SAP MM stands for SAP Materials Management and supports material management processes, including procurement.
Three Common Questions:
The standard module of SAP’s ERP software is used by companies to digitize their procurement processes in SAP. It can also be used to support other material management processes, such as service processing and inventory management.
If your company has chosen SAP as its ERP system, it is usually recommended to use SAP MM, at least for procurement. The main advantage is the integration with other modules such as finance and controlling, which avoids isolated solutions and achieves efficiency gains.
SAP MM Components
Following List provides an overview of the components or sub-modules of SAP MM and their tasks.
Supports the procurement of materials and external services
Inventory Management (MM-IM):
Creates transparency over inventory and goods movement
Manages the invoicing of supplier invoices (incoming invoices)
Invoice Verification (MM-IV):
Verifies incoming invoices
Master Data (MM-MD):
Maintains master data
Services and External Services (MM-SRV):
Supports the processing of external services
PUR = Purchasing, IM = Inventory Management, INV = Invoice, IV = Invoice Verification, MD = Master Data, SRV = Service
Do you need more information about SAP S/4HANA Sourcing & Procurement?
Strengths and Weaknesses of using SAP ERP in Procurement
In addition to the benefits of S/4HANA, the classic advantage of the SAP ERP system is its integration with other modules, allowing for cross-functional processes from start to finish. This eliminates isolated solutions, data silos, and redundant data storage.
The system’s user-friendliness and appearance were particularly criticized by users, but this disadvantage has significantly improved with the introduction of S4/HANA and the Fiori Apps.
Functionally, MM contains a lot for operational procurement. SAP first released MM under the name RM/1 in 1975, and since then, MM has evolved into a robust and solid module in procurement in subsequent versions and is now an integral part of ERP systems due to its integration with SAP FI/CO.
Third-party procurement solutions also offer interfaces to SAP MM, allowing orders to be created in the SAP ERP as a document. However, MM is weak in terms of communication through the internet, as SAP ERP was originally designed as an internal system without the internet. External business partners and suppliers still do not have direct access to their customers’ SAP ERP systems, for security reasons. Therefore, MM is weak when it comes to procurement through electronic catalogs.
Established webshop solutions offer a search engine as their strongest feature to guide users to the desired item. Although the new SAP S/4HANA system also has an integrated search engine based on the HANA database, an efficient catalog management system to supply the HANA database with catalog items, prices, and images is missing. Additionally, the search function for catalog items in the HANA database is only rudimentary and cannot compete with modern open-source search engines such as Elastic Search and Apache SOLR.