SAP MM

What is SAP MM module?

SAP MM (Material Management) is the module that supports the procurement activities in an organization right from the planning and purchasing to inventory management and quality control.

The procurement process consists of a chain of events that take place in order. Starting from the creation of a Purchase Requisition (PR), it moves to the authorization of PR and creation of a Purchase Order (PO). This Purchasing function includes creation of requisitions, its approval, purchase order generation, and receipt of products purchased. Inventory Management deals with transferring inventory, restocking, count and adjustment processes.

Subsequently, Receipt is generated on the amount of goods ordered, then it undergoes Invoice Verification and the Quality Control activities. The payment is ultimately dispatched to the vendors for goods /services.

This module has several features and functionalities that are fully integrated with the other important modules like Finance and Control, Sales and Distribution, Production Planning etc.

Major components of MM Module include:

• Materials management,
• Plant maintenance,
• Quality management,
• Production planning control, and
• Project management system.

Each is divided into a number of subcomponents.

Some of the prominent sub-components of MM are listed below:

• vendor master data,
• consumption based planning,
• purchasing,
• inventory management,
• invoice verification and so on.

MM is coherent to SD, PP and QM modules.SAP MM module comprises of - material and vendor in the master data. Different levels that determine SAP MM implementation include: Client, Code, Plant, Location and Purchases.

SAP MM Module

SAP MM module forms an essential part of modern day ERP systems. It aids other SAP modules in dealing with fundamental parts of a client enterprise.

This module governs procurement and inventory functions that occur in everyday business activities. It incorporates all master data, and its transactions. The SAP MM module supervises various functions like goods receiving, purchasing, material storage, etc.

One of the functional sub-module of SAP MM is Purchasing and procurement. In most companies, the purchasing process begins when there is a necessity of materials/services.The administration seeks vendors who can avail these goods in accordance to deadlines defined. The actual purchasing process presumes:

• ModelingPurchase Requisition (PR)
• Production of Purchase Order (PO)
• Receipt of goods/ services
• Invoice Verification
• Payment to vendors.

SAP MM also supports the features and functionalities of the organizational structure, plant, valuation areas, storage locations, vendors and purchasing organizations/ groups. It goes a long way in supporting the different phases of materials management.

Why SAP MM?

While looking for the right kind of enterprise software, it is essential to know how to choose the right kind of solutions. There are plenty of companies or software manufacturers that offer solutions in areas such as:

• Resource planning,
• Customer relationship management,
• Financial planning,
• Supply chain management and so on

It is extremely important to differentiate between different kinds of solutions, when it comes to SAP. For instance, if your focus is on supply chain management, then you need to go in for an SAP MM or Materials Management module.

This module is pretty popular because most business organizations need to have some kind of supply chain and logistics management in place.Most business organizations have to manage a process that begins with sourcing and procurement of different kinds of materials and resources. So, from the time such procurement begins, to the time that the payment is completed, there is the necessity of a process that is efficient, effective and makes financial sense as well. You can learn more in Mindmajix SAP MM Training which talks about the basics and advanced features of SAP MM.

And this is exactly where SAP MM comes into play. With such knowledge levels, a business organization can enjoy:

• Better vendor management,
• Streamlined data storage, retrieval and usage,
• Better purchasing mechanisms,
• Smoother inventory management,
• Higher quality of materials evaluation and
• Overall improvement in quality control as well.

Considering the fact that poor quality materials will bring down the overall quality of the finished goods or products, every business organization will indeed want to invest in smooth materials management processes.

Benefits of SAP MM

With raising customer demands, any enterprise must be in a position to serve their customers within the shortest time possible. To accomplish this, the enterprise must possess all the necessary raw materials at time and must be able to utilize them efficiently.

A peculiar Material Management module ensures that all the possible materials are available and that supply chain process is continuous. Some important benefits of SAP MM include:

• Reduces material costs by avoiding stocking of unnecessary or obsolete materials
• Inventory losses are minimized
• Direct labour costs are reduced and labour can be used efficiently
• Manufacturing cycle times are reduced and can be controlled effectively
• Effective inventory management and reduces expenditure on unwanted material storage
• Improves delivery time and increases transparency across the organization
• It deals with governing the resources of an organization, thereby evaluating its productivity, decreasing the costs and improving the versatility to deal with everyday changes.

Some of the benefits of SAP MM touch upon key aspects such as:

• A better understanding of organizational structure,
• Better control over logistics and invoice verification,
• Clearer understanding of different purchase procedures,
• Forecasting materials requirements,
• Creating and using MIS or Management Information Systems with specific reference to materials management.
• More powerful application featuring more advanced user options, suited for power users and complex financial transactions.
• Full inventory management, including goods issues and stock adjustments.
• Ability to automatically generate requisitions based on MRP.
• Standard P2P volume reporting.
• Full access to keyed invoice details, and scanned images.

The Phases of the Process Flow in SAP MM

The process flow deals with complete cycle that must be followed by a service as soon as it enters the system to the moment it is distributed to the intended party and also accomplishes the final stage of the transaction. Explained below are the essential phases in the process flow:

1. Determination of Requirements:It is very important to determine the requirements to evolve at clear perspective about the need of purchase material.

2. Source Determination:Determining the source of products and services for an organization is of prime importance. This procured data is recorded into the PC so that Requests for Quotation are created so as to enable company take decisions for future needs.

3. Vendor Selection and Comparison of Quotations: This feature permits user either to select and reject quotes and compare them. The user can also choose the vendor depending on the specifications.

4. Purchase Order Processing:After attaining the ideal quotes, it is essential to generate a purchase order (PO). This platform automatically generates purchase orders, thereby processing them. This order can be generated and supported manually as well.

5. Purchase Order Follow-up: Purchase orders sent to suppliers are monitored by using reminder periods established by the user. This follow-up of purchase orders help maintain quotations and purchase requisitions.

6. Goods Receiving and Inventory Management: The goods thus received are monitored using established parameters and their receipt is confirmed based on the order of purchase.

7. Invoice Verification: Goods requested under purchase order must be equal to the invoice generated. This invoice are further delivered to the eligible personnel for verification.

Scope and Opportunity of a Career in SAP MM

SAP MM is having a very good future. The SAP technology is going to stay in the market for at least the next 30 years at the current state and it is still growing.Majority of SAP ERP implementation throughout the globe are integrating with MM module.

Opting SAP MM module for a career is great. The MM consultants are in demand for any foreseeable future. Its robust nature has made SAP MM an opting course for career development.

MM rank stop in the list of SAP modules. This material management platform is attracting professionals from all over the globe and helping them in building their career under several designations like SAP analysts, consultants and coordinators.

SAP industry consultants are highly paid around the world, and among them Techno functional consultants are top earning employees.

Conclusion

The SAP MM module is the essential part of logistics and aids in governing end to end procurements and other business process. The principal features of MM include requisitions, goods receipt, inventory management, BOM's and list of finished goods, etc. This module makes procurement and planning activities, enhance efficiency and lessens the required delivery cycles. You should take SAP MM online training to understand the topics mentioned in this article.

To sum it up, SAP MM is a fully integrate suite that aids inseamless integration of several business functions associated to finance, project management, production controls, customer relations management and after the sale service.