What are the most important SAP logistics modules (MM, SD, LE, WM, PP, PM, QM)?

• MM (Materials Management) covers purchasing, inventory management, invoice verification, physical inventory and the material master.
• SD (Sales and Distribution) ranges from sales through shipping to billing.
• LE and WM control goods receipt, shipping, transport and warehouse management through to picking.
• PP plans and controls production, including MRP for material requirements planning. PM and QM cover maintenance and quality.

This article was first published on 17 February 2022. In SAP S/4HANA, the classic WM module can only be used via the compatibility packs until the end of 2025. Its successors are Stock Room Management for simple warehouses and Extended Warehouse Management (EWM) for complex ones. The other modules continue to exist.

MM module

The MM module stands for Materials Management and takes care of procurement and inventory management. It essentially comprises purchasing, inventory management, warehouse stock management, invoice verification, physical inventory and the material master.

SD module

SD, i.e. Sales and Distribution, is responsible for sales, and therefore for everything from selling through shipping to billing, credit management and customs.

CS module

The CS module stands for Customer Service and provides ways to resolve customer problems easily.

LE module

LE stands for Logistics Execution and is responsible for everything from goods receipt through shipping to transport.

WM module

WM stands for Warehouse Management and controls warehouse administration: from delivery and putaway through storage and picking to packing and shipping.

PP module

The PP module stands for Production Planning and Control and has the task of planning and controlling a company's production. An important sub-module here is MRP, i.e. Material Requirements Planning, which handles material requirements planning and thus ensures that the required quantities of materials are always available. This can be done in combination with SAP APO or IBP. In this area, it can also make sense to work with external inventory optimisation systems such as EazyStock instead.

PM module

PM stands for Plant Maintenance and is therefore responsible for maintenance and its sub-areas of inspection, preventive maintenance and repair.

QM module

The QM module stands for Quality Management and covers quality planning, quality inspection and quality control.

Inventory optimisation with SAP: APO, IBP, Excel or an external solution?

For many SAP customers, it is important to keep their inventory under control: neither running out of stock nor building up excessive overstock. There are essentially three ways to do this.

SAP APO and SAP IBP: historically, SAP has offered SAP Advanced Planning and Optimization (APO) and, as its successor, SAP Integrated Business Planning (IBP). In APO, forecasts run in the Demand Planning module (APO DP) and network planning in Supply Network Planning (APO SNP). In IBP, there is the IBP for Demand module for forecasting and IBP for Inventory for inventory optimisation, which comes from the acquisition of SmartOps. Both offer the best integration into SAP ERP, but are often viewed critically because of cost and usability.

Excel: the opposite. Initial calculations are done quickly, but it is not a long-term solution. That shows in the low forecast accuracy, and at the latest when the person who built the files goes on holiday or leaves the company.

External inventory optimisation such as EazyStock sits between these extremes and is an alternative in terms of usability, cost and project duration. From the forecast through safety stocks and multi-echelon calculations across the network to specific order proposals, the calculation runs in the background. Either just the calculated inventory parameters or the order proposals themselves go back to SAP.