Materials Management

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Materials Management (MM) includes the business processes used for purchasing, material requirement planning, goods receipt, and inventory management. Materials Management has a strong connection with SD ” for instance, your company's MM department will be dealing with other companies'SD departments and vice versa.

Your company's structure also needs to be represented in SAP R/3 for MM. Figure A.3 shows a typical way you might represent your purchasing organization.

Figure A.3. One way a complex purchasing structure could be represented in SAP R/3.

As with SD, the top level is Client, which is normally used to represent your head office. Within Client , your organization can be subdivided into Company Code and then Purchasing Group. Purchasing Group is sometimes used to identify individual purchasing agents . You can use a matrix if you have central groups responsible for the purchase of a certain class of materials. Again, your company might not need to use all these divisions or might use them differently.

The flow chart in Figure A.4 shows a typical sequence for buying, assembling, and selling as an example of how MM works.

Figure A.4. A typical flow in Materials Management.

CAUTION

Availability

Just because you see an item on the shelf doesn't mean it's available. It could have a material reservation against it. If you really want to know what's available, check SAP R/3, not the shelf.

MRP-Materials Requirements Planning can generate proposed orders based on order point, order quantity, Sales Orders from SD, reservations on existing stock, and so on.

The main documents used in MM are purchase requisitions, purchase orders, goods transfers, goods receipts, and goods issues. The main master files used in MM are Material Master, Inventory Master, and Vendor Master.

Purchasing passes information to Controlling (CO) so that CO can assign costs to the appropriate cost center. Purchasing shares the Vendor Master with Financial Accounting (FI). Purchasing takes information from SD to perform Material Requirements Planning.

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