SAP MM or the material management module is the part of logistics and supply chain management module, and therefore it is integrated to a number of related modules of SAP. It supports the functionalities of material management, planning, control, goods receiving, inventory and purchasing. It conducts the functionalities such as final payment and invoice verification after material acquisition.
Features of SAP MM Module
There are many SAP MM Module features but below are some major features of it.
Purchasing: Purchasing is the main part of SAP MM module. Purchasing helps the organization to acquire goods and services on time, and the module is fully integrated to FI, PS, PP, SD and CO. To know about purchase requisition one should be aware of the master data.
There are two groups defined in the module: Material group and purchasing group. The material group contains the services and items which have same attributes and the material can be assigned to a particular material group. The purchasing group has the purchasing value key which can be used to define the reminder days and the tolerance limits. The shipping instructions and the related order acknowledgement required to purchase the material is defined as the purchasing value key. The material groups can be used to restrict the scope of analysis and to search the material master records.
The material management procurement cycle for a material takes place in the following stages: determination of requirements, source determination, vendor selection based on the comparison of quotations, purchase order processing, purchase order follow ups, goods receiving, inventory management, invoice generation and verification.
Determination of Requirements: First the material should be identified through the user department for material planning and control sub modules.
Source Determination: The purchase component helps to get the potential source from where the company will get the orders. The supply is mainly based on past orders and long term purchase agreements and to quicken the process, an electronically designed RFQ can be made.
Vendor Selection Based on The Quotations: It is one of the key SAP MM module features. A comparison of quotation of various vendors can be made to find out the vendors with similar pricing options and to select the best option. After making the vendor selection - the rejection of other letters can be made.
Processing Purchase Order: The purchase order can be processed after vendor selection and the information related to the purchase order can be obtained from the system. An automatic PO can be generated by the system. The PO is supported by the vendor scheduling agreements and contract - including the long term agreements.
PO Follow Ups: The system keeps a record of the reminders and automatically prints the reminders at defined time intervals. It also provides the latest status of the requisitions, quotations and POS. It is one of the important SAP MM module features.
Invoice Verification: The system takes care of the invoices and checks the invoices. The accounts payable clerk is informed about the amount and price variance. The accounts payable employee can ensure the data by checking the purchase order and goods receipt data. The process makes the data available to the user which can be easily audited and invoices can be generated and cleared on the time for payment.