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Overview of SAP MM

SAP MM (Materials Management) is a crucial part of the SAP ERP system that streamlines the procurement of goods and services, inventory management, and material availability. Key features include material and vendor master data management, purchasing processes, inventory tracking, invoice verification, and various procurement types. Additionally, SAP MM provides reporting tools for effective management of procurement and vendor performance.

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12 views

Overview of SAP MM

SAP MM (Materials Management) is a crucial part of the SAP ERP system that streamlines the procurement of goods and services, inventory management, and material availability. Key features include material and vendor master data management, purchasing processes, inventory tracking, invoice verification, and various procurement types. Additionally, SAP MM provides reporting tools for effective management of procurement and vendor performance.

Uploaded by

praful
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Overview of SAP MM (Materials Management)

SAP MM is a key component of the SAP ERP system that facilitates the
procurement of goods and services, managing inventory, and ensuring that
materials are available when needed. It is closely integrated with other SAP
modules such as SAP SD (Sales and Distribution), SAP PP (Production Planning),
SAP WM (Warehouse Management), and SAP FICO (Financial Accounting and
Controlling).

Key Features and Components of SAP MM


1. Material Master Data:
o The material master contains all the necessary information about
materials that a company procures, stores, uses, or sells.
o It is organized into various views like Basic Data, Purchasing,
Accounting, and Storage.
o Each material is identified by a unique Material Number.

2. Vendor Master Data:


o Vendor master data stores details of the suppliers from whom
materials or services are procured.
o It includes information such as name, address, payment terms, and
banking details.
3. Purchasing:
o SAP MM supports the process of acquiring goods and services from
external vendors.
o Purchase Requisition (PR): An internal document requesting the
procurement of materials.
o Purchase Order (PO): A document sent to the vendor to procure
materials or services.
o Source List and Quota Arrangement: Tools used to maintain
preferred suppliers and their conditions.
o Vendor Evaluation: Used to assess the performance of vendors
based on criteria like quality, price, and delivery time.
4. Inventory Management:
o Tracks inventory levels and movements of materials.

o Goods Receipt (GR): The process of receiving goods into the


company's warehouse or stock.
o Goods Issue (GI): The process of issuing goods out of the
warehouse, either for internal consumption or for delivery to
customers.
o Stock Transfers: Movements of materials between storage
locations, plants, or company codes.
5. Invoice Verification:
o After goods are received, the vendor sends an invoice. Invoice
verification is the process of comparing the invoice against the
purchase order and goods receipt to ensure the accuracy of the
invoice before payment.
o MIRO: Transaction code used for posting incoming invoices and
credit memos.
6. Material Valuation and Account Assignment:
o SAP MM helps in managing material valuations (such as FIFO, LIFO,
moving average price, or standard price).
o Account assignment categories help in determining how the
material costs will be allocated, such as to a cost center, internal
order, or project.
7. Procurement Types:
o External Procurement: Sourcing materials from an external
vendor.
o Internal Procurement: Sourcing materials from within the
organization (i.e., inter-plant transfer).
o Subcontracting: Sending raw materials to an external vendor for
processing and receiving finished goods.
o Consignment: A form of procurement where goods are kept at the
company’s premises, but ownership remains with the supplier until
the goods are consumed.
8. Reports in SAP MM:
o SAP MM offers numerous reports for managing procurement,
inventory, and vendor performance, such as:
 Stock overview reports.
 Goods receipt/issue reports.
 Vendor performance evaluation reports.

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