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SAP MM (Material Management)

What is ERP?
Enterprise resource planning (ERP) is a business process management software that
allows an organization can use to collect, store , manage and interpret data from
many business activities i.e. its stores & integrates data in single platform
maintained by a database management system.
E Enterprise > an Organization
R Resources > Money Man Power Material & Machine
P Planning > Systematic approach to achieve business requirements
Why we need ERP?

ERP is used for integration of system business process


Standardization of system across business locations
For overall control of organization
Better controlling & reporting systems of different business processes
Best utilization of Money Men Material & Machine

Types of ERP Systems;


1. Decentralized System (Non ERP System)
2. Centralized System (ERP System)
1. Decentralized System:
Decentralized system is a NON-ERP based system where data is maintained locally
at individual departments with no access to other departments. There are no
advantages in this system
Disadvantages:
No real time information & time consuming
Loss of revenue & customer satisfactions
Data maintenance cost goes up
Material & inventory cost increases due to non-tracking of Inward & outward
flow of material
Increase in man power & labor costs
Loss of reputation & face legal actions

2. Centralized System:
Centralized system is an ERP based system where data is maintained at central
location and is shared with various departments & each department has access to
information/data to other departments.
Advantages:

Real time information is available in fraction of seconds & time saving


Increase in revenue & customer satisfaction
No data duplication
Less man power & decrease in labor cost
Payment transactions to vendors on time & no legal issues

ERP Packages:
Around 500+ ERP softwares systems are currently being used in market and
below are list few;

SAP All Modules


Oracle Fusion FICO
Peoplesoft HR
SIEBEL CRM (Customer Relationship Management)
JD EDWARDS Manufacturing
BAAN Manufacturing
RAMSCO Systems
Tally
Microsoft Dynamics
SAGE Systems

Introduction to SAP
SAP System Applications & Products in Data Processing) is one of the ERP
(Enterprise resource planning) package available in market to manage, integrate
business operations and customer relations. It was founded in 1972,Germany
(Europe) by former employees of IBM - Dietmar Hopp ,Hans Werner Hector, Hasso
Plattner, Klaus Tschira, Claus Wellenreuther.
SAP Advantages:

Integration is very easy between different modules


Client-Server architecture is very strong and more reliable
Supports any operating system (Windows/Unix/linux)
Supports any database (Oracle/RDBMS/SQL/HANA)
Supports around 40+ languages worldwide
Any client business requirements can be developed by programmer i.e. ABAP
(Advanced Business Application Programming)

SAP Disadvantages:
License cost is high
Consultation charges are high

Evolution of SAP versions

1973
1976
1979
1992

SAP
SAP
SAP
SAP

R/98
GmbH
R/2
R/3

Current version is SAP R/3 ECC 6.0 EHP 7


R/3 Real Time / 3 Tier Client Server Architecture
ECC ERP Central Component
EHP Enhancement Package
To view version: Systems (in MENU BAR) > Click STATUS

Modules of SAP
Below are modules are integrated via SAP R/3 Client Server Architecture

FICO Financial Accounting & Controlling


HR Human Resource
SD Sales & Distribution
MM- Material Management
PP Production Planning
QM Quality Management
PM Plant Maintenance
AA Asset Accounting
PS Project System
WF Work Flow
IS Industry Standard (Retail,Banking,Utilities, Real Estate, Mining)
WM Warehouse Management
EWM Extended Warehouse Management
APO Advanced Planning Optimization
SCM Supply Chain Management
CRM Customer Relationship Management
SRM Supplier Relationship Management

Classification of Modules
Functional Modules: FICO, MM, SD, PP, HR, CRM, SRM, SCM
Technical Modules: ABAP, Net weaver or BASIS, BI/BW

In real time, SAP Login credentials will be provided by BASIS team

SAP Easy Access screen restricted to END USER only without TOOLS folder
(Customization Part)

SAP Consultants & ABAP team assigned for a particular project will carry out
Business transaction customizations as per End User business requirements.
Customizations will be carried out in tcode SPRO Execute Project which is
available in below path.
Tcode SPRO:
SAP Easy Access > Tools > Customizing > IMG (Implementation Guide) > SPRO
Execute Project

SPRO SAP Project Reference Object

Blue print of MyHome Company

Central Pur
Org
CCPO

India (777)

MyHome
Cement
(MHCEM)
Comp Code:
MHCM/1000

MyHome Power
(MHPOW)

MyHome Const
(MHCON)

Comp Code:
MHPO/2000

Comp Code:
MHCN/3000

Kodada Plant

Vizag Plant

Plant Code:
MCKP/1001

Plant
Code:
MCVP/100

Raw 1.
Material

Spare
Parts

Store Code:
KPS1/0010

Store
Code:

Koda Pur. Org.

Vizag Pur.
Org.

Code: KPPO

CLI
EN
T

MyHome
Group

Ranga Reddy
Plant

Hyderabad
Plant

Plant Code:
MCRP/1003

Plant Code:
MPHP/2001

Semi Finished
Part
Store Code:
KPS3/0012

PL
AN
T

Finished
Goods

Hyd Stores
Store Code:
HPS1/0040

Store Code:
KPS4/0013

RR Pur. Org.

Hyd Pur. Org.

Code: RPPO

Code: HPPO

Code: VPPO
Koda-Vizag Cross
Plant Pur Org
Code : KVPO

Raw
Material
Store Code:
VPS1/0020
Finished
Goods
Store Code:
VPS2/0021

CO
MP
AN
Y

RR Stores
Store Code:
RRS1/0030
0

Hyd-RR Cross
Comp Pur Org
Code : HRPO

ST
OR
ES

Pur
cha
se
Org
ani
zati
on

Silent features of Enterprise structure in SAP


Client Code Max 3 digit code (Ex : 000/001 Master Client , 066 Early
Watch Client , 800 Training client)
Company -Max 6 digit code
Company code Max 4 digit Code only
Plant code - Max 4 digit Code only
Storage location code - Max 4 digit Code only
Purchase Organization code - Max 4 digit Code only
Company,Plant,Store,Purchase Organization can be Numerical, Alphabets, or
Alpha-Numeric not more than 4 digits
Company code should not be same for different companies
In a company, one plant code should not be used for another plant in same
company.
We cannot use same plant code for another plant in different company
A company is an organizational unit in Accounting which represents a business
organization according to the requirements of commercial law in a particular
country.
Define Company tcode : OX15

Edit, Copy, Delete, Check Company Code t code OX02

Define Valuation Level : tcode OX14

Define, Copy, Delete, Check plant tcode : OX10

Maintain Storage Location tcode OX09

SAVE

Click New Entries

Maintain purchasing organization tcode OX08

Assign company code to company t code OX16

Assign Plant to company code t code OX18

Assign Purchase organization to company code t code OX01