Fundamental of SAP Material Management (MM)

What Is Material Management?

  Material Management is a process that guarantees that there are no material shortages or loopholes in the organization’s supply chain. With SAP MM, organizations can speed up the procurement and material management processes, ensuring smooth functioning while saving time and costs. SAP MM also manages an organization’s materials, products, services, and resources to increase productivity and reduce costs. SAP MM is adaptable to the frequent changes that occur in any company setting. SAP MM also helps companies by helping them deal with:

• Account determination
•  Procurement process
•  Inventory management
•  Invoice verification
•  Master data
•  Material Requirement Planning (MRP).

Components of Organizational Structure in SAP MM

  There are other components of organizational structure as well, such as top-level organization entity known as client, and the companies (company is a legal entity within a client). Other structures in other different modules, such as the Sales Module, have a sales organization. Here, we are only talking about organizational structures within SAP MM.

 

Explaining Components of Organizational Structure

  Following explains the five organizational components of SAP MM within an organization’s structure: Plant: A company’s organizational unit where operations are carried out. A plant will generate products and provide products for the business.  Purchasing Organizations: This division is to make material and service purchases and bargaining terms of purchase with suppliers.  Storage locations: This place physically stores stock inside the plant. It can be semifinished goods, raw materials, and finished goods.  Assessment: Assessment is a technique for allocating internal costs. It allows the costs of a sender cost center to be distributed to recipient CO items (such as orders and other cost centers). It does so by using an assessment cost element and the keys provided by the user.  Purchasing groups: This is a team of buyers who handle various purchasing activities.