What is SAP MM (Materials Management)?

SAP MM (Materials Management) is a module in SAP ERP (Enterprise Resource Planning). Materials Management is a core supply chain function and includes the capabilities of supply chain planning and execution.

Materials Management is what companies use to decide complete specifications for materials, the specifications for materials conveyed to procurement, and other sourcing functions.

Materials Management is also responsible for deciding the amount of material to be transported in the supply chain at each storage site, developing material replenishment plans, deciding the inventory levels to be kept for each category of product (raw material, finished goods) and transmitting material needs information within the extended supply.
 

SAP Logistics

The SAP Materials Management (MM) module is part of SAP Logistics. The role of SAP Logistics encompasses several distinct areas that follow together with the movement of materials from the manufacturer to the customer.

Logistics includes the acquisition, storage, transport, and delivery of goods along the supply chain. Materials Management covers many facets of SAP functionality including ordering, obtaining items, processing products, inventory, and invoicing. The main objective of Materials Management is to assure the supply chain is intact, there is a high enough inventory level, and less deviation between planned and actual results.

 

MM Objective

The objective of Materials Management is to provide the customers with an unbroken chain of manufacturing components to deliver products on time. The materials department is paid to release goods to a supply base, making sure that the goods are shipped to the customers on time using 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.

Management of materials is often charged in certain industries with the procurement of materials through the establishment and management of a supply base. In other organizations, a separate buying department is responsible for the procurement and management of the supply base. The purchasing department is then responsible for variances in purchased prices from the supply base.

 

Sub-Components of MM

The SAP S/4HANA Materials Management (MM) is one of the most important modules among all other modules in SAP. The SAP MM module comprises of many sub-components and the important ones are as follows:

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

 

Among the above-mentioned sub-components master data, purchasing and inventory management are most widely in the Materials Management module.
 

Master Data

The end-user has master data that tracks every transaction within the data. The MM Master Data comprises vendor master, material master, and purchasing master. 
 

Purchasing

Purchasing is an important component of Materials Management. MM Purchasing tasks include external procurement of materials and services, determination of possible sources of supply, and monitoring of supply and payment to vendors.

All the material procurement-related activities such as quote request, purchase orders, procurement request, release procedure, outline agreement, contract, and timing agreement are also carried out in this module.

 

Inventory Management

Inventory Management activities include inventory receipt, internal transition (material movements), the question of inventory, and reservations are carried out in this module.

 

Invoicing Verification

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

The activities such as physical inventory creation, post difference, cycle count, inventory session, and count area are all carried out as physical inventory in the storage area.

 

Material Valuation

All activities such as material price change, different kinds of valuation such as  LIFO, FIFO, and lowest value are related to material valuation.

 

Service Management

Service management includes activities such as service master and service entry sheet.

 

What Does the Future Hold for SAP S/4HANA MM?

The SAP S/4HANA MM is the next generation ERP which incorporates all the SAP modules. With the introduction of SAP S/4HANA's high-performance HANA database, SAP has increased the efficiency of ERP and enhanced the functionality of Materials Management sub-components.

This greatly helped Materials Management consumers to leverage the SAP S/4HANA product either on-premise or cloud for doing business transactions. There are many businesses and different industry sectors around the world that are moving towards the incorporation of SAP modules into their systems.

The incorporation of the SAP MM module is advantageous in many ways. It reduces the risk of inventory loss, controls the manufacturing cycle, improvement in product delivery, material cost is lowered down, and much more.

Michael Management offers several MM courses for you to gain exposure to Materials Management through specialized SAP training programs. You will also gain unprecedented access to the SAP S/4HANA system and learn in-depth and hands-on SAP skills.

 

Looking for SAP S/4HANA MM Courses?

Are you interested in learning more about Materials Management? Our SAP Materials Management Courses are the best place to start your journey in SAP MM.