What is SAP MM (Materials Management)?

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SAP MM (Materials Management) is a SAP ERP module (Enterprise Resource Planning). Materials management is an important supply chain job that comprises supply chain planning, execution, and management capabilities.

SAP MM (Materials Management), is a module within SAP ERP (Enterprise Resource Planning). Materials Management is a key supply chain function that includes capabilities for supply chain planning, execution and management.

Materials Management is the process used by companies to determine complete specifications for materials and to communicate those specifications to procurement.

Materials Management also has the responsibility of deciding how much material is to be transported to each storage site and developing replenishment plans.

SAP Logistics

SAP Logistics includes the SAP Materials Management module (MM). SAP Logistics is responsible for many different areas, including the movement of materials from the manufacturer and customer.

Logistics is the process of acquiring, storing, transporting, and delivering goods throughout the supply chain. Materials Management encompasses many aspects of SAP functionality, including ordering, obtaining items and processing products. It also includes inventory management, invoicing, and order entry. Materials Management's main goal is to ensure that the supply chain is in place, that there is enough inventory, and that there are fewer deviations between actual and planned results.

 

MM Objective

Materials Management's objective is to ensure that customers have a continuous supply of manufacturing components in order to deliver their products on time. Materials management is responsible for releasing goods to a supply base and ensuring that goods are delivered to customers on time with the appropriate carrier.

SAP Materials Management simplifies the Procurement Process, Valuation of Material Account Determination, Invoice Verification, Inventory Management, Material Requirement Planning, Master Data (Material Vendor Master), etc.

In certain industries, management of materials includes the procurement of materials and the management of a supply source. A separate purchasing department is responsible for managing the supply base and procuring materials in other companies. The variances in the purchased prices are then managed by the purchasing department.

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Sub-Components for MM

The SAP S/4HANA Materials Management module (MM) is the most important of all modules within SAP. There are many components to the SAP MM module. Here are the most important:

  • Master data
  • Purchase
  • Inventory management
  • Invoicing verification
  • Physical inventory
  • Material valuation
  • Service management

 

The Materials Management module contains the most extensive sub-component master data. They include purchasing and inventory management.

Master Data

Master data is the end-user's data that records every transaction. The MM Master Data comprises vendor master, material master, and purchasing master.

Purchase

Materials Management is incomplete without purchasing. MM Purchasing tasks involve external procurement of materials or services, determining possible sources of supply, monitoring supply and paying vendors.

This module also handles all material procurement-related activities, such as purchase orders, quote request, procurement request and release procedure. It also includes outline agreement, contract, contract and timing agreement.

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Inventory Management

This module manages inventory management activities, including inventory receipt, internal transit (material movements), and the question of inventory. Reservations are also performed in this module.

 

Verification of Invoice

All activities related to the invoicing processes such as Invoice Receipt from Vendor, Automatic Invoice and Direct posting for materials are executed in this Invoice Verification Configuration area of Materials Management.

 

Physical Inventory

Physical inventory is the storage area. It includes activities like cycle count, post difference, inventory session and cycle count.

 

Material Valuation

Material valuation includes all activities, such as material price changes, various types of valuation like LIFO, FIFO and lowest value.

 

Service Management

Service management can include activities like service master and service entry sheets.

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What does the future hold for SAP S/4HANA-MM?

The SAP S/4HANAMM is the next-generation ERP that integrates all SAP modules. SAP S/4HANA's HANA databases have been introduced to improve the efficiency and functionality of ERP.

Materials Management customers were able to use the SAP S/4HANA product on-premise and cloud for business transactions. Many businesses and industries around the globe are working towards incorporating SAP modules into their systems.

In many ways, the SAP MM module incorporation is beneficial. It lowers inventory losses, improves product delivery, reduces material costs, and many other benefits.

Michael Management offers several MM classes to help you gain exposure to Materials Management. In-depth SAP training will be provided and you will have access to SAP S/4HANA.

 

Are you looking for SAP S/4HANA M Courses?

Do you want to learn more about Materials Management? The best place to begin your journey in SAP MM is Sevenmentor's SAP MM Courses.

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