3/30/23, 9:11 AM SAP MM module: What is, Material Management Process Flow

SAP MM module: What is, Material Management

Process Flow
By Madeline Carter Updated March 4, 2023

What is SAP MM Module?

SAP MM (Material Management) Module is
a SAP ERP component that helps
organizations with material management,
inventory management, and warehouse
management in the supply chain process.
It is a part of SAP ECC’s logistics functions
which consists of several components and
sub-components. The most prominent
and widely used components are Master
Data, Purchasing, and Inventory.

SAP MM Module

All of these components have their subcomponents that are essential in specific business
processes, and all of the processes are executed by using transactions in SAP MM process
flow.

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3/30/23, 9:11 AM SAP MM module: What is, Material Management Process Flow

Transaction (in SAP) means processing of certain information in order to complete

business process requirement. For example, if you have purchased 10 pieces of litter
buckets, you can perform particular transaction code (t-code) that will reflect those
changes in SAP. Most of the business processes involve multiple SAP transactions to be
accomplished and are spread over one, two or more modules.

Now in this SAP MM basics tutorial, let’s briefly talk about the various sub-modules in SAP
Materials Management:

SAP MM – Master Data

Data stored in SAP R/3 is categorized as

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1. Master Data and

2. Transactional Data.

Master data in SAP materials management is the core data that is used as a base for any
transaction. If you are producing, transferring stock, selling, purchasing, doing a physical
inventory, whatever your activity may be, it requires certain master data to be
maintained.

Example of Master Data

Material master data

Customer master data
Vendor master data
Pricing/conditions master data
Warehouse management master data (storage bin master data)

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3/30/23, 9:11 AM SAP MM module: What is, Material Management Process Flow

Learn more about Master Data

here

Purchasing
Purchasing is a component of SAP MM module, and its process can be roughly depicted in
below diagram.

MRP (material resource planning) creates procurement proposal and later gets converted
into Purchase Requisition. Next step is assigning a source to Purchase Requisition, and
release of Purchase Requisition. The PR gets converted to Purchase Order, and upon
goods receipt, an invoice receipt can be done to complete the purchasing process.
Additionally, payment is processed (in FI module).

Learn more about Purchasing here

Inventory Management
Inventory management is used to manage the inventory of the goods. It is based on
several key processes like

Definition of movement types

Reservations
Goods issue
Goods receipt

There are a number of functions and transactions used in the Inventory management
processes.

Learn more about Inventory Management here

Pricing Procedure
Pricing procedure in MM module is a way to determine prices in purchasing documents. It
gives us functionality to assign different calculation types for different needs. Defining a
pricing procedure can be done by creating an access sequence, and assigning it to
condition types. Access sequence tells the system where to look for the condition values.
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3/30/23, 9:11 AM SAP MM module: What is, Material Management Process Flow

Learn more about Pricing Procedure here

Features of SAP MM

It can deal with both material management and inventory management.

Ensures no shortage of material in the supply chain process.
Helps to speed up material management and procurement activities.
It helps to accelerate productivity and reduce costs while maintaining
accommodations for frequent changes in a business environment.
It helps organizations to deal with various business aspects like Procurement, Master
data, Material valuation, Inventory management, Invoice verification, Material
requirement planning, etc.

Summary

SAP MM meaning: SAP Material Management module is a SAP ERP component that
helps organizations with material management, inventory management, and
warehouse management in the supply chain process.
SAP MM full form is SAP Material Management.
Transaction in SAP means processing of certain information in order to complete
business process requirement.
Master data is the core data that is used as a base for any transaction.
Purchasing is a component of SAP MM module, and its process can be roughly
depicted in below diagram.
Inventory management is used to manage the inventory of the goods.
Pricing procedure for MM module in SAP is a way to determine prices in purchasing
documents.

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3/30/23, 9:11 AM SAP MM module: What is, Material Management Process Flow

Overview Of Pricing Procedure in SAP MM & SAP SD

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