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Sap Material Management Online

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Content

Introduction
Why Material Management ???
Process Flow
Material Management Integration
Material Management Component
Benefits of Material Management
Implementation Challenges
Thank you !!!

Introduction
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
BOMs
Master raw materials, finished goods etc

Why
Need
MM
???
amount spend on material is higher
than other inputs

material offer considerable scope for


reducing cost and improving profit
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.

Process Flow
orders
S
U
P
P
I
E
R
S

R
E
C
I
V
I
N
G

Purchasing

Raw
Material
Storage

Finish
Goods
Storage

Transformation
Processes

In Process
Storage

D
I
S
T
R
I
B
T
N

C
U
S
T
O
M
E
R

MM Integration
SD

Sales & Distribution


PP

QM

Quality Management
PM

MM

Production Planning

Production Managemen
Financial Accounting

FI
AM

Asset Management

Material Management
Controls

CO
PS

Project System

Material Management Component

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

Consumption
based
planning
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

Purchasing
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

External Service Management


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

Inventory 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

Logistic Invoice Verification :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

Vendor Evaluation :-

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

Benefits of MM
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

Implementation Challenges
Optimizing
time and
quality for
product
Selection
of
appropriate
vendors

Difficulty in
forecast
accurate
demand

Management
of
information

Thank you !!!

Appendix I MM Definition
Material management is the grouping of management functions
supporting the complete cycle of material flow, from the purchase and
the internal control of production material to the planning and control of
work in process to the warehouse shipping and distribution of the
finished product. Thomas f Wallance.

Material management is the management of the flow of materials


into an organization to the point, where those material are converted
into firm's end products.

Appendix II Material Type


DIEN
FERT
FHMI
HALB
HAWA
HIBE
NLAG
ROH
UNBH
VERP
WETT

----------------------------------

Services
Finished Product
Production Resources / tools
Semi finished Products
Trading Tools
Operating Supplies
Non-stock material
Row Material
Non Valuated Material
Packaging material
Competitive product

http://www.sap-img.com/materials/sap-mm-configuration-tips.htm

Appendix III MM Terms Definition

Material Master Record


Data record contain all the basic information required to manage a
material.

Material Requirement Planning


Term for requirement planning that take into account and plan every
future requirement during the creation of order proposal.

Plant
An organization unit for dividing enterprise according to production,
procurement, maintenance & material planning.

Storage Location
Warehouse Stock Location

Vendor Master
Contains details about all the vendors within a company.

Goods Receipts
Term for inventory management denoting a physical inward movement
of goods or material.

Appendix III MM Terms Definition

Material Group
Grouping of material and services according to their characteristics.

Material Master Record


Data contains all the basic information required to manage a material.

Release Strategy
Plan define the release code with which a purchase requisition item, a
complete purchase requisition or a complete external purchasing
document must be release.

Appendix IV MM Tables
EINA

Purchasing info record general data

EINE

Purchasing info/organization record

MAKT

Material description

MARA

General material data

MARC Plant data for material


MARD Storage location data for material
MAST

Material to BOM link

MBEW Material consumption


RKPF

Document header

T156

Movement type

T024

Purchasing group

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