SAP MM Submodules: A Deep Dive into Materials Management

SAP MM (Materials Management) is a core component of the SAP ERP system, streamlining the procurement and management of materials and resources in an organization. This comprehensive module consists of several submodules, each specializing in specific aspects of the materials management process. Let’s break down these key submodules:

1. Master Data

• Material Master: The heart of SAP MM. It stores all essential information about a material: description, technical specifications, units of measure, suppliers, pricing, etc.
• Vendor Master: Contains crucial data about suppliers, including addresses, contact information, payment terms, and performance history.
• Purchasing Info Records: Link specific materials and vendors, storing negotiated conditions, prices, and discounts.

2. Purchasing

• Purchase Requisitions: Internal requests for materials or services.
• Requests for Quotation (RFQ): Formal requests sent to vendors for price quotes.
• Purchase Orders (PO): Legally binding documents sent to a vendor to procure goods or services.
• Outline Agreements: Long-term contracts with vendors outlining overall conditions and potential volumes.

3. Inventory Management

• Goods Movements: Tracks receipt of goods into the warehouse (goods receipt), their issue for consumption (goods issue), and transfers between locations.
• Stock Transfers: Moves materials between different plants, storage locations, or warehouses within the company.
• Physical Inventory: Periodic counting of materials in the warehouse to ensure stock accuracy.

4. Invoice Verification

• Logistics Invoice Verification: Matches invoices received from vendors against purchase orders and goods receipts. Handles discrepancies for accurate payment processing.

5. Valuation and Account Assignment

• Material Valuation: Calculates the value of materials in stock using various methods (e.g., moving average price, standard price).
• Account Assignment: Determines the cost accounts to be charged when goods are consumed or when a purchase order is created.

6. Other Important Submodules

• Consumption-Based Planning: Uses historical material usage data to forecast future requirements, aiding in procurement planning.
• External Services Management: Manages the procurement and processing of services provided by external vendors.

How the MM Submodules Work Together

The magic of SAP MM lies in the deep integration between its submodules. Here’s an example of how they interact:

1. A department needs a specific material. They create a purchase requisition.
2. The Purchasing submodule uses the info record and vendor master data to find suitable vendors, potentially sending an RFQ.
3. Based on the best quote, a purchase order is created.
4. Goods are delivered, and a goods receipt is recorded in the Inventory Management submodule.
5. The vendor sends an invoice, which is verified against the PO and goods receipt in the Invoice Verification submodule.
6. Valuation and Account Assignment submodules handle the financial implications of the transactions.

In Conclusion

SAP MM provides a robust framework to optimize materials management processes. By mastering individual submodules, businesses can ensure efficient procurement, accurate inventory tracking, streamlined invoice processing, and seamless cost management.