What is SAP MM Module?

SAP MM (Material Management) Module is a SAP ERP component that

helps organizations with material management, inventory management, and
warehouse management in the supply chain process. It is a part of SAP
ECC’s logistics functions which consists of several components and sub-
components. The most prominent and widely used components are Master
Data, Purchasing, and Inventory.

SAP MM Module
All of these components have their subcomponents that are essential in
specific business processes, and all of the processes are executed by using
transactions in SAP MM process flow.

Transaction (in SAP) means processing of certain information in order to

complete business process requirement. For example, if you have purchased
10 pieces of litter buckets, you can perform particular transaction code (t-
code) that will reflect those changes in SAP. Most of the business processes
involve multiple SAP transactions to be accomplished and are spread over
one, two or more modules.

Now in this SAP MM basics tutorial, let’s briefly talk about the various sub-
modules in SAP Materials Management:
SAP MM – Master Data
Data stored in SAP R/3 is categorized as

1. Master Data and

2. Transactional Data.

Master data in SAP materials management is the core data that is used as a
base for any transaction. If you are producing, transferring stock, selling,
purchasing, doing a physical inventory, whatever your activity may be, it
requires certain master data to be maintained.

Example of Master Data

 Material master data

 Customer master data
 Vendor master data
 Pricing/conditions master data
 Warehouse management master data (storage bin master data)

Learn more about Master Data

here

Purchasing
Purchasing is a component of SAP MM module, and its process can be
roughly depicted in below diagram.

MRP (material resource planning) creates procurement proposal and later

gets converted into Purchase Requisition. Next step is assigning a source to
Purchase Requisition, and release of Purchase Requisition. The PR gets
converted to Purchase Order, and upon goods receipt, an invoice receipt can
be done to complete the purchasing process. Additionally, payment is
processed (in FI module).

Learn more about Purchasing here

Inventory Management
Inventory management is used to manage the inventory of the goods. It is
based on several key processes like

 Definition of movement types

 Reservations
 Goods issue
 Goods receipt

There are a number of functions and transactions used in the Inventory

management processes.

Learn more about Inventory Management here

Pricing Procedure
Pricing procedure in MM module is a way to determine prices in purchasing
documents. It gives us functionality to assign different calculation types for
different needs. Defining a pricing procedure can be done by creating an
access sequence, and assigning it to condition types. Access sequence tells
the system where to look for the condition values.

Learn more about Pricing Procedure here

Features of SAP MM
 It can deal with both material management and inventory management.
 Ensures no shortage of material in the supply chain process.
  Helps to speed up material management and procurement activities.
 It helps to accelerate productivity and reduce costs while maintaining
accommodations for frequent changes in a business environment.
 It helps organizations to deal with various business aspects like
Procurement, Master data, Material valuation, Inventory management,
Invoice verification, Material requirement planning, etc.

Summary
 SAP MM meaning: SAP Material Management module is a SAP ERP
component that helps organizations with material management,
inventory management, and warehouse management in the supply
chain process.
 SAP MM full form is SAP Material Management.
 Transaction in SAP means processing of certain information in order to
complete business process requirement.
 Master data is the core data that is used as a base for any transaction.
 Purchasing is a component of SAP MM module, and its process can be
roughly depicted in below diagram.
 Inventory management is used to manage the inventory of the goods.
 Pricing procedure for MM module in SAP is a way to determine prices in
purchasing documents.

What is Master Data?

Data stored in SAP R/3 is categorized as

1. Master Data and

2. Transactional Data.

Master data is the core data that is used as a base for any transaction.
If you are producing, transferring stock, selling, purchasing, doing physical
inventory, whatever your activity may be, it requires certain master data to be
maintained.

Example of Master Data

 Material master data

 Customer master data
 Vendor master data
 Pricing/conditions master data
 Warehouse management master data (storage bin master data)

The ones we will focus in MM module are material master and purchase info
record.

Material Master: What you should know about material master?

Material in SAP is a logical representation of certain goods or service that is
an object of production, sales, purchasing, inventory management etc. It can
be a car, a car part, gasoline, transportation service or consulting service, for
example.

InInIn All the information for all materials on their potential use and
characteristics in SAP are called material master. This is considered to be the
most important master data in SAP (there are also customer master data,
vendor master data, conditions/pricing master data etc), and all the
processing of the materials are influenced by material master. That is why it’s
crucial to have a precise and well maintained material master.

In order to be confident in your actions you need to understand material

master views and its implications on processes in other modules, business
transactions and a few more helpful information like tables that store material
master data, transactions for mass material maintenance (for changing certain
characteristics for a large number of materials at once).

Material types
In SAP ERP, every material has a characteristic called “material type” which is
used throughout the system for various purposes.
Why is it essential to differentiate between material types and
what does that characteristic represent?
1. It can represent a type of origin and usage – like a finished product
(produced goods ready for sale), semifinished product (used as a part of
a finished product), trading goods (for resale), raw materials (used for
production of semifinished and finished products) etc. These are some
of the predefined SAP material types among others like food,
beverages, service and many others.
2. We can define our custom material types if any of standard ones
doesn’t fulfill our need.

Most used material types in standard SAP installation

What can be configured on material type level (possible

differences between types)?
1. Material master views: It defines the views associated with a Material
Type. For example, if we have a material type “FERT” assigned to our
material Product 1000 – we don’t want to have Purchasing based views
for that material because we don’t need to purchase our own product –
it is configured on material type level.
2. Default price control: we can set this control to standard or moving
average price (covered later in detail), but this can be changed in
material master to override the default settings.
3. Default Item category group: used to determine item category in sales
documents. It can be changed in material master to override the default
settings.
4. internal/external purchase orders, special material types indicators, and
few more.
 Offered material types in MM01 transaction

So material type is assigned to materials that have the same basic settings for
material master views, price control, item category group and few other.
Material Type can be assigned during the creation of the material in t-
code MM01 (covered in detail later)

Where can we find a complete list of materials with their

respective material type?
There are numerous transactions for this. The raw data itself is stored in
MARA table

(you can view table contents with t-code SE16 or SE16N – newest version of
the transaction), but in some systems these t-codes aren’t allowed for a
standard user. In such cases, we can easily acquire the list with t-
code MM60 (Material list). MM60 is used particularly often as it displays a lot
of basic material characteristics.

Selection screen – you can enter only the material number:

 Selection screen for MM60 transaction

We can see that material 10410446 in plant AR01 is of type FERT (finished
product).

MM60 report results with the export button highlighted

Using the toolbar button highlighted on screen, we can export the list of
materials we have selected on screen.

Material group
Another characteristic SAP material is assigned during it’s creation is
“material group”, which can represent a group or subgroup of materials based
on certain criteria.

Which criteria can be used to create material groups?

Any criteria that suit your needs for reporting purposes is right for your
system. You may group materials by the type of raw material used to produce
it (different kinds of plastics used in the production process), or you can divide
all services into consulting services (with different materials for SAP
consulting, IT consulting, financial consulting etc), transportation services
(internal transport, international transport), you can also group by production
technique (materials created by welding, materials created by extrusion,
materials created by injection etc). Grouping depends mainly on the approach
your management chooses as appropriate, and it’s mainly done during the
implementation, rarely changes in a productive environment.

Assigned material group in material master

In addition, there is a material hierarchy (used mostly in sales & distribution)

that can also be used for grouping, but it’s defined almost always according to
sales needs as it is used for defining sales conditions (standard discounts for
customers, additional discounts, special offers).

On the other hand, material group is mainly used in PP and MM module.

If you need to display material groups for multiple materials, you can use
already mentioned t-code MM60. You just need to select more materials in
selection criteria.

Material group in report MM60

Material group is easily subject to mass maintenance via

transaction MM17. More on that in the material master editing section.