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SAP CO Material Master
SAP CO Material Master
The Material Master is the foundation of product costing and variance analysis in SAP CO. Standard cost estimates, cost component structures, and production order variance settlement all depend on settings in this master. This article covers the Material Master’s structure, views, organizational levels, and the field-level detail CO consultants must own.
Part 1: Material Master — Core Concepts (All Modules)
1.1 What Is the Material Master?
The Material Master is the central repository that stores all information about every material (item/product) a company handles — raw materials, semi-finished goods, finished products, consumables, and everything else that flows through the enterprise.
| Aspect | Details |
|---|---|
| Role | Single Source of Truth for all material attributes across the enterprise |
| Modules using it | MM (Purchasing, Inventory), PP (Production Planning, MRP, BOM), SD (Sales, Shipping, ATP), WM/EWM (Warehouse Mgmt, Putaway/Pick), QM (Quality Inspection, CoA), FI (Inventory Valuation, Auto Posting), CO (Standard Cost, Variance Analysis), PM (Plant Maintenance, MRO Procurement), PS (Project Procurement, Material Allocation), CS (Customer Service, Spare Parts), EHS (Hazardous Material Mgmt, Environmental Compliance), GTS (Trade Compliance, HS Code, Export Control) |
| Transactions | MM01 (Create) / MM02 (Change) / MM03 (Display) |
| S/4HANA change | Material number length extended from 18 to 40 digits (MATNR field) |
1.2 Three Defining Axes: Material Type × Industry Sector × Views
The structure of a Material Master record is determined by the combination of three axes:
| Axis | Description | Examples |
|---|---|---|
| Material Type | Classifies the material. Controls screen layout, number assignment, and valuation method | ROH, FERT, HALB |
| Industry Sector | Industry branch. Controls which fields are displayed based on industry characteristics | M (Mechanical), C (Chemical), A (Automotive) |
| Views | Data sets organized by department. Only relevant views need to be extended | Basic Data, MRP, Accounting |
Important: Once created, Material Type and Industry Sector cannot be changed as a general rule. Lock these in during design.
1.3 Key Material Types
| Code | Name | Use Case | Stock-Managed | Qty / Value |
|---|---|---|---|---|
| ROH | Raw Material | Input materials | Yes | Both |
| HALB | Semi-Finished | Internally produced intermediates | Yes | Both |
| FERT | Finished Product | Internally produced / sold goods | Yes | Both |
| HAWA | Trading Goods | Buy-and-sell merchandise | Yes | Both |
| HIBE | Operating Supplies | Indirect materials, consumables | Yes | Both |
| DIEN | Service | Service items | No | Value only |
| NLAG | Non-Stock | No inventory management | No | — |
| UNBW | Non-Valuated | Quantity tracking only | Yes | Qty only |
1.4 View Structure
The Material Master is divided into department-specific Views. Only the views required by each department need to be extended. Approximately 30 standard views exist; the views to extend are selected based on Material Type and business requirements.
| # | View | Owning Dept | Key Fields | Org Level |
|---|---|---|---|---|
| 1 | Basic Data 1 | Cross-module | Material description, Base UoM, Material group, Weight/Volume | Client |
| 2 | Basic Data 2 | Cross-module | Dimensions, EAN/UPC, Old material number, Division | Client |
| 3 | Classification | Cross-module | Class assignment, Characteristic values | Client |
| 4 | Purchasing | Purchasing (MM) | Purchasing group, Order unit, GR processing time, Source list required flag | Plant |
| 5 | Purchase Order Text | Purchasing (MM) | PO text, Text ID, Language | Plant |
| 6 | Foreign Trade: Import | Purchasing (MM) / GTS | Country of origin, HS code (import), CAS number, Import license | Plant |
| 7 | MRP 1 | Purchasing / PP (MM/PP) | MRP type, MRP controller, Lot size, Reorder point | Plant |
| 8 | MRP 2 | Purchasing / PP (MM/PP) | Procurement type, Special procurement, Planned delivery time, Safety stock | Plant |
| 9 | MRP 3 | Purchasing / PP (MM/PP) | Strategy group, Consumption mode, Availability check | Plant |
| 10 | MRP 4 | PP-oriented | BOM selection, Individual/collective requirements, Discontinuation flag | Plant |
| 11 | Forecasting | Purchasing / PP (MM/PP) | Forecast model, Historical/forecast periods, Smoothing factors | Plant |
| 12 | Work Scheduling | Production (PP) | Production unit, Receiving storage location, In-house production time | Plant |
| 13 | Production Resources/Tools | Production (PP) | Production resource/tool data | Plant |
| 14 | General Plant Data / Storage 1 | Inventory (MM) / EHS | Plant-specific material status, Storage conditions, Hazardous material number, EHS hazard data | Plant |
| 15 | General Plant Data / Storage 2 | Inventory (MM) | Shelf life management, Minimum remaining shelf life, Temperature conditions | Plant |
| 16 | Warehouse Management 1 | Warehouse (WM/EWM) | Warehouse number, Storage type, Storage section | Warehouse |
| 17 | Warehouse Management 2 | Warehouse (WM/EWM) | Picking type, WM unit of measure | Warehouse |
| 18 | Quality Management | Quality (QM) | QM procurement key, Inspection type, Certificate type | Plant |
| 19 | Accounting 1 | Finance (FI) | Valuation class, Price control (S/V), Standard price / Moving average price | Valuation Area |
| 20 | Accounting 2 | Finance (FI) | Tax-based valuation, Commercial valuation, Devaluation flag | Valuation Area |
| 21 | Costing 1 | Controlling (CO) | Costing lot size, With/without quantity structure, Variance key | Plant |
| 22 | Costing 2 | Controlling (CO) | Standard cost (Future/Current/Previous), Costing status | Plant |
| 23 | Sales: Sales Org 1 | Sales (SD) | Sales unit, Tax classification, Item category group | Sales Org / DCh |
| 24 | Sales: Sales Org 2 | Sales (SD) | Material statistics group, Material group 1–5 | Sales Org / DCh |
| 25 | Sales: General/Plant | Sales (SD) | Delivering plant, Transportation group, Loading group, Profit center | Plant |
| 26 | Sales Text | Sales (SD) | Sales/shipping texts | Client |
| 27 | Foreign Trade: Export | Trade (SD/GTS) | HS code (export), Export statistics group, Preference status, Export control | Plant |
| 28 | Plant Stock | Reference (display only) | Plant stock quantity / value (read-only) | Plant |
| 29 | Storage Location Stock | Reference (display only) | Storage location-level stock (read-only) | Storage Loc |
| 30 | Environment (EHS) | EHS | Hazardous substance regulations, Waste code | Plant |
1.5 Organizational Levels and Data Hierarchy
Each view stores its data at a different organizational level. This is the core design challenge of the Material Master.
Client (300)
│
├── Basic Data, Classification ← Client-level (one record for entire enterprise)
│
├── Plant (1000, 2000, ...)
│ │
│ ├── MRP, Purchasing, Work Scheduling ← Plant-level
│ │
│ ├── Storage Location (0001, 0002, ...)
│ │ └── Storage Data ← Storage Location-level
│ │
│ └── Warehouse Number (WH1, ...)
│ └── WM Data ← Warehouse-level
│
├── Valuation Area = Plant ← Accounting is typically at Plant level
│ └── Valuation class, Standard cost
│
└── Sales Org × Distribution Channel
└── Sales Data ← Sales Org-level| Org Level | Primary Use | Representative Fields | Notes |
|---|---|---|---|
| Client | Enterprise-wide common attributes | Material description, Base UoM, Classification | One record shared across entire enterprise |
| Company Code | Financial accounting unit | Accounting View (valuation class, price control) | When Valuation Area = Company Code |
| Controlling Area | Management accounting unit | Costing View (cost estimate, variance analysis) | May span multiple Company Codes |
| Purchasing Organization | Purchasing org unit | Purchasing Info Record (price, conditions) | Material Master itself is at Plant level; purchase conditions are at Purch. Org level |
| Plant | Factory / site unit | MRP, Purchasing, Work Scheduling, General Plant Data | The primary level with the most views |
| Purchasing Group | Buyer group | Purchasing View: Purchasing Group (EKGRP) | Buyer group within a Plant; starting point for PO release strategy routing |
| Valuation Area | Inventory valuation unit | Accounting 1 (valuation class, standard price) | Typically = Plant; Company Code-level valuation is also configurable |
| Storage Location | Storage area unit | General Plant Data / Storage (storage location stock) | Warehouse / bin area within a Plant |
| Warehouse Number | Warehouse management unit | WM View (storage type, picking strategy) | Used in Plants with WM/EWM |
| Sales Organization | Sales org unit | Sales: Sales Org View (sales unit, tax classification) | Keyed together with Distribution Channel |
| Distribution Channel | Distribution channel unit | Sales: Sales Org View | Extended in combination with Sales Org |
| (GTS reference) | Trade compliance management | Foreign Trade View (HS code, country of origin, export control) | No GTS-specific org level key in Material Master; GTS references the Foreign Trade View data |
Part 2: CO-Specific View Details (Controlling)
2.0 All Views × CO Involvement
| # | View | Primary Module | CO Involvement |
|---|---|---|---|
| 1 | Basic Data 1 | Cross-module | ○ |
| 2 | Basic Data 2 | Cross-module | △ |
| 3 | Classification | Cross-module | △ |
| 4 | Purchasing | MM | △ (purchase price feeds standard cost) |
| 5 | Purchase Order Text | MM | × |
| 6 | Foreign Trade: Import | MM | × |
| 7 | MRP 1 | MM / PP | △ (lot size affects unit cost) |
| 8 | MRP 2 | MM / PP | △ (procurement type E/F determines cost source) |
| 9 | MRP 3 | MM / PP | × |
| 10 | MRP 4 | PP | × |
| 11 | Forecasting | MM / PP | × |
| 12 | Work Scheduling | PP | ○ (in-house production time feeds scheduling) |
| 13 | Production Resources/Tools | PP | × |
| 14 | General Plant Data / Storage 1 | MM | × |
| 15 | General Plant Data / Storage 2 | MM | × |
| 16 | Warehouse Management 1 | WM / EWM | × |
| 17 | Warehouse Management 2 | WM / EWM | × |
| 18 | Quality Management | QM | × |
| 19 | Accounting 1 | FI | ◎ (valuation class + price control) |
| 20 | Accounting 2 | FI | △ |
| 21 | Costing 1 | CO | ◎ (Owner) |
| 22 | Costing 2 | CO | ◎ (Owner) |
| 23 | Sales: Sales Org 1 | SD | × |
| 24 | Sales: Sales Org 2 | SD | × |
| 25 | Sales: General/Plant | SD | ○ (profit center) |
| 26 | Sales Text | SD | × |
| 27 | Foreign Trade: Export | SD / GTS | × |
| 28 | Plant Stock | Reference | — |
| 29 | Storage Location Stock | Reference | — |
| 30 | Environment (EHS) | EHS | × |
Legend: ◎ = Owner / Critical, ○ = Direct involvement, △ = Reference / Integration, × = Other module owns, — = Display-only view
2.1 Costing 1 View
The prerequisite settings for running a standard cost estimate (CK40N) via BOM × Routing.
| Field | Description | Practical Usage |
|---|---|---|
| Costing Lot Size | Base quantity for cost rollup | Fixed costs (setup, depreciation) are spread over this quantity to calculate unit cost. Set close to the actual average production lot size — deviations cause systematic price variances at every GR. A common mistake is leaving it at 1, which inflates unit cost by concentrating all setup costs on a single unit. |
| With Qty Structure | BOM/Routing cost rollup flag | Check for FERT/HALB — enables CK40N to roll up cost from BOM × Routing. Leave blank for ROH/HAWA where cost comes from the purchasing price. The most important flag in the Costing view. |
| Material Origin | Cost breakdown by component | When checked, the cost estimate shows cost by individual material rather than aggregated by cost component. Enable for key purchased components where visibility into material cost variance is required. |
| Variance Key | Variance analysis key | Determines how production order variances are categorized (input price, quantity, remaining variance, etc.) and settled. 000 = standard; define additional keys for split variance reporting by product line. |
| Production Version (Costing) | Default costing production version | When multiple Production Versions exist (different routings or BOMs), this determines which version is used for the standard cost estimate. Locks “which manufacturing method” into the cost. |
2.2 Costing 2 View
Displays the three generations of standard cost and the current workflow state.
| Field | Description | Practical Usage |
|---|---|---|
| Standard Cost — Future | Marked but not yet released | Result of CK40N Mark step. Visible for review but does not yet affect inventory value or GR postings. Used for simulation and review before the annual or mid-year cost release. |
| Standard Cost — Current | Active released standard | Released via CK40N Release step. This value populates the Standard Price in Accounting 1 and drives all inventory GR postings in the current period. Changing this mid-period triggers mass revaluation. |
| Standard Cost — Previous | Prior released standard | Retained automatically when a new cost is released. Used for year-over-year variance analysis, budget vs. actual cost comparison, and audit trail. |
| Costing Status | Mark/release workflow status | KA = Marked (review phase), FR = Released (active). Use to build a governance workflow: cost accountants mark → controller reviews → FI releases. Prevents accidental release of incorrect costs. |
2.3 Accounting 1 View (CO perspective)
While FI owns Accounting 1, CO must understand the key fields that drive product costing.
| Field | Description | Practical Usage |
|---|---|---|
| Price Control (S/V) | Cost method selector | S = Standard Price — variances between actual and standard are posted to price difference accounts and settled via production orders. V = Moving Average — actual cost is absorbed into inventory directly. CO’s preferred mode is S, as it enables variance analysis. Never mix S and V within the same product line without a clear policy. |
| Valuation Class | Account determination key | In CO-PA (account-based), the Valuation Class contributes to the revenue account determination matrix. Also determines which cost of goods sold (COGS) account is posted at goods issue to sales. |
| Standard Price | Active unit cost | The value CO uses as the basis for all standard cost calculations, production order settlement, and CO-PA COGS posting. Must be released before the fiscal year start to enable clean variance reporting from day one. |
2.4 MRP 2 View (CO perspective)
| Field | Description | Practical Usage |
|---|---|---|
| Procurement Type (E/F/X) | In-house vs. external sourcing | E = In-house: CK40N rolls up cost from BOM + Routing. F = External: CK40N uses the Planned Price or purchasing info record price as the cost source. X = Both: CO must decide which source drives the standard cost — document this policy explicitly. Misalignment between actual procurement and the Procurement Type causes systematic variances. |
| Special Procurement (40 = Subcontracting) | Subcontracting flag | When set to 40, CK40N includes the subcontracting service cost (from the Purchasing Info Record or planned price) on top of the component cost. A common source of unexpected cost in BOM rollups for subcontracted assemblies. |
2.5 Work Scheduling View (CO perspective)
| Field | Description | Practical Usage |
|---|---|---|
| In-house Production Time | Fixed lead time (days) | Used in simplified scheduling when no Routing exists. CO must ensure this is aligned with the Routing-based lead time — discrepancies affect MRP scheduling and in turn affect which cost period absorbs the production order variance. |
| Production Version | BOM × Routing combination | CO must confirm which Production Version is selected in Costing 1 and verify it represents the intended manufacturing method. A wrong Production Version selection in costing produces a standard cost that does not match actual production — the root cause of large, unexplained variances. |
2.6 Sales: General/Plant View (CO perspective)
| Field | Description | Practical Usage |
|---|---|---|
| Profit Center | CO-PA / PCA profit center | In S/4HANA, Profit Center is mandatory for all inventory-holding materials. Revenue, COGS, and inventory value flow here. In account-based CO-PA, the Profit Center is the primary drill-down axis for profitability reporting. Design the Profit Center hierarchy together with the CO-PA characteristic set. |
What to Read Next
L1) Big Picture
| ID | Category | Title |
|---|---|---|
| co-001 | Overview | What is SAP CO? |
L2-A) Master Data
| ID | Category | Title |
|---|---|---|
| co-a01 | Overview | SAP CO Master Data: Overview, Hierarchy & Relationships |
| co-a02-01 | Master Data | SAP CO Material Master 📍 |
| co-a03-01 | Master Data | SAP CO Cost Element |
| co-a03-02 | Master Data | SAP CO Cost Element Group |
| co-a04-01 | Master Data | SAP CO Profit Center Group |
| co-a04-02 | Master Data | SAP CO Profit Center |
| co-a05-01 | Master Data | SAP CO Cost Center Group |
| co-a05-02 | Master Data | SAP CO Cost Center |
| co-a05-03 | Master Data | SAP CO Activity Type Group |
| co-a05-04 | Master Data | SAP CO Activity Type |
| co-a05-05 | Master Data | SAP CO Statistical Key Figure |
| co-a06-01 | Master Data | SAP CO Internal Order Group |
| co-a06-02 | Master Data | SAP CO Internal Order |
| co-a07-01 | Master Data | SAP CO Cost Component Structure |
| co-a07-02 | Master Data | SAP CO Costing Variant |
| co-a08-01 | Master Data | SAP CO Operating Concern |
L2-B) Transaction
| ID | Category | Title |
|---|---|---|
| co-b01 | Overview | SAP CO Transactions: Process Flow, Hierarchy & Relationships |