A deep dive into SAP S/4HANA MM: its definition and application
SAP S/4HANA MM refers to the Materials Management element of SAP’s comprehensive ERP S/4HANA. It’s a key capability for enterprises that work within supply chains and want to utilize advanced data analysis to improve efficiency and effectiveness. Combined with the other functionalities within SAP S/4HANA, companies can perform at their best and achieve even better business outcomes. This is everything you need to know about SAP S/4 HANA MM.
What is SAP S/4HANA?
SAP offers businesses the opportunity to leverage a next-generation, intelligent ERP in the form of S/4HANA. It enables companies to manage all business processes in real-time on the cloud, increasing responsiveness and resilience as businesses make decisions to adjust to the changing environment they’re operating within.
SAP S/4HANA simplifies the management of even the most complex businesses because business leaders can manage all aspects of the organization on one interconnected platform, from finance to human resources to logistics. They can see a single truth, based on real-time data, which allows them to make informed decisions, especially through the user-friendly customization enabled by SAP Fiori design capabilities.
What is Materials Management?
The Materials Management module plays an important role within SAP S/4HANA for those within the logistics and supply chain sector. It organizes all processes within materials management including purchasing and receiving goods, storing materials, inventory optimization, and consumption-based planning.
It creates a flow that is necessary for modern supply chains to create the agility needed to succeed in today’s environment. There’s a flow of materials between suppliers, buyers and customers. There’s a flow of information between partners about orders, deliveries, and inventory. There’s also a flow of key documentation such as invoices and shipping receipts. It minimizes delays and shortages because every partner has the information they need to fulfill their role in good time. Each member of a supply chain can be responsive as they have up-to-date information about the current situation.
Why use SAP S/4HANA MM?
The Material Management module of SAP S/4HANA eases the challenges supply chain enterprises are facing. In order to be efficient and deliver products to customers on-time, businesses need suppliers to fulfill demands, be flexible to order changes, prepare sufficient storage space and transport availability, have an accurate view of current inventory levels, and minimize waste. Essentially there are multiple moving parts businesses need data on (internal and external) to secure task completion through adjustments to changes when they occur.
SAP S/4HANA MM fulfills the needs of supply chain enterprises that want to achieve the following.
Increased supply chain visibility
For companies to be agile and responsive in the fast-paced environment of business operations, they need to have visibility of the whole supply chain. End-to-end visibility, from procurement to last-mile delivery, enables businesses to identify issues as soon as possible and come up with a resolution that minimizes disruption. It is hard to maintain material levels with blindspots in key data points. Supply chain visibility eliminates that issue.
Better meet customer needs
While customer demands are ever-changing in response to trends and current events, one demand is consistent – the demand for the fast fulfillment of orders. S/4HANA Material Management supports fast turnaround times because the materials needed to fulfill orders can be tracked at every stage of processing. As demands change, the orders of materials can change alongside them.
Return to just-in-time inventory
The most efficient way to fulfill customer orders is to procure products from suppliers as orders come in. This means that a company is only ever storing the materials that they need. With all the supply chain issues in the past few years, logistics companies moved away from this material management model. However, with advanced technology for managing materials, just-in-time inventory management is much more attainable for businesses that want to prioritize efficiency and minimize waste.
More accurate planning
Planning is essential to the financial viability of a logistics business. They need to prepare suitable material orders, storage and transport so all the pieces are in place to serve their customers. S/4HANA Material Management enables businesses to maintain the right inventory levels and other assets because they always have access to up-to-date information about outgoing orders, incoming supplies and any other relevant information.
How to introduce SAP S/4HANA MM
There are plenty of reasons to introduce SAP S/4HANA MM to your supply chain management strategy as a logistics business. Transitioning to a new tool, especially for businesses with lots of moving parts as logistics businesses are, requires proper planning and management to ensure success and minimize disruption. NTT DATA are experts in SAP implementation, having supported clients in various industries to utilize SAP to meet their own business needs, goals and current processes.
As your implementation partner, NTT DATA will determine your roadmap for S/4HANA MM, according to your stated objectives. Then we will support you through the implementation period as processes are revamped, reinvented and retained, integrating into a singular management platform for simplicity.
To ensure that a move to SAP, leveraging Materials Management and its other functionalities, creates immediate value, choose NTT DATA as your implementation partner.
