Introduction
Material Types in SAP MM, serve as a fundamental method for classifying materials based on their characteristics and usage within the organization. Grouping materials by Material Type (along with Industry Sector) allows SAP to define how each material is treated throughout its lifecycle. This classification plays a critical role in determining which data is required, how it is maintained, and the specific business processes that can be applied to each material.
In this blog post, we will explore the importance of Material Types in SAP MM and how they affect various aspects of material master data management.
Table of Contents
- What Are Material Types in SAP MM?
- Why Are Material Types Important in SAP MM?
- Key Functions and Control Aspects of Material Types
- Common Material Types in SA
1 What Are Material Types in SAP MM?
A Material Type in SAP MM is used to classify materials based on their characteristics and usage in the system. Each material type defines the behavior and attributes of materials and plays a crucial role in material master data management. SAP uses material types to ensure that the correct data is entered and that the material is handled appropriately within procurement, sales, inventory management, and accounting processes.
Material types are predefined in SAP and can be customized based on business requirements. Some examples of standard material types include:
- FERT (Finished Goods)
- HAWA (Trading Goods)
- HALB (Semi-Finished Goods)
- ROH (Raw Materials)
2 Why Are Material Types Important in SAP MM?
| Key Aspect | Description | Impact/Example |
|---|---|---|
| Control of Views | Determines which views can be maintained in the material master. | Finished Goods (FERT) may have Sales and Work Scheduling views, while Raw Materials (ROH) may only have Purchasing and Accounting views. |
| Field Management | Controls which fields are mandatory, optional, or display-only. | For ROH, fields like Purchasing Group are mandatory, while Work Scheduling fields might be optional or not applicable. |
| Procurement Control | Defines the procurement type (internal, external, or both) for a material. | ROH materials are typically procured externally, whereas HALB (semi-finished goods) can be sourced both internally and externally. |
| Material Numbering | Controls how materials are numbered (internal or external) and the number range. | Internal numbering is used for automated numbering, while external numbering allows manual number assignment. The material type determines the acceptable number range. |
| Valuation Area Control | Defines whether quantity and/or value should be updated in a specific Valuation Area. | For FERT materials, quantity and value updates are typically done at the plant level, while for ROH, value updates might be restricted to certain valuation areas, depending on business requirements. |
| General Ledger (GL) Accounts | Links material types to specific GL accounts for inventory postings. | ROH may link to a different GL account for goods receipts than HALB or FERT, which have distinct accounts for inventory valuation. |
| Item Category Group | Defines the default item category group, impacting sales and distribution processes. | FERT might be linked to an item category group for sales, whereas ROH would be linked to an item category group for consumption or internal transfer. |
| Price Control Indicator | Defines the default Price Control Indicator (Standard Price (S) or Moving Average Price (V)). | FERT could be set to Standard Price (S) for stable pricing, while ROH might be set to Moving Average Price (V) to account for fluctuating raw material costs. |
| Changeability of Price Control | Determines whether the Price Control Indicator can be changed after the material master is created. | For materials like FERT, price control might be fixed, but for materials like HALB, the system may allow changes based on changing market conditions or fluctuations in procurement costs. |
3 Key Functions and Control Aspects of Material Types
| Function | Control by Material Type |
|---|---|
| Views Available | Determines which views can be maintained in the material master (e.g., Sales, Accounting). |
| Field Definitions | Controls which fields are mandatory, optional, or display-only in the material master. |
| Procurement Type | Defines whether a material is procured internally, externally, or both. |
| Numbering | Controls whether the material has internal or external numbering, and the number range allowed. |
| Valuation Area | Determines if quantity and/or value are updated in a valuation area. |
| GL Accounts | Links the material type to specific GL accounts for inventory valuation. |
| Item Category Group | Controls the default Item Category Group for sales and distribution processes. |
| Price Control | Defines the Price Control Indicator (S or V) and whether it is changeable. |
4 Common Material Types in SAP
Some of the standard Material Types in SAP MM include:
| Material Type | Description | Example Materials |
|---|---|---|
| ROH | Raw Materials, procured externally | Steel, chemicals, raw plastic |
| HALB | Semi-Finished Goods, produced internally or externally | Assembled components, intermediate products |
| FERT | Finished Goods, ready for sale or use | Consumer electronics, machinery, furniture |
| HAWA | Trading Goods, bought and sold as-is | Imported electronics, goods purchased for resale |
5 Conclusion
Material Types in SAP MM play a crucial role in the classification and management of materials. They govern a wide range of parameters, such as procurement options, pricing, field definitions, and accounting controls. By assigning the appropriate material type to each material, businesses can effectively manage their material data, optimize procurement and sales processes, and ensure accurate inventory and financial reporting.
Understanding the importance and functionality of material types is key for SAP users involved in material master creation, maintenance, and configuration. By properly defining material types, companies can streamline their SAP MM processes and maintain accurate, consistent material data across the system.