SAP MM

SAP is an enterprise resource planning software that was

basically designed to manage resources, information and
activities that are required to complete business processes such
as procurement and managing orders, billing of orders and
management of human resources, INVENTORY MANAGEMENT.
SAP applications work with real-time data. It has the ability to be
configured according to the needs of the business. It allows a
business to make rapid changes in its requirements through a
common set of programs. This tutorial adopts a step-by-step
approach to acquaint the readers with the SAP MM environment
and how to make good use of its features. It will also help
learners to perform procurement of stock materials in SAP.
Audience
This tutorial has been designed for beginners without prior
exposure to materials management. With the customer demands
changing rapidly, this tutorial will be especially useful for those
who want to learn how to manage the supply chain management
side of the business using SAP so that market demands can be
met in the shortest possible time.
Prerequisites
A basic knowledge of ERP concepts will help you in
understanding the concepts of SAP Material Management
System described in this tutorial.
 SAP MM OVERVIEW

SAP ERP (Enterprise Resource Planning) is a commercial

software that integrates all the information in a single software,
considering various factors such as time and cost. Organizations
can easily meet their business demands with the help of
SAP.PROFIT

SAP Business Process

SAP MM is the short form for SAP Material Management system.

The roles of SAP MM in a business process are as follows −
 A business process in SAP is termed as a “module”.
 SAP MM is a part of logistics functions and it helps in
managing the procurement activities of an organization.
 It supports all aspects of material management (planning,
control, etc.).
 It is the backbone of logistics that incorporates modules such
as Sales and Distribution, Production Planning, Plant
Maintenance, Project Systems, and Warehouse
Management.
Features of SAP MM
The features of a SAP MM system are as follows −
 SAP MM is one of the modules of SAP that deals with
material management and inventory management.
 Material Management as a process ensures no shortage of
materials or any gaps in the supply chain process of the
organization. SAP MM speeds up the procurement and
material management activities, making the business run
smoothly with complete time and cost efficiency.
 It deals with managing the materials (products and/or
services) and resources of an organization with the aim of
accelerating productivity and reducing costs. At the same
time, SAP MM is quite versatile to accommodate changes
that are frequent in any business environment.5 TO 8
 It deals with the Procurement Process, Master Data (Material
& Vendor Master), Account Determination & Valuation of
Material, Inventory Management, Invoice Verification,
Material Requirement Planning, etc.
 ASAP METHOLODOGY
This document will help in getting basic understanding on ASAP
Methodology.
We’ll discuss below points:
1- What is ASAP Methodology?
2- Phases of ASAP Methodology
3- Brief explanation of each phase
1- What is ASAP Methodology?
ASAP stands for Accelerated SAP.
 Its purpose is to help design SAP implementation in the
most efficient manner possible.
 Its goal is to effectively optimize time, people, quality and
other resources, using a proven methodology to
implementation.
1- Phase of ASAP Methodology
ASAP focuses on tools and training, wrapped up in a five-phase
process oriented road map for guiding implementation.
The road map is composed of five well-known consecutive
phases,
• Phase 1 Project Preparation
• Phase 2 Business Blueprint
• Phase 3 Realization
• Phase 4 Final Preparation
• Phase 5 Go-Live and support
Support 6
 Brief explanation of each phase
ASAP Methodology – Phase 1 : Project Preparation
Phase-1 initiates with a retrieval of information and resources. It
is an important time to assemble the necessary components for
the implementation. Some important milestones that need to be
accomplished for phase 1 include
• Obtaining senior-level management/stakeholder support
• Identifying clear project objectives
• Architect an efficient decision-making process
• Creating an environment suitable for change and re-
engineering
• Building a qualified and capable project team.
ASAP Methodology – Phase 2- Business Blueprint
SAP has defined a business blueprint phase to help extract
pertinent information about your company that is necessary for
implementation. These blueprints are in the form of
questionnaires that are designed to probe for information that
uncovers how your company does business. As such, they also
serve to document the implementation.
Each business blueprint document essentially outlines your future
business processes and business requirements. The kinds of
questions asked are germane to the particular business function,
as seen in the following sample questions:
1) 1) What information do you capture on a purchase order?
2) 2) What information is required to complete a purchase order?
 ASAP Methodology – Phase- 3 – Realization
With the completion of the business in phase 2, “functional”
experts are now ready to begin configuring SAP.
The Realization phase is broken in to two parts.
1) 1) Your SAP consulting team helps you configure your baseline
system, called the baseline configuration.
1) 2) Your implementation project team fine-tunes that system to
meet all your business and process requirements as part of the
fine tuning configuration.
The initial configuration completed during the base line
configuration is based on the information that you provided in
your blueprint document. The remaining approximately 20% of
your configuration that was not tackled during the baseline
configuration is completed during the fine tuning configuration.
Fine tuning usually deals with the exceptions that are not covered
in baseline configuration. This final bit of tweaking represents the
work necessary to fit your special needs.
Configuration Testing-
With the help of your SAP consulting team, you segregate your
business processes into cycles of related business flows. The
cycles serve as independent units that enable you to test specific
parts of the business process. You can also work through
configuring the SAP implementation guide (IMG). A tool used to
assist you in configuring your SAP system in a step by step
manner.
Knowledge Transfer-
As the configuration phase comes to a close, it becomes
necessary for the Project team to be self-sufficient in their
knowledge of the configuration of your SAP system.
Knowledge transfer to the configuration team tasked with system
maintenance (that is, maintenance of the business processes
after Go-live) needs to be completed at this time. In addition, the
end users tasked with actually using the system for day-to-day
business purposes must be trained.
ASAP Methodology – Phase 4 – Final Preparation
As phase 3 merges into phase 4, you should find yourselves not
only in the midst of SAP training, but also in the midst of rigorous
functional and stress testing.
Phase 4 also concentrates on the fine tuning of your configuration
before Go-live and more importantly, the migration of data from
your old system or systems to SAP.
Workload testing (including peak volume, daily load, and other
forms of stress testing), and integration or functional testing are
conducted to ensure the accuracy of your data and the stability of
your SAP system. Because you should have begun testing back
in phase 2, you do not have too far to go until Go-live.
Now is an important time to perform preventative maintenance
checks to ensure optimal performance at your SAP system. At
the conclusion of phase 4, take time to plan and document a Go-
live strategy. Preparation for Go-live means preparing for your
end-users questions as they start actively working on the new
SAP system.
ASAP Methodology – Phase 5 – Go-live and Support
The Go-live milestone is itself is easy to achieve; a smooth and
uneventful Go-live is another matter altogether. Preparation is the
key, including attention to what-if scenarios related not only to the
individual business processes deployed but also to the
functioning of technology underpinning these business processes
and preparation for ongoing support, including maintenance
contracts and documented processes and procedures are
essential. Support Team provide training on sap to all employees.
support team will help onsite or off site support to clint by solving
error tickets.tickets will be sorted by levels of deficulty.
 Consignment
In consignment processing, the vendor provides materials and stores
them on our premises. The vendor remains the legal owner of the
material until you withdraw materials from the consignment stores.
 Consignment stocks of the same material from different vendors can be
managed independently from one another and at the price of the
individual vendors.
 Consignment stocks are not valuated. When the material is withdrawn it
is valuated at the price of the respective vendor.
 A consignment material can be allocated to one of three stock types:
 Unrestricted-use stock
 Quality inspection stock
 Blocked stock
You can make transfer postings between these three stock types.
Withdrawals can only be posted from unrestricted stock, however

Consignment Process:
A. Create Consignment info record in T-code ME11. (Prices need to be
maintained in info record which will be used when settling liabilities with
vendor)
B. Create the Purchase Order with item category K in ME21N to order the
goods from vendor for consignment.
C. DO the GRN with MVT 101K in T-code MIGO. These goods will not be
valuated; accounting document will not be posted unless stock is
withdrawn from consignment stock to our own use.
D. Transfer consignment stock to your own stock in MVT 411K in T-code
MB1B This will be evaluated and will post accounting document. Now
consignment stock is actually valuated.
E. Do the Vendor Settlement in T-code -MRKO.
F. If goods are not withdrawn, you can do 102 (MIGO) or 122 (MB01)
with special stock indicator K for consignment to return goods to vendor.
G. Stock in consignment is seen separately in stock overview MMBE for
certain material and plant.
Accounting Entries for Consignment:
Good issue to cost centre-Mvt-201K:-
Raw Material consumption A/c = + GBB/VBR (Debited)
A/c Payable consumption = - KON (Credited)
Transfer good to own stock from Vendor-Mvt-411K:-
Inventory A/c = + BSX (Debited)
A/c Payable consumption = - KON (Credited)
For both Mvt-201K/411K invoice is –MRKO:-
A/c Payable consumption = + KON (Debited)
Vendor A/c = - Credited