Question on raw material semi finished and finished goods

[Former Member]

Hi,

Will it be always that a raw material will have a purchasing view in Material master data and no sales view?

Likewise for a finshed product we can have only sales view in a material master data and no purchasing view always?

Also I would like to know a difference between a raw material and semi finshed goods with an example.Basically how can we differentiate if a material can be used as a raw material or a semifinsihed material?

[Former Member · Accepted solution]

Hi Christino,

General Concept in SAP:

1. Whenever you are Purchasing any material irrespective of the Type of Product (Raw Material, Semi-fin or Finished), Purchasing View needs to be Maintained in MATERIAL MASTER.

2. Whenever you are selling material irrespective of the Type of Product (Raw Material, Semi-fin or Finished), its SALES VIEWS needs to be extended in Material Master.

For info:

1. Raw Material: (a) It is the Basic Input material which you use for Production of your desired Product. Generally raw material is procured from outside sources or purchased from vendors. So for Raw Material Purchasing View needs to be there.

(b) Some industries Sell the Raw Materials also. So in order to sell the Raw Material, you have to extend Sales Views for that Material.

2. Semi-fin: (a) Semi-fin product is a product which is produced either from RAW MATERIAL or any other Semi-finished Product. So generally, a semi-fin product gets produced in industry itself. So no Purchasing View or Sales View needs to be maintained. But for Production of a Product, you need to Maintain MRP Views and Work Scheduling Views (Must Condition).

3. Finished Prod: A product which is ready to be sold to Customers. So in order to sell it, Sales Views needs to be Maintained. If you are purchasing your Fin-mat from outside then you need to extend the Purchasing View.

E.g:

(a) Our industry is making Mild Steel Pipes (Fin- Product).

(b) The Raw Material (suppose 01) is Steel Coils which we Purchase from Vendors.

(c) Then that raw material, 01 is cut into different materials (Suppose 11, 21 and 31). So now 11, 21, 31 are Semi-finished Product.

(d) SF Mat. 11 is consumed to Produce the Pipe Material, 12 (which is also a SF material).

(e) Now, this SF material 12 is consumed by Finishing Department, which gives it proper shaping, do Varnishing on Pipe etc. So from SF mat. 12, we are producing Finished Mat. 13.

(f) Now, this Fin-Mat is ready to be sold.

This is the complete One Production scenario of our company.

Regards,

Vishal

[Former Member · Accepted solution]

Vishal that was an amazing explanation. Simple and to the point.

Thank you.Points rewarded.

[Former Member]

HI,

It is quite general ,

When ever you purchase an a item and do some activity like assembly or alteration,for converting it to finished item it is known as rawmaterial

And the same product you are going to be selling it to customers its know as a finished product

Ans the same purchased product,if you are selling it in to market with out any above activities is know as a semi-finished product

Regards,

[former_member550050]

Hi

Raw material will have a purchasing view in Material master data and no sales view?

This is correct as a raw material is not sold

Logicallly a raw material is the base for producing your product and hence it is not sold

Logically it should not be sold and it is not sold (it means raw material) hence no sales view

Likewise for a finshed product we can have only sales view in a material master data and no purchasing view always?

No

A finished product has both sales viws and purchasing views

A finished product can be purchased or produced or procured and then sold

Hence it has both the purchasing view and sales view always and logically also it should have both views

• Raw materials (ROH)*

Raw materials are always procured externally and then processed. A material master

record of this type contains purchasing data, but not sales data since they cannot be

sold.

• Semifinished products (HALB)*

Semifinished products can be procured externally and manufactured in-house. They are

then processed by the company. A material master record of this material type can

contain both purchasing and work scheduling data

Examples of raw material and finished goods

If you have worked in cement industry for cement manufacturing the raw materials used are limestone + some others Here limestone is raw material

Before we get the finished product CEMENT manufactured we got some semifinished products like molestus etc Here molestus issemifinished material

Cement is the finished product

Basically how can we differentiate if a material can be used as a raw material or a semifinsihed material?

A raw material after some Process can become a semifinished product and then finished product or straight away become a finished product

This qn may be MM colleagues will give better answers

Regards

Raja