A comprehensive guide to understanding the integration between Materials Management and Sales & Distribution modules in SAP
The Materials Management (MM) module handles the procurement and inventory management processes within SAP. It manages the materials required, purchased, received, and issued in your organization.
Manages the complete procurement cycle from purchase requisition to vendor payment.
Handles storage locations, goods movements, and physical inventory management.
Central repository for all material-related information across the organization.
Manages material valuation and accounting impact of MM processes.
The Sales and Distribution (SD) module manages customer relationships, sales order processing, shipping, billing, and other sales activities in SAP.
Handles inquiries, quotations, and sales orders from customers.
Manages delivery, picking, packing, and goods issue processes.
Processes invoices, credit/debit memos, and billing plans.
Manages complex pricing structures and conditions for customers.
The integration between MM and SD modules is critical for efficient business operations, ensuring material availability for sales orders, accurate pricing, and timely deliveries.
Master data serves as the foundation for MM-SD integration. The consistency and accuracy of this data are crucial for seamless operations.
Material master serves as the central integration point between MM and SD. Sales views contain data relevant for SD processing, while MM views hold procurement and inventory information. Both must be properly maintained for seamless integration.
The end-to-end business process flow demonstrates the critical integration points between MM and SD modules.
The Availability Check is a critical integration point between MM and SD modules. It ensures that materials ordered by customers are available in sufficient quantities.
The Goods Issue process creates a critical link between SD and MM modules, transferring inventory management responsibility from MM to SD during shipping.
The goods issue process links SD with MM by creating material documents that update inventory. This ensures accurate stock levels, valuation, and financial postings when products are shipped to customers.
Proper configuration is essential for smooth MM-SD integration. These settings determine how the modules interact.
Configuration Element | Purpose | Impact |
---|---|---|
Material Master Views | Define which views are required for materials | Determines what information is available to both MM and SD |
Availability Check | Configure ATP check rules and scope | Controls how system determines if material is available for sales |
Requirements Transfer | Settings for transferring requirements from SD to MM | Impacts MRP and planning for sales requirements |
Item Category Determination | Determine how items are processed in sales documents | Controls relevance for delivery and whether it reduces stock |
Movement Types | Define and control inventory movements | Determines accounting and inventory impact of goods movements |
Batch Determination | Configure rules for batch selection | Controls which batches are selected during goods issue |
Copy Control | Rules for data transfer between documents | Determines data flow from sales order to delivery to billing |
Batch determination is essential for industries with batch-managed materials, linking MM batch management with SD processes.
Item category determines how an item is processed in the SD module and its integration with MM.
Proper configuration of item categories is crucial for MM-SD integration. The item category determines whether an item reduces inventory, requires delivery processing, and how it impacts material requirements planning.
Material availability checking and delivery processing represent the most critical integration points between MM and SD.
When a sales order is created, the system must check if the requested material is available in sufficient quantity.
When a delivery is processed, MM and SD modules interact to update inventory and account for shipped goods.
MM and SD modules also integrate through valuation and accounting processes, ensuring consistent financial reporting.
Process | MM Impact | SD Impact | Integration Document |
---|---|---|---|
Goods Issue for Delivery | Reduce inventory valuation, post to COGS | Update delivery status | Material document (601) |
Billing | No direct impact | Post revenue, customer receivable | Accounting document |
Returns Processing | Increase inventory valuation | Handle credit memo | Material document (602) |
Consignment Processing | Special stock handling | Consignment fill-up/issue/billing | Material document + special stock indicator |
The cost of goods sold value used in SD billing is derived from the material's valuation in MM. This ensures consistent profitability reporting across procurement and sales processes.
Despite careful configuration, organizations often face challenges with MM-SD integration. Understanding these challenges helps in troubleshooting and process optimization.
Availability check issues are among the most common MM-SD integration problems.
Issues during goods issue processing can disrupt MM-SD integration and cause inventory discrepancies.
Inconsistencies in valuation and COGS determination can cause financial reporting problems between MM and SD.
Following best practices for MM-SD integration can help ensure smooth operations and reduce integration issues.
Successful MM-SD integration requires both technical configuration and organizational alignment. Ensure that teams responsible for MM and SD understand the interdependencies between their modules and collaborate effectively.
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