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SAP Materials Management

The document discusses the key objectives and components of SAP's Materials Management module, including maintaining accurate master files for materials, vendors, and bills of materials. It outlines requirements for order management, warehouse management, reporting, and conducting stocktakes. The overall goal is to ensure the right materials are in the right place at the right time and quantity while maintaining appropriate controls, authorizations and procedures.

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Dilshad Begum Mohammed
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297 views4 pages

SAP Materials Management

The document discusses the key objectives and components of SAP's Materials Management module, including maintaining accurate master files for materials, vendors, and bills of materials. It outlines requirements for order management, warehouse management, reporting, and conducting stocktakes. The overall goal is to ensure the right materials are in the right place at the right time and quantity while maintaining appropriate controls, authorizations and procedures.

Uploaded by

Dilshad Begum Mohammed
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SAP- MATERIALS MANAGEMENT (MM)

OVERALL OBJECTIVE

• To ensure that we have the right product, in the right place, at the right quantity and
price.
• To reduce working capital by monitoring raw and packaging stocks on a continuous
basis.

VENDOR MASTER FILE

• Only authorised suppliers must be included in the master file in terms of the purchasing
standards policy.
• Deliverables include policy and procedure documents defining standards for purchasing
relating to SAP systems.

MATERIAL MASTER FILE

• Ensure that controls are adequate to ensure that the master file is completely and
accurately created.
• Ensure that there is appropriate accountability for master file data.
• Ensure that compulsory fields (conditions) such as discounts, delivery costs, cash
discounts, etc. are identified (pre-defined) and flagged to ensure that these fields are
entered on the system.
• Ensure that appropriate unit of measure is updated on the system.
• The system must identify obsolete and potential obsolete stocks in respect of date code
and expired stocks.
• All purchases from non-approved suppliers must be flagged.
• Ensure that obsolete codes can be timeously removed from the system (S&D, FIN, PP,
MM)
• Ensure that routing is appropriately implemented (linked to PP).
• Appropriate access must be given to master file information (technical, purchasing,
distribution and at factory levels).
• The master file only contain authorised technical data.
• Management decision must be taken regarding the updating of material specifications.
• Documented procedures must address lot control, production control and demand
management.
• Ensure that lot tracking is considered.
• Ensure that appropriate decision is taken regarding pricing. Interfaces to costing is
adequate.
• Ensure that warehouse management decision considers stock rotation and best before
dates.

BILLS OF MATERIAL (BOM)

• Ensure that all BOMs are appropriately authorised and updated on the system.
• Ensure that the ownership of bills is defined and access appropriately designed.
• Ensure that standards are appropriate and periodically reviewed.
• A management decision needs to be made with regards to updating of the bills on the
SAP system.
• Ensure that the current BOMs and material master file are adequately reviewed before
they are updated on the SAP system.
• Appropriate take-on procedures of BOMs needs to be implemented.
• Adequate integrity checks must be done between master files in both systems in
respect of fill weights, raw and packaging materials (part, item, parent and completed
products).
• Ensure that the SAP system enables the use of effective dates (linked to PP) on the
system.
• Ensure that bills are independently checked before copied to the live system.

ORDERS

• A management decision with regards to ABC analysis of materials needs to be made.


The analysis must be done by quantity, value, material and vendor.
• Ensure that forecasting information is down loaded onto the materials management
model, on a timeous basis.
• Ensure that stock requirements reflect current stock holding and lead times.
• The system needs adequate control with regards to the processing of EDI orders.
• Costs relating to transfer orders must be pre-defined.
• Ensure that only authorised orders are placed. These must be within the buyers
purchasing authority.
• The system should accommodate for forward cover for indent orders.
• Ensure that foreign exchange cover is taken and monitored, by specific indent orders.
• Ensure that the order price does not include VAT.
• The system must account for the recording and monitoring rebates, on an ongoing
basis.
• A system needs to be implemented to control stock transfers between plants.
• Transport cost incurred must be accurately accounted for.
• The system must cater for scheduling agreements/contracts and quotations.
• A decision has to be made with regards to use of system generated requisitions, on the
MRP system.
• Management must ensure that outstanding orders listing, as well as expected orders,
feed into the warehouse management system are reviewed daily.
• The buyers must have viewing access on the system.
• Procedures need to be defined for promotional and made to order stock orders. (These
should include access, monitoring and authorisation controls).
• A policy decision needs to be made with regards to the updating and controlling of
manual payments.
• Account codes updated on the master file, must cater for accrual variances.
• Accrual variances must be analysed by the Purchasing Manager.
• Only once the BOMs are activated, should orders be captured against these materials.

WAREHOUSE

• Procedures regarding the checking and releasing of goods, by QC and warehouse,


needs to be documented.
• Ensure authorisations/segregation of duties are adequately set up, for job functions, in
the warehouse management function.
• Procedures should ensure that all goods received are captured onto the system on a
daily basis.
• Only stock inspected and released by QC should be issued to production.
• All issues must be appropriately authorised and the documentation must be sequentially
controlled.
• Nightshift requirements must be prepared and checked adequately, before nightshift
production commences.
• Access to stock and stock records should be restricted.
• Ensure that all stocks received are captured onto the system, in the correct period.
• The tolerance level between order and receipt quantity must be documented.
• A decision needs to be made with regards to incomplete deliveries. The order can
either be returned to the supplier, or part receipted into stock.
• Goods returned must be accurately recorded in the correct period.
• Access to stock records for returns, should be restricted.
• Procedures should be present to ensure that all goods returned, are credited to the
correct creditors account.
• Ensure adequate storage arrangements with regard to FIFO/LIFO system is
implemented.
• Price variance must be analysed, reported and actioned on a timeous basis.
• Management needs to ensure that the engineering stores function is catered for
adequately, in the MM module.
• All movements must be traceable through the system.

REPORTS

The following standard report obtained in the current system must be available on the SAP
system:

• Buyers requirements
• Stock simulation
• Stock versus plan
• Price increases
• Outstanding orders
• Weekly requirements
• MRP

STOCKTAKE

• Management needs to decide whether stocktake will be done on a monthly or perpetual


basis.
• The system needs to accommodate for the scanning of products into the warehouse.
• Facility to print stock count sheets must be available on the system.
• The system must facilitate adequate cut-off procedures.
• Access of theoretical stock balances should not be available to people involved in the
stocktake.
• The system must be able to identifying any old or slow moving stock to be written off, on
a timeous basis.
• The system must be able to generate a report identifying frozen stock in all locations.
• Audit trails of physical stocks captured on the system must be available.
• Option to generate variances and to print stock variance reports, must be available
during the stocktake..

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