For which processes is a material valuation at plant level mandatory in SAP MM?

Material valuation at plant level is mandatory primarily for product costing in SAP MM because product costing involves the detailed evaluation of costs associated with manufacturing a product, which is inherently dependent on the specific characteristics and costs of materials at the plant level. Each plant can have different costs related to materials due to factors like location, supplier pricing, and local taxes.

In product costing, accurate material valuation ensures that the overall cost of producing goods reflects all relevant expenses associated with acquiring and using materials in that particular plant. This granularity allows for a more precise assessment of profitability, resource planning, and financial reporting for decision-making.

While processes like production planning, invoice verification, and physical inventory do involve material valuation, they do not necessarily require it to be conducted explicitly at the plant level to be operational. For example, production planning might rely on aggregated data rather than specific plant-level costs, and invoice verification might focus more on matching purchasing data rather than material valuation specifics. Similarly, physical inventory can track stock levels across multiple locations without necessitating detailed costing at the plant level. Thus, product costing stands out as the process requiring the specific plant-level valuation to ensure cost accuracy and financial integrity.