This time I want to re-write from many sources about Material Management Module in SAP. Caused by my short term (and long term) memory doesn’t work well, so I decided to copy and paste some tutorials about MM Module here.

What is SAP MM Module?

SAP MM Module is a part of logistics and it helps end to end procurements and logistics business process. Main features of this module are requisitions, purchase orders, goods receipt, accounts payable, inventory management, BOM’s and master raw material, finished goods, etc.

Requisitions in SAP MM module is a document created for purchase of goods or services, it is sent to procurement office for the issuance of purchase orders. Requisitions exceeding certain amount need vendor verification in SAP MM module. There are two ways of placing requisition either through SAPGUI or SAP web.

Purchase orders are legal document issued as commitment to the vendor to supply mentioned material in the specified quantity along with shipping details and specification. The authorized vendors list is displayed while creating purchase order as per material and plant of the organization.

Goods receipt in SAP MM module is made against the purchase order issued to the vendor. The goods receipt affects warehouse, inventory management, and FI and CO modules of SAP.

Accounts payable component of SAP MM module handles accounting data of all vendors by recording the transaction of goods. Deliveries and invoices are managed according to vendors and this component is an integral part of sales management and cash management, it keeps them updated by making automatic postings of all the transactions. Inventory management helps the user in managing inventory as per items purchased, manufactured, sold and kept in stock. It provides optimum support for business processes and handles creation of orders, delivery notes and outgoing invoices. It also automatically updates price, create sales units and calculating gross profit.

Taken from http://www.erpchronicle.com/sap-mm-module.htm

According to this site, procure to pay business process associated with SAP MM module can be described as below (click to enlarge image):

In master record, there are two kinds of record that needed: material and vendor master.

Material master:

The material master contains information on all the materials that a company procures or produces, stores, and sells. It is the company’s central source for retrieving material-specific data. This information is stored in individual material master records. Source.

Vendor master:

Data in vendor master records controls how transaction data is posted and processed for a vendor. The vendor master record also contains all the data you require to do business with your vendors.

The master record is used not only in Accounting but also in Materials Management. By storing vendor master data centrally and sharing it throughout your organization, you only need to enter it once. You can prevent inconsistencies in master data by maintaining it centrally. If one of your vendors changes their address, you only have to enter this change once, and your accounting and purchasing departments will always have up-to-date information.

A vendor master record contains:

• Vendor’s name, address, language, and phone numbers

• Tax numbers

• Bank details

• Account control data like the number of the G/L reconciliation account for the vendor account

• Payment methods and terms of payment set up with the vendor

• Purchasing data

If you implement Materials Management(MM), you will need purchasing data. For more information on this, see the documentation for Materials Management. In Materials Management, vendors are represented as suppliers. Source.

-To be continued-