Sap Material Management
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Content: • Introduction • Why Material Management ??? • Process Flow • Material Management Integration • Material Management Component • Benefits of Material Management • Implementation Challenges • Q&A • Thank you !!! • Appendix A - MM Definition • Appendix B – Material Type • Appendix C – MM Terms & Definition USA: +1-847-787-7647 & India-MM +91-9052666559 info@magnifictraining.com Visit : • Appendix D – Important Tables www.magnifictraining.com
Introduction SAP MM Module is one of the most important SAP Modules where MM stands for Materials Management - underpins the supply chain, including
Requisitions Purchase orders Goods receipts Accounts payable Inventory management BOM’s Master raw materials, finished goods etc
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Why Need MM ??? amount spend on material is higher than other inputs material offer considerable scope for reducing cost and improving profit material add value to the product quality of end product depend on material efficiency of any organization depend upon the availability of right material, in right quantity at right time and at right place.
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Process Flow orders S U P P I E R S
R E C I V I N G
Purchasing
Raw Material Storage
Finish Goods Storage
Transformation Processes
In Process Storage
D I S T R I B T N
C U S T O M E R
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MM Integration SD
Sales & Distribution PP
QM
Quality Management PM
MM
Production Planning
Production Management Financial Accounting
FI AM
Asset Management
Material Management Controls
CO PS
Project System
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Material Management Component
Consumption based planning (MM-CBP)
Purchasing (MM-PUR)
External Service Management (MM- SRV)
Inventory Management (MM-IM)
Logistic Invoice Verification (MM - IV)
Vendor Evaluation Management
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Consumption based planning CBP is based on the past consumption values and uses the forecast or other statistical procedure to determine future requirements. It gets trigger when stock level falls below pre-defined reorder points.
Procedure available for MRP :ď ś Reorder point procedure
ď ś Forecast based planning ď ś Time-phased materials planning
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Purchasing Purchasing is a component of Material Management. Task of Purchasing as following : External procurement of material & services Determination of possible source of supply Monitoring deliveries from and payment to vendors. Integration with :-
SD, FI & CO
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External Service Management SRV is a MM component. It supports the complete cycle of bid invitation, award / order placement & acceptance of services. Task of Purchasing as following : External procurement of material & services Determination of possible source of supply Monitoring deliveries from and payment to vendors. Integration with :- PM & PS
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Inventory Management Task of SAP-IM as following : Management of material stocks on a quantity and value basis Planning, entry and documentation of all goods movement
Carrying out the physical inventory
Integration with :- SD, PP, QM & PM
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Logistic Invoice Verification :It is a component of MM. It is in the logistic invoice verification that incoming invoice are verified in terms of content, price and arithmetic.
Task of SAP-IV-LIV as following : It completes material procurement process, which start with purchase requisition & result in goods receipts. It allows invoices, that do not generate in material procurement like expenses to be processed. It allows credit memo to be processed.
Integration with :- FI & CO USA: +1-847-787-7647 & India- +91-9052666559 info@magnifictraining.com Visit : www.magnifictraining.com
Vendor Evaluation :The Vendor Evaluation component supports you in optimizing your procurement processes in the case of both materials and services.
Task of SAP-IV-LIV as following :ď ś Helps you to select source of supply & monitoring of existing supply relationships ď ś Vendor reliability
Criteria :- Price / Quantity / Delivery / General Service Support
Integration with :- QM & MM
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Benefits of MM Material cost can be lowered down Controlling of indirect cost Risk of Inventory loss minimized Reduction in loss of time of direct labor Control of manufacturing cycle Material congestion in storage places avoided Improvement in delivery of the product
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Implementation Challenges Optimizing time and quality for product Selection of appropriate vendors
Difficulty in forecast accurate demand
Management of information
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Q&A I hate it.
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Appendix I – MM Definition • “Material management is the grouping of management functions supporting the complete cycle of material flow, from the purchase and the internal control of production material to the planning and control of work in process to the warehouse shipping and distribution of the finished product”. – Thomas f Wallance.
• “Material management is the management of the flow of materials into an organization to the point, where those material are converted into firm's end products”.
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Appendix II Material Type DIEN FERT FHMI HALB HAWA HIBE NLAG ROH UNBH VERP WETT
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Services Finished Product Production Resources / tools Semi finished Products Trading Tools Operating Supplies Non-stock material Row Material Non Valuated Material Packaging material Competitive product
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Appendix III – MM Terms Definition • • •
• •
•
Material Master Record Data record contain all the basic information required to manage a material.
Material Requirement Planning Term for requirement planning that take into account and plan every future requirement during the creation of order proposal.
Plant An organization unit for dividing enterprise according to production, procurement, maintenance & material planning.
Storage Location Warehouse Stock Location
Vendor Master Contains details about all the vendors within a company.
Goods Receipts Term for inventory management denoting a physical inward movement of goods or material.
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Appendix III – MM Terms Definition • •
•
Material Group Grouping of material and services according to their characteristics.
Material Master Record Data contains all the basic information required to manage a material.
Release Strategy Plan define the release code with which a purchase requisition item, a complete purchase requisition or a complete external purchasing document must be release.
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Appendix IV – MM Tables EINA
Purchasing info record – general data
EINE
Purchasing info/organization record
MAKT
Material description
MARA
General material data
MARC Plant data for material MARD Storage location data for material
MAST
Material to BOM link
MBEW Material consumption RKPF
Document header
T156
Movement type
T024
Purchasing group
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Material Management
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