2.3 Material Master / Product Master Sales Views, Tax Classifications, and Unit of Measure

Material Master / Product Master Sales Views, Tax Classifications, and Unit of Measure

Product Master Data Architecture in SAP S/4HANA

In SAP S/4HANA, the material master—often designated as the Product Master—serves as the central repository of all physical goods, consumables, services, and digital assets traded or manufactured by the enterprise. Master data maintenance is executed through classical SAP GUI transaction codes (MM01 for Create, MM02 for Change, MM03 for Display) or through SAP Fiori apps such as Manage Product Master Data.

A key technical enhancement in SAP S/4HANA is the extension of the material number field length (MATNR) from 18 characters (in legacy ECC) up to 40 characters. The extended material number must be activated explicitly in Customizing (Cross-Application Components -> General Application Functions -> Field Length Extension); it is a system-wide setting to decide on early in a project.

The material master is organized hierarchically across organizational levels to avoid redundant data storage while granting flexible local execution:

• Client Level: Attributes valid uniformly across all companies and plants (e.g., material number, material description in multiple languages, base unit of measure, gross and net weight, volume). Stored in table MARA (General Material Data) and MAKT (Material Descriptions).
• Sales Organization and Distribution Channel Level: Attributes specific to a commercial selling channel (e.g., sales unit, delivering plant, tax classification, item category groups). Stored in table MVKE.
• Plant Level: Attributes governing manufacturing, procurement, quality, inventory valuation, and logistics execution (e.g., availability checking group, loading group, batch management indicator). Stored in table MARC. The transportation group appears on the same Sales: General/Plant view but is a client-level field (MARA-TRAGR).
• Storage Location Level: Physical bin locations, picking areas, and stock quantities. Stored in table MARD.

Sales: Sales Org. 1 View Field Controls

The Sales: Sales Org. 1 view establishes baseline commercial parameters for a specific combination of Sales Organization and Distribution Channel:

1. Base Unit of Measure vs. Sales Unit

• Base Unit of Measure (MARA-MEINS): The primary unit in which warehouse stock is inventoried, valued on the general ledger, and tracked. Defined at the client level.
• Sales Unit (MVKE-VRKME): An alternative unit of measure specifically utilized for sales orders, quotations, and customer contracts (e.g., selling by "Box" or "Pallet" while stock is held in "Pieces").
• Conversion Factors: If the Sales Unit differs from the Base Unit of Measure, explicit mathematical conversion ratios must be maintained in the material master under Additional Data -> Units of Measure (e.g., 1 Box = 24 Pieces).
• Variable Sales Unit Not Allowed: If this indicator is set, the sales unit proposed from the material master cannot be changed in sales documents. Without it, users can enter another unit, but only one for which a conversion factor exists.

2. Delivering Plant (MVKE-DWERK)

The default plant from which goods are supplied to customers within the specified sales organization and distribution channel. While maintained in Sales Org 1, it represents the third and lowest priority level in the delivering plant determination sequence.

3. Cash Discount Indicator (MVKE-SKTOF)

A single-character flag specifying whether the material is eligible for cash discounts during payment processing. If deselected, the pricing engine excludes this material item from cash discount condition calculations (such as condition type SKTO).

4. Tax Classification Matrix

Sales tax determination in SAP SD requires evaluating the tax liability of both the customer and the material. The Sales Org. 1 view contains the Tax Classification table, structured by:

• Country of Departure: Derived from the delivering plant assigned to the sales organization.
• Tax Category: The fiscal tax condition type configured for that country (e.g., UTXJ for United States, MWST for Germany/EU).
• Tax Classification Indicator: A numeric code indicating fiscal tax liability:
  • 0: Tax Exempt (e.g., non-taxable services, exempt pharmaceutical goods).
  • 1: Full Tax (standard statutory rate).
  • 2: Half / Reduced Tax (concessionary rates for food, agricultural, or cultural goods).

During sales order pricing, the condition technique evaluates the material's tax classification in combination with the customer's tax classification (from the customer master sales area view) to derive the applicable condition record for MWST or sales tax.

Sales: Sales Org. 2 View Field Controls

The Sales: Sales Org. 2 view defines grouping criteria essential for pricing, document line item category determination, and sales reporting:

1. General Item Category Group vs. Item Category Group

A vital conceptual distinction tested in the certification exam:

• General Item Category Group (MARA-MTPOS_MARA): Defined at the client level (table MARA). It defines the fundamental commercial nature of the product across the entire enterprise. Common standard values include:
  • NORM: Standard delivery-relevant inventory item.
  • BANC: Individual purchase order (item category TAB: a purchase requisition is created for each order item and the vendor delivers to your own plant).
  • BANS: Third-party item (item category TAS: the vendor delivers directly to the customer).
  • NLAG: Non-stock material.
  • DIEN: Service material (non-inventory, order-related billing).
  • LUMF: Bill of Materials (BOM) item with pricing and delivery at the component level.
  • ERLA: Bill of Materials (BOM) item with pricing and delivery at the header level.
• Item Category Group (MVKE-MTPOS): Defined at the Sales Organization and Distribution Channel level (table MVKE). It allows a specific sales organization to override the general item category group. If the sales-organization-specific field is left blank, the system automatically defaults to the general item category group.

2. Item Category Determination Integration

The item category group is one of the four criteria that the system evaluates to determine the Item Category in a sales order:

$$\text{Sales Document Type} + \text{Item Category Group} + \text{Item Usage} + \text{Higher-Level Item Category} \longrightarrow \text{Item Category}$$

For example, for a standard order type OR with item category group NORM and no item usage or parent line, the system determines item category TAN (Standard Item).

3. Material Statistics Group (MVKE-VERSG)

Controls whether sales transactions involving this material update the statistics of the Logistics Information System (LIS). Embedded analytics on CDS views reads the documents directly and does not depend on this update.

4. Product Hierarchy (MVKE-PRODH)

A multi-level alphanumeric code (up to 18 characters structured across up to three levels) used for product classification, margin analysis, and condition technique pricing discounts across related product families.

Sales: General/Plant View Field Controls

The Sales: General/Plant view is maintained at the Plant level (MARC). Its fields establish direct integration between SD, Materials Management (MM), and Warehouse Management (WM):

1. Availability Check Checking Group (MARC-MTVFP)

The checking group specifies how inventory requirements are aggregated and checked against stock during the Available-to-Promise (ATP) calculation:

• 01 (Summarized daily requirements): Requirements of the same day are planned as one daily total for MRP.
• 02 (Individual requirements): Each sales order schedule line is passed to MRP as its own requirement, so planners can trace exactly which order created the demand.
• CH (Batches): Availability checks are executed against individual batch allocations.

In classic ERP, summarized requirements were stored in the totals table VBBS. In SAP S/4HANA, requirements are kept as individual records in VBBE and totals are calculated when needed, so VBBS is no longer used.

The Checking Group (MTVFP) is combined with the Checking Rule (e.g., A for sales orders, B for outbound deliveries) in SPRO to determine the Scope of Check (stocks, receipts, and issues included in ATP).

2. Loading Group (MARC-LADGR)

Defines the manual or mechanical handling equipment required to load the material onto transport vehicles (e.g., 0001 Forklift, 0002 Crane, 0003 Manual).

• Core SD Impact: The Loading Group is an indispensable input into Shipping Point Determination:

$$\text{Shipping Condition (from Sold-to)} + \text{Loading Group (from Material)} + \text{Delivering Plant} \longrightarrow \text{Shipping Point}$$

3. Transportation Group (MARA-TRAGR)

Identifies materials with shared transport requirements (e.g., 0001 Ambient Pallets, 0002 Refrigerated/Cold Chain, 0003 Liquid Tanker).

• Core SD Impact: The Transportation Group is a primary input into Route Determination:

$$\text{Departure Country/Zone} + \text{Shipping Condition} + \text{Transportation Group} + \text{Destination Country/Zone} \longrightarrow \text{Route}$$

4. Batch Management Requirement (MARC-XCHPF)

Specifies whether the material must be tracked and issued by discrete manufacturing or vendor batches. If checked, picking and goods issue require batch assignment.

The Sequential Delivering Plant Determination Hierarchy

When an order entry specialist adds a line item to a sales order, the system must establish the supplying plant to perform availability checks and delivery scheduling. The SAP system searches for a delivering plant using a strict, three-tier hierarchical sequence:

1. First Priority: Customer-Material Information Record (CMIR - table KNMT) The system queries table KNMT for a record matching the sold-to party, sales organization, and distribution channel with the ordered material. If a delivering plant is maintained in the CMIR, that plant is immediately populated in the order line item.
2. Second Priority: Ship-to Party Customer Master (table KNVV) If no CMIR exists or if the CMIR delivering plant field is unpopulated, the system checks the Sales Area data of the Ship-to Party (KNVV-VWERK). The Ship-to party governs this step because physical goods are dispatched to the destination site.
3. Third Priority: Material Master Sales Org. 1 View (table MVKE) If neither the CMIR nor the Ship-to customer master specifies a plant, the system falls back to the default delivering plant maintained on the material master Sales Org. 1 view (MVKE-DWERK).

If all three master data sources lack a delivering plant, the sales order line item triggers an entry in the Incompletion Log. The order cannot be released for delivery until an authorized user manually enters a valid plant in the sales document item.