1. What is SAP MM?
SAP MM (Materials Management) is a module within the SAP ERP system that focuses on managing the procurement, inventory management, and material planning processes of an organization. It helps businesses streamline their supply chain operations, optimize inventory levels, and ensure the availability of materials for production and other business processes.

2. What are the key components of SAP MM?

• Procurement: Involves the creation of purchase requisitions, purchase orders, and managing relationships with suppliers.
• Inventory Management: Tracks and manages the movement of materials within an organization, including goods receipts, goods issues, and transfers.
• Invoice Verification: Verifies and processes supplier invoices against purchase orders and goods receipts.
• Material Requirement Planning (MRP): Ensures materials are available when needed by calculating demand and creating procurement proposals.
• Master Data Management: Centralizes information about materials, vendors, and other relevant data.

3. Explain the procurement process in SAP MM.
The procurement process starts with the creation of purchase requisitions (PRs) when a material is required. PRs are then converted into purchase orders (POs) and sent to vendors. Once goods are received, a goods receipt (GR) is recorded, and the invoice verification process ensures that invoices match the purchase orders and goods receipts.

4. What is a Purchase Requisition?
A Purchase Requisition (PR) is a formal request generated within the organization when materials or services are needed. It initiates the procurement process and contains details like material requirements, quantities, delivery dates, and more.

5. What is a Purchase Order (PO)?
A Purchase Order (PO) is a legally binding document sent by a buyer to a vendor to request specific quantities of materials or services at predefined prices. It outlines terms and conditions of the transaction.

6. What is a Material Master in SAP MM?
The Material Master is a central repository that holds comprehensive data about all materials managed within an organization. It includes information such as material description, vendor details, pricing, units of measure, stock levels, and more.

7. Explain the concept of Goods Receipt (GR) in SAP MM.
Goods Receipt (GR) is the process of recording the arrival of materials into an organization's inventory. It involves physically receiving the goods, verifying them against purchase orders, and updating inventory levels in the system.

8. What is Invoice Verification in SAP MM?
Invoice Verification is the process of comparing supplier invoices against corresponding purchase orders and goods receipts to ensure accuracy. It involves three-way matching (invoice, PO, and GR) and helps prevent payment errors.

9. What is a Purchase Info Record?
A Purchase Info Record (PIR) contains information about specific materials and the prices agreed upon with a particular vendor. It's used to determine the source of supply and pricing during procurement.

10. What is Movement Type in SAP MM?
Movement Types are three-digit codes that categorize various goods movements within SAP MM. They indicate whether materials are received, issued, transferred, or adjusted, and each movement type triggers specific system actions.

11. What is the purpose of a Reservation in SAP MM?
A Reservation is a formal request to set aside a specific quantity of material for a designated purpose, such as production or maintenance. It ensures availability of materials for planned activities.

12. What is the difference between a Goods Issue and a Goods Receipt?
Goods Issue refers to the process of taking materials out of inventory for consumption, production, or other purposes. Goods Receipt, on the other hand, involves receiving materials into inventory from external sources.

13. What is a Source List in SAP MM?
A Source List is a list of approved vendors for specific materials. It ensures that procurement is limited to approved suppliers, helping maintain quality and consistency in the supply chain.

14. Explain the concept of Vendor Evaluation in SAP MM.
Vendor Evaluation assesses and ranks vendors based on their performance in terms of quality, delivery timeliness, service levels, and more. It aids in making informed vendor selection decisions.

15. What is a Release Strategy in SAP MM?
A Release Strategy is a predefined set of rules that determine the approval process for purchase requisitions and purchase orders. It ensures that higher-value transactions receive the appropriate level of approval.

16. What is Consignment Stock in SAP MM?
Consignment Stock is inventory owned by a supplier but stored at the customer's premises until consumed. The customer only pays for items used, reducing inventory costs.

17. What is a Stock Transport Order?
A Stock Transport Order (STO) is used for inter-company transfers, allowing materials to move from one plant or location to another within the same company code.

18. Explain the concept of Reservation vs. Goods Issue.
A Reservation is a request to set aside materials for a planned purpose, while a Goods Issue is the actual withdrawal of materials from stock. Reservations help ensure material availability.

19. What is the purpose of the Valuation Area in SAP MM?
The Valuation Area determines how materials are valued for accounting purposes. It can be at plant level, company code level, or other defined levels to handle valuation differently.

20. What is the significance of the ABC Analysis in Inventory Management?
ABC Analysis classifies items based on their value and usage frequency. It helps in prioritizing management efforts on high-value, high-usage items for efficient inventory control.

21. What is the importance of a Quota Arrangement in SAP MM?
A Quota Arrangement distributes procurement quantities among approved vendors based on predefined proportions. This helps balance procurement among suppliers and ensures fairness.

22. How does the Material Requirement Planning (MRP) process work in SAP MM?
MRP calculates the material requirements for production and procurement based on demand, lead times, and safety stock. It generates purchase requisitions and planned orders to fulfill these requirements.

23. What is the purpose of the Stock Type field in Material Master?
The Stock Type field defines the category of stock in which a material is stored, like unrestricted, blocked, or quality inspection stock. It helps manage and control the material's status.

24. How does SAP MM integrate with other SAP modules?
SAP MM integrates with modules like SAP SD for sales and distribution, SAP PP for production planning, SAP WM for warehouse management, and SAP QM for quality management, enabling seamless end-to-end processes.

25. What is the significance of the Release Procedure in Purchase Orders?
The Release Procedure ensures that higher-value purchase orders undergo appropriate levels of approval before they are processed. It maintains control over procurement spending and vendor selection.

FAQ's:

1. What is SAP MM?

• SAP MM (Materials Management) is a module of the SAP ERP (Enterprise Resource Planning) system that deals with procurement, inventory management, and other aspects of materials management.

2. What are the key components of SAP MM?

• The key components of SAP MM include:
  • Procurement
  • Inventory Management
  • Material Valuation
  • Vendor Evaluation
  • Invoice Verification
  • Material Requirements Planning (MRP)
  • Master Data Management

3. Explain the procurement process in SAP MM.

• The procurement process involves creating purchase requisitions, converting them into purchase orders, sending them to vendors, receiving goods, and processing invoices. It starts with a need for materials and ends with the payment to the vendor.

4. What is a purchase requisition?

• A purchase requisition is a formal request to procure materials or services needed by a department within an organization.

5. What is a purchase order (PO)?

• A purchase order is a formal document issued by a buyer to a vendor, indicating the types, quantities, and agreed prices for products or services that the vendor will provide.

6. What is a goods receipt (GR)?

• A goods receipt is the process of acknowledging the receipt of goods from a vendor. It involves physically receiving and recording the delivered materials in the system.

7. What is invoice verification in SAP MM?

• Invoice verification is the process of reconciling the vendor's invoice with the goods receipt and purchase order to ensure accurate payment.

8. What is material valuation in SAP MM?

• Material valuation is the process of determining the value of materials in the inventory. It involves assigning a value to materials based on different valuation methods.

9. What is Material Requirements Planning (MRP)?

• MRP is a process used to plan and manage the materials required for production or procurement. It ensures that materials are available when needed while avoiding excess inventory.

10. What is master data in SAP MM?

• Master data in SAP MM includes critical information about materials, vendors, and other relevant entities. It's the foundation for various processes within the module.