SAP MM Overview

SAP ERP
SAP is an enterprise resource planning (ERP) software product capable of integrating multiple business applications, with each application representing a specific business area. These applications update and process transactions in real time mode. It has the ability to be configured to meet the needs of the business. SAP are categorized into 3 core functional areas: Logistics Sales and Distribution (SD) Material Management (MM) Warehouse Management (WM) Production Planning (PP) General Logistics (LO) Quality Management (QM) Financial Financial Accounting (FI) Controlling (CO) Enterprise Controlling (EC) Investment Management (IM) Treasury (TR) Human Resources Personnel Administration (PA) Personnel Development (PD)

What is SAP ?
Master Data: Master data is data that remains unchanged over a period of time. It contains information that is always needed in the same way. Transaction data: Data relating to the day-to-day transactions.

Using Matchcodes/Search Helps

Matchcodes are a SAP specific search method you can use to find information Several different search criteria are possible To access a matchcode, press F4 New matchcodes can be created by selecting the file folder tabs at the top of the matchcode window To enter a multiple selection of values for any one matchcode, position your cursor in that field, click and enter your selections

To close the matchcode window, click

Storage Location
It represents the physical area within a plant where the materials are stored. It is attached to a plant. Manufacturing Plants Raw Material Fuels Semi finished Central Stores SQC FG Warehouse Trading Divisions & Sales Depots Depot Stores Services Division

Purchase Organization
It is responsible to procure material and services, negotiation of price with vendor. It can be Company specific - assigned to company code Plant specific assigned to plant

Purchase group
Represents buyer or group of buyers responsible for specific purchasing activities. It represents buyer It is used for reporting Plant & Product Specific

Material Type
Material type is the important identification for material master. Different fields and screens are controlled with respect to material type

Data in SAP
There are two important types of data in SAP Master Data
Master data is the backbone for each transaction. Without master data transactions can not be performed. E.g. Material master Vendor master Purchasing info record

Transaction data
Transaction data are created when performing a transaction. Transaction data are created with the input from master data. e.g. Purchase requisition Purchase order Goods receipt Invoice verification

MM Specific Master data

Material Master Vendor Master Info record MRP Data

Material Master views

Material master contains entire information about the material related all the departments of an organization.
Information related to different departments is stored through different views of material master. Views for material master are
Basic data Classification Sales views Purchasing MRP views Work scheduling Storage locations Warehouse data Quality Management data Accounting data Costing data

Views on a Material Master Record

Basic Data
St

Purchasing

MRP Stocks in plant/ storage location Accounting

Material master record

Sales Work scheduling Quality management

A B

Storage Warehouse management

Forecasting

Classification

Vendor Master

Vendor master contains all the information required to do business ` with a vendor. Information is shared between the accounting and purchasing departments. All data is grouped into three categories: General data Company code data Purchasing data

Purch.

Bank

Purchase order

Order Recipient

Payment

Payee

Vendor
Material

Invoice

Invoicing Party
Purc. order Invoice

Goods Supplier
Goods receipt

? =
Invoice verification

Purchasing Info Record

It is created for the combination of material, vendor and purchase organization.
General data Vendor data Origin data Order unit Control data Delivery time Minimum quantity Tolerances Prices and conditions Gross price Discount Freight Price history Ordering statistics Change history Texts

MM Module Data flow

Purchase order Invoice

Determine Requirements
Plan Rqmts.

Invoice verification

Goods receipt and 6 inventory management

Materials mgmt

MM

Source determination

Order follow-up

Purchase order

3 4 Order processing

Vendor selection

MM Process
1. 2. 3. 4. 5. 6. 7. 8. MRP run triggers the requirements or Manual Requisitions Created. Purchase requisition is released. Vendor is selected. Prepare Purchase Order. Release Purchase Order. Follow up with vendor for supply. Goods Receipt. Receive Invoice and pay vendor.

What is MRP?
MRP stands for: Materials Requirements Planning.

The function of MRP is to provide material availability, that is, it is used to procure or produce the requirement quantities on time. This process involves the monitoring of stocks and demand, leading to the automatic creation of procurement proposals for purchasing or production. The main objective of MRP is to determine which material is required, the quantity required and by when it is required. MRP compares the requirements for end products with the current stocks and planned manufacturing orders. MRP then explodes the product BOMs to determine the dependent requirements for intermediate products and purchased raw materials. MRP can be run Daily / Weekly / Monthly, which is scheduled for automatic run. It can also be done manually.

Purchase Requisition: PR is the request for Material and services. It is the first trigger to
the buyer to arrange for procurement. It is generated automatically or manually. Item category and account assignment are important in PR

Release Strategy
Release strategy helps to control further processing of the Documents. Based on conditions, different person or department can be authorized to release in sequence It can be applied for PR, RFQ and for PO.
Does a Strategy Apply? Who can do what?

What can the Requisition be Released to?

Who is Authorised to release?

Purchase Order A purchase order is a formal request to a vendor to provide certain materials or services under specific conditions (quantity, price, delivery date, etc.) PO is the legal document. PO can be controlled with header level release procedure. Item category and account assignment are important in PO like PR.

Purchase Order Processing

Contents in Purchase Order

Account Assignment

PO Header

PO Overview

Pricing Conditions

Texts PURCHASE ORDER

Order History

Delivery Schedules

Additional Data

Services

Changes

Scheduling agreement
It specifies Order quantity Price specific period to supply There is a delivery schedule for each scheduling agreement Helps to reduce paper work

Results of a Goods Receipt Posting

Transaction documents are created both for materials management and finance.

G/L accounts: Consumption account GR/IR account Material document

Accounting document

Stock quantity Consumption statistics

Goods Receipt Posting

Point of consumption Cost center Order

Purchasing data: Order item, Order history

Transfer Order

Invoice Processing
This last step in the procurement process includes invoice verification and updating accounts payable in the FI module.

Payment will then be made later based upon the open invoices posted on the system

Invoice Verification Environment

Invoice verification accesses data from purchasing, inventory management, material master, and vendor master files.

Vendor Payment
Accounts payable reads the invoice file and pays all posted invoices due. (Payment runs can be automated to occur at specific times.)