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 BOM’s 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.

SUPPIERS

CUSTOMER

RECIVING

DISTRIBTN

Purchasing

RawMaterialStorage

TransformationProcesses

In ProcessStorage

FinishGoods

Storage

orders

Process Flow

MM Integration

SD

PP

QM

PM

FI

AM

CO

PS

MM

Material Management

Sales & Distribution

Production Planning

Quality Management

Production Management

Financial Accounting

Asset Management

Controls

Project System

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.It allows credit memo to be processed.

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

Selection of

appropriate vendors

Management of

information

Optimizing time and quality for product

Difficulty in forecast accurate demand

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

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

• 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 LocationWarehouse Stock Location

• Vendor MasterContains 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

Appendix III – MM Terms Definition• Material Group

Grouping of material and services according to their characteristics.

• Material Master RecordData contains all the basic information required to manage a material.

• Release StrategyPlan 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 Purchasing info record – general data

EINE Purchasing info/organization record

MAKT Material description

MARA General material data

MARC Plant data for material

MARD Storage location data for material

MAST Material to BOM link

MBEW Material consumption

RKPF Document header

T156 Movement type

T024 Purchasing group