SAP MM Interview Questions

SAP MM Interview Questions & Detailed Answers

Q1. Can you explain what SAP MM is and why it is important in an organization?

SAP MM (Materials Management) manages procurement, inventory, and material valuation. It ensures materials are available in the right quantity, time, and place. Key value: streamlined supply chain processes, real-time visibility of stock and spend, reduced manual errors via automation, and tight integration with SD, PP, and FI for end-to-end control.

Q2. What are the main components of SAP MM?

• Master Data: Material Master, Vendor Master, Purchasing Info Records.
• Purchasing: PR, RFQ/Quotation, PO, Contracts, Scheduling Agreements.
• Inventory Management: GR, GI, transfer postings, physical inventory.
• Invoice Verification: three-way matching and postings to FI.
• Integration: SD, PP, FI/CO, WM/EWM, QM.

Q3. What is a Material Master record in SAP MM, and what information does it contain?

A central repository of all material data used across functions. Typical views: Basic Data (description, UoM), Purchasing (order unit, planned delivery), MRP (planning type, lot size), Accounting (valuation class, price control), and Storage (storage location, shelf life).

Q4. What is a Vendor Master record in SAP MM?

Supplier data split into General (name, address), Company Code (reconciliation account, payment terms), and Purchasing (incoterms, order currency, purchasing group). Drives procurement and accounting consistency.

Q5. What is the difference between a Purchase Requisition and a Purchase Order?

• PR: Internal request to procure; not legally binding.
• PO: External order sent to vendor; legally binding.

Q6. What are different stock types in SAP MM?

• Unrestricted: Free for use.
• Quality Inspection: Awaiting QA decision.
• Blocked: Not available until released.

Q7. Explain Movement Types in SAP MM.

Codes that define inventory postings. Common: 101 (GR for PO), 201 (GI to cost center), 301 (plant-to-plant transfer), 122 (return to vendor).

Q8. What is Goods Receipt (GR)?

Posting receipt of goods against PO/production order. Updates stock, triggers valuation/accounting, and can create inspection lots if QM is active.

Q9. What is Invoice Verification in SAP MM?

Three-way match (PO, GR, Invoice) to ensure correctness before payment. Posts to FI/AP, handles variances, and supports credit/debit memos.

Q10. What is MRP in SAP MM?

Material Requirements Planning calculates procurement proposals based on demand, current stock, lead times, and BOMs, ensuring availability without excess inventory.

Q11. What is a Source List?

A list of approved sources for a material with validity dates. Can enforce source determination and block unapproved vendors.

Q12. Difference between Contract and Scheduling Agreement?

• Contract: Long-term agreement without fixed delivery dates; releases via POs.
• Scheduling Agreement: Long-term with delivery schedules/lines; call-offs via schedule lines.

Q13. What is a Purchasing Info Record?

Links a material and vendor: contains price, conditions, lead time, order unit, and last PO data; referenced during PO creation.

Q14. What is Consignment Stock?

Vendor-owned stock at your site. Liability arises and vendor is paid only upon consumption; tracked with special stock indicators.

Q15. What are the key benefits of using SAP MM?

• Faster, controlled procurement cycles.
• Real-time inventory visibility and valuation.
• Reduced maverick spend; better compliance.
• Improved supplier performance and analytics.

Q16. What is the difference between Consumption-Based Planning (CBP) and MRP?

CBP: Replenishment from historical consumption (e.g., reorder point). MRP: Net requirements from sales orders/forecasts/BOMs; considers lead times and lot sizing for precise planning.

Q17. Can you explain subcontracting in SAP MM?

Send components to a vendor who returns finished goods. Steps: subcontracting PO → issue components (541) → receive finished goods (101) → components are backflushed; settlement via normal IV.

Q18. Difference between Stock Transport Orders (STO) and Transfer Postings?

• STO: Formal inter-plant transfer; supports delivery, shipment, and (optionally) billing.
• Transfer Posting: Changes stock type/location without a purchasing doc (e.g., QI → unrestricted).

Q19. What is Automatic Account Assignment in SAP MM?

System derives G/L accounts for postings using valuation class, account grouping, and rules in OBYC (e.g., BSX, WRX, PRD, GBB).

Q20. What is a Release Strategy in SAP MM?

Approval workflow for PR/PO based on criteria (value, material group, plant). Uses release codes, indicators, and classification (CEKKO/CEB** structures).

Q21. How is Blocked Stock handled in SAP MM?

Stock not usable for consumption/issue. Posted using specific movement types; can be moved to QI/unrestricted after QA or review.

Q22. Can you explain the Physical Inventory process in SAP MM?

1. Create physical inventory document for material/locations.
2. Perform and record the count.
3. Enter count results and analyze differences.
4. Post differences to update stock and FI.

Q23. What is Vendor Evaluation in SAP MM?

Scoring suppliers on price, quality, delivery, and service using weighted criteria; supports sourcing decisions and performance improvement.

Q24. How does SAP MM integrate with other modules?

• FI/CO: Valuation, GR/IR, price differences, cost centers.
• SD: Sales deliveries affect stock and ATP.
• PP: MRP and production orders consume/require materials.
• WM/EWM: Bin-level storage and picking.
• QM: Inspection lots and usage decisions.

Q25. What is the role of an MRP Controller?

Runs and reviews MRP results, resolves exceptions/shortages, tunes planning parameters (lot size, safety stock), and coordinates with purchasing/production.

Q26. What is a Delivery Schedule in SAP MM?

Time-phased delivery plan (often in scheduling agreements) with quantities and dates; drives inbound logistics and supplier commitments.

Q27. How are Returns to Vendor processed?

Create return PO referencing original PO → post goods issue with 122 → handle credit memo in IV; optional quality notification for cause tracking.

Q28. What are Pricing Conditions in SAP MM?

Condition technique calculates PO price via condition types (e.g., PB00 base price, PBXX manual price, freight, discounts). Access sequences and schemas define determination.

Q29. What is an Availability Check in SAP MM?

Verifies stock availability for confirmations and commitments (often handled in SD/PP). Prevents over-commitment and supports ATP.

Q30. What is the significance of Material Type in SAP MM?

Controls number ranges, views, procurement type, quantity/value updating. Examples: ROH (raw), FERT (finished), HAWA (trading).

Q31. What is a Valuation Class in SAP MM?

Groups materials for automatic account determination, linking material to the correct G/L accounts for inventory postings.

Q32. How is a Release Strategy configured in SAP MM?

1. Define release codes and indicators.
2. Create classes/characteristics (e.g., value, plant).
3. Assign to document type and set strategy sequence.
4. Test with sample documents and simulate approvals.

Q33. What is a Stock Transfer Order?

PO-like document to move stock between plants/storage locations. Supports delivery/transportation and (in cross-company scenarios) billing.

Q34. What is a Service Master Record?

Master data for services (no physical stock): description, service category, UoM, pricing. Used with service POs and entry sheets.

Q35. What is Batch Management in SAP MM?

Tracks and manages materials in batches for traceability, expiry, and quality attributes. Enables batch determination at GR/issue.

Q36. Why is the Purchasing Info Record important?

Ensures consistent pricing and lead times per vendor-material; speeds PO creation and supports analytics of historical purchasing.

Q37. What is the role of a Purchasing Group?

Represents buyers; used for responsibility assignment, reporting, and workflow routing in purchasing documents.

Q38. What is an MRP Forecast and when is it used?

Predicts future demand from historical consumption; useful for stable-demand items and CBP scenarios to prevent stockouts.

Q39. What are common challenges in Inventory Management?

• Stock discrepancies and data quality issues.
• Over/under-stocking from poor planning.
• Slow-moving/obsolete inventory.
• Process compliance and cycle count variance.

Q40. What are the steps in the Procure-to-Pay (P2P) process in SAP MM?

1. Purchase Requisition
2. Source Determination/RFQ
3. Purchase Order
4. Goods Receipt
5. Invoice Verification
6. Vendor Payment

Q41. How do you configure SAP MM for a new implementation?

Define org structure (company code, plant, SLoc), set material types/number ranges, configure purchasing and inventory, OBYC account determination, release strategies, and cross-module integrations.

Q42. How is data migration handled in SAP MM?

Profile/cleanse legacy data → field mapping → load via LSMW, BAPIs, or Data Services → reconcile counts/values → cutover plan and post-go-live validation.

Q43. What strategies can be used for Vendor Management?

• Evaluation scorecards and SLAs.
• Performance reviews and corrective actions.
• Risk monitoring and diversification.
• Strategic sourcing and collaboration.

Q44. What are the key differences in SAP MM in S/4HANA compared to ECC?

Fiori UX, simplified data model, Business Partner (replacing classic vendor), embedded analytics, and streamlined processes (e.g., BP, advanced MRP).

Q45. How does SAP MM integrate with SAP Ariba?

Ariba handles sourcing, supplier collaboration, and catalogs; integration syncs POs, confirmations, and invoices via Ariba Network/CI flows for seamless P2P.

Q46. What are best practices for maintaining Material Master data?

• Standardized naming and coding.
• Mandatory fields and validations.
• Periodic data audits and stewardship.
• Limit unnecessary views; reuse templates.

Q47. How are exceptions handled in MRP runs?

Monitor exception messages, adjust lot sizing/safety stock/lead times, expedite or reschedule, and re-run MRP; collaborate with planners and buyers.

Q48. What is EDI in SAP MM?

Electronic Data Interchange for POs, confirmations, ASNs, and invoices using IDocs/XML; reduces manual entry and speeds cycle time.

Q49. How is compliance and audit control ensured in SAP MM?

• Release strategies and SoD controls.
• Document history and change logs.
• GR/IR reconciliation and variance handling.
• Vendor master governance and approvals.

Q50. How can continuous improvement be achieved in SAP MM?

Track KPIs (cycle time, on-time delivery, price variance), automate recurring tasks, refine master data and planning parameters, and run periodic process audits/training.