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SAP Pipeline Materials Process Guide

SAP Pipeline Materials Process Guide

A comprehensive guide to understanding and implementing pipeline materials in SAP

What Are Pipeline Materials?

Pipeline Materials are materials that have a continuous supply to your organization, often (but not always) through a physical pipeline. Payment is based on actual consumption rather than stock quantities.

Continuous Supply

Materials that are continuously supplied without interruption

Pay Per Consumption

Payment is made based on how much material is consumed

Always Available

No planning required as material is continuously available

Simplified Process

Streamlined procurement process without standard PO

Common Examples of Pipeline Materials:

  • Oils - Palm oil, diesel oil for manufacturing
  • Utilities - Water, electricity, gas
  • Raw Materials - Any continuously supplied material used in manufacturing

Important Distinction

Pipeline materials don't need to be physically delivered through a pipeline. Any material with continuous supply where you pay based on consumption can be treated as a pipeline material in SAP.

Pipeline Materials in SAP

In SAP, pipeline materials are handled differently from regular materials. Here are the key characteristics:

Special Material Type

Uses "Pipeline Materials" material type in SAP

No Stock Management

No inventory tracking or stock monitoring in SAP

No Planning

No MRP or demand planning required

No Purchase Order

Uses purchase info record instead of purchase order

Why Use Pipeline Materials?

Using the pipeline materials process in SAP simplifies procurement for continuously supplied materials. It eliminates unnecessary steps like goods receipt and inventory management, focusing solely on consumption and payment.

Complete Pipeline Materials Process Flow
1
Create Material
Create material with "Pipeline Materials" material type
2
Purchase Info Record
Create purchase info record with vendor and pricing
3
Consumption Entry
Record consumption using MIGO (Movement Type 291)
4
Settlement
Settle consumption with vendor using MRKO

Step 1: Create Material

Create a material master with material type "Pipeline Materials". Only maintain basic views:

  • Basic Data
  • Purchasing Data
  • Accounting Data

Note: No storage or planning views required

Step 2: Create Purchase Info Record

Create a purchase info record (not a purchase order) with:

  • Vendor details
  • Price information
  • Pipeline info record category

Transaction: ME11 (Create Info Record)

Step 3: Record Consumption

Directly record consumption (no goods receipt needed):

  • Transaction: MIGO (Goods Movement)
  • Movement Type: 291 (Consumption from Pipeline)
  • Account Assignment: GL Account, Cost Center, etc.

Note: This doesn't affect inventory as pipeline materials are non-stock

Step 4: Settlement with Vendor

Settle consumption with the vendor:

  • Transaction: MRKO (Pipeline Settlement)
  • Select the consumption document
  • System creates settlement document
  • Creates liability to vendor

Result: GR account settled and vendor liability created

Step 1: Create Material Master (Detailed)

To create a material master for pipeline materials:

1
Transaction MM01 (Create Material)

Enter material number and select material type "Pipeline Materials"

2
Select Views

Only select these views:

  • Basic Data
  • Purchasing
  • Accounting

3
Basic Data

Enter description and material group

4
Purchasing Data

Enter purchasing group

Note: No MRP data required

5
Accounting Data

Enter valuation class

Note: This is crucial for account determination

Example Material Creation

Material: SG05_PIPELINE

Material Type: Pipeline Materials

Views: Basic Data, Purchasing, Accounting

Material Group: ENGINE

Purchasing Group: N01

Valuation Class: YB00

Step 2: Create Purchase Info Record (Detailed)

Unlike standard materials, pipeline materials don't use purchase orders. Instead, we create a purchase info record:

1
Transaction ME11 (Create Info Record)

Enter the vendor and purchasing organization

2
Select Info Category: Pipeline

This is critical - must select the pipeline info category

3
Enter Material Details

Select the pipeline material created in Step 1

4
Purchasing Data

Enter standard quantity, planned delivery time

5
Enter Price Information

Enter the agreed price per unit (crucial for settlement)

Example Info Record Creation

Vendor: 4103

Purchasing Org: SGP1

Info Category: Pipeline

Material: SG05_PIPELINE

Standard Quantity: 1

Planned Delivery Time: 1 day

Price: 1 USD per unit

Important Note

Make sure to maintain the text code in the info record. The settlement process (MRKO) requires this information; otherwise, it will show "No Text Information Found" error.

Step 3: Consumption Entry (Detailed)

For pipeline materials, we directly record consumption without goods receipt:

1
Transaction MIGO (Goods Movement)

Select "Goods Issue" and then "Other"

2
Select Movement Type 291

Movement Type 291: "Consumption of all account assignment for pipeline"

3
Enter Material and Plant

Specify the pipeline material and the plant

4
Enter Consumption Quantity

Enter the quantity consumed (based on meter readings or other measurements)

5
Account Assignment

Enter account assignment information:

  • GL Account (expense account)
  • Cost Center (or other cost object)

6
Post the Document

This creates accounting entries (but no inventory movement)

Accounting Entries Created

When you post the consumption, the system creates these accounting entries:

  • Debit: Expense GL Account (based on account assignment)
  • Credit: GR/IR Clearing Account (automatically determined)

The GR/IR account will be settled in the next step.

Example Consumption Entry

Transaction: MIGO

Movement Type: 291

Material: SG05_PIPELINE

Plant: SG05

Quantity: 1 EA

GL Account: 400000 (Manufacturing Expense)

Step 4: Settlement with Vendor (Detailed)

After recording consumption, we need to settle with the vendor:

1
Transaction MRKO (Pipeline Settlement)

Enter the company code and plant

2
Select Materials to Settle

You can select by material or vendor

The system displays all unsettled consumption documents

3
Select Consumption Documents

Choose the documents you want to settle

4
Execute Settlement

The system creates a settlement document

Accounting Entries Created

The settlement creates these accounting entries:

  • Debit: GR/IR Clearing Account (settles the previous entry)
  • Credit: Vendor Account (creates liability to vendor)

After this, the Finance department processes the payment to settle the vendor liability.

Example Settlement

Transaction: MRKO

Company Code: SG05

Plant: SG05

Material: SG05_PIPELINE

Documents to Settle: 1 entry for 1 EA

Result: Settlement document created

Important Configuration Requirements

Account Determination Configuration

Before you can use pipeline materials, you need to configure account determination properly in SAP. Without this, consumption posting will fail.

OBYC is the main transaction for configuring account determination:

Transaction: OBYC (Account Determination without Wizard)

You need to configure two main entries:

Transaction Key Description Purpose
BSX Inventory Posting Identifies GR/IR account for pipeline materials
GBB Consumption Posting Identifies consumption account (with modifier VBR)
1
Enter OBYC and Select BSX

This controls the GR/IR accounting

2
Create Entry with Chart of Accounts + Valuation Class

Example: Chart of Accounts = SG05, Valuation Class = YB00

Assign GR/IR account (e.g., 101000)

3
Enter OBYC and Select GBB

This controls consumption posting

4
Create Entry with Chart of Accounts + Account Modifier + Valuation Class

Example: Chart of Accounts = SG05, Account Modifier = VBR, Valuation Class = YB00

Assign expense account (e.g., 400000)

For pipeline materials, you need to configure these account keys:

Account Key Components Account Type
BSX Chart of Accounts + Valuation Class GR/IR Clearing Account (e.g., 101000)
GBB + VBR Chart of Accounts + Account Modifier + Valuation Class Expense Account (e.g., 400000)

Account Modifier

The account modifier VBR is used for cost center consumption. Other modifiers might include:

  • AUF: For production order consumption
  • KOA: For internal order consumption
  • PEK: For project consumption

These are common issues encountered when using pipeline materials:

Error: "Account determination for KON + YB00 not possible"

Cause: Missing entry in OBYC for transaction key BSX

Solution: Configure account determination in OBYC for BSX with your Chart of Accounts and Valuation Class

Error: "Account determination for GBB + VBR + YB00 not possible"

Cause: Missing entry in OBYC for transaction key GBB with account modifier VBR

Solution: Configure account determination in OBYC for GBB with your Chart of Accounts, Account Modifier VBR, and Valuation Class

Error: "No text information found" during settlement

Cause: Missing text code in purchase info record

Solution: Maintain the text code in the purchase info record for the pipeline material

Error: "SG05 has no purchasing operations"

Cause: Issue with purchase info record data

Solution: Ensure the purchase info record has the correct plant and purchasing organization

Key Points to Remember

Essential Takeaways

Simplified Process

Pipeline materials bypass standard procurement processes (no PO, no goods receipt, no inventory)

Four-Step Process

Create Material → Create Info Record → Consumption Entry → Settlement

Account Determination is Crucial

Configure OBYC for both BSX and GBB+VBR transaction keys

Movement Type 291

Always use movement type 291 for pipeline material consumption

Settlement with MRKO

Use transaction MRKO for settlement, just like consignment materials

When to Use Pipeline Materials

Pipeline materials are ideal for:

  • Continuously supplied materials
  • Materials where you pay based on consumption
  • Utilities and raw materials that don't require inventory management
  • Materials with meter-based consumption tracking
Process Step Standard Materials Pipeline Materials
Material Type FERT/HALB/ROH/etc. Pipeline Materials
Planning MRP, Planning runs No planning required
Procurement Document Purchase Order Purchase Info Record
Goods Receipt Required (MIGO) Not applicable
Inventory Management Tracked in stock No stock tracking
Consumption Goods Issue from stock Direct consumption (MT 291)
Settlement Invoice verification Pipeline settlement (MRKO)

SAP Pipeline Materials Process Guide | Created by Claude | This document provides a comprehensive overview of the pipeline materials process in SAP

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