SAP MM module is a part of logistics and it helps in managing 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.
Three types of bill of material is supported by SAP MM module, these are production bill of material which describes components used in making the finished product or hour's of labor required for making the product. Sales bill of material describes finished product which is ready to be sold and third is assembled bill of material which also describes finished product ready to be sold, the difference between sales BOM and assembled BOM is that sales bill contains description of finished product as well as its components while assembled BOM contains only one single entry of finished product.
Material master or finished product master is integrated with all the sub modules of SAP logistics including SAP MM. The single database of SAP supports easy data access, storage and retrieval. The master is required for purposes like purchasing for ordering, inventory management for goods movement postings and physical inventory, invoice verification for postings, sales order processing and for material requirement planning, work scheduling and scheduling.
SAP MM module is integrated with other SAP modules like FI, information related to vendors and purchasing details are directly updated and retrieved, SD or sales and distribution module also interacts with SAP MM via bill of material and invoices, SAP plant maintenance controls the activities related to plant management, maintenance and material required for running them smoothly, PPC or production planning and control module of SAP and project management system also interact in real time with MM module for updated information and proper functioning.