A Step-by-Step Tutorial Guide to SAP MM

Shivali Sharma | Updated on 21 Jul, 2023 | Data Analyst Training Certification Courses Online | 3542

What is SAP MM?

The SAP MM (Materials Management) Online Training and Certification Course is a specialized program that provides comprehensive knowledge of the SAP MM module, an integral part of the SAP ECC (ERP Central Component). SAP MM is primarily focused on managing materials and resources in a company, encompassing areas like procurement, inventory management, and material valuation.

The online training offers a detailed exploration of all facets of SAP MM. You will learn about master data, purchasing, inventory management, invoice verification, and much more. The course will provide insights into the configurations needed to customize SAP MM to a company's requirements. Upon successful completion of the training, participants have the option to obtain SAP MM training, demonstrating their proficiency in this module.

Features of SAP MM

SAP MM (Materials Management) is a critical component of the SAP ECC system, serving as the backbone for the entire supply chain process. It encompasses everything from procurement to payment, providing a unified platform for managing all material-related activities in an organization. Key features of SAP MM include:

Integration with other SAP modules like Finance (FI), Controlling (CO), Sales and Distribution (SD), Quality Management (QM), and Plant Maintenance (PM) for efficient business processes.
A comprehensive Vendor Master Data management system for centralized storage and handling of vendor information.
Purchase Requisition and Purchase Order Management, allowing for the streamlined acquisition of goods and services.
Inventory Management capabilities that enable the tracking and control of stock movement, including goods receipt, goods issue, and stock transfer.
Material Requirement Planning (MRP) functionality, which aids in forecasting and planning for future material requirements.
Automated procedures for valuation and account determination, allowing for accurate valuation of materials and automatic updates to the general ledger.

These features together make SAP MM a comprehensive and robust tool for managing material and inventory processes, leading to improved efficiency and profitability.

Components of SAP MM

SAP MM (Materials Management) is composed of several components, each catering to specific functions within the materials management realm. Here's a brief overview of the components you've listed:

MM - CBP (Consumption-Based Planning): This component deals with planning processes based on past consumption patterns. It helps determine what materials are needed, the quantities required, and when they are needed.
MM - PUR (Purchasing): This is a crucial component that deals with all purchasing activities, including the creation of purchase requisitions, purchase orders, goods receipt, and vendor invoice verification.
MM - SRV (External Services Management): This component is responsible for managing services provided by external vendors. This could include tasks such as managing service contracts, recording service entries, and verifying invoices from service providers.
MM - IV (Inventory Management): Inventory Management is responsible for managing stocks on a quantity and value basis, and planning, entering, and documenting all goods movements to, from, and within the storage locations in the plant.
MM - IV (Logistics Invoice Verification): Despite the same code (IV) as Inventory Management, Logistics Invoice Verification is a separate component. It deals with verifying invoices received from vendors, ensuring that the goods and invoices received match the purchase orders.

Each of these components plays a crucial role in the SAP MM module, contributing to a comprehensive system for managing material and inventory processes within an organization.

Benefits of SAP MM

SAP MM (Materials Management) offers numerous benefits to organizations by providing a streamlined and integrated approach to managing material procurement, inventory, and related processes. With its comprehensive functionalities and seamless integration with other SAP modules, SAP MM empowers businesses to optimize their supply chain operations. Some key benefits of SAP MM include:

Improved procurement efficiency and cost savings
Enhanced inventory control and visibility
Streamlined vendor management and collaboration
Accurate and timely financial reporting
Effective demand planning and forecasting
Enhanced traceability and compliance
Better decision-making through real-time insights

Organizational Structure

Organizational structure in SAP MM (Materials Management) provides a framework for the system. It represents the hierarchy of your organization and how each unit interacts with others. The main organizational elements in SAP MM are:

Plant: In SAP, a plant is a location in the organization where activities take place. A plant could be a manufacturing facility, a distribution center, a regional sales office, or a service center. Each plant is associated with a company code.
Storage Location: A storage location is the place within a plant where materials are physically stored. Every transaction that causes a change in stock is connected to a particular storage location.
Purchasing Organization: This is an organizational unit in the SAP Material Management module. It is responsible for procuring materials and services, negotiating conditions of purchase with vendors, and bearing responsibility for such transactions.
Purchasing Group: In SAP, a purchasing group represents the buyer or group of buyers responsible for certain purchasing activities. They deal with day-to-day purchasing activities, including placing orders with vendors and managing purchase requisitions.

Types of Procurement Process

1. Basic Procurement

Purchase Requisition: The process of creating a request for the purchase of goods or services.
Purchase Order: The formal document issued to a vendor, specifying the details of the requested goods or services.
Goods Receipt: Recording the receipt of goods into inventory after they have been physically received.
Invoice Verification: Verifying vendor invoices against the purchase order and goods receipt to ensure accurate payment.

2. Special Procurement

Subcontracting: Outsourcing a portion of the manufacturing process to a subcontractor.
Consignment: Storing materials provided by a vendor in your inventory until consumed or sold.
Third-Party Processing: Having a third-party service provider process materials on behalf of your organization.
Stock Transport Orders: Moving goods between different plants within the same organization.
Pipeline Material Management: Managing the flow of materials through a pipeline, such as oil or gas.

These procurement processes are designed to cater to various scenarios and requirements within an organization. By understanding and utilizing these processes effectively, businesses can optimize their procurement operations, ensure timely availability of goods and services, and maintain control over costs and inventory management.

Career opportunities

The career scope for professionals skilled in SAP MM (Materials Management) is promising, with a wide range of job opportunities available across industries. Here are some potential career paths in SAP MM:

SAP MM Consultant: As an SAP MM consultant, you'll work with organizations to implement and configure the SAP MM module according to their specific business needs.
Materials Manager: With SAP MM skills, you can pursue a career as a materials manager, responsible for overseeing the procurement, inventory management, and logistics functions within an organization.
Supply Chain Analyst: As a supply chain analyst, you'll leverage your SAP MM knowledge to analyze and optimize supply chain processes.
Purchasing Manager: With expertise in SAP MM, you can pursue a role as a purchasing manager, responsible for managing the organization's procurement activities.
Inventory Controller: As an inventory controller, you'll use your SAP MM skills to monitor and control inventory levels, ensuring accuracy, minimizing stock-outs, and optimizing inventory turnover.
SAP MM Trainer: With in-depth knowledge of SAP MM, you can explore opportunities as an SAP MM trainer, sharing your expertise through training programs and helping professionals enhance their skills in materials management.

Course FAQ’s

Q1. What is SAP MM?

Ans: SAP MM is a module in the SAP ERP system that manages procurement, inventory management, and material valuation. It helps organizations streamline their purchasing processes, optimize inventory levels, and improve supply chain management.

Q2. How does SAP MM integrate with other SAP modules?

Ans: SAP MM integrates with various other SAP modules, such as SAP SD (Sales and Distribution), SAP FI (Financial Accounting), SAP CO (Controlling), SAP PP (Production Planning), and SAP QM (Quality Management). Integration allows seamless flow of data and transactions between these modules, enabling end-to-end business processes.

Q3. What is a Purchase Requisition in SAP MM?

Ans: A Purchase Requisition (PR) is a document used to initiate the procurement process in SAP MM Certification. It is created when a department or user identifies a need for materials or services. The PR contains information such as the material or service required, quantity, delivery date, and account assignment details.

Q4. How can a Purchase Order (PO) be created in SAP MM?

Ans: A Purchase Order (PO) is created in SAP MM based on a Purchase Requisition. The PO includes specific details of the material, quantity, delivery terms, pricing, and vendor information. It is a formal request to a vendor to supply materials or services.

Q5. What is a Goods Receipt (GR) in SAP MM?

Ans: A Goods Receipt (GR) is a process in SAP MM that confirms the receipt of goods or services from a vendor. It involves recording the quantity and quality of the received items, updating inventory levels, and initiating the payment process.

Q6. How does SAP MM handle inventory management?

Ans: SAP MM provides functionalities to manage inventory effectively. It includes features such as goods receipt, goods issue, stock transfer, physical inventory, and stock valuation. These processes ensure accurate tracking and control of inventory levels within the organization.

Q7. What is the Material Master in SAP MM?

Ans: The Material Master is a central data repository in SAP MM that stores information about materials used in an organization. It contains details such as material description, unit of measure, pricing, inventory levels, storage locations, and procurement data.

Q8. How does SAP MM support Vendor Evaluation?

Ans: SAP MM includes Vendor Evaluation functionality to assess and rate vendors based on predefined criteria such as delivery performance, quality of goods or services, and price adherence. It helps organizations in selecting and maintaining reliable suppliers.

Conclusion

This step-by-step tutorial guide to SAP MM provides a comprehensive overview of the module's key functionalities and processes. Starting from the basics, the guide explains the fundamental concepts of SAP MM, including procurement, inventory management, and material valuation. It covers the integration of SAP MM with other modules, such as SD, FI, CO, PP, and QM, highlighting the importance of seamless data flow across different business processes.

By following this guide, users can gain a solid understanding of how to effectively manage materials, streamline procurement processes, and optimize inventory levels within the SAP ERP system.

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About the Author

Shivali Sharma

Shivali is a Senior Content Creator at Multisoft Virtual Academy, where she writes about various technologies, such as ERP, Cyber Security, Splunk, Tensorflow, Selenium, and CEH. With her extensive knowledge and experience in different fields, she is able to provide valuable insights and information to her readers. Shivali is passionate about researching technology and startups, and she is always eager to learn and share her findings with others. You can connect with Shivali through LinkedIn and Twitter to stay updated with her latest articles and to engage in professional discussions.

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A Step-by-Step Tutorial Guide to SAP MM

What is SAP MM?

Features of SAP MM

Components of SAP MM

Benefits of SAP MM

Training Schedule

About the Author

Shivali Sharma

Enquire Now

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A Step-by-Step Tutorial Guide to SAP MM

What is SAP MM?

Features of SAP MM

Components of SAP MM

Benefits of SAP MM

Training Schedule

About the Author

Shivali Sharma

Enquire Now

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