SAP is the abbreviated term for Systems, Applications, and Products. The SAP ERP (Enterprise Resource Planning) software package was first developed by SAP AG in Germany and is comprised of numerous modules that allow businesses to deliver excellent customer satisfaction while taking full control of daily operations to maximize results.
Among the many modules is the SAP MM (Materials Management) module, which is part of the logistics area and is often integrated into production and manufacturing facilities that utilize SAP. The SAP MM module handles the procurement and inventory functions of organizations that engage in large volumes of purchasing by giving them hands-on control of inventory management, batch management, purchasing, client categorization, valuation, invoice verification and procurement process, just to name a few. In a nutshell, if you are considering a career path as a SAP MM consultant the prospects are basically endless.
With the use of SAP ERP, businesses in essence automate the input and output of information across specific sections of their organization. For those concerned about materials management, the SAP MM module isintegrated with other modules such as Sales and Distribution (SD), Warehouse Management (WM), Production Planning (PP), Quality Management (QM), Finance (FI) and Controlling (CO) so external and internal aspects are factored into each decision stage. It is therefore imperative that a deep understanding of how these modules work alongside the SAP MM module is fully in place to generate accurate input and output information in a quick and reliable manner. For this reason beginners and even seasoned SAP MM consultants must have a full understanding of SAP financial accounting and SAP warehouse training. The basic aspects of the module it outlined in the next paragraphs.
The Concept of Materials Planning
Before going through the phases of the process flow, the user must fully understand the inventory approach that will be used in the module. The Materials Requirements Planning (MRP) and Consumption Based Planning (CBP) are the two types of materials planning procedures in the module. While the former is guided by a procurement proposal only when the intended inventory is triggered by shortage, the latter is based on forecasting by taking into consideration past usage and how this previous consumption can affect future consumption. Both aspects of inventory control are essentially based on the model that the business decides to adopt and form an important part of the MM Process Flow which will be discussed in the next paragraph.
The Phases of the Process Flow in SAP MM
The process flow in the module takes into consideration the entire cycle that a material of service must follow from the instant it enters the system to the moment it is delivered to the intended party and the transaction is complete. There are essentially seven phases in the MM process flow and these are as follows:
1. Determination of Requirements: As mentioned previously, materials planning can either be MRP or CBP and these help to create a better perspective to initiate the need to purchase material.
2. Source Determination: Essentially, knowing where the business intends to source its products for production or service delivery is paramount to ensure uninterrupted operations. There may be existing long-term purchase agreements with suppliers, or depending on the shifts in the economic landscape alternative considerations regarding the sourcing of materials from a different entity to guarantee reduced overheads and better quality are possible. Whatever the approach, this information must be entered into the system so that requests for quotation (RFQs) are generated and the company is able to make an informed decision based on its intended needs.
3. Vendor Selection and Comparison of Quotations: This feature in the MM module puts the user in the driver seat of selecting and rejecting quotes based on specific criteria and needs. The user can also simulate price scenarios and therefore be able to accurately choose the best prices according to tailored input data.
4. Purchase Order Processing: Once the ideal quotes have been selected the next phase is to generate a purchase order (Po). The module has been developed to automatically generate purchase orders by using the information from requisition and quotation to do so and sending these to the suppliers in real time. Total autonomy to generate the order manually is also supported.
5. Purchase Order Follow-up: Purchase orders that have been sent to suppliers can be monitored automatically by reminder periods that the user establishes. This makes it possible to have a better idea of what is happening with the purchase orders the company sent to suppliers. Additionally, it is also possible to check quotations and the purchase requisitions.
6. Goods Receiving and Inventory Management: The supplier that delivers goods according to the purchase order in one step closer to closing the transaction that the company initiated. These goods can be monitored through established parameters in the system and their receipt confirmed based on the number of the purchase order.
7. Invoice Verification: Good that are requested by a purchase order should match the invoice generated to avoid deviations in quantities and monies spent. This information on invoices are checked in the system and delivered to the assigned personnel for verification before the transaction is closed.
To get a better understanding of the phases above and essentially of all that is involved at step one you may want to cover the essentials of the course SAP Materials Management – Purchasing and Material Master for Beginners to Intermediate.
SAP MM Consultant 101
As the main module in the SAP ERP, the SAP MM module is widely used by manufacturing, automotive, wholesaling, retail, pharmaceuticals and other major organizations involved in import and export. This simply means that demand is high for the professionals who have the necessary expertise to analyze and configure the software according to the business’ model to follow the seven-step phase discussed above and guarantee its seamless integration with other modules.
Coupled with the knowledge areas highlighted above, in-depth know-how of SAP Sales and Distribution as you can learn in this course is a major advantage when citing experience in job interviews. Companies that find their desired SAP MM professional offer attractive salary packages in the range of $ 105,000 to $157,000 or above for their expertise, according to Indeed National Salary Trend.