MANAGEMENT
5500/ 0827/ 1
SAP INVENTORY MANAGEMENT
נכתב ונערך ע"יCompuGenius, Inc. :
CompuGenius, Inc.
Inventory Management
Purpose:
All transactions that bring about a change in stock are entered in real time, as are the
stock updates resulting from these changes. You can obtain an overview of the current
stock situation of any given material at any time. This, for example, applies to stocks
that:
• Are located in the warehouse
• Have already been ordered, but have not yet been received
• Are located in the warehouse, but have already been reserved for
production or a customer
Material is procured from external or internal sources on the basis of the requirements
determined by Material Requirements Planning. The delivery is entered in Inventory
Management as a goods receipt. The material is stored (and managed under Inventory
Management) until it is delivered to customers (Sales & Distribution), or is used for
internal purposes (for example, for production).
During all transactions, Inventory Management accesses both master data (such as material
master data) and transaction data (such as purchasing documents) shared by all Logistics
components
Goods Movement:
• Goods receipt:
A goods receipt (GR) is a goods movement with which the receipt of goods from
a vendor or from production is posted. A goods receipt leads to an increase in
warehouse stock.
• Goods issue:
• Stock transfer:
A stock transfer is the removal of material from one storage location and its
transfer to another storage location. Stock transfers can occur either within the
same plant or between two plants.
• Transfer posting:
A transfer posting is a general term for stock transfers and changes in stock type
or stock category of a material. It is irrelevant whether the posting occurs in
conjunction with a physical movement or not. Examples of transfer postings are:
Movement Type:
When you enter a goods movement in the system, you must enter a movement type to
differentiate between the various goods movements.
The movement type has important control functions in Inventory Management.
For example, the movement type plays an important role in
When you enter a goods movement, you start the following chain of events in the
system:
Client
Controlling Area B
Controlling Area A
Purchasing Organization
(Cross Company Code)
The structure of an enterprise is represented in the SAP R/3 System by the following
organizational levels:
Client:
Client is highest organizational level in Hierarchy. The Client is a Commercial,
Organizational unit within the R/3 System, with its own data, Master Records and Set of
tables. From a business perspective, the clients form a corporate group.
Company code:
Company code is the smallest unit in organization structure.
This level represents an independent accounting unit within a client. Balance sheet and
Profit & Loss statements, required by law, are created at company code level. You can
set up several company codes in one clients level.
Example: a subsidiary company, member of a corporate group.
Plant:
Plant can be a manufacturing plant in the true sense, or can represent a branch office or
site within a company code. A plant is an organizational logistic unit that structures the
enterprise from the perspective of production, procurement, plant maintenance and
material planning.
In SAP system, a plant must be assigned to one or more purchasing organizations.
Furthermore, a plant must always be assigned to a company code.
Storage Location:
The storage location is an organizational unit that allows the differentiation of material
stocks with in a plant. Physical inventory is carried out at storage location level.
Purchasing organization:
Purchasing organization is an organizational unit responsible for procuring materials and
services for one or more plants and for negotiating prices and terms of delivery with
vendors. The purchasing organization assumes legal responsibility for all external
purchase transactions.
You can incorporate purchasing into the company structure by assigning purchasing
organization to company code and plants. You can have a combination of centralized
and decentralized organizations.
Material Master:
The Material Master record is a company’s main source of material- specific data. It is
used by all components in the R/3 system.
The material master database (often referred to simply as the "material master",
comprising all the individual material master records stored in the system) contains
descriptions of all materials that an enterprise procures, produces, and keeps in stock. It
is the central repository of information on materials (such as inventory levels) for the
enterprise. The integration of all material data in a single database objects prevents the
problem of data redundancy. Every area, such as Purchasing, Inventory Management,
Material Planning and Invoice verification can use the data stored.
Material master
Transaction code: MM01
Since materials are processed by
various user departments within a
company and each department
stores different information for the
materials. The Material Master is
sub divided into information
grouped by user departments.
Each user department has a
different view of the material
master record and id responsible
for maintaining the data to support
its function.
Menu path:
SAP main menu> Logistics>
Material Management> Material
Master > Material> Create
(General) >Immediately
Click on Enter.
Basic data 1
Enter Description of material
Click on Enter
Click on Enter
Click on purchasing
Click on Enter
Click on Enter
Click on Accounting 1
In the field Valuation Class,
enter valuation class number or
use F4 to choose one value.
Table of Contents
Goods Receipts:
A goods receipt (GR) is a goods movement with which the receipt of goods from a
vendor or from production is posted. A goods receipt leads to an increase in warehouse
stock.
You use this component to post the receipt of goods from an external vendor or from
production. A goods receipt leads to an increase in warehouse stock.
The R/3 System distinguishes between the following types of goods receipts:
If your company uses the MM Purchasing component, deliveries from vendors are most
likely the result of purchase orders initiated by the purchasing department.
The purchase order is not only the document with which the purchasing department
orders goods from the vendor; it is also an important planning and tracking tool for the
following departments: Purchasing, Material Requirements Planning (MRP), Inventory
Management, and Invoice Verification.
If a material is delivered for a purchase order, it is important for all of the departments
involved that the goods receipt entry in the system references this purchase order, for
the following reasons:
Step1:
Menu path:
Note:
Step 2:
Reservation:
A reservation is a request to the warehouse to keep materials ready for a goods issue at
a later date and for a certain purpose. A reservation for goods issue can be requested by
various departments for various account assignment objects, (such as cost center,
order, asset, etc.)
Purpose of a Reservation:
In a reservation, information is stored that is relevant for the goods issue and for MRP,
for example:
Note: You can create a reservation for exactly one purpose only; that is, in a
reservation, you can only enter one movement type and one account assignment object
(for example, a cost center).
Creating A Reservation:
Menu Path:
Click on Enter
Step 3:
Goods Receipts
(Reservation)
Menu path:
SAP main menu> Logistics>
Inventory Management> Goods
Movement > MIGO
Select Reservation
Enter your Reservation number
Click on Enter
Check on Item ok
Step 4:
Display a Reservation
Menu Path
Click on Enter
Step 5:
Change Reservations:
Menu Path:
Click on Enter:
Goods Issues:
A goods issue (GI) is a goods movement with which a material withdrawal or material
issue, a material consumption, or a shipment of goods to a customer is posted. A goods
issue leads to a reduction in warehouse stock.
Inventory Management provides for the staging of components for production. You enter
withdrawals for production as goods issues with reference to the production orders for
which the components are required.
Materials can be withdrawn not only for production but also for other purposes (for
example, for cost center, CO order, maintenance order, or asset).
Before entering a goods issue, you have to find out whether any reference document or
data exists in the system.
When you enter a goods receipt, you can reference:
• Reservations
• Production orders
• Bills of material
If you do not reference the corresponding reference document during the goods issue,
the reservation remains open and the requested quantity remains reserved, although the
request no longer really exists. Consequently, available stock in Materials Planning no
longer corresponds to the stock actually available!
Menu Path
Click on Enter
Click on Save/Post,
SAP will display a message
Document xxxxx Posted.
Step 7:
Menu Path:
Click on To reservation
Click on Enter
Click on Enter
Click on Save/Post
Step 8:
Stock Overview
Menu Path:
SAP main menu> Logistics>
Materials
Management>Inventory
Management> Environment>
Stock> Stock Overview
Step 9:
Menu Path:
Enter Plant Id
Step 10:
Return Delivery
Transaction Code: MBRL
Menu Path:
SAP main menu> Logistics>
Material Management>
Inventory Management>Material
Document > Return Delivery
Click on Enter
Click on Enter
Click on Save/Post
Stock Transfer:
In a company, goods movements do not only occur in the form of goods receipts and
goods issues. Depending on the organization of the company (for example,
decentralized storage) and its sales policy, internal stock transfers might also be
necessary.
Stock transfers can occur at three different levels:
A stock transfer from company code to company code corresponds to a stock transfer
from plant to plant, with both plants belonging to different company codes.
A stock transfer from plant to plant not only leads to a change in stock quantity in both
plants; if both plants are assigned to different valuation areas, an accounting document
is also created.
This type of stock transfer can only be carried out from unrestricted-use stock of the
issuing plant to unrestricted-use stock of the receiving plant.
Stock transfers from plant to plant are relevant for Material Planning, since Materials
Planning operates at plant level.
You can post both stock transfers and transfer postings in the R/3 System. Transfer
postings differ from stock transfers in that transfer postings are not connected with a
physical goods movement. They usually involve a change in stock type, batch number,
or material number.
An example of transfer posting is the release from inspection into the company's own
stock.
Stock Transfer Procedures
There are three different procedures for carrying out a stock transfer:
Both stock transfers and transfer postings consist of a "goods issue" from an issuing
point and a "goods receipt" at a receiving point. You can post a stock transfer from
storage location to storage location or from plant to plant either in one step or in two
steps.
The advantage of the one-step procedure is that you enter a single transaction in the
system.
The two-step procedure, on the other hand, allows you to monitor the stocks in transit.
After the goods issue is posted at the issuing point, the stock appears "in stock transfer"
at the receiving point and is managed as such in the system.
The two-step procedure is also required if users have authorizations only for their own
plants.
One-Step Procedure:
During a one-step stock transfer, the system creates two material document items for
every item you enter:
• An item for the removal from storage at the issuing point
• An item for placement into storage at the receiving point
Two-Step Procedure:
Step 11:
Menu Path:
Step 12:
(One step procedure with a reservation): For stock transfer with Reservation you
must create
Reservation for movement Type (Storage Location to Storage Location)
This stock transfer procedure reduces unrestricted-use stock and reserved stock at the
issuing storage location and increases the same stock at the receiving storage location.
At plant level, the stock level does not change, except that the stock is distributed
differently among the storage locations in the plant. The system does not create an
accounting document for the material document. The quantity becomes available again
for Materials Planning.
Menu Path:
Click on Enter
Step 13:
Menu Path:
Click on To Reservation Or F6
Click on Enter
Step 14:
Stock overview:
(After Transfer Posting)
Menu Path:
Click on Execute
Step 15:
Menu Path:
Click on Enter
Step 16:
Menu Path:
SAP main menu> Logistics>
Materials
Management>Inventory
Management> Environment>
Stock> Plant Stock Availability
Click on Execute
Step 17:
Menu Path:
Click on Enter
Click on overview
Step 18:
Menu Path:
SAP main menu> Logistics>
Materials Management>
Inventory Management>
Material Document> Place in
Storage
Click on Enter
Step 19:
Menu Path:
Click on Execute
Physical Inventory allows you to carry out a physical inventory of your company’s
warehouse stocks for balance sheet purposes.
In the R/3 System, physical inventory can be carried out both for a company’s own
stock and for special stock. Inventory for a company’s stock and for special stocks
(such as, consignment stock at customer, external consignment stock from vendor or
returnable packaging) must be taken separately (in different physical inventory
documents), however.
Furthermore, the stock can be divided into stock types. In the standard system, a
physical inventory can be carried out for the following stock types:
Inventory of all stock types mentioned can be taken in a single transaction. For the
materials to be inventoried, one item is created in the physical inventory document for
every stock type.
Physical inventory takes place at storage location level. A separate physical inventory
document is created for every storage location.
If a material does not exist in a storage location, this means that no goods movement
has ever taken place for the material in the storage location. The material, therefore, has
never had any stock in this storage location. The material does not exist at stock
management level in the storage location. It is therefore not possible to carry out a
physical inventory for the material in this storage location.
This is not to be confused with a material for which a goods movement has taken place
and for which the stock balance is currently zero. A physical inventory must be carried
out in this case, since storage location data is not deleted when the stock balance is
zero.
• Periodic inventory
• Continuous inventory
• Cycle counting
• Inventory sampling
Periodic Inventory
In a periodic inventory, all stocks of the company are physically counted on the balance
sheet key date. In this case, every material must be counted. During counting, the entire
warehouse must be blocked for material movements.
Continuous Inventory
In the continuous inventory procedure, stocks are counted continuously during the entire
fiscal year. In this case, it is important to ensure that every material is physically counted
at least once during the year.
Cycle Counting
Cycle counting is a method of physical inventory where inventory is counted at regular
intervals within a fiscal year. These intervals (or cycles) depend on the cycle counting
indicator set for the materials.
The physical inventory is connected to the Logistics Information System (LIS). When
inventory differences are updated in the LIS, they are displayed both on a quantity and
on a value basis. The physical inventory items are aggregated at inventory number level,
plant level, storage location level, and material level. If you need more detailed
information on the inventory differences in the LIS, you can access the list of inventory
differences directly from the LIS and continue the analysis at item level.
Constraints
The posting of physical inventory differences is subject to certain time constraints:
Step 20:
Physical Inventory
The physical inventory procedure is carried out in three steps:
Menu Path:
Click on Enter
Step 21:
Creating Sessions
Menu Path:
Step 22:
Menu Path:
Click on Enter
Step 23:
Menu Path:
Click on Enter
Step 24:
Menu Path:
Click on Enter
Menu Path:
Click on Enter:
Step 26:
Initiating of Recount
Transaction code: MI11
Menu Path:
Click on Enter
Step 27:
There are various options for posting inventory differences depending on the processing
status of the physical inventory transaction.
A physical inventory document has already been created, and the count
has already been posted. You only have to post the inventory differences.
A physical inventory document has been created, but the count has not
yet been posted. The count results are available. You enter the count and
post the differences in one step.
You have a count result without reference; that is, no physical inventory
document has yet been created for this physical inventory transaction.
You create a physical inventory document, enter the count, and post the
differences in one step
Physical Inventory
Difference
Transaction Code: MI07
Menu Path:
Click on Enter
Click on save/Post
Step 28:
Menu Path:
Click on Enter
Click on Save/Post
As well as providing a wide range of options for carrying out an inventory of your stocks,
the physical inventory functions in the R/3 System allow you to obtain an overview of the
progress of the physical inventory for each material at each stage of the process - from
creating the physical inventory document to posting the physical inventory differences
Example 1
Example 2
Step 30:
Consignment:
In consignment processing, the vendor provides materials and stores them on your
premises. The vendor remains the legal owner of the material until you withdraw
materials from the consignment stores. Only then does the vendor require payment. The
invoice is due at set periods of time, for example, monthly. In addition, you can also
arrange with the vendor that you take over ownership of the remaining consignment
material after a certain period of time.
Features
The consignment stock is managed under the same number as your own stock.
Consignment stock can, therefore, be transferred to the available stock.
You can define consignment prices in foreign currency. The currency in which the order
is placed with the vendor applies for consignment withdrawals.
You can determine period-specific consignment prices.
You can specify the consignment price in any unit of measure. The conversion factor is
stored in the info record.
Using consignment info records, you can make use of other condition functions used in
Purchasing, such as discounts and price quantity scales.
Consignment stocks of the same material from different vendors can be managed
independently from one another and at the price of the individual vendors.
Consignment stocks are not valuated. When the material is withdrawn it is valuated at
the price of the respective vendor.
You can make transfer postings between these three stock types. Withdrawals can only
be posted from unrestricted stock, however.
Before you can order a material from a vendor or post a goods receipt to consignment
stock, you must maintain the consignment price for the vendor in an info record.
The price is required for material valuation and accounting purposes.
If you order consignment material from several vendors, the system maintains the
consignment stock separately for each vendor, since the individual quantities of the
material can have different prices with each vendor
Menu Path:
Click on Enter
Click on Texts
Step 31:
You can procure consignment material via purchase requisitions, purchase orders and
outline agreements for consignment material.
Enter the item category K for the consignment item. To ensure that the goods receipt is
posted to the consignment stores and an invoice receipt cannot be generated for the
item.
Do not enter a net price.
Menu Path:
Step 32:
Menu path:
Click on Enter
Check on Item Ok
Click on Post/Save
Step 33:
Displaying Consignment
Overview:
Transaction code: MB54
Menu Path:
Click on Execute
Step 34:
Menu Path:
Click on enter:
Click on Overview
Step: 35
Transferring consignment
Material
Menu Path:
Click on Enter
Click on Overview
Settling Consignment
Liabilities:
Menu Path:
Select Display
Click on execute
Step 37:
Pipeline
A pipeline material is a material that flows directly into the production process from a
pipeline (for example, oil), from a pipe (for example, tap water), or from another similar
source (for example, electricity).
A material from the pipeline is always available; i.e. it can be withdrawn from the pipeline
at any time and in any quantity.
Depending on the system configuration, a material can be withdrawn only from the
pipeline or, in addition to the pipeline; normal stocks of the material can also be
managed.
Pipeline Withdrawal
You can enter a pipeline withdrawal for an order or for a cost center. Pipeline
withdrawals differ from other goods movements in that they are entered with the special
stock indicator P.
The withdrawal is valuated at the price defined in the pipeline info record.
A withdrawal from the pipeline results in the following updates in the system:
• The pipeline withdrawal results in a vendor liability that must be settled
periodically in a similar way to the management of consignment stocks. In
the standard system the same account is used for both pipeline and
consignment liabilities, but a different pipeline liabilities account can be
defined in Customizing.
• A consumption history is kept.
The pipeline withdrawal has no effect on existing warehouse stock or on the availability
of the material.
Menu Path:
Click “Continue”.
Enter Plant id
Click on Enter
Click on Purchasing:
Price Unit: 1
Click on Accounting 2:
Step 38:
Menu Path:
SAP main Menu> Logistics>
Materials Management>
Purchasing> Master Data>Info
Record > Create
Click on Enter
Click on text:
Step 39:
Menu Path:
Click on Enter
Click on Save/Post
Menu Path:
Sap main menu> Logistics >
Materials Management>
Inventory
Management > Environment>
Consignment> Consignment
from Vendor> Liability
Check Pipeline
Select settle