This tutorial gives you an overview and talks about the fundamentals of SAP MM.
SAP stands for Systems, Applications and Products in Data Processing. SAP is an ERP software which large organizations use to manage their business. SAP has several modules, each of which represents a business-process.
Modules are usually abbreviated for the business process they represent. For instance, HCM is Human Capital Management, FI for Financial Accounting, MM for Materials Management and SD is Sales & Distribution and so on. All together there are some nineteen core modules.
Materials Management deals with managing the materials (products and or services) resources of an organization with the aim of increasing productivity, reducing costs, and increase optimization and at the same time be flexible to accommodate changes.
SAP Materials Management (MM) is a part of Logistics area and helps to manage the procurement activity of an organization from procurement process, inventory management, invoice verification and material planning. Materials Management is the backbone of the Logistics area which includes modules like Sales and Distribution, Production Planning, Plant Maintenance, Project Systems, Warehouse Management which are highly dependent on the Materials Management module.
The Basic Functions Purpose: Vendor, purchasing info, material, and customer master records contain foreign trade data. This data includes general foreign trade information and information on legal control and preference handling. The system uses the foreign trade data in these master records both directly and indirectly. It uses the data directly as default values in the Materials Management (MM) application. Fundamental to Foreign Trade and should always be implemented.
This component integrates with SD’s Sales (SD-SLS), Delivery Processing (SD-SHP-DL), and billing (SD-BIL) components. It also integrates with Materials Management’s (MM) Purchasing(MM-PUR) and Goods Receipt (MM-IM-GR) components.
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The typical procurement cycle for a service or material consists of the following phases:
1. Determination of Requirements: Materials requirements are identified either in the user departments or via materials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials defined by master records, use of the order-point method, and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.
2. Source Determination: The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements. This speeds the process of creating requests for quotation (RFQs), which can be sent to vendors electronically via SAP EDI, if desired.
3. Vendor Selection and Comparison of Quotations : The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically.
4. Purchase Order Processing: The Purchasing system adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically. Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase agreement) are also supported.
5. Purchase Order Follow-Up: The system checks the reminder periods you have specified and – if necessary – automatically prints reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders.
6. Goods Receiving and Inventory Management: Goods Receiving personnel can confirm the receipt of goods simply by entering the Po number. By specifying permissible tolerances, buyers can limit over-and-under deliveries of ordered goods.
7. Invoice Verification: The system supports the checking and matching of invoices. The accounts payable clerk is notified of quantity and price variances because the system has access to PO and goods receipt data. This speeds the process of auditing and clearing invoices for payment.
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This article was composed to create interest in readers about SAP MM online course. The topics and the SAP MM course is dealt with more detailing, in-depth, practice, and completeness.
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