6 Replies Latest reply: Aug 2, 2010 9:07 AM by Madhu Kiran RSS

MM Cycle

Dhanasekhar Viswanathan
Currently Being Moderated

Can u please specify the stages involved in the MM cycle i.e the whole cycle involved in MM.

I also want to know about the technical details of the MM cycle.




  • Re: MM Cycle
    Amit More
    Currently Being Moderated



    The general procurement cycle consists of:


    1 Material Requirement (Manual or through MRP/CBP)

    2 Checking availability of Material

    3 Selection of Vendor

    4 Negotiation (Price & Other Condition)

    5 Issuing the Purchase Order to Vendor

    6 Follow up with Vendor

    7 Goods Receipts

    8 Goods Issue to Indenting Department

    9 Invoice Verifications

    10 Consignment Purchase

    11 Contract release order





  • Re: MM Cycle
    Pavan hs
    Currently Being Moderated



      1. You will create material master (MM01)

      2. You will create vendors(XK01)

      3. Purchase Requisition(ME51N)

      4. Request for Quotation (ME41)

      5. Maintain Quotation (ME47)

      6. Select best vendor and create PO (ME21N)

      7. Goods Receipt (MIGO)

      8. Invoice Verification (MIRO)


    Meantime you can maintain Inforecord for material and vendor combination ( ME11)

    You can also have a source list of approved vendors (ME01)

    You can create contracts (ME31K)




  • Re: MM Cycle
    Currently Being Moderated


    First will get sales order from the customer.Then will check stock availability then if the stock is not available then PP person will run MRP(Material Requirement planning).

    After MRP run you will decide whether the material is to be produced or procured.

    Then the procurement cycle starts.

    Based on the material requirement you will ask quotation from the vendor then after getting quotation from the vendor you will select the best vendor which is suitable for your procurement like cost, etc.Then you will maintain & compare the quotation.

    After quotation is ready you will agree with whether one purchase or continuous purchase.

    Then you will maintain the PO & follow up the PO.

    Then Goods Receipts, Invoice verification.




    Ravi shankar.

  • Re: MM Cycle
    Ravikant Dewangan
    Currently Being Moderated



    Process Flow


    The typical procurement cycle for a service or material consists of the following phases:


    Determination of Requirements

    Materials requirements are identified either in the user departments or via materials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials defined by master records, use of the order-point method, and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.


    Source Determination

    The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements. This speeds up the process of creating requests for quotation (RFQs), which can be sent to vendors electronically via SAP EDI, if desired.


    Vendor Selection and Comparison of Quotations

    The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically.


    Purchase Order Processing

    The Purchasing system adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically. Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase agreement) are also supported.


    Purchase Order Follow-Up

    The system checks the reminder periods you have specified and - if necessary - automatically prints reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders.


    Goods Receiving and Inventory Management

    Goods Receiving personnel can confirm the receipt of goods simply by entering the Po number. By specifying permissible tolerances, buyers can limit over- and underdeliveries of ordered goods.


    Invoice Verification

    The system supports the checking and matching of invoices. The accounts payable clerk is notified of quantity and price variances because the system has access to PO and goods receipt data. This speeds the process of auditing and clearing invoices for payment.




    for technical detail see the below link




    reward points if helpful


    ravikant dewangan

  • Re: MM Cycle
    Currently Being Moderated




    Please find the procurement cycle mentioned below

    Complete Purchase Cycle Till FI

    Let us go about purchase cycle:

    1. Purchase Requistation : First Purchase requisation has to made to purchase department wheever the product need by the user or production depaartment.They are created by tcode me51k.

    2. Once the purchase requested, then the purchase department will search for the materail, where available and when available. That is called Material determination.

    3. After the search of material is over, then look for who are the parties , who is going to supplies the material in competitive rate. Then select the correct vendor is known as material determination.

    4. After that Tender process done through Tcode-ME41.

    5. After finilisation of Tender, the vendor selected and purchase order issued. The Creation of Purchase Order is ME21N. There will not be any finance entry while creating the Purchase Order.

    6. Once the purchase order issued, then by the terms of PO, the vendor will supply the materials. The Receipt of Good (GR) , done through MIGO or if it is an service entry done through ML81N.

    The Entry will be

    Inventory account - dr-

    GR/IR Clearing a/c - cr-

    Purchase a/c - dr-

    Purchase offset a/c -cr-

    GR/IR clearing is a intermediate account, will be used to connect cost and vendor.

    In GR/IR clearin a/c - 1. Assesable Value

    2. Sales Tax

    3. Surcharge

    ie., Other than Cenvat Clearing will be there.

    7. After the receipt of material, the Good Receipt along with Invoice Bill submitted to the Excise person handling Central Excise matters, to take Credit of duty for the product.

    The entry will be

    1. Cenvat Clearin a/c - cr

    RG23a Part II a/c - dr

    RG23a Part II cess a/c - dr.

    8. From the Excise person , the bill move towards the person who passing the bills for payment. He will do the Invoice Receip First through MIRO. Here two document will be created, one for MM and one for FI.

    The entry will be

    Vendor a/c - Cr-

    Gr/IR Clearing a/c - dr

    Cenvat Clearing a/c- dr.

    9. After finalisation of Invoice receipt, the bill is for Payment process mode through F-53.

    The entry will be

    Vendor a/c - dr

    Bank a/c - cr.



    There is no need to create entry thru J1Is if u post the GR thru MIGO and captuer excise thru J1iex

    J1is is used if u post the document with transaction/sub transation type is others.