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Material Master Records in Product Cost Planning

Material Master

In order to track inventory and allow postings for purchase and produced products in SAP, we need to create material masters to identify unique characteristics about products.

The key points about material master are as follows:

  • This is the enterprise main source of material specific data. This data will include information on the materials that a company can procure, or produce, or store or sell.
  • Since there are different departments in an enterprise and each department works on some specific material. So they will enter different information regarding their material. So each user department has its own view of the material master record. So, the data screens that are used to create material master can be divided into two categories:
    Main Data: This will include basic data (base unit of measure, weight), purchasing data (over tolerance and under tolerance), accounting data (standard price, moving price).
    Additional Data: This will include additional information like short description about material, currency etc.

Fit, form, function

A material master record is created in SAP for each product with a unique form, fit, and function. A Form-Fit-Function (FFF) class is a grouping of fully interchangeable products that are identical in all of their technically relevant properties (form, fit, and function). Material masters contain many views that hold key fields for different purposes.

Generally, each functional area or department has several views that they maintain with input from other functional areas. Product costing users maintain the accounting and costing views and have a strong interest in the fields on the basic data and MRP views. Depending on the design of your material master, you may also be interested in several fields in the purchasing and sales views.

SAP material types

The standard system comes with certain material types.

Material type is a global setting that groups materials with similar attributes. For example, you may create material groups for raw materials, semi-finished products, and finished products.

There are many SAP standard material types and you can also create custom material types to achieve a unique purpose. Material types are not specific to a plant or company code, so you must choose a material type that works for that given material at all plants.

There are many views available while creating a material and each material type comes with a different set of applicable views. In addition to customizing material types, you can also customize views to add unique fields or change the field labels.

SAP offers many more material types that are industry-specific, or works well for a particular business situation. Product costing users coordinate with the other functional areas or departments to determine the most suitable material types, as well as the need for custom material types.

The following are some common standard SAP material types:

ROH: Raw materials

HIBE: Operating supplies

ERSA: Spare parts

VERP: Packaging materials

HALB: Semi-finished goods

FERT: Finished goods

HAWA: Trading goods

NLAG: Non-stock materials

DIEN: Services

FHMI: Production resources/tools

UNBW: Non-valuated materials


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