This action might not be possible to undo. Are you sure you want to continue?
Present by :-
• • • • • • • • • • • • • 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 Appendix D – Important MM Tables
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
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.
orders S U P P I E R S
R E C I V I N G
Raw Material Storage Transformation Processes
Finish Goods Storage
D I S T R I B T N
C U S T O M E R
In Process Storage
SD Sales & Distribution
QM MM FI AM Material Management CO PS PM
Production Managemen Financial Accounting Asset Management Controls Project System
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
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 : Reorder point procedure Forecast based planning Time-phased materials planning
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
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
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
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
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 : Helps you to select source of supply & monitoring of existing supply relationships Vendor reliability
Criteria :- Price / Quantity / Delivery /
General Service Support
Integration with :- QM & MM
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
Optimizing time and quality for product Difficulty in forecast accurate demand
Selection of appropriate vendors
Management of information
I hate it.
Thank you !!!
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”.
Appendix II Material Type
DIEN FERT FHMI HALB HAWA HIBE NLAG ROH UNBH VERP WETT ---------------------------------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
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.
An organization unit for dividing enterprise according to production, procurement, maintenance & material planning.
Warehouse Stock Location
Contains details about all the vendors within a company.
Term for inventory management denoting a physical inward movement of goods or material.
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.
Plan define the release code with which a purchase requisition item, a complete purchase requisition or a complete external purchasing document must be release.
Appendix IV – MM Tables
EINA EINE Purchasing info record – general data Purchasing info/organization record
General material data
MARC Plant data for material MARD Storage location data for material
RKPF T156 T024
Material to BOM link
Document header Movement type Purchasing group
MBEW Material consumption