What Is MM Cycle in SAP?
SAP Module MM (Materials Management) is an important component of SAP ERP that assists organizations in managing materials, inventory, and warehouses throughout the supply chain. It is a part of the logistics functions of SAP ECC and consists of several components and subcomponents. The most visible and widely used components are master data, purchasing, and inventory.
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SAP MM Procurement Cycle:
Every organization buys materials or services to meet its business needs. The process of buying materials and getting services from vendors or agencies is called procurement. The steps required to purchase an item are a procurement cycle. Each organization follows several general and consecutive steps to prepare materials in the right quantity and at the right price.
The Steps of the MM cycle in SAP are:
- Determination of Demand: This is the main stage of the logistics procurement cycle. The company determines the number of materials or services required. After determining the need, a list of products is created, which is accepted by the highest authority for purchase.
- Purchase Request: The organization collects all of its needs and then prepares a list of requirements that is provided to the procuring organization to receive the listed products.
- Purchase Order Manufacturing: After confirmation, a purchase order is created and sent to the seller to provide the required materials. A purchase order contains details of the seller, their address, and the delivery date.
- Manufacturing Goods Receipt: When a seller processes a purchase order and delivers it to the appropriate party, this is called a goods receipt process. Then a specialist checks the quality and condition of the delivered goods. After confirming the materials, a sales receipt will be sent.
- Invoice Production: The invoice is sent to the company by the seller. After receiving the invoice, it is approved by the organization. Now for payment to sellers, an account setup is set up in SAP MM, which allows the system to automatically create a seller account in the general ledger to be paid.
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In this technology-driven world, the SAP MM module is still in high demand because all companies need the SAP MM module to process their content reliably. SAP MM module helps organizations stay up-to-date and efficient.
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