SAP-

MATERIAL MANAGEMENT
-AYUSH KAKANI
 MM OVERVIEW

 The materials management module consists of all master data, system

configuration, and transactions to complete the procure to pay process.
 This process map spans from MRP generated procurement proposals
through final invoice receipt and verification.
ORGANIZATION STRUCTURE
 ORGANIZATIONAL STRUCTURES

 1. CLIENT
:- the client is a unit within a SAP R/3 system that is self contained both in legal and organizational
terms of data, with separate master records and an independent set of tables.
From a business point of view, the client represents a corporate group
Client is of 3 numeric digits.
2. PLANT
:- An organizational unit where materials are produced or goods and services are provided. You can
divide an enterprise into various plants according to production, procurement, maintenance, and
materials planning.
3. Storage location
:- An organizational unit where the goods produced in the plant are stored.
4. Warehouse number
An alphanumeric key that represents a warehousing system, which is made up of different
organizational and technical storage areas.
5. Storage Type
: An area such as a goods receipt area, goods issue area, or picking area. Also the
physical or logical division of a complex warehouse.
6. Purchasing Organization
: An organizational unit that procures materials and services and negotiates with
vendors to purchase materials or goods.
7. Purchasing group
: An alphanumeric key for a buyer or a group of buyers who are involved in
purchasing activities. The purchasing group is responsible for materials procurement
and dealing with vendors.
 P2P CYCLE

Procurement Activities Description

 Determine requirements Determination of requirement It is the logical subdivision where it is determined that what material or
services are required to company, and which supplier can fulfill the
 Source determination requirement.

 Vendor Selection
Creating Purchase Requisition It is the phase in which purchasing department is informed about the
 Order Processing requirement of items or services required for business purpose. A
requisition is a internal document.
 Order follow up
 Goods receipts Creating Purchase Order
and
It is the phase when orde\r is created from requisition and it is approved
and assigned to a supplier.
Inventory management
 Invoice Verification Goods receipt/ Invoice Received It is the phase in which the material is received by the company and the
condition and quality are verified. In this phase Invoice is received from
the vendor (seller).

Invoice verification/ Vendor Payment It is the phase in which the vendor (seller) is paid from the company and
reconciliation of the invoice and PO is accomplished.
 STEP 3:
STEP 1: STEP 2:
REQUISITION/QUOT
INDENTIFY NEEDS CREATE REQUISITION
ATION APPROVAL

STEP 5: STEP 4:
STEP 6:
PURCHASE ORDER CREATE A PO/SPOT
GOODS RECEIPT
APPROVAL BUY

STEP 7:
STEP 8: STEP 9:
SUPPLIER
INVOICE APPROVAL VENDOR PAYMENT
PERFORMANCE
 MRP

 MRP stands for Materials Requirement Planning and it is one of the most
important functions of SAP ERP system.
 The objective of MRP is to ensure material availability for the requirements.
Requirements could be of two types – internal requirements and external
requirements.
 SAP MRP checks the stock level of the respective material and generates
procurement proposals or planned orders which could be either converted
to purchase requisitions or production orders based on the MRP settings in
material master records.
 Consumption Based Planning (CBP)
 three procedures in cbp:
 1. reorder point planning
 2. fore cast based planning
 3. time phased materials planning
 ELEMENTS OF MASTER DATA

1. MATERIAL MASTER
 Material master data (often referred to simply as the "material master" or
"item master") contains descriptions of all materials that an enterprise
procures, produces, and keeps in stock. It is the central repository of
information on materials and contains descriptions of a variety of data
elements including part number, description, technical specifications and
stocking codes.
Material master is considered the core functionality for any ERP system used
in distribution or manufacturing type functions. The integration of all
material data in a single materials database eliminates the problem of
data redundancy. This permits the data to be used by various
departments/applications such as accounting, materials planning and
control, purchasing, engineering, warehousing, forecasting, etc..
 2. VENDOR MASTER

 Vendor is a Business Partner from whom the material or services can be procured.
 Vendor Master: It contains the complete data of Vendor to whom the a company
conducts business with.
 Vendor Master Record consists of

1. General Data (2 screens)

- Address, Communication details
-Control data
-Bank details
2. Company code data (5 screens)
- Account management (reconciliation a/c etc.)
-Payment transaction (payment methods for automatic payment transactions)
-Correspondence
-With hold tax
3. Purchasing Org. data (2 screens)
-Purchasing data (order currency, inco-terms, Vendor tax data)
-Partner roles
 3. SOURCE LIST
 Source List are lists of available sources of supply for materials in SAP. A
source list shows the date ranges during which procurement of materials
are possible from certain sources.
 If a source list requirement exists for the material, you must create a source
list to proceed with the ordering
 A source list is like a database of suppliers that can provide a specific
material. This list can contain suppliers that have been blocked or deemed
unfit by your company for future purchase.

4. PURCHASING INFO RECORDS

 A purchasing info record is a record of the purchasing related information for a
material that a vendor has to offer. Info record is specific to one material and
one vendor. Information like discounts, validity of price etc are maintained for a
material that is provided by that specific vendor.
 Serves as a source of information for Purchasing. The purchasing info record
(also referred to in abbreviated form as the "info record") contains information
on a specific material and a vendor supplying the material. For example, the
vendor's current pricing is stored in the info record.
MM Sub-modules list
 MM-CBP : Consumption-Based Planning
 MM-PUR : Purchasing
 MM-SRV : External Services
 MM-IM : Inventory Management
 MM-IV : Logistics Invoice Verification

 Some of the important tables in  Important Tcodes in MM module

material management module are  MM01
 MARA  MMBE
 MARC  Mm60
 MBEW  ME51N

 MVKE  ME54
 Me21n
 MLGN
 Me29n
 MVER