Materials Management module in SAP consists of several components and sub-components. The most prominent and widely used are Master Data, Purchasing, Inventory and Logistics Invoice.
All of these components have their subcomponents that are essential in specific business processes, and all of the processes are executed by using transactions.
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.
Organization Structure
Master Data
Transactional Data
Enterprise structure is the structure that represents an enterprise in SAP system. It is subdivided into various organizational units, which for legal reason or business related reason are grouped together. Enterprise structure for MM module is defined in an organization as follows;
Master data 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.
Purchasing is a component of SAP MM module and the process flow for procure to pay (PTP) is represented as follows;
MRP (material resource planning) creates procurement proposal and later gets converted into Purchase Requisition. Once the purchase requisition is created, a source is assigned and it is released/approved. 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).
Inventory management is used to manage the inventory of the goods. It is based on several key functions, transactions and processes used in the Inventory management as follows;
Invoice Verification is a process, which confirms in SAP that the AP department has received an invoice against the purchase orders. Goods receipt will need to enter on SAP prior to invoice verification unless that process has been by-passed at the raising of the purchase order.
Once the invoice verification process is complete, the payment is posted to the vendor using appropriate payment methods.
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