SAP Material Management (SAP MM) is a kind of SAP ERP module that benefits organizations in warehouse, material, and inventory management. The main use of SAP MM is in the resource planning of components in the supply chain process. Many organizations use it as a part of the logistic functions of a much larger SAP Enterprise Central Component. Many of the sub-components of the SAP ECC including purchasing, master data, and inventory runs through the transaction process in the SAP MM execution. In 2022, the demand for the supply chain technical skillset and professionals is on the higher side. Therefore, there is an increase in the set-up of institutes. Many of the supply chain professionals are opting for SAP MM Training in Gurgaon to increase their proficiency level and get better prospects. Broaden your career prospects by learning SAP MM.
Read about the types of SAP MM from the subsections below:
Types of SAP MM Procurement
It is an asset that elevates supply chain management and helps in the adequate delivery of services. Now, before moving toward the other advantages of the SAP MM, it is important to glance over the types of SAP. There are essentially two types of SAP Material Management-Basic Procurement and Special Procurement.
Basic Procurement is the process of purchasing adequate materials at the correct time at a given time and at the minimum price possible. It is a primarily systematic way of filling in the inventory using an economical and planned way. The process generally involves three essential steps-
- Collecting Information: Purchasing correct materials at a nominal cost involves proper research about the material and the required quantity. Thus, based on the research, a proper touch base with the suppliers can be established. The module then specifies proper communication to the right suppliers and specifies the correct amount in advance.
- Contacting the Suppliers: Negotiation is an important process in acquiring the materials. Being in regular touch with the suppliers and ensuring that they are supplying all the materials at the right time is a sound management practice.
- Rating of Services: After utilizing all materials, taking feedback from the market and from the organization is necessary. Feedback also makes it easier to rate the products and review the services based on their performance. Now, based on their feedback and rating, repeat orders of certain materials can be made. On the flip side, if the feedback on the materials is not correct, the module can proceed to contact new suppliers.
The process of special procurement is used for the acquisition of unique and special materials. The flow of these materials generally does not go from vendor to organization. For example, sometimes the stocks are delivered by the vendor to the customer of the customer. In this scenario of third-party transactions, the process of special procurement is used. Look at the pointers to know about these special materials-
- Consignment Stocks- These are the kind of materials that which seller has to purchase from the vendor. However, the materials generally stay on the store premises. The organization can acquire possession of the materials after the payment.
- Third-Party Processing- In this situation, the organization may not want to acquire materials but want to deliver them to a third party as a service. So, the vendor delivers the materials to the customer of the customer.
- Pipeline Handling- In this process, the stocks get to the customer via a pipeline. For example, in spite of placing an order and paying the amount, the stocks remain in the plants of the vendor. The seller then waits for the customer to raise demand for the materials. Meeting the demand, the seller arranges for the transfer of the materials from the vendor to the customer.
Proceed forwards and read some of the plus points of SAP MM.
Advantages of SAP MM
It is a methodology for managing the core resources of the organization and is an innovative technology to streamline all the processes in this domain. There are other multi-faceted uses of the SAP MM module as described below:
- To meet consumer demands, it is important to maintain an optimum level of stocks at all times. It ensures that the organization is going as per the market standards and delivery of services in the shortest time possible. SAP MM cuts down the supply gaps and facilitates a regular delivery of stocks and improves efficiency.
- It automates a lot of repetitive processes, further improving the delivery time. Furthermore, the module automates a lot of procurement activities, which benefits the vendors.
- The main application area of the module is in managing the inventory of the organization. It does that efficiently and brings down the shortages in the inventory and the raw materials to a minimum.
- It reduces the need for labor. Since SAP MM automates procurement and inventory processes and computerizes the majority of operations, the need for manual power decreases significantly. It contributes to the time efficiency of the module and reduces the need for manpower to maintain the inventory.
- To improve the ROI of the organization, the wastage of the materials needs to minimize. Therefore, SAP MM ensures that the inventory is stocking only those raw materials that are essential in the market. It further allows the companies to analyze those materials that have become obsolete and outdated in the market.
- Another thing SAP MM adds to the management process is transparency. Maintaining proper data pertinent to the raw materials and logistics ensures that it is easy to maintain a track record of influx and outflux of resources. It improves transparency in inventory management and in the manufacturing department.
SAP MM module is a kind of ERP component provided by SAP that ensures proper handling of inventory, warehouse, and materials. It entails both kinds of procurements namely: basic and special procurement. Proper planning and monitoring of resources and materials reduce the delivery time and introduce better transparency in the management process. The consultants earn a very high salary after obtaining sufficient experience and handling complex projects. This is a field of continuous learning and high prospects. Therefore, evaluate and then elevate your knowledge level with the help of SAP MM Training and acquire a highly rewarding career. It is also a very enjoyable career since you will directly ensure the satisfaction of the customers and the growth of the company.