and ME2N (POs by material and vendor), MIGO (goods movements), MIRO (invoice verification), MMBE (stock overview), MB52 (warehouse stocks), MB51 (material document list), MM01, MM02 and MM03 (material master), ME11 (info record) and MD04 (stock and requirements list).
Applied problems, trade-offs and questions about your own projects.
A movement type is a three-digit key that identifies a goods movement and controls how stock and accounts are updated. Examples: 101 goods receipt for a purchase order, 102 its reversal, 122 return to vendor, 201 goods issue to a cost centre, 261 goods issue to a production order, 311 transfer between storage locations, 551 scrapping and 561 initial stock upload.
A release strategy is an approval workflow for purchase requisitions or purchase orders.
It uses classification with characteristics such as total value, plant or document type to decide which approvers must release a document before it can be processed.
For example, POs above ₹5 lakh may need both the purchasing manager and the finance head to approve.
MM uses the condition technique.
A calculation schema (pricing procedure) such as RM0000 lists condition types like PB00 gross price, discounts, freight and taxes.
The schema is determined from the purchasing organisation and the vendor's schema group.
Condition records store the actual values, for example in a purchasing info record or a contract, and the system finds them using access sequences.
Both are long-term outline agreements with a vendor.
A contract sets terms for a quantity or value over a period, and separate release orders (POs) are created against it when needed.
A scheduling agreement includes a delivery schedule with dates and quantities, so no separate POs are created; schedule lines are sent to the vendor, which suits regular repeated supply such as production materials.
A quota arrangement (MEQ1) splits requirements for a material between several sources according to quotas, such as 60% to vendor A and 40% to vendor B, over a validity period.
When requisitions are created, the system assigns the source whose quota rating (quota-allocated quantity plus base quantity, divided by quota) is lowest.
It ensures planned supplier splits are followed.
In MIRO the vendor invoice is entered with reference to the purchase order, and the system proposes the items received (for GR-based invoice verification) and compares quantities and prices.
If differences exceed tolerance limits, such as price variance (PP) or quantity variance (DQ), the invoice is blocked for payment.
Blocked invoices are reviewed and released with MRBR.
A physical inventory document is created (MI01, or MI31 for many items), which can block the materials for posting.
Stock is counted and counts entered (MI04), recounts are done if needed, and differences are posted (MI07), adjusting stock and posting gains or losses to finance.
MI10 combines these steps.
Cycle counting counts important items more frequently based on ABC classification.
Output determination decides how a PO is sent to the vendor: printed, by email, EDI or another channel.
In ECC this used the condition technique with message types such as NEU configured in NACE; in S/4HANA, output management based on BRF+ determines output types, channels, forms (Adobe forms) and recipients.
Output can be repeated or sent manually from the PO.
An account assignment category on a PO item tells the system where the cost goes when the item is consumed directly instead of going into stock: K for cost centre, A for asset, F for internal order, P for project (WBS element), C or M for sales orders, and U for unknown. It controls which assignment fields are required and how goods receipt and invoices are posted.
Batch management tracks materials in batches, quantities produced or received together with the same properties, such as manufacturing and expiry dates.
It is essential in pharmaceuticals, food and chemicals for traceability and recalls.
Batches can have classification characteristics, batch determination selects batches using strategies such as first expiry first out, and the batch where-used list traces usage.
A stock transport order moves stock from one plant to another using a purchase order with document type UB, which allows delivery and shipping processing, planning through MRP and tracking of stock in transit.
Within one company code it is usually done without billing, while between company codes an intercompany STO includes delivery, billing and a vendor invoice.
Movement types include 641 and 101.
System design, deep internals, leadership and tough follow-ups.
Each material uses price control S (standard price, fixed for a period, with differences posted to a price difference account, common for manufactured items) or V (moving average price, recalculated with each receipt, common for purchased materials).
Valuation can be at plant or company code level, and split valuation lets the same material be valued differently, for example by batch or origin.
Material Ledger supports actual costing and multiple currencies.
Material requirements planning makes sure materials are available for production and sales without excess stock.
MRP reads demand (sales orders, forecasts, dependent requirements from bills of material), compares it with stock and open receipts, and creates planned orders or purchase requisitions for shortages.
MRP type (such as PD for MRP or VB for reorder point), lot size, lead time and safety stock in the material master control the result.
In S/4HANA, MRP Live (MD01N) runs much faster.
In consignment, the vendor's stock is kept at our site but remains the vendor's property until we withdraw it, when a liability is created and settled (MRKO).
In subcontracting, we send components to a vendor who processes them into a finished item; the PO has item category L, components are issued with movement type 541 and consumed at goods receipt.
Stock transport orders move stock between plants, and third-party orders ship directly from vendor to customer.
Material documents are stored in one table, MATDOC, replacing MKPF, MSEG and many aggregate tables, which improves performance and simplifies the data model. Vendors became Business Partners, the material number length increased to 40 characters, MRP Live (MD01N) runs planning on the database, the material ledger is mandatory for valuation, and Fiori apps provide analytics and new user interfaces for purchasing and inventory.
Inventory Management tracks stock quantities and values at plant and storage location level.
Warehouse Management (WM) adds detailed management of bins, transfer orders, putaway and picking strategies inside a warehouse; it is deprecated in S/4HANA.
Extended Warehouse Management (EWM), embedded in S/4HANA or decentralised, is the successor, supporting complex warehouses, waves, labour management, RF devices and automation.
MR11 (GR/IR account maintenance) clears open GR/IR balances when the invoice and goods receipt quantities will never match, for example when a vendor will not invoice the remaining quantity or a small difference remains after invoicing.
It posts the difference to a price difference or expense account.
It should be run after analysis and approval, typically as part of period-end closing.
SAP Ariba handles sourcing, contracts, supplier management and guided buying in the cloud, and connects to S/4HANA through the Ariba Network and integration tools. Requisitions or purchase orders created in S/4HANA can be sent to suppliers through the Ariba Network, suppliers confirm orders and send advance shipping notices and invoices electronically, and documents flow back to update S/4HANA.
With FI through automatic account determination for goods movements and invoice verification; with CO through cost centre and internal order assignments and product costing; with SD through availability checks, deliveries and third-party orders; with PP through MRP, component issues and goods receipts from production; with QM through inspection lots at goods receipt; and with warehouse management for detailed stock handling.
See all SAP & CRM Consultant interview questions, covering SAP FICO, SAP MM, SAP SD, SAP ABAP, Salesforce and more.