The invention of computers has changed the world to a large extent; there is no doubt in it. There are many applications that have made the computation easy and effective which can be comfortably executed also. Among the applications, one must take note of SAP. The SAP is the #1 standard business application software, vendor. It is also the third largest software supplier in the world. The current SAP version is the result of about 40 years of development that has been determined by the needs of customers.

Down below elements of logistics in SAP ERP and the logistics functionality will be examined. There are various components to the logistics functions in SAP that include the following areas of SAP:

• Materials Management (MM): SAP material managementcomponent is the foundation of a company’s logistics functions. This component includes inventory movements, purchasing functionality, and material master and accounts payable file that consists of all the info on materials and services that are being used at a company.
• Sales and Distribution (SD): this component is used to incorporate the processes from a customer’s order to the delivery of a product to a customer. SD includes pricing, sales functions, picking, shipping, and packing.
• Quality Management (QM): quality management component is used to make sure and get improvement in the quality of a company’s products. The functions of this component are the execution and planning of purchased and finished products’ quality inspection.
• Plant Maintenance (PM): this component maintains the equipment that is being used in the company’s production of finished products. PM component emphases on the execution and the planning of preventive maintenance on tools and equipment used in the process of production.
• Production planning (PP): the production planning component manages the production process of a company. The functionality of this component includes the master production scheduling (MPS), planning of a company’s production, material requirements planning (MRP).
• Customer Service (CS): CS is a component that manages the service that a company provides to its customers for warranties and repairs. Items may be sent back for repair. This SAP customer service component helps a company to repair and service items with extreme efficiency.
• Warehouse Management (WM): the warehouse management WM helps in accurately managing the inventory and maximising the storage capacity of a company. WM reduces the time taken to remove and place new items.

In addition to the SAP material management and other mentioned components, there are more functions involved such as Batch Management, Transportation Management, Logistics Information System (LIS), Engineering Change Management, Handling Unit Management, Environmental Health and Safety (EHS) and Project Systems (PS). All of these components could be highly essential in the area of logistics, depending on the requirement of a company.

At the end of the day, an Enterprise Resource Planning (ERP) system must help an organization to optimize its supply chain. A company will know that its supply chain optimized when it is delivering the products and services its customers demand and want. An ERP is an investment and is must have for the optimization.