SAP MM module: What is, Material Management Process Flow

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.

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.

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

Master Data and
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)

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.

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.