Process Flow in SAP MM-Module

Process Flow in SAP MM-Module

The process flow in the module takes into consideration the entire cycle that a material of service must follow from the instant it enters the system to the moment it is delivered to the intended party and the transaction is complete. There are essentially seven phases in the MM process flow and these are as follows:

1. Determination of Requirements: As mentioned previously, materials planning can either be MRP or CBP and these help to create a better perspective to initiate the need to purchase material.
2.  Source Determination: Essentially, knowing where the business intends to source its products for production or service delivery is paramount to ensure uninterrupted operations. There may be existing long-term purchase agreements with suppliers, or depending on the shifts in the economic landscape alternative considerations regarding the sourcing of materials from a different entity to guarantee reduced overheads and better quality are possible. Whatever the approach, this information must be entered into the system so that requests for quotation (RFQs) are generated and the company is able to make an informed decision based on its intended needs.
3. Vendor Selection and Comparison of Quotations: This feature in the MM module puts the user in the driver seat of selecting and rejecting quotes based on specific criteria and needs. The user can also simulate price scenarios and therefore be able to accurately choose the best prices according to tailored input data.
4. Purchase Order Processing: Once the ideal quotes have been selected the next phase is to generate a purchase order (Po). The module has been developed to automatically generate purchase orders by using the information from requisition and quotation to do so and sending these to the suppliers in real time. Total autonomy to generate the order manually is also supported.
5. Purchase Order Follow-up: Purchase orders that have been sent to suppliers can be monitored automatically by reminder periods that the user establishes. This makes it possible to have a better idea of what is happening with the purchase orders the company sent to suppliers. Additionally, it is also possible to check quotations and the purchase requisitions.
6. Goods Receiving and Inventory Management: The supplier that delivers goods according to the purchase order in one step closer to closing the transaction that the company initiated. These goods can be monitored through established parameters in the system and their receipt confirmed based on the number of the purchase order.
7. Invoice Verification: Good that are requested by a purchase order should match the invoice generated to avoid deviations in quantities and monies spent. This information on invoices are checked in the system and delivered to the assigned personnel for verification before the transaction is closed.