If you're preparing for an SAP MM (Materials Management)
interview, understanding key concepts like consignment stock, procurement
cycles, and purchasing organizations is essential. Below are
some of the most frequently asked interview questions with well-structured
answers to help you succeed.
1. What is meant by consignment stock?
Consignment stock is a procurement method where a vendor
(supplier) provides materials to a customer (buyer) and stores
them at the customer's premises. However, ownership of the stock remains
with the vendor until the materials are withdrawn for use.
Key Points:
-
The customer only pays when they consume or withdraw the
stock.
-
The vendor tracks withdrawals and issues invoices accordingly.
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Helps businesses maintain inventory without immediate financial
outflow.
2. What are the steps involved in the consignment cycle?
The consignment process in SAP MM follows a structured procurement
workflow. The key steps are:
Step 1: Material Master Record & Vendor Setup
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The vendor must be registered in the system.
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A Material Master Record should exist in the system.
Step 2: Create an Info Record for Consignment
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An info record with procurement type consignment
is created.
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This contains essential details such as price, vendor information,
and procurement conditions.
Step 3: Activate Consignment Prices in SPRO
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Navigate to SPRO → Materials Management → General
Settings for Materials Management.
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Enable Activate Consignment Prices via Info Records
to ensure the correct price is picked during procurement.
Step 4: Purchase Order (PO) Creation
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While creating the Purchase Order (PO), the price
is automatically fetched from the info record (it remains zero in PO).
Step 5: Goods Receipt & Storage
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The vendor supplies materials as per the PO.
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The received materials are stored at the company premises
but do not belong to the inventory until used.
Step 6: Consumption & Payment
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Materials are moved to inventory or directly consumed
when needed.
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Payment is only made when stock is withdrawn, processed via
MRKO settlements.
-
Businesses can set up automatic payments using batch
jobs.
3. What is a reference purchasing organization? When can
it be used?
A purchasing organization (Pur Org) is a critical
element in SAP MM that handles procurement and supplier negotiations.
Types of Purchasing Organizations in SAP MM
Standard Purchasing Organization (Std Pur Org)
-
The default purchasing unit that automatically handles procurement
tasks like stock transfers and consignment orders.
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A site must be linked to a purchasing organization to enable
order placement.
Reference Purchasing Organization (Ref Pur Org)
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Used to share contracts and conditions among multiple
purchasing organizations.
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Helps centralize procurement policies while allowing
flexibility at the operational level.
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A purchasing organization can be assigned to two reference
purchasing organizations to access conditions efficiently.
Final Thoughts
Understanding consignment stock, procurement cycles,
and purchasing organizations is crucial for success in SAP MM
interviews. These concepts ensure efficient inventory management,
cost control, and streamlined procurement processes. |
SAP MM
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