In this SAP MM blog post, you will learn about the SAP MM Module's features and operations, as well as its various components and subcomponents such as master data, purchasing, billing, human resource management, and inventory management.
We'll start this SAP MM blog post with learning about the SAP MM Module. The SAP MM Module is an essential component of the SAP ERP Software. SAP Material Management is used by many businesses to manage their purchasing and transactional data since it is both cost-effective and time-efficient. SAP Material Management is a logistic function that assists the industry from goods acquisition through delivery. SAP MM Module is made up of numerous modules that handle material procurement and suppliers, material condition and quality inspection, and vendor payment.
What exactly is SAP Business Process in the SAP MM Module?
SAP Business Process is a component of the SAP MM Module. It is in charge of a company's sales, manufacturing, distribution, unit maintenance, planning, and warehouse management. It aids in the management of a company's inventory and human resources.
SAP MM Module Advantages
The following are some of the important characteristics of the SAP MM Module:
It is concerned with Inventory and Material Management.
It is a process that controls scarcity or violations in a company's Supply Chain.
It oversees the procurement process.
It handles a company's material (products/services) and resources in order to increase productivity and reduce expenses.
It covers Master Data, Material Valuation, Material Requirement, Invoice Verification, and so on.
The Benefits of the SAP MM Module
It reduces operational costs.
It decreases inventory losses by removing old or superfluous material.
Automatic Material Management and procurement activities result in a more efficient and smoother procedure.
The SAP MM Module's Procurement Process
This article will undoubtedly assist you in understanding the Procurement Process in a SAP MM module. This SAP MM blog post will demonstrate the many types of Procurement Processes.
Every business requires materials or services to meet their needs, therefore they buy them. This practise is known as procurement.
The Benefits of the SAP MM Module
It reduces operational costs.
It decreases inventory losses by removing old or superfluous material.
Automatic Material Management and procurement activities result in a more efficient and smoother procedure.
The SAP MM Module's Procurement Process
This article will undoubtedly assist you in understanding the Procurement Process in a SAP MM module. This SAP MM blog post will demonstrate the many types of Procurement Processes.
Every business requires materials or services to meet their needs, therefore they buy them. This practise is known as procurement.
Procurement Types in the SAP MM Module
This SAP MM blog article will teach you about several sorts of procurement.
There are two kinds of procurement: formal and informal.
Basic sourcing
Procurement on a whim
Basic Purchasing
Basic Procurement refers to the process of purchasing the correct materials and services in the right amount at the right price and at the right time.
What are the several stages of the basic procurement lifecycle?
There are several procurement lifecycles, which are as follows:
Gathering Information: The Procurement Process begins with gathering information about a product and its quantities. Suppliers must then be contacted based on the desired items and services.
Suppliers: Suppliers are contacted and asked to meet the need based on the demand.
Consumption, Maintenance, and Disposal: The performance of products and services is reviewed.
Special Procurement
Special stocks are equities that do not belong to a corporation and are kept in a specific area. Special Procurement is the method used to obtain these stocks.
The following are examples of special procurement and unique stocks:
Consignment Stocks: Consignment stocks are materials that are available on the store's premises. This material belongs to the seller, but you must pay the merchant to use it.
Third-party Processing: In third-party processing, the corporation sends orders to vendors, who then deliver them straight to clients. Buy orders, purchase requisitions, and sales orders are all updated with these orders.
Pipeline Handling: The material in pipe handling is not stored by the company; rather, it is stored by the vendor.
Stock Transport Order: When one factory demands commodities, it places an order with another plant in the corporation. The stock transport order is used to obtain these items. This stock transit order can be used to track the movement of products.
Structure of an Organization In SAP MM Module
An organisation is made up of several levels and units. These units are organised in a logical hierarchy. Each of these elements serves a certain purpose and contributes to the description of an organization's structure.
Client
Company code
Plant Storage location
Purchasing organization
Purchasing group
Client: A client is a commercial entity with its own Master Data, which consists of independent table sets. It is at the top of the SAP system's hierarchy. All data saved at the client level is accessible to all organisational levels.
A Corporation Code is the smallest unit of a company that falls under the client level. It has its own accounting entity that keeps its own profit, loss, and balance sheet.
Plant: A plant is a unit within a firm that is in charge of producing items and making them available to the company. A plant unit is made up of two parts: a production facility and a warehouse.
Follow the steps below to define a plant:
Step 1: Enter the transaction code ‘SPRO' in the command area and press the Go button.
Step 2: Follow the Menu Course
Step 3: Select Define Plant.
Step 4: Select New Entries from the drop-down menu.
Step 5: Enter the new plant code, change the plant's name, and then hit Enter now.
Step 6: Update the plant's address and press Enter now.
A storage location is a unit within a corporation that is used to keep material supplies and items that are available in a factory. A plant may have numerous storage locations, each of which stores all data connected to the storage location.
Purchasing Organization: A purchasing organisation is a unit within a firm that is in charge of purchasing tasks. External procurement is also managed by the purchasing business. A centralised purchasing organisation exists when a purchasing organisation unit is present at the client level.
Purchasing Group: An organization's purchasing group is a unit that is in charge of the day-to-day procurement activities of the organisation. It is a group of purchasers that are in charge of purchasing activities
SAP R/3
SAP R/3 is a piece of software created by the German company SAP AG (now SAP SE). This programme was created to help businesses manage all of their resources and activities, such as Human Resource Management, order fulfilment, billing, and production planning.
SAP R/3 is a real-time data storage system. SAP R/3 data is now separated into two categories:
Transactional Information
Master Information
Transactional Information
.Transactional data is information pertaining to the processing of a business transaction. It is the information pertaining to the payment made to vendors in response to their orders or the payment received from a consumer for the goods.
Master Data
The primary data used for any transaction within a corporation is known as master data. It is kept centrally in an organisation and may be accessed by anyone. However, the data must be updated on time.
SAP Master Data is classified into two types:
Material Master Data
Vendor Master Data
Vendor Master Data is a compilation of information about all vendors linked with a business. It includes information such as a vendor's name, age, address, the type of material he (Vendor) sells or buys, and so forth..
Vendor master data is classified into three types:
General DatNumber Range
When a vendor master record is generated, a unique number is assigned to that vendor to help it be identified.
The number can be assigned to a vendor in two ways:
External number assignment: When creating a record for the vendor in this assignment, you must input your own unique number, which must contain alphabets and digits.
Internal number assignment: In this assignment, the system generates a unique number while generating a record for the vendor.a: This is data that is retained at the client level and is valid across all organisational levels.
Accounting Data: Accounting Data is information on the costs of materials purchased or sold. All of this information is stored at the organisational level.
Purchasing Data: Purchasing Data contains information about the materials or services that must be obtained from suppliers or vendors. The purchase data information is kept at the Purchasing organisation level.
Vendor Account Organization
All vendors listed under a firm are classified based on their needs. Vendors with comparable qualities are grouped together under a single account, which is known as a vendor account group.
Vendor Master Design
A vendor master is a database that stores a list of vendors from whom a corporation can sell or manufacture goods.
Material Master Data: The Material Master Data is used to hold material-specific data. The data that is saved comprises of information about the materials that a company needs to buy, store, make, or sell.
A business is divided into departments. Each department works on a distinct substance and enters different information about their material. As a result, each department has its own interpretation of the material master record.
Characteristics of Material Master Data:
Types of Materials
All materials with similar properties are grouped together and assigned to a material type. It aids in distinguishing the materials and handling them in a systematic manner.
For example, final products and raw materials can be classified according to their material type.
Groups of Materials
A Material Group is a broad range of material kinds. Materials with similar properties are grouped together and assigned to a material group.
Food products, electrical items, stationery, and so on are examples of materials that can be categorised.
Number Range
When a material master record is established, a unique number is assigned to each material to help it be identified.
The number can be allocated to the material in two ways:
External number assignment: When creating a record for content in this assignment, you must enter your own unique number that must include alphabets and digits.
Internal number assignment: In this assignment, the system generates a unique number while establishing a record for material.
Material Master Design
Material Master is used to maintain track of all the facts about the materials that a firm creates, markets, stores, or acquires. It keeps all of the information in a central database that is accessible to every unit present at various levels.
SAP's MM flow employs the Procurement Cycle.
To meet their company needs, every business organisation demands goods or services. Procurement refers to the process of procuring products and services.
In the sap procurement cycle, various processes are used to obtain materials and services that compose an MM Circulation. The steps of MM circulation in SAP are as follows:
Identifying the requirement
Purchase Requisition
Making the purchasing order
Creating a goods receipt
Making the invoice
Let's take a closer look at each stage of the procurement lifecycle:
The first stage in the procurement lifecycle is determining the requirement. A business determines the number of materials or services required. Following the identification of the requirement, a list of products is developed that is approved for procurement by the senior authority.
Purchase Requisition: An organisation gathers all of its requirements, and then creates a list of requirements that is delivered to the purchasing organisation in order for the products on the list to be acquired.
Creating the purchase order: Following approval, a purchase order is created and forwarded to the vendor to obtain the required material. A purchase order contains information on the vendor's name, address, and delivery date.
Creating a goods receipt: A goods receipt is created when a vendor processes a purchase order and sends it to the appropriate recipient. The authority then verifies the supplied items' quality and condition. The receipt of the products is posted after the material has been verified.
Invoice generation: The vendor sends the invoice to the company. The organisation verifies the invoice after receiving it. To send payments to vendors, an account determination in SAP MM is configured, which causes the system to automatically construct the vendor's G/L Account.
Management of Physical Inventory Within the SAP MM Module
Physical Inventory Management, part of the SAP MM module, manages a company's stock goods. It covers the procurement of commodities based on availability as well as the storage of goods within the company's facilities. It is used to keep track of inventory and to update it on a regular basis.
Physical inventory management includes the following functions:
Movement management in SAP MM: Movement Management monitors the items that are ordered, stored, sold, or used, i.e. it handles goods receipt or goods issue.
2 .SAP MM Goods receipt: A good receipt is a record of the material provided by the vendor to the customer who bought it. The quality and condition of the goods are then reviewed after delivery, and the receipt of the Goods is posted when the material has been confirmed. Currently, the stock in the inventory is updated based on the kind of movement using the receipt of the products. The receipt of goods represents the rise in warehouse inventories.
3. Reservation in SAP MM: A reservation in SAP MM is the blocking of particular stocks in order for them to be made available at a specific time. It assures stock schedule and may be viewed using the t-code ‘MMBE' and the material number as well as the plant key/code.
4. Goods issue in SAP MM: Goods Issue is the activity of removing stock from the Inventory System for use, sampling, or returning to the vendor. The quantity of stock in the warehouse decreases as a result of goods issue.
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