Why SAP MM?& its overview

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Process Flow Material Management Integration Material Management Component Benefits of Material Management Implementation Challenges Q&A Thank you !!! Appendix A - MM Definition Appendix B – Material Type Appendix C – MM Terms & Definition Appendix D – Important MM Tables

Why material management???


SAP MM Module is one of the most important SAP Modules where MM stands for Materials Management - underpins the supply chain, including

Requisitions Purchase orders Goods receipts Accounts payable Inventory management BOM’s Master raw materials, finished goods etc

Introduction


WHY NEED MM?


Amount spend on material is higher than other inputs.

Material offer considerable scope for reducing cost and improvingProfit.

Material add value to the product.

Quality of end product depend on material.

Efficiency of any organization depend upon the availability of right material, in right quantity at right time and at right place.


Consumption based planning (MM-CBP)

Purchasing (MM-PUR) External Service Management (MM- SRV)

Inventory Management (MM-IM)

Logistic Invoice Verification (MM - IV)

Vendor Evaluation Management

Material management component


It is a component of MM. It is in the logistic invoice verification that incoming invoice are verified in terms of content, price and arithmetic.

Task of SAP-IV-LIV as following :- It completes material procurement process, which start with purchase requisition & result in goods receipts. It allows invoices, that do not generate in material procurement like expenses to be processed.It allows credit memo to be processed.

Integration with :- FI & CO

Logistic invoice verification


CBP is based on the past consumption values and uses the forecast or other statistical procedure to determine future requirements. It gets trigger when stock level falls below pre-defined reorder points.

Procedure available for MRP :-

Reorder point procedure

Forecast based planning

Time-phased materials planning

Consumption based planning


Purchasing is a component of Material Management.

Task of Purchasing as following :- External procurement of material & services Determination of possible source of supply Monitoring deliveries from and payment to vendors.

Integration with :- SD, FI & CO

Purchasing:


SRV is a MM component. It supports the complete cycle of bid invitation, award / order placement & acceptance of services.

Task of Purchasing as following :- External procurement of material & services Determination of possible source of supply Monitoring deliveries from and payment to vendors.

Integration with :- PM & PS

External service management


Task of SAP-IM as following :-

Management of material stocks on a quantity and value basis

Planning, entry and documentation of all goods movement

Carrying out the physical inventory

Integration with :- SD, PP, QM & PM

Inventory management


It is a component of MM. It is in the logistic invoice verification that incoming invoice are verified in terms of content, price and arithmetic.

Task of SAP-IV-LIV as following :- It completes material procurement process, which start with purchase requisition & result in goods receipts. It allows invoices, that do not generate in material procurement like expenses to be processed.It allows credit memo to be processed.

Integration with :- FI & CO

Logistic invoice verification


The Vendor Evaluation component supports you in optimizing your procurement processes in the case of both materials and services. Task of SAP-IV-LIV as following :- Helps you to select source of supply & monitoring of existing supply relationships Vendor reliability

Criteria :- Price / Quantity / Delivery / General Service Support

Integration with :- QM & MM

Vendor evolution


Material cost can be lowered down Controlling of indirect cost Risk of Inventory loss minimized Reduction in loss of time of direct labor Control of manufacturing cycle Material congestion in storage places avoided Improvement in delivery of the product

Benefits of MM



Documents

Why SAP MM?& its overview