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Introduction

SAP MM (Materials Management) is a module in the SAP ERP system that deals with procurement and inventory management processes. It enables organizations to manage the procurement and inventory of materials needed for their operations, including the tracking of suppliers, purchase orders, deliveries, invoices, and stock levels. The SAP MM module is integrated with other SAP modules such as SAP PP (Production Planning), SAP SD (Sales and Distribution), SAP FICO (Finance and Controlling), and SAP PP-PI (Production Planning for Process Industries) to provide a comprehensive solution for supply chain management.

Sub-modules of SAP MM

• Purchasing: The Purchasing sub-module of SAP MM provides organizations with the tools to manage the purchasing process efficiently. It enables the creation and management of purchase orders, request for quotations (RFQs), and contracts. The Purchasing sub-module also provides functionality for source selection and evaluation, as well as monitoring and controlling the purchasing process.
• Inventory Management: The Inventory Management sub-module provides organizations with the tools to manage their inventory levels effectively. It enables the tracking of stock levels, movements, and valuations, and provides real-time visibility into inventory data. The Inventory Management sub-module also provides functionality for managing the physical inventory process, including cycle counting and stocktaking.
• Invoice Verification: The Invoice Verification sub-module provides organizations with the tools to reconcile goods receipts and invoices. It enables the matching of invoices with purchase orders and deliveries, and the processing of invoice-related payments. The Invoice Verification sub-module also provides functionality for handling invoice-related disputes and resolving any discrepancies.
• Material Valuation: The Material Valuation sub-module provides organizations with the tools to calculate and maintain the prices of their materials. It enables the calculation of material prices based on various methods, including standard cost, moving average, and perpetual inventory. The Material Valuation sub-module also provides functionality for managing price changes and creating price lists.
• Material Requirement Planning (MRP): The Material Requirement Planning (MRP) sub-module provides organizations with the tools to perform demand-driven calculation of material requirements. It enables the calculation of material requirements based on the planned order quantities, and the scheduling of deliveries to meet these requirements. The MRP sub-module also provides functionality for managing the safety stock levels, and the planning of procurement activities.
• External Services Management: It is the process of managing and procuring services from external vendors. It covers tasks such as creating a Request for Quotation (RFQ), evaluating quotes, selecting a vendor, and creating a Purchase Order (PO) for the services.
• Source-list: It is used to manage and maintain a list of suppliers for a specific material. The system uses the source list to determine the preferred supplier for a material and to check if a particular supplier is allowed to supply the material. The source list also contains information about delivery times and minimum order quantities, which can be used in the purchase order process.
• Quota Arrangements: It is used to manage the procurement of a material from multiple suppliers over a specified period of time. It assigns a specific quantity of a material to a particular supplier, thereby creating a purchase quota. The quota arrangements help to distribute procurement among multiple suppliers, thereby reducing the dependency on a single supplier.
• Info Records: is used to store information about the price and delivery time of a material from a specific supplier. This information can be used for price comparison and to determine the best supplier for a particular material. The info record also contains information about the lead time, terms of payment, and minimum order quantity for a material from a supplier.

Advantages of Using SAP MM

• Improved efficiency and cost savings: The use of SAP MM enables organizations to automate and standardize their procurement and inventory management processes, resulting in improved accuracy, reduced manual errors, and improved process consistency.
• Real-time visibility: It provides real-time visibility into procurement and inventory data, enabling organizations to make informed decisions based on accurate and up-to-date information. This results in improved decision-making and increased efficiency, as well as reduced lead times, improved supplier performance, and reduced stock levels.
• Improved data analysis capabilities: It enables them to identify trends, patterns, and areas for improvement in their procurement and inventory management processes. This results in improved process efficiency and reduced costs, as well as increased competitiveness and improved customer satisfaction.