The document discusses material management and its components in SAP. It describes material management as managing the procurement, storage, and distribution of materials. The key components of material management in SAP are consumption-based planning, purchasing, external service management, inventory management, logistic invoice verification, and vendor evaluation. Material management helps reduce costs, minimize inventory loss, improve delivery times, and avoid material congestion through efficient procurement and use of materials. Implementation challenges include selecting vendors, managing information, optimizing production time and quality, and accurately forecasting demand.

1. Material Management Presented by : HARPAL SINGH MATERIAL MANAGEMENT - HSS

2. Content Introduction Why Material Management ??? Process Flow Material Management Integration Material Management Component Benefits of Material Management Implementation Challenges Q&A MATERIAL MANAGEMENT - HSS

3. Introduction SAP MM Module is one of the most important SAP Modules where MM stands for Materials Management , which includes Requisitions Purchase orders Goods receipts Accounts payable Inventory management BOM’s Master raw materials, finished goods etc MATERIAL MANAGEMENT - HSS

4. 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. MATERIAL MANAGEMENT - HSS

5. S U P P I E R S C U S T O M E R R E C I V I N G D I S T R I B T N Purchasing Raw Material Storage Transformation Processes In Process Storage Finish Goods Storage orders Process Flow MATERIAL MANAGEMENT - HSS

6. 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 - HARPAL

7. 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 MATERIAL MANAGEMENT - HSS

8. 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 MATERIAL MANAGEMENT - HSS

9. 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. MATERIAL MANAGEMENT - HSS

10. 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. MATERIAL MANAGEMENT - HSS

11. 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 MATERIAL MANAGEMENT - HSS

12. 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-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 MATERIAL MANAGEMENT - HSS

13. Vendor Evaluation :- The Vendor Evaluation component supports you in optimizing your procurement processes in the case of both materials and services. Task of SAP-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 MATERIAL MANAGEMENT - HSS

14. 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 MATERIAL MANAGEMENT - HSS

15. Implementation Challenges Selection of appropriate vendors Management of information Optimizing time and quality for product Difficulty in forecast accurate demand MATERIAL MANAGEMENT - HSS

16. Q&A MATERIAL MANAGEMENT - HSS

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