SAP Material Management – a Key to Material Logistics

Companies involved in manufacturing are highly dependent on the accuracy of material management, as it ensures the availability of the right product, in the right quantity and at the right time, thus, providing a non-stop performance of the production line.

Aiming to address the challenges of material management, SAP software developers created a dedicated module – SAP Material Management, to help Businesses organize and streamline all the related operations. Let’s learn how it works.

What is SAP Material Management (SAP MM)?

SAP Material Management is one of the core modules within the SAP system dedicated to procurement inventory management, and logistics – the essential components of a supply chain. SAP MM allows Businesses to optimize the supply chain by facilitating purchasing activities, material movement, stock movement, and more.

SAP MM is a beneficial tool for streamlining material movement and procurement processes within the supply chain. Let’s break it down into more specific functions:

1.    Material Master Data Management

Master data is essential information regarding key entities of production; it outlines all the components of a supply chain, their specifications, and their interactions. SAP MM creates a data hub with all the required material information regarding descriptions, measure units, stock status, procurement details, etc.

2.    Vendor Management

SAP MM offers tools for managing supplier-vendor relationships (selection of suppliers, contract negotiations, cost control, risk mitigation, and performance evaluation) and ensuring the quality and timeliness of delivered goods and services.

3.    Purchase Requisition

SAP MM offers all the tools for managing an entire procurement process – from its planning to actual payment. The framework facilitates all the purchase requisition, ensuring its adherence to external and internal regulations.

4.    Purchase Order

SAP MM provides tools to create purchase orders based on the purchase requisitions and procure the materials from vendors ensuring a streamlined procurement process, control over operations, visibility of all orders, etc.

5.    Goods Receipt

Inaccuracy of goods receipts leads to discrepancies in stock levels and financial mismanagement.

SAP  management solution facilitates the goods receipts, which benefits the accuracy and timeliness of inventory management, invoice verification, and payment processing.

6.    Invoice Verification

SAP MM allows managers to verify the accuracy of payments, matching the invoices against purchase orders and receipts.

Benefits of SAP Material Management

1.    Enhanced efficiency

Implementation of SAP products is always about maximizing the efficiency of the performance. SAP MM introduces automation to material planning and management, thus, reducing the manual input of data and related errors.

2.    Real-time insights

SAP software serves as a ‘know-it-all’ assistant, which provides Businesses with timely insights into the performance and management processes, thus allowing for data-driven decisions and risk management.

3.    Regulatory compliance

SAP MM helps businesses to maintain a sustainable development path and gain a competitive advantage in the industry.

Using the available tools, organizations can align their processes with regulatory compliances related to customs, trade, environmental impact, quality and safety, taxes, and code of conduct, and thus, demonstrate commitment to ethical Business practices (locally and globally).

4.    Increased productivity

As SAP MM and other SAP products introduce the automation of routine tasks the employees can concentrate on more challenging and demanding tasks, which require a better level of creativity and concentration.

7.    Integration

The basic features of SAP MM integration can also be extended with other modules like SAP Warehouse Management, SAP Supply Chain Management, SAP Sales and Distribution, etc. Apart from establishing the ease of manufacturing tracking, SAP MM can also complement other crucial functions like financial planning, quality management, etc.

The integration capabilities can only work if implemented with the help of professional companies, with a decent level of SAP-related experience. While there are many services on the market, choosing the best ones can be rather a challenge. It is recommended to make a list of candidates, and step-by-step check their profiles, till choosing the best one fitting the company’s demand and financial expectations.

For instance, among the top five SAP suppliers, there is always LeverX, a company with global coverage. According to the website information, LeverX is an acknowledged SAP Partner, with 20 years of experience, an extensive list of partnering industries, and an average score of reviews 4.8. Considering reviews and testimonials, the company is a reliable partner for further collaboration and achieving Business goals.

Concluding Lines

SAP MM is one of the multiple SAP modules that let businesses facilitate the performance of the supply chain, structure the procurement process, and introduce cost-saving practices. Its key benefits are:

• Comprehensive functionality, as it covers multiple aspects of the procurement process and supply chain performance.
• Integration, together with other SAP solutions, SAP MM, can complement a unified and digitized company’s structure.
• Regulatory compliance offers numerous practices to follow to maintain business sustainability.
• Efficiency, as the majority of data is automatically processed, eliminates the risks of manual data input.

SAP MM brings qualitative value to every company adopting it. For more details, contact the companies involved in SAP implementation, like LeverX, for further guidance and assistance.