MM - Material Management

Material management module comprises functions of purchase processing operation and stock records. Efficient MM module function results from maintained primary data about materials, primary commodities, goods and services, supplier and customer records, and records about price and other business agreements.

Material management comprises the following basis functions:

·        Purchase;

·        Purchase optimalization;

·        Stock records;

·        Invoice liquidation;

·        Planning of material requisitions – material instructions;

·        Inventory check;

·        Stock management – shelf copybooks;

·        Purchase information system;

·        Stock controlling;

Purchase

Purchase includes all activities connected with purchase preparation at the initial stage to the stage of completing the order – contract of purchase.

Překlad obrázku: 1 – Requisite Records (Requisite Planning), 2 – Acquisition Source Definition, 3 – Supplier Assessment, 4 – Order Execution, 5 – Order Controlling, 6 – Material Receipt and Stock Level Administration, 7 – Invoice Liquidation

Stock Records

Stock records deal with material stock administration in terms of quantity and value. All stock-recording processes are executed in real time, so that the actual stock level is always displayed. Therefore, user has a view of the actual material stock at any time.

On behalf of every material the user can trace not only the available stock, but also the stock which has just been ordered so far; then the available stock which has been reserved for a customer; stock being quality-controlled; blocked stock, etc.

If there is a need to divide the material stock according to some partial quantity, then each of such partial quantities may be labelled by a batch. The batch numbers are recorded independently within the total material stock. Special stock from customers and suppliers (e. g. consignment stock or stone reserves) are also recorded independently.

Quantity and value updating is executed automatically via entering material transactions. Originating material records also have a bookkeeping part (in case of factual sense) where the automatic accounting procedure charges items directly to the general ledger accounts. 

Material transactions in stock records can be divided into:

·        Material receipt to the stock including an optional link to the order or manufacturing order, or store receipt voucher print;

·        Stock material outgoing with an optional link to material reservation, manufacturing order, or requisition slip print;

·        Material abandonment from material to material, from one kind of stock to another, from store to store, from factory to factory, document print.

Invoice Liquidation

Invoice liquidation involves ordering and control of supplier invoices. When liquidating invoices, supplier invoices are compared with material order and receipt. The invoices are controlled from three different aspects – factual, pricing and quantifying. Within MM the invoice liquidation fulfils the following objectives:

·        Termination of the material acquisition process – ranging from order demand, purchase to material receipt;

·        Processing of invoices which do not originate in the area of material acquisition (e. g. services, advance payment clearing, costs on seminar meetings, etc.);

·        Credit note processing, both as invoice cancellation, or as rebates.

Nevertheless, the invoice liquidation area does not involve invoice payments or assessment – the appropriate information is passed on to other departments. In this way, the invoice liquidation creates a link between material management and accounting (finance accounting, fiscal assets accounting and cost accounting).

Planning of Material Requisitions

Within material management consumption-controlled instructions are set up – it would also be appropriate to utilize them for some indirect materials. On the basis of data processing of past and planned consumption it is possible to optimize order and insurable level for particular materials.

Inventory Check

The system enables three kinds of inventory check procedure:

·        Inventory check on a fixed date;

·        Spot inventory check;

·        Cyclic inventory check;

Inventory check typically consists of three steps:

·        Inventory check preparation – execution of stocktaking lists, blocking materials for accounting of current turnovers, stocktaking list print;

·        Counting of stocktaking status – summarizing physical stocks, their recording to the lists and system storage;

·        Inventory check assessment – possibility of supplementary stock summarizing with selected materials including execution of a new stocktaking list, and posting of stocktaking differences