What is SAP MM?
SAP MM is one of the important modules in ERP SAP software that supports the procurement, material requirement planning (MRP), and inventory functions occurring in day-to-day business operations.
SAP MM(Material Management) module contains many aspects such as purchasing, goods receiving, material storage, consumption-based planning, and inventory. It supports all phases of materials management, materials planning, purchasing, goods receiving, inventory management, and invoice verification.
Material Management in SAP S/4HANA
- SAP system was developed as an ERP software for managing the supply chain operations of manufacturing companies. Already, from small organizations to large organizations have adopted SAP software to manage their business operations.
- SAP S/4HANA with its latest application has simplified the logistics operations by integrating the logistics and supply chain functionalities. Now the Material ledger is one of the important functionalities that should be activated as a mandatory step in S4HANA.
- Before SAP S/4HANA, this application or module was called SAP MM (Material Management), now it can be called SAP S/4HANA sourcing and procurement.
Key Features of SAP MM
The important features of the SAP Material Management module are as follows:
- SAP S/4HANA MM provides real-time analytics and simplified processes in cloud and on-premises deployments.
- Support procurement management with the complete procure-to-pay (P2P) cycle from purchases to its final payments.
- Inventory management with stock management, goods movements, batch methods, and valuation at the finance level.
- In SAP S4 Hana, has a new feature called material ledger, where the materials are evaluated at multiple prices.
- Materials are managed at the centralized level and enables material master data available across the organization.
- It supports a 3-way matching verification process – Purchase order, Goods Receipt, and Invoice Receipt. So the 3-way matching reduces the errors and fraud.
- MRP (Material Requirement Planning) enables the availability of materials, stock level, and production planning and it ensures the availability of materials on time.
SAP MM Organizational Structure
An effective MM enterprise structure enables to process of basic transactions, and these organizational units can be grouped to provide the specific functional activities in Finance, Sales, logistics, etc. The important organizational units in the SAP MM module are:
SAP MM Sub Modules-
SAP MM is a key area within logistics as it is tightly integrated with all the components of the SAP Logistics module. The important components of the SAP MM module are
- Material Planning
- Purchasing
- Inventory Management
- Vendor Valuation
- Invoice Verification
- Statutory Requirements
- Information System
SAP MM integration with other Modules
SAP MM module is fully integrated with other modules in the SAP R/3 System such as Finance (FI), Controlling (CO), Sales and Distribution (SD), Quality Management (QM), Plant Maintenance (PM), Production Planning (PP), and Warehouse Management(WM).
MM can also integrate with other external tools and create an efficient landscape for managing the supply chain operations.
Procurement Process
- One of the important processes in the SAP MM module is Purchasing/Procurement.
- The purchasing process is initially started when there is a requirement of material/service for the organization.
- If the material/service can not be obtained from the company’s internal resources, the responsible person of that company must find the vendor/supplier that can provide it on the required date.
The purchasing process starts with the creation of a Purchase Requisition (PR), > Purchase Order (PO), > Goods Receipt/Services, > Invoice Verification, and finally Payment to Vendors.
Now refer to SAP MM tutorials with a complete guide for beginners and included with real-time examples.