SAP MM Material Manaement

Materials Management (MM)

Starting with procuring materials for the organization via a purchase order, materials management also deals with the movement of materials within and between various departments. MM supplies raw materials and other components for production. Once products are produced, the software enables stocking the materials in the warehouse, ready to ship when there is a need. The SAP software records a financial transaction (most of the time) when goods are moved into/within/outside the organization. Vendors submit invoices and are paid at a later date (depending on the payment terms), thereby completing the procure-to-pay cycle. Alex recalled that they called it a source-to-pay cycle at FLW.

SAP MM Module Process Flow                                                                                   

• Determination of Requirements
• Source Determination
• Vendor Selection
• PO Processing
• PO Follow-up
• Goods Receiving and Inventory Management
• Invoice Verification

    

SAP Business Process

The features of SAP MM system are as follows:

·        SAP MM is one of themodules of SAP that deals with material management and inventory management.

·        Material Management process ensures that there is never a shortage of materials or any gaps in the supply chain process of the organization. SAP MM speeds up the procurement and material management activities making the business run smoother with complete time and cost efficiency.

·        It deals with managing the materials (products and or services) resources of an organization with the aim of accelerating productivity, reducing costs and increase improvement and at a similar time be versatile to accommodate changes in day to day life.

·        It deals with the Procurement Process, Master Data (Material & Vendor Master), Account Determination & Valuation of Material, Inventory Management, Invoice Verification, Material Requirement Planning etc.

Introduction to Master Data in SAP

What is Master Data?

Data stored in SAP R/3 is categorized as

• Master Data and
• Transactional Data.

Master data is the core data that is used as a base for any transaction. If you are producing, transferring stock, selling, purchasing, doing physical inventory, whatever your activity may be, it requires certain master data to be maintained.

Example of Master Data

• Material master data
• Customer master data
• Vendor master data
• Pricing/conditions master data
• Warehouse management master data (storage bin master data)

The ones we will focus in MM module are material master and purchase info record.

Organizational Structure of SAP MM

·          Client

·        Company Code

·        Purchase Organization

·        Storage Location

·        Purchasing Group

SAP MM Organization Structure

Client

It is a highest of organization unit that contains of tables, master data, etc. In real time Sap basis consultant creates new SAP clients other than existing clients.

Company Code

Company code is a separate legal entity or separate accounting department of an

Organization. All the financial statements like profit and loss account, business

 Balance sheets, etc.. Are prepared at company code level.

Plant

Plant is a location where the logistics activities such as production, services and maintenance facilities are performed.

Purchasing Organization

Purchase organization is a physical organization unit which is responsible of goods and services for an organization from the vendors.

Storage Location

Storage location is the sub division of plant where the materials are maintained and stored.

Purchasing Group

It is a groups of persons or employees who are responsible with the materials that are being purchased in the organization. Purchase groups are assigned to a respective material master.

How to Change Material Master Data (MM02, MM03) in SAP

It may be needed to change certain option in our material master (due to the organizational changes, or changes in processes). We cannot use MM01 as that is the transaction code used only for creating views that are not maintained for certain material. In this case, we need to use MM02and MM03 transaction codes.

In SAP transactions ending with 01 are for creating, ending with 02 for editing/changing, and the ones ending in 03 are used for viewing data without possibility to change it.

Introduction to Purchasing & Purchase Requisition in SAP

Purchasing is a component of SAP MM module and its process can be roughly depicted in below diagram.

For more details about sap erp training and sap MM training please visit : www.asipt.net/sap-erp-training