Material Management

Present by :Ravi Jain

Content
Introduction Why Material Management ??? Process Flow Material Management Integration Material Management Component Benefits of Material Management Implementation Challenges Q&A Thank you !!! Appendix A - MM Definition Appendix B Material Type Appendix C MM Terms & Definition Appendix D Important MM Tables

Introduction
SAP MM Module is one of the most important SAP Modules where MM stands for Materials Management - underpins the supply chain, including Requisitions Purchase orders Goods receipts Accounts payable Inventory management BOMs Master raw materials, finished goods etc

Why Need MM ???

amount spend on material is higher than other inputs material offer considerable scope for reducing cost and improving profit material add value to the product quality of end product depend on material efficiency of any organization depend upon the availability of right material, in right quantity at right time and at right place.

Process Flow
orders S U P P I E R S Purchasing Finish Goods Storage

R E C I V I N G

Raw Material Storage Transformation Processes

In Process Storage

D I S T R I B T N

C U S T O M E R

MM Integration
SD PP QM MM FI AM Material Management CO PS Controls Project System PM Sales & Distribution Production Planning Quality Management Production Management Financial Accounting Asset Management

Material Management Component

Consumption based planning (MM-CBP) Purchasing (MM-PUR) External Service Management (MM- SRV) Inventory Management (MM-IM) Logistic Invoice Verification (MM - IV) Vendor Evaluation Management

Consumption based planning

CBP is based on the past consumption values and uses the forecast or other statistical procedure to determine future requirements. It gets trigger when stock level falls below pre-defined reorder points. Procedure available for MRP :Reorder point procedure Forecast based planning Time-phased materials planning

Purchasing
Purchasing is a component of Material Management. Task of Purchasing as following :External procurement of material & services Determination of possible source of supply Monitoring deliveries from and payment to vendors. Integration with :SD, FI & CO

External Service Management

SRV is a MM component. It supports the complete cycle of bid invitation, award / order placement & acceptance of services. Task of Purchasing as following :External procurement of material & services Determination of possible source of supply Monitoring deliveries from and payment to vendors. Integration with :- PM & PS

Inventory Management
Task of SAP-IM as following :Management of material stocks on a
quantity and value basis Planning, entry and documentation of all goods movement Carrying out the physical inventory

Integration with :- SD, PP, QM & PM

Logistic Invoice Verification :It is a component of MM. It is in the logistic invoice verification that incoming invoice are verified in terms of content, price and arithmetic.

Task of SAP-IV-LIV as following :It completes material procurement process,

which start with purchase requisition & result in goods receipts. It allows invoices, that do not generate in material procurement like expenses to be processed. t allows credit memo to be processed. I

Integration with :- FI & CO

Vendor Evaluation :The Vendor Evaluation component supports you in optimizing your procurement processes in the case of both materials and services

Task of SAP-IV-LIV as following :Helps you to select source of supply & monitoring of existing supply relationships Vendor reliability

Criteria :- Price / Quantity / Delivery /

General Service Support

Integration with :- QM & MM

Benefits of MM
Material cost can be lowered down Controlling of indirect cost Risk of Inventory loss minimized Reduction in loss of time of direct labor Control of manufacturing cycle Material congestion in storage places avoided Improvement in delivery of the product

Implementation Challenges
Optimizing time and quality for product Selection of appropriate vendors Difficulty in forecast accurate demand

Management of information

Q&A
I hate it.

Thank you !!!

Appendix I MM Definition
Material management is the grouping of management functions supporting the complete cycle of material flow, from the purchase and the internal control of production material to the planning and control of work in process to the warehouse shipping and distribution of the finished product. Thomas f Wallance.

Material management is the management of the flow of materials into an organization to the point, where those material are converted into firm's end products.

Appendix II Material Type

DIEN FERT FHMI HALB HAWA HIBE NLAG ROH UNBH VERP WETT ---------------------------------Services Finished Product Production Resources / tools Semi finished Products Trading Tools Operating Supplies Non-stock material Row Material Non Valuated Material Packaging material Competitive product

http://www.sap-img.com/materials/sap-mm-configuration-tips.htm

Appendix III MM Terms Definition

Material Master Record
Data record contain all the basic information required to manage a material.

Material Requirement Planning

Term for requirement planning that take into account and plan every future requirement during the creation of order proposal.

Plant
An organization unit for dividing enterprise according to production, procurement, maintenance & material planning.

Storage Location
Warehouse Stock Location

Vendor Master
Contains details about all the vendors within a company.

Goods Receipts
Term for inventory management denoting a physical inward movement of goods or material.

Appendix III MM Terms Definition

Material Group
Grouping of material and services according to their characteristics.

Material Master Record

Data contains all the basic information required to manage a material.

Release Strategy
Plan define the release code with which a purchase requisition item, a complete purchase requisition or a complete external purchasing document must be release.

Appendix IV MM Tables
EINA EINE MAKT MARA Purchasing info record general data Purchasing info/organization record Material description General material data

MARC Plant data for material MARD Storage location data for material MAST RKPF T156 T024 Material to BOM link Document header Movement type Purchasing group MBEW Material consumption