Companies that manufacture products have to handle different a lot of departments. The material management steps include materials planning, control, inventory management, and invoice management. However, organizing all these tasks may require a lot of manpower and also software solutions. To make the task easier the companies prefer SAP MM software for a speedy process of work. SAP MM (Material Management) Module is an SAP ERP component that helps in organizing material management, inventory management, and warehouse management in the supply chain process. For a better understanding of this software, one can go for SAP MM Training for a better understanding.
SAP MM Process Flow
1. Determination of Requirements
You can identify materials requirements in both user departments and the materials planning and control section. This basically covers both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials is done by master records. Additionally, the order-point method, and forecasting on the basis of past usage are important aspects of the latter. You can enter purchase requisitions yourself, or can be generated automatically by the materials planning and control system.
2. Source Determination
The Purchasing component allows you to identify potential sources of supply based on past orders and existing longer-term purchase agreements. This however speeds up the process of creating requests for quotation. Which further can be sent to vendors electronically via SAP EDI.
3. Vendor Selection and Comparison of Quotations
The system is suitable for simulating pricing scenarios. Thus, it allows you to compare a number of different quotations. Also, rejection letters are sent automatically.
4. Purchase Order Processing
The Purchasing system develops information from the requisition and next the quotation helps you to create a purchase order. Going further with purchase requisitions, you can generate Pos yourself. Or at times make the system generate them automatically. It also supports vendor scheduling agreements and contracts. Moreover, the SAP System also supports longer-term purchase agreements.
5. Purchase Order Follow-Up
The system examines the reminder periods you have specified. And if it seems necessary it automatically prints reminders or expediters at predefined intervals. Besides, it also gives you an up-to-date status of all purchase requisitions, quotations, and purchase orders.
6. Goods Receiving and Inventory Management
Goods Receiving personnel can assure the receipt of goods simply by entering the Po number. However, by specifying permissible tolerances, buyers can limit over- and under-deliveries of ordering goods.
7. Invoice Verification
The system helps in the checking and matching of invoices. The accounts payable clerk is aware of quantity and price variances. As the system has access to PO and goods receipt data. This further speeds up the process of auditing and clearing invoices for present and future payments.
Benefits of SAP MM
With changing dynamics of customer demands and expectations, the efficiency of an organization relates to its ability to satisfy the market demands in the shortest time possible. To present a seamless delivery of products, the business requires maintaining the right stock at the right time. Owing to an efficient material management process helps prevent supply gaps and shortages of inventory and raw materials. Thus, improving the supply chain’s efficiency. SAP MM automates material management and procurement activities. However, it makes the entire process more competent.
Benefits of SAP MM module
- Makes better changes for overall inventory management
- Lowers and eliminates inventory losses
- Minimizes the time and labor spent on maintaining inventory
- Lowers material wastage by avoiding stocking obsolete or unwanted products
- Reduces labor costs and optimizes labor employment
- Less number of manufacturing cycle times
- Bring down the expenditure on storing unwanted materials
- Builds better product delivery time
- Magnifies the transparency of inventory management
CONCLUSION
One of the toughest challenges for organizations today is material management. SAP MM ensures organizations optimize better their supply chain, inventory, and warehouse management. They do this by providing complete control over the workforce, machines, and materials. Besides, to understand its workflow in a better manner, you can take SAP MM Training in Gurgaon. However, by implementing SAP MM, organizations efficiently manage their production line, supply chain, and logistics. Moreover, SAP MM is helping organizations in multiple ways for a better product delivery process.