SAP MM Details

2 min readJun 26, 2024

SAP Material Management (MM) is a comprehensive module within the SAP ERP (Enterprise Resource Planning) system that plays a crucial role in managing procurement and inventory processes for organizations.

Key functionalities of SAP MM:

Master Data Management:
Material Master: Stores detailed information about materials, including description, unit of measure, valuation class, etc.
Vendor Master: Contains data about suppliers, such as name, address, payment terms, and more.
Purchasing Info Record: Links materials to vendors and maintains relevant purchasing data like pricing and lead times.
Source List: Specifies approved vendors for specific materials.
Procurement Processes:
Purchase Requisition (PR): An internal request for materials or services.
Purchase Order (PO): A formal document sent to the vendor to order goods or services.
Goods Receipt (GR): Records the physical receipt of goods into the warehouse.
Invoice Verification (IR): Verifies the accuracy of the vendor’s invoice against the PO and GR.
Inventory Management:
Goods Movement: Tracks the movement of materials within the organization.
Physical Inventory: Periodically counts and reconciles physical stock with inventory records.
Stock Transfer: Transfers materials between storage locations.
Valuation and Account Determination:
Material Valuation: Determines the monetary value of materials based on different costing methods (e.g., standard cost, moving average).
Account Determination: Assigns the appropriate general ledger accounts for each material movement.
Additional Features:
Material Requirements Planning (MRP): Calculates the need for materials based on production plans and inventory levels.
Consumption-Based Planning: Forecasts future demand based on historical consumption data.
Special Procurement: Covers processes like subcontracting, consignment, and pipeline materials.
Reporting and Analysis:
Standard Reports: Provides numerous pre-built reports for analyzing procurement and inventory data.
Custom Reporting: Allows creation of custom reports to meet specific business needs.

Benefits of using SAP MM:

Streamlined procurement processes: Automates manual tasks, reducing errors and speeding up the procurement cycle.
Improved inventory control: Provides real-time visibility into stock levels, preventing stockouts and overstocks.
Cost reduction: Optimizes inventory levels and streamlines processes, leading to significant cost savings.
Increased efficiency: Automates repetitive tasks, freeing up staff to focus on strategic activities.
Better decision-making: Provides comprehensive data and reports for informed decision-making.