The SAP MM system consists of several components integrated with each other. This integration makes it easy for each department to share information with other departments, thereby updating data in real-time. SAP MM separates into five key components, with each of these components containing several sub-modules. Here are five of the major components of the SAP MM software suite:
1. MM - CBP (Consumption-Based Planning) : Consumption-based planning uses past consumption values to forecast future requirements using statistical procedures. The primary role of the MM-CBP component is to monitor stocks and automatically create procurement proposals for production and purchasing. The proposal triggers when stock levels go below a pre-defined reorder point or by forecasting requirements using past consumption values.
2. MM - PUR (Purchasing) : The purchasing component ensures seamless communication among all participants in the procurement process, thereby ensuring that the purchasing unit of an organisation functions smoothly. The primary tasks of the purchasing element are:
* handling external procurement of materials and services
* monitoring deliveries from vendors
* tracking payments to vendors
* determining possible sources of supply for a requirement
3. MM - SRV (External Services Management) : This component supports bid invitations, order/award placements, acceptance of services and invoice verification. It provides a platform for managing and coordinating external services. It supports two types of external services :
* planned services where the nature and scope of requirement is known at the start of the procurement phase
* unplanned services where the scope of requirement is unavailable and procurement relies on a value limit
4. MM - IV (Inventory Management) : This component deals with the following tasks:
* tracking and managing material (physical) stocks based on quantity and value
* maintaining the physical inventory of goods
* planning, entering and documenting the movement of all goods
5. MM - IV (Logistics Invoice Verification) : The logistics invoice verification is a process that comes at the end of the logistics supply chain. It includes tasks like purchasing, inventory management and invoice verification. This component helps in verifying incoming invoices based on prices, content and quantity. As soon as a vendor sends a purchasing invoice, this component adds it to the system, then passes it to financial accounting and other elements in materials management.
