SAP MM-PP Integration: A Key to Streamlined Operations

In the world of SAP ERP, two modules reign supreme for managing the core of manufacturing businesses: Material Management (MM) and Production Planning (PP). MM handles all aspects of procurement and inventory, while PP focuses on the planning and execution of production activities. Successful integration between MM and PP is vital for efficient production and a healthy supply chain. Let’s delve into why this integration matters and how it works.

What is SAP MM?

The SAP MM (Material Management) module encompasses the following essential processes:

• Procurement: Sourcing, vendor management, purchase requisitions, purchase orders, and goods receipts.
• Inventory Management: Material stock tracking, valuation, and physical inventory processes.
• Master Data: Creation and maintenance of material master records, vendor master records, and other essential data.
• Invoice Verification: Matching invoices with purchase orders and goods receipts.

What is SAP PP?

The SAP PP (Production Planning) module oversees the entire production process:

• Demand Planning: Sales forecasts and independent requirements form the basis for production plans.
• Master Production Scheduling (MPS): Converts high-level plans into specific material requirements.
• Material Requirements Planning (MRP): Calculates exact material needs and production quantities based on BOMs and stock levels.
• Capacity Planning: Evaluates resource availability (machines, labor) against production requirements.
• Production Orders: The instructions for executing the manufacturing process.
• Shop Floor Control: Tracking and confirmation of production activities.

Integration Touchpoints: The MM-PP Connection

The integration between MM and PP creates a seamless flow of data and processes. Here’s how they connect:

1. Bill of Materials (BOM): The critical link! A BOM in PP defines the raw materials, components, and quantities needed for a finished product. MM uses this to procure the correct materials and manage inventory.
2. Material Requirements Planning (MRP): MRP runs, driven by PP, calculate net material requirements. This triggers procurement requests within MM, either directly or via manual actions by planners.
3. Purchase Requisitions & Orders:  MM takes over, converting procurement requests into purchase requisitions and then purchase orders to vendors.
4. Goods Receipts: When materials arrive, MM posts goods receipts, updating inventory levels. This information is essential for PP to track production progress.
5. Material Issuance to Production: MM issues raw materials and components to shop floor production orders, as instructed by PP, decreasing inventory stocks accordingly.
6. Production Confirmation: Once a production order is complete, PP confirms the finished goods, and then MM receives them into stock.

Benefits of Strong MM-PP Integration

• Optimized Inventory Levels: Accurate material demand calculations from PP help MM maintain ideal stock levels, reducing holding costs and preventing stockouts.
• Production Efficiency: Smooth material flow ensures productions run without delays, improving throughput and on-time delivery.
• Visibility and Transparency: Real-time updates across modules provide a clear picture of inventory, material movements, and production status.
• Decision-Making: Accurate data empowers informed decision-making about purchasing, scheduling, and resource allocation.
• Customer Satisfaction: Streamlined processes improve your ability to meet customer orders on time and in full.