Do checkout this commonly asked SAP MM Interviews Series and prepare for your interviews easily. This is Part 1 of 10 Part Series.
SAP MM Interviews Series
What is procurement means. Explain both external & internal procurement?
Ans: When the goods & the services are being acquired from external suppliers or vendors, then the process is known as procurement. It Is a very important process to be taken care by. It ensures that the materials are available as and when needed.
This is done so that all the production and operational activities are uninterrupted. Bulk purchasing helps in cost efficiency & since we work with reliable suppliers, it also ensures quality assurance. It also supports compliance & strategic planning.
Internal procurement mainly means the materials and the sources are sourced within the internal organizations itself, rather than buying them from external vendors. Just like transferring materials within different plants. It helps in cost savings & resource optimizations very efficiently.
External procurement is when the supplies and goods cum services are being procured from outside of the organization or basically from external vendors. The expertise of various external experts producing variety of raw materials will come into picture, when ordering from external vendors. Big inventories need not to be maintained, saving internal investments and reducing risk management.
2. What is consumption based planning in SAP MM?
Ans. In SAP MM, A CBP is basically a strategy which is used to manage the inventory levels in the organizations. It plans the same using the historical consumption data. Optimal level of inventory is being managed using this strategy. Here, historical data is being used to plan future stock requirements.
For each material, we make a reorder point, such that if inventory falls below that point, we create a procurement order.
There are mainly 3 type of consumption based planning which includes:
- Reorder Point Planning which is based on a trigger point, in case if point falls below a certain level we have to start the procurement process.
- Time based planning where planning is being carried out in a regular interval of time.
- Forecast Based Planning where historical consumption data is being to find the future requirements.
3. How can you create RFQ – Request For Cancellation?
RFQ is basically a formal document where quotations are being asked from the potential vendors before finalizing a vendor. If any RFQ has to be cancelled, then also SAP provides the functionality to update it in SAP. That can be done through deleting the current RFQ or changing its status.
There is no direct RFQ for Cancellation available. We can change the RFQ through ME42 Tcode. Give RFQ Number -> Select it & Mark it for deletion. Save the changes.
We need to have proper authorizations for deleting RFQs Stakeholders need to be informed before the deletion. Also, it is to be considered that marking it deleted will not physically remove the RFQ from the system but only the status will change.
4. How to create a contract in SAP MM?
Ans: Contracts are the long term agreements basically with the vendors,in which the materials or services which is required and what framework of time, it is required is being mentioned.
Contracts can be said of two types – quantity contract as well as value contract.
- Quantity contract mainly deals with the quantity value of the materials to be supplied by the vendor.
- Value contract mainly deals with the value (total amount) to be paid for the quantity supplied by the vendor.
In order to create a contract in SAP MM, we have to access Tcode – ME31K and enter initial data there, such as contract type, purchasing organization, group etc. Header level data and item level data also needs to be filled. Once all the data is filled, we just check and save. This way we can create contract details.
5. Explain the type of purchase orders available in SAP MM?
Ans: Here are different type of purchase orders available in SAP MM Standard Purchase Order It is used for regular procurement activities like for goods and services.
It includes material number, delivery date etc. Consignment PO These are the Po’s which are stored in company’s premise but is the property of the vendor.
- Stock Transfer PO -These PO’s are used to transfer stock from one plant to other plant within the company.
- Subcontracting PO -These PO’s are created when the company provides raw materials to the vendor and vendor provides finished goods in return.
- Service PO -These PO’s are created for services rather than physical goods.
- Framework PO -These PO’s are long term agreements, where vendors supply goods and services within frequent time interval.
- Third Party PO -These PO’s are created when vendors directly deliver to customers, all the customers which are required.
Hope you like SAP MM Interviews Series PART – 1
Check our other parts of SAP MM Interview Series Part 01 to 10.
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- ๐จ๐๐๐, ๐๐๐ ๐บ๐จ๐ท ๐ฉ๐พ/๐ฏ๐จ๐ต๐จ ๐ธ๐๐๐๐ ๐น๐๐๐๐๐๐๐ ๐ธ๐จ’๐บ, ๐๐๐๐๐๐๐๐
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- ๐จ๐๐๐, ๐๐๐ ๐บ๐จ๐ท ๐ฉ๐จ๐บ๐ฐ๐บ ๐ธ๐๐๐๐ ๐น๐๐๐๐๐๐๐ ๐ธ๐จ’๐บ, ๐๐๐๐๐๐๐๐
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