What are the essential components in SAP MM?

SAP MM Online Training


A certification in SAP MM can give you the skills and knowledge you need to become a certified SAP MM consultant and assist businesses in streamlining their supply chain operations. SAP MM (Materials Management) is a crucial part of the SAP ERP system, which is used by organizations to manage their supply chain, inventory, and procurement processes.

The complete procurement cycle, including vendor selection, purchase order development, delivery of the items, and invoice verification, is supported by SAP MM. The module offers capability for handling purchase information records, vendor master data, and material master data.

Being able to handle inventory and procurement processes more effectively, lower expenses associated with inventory and procurement, and enhance supply chain operations makes SAP MM a crucial module for enterprises. Many different businesses, including manufacturing, retail, pharmaceuticals, and healthcare, use it extensively.

Essential Components in SAP MM:

Materials management, or SAP MM, is a crucial module in the SAP ERP (Enterprise Resource Planning) system that aids businesses in effectively managing their purchasing and inventory management procedures. The following are the crucial SAP MM Course elements:

  1. Master Data:
  2. Material Master: includes details on all the materials a company buys, makes, stores, and sells.
  3. Vendor Master: Stores details about suppliers and vendors.
  4. Info Record: maintains data on the interactions between materials and vendors, such as pricing, delivery terms, and other details.
  5. Purchasing:
  6. Purchase Requisition: A document that initiates the procurement process for materials or services.
  7. Purchase Order (PO): a formal request made to a vendor for the provision of goods or services under particular terms, such as price and delivery schedules.
  8. Purchase Order Release: Allows for multi-level approvals for purchase orders.
  9. Purchase Order Monitoring: Tracking the status and changes to purchase orders.
  10. Inventory Management:
  11. Goods Receipt (GR): Records the receipt of materials and updates inventory.
  12. Goods Issue (GI): Records the issuance of materials from inventory.
  13. Stock Transfer: Manages the transfer of materials from one storage location to another.
  14. Physical Inventory: Involves periodic counts of materials to reconcile physical stock with system stock.
  15. Valuation and Account Determination:
  16. Valuation Areas: Define how materials are valued within an organization.
  17. Account Determination: Links material movements to financial accounts for proper accounting.
  18. Price Control: Determines how the system calculates the material’s value (e.g., moving average price, standard price).
  19. Invoice Verification:
  20. Invoice Verification (IV): Compares vendor invoices with purchase orders and goods receipts.
  21. Three-Way Matching: Matches PO, GR, and vendor invoice to ensure accuracy before payment.
  22. Evaluated Receipt Settlement (ERS): Automates invoice verification by using goods receipts as the basis for payment.
  23. Material Requirements Planning (MRP):
  24. MRP Run: based on demand and inventory levels, calculates procurement proposals and creates planned orders.
  25. MRP Types: Define how MRP calculates material requirements (e.g., dependent requirements, independent requirements).
  26. Vendor Evaluation and Rating:
  27. Vendor Performance: Monitors and evaluates vendor performance based on predefined key performance indicators (KPIs).
  28. Vendor Rating: Assigns scores or ratings to vendors based on their performance.
  29. Special Procurement Processes:
  30. Subcontracting: Involves sending materials to external suppliers for processing.
  31. Consignment: Manages materials stored at the customer’s location but owned by the vendor.
  32. Third-Party Processing: Involves having a third-party supplier deliver goods directly to a customer.

These are the main SAP MM building blocks that support businesses in efficiently managing their inventory, procurement, and material management processes within the SAP ecosystem.