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Table of contents
1.
Introduction
2.
SAP MM Interview Questions For Freshers
2.1.
1. What is SAP MM?
2.2.
2. How can the SAP MM or Material Management module be used?
2.3.
3. What are some common assignment types in the SAP Material Management system?
2.4.
4. What are the necessary components of SAP material management?
2.5.
5. What is internal procurement?
2.6.
6. What is external procurement?
2.7.
7. What exactly is Special Procurement?
2.8.
8. Which type of document is a purchase requisition, internal, or external document?
2.9.
9. Explain in detail the order of purchase?
2.10.
10. How is a receipt posted?
2.11.
11. What is CBP?
2.12.
12. What are the various Procurement types that can be used to create Purchase requisitions in SAP MM?
2.13.
13. Describe the various types of stocks.
2.14.
14. What are the different info record types in SAP MM?
2.15.
15. What is consignment stock?
2.16.
16. What is a Purchase Order?
2.17.
17. What is an RFQ?
2.18.
18. What is material requirement planning (MRP)?
2.19.
19. What is consumption-based planning (CBP)?
2.20.
20. How do you tell the difference between MRP and CBP?
3.
SAP MM Interview Questions For Experienced
3.1.
21. What is the difference between production orders and purchase orders?
3.2.
22. How does SAP MM utilize its main master files?
3.3.
23. What is the Master production schedule (MSP)?
3.4.
24. Could you please explain the process of linking a document to a vendor master record?
3.5.
25. What is the difference between stock procurement and consumption procurement?
3.6.
26. What is invoice processing?
3.7.
27. What is a purchase requisition?
3.8.
28. What is the difference between a goods receipt and a post goods receipt?
3.9.
29. What is SAP Material Master? How can it be kept in the SAP system?
3.10.
30. How does a company's Posting Period work?
3.11.
31. What is a contract in SAP MM?
3.12.
32. What is the purpose of the batch record?
3.13.
33. What is the distinction between the terms RFQ, RFI, and RFP in SAP MM?
3.14.
34. What do you mean by "Outline agreement"?
3.15.
35. How can you identify the crucial fields within the purchasing view in SAP MM?
3.16.
36. In SAP MM, how is a purchase requisition created and released?
3.17.
37. How can you provide a detailed explanation of the various steps involved in the Procurement Lifecycle?
3.18.
38. What is RTP?
3.19.
39. What steps are involved in the RFQ process?
4.
Frequently Asked Questions
4.1.
What are the important topics in SAP MM module?
4.2.
What is the pricing procedure in SAP MM interview questions?
4.3.
What are the benefits of using SAP material management?
4.4.
Is SAP MM still in demand?
4.5.
In SAP MM, what is the process order?
5.
Conclusion
Last Updated: Jun 7, 2024
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Top SAP MM Interview Questions (2024)

Author Prerna Tiwari
0 upvote

Introduction

If you decide to pursue a career in SAP MM, you must undergo a sap mm interview process to secure a position in a reputable company. However, if you obtain a collection of sap mm Interview questions, you can pass the sap mm interview round regardless of whether you are a beginner or an expert.

Top SAP MM Interview Questions.

This blog will provide you with the top 30 sap mm interview questions and answers to help you ace your sap mm interview.
Also Read: Java OOPs Interview Questions

SAP MM Interview Questions For Freshers

1. What is SAP MM?

MM is a functional module in SAP. MM means Material Management, which deals with procurement and materials management. It has master data, material valuation, invoice verification, material requirement planning, etc.

2. How can the SAP MM or Material Management module be used?

SAP MM is the backbone of the logistics industry, which includes modules such as sales and distribution, project management, plant maintenance, production planning, and material management.

The MM module supports all aspects of material management, such as control, planning, and so on.

The MM module aids in the management of a company's procurement activity.

3. What are some common assignment types in the SAP Material Management system?

  • Purchasing organization to company code
  • Standard purchasing organization to plant
  • Plant to Company code
  • Purchasing organization to Plant

4. What are the necessary components of SAP material management?

  • Vendor Selection
  • Order Processing
  • Order follow up
  • Invoice Verification
  • Source determination
  • Determine requirements
  • Goods receipts and Inventory management

5. What is internal procurement?

Different businesses exist within large organizations. An internal procurement process gathers material and service requirements from a single company. However, each identical company must keep a more comprehensive bookkeeping system, as well as separate Profit and Loss statements and Balance Sheets.

6. What is external procurement?

An external procurement occurs when products or services are purchased from third-party vendors. It comes in three basic forms:

  • One-time orders: These are goods that are required on an irregular basis.
  • Longer-term contracts: This term refers to materials that are ordered in large quantities regularly.
  • Longer-term scheduling agreements: This term refers to material ordered regularly and in large quantities.

7. What exactly is Special Procurement?

In SAP MM, Special Procurement refers to stocks that do not belong to a company. These are kept in various locations.

8. Which type of document is a purchase requisition, internal, or external document?

A purchase requisition is an internal document used within a company to request the purchase of goods or services. It's not meant for external parties but for internal processes.

9. Explain in detail the order of purchase?

A purchase order (PO) is a legal document that a buyer creates and sends to a seller to confirm their intention to purchase goods and/or services.It specifies the number and type of things needed, as well as payment terms and delivery information.

10. How is a receipt posted?

A receipt is posted in SAP by entering necessary transaction details such as vendor, invoice number, and amount in the appropriate module (for example, FI or MM). The system validates the data and updates the appropriate accounts, ensuring accurate financial record-keeping.

11. What is CBP?

CBP stands for  Cross-Border Planning and refers to the entire international procurement and logistics administration. It entails navigating customs procedures, dealing with duties and taxes, and meeting cross-border trade obligations. CBP that effectively supports seamless operations and reduces risks in global supply chain activities.

12. What are the various Procurement types that can be used to create Purchase requisitions in SAP MM?

 A purchase requisition is issued for the following types of the procurement:

  • Stock transfer: The movement of materials within an organization.
  • Subcontracting entails sending raw material to a seller and receiving finished material in return.
  • Getting finished material back from the seller is standard.
  • External service: Obtaining services such as maintenance from third-party sellers.
  • Consignment: Paying the seller for procuring material on the company's premises.

13. Describe the various types of stocks.

There are three different kinds of stocks;

  • Valuated Stock
  • Non-valuated stock
  • Special Stock

    Valuated Stock:- Valuated stocks are those that are kept on-premises and have values recorded in the company's books. There are three types of valued stock, each of which can be moved using a specific movement type. Each subtype of valued stock is defined below.
  1. Unrestricted Stock: Unrestricted stock is stock that can be used immediately and is always available for use on the premises.
  2. Quality Inspection Stock: Delivered material that is retained for quality inspection is referred to as quality inspection stock. It is not considered unrestricted and cannot be used freely.
  3. Blocked Stock: In SAP, if the material is rejected due to poor quality, it is moved to blocked stock. This can also happen during production if some irregularities with the stock are discovered.
     

Non-valuated stock:- There is no accounting entry made when non-valuable stocks are purchased. Even though they are on the premises, these SAP stock types are not yet owned by the company. If a vendor sends visibly damaged goods upon receipt, they are returned to the vendor and are not processed into inventory. The goods are received into blocked stock without accounting entry in this case.
 

Special Stock: SAP special stock types have a different procurement method than the standard procure-to-pay process. The following are the various types of special stock:

1.Subcontracting is a special procurement method in which a company decides to outsource its work to a vendor. A company sends raw material to a vendor for specific manufacturing processes and receives finished material back.
 

2. Consignment: The vendor provides goods and stores them in a company's storage area during the consignment process. The vendor is still the owner of the goods, and the company becomes the owner only when it withdraws the goods from the consignment stores for its own use. The company only pays the vendor when the goods stored in the company's storage area are consumed.
 

3. Stock Transport Order (STO): The stock transport order (STO) process refers to the special stock process in which plant stocks are transferred between supplying and receiving plants using the same company code.
 

4. Third-Party Processing: Third-party processing occurs when a customer places an order with a company that is then routed to a third-party vendor for processing. The third-party vendor delivers the goods to the end customer directly, but invoicing is handled by the intermediary company.
 

5. Returnable Transport Packaging (RTP): It is a special procurement process in which goods can be exchanged repeatedly between vendors and customers. It is possible to do so using a packaging medium such as pallets and containers. Returnable transport packaging is managed as a vendor-owned special stock. It is received by a company with a movement type of 501M, and the material is not included in the customer's valued stock.
 

6. Pipeline Handling: Pipeline handling is used when a company obtains materials such as water, oil, or electricity through a pipeline. There is no need to store the ordered material in this special stock process. When there is a demand, the material is ordered, and the goods are delivered via movement type 201P. Following that, settlement with the vendor is handled using transaction code MRKO.

14. What are the different info record types in SAP MM?

In SAP MM, there are three main types of information records: Standard, Subcontracting, and Consignment. These records help manage procurement and supply chain information efficiently.

15. What is consignment stock?

Consignment stocks are materials that are still available in the store but belong to the owner or seller. The buyer must pay for the consignment stocks when he uses them.

16. What is a Purchase Order?

A buyer sends a purchase order to his sender to finalize the requirements. Instead of the names and quantities of materials, the purchase order includes valuable information such as the purchasing company's details with a company code, the name of the material, the corresponding Plant, and the date for material delivery.

17. What is an RFQ?

The acronym RFQ stands for Request for Quotation. RGQ is an invitation sent to sellers to submit quotes that include pricing and terms and conditions. The RFQ also includes the delivery date, goods and services, quantity, and submission date.

18. What is material requirement planning (MRP)?

Material requirement planning, or MRP, is an SAP ERP module (Enterprise Resource Planning). It is a planning tool that assists procurement and production planners in developing realistic and feasible plans that allow procurement and production procedures to be initiated quickly.

19. What is consumption-based planning (CBP)?

Consumption-based planning, or CBP, is based on previous consumption values. Forecasting is used to determine future requirements. These CBP processes are not dependent on the master production schedule. It is activated when the stock level falls below a certain reorder point, or the forecast needs to be calculated using past consumption values.

20. How do you tell the difference between MRP and CBP?

PropertyMRPCBP
Full form

Material Requirements Planning

 

Consumption-Based Planning

 

Process Explanation

 

Current and projected sales figures are used to plan.

Depending on the settings, this may include open sales orders and deliveries, open purchase orders and purchase requisitions, open planned orders, and production orders.

Consumption-based planning procedures use historical consumption data to forecast future requirements using material forecasting or static planning procedures.

Safety Stock

 

The calculation of the net requirement is triggered based on the planned and exact requirement.

Because the net requirement is the exact requirement, only a small amount of safety stock is required.

The calculation of net requirements is triggered by reorder points or forecast requirements calculated from past consumption data.

Because net requirements are not exact requirements, safety stock levels should be higher to avoid an out-of-stock situation.

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SAP MM Interview Questions For Experienced

21. What is the difference between production orders and purchase orders?

Production order: It determines which materials must be prepared at what time and location and the quantity required. It also specifies the components and sequence of operations that must be used. Furthermore, concerns about order costs must be addressed.

Purchase order: A purchase order is issued by a vendor or factory to supply a specific quantity of products and services at a specific time and location.

22. How does SAP MM utilize its main master files?

SAP MM (Materials Management) uses its main master files to manage materials efficiently. These files contain essential data like item descriptions, suppliers, and prices. By accessing this information, SAP MM streamlines procurement, inventory management, and pricing processes, ensuring businesses can handle materials effectively and economically.

23. What is the Master production schedule (MSP)?

MSP is used to plan for individual commodities that must be produced at all times, such as production, inventory, staffing, and so on. It is related to manufacturing, where the plan specifies how much and when each product will be required.

24. Could you please explain the process of linking a document to a vendor master record?

Linking a document to a vendor master record involves associating specific documents (e.g., invoices, contracts) with a vendor's information in a business or accounting system. 
First, access the vendor's profile, then choose and upload the document. Provide document details such as type and date, and save the attachment. Now, the document is linked to the vendor's master record, enabling easy retrieval when needed. This organized approach streamlines record-keeping, enhances data accessibility, and simplifies vendor transaction reviews. It's crucial to ensure secure access and periodically manage linked documents for efficient vendor management and compliance.

25. What is the difference between stock procurement and consumption procurement?

Procurement for Stock: This refers to the storage of material on hand. Once received from the seller, the material is stored in it. The quantity of stock material depends on the material's demand. We keep the master record in the system to record all information about the stock.

Procurement for Direct Consumption: When a material is stored and then used or consumed, this is referred to as procurement for direct consumption. A master record is kept within the system before ordering material for consumption.

26. What is invoice processing?

A company's account payable department uses it to manage supplier invoices. Invoice processing begins when an invoice is accepted and ends when it is cleared and is recorded in the general ledger.

27. What is a purchase requisition?

It is a primary document used to launch a product or purchase supplies. It is a component of the accounting method. This document provides the buyer with information about the purchases and identifies the business requirements.

28. What is the difference between a goods receipt and a post goods receipt?

Goods receipt occurs when the physical inbound transfer of material and goods into the warehouse occurs. It includes the transfer of goods received from in-plant production or external vendors. The issuance of goods receipts always increases warehouse stock.

A post-goods receipt is when the receipt of goods is posted concerning the purchase order with which products or goods were ordered. When the material for a purchase order is sent, all departments must enter the system references.

29. What is SAP Material Master? How can it be kept in the SAP system?

A material master has information on various materials, such as raw materials and finished products. It is used for product identification, goods issue, receipt, purchase material, production confirmation, and MRP.

Material data is stored in a single database object to avoid redundancy. The material should be created only once in the system and given a unique number.

Depending on the views maintained, a material receives an automatic maintenance status. When you want to use a material in a process, the system checks to see if it has the required maintenance status—that is, if the required views have been maintained.

30. How does a company's Posting Period work?

A company's posting period is used to define five fields, including;

  1. Keep the Fiscal Year Variant
  2. Define Open Posting Period Variants
  3. Posting Periods (Open and Closed)
  4. Assign the Variant to the Company Code
  5. Assign the Fiscal Year Variant to the Company Code

31. What is a contract in SAP MM?

A contract in SAP MM is a long-term agreement between the seller and the ordering party for predefined material for a specific framework. Contracts are classified into two types.

Quantity Contract: The entire value of a quality contract is stated in terms of the quantity required to be supplied by the seller.

A value contract specifies the total amount that the vendor must pay. When the company supplies the agreed total value of material against the contract, the contract is considered fulfilled.

32. What is the purpose of the batch record?

A batch is used to determine the quality of a specific product that must be processed or produced simultaneously. It should be noted that the material produced in such a batch must have the same characteristics and values. Furthermore, the batch record ensures that information about a specific batch product is available. It also helps in determining whether or not the product has gone through the Good Manufacturing Process (GMP).

33. What is the distinction between the terms RFQ, RFI, and RFP in SAP MM?

Property

 

RFQ

 

RFI

 

RFP

Definition

 

The RFQ is a request for information that specifies how much the solution you're interested in will cost in real terms, i.e., what inputs and costs will be required to achieve the desired results.This is a request for general information about the problems you're experiencing, what the vendor knows about them, what the cause could be, any applicable solutions the vendor can offer, and any previous experience the vendor may have with similar situations.A request for proposal is a request for a solution that various vendors can provide so that they can be compared based on their merits, demerits, the pain points they intend to solve, and so on

Awareness level

 

The procuring organization typically knows how much of the supplies they need and wants to get an idea of how much it would cost.

 

From a procurement standpoint, you are aware of the issues that your organization faces, but you are unsure of the best solution(s) to these issues.

 

A request for proposal asks vendors to provide information on the solutions they can provide and why they are the best fit for the customer's needs.

 

Intent

 

At this point, the goal is to inform suppliers who are still in the selection process that 'here's the solution we'd like to pursue, and we'd love a cost breakdown of how much you can offer it for.'

 

The purpose of the request for information is to obtain detailed information on the problem that the organization is experiencing, what caused it, how to fix it, and the solution that will effectively resolve the situation.

The purpose of issuing requests for proposals is to determine how well the various solutions offered by the various vendors under consideration can meet the procurer's needs in order to help the procurer make the best choice.

 

Style

A request for quotation is well-structured and outlined in order to provide a clear picture of what the procuring organization intends to obtain.

 

An RFI is a casual first-touch outreach for a procuring organization looking for assistance and potentially building a relationship with a vendor.A request for proposal is formal, focused, and conveys a sense of urgency. The procurer is about to make a significant procurement decision, and the supplier is about to acquire a significant client.

Advantages

 

The request for quotation assists the procuring organization in gaining an understanding of how much the solution they seek will cost from a variety of perspectives.

The RFI establishes the groundwork for future consultations and agreements.

 

The request for proposal assists the procuring organization in narrowing down suppliers who can actually meet their needs and clearly demonstrate how.

34. What do you mean by "Outline agreement"?

An outline agreement is a long-term purchase agreement. It is made with the seller with terms and conditions about the goods or material that the seller is required to send. This agreement is only valid for a limited time and covers a predefined quantity or value.

35. How can you identify the crucial fields within the purchasing view in SAP MM?

To spot important details in SAP MM's purchasing view:

  • Look for item descriptions.
     
  • Check quantities.
     
  • Review prices.
     
  • Verify supplier info.
     
  • Inspect delivery dates.

36. In SAP MM, how is a purchase requisition created and released?

A purchase requisition is created using T-code ME51N as part of this process:

  • First, the ME51N transaction is executed.
  • Then, create a purchase requisition document of the following type: NB.
  • Now choose the source: OFF or ON.
  • Enter the heater note, material number, UoM, quantity, and storage location.
  • The vendor is then determined automatically through source determination.
  • Now enter the tracking number and valuation prices before saving the transaction data.

37. How can you provide a detailed explanation of the various steps involved in the Procurement Lifecycle?

Here's a simplified explanation of the Procurement Lifecycle:

  • Planning: First, plan what to buy and set a budget.
     
  • Sourcing: Then, you find suppliers who can provide what you need.
     
  • Selecting: You choose the best supplier based on cost and quality.
     
  • Ordering: Next, you place an order with the chosen supplier.
     
  • Receiving: When the goods arrive, you confirm they're what you ordered.
     
  • Paying: Finally, you pay the supplier for the delivered goods or services.

38. What is RTP?

RTP stands for returnable transport packaging. It is a multi-trip packaging medium in which goods or products are transported between customers and retailers more than once.

39. What steps are involved in the RFQ process?

To process an RFQ, several steps are taken:

  • Enter the t-code (transaction code) ME41 first, followed by the RFQ type 'AN.'
  • After that, make a note of the location and the late date when the seller submits the quotation. Enter the purchasing group, delivery date, and other details, and click the button.
  • Following that, you will see a new screen where you must enter the item codes. Now enter the item codes as well as the vendor's information.
  • Furthermore, additional requests can be made based on vendor information.

Frequently Asked Questions

What are the important topics in SAP MM module?

SAP MM is composed of five primary components. These functions include materials management, plant maintenance, quality management, production planning and control, and a project management system. Each has a number of sub-components. SAP MM (Material management) is all about managing an organization's materials or resources.

What is the pricing procedure in SAP MM interview questions?

The Pricing procedure in the MM module is a mechanism for determining prices in purchase papers. This allows us to assign different calculation types for different uses. The total material value is based on all additions and subtractions, such as surcharges, discounts, taxes, and goods.

What are the benefits of using SAP material management?

  • Inventory with multiple locations
  • Stock replenishment
  • Management of the Product Life Cycle
  • Material valuing
  • The serial and lot traceability
  • Bin administration
  • Scheduling and resource allocation

Is SAP MM still in demand?

Yes, SAP MM (Materials Management) is still needed by many companies. It manages and controls the procurement and inventory of materials, which remains vital in business operations.

In SAP MM, what is the process order?

Process orders are created when thorough planning and execution of process manufacturing are determined. It identifies the material production in a production run.

Conclusion

We have extensively discussed the sap mm interview questions in this article in detail. This blog featured the top 30 sap mm interview questions.

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