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Material Type is the DNA of your material master. Pick it right and procurement → production → costing flows. Pick it wrong and you chase errors.

At the core of SAP logistics is a deceptively simple question: 👉 “What kind of material is this?”
That answer shapes everything that follows. In SAP, that answer is the Material Type.

Material Type = the DNA of your material master. It controls:

  • 👍 Which screens & views you see in MM01/MM02
  • 👍 Internal vs. external number ranges
  • 👍 Whether stock is quantity/ value updated
  • 👍 Which valuation classes are allowed (via account category reference)
  • 👍 Whether the material is typically purchased, produced, or just consumed

Get it right → processes flow. Get it wrong → procurement, production, and costing drift out of alignment.

Why it’s critical (a quick story)

You create Lubricating Oil as ROH (Raw Material). SAP now treats it like something that belongs in BOMs and production orders. In reality, it should be HIBE (Operating Supplies) — consumed directly in maintenance orders, not embedded in finished goods.
Result: planning noise, incorrect consumption, wrong valuation/CO postings, and frustrated stakeholders.

The Common SAP Material Types (with quick tips)

Production & Sales

1) ROH — Raw Materials

  • Use for: Purchased inputs consumed in production.
  • Examples: Steel plate, bearings.
  • Be careful: Don’t use for shop supplies or MRO; that belongs in HIBE/ERSA.

2) HALB — Semi-Finished Products

  • Use for: In-house assemblies used to make FERT.
  • Examples: Engine sub-assembly.
  • Be careful: If you never sell or stock it separately, confirm whether it needs its own master.

3) FERT — Finished Products

  • Use for: Final, sellable products.
  • Examples: Car, laptop, pump.
  • Be careful: Sales views, pricing, and ATP need attention; don’t confuse with HAWA.

4) HAWA — Trading Goods (often overlooked)

  • Use for: Purchased and resold as-is (no in-house manufacturing).
  • Examples: Resale spare kits, third-party tools.
  • Be careful: If it goes through production, it’s not HAWA.

Maintenance, Services & Consumables

5) HIBE — Operating Supplies / Consumables

  • Use for: MRO and operations consumption, not part of BOMs.
  • Examples: Lubricants, grease, cleaning chemicals.
  • Be careful: Creating as ROH will pollute production structures and costing.

6) ERSA — Spare Parts

  • Use for: Repairs and maintenance replacement parts.
  • Examples: Conveyor belt, pump seal.
  • Be careful: If you sell it externally, consider HAWA or FERT as appropriate.

7) DIEN — Services (non-stock)

  • Use for: Service procurement (no physical stock).
  • Examples: Calibration, subcontracted labor.
  • Be careful: No quantity/valuation like materials; align with service entry processes.

Special Handling

8) NLAG — Non-Stock Materials

  • Use for: Items procured only as needed; no inventory kept.
  • Examples: Office furniture, special tools.
  • Be careful: If you actually keep stock, don’t choose NLAG.

9) UNBW — Non-Valuated Materials

  • Use for: Quantity tracking without valuation.
  • Examples: Free samples, scrap.
  • Be careful: Finance won’t see inventory value; ensure that’s intentional.

10) VERP — Packaging Materials

  • Use for: Packing and shipping materials.
  • Examples: Cartons, pallets.
  • Be careful: If packaging is a sellable product on its own, rethink HAWA/FERT.

Quick sanity checks before you hit Save in MM01

  • Will it appear in a BOM or production order? → ROH/HALB/FERT
  • Is it purely for maintenance/consumption? → HIBE/ERSA/DIEN
  • Do you keep inventory on hand? → Avoid NLAG
  • Should it carry value in inventory? → Avoid UNBW
  • Is it resold as-is? → HAWA (not FERT)

⚠️ Changing material type later is constrained and risky (valuation & account determination implications). If you’re unsure, confirm the business use first—or create the correct new material and decommission the old one cleanly.

Power takeaway

Material Type may look like just a code, but it drives procurement, production, valuation, and sales behavior.
Choose it wrong → you’ll break processes.
Choose it right → the system hums.

If you have question on this or any other PortSAP Consulting blog please feel free to contact us at Blog@PortSAP.com. Or if you are looking for Top Quality SAP Consultants please feel free to contact us.

The author, Ray Hornbrook, has over 19 years of SAP functional and technical experience.  Ray started his career in SAP as a MM/PP Subject Matter Expert (SME) for a SAP implementation in 1998 and is now a Senior Level SAP Consultant.  Since Ray has worked both sides of SAP, business end user and IT professional, he is able to communicate effectively with both IT and Business team members. Having a background as an SAP business end user has helped Ray greatly in his consulting career.  The business background helps him better communicate with the business members of the team.  As well as helping bridge gaps in communication between the IT and Business team members.

To find out more about Ray Hornbrook please check out his LinkedIn profile by clicking HERE.

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