SAP MM Essentials: A Complete Handbook for Material Management

SAP, a leading global software development company, originated in Germany and was founded by five former IBM engineers. It has become renowned for offering top-tier enterprise software solutions. Presently, SAP products are utilized by thousands of organizations worldwide, thanks to the range of benefits they provide. SAP comprises various modules, each allowing for specialization. To work with these modules professionally, one often needs to pass SAP certification exam, opening up numerous job opportunities. Studies indicate that approximately 70% of organizations globally use SAP modules or software, highlighting the high demand for SAP certified professionals. This demand is expected to grow significantly in the future.

SAP excels in managing a wide array of business tasks efficiently and is recognized globally for its broad applicability. In this post, we aim to provide a clear and concise overview of the different SAP modules, helping you to understand their functionalities and applications.

What is SAP MM?

In SAP Material Management, a key module within the SAP ERP system, organizations are equipped to handle materials, inventory, and warehousing within their supply chain. This module is a crucial component of SAP ECC’s logistics functions and includes various elements like Master Data, Inventory, and Purchasing, each with its own sub-components vital for specific business operations.

These operations are carried out through a series of transactions within the SAP MM process flow. In the context of SAP, a transaction refers to the execution of specific tasks to fulfill business requirements. For example, purchasing 10 buckets would involve executing a specific transaction code (t-code) in SAP, which records this activity. Most business processes in SAP involve a sequence of different transactions and often span across one or more modules in the system.

Features

Here are some essential features of SAP MM online training course:

• SAP MM efficiently manages both inventory and raw materials.
• This module addresses various business processes including invoice verification, warehouse management, material validation, procurement, vendor assessment, material requirement planning, and others.
• It ensures a consistent and uninterrupted material flow in the supply chain.
• By optimizing procurement processes, it boosts productivity and reduces procurement-related costs.
• SAP MM plays a pivotal role in improving the effectiveness of procurement operations.

Components

SAP MM online training is a comprehensive system consisting of various interconnected components, enhancing the efficiency of departmental information sharing and ensuring real-time data updates. It is divided into five key components, each comprising different sub-modules. Here’s an overview of these components:

• MM – CBP (Consumption-Based Planning): This component relies on historical consumption data to predict future requirements using statistical methods. Its primary function is to monitor inventory levels and automatically generate procurement proposals for production and purchasing based on either the depletion of stock to a predetermined reorder level or forecasts derived from past consumption patterns.
• MM – PUR (Purchasing): Focused on facilitating effective communication within the procurement process, this component aims to streamline the purchasing department’s operations. It involves managing the external procurement of materials and services, identifying potential supply sources for requirements, monitoring vendor deliveries, and overseeing vendor payments.
• MM – SRV (External Services Management): This component aids in managing various aspects of external services, including bidding, service acceptance, order placement, and invoice verification. It caters to both unplanned services, where the scope is undefined and depends on a value limit, and planned services, where the scope and nature of the requirement are predetermined.
• MM – IV (Inventory Management): This area is responsible for various inventory-related tasks such as maintaining and tracking physical stock levels by quantity and value, recording and managing product movements, and conducting physical inventory checks.
• MM – IV (Logistics Invoice Verification): Positioned at the end of the logistics supply chain, this component involves multiple tasks including purchasing, invoice verification, and inventory management. It plays a crucial role in the verification of incoming invoices in terms of quantity, content, and prices. Upon receiving an invoice from a vendor, logistics invoice verification processes it in the system and forwards it to the financial account and other relevant sections within materials management.

SAP MM Modules Component

Here’s a breakdown of the key elements in the SAP MM (Materials Management) module that are essential to understand:

• Master Data: This is the core data required for any transaction, such as creating inventories or transferring stock. Master data helps track every transaction and includes various types like:

1. Data for warehouse management
2. Material information
3. Vendor details
4. Pricing information
5. Customer information
   • Material Requirement Planning: This involves processing according to the material bills. The necessity for materials is determined based on these bills.
   • Purchasing: The main aim here is to acquire materials and services. It involves tasks like material procurement, vendor payment monitoring, and selecting supply sources, aiding in meeting the material planning department’s requirements.
   • Inventory Management: This aspect focuses on product inventory control, encompassing processes like product issuance, definition, movement, receipt, and more.
   • Material Valuation: This process assesses the value of a material’s stock based on quantity and price. It involves valuation methods like FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and material price variations.
   • Invoice Verification: In the SAP system, once an invoice is entered, the MM Module’s invoice information is updated. This component involves checking invoice details and processing them, including activities like vendor invoice receipts and automatic invoicing.
   • Physical Inventory: This includes various tasks related to physical stock counting, such as:
6. Creating inventory records
7. Defining count areas
8. Posting discrepancies
9. Managing inventory sessions
10. Cycle counting
    • Service Management: This covers activities related to services, including managing service masters and service entry sheets.

Conclusion

Over time, SAP Material Management has gained widespread popularity among various organizations globally. Increasingly, new companies are implementing this module to enhance their supply chain operations. SAP MM has been instrumental in facilitating transaction management and streamlining manufacturing processes for businesses. This, in turn, has had a beneficial impact on their business development processes and for corporate training also. Enrolling in SAP MM online training & certification course by Multisoft Virtual Academy is a great way to enhance your skills.