How to Set-up Inter-company Stock Transfer

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How to set-up inter-company stock transfer process in SAP

Saurabh Lal Page 1 10/01/2006

How to set-up inter-company stock transfer process in SAPwith delivery and billing documents

Stock transfer is a movement of goods from one plant to another. The goods may be

of any material type and the supplying and receiving plants may belong to same ordifferent company codes. When the plants belong to same company code it is a case

of normal stock transfer but when the plants belong to different company codes itbecomes a case ofinter-companystock transfer.

Before discussing inter-company stock transfer further, first let us look at how to set-up normal stock transfer process (between plants of same company code). This will

help us to appreciate the additional settings required for inter-company cases.

As often used in practice, we will see the set-up of normal stock transfer process

using SD delivery. There is usually no relevance of billing in this process as the

transaction occurs within the same company code. Billing may be relevant in casethe plants are in different countries andplants abroadfunctionality is used.

It is assumed that the reader has a basic knowledge of SAP Materials Management

and Sales & Distribution modules. The screen shots are from IDES, SAP R/3 4.7

Enterprise system.

Normal stock transfer

The steps for set-up of normal stock transfer are as follows:

1. Define which document type will be used for the stock transfer. For this,

assign document type of purchase order that is to be used for stock transferto the combination of supplying plant and receiving plant. For normal stock

transfer, document type UB may be used. The customizing path in IMG isMaterials Management Purchasing Purchase Order Set up Stock

ReceivingPlant

SupplyingPlant

Normal stocktransfer

Company Code A

Goodsmovement


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Transport Order Assign Document Type, One-Step Procedure,

Underdelivery Tolerance.

2. Assign the required delivery type to the combination of purchase order type

and supplying plant to specify that an SD delivery is to be created for thephysical stock transfer. Unless required otherwise, standard delivery type NL

may be used. The customizing path in IMG is Materials Management Purchasing Purchase Order Set up Stock Transport Order Assign

Delivery Type and Checking Rule.

3. Assign a valid sales area to the supplying plant in customizing. The deliverydocument of type NL will be created in this sales area. The customizing path

in IMG is Materials Management Purchasing Purchase Order Set upStock Transport Order Define Shipping Data for Plants.


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4. Create a customer (only general data), preferably with same name asreceiving plant, in account group for internal customers. Assign this customerto receiving plant in customizing. This customer will be used as Ship-to partyin the NL delivery. The customizing path in IMG is Materials Management

Purchasing Purchase Order Set up Stock Transport Order Define

Shipping Data for Plants.

5. Goods movement type 641 for normal 2-step transfer is defined in standard

schedule line category NN in customizing. Ensure that this movement type ismaintained in the schedule line category used. 641 movement type is used

for posting goods issue in NL delivery. The customizing path in IMG is Salesand Distribution Sales Sales Documents Schedule Lines Define/

Assign Schedule Line Categories. Unless required otherwise, schedule line

category NN should be assigned to standard delivery item category NLN incustomizing.


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6. After the customizing steps a few steps for master data set-up are required

for proper execution of the process. Extend customer assigned to receivingplant (from step 4) to the company code and sales area of supplying plant(from step 3).

7. Extend the materials to be transferred to both supplying and receiving plantsand sales area of supplying plant (from step 3).

The reader is encouraged to try out these steps in a sandbox or IDES environment to

gain familiarity.

Let us now see the settings required for set-up of inter-company stock transfer

process with delivery and billing document creation. New settings for inter-companyprocess are marked with a check sign.

Inter-company stock transfer with delivery and billing documents

1. Define which document type will be used for inter-company stock transfer.Assign document type of the purchase order that is to be used for inter-company stock transfer to the combination of supplying plant and receiving

plant. For inter-company stock transfer, document type NB may be used. Thecustomizing path in IMG is Materials Management Purchasing PurchaseOrder Set up Stock Transport Order Assign Document Type, One-Step

Procedure, Underdelivery Tolerance.

Supplying

Plant

Receiving

Plant

Inter-companystock transfer

Company Code A Company Code B

Goodsmovement


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2. Assign the required delivery type to the combination of purchase order typeand supplying plant to specify that an SD delivery is to be created for the

physical stock transfer. Unless required otherwise, standard delivery typeNLCC may be used. The customizing path in IMG is Materials Management

Purchasing Purchase Order Set up Stock Transport Order Assign

Delivery Type and Checking Rule.

3. Assign a valid sales area to the supplying plant in customizing. The delivery

document of type NLCC will be created in this sales area. The customizingpath in IMG is Materials Management Purchasing Purchase Order Setup Stock Transport Order Define Shipping Data for Plants.

4. Create a customer (only general data), preferably with same name asreceiving plant, and assign to receiving plant in customizing. This customer

will be used as Ship-to party in the NLCC delivery. The customizing path inIMG is Materials Management Purchasing Purchase Order Set upStock Transport Order Define Shipping Data for Plants.

5. NLCC delivery document will be relevant for only inter-company billing and

not normal billing. This status is indicated in processing tab in the deliveryheader and is controlled by billing relevance of delivery item category

(standard NLC) in SD customizing. The billing relevance should be D. In case

automatic batch determination is active it should be N. The customizing pathin IMG is Sales and Distribution Sales Sales Documents Sales

Document Item Define Item Categories.


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6. Inter-company billing type IV is determined from sales order type DL incustomizing. DL is the default order type for delivery type NLCC. The inter-

company invoice is created in the sales area of the supplying plant (from step3). Payer is the customer assigned to the receiving plant (from step 4).

7. Goods movement type 643 for normal 2-step cross-company transfer isdefined in standard schedule line category NC in customizing. Ensure that thismovement type is maintained in the schedule line category used. 643

movement type is used for posting goods issue in NLCC delivery. Thecustomizing path in IMG is Sales and Distribution Sales Sales Documents Schedule Lines Define/ Assign Schedule Line Categories. Unless required

otherwise, schedule line category NC should be assigned to standard deliveryitem category NLC in customizing.


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8. For 1-step transfer (meaning goods receipt in receiving plant happensautomatically at the time of goods issue in supplying plant), tick the one-stepindicator in customizing for stock transport order. In this case, the 1-step

movement type 645 is used as specified in NC schedule line category. In 1-step stock transfer only one material document is created for both goods

issue (movement type 645) and goods receipt (movement type 101). Thecustomizing path in IMG is Materials Management Purchasing PurchaseOrder Set up Stock Transport Order Assign Document Type, One-Step

Procedure, Underdelivery Tolerance.

9. After the customizing steps a few steps for master data set-up are requiredfor proper execution of the process. Create a vendor in receiving companycode and purchasing organization in account group for internal vendors.Assign the supplying plant to this vendor in purchasing data view (Extras

Add purchasing data). This vendor will be used in stock transfer order as the

supplier.

One-step indicator


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10. Extend customer assigned to receiving plant (from step 4) to the company

code and sales area of supplying plant (from step 3).

11. Extend the materials to be transferred to both supplying and receiving plantsand sales area of supplying plant (from step 3).

In practice it is often required to do a reversal of stock transfer process when thereceiving plant needs to return goods to the supplying plant. For such cases we

require the inter-company stock transfer return process.

New settings for inter-company return process are marked with a check sign.

SupplyingPlant

ReceivingPlant

Inter-company stocktransfer return

Company Code A Company Code B

Goodsmovement


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Inter-company stock transfer return with delivery and billing documents

1. Define which document type will be used for inter-company stock transferreturn. Assign document type of the purchase order that is to be used forinter-company stock transfer return to the combination of supplying plant and

receiving plant. For inter-company stock transfer return process NB document

type may be used as in the case of normal inter-company stock transfer. Nonew document type is required. To create a stock transfer return order, tick

the return indicator on the purchase order item line. With this indicator, theflow of goods is reversed but supplying and receiving plants remain the same.

In terms of goods movement, stock in the receiving plant decreases and inthe supplying plant it increases.

2. Assign the required return delivery type to the combination of purchaseorder type and supplying plant to specify that an SD return delivery is to be

created for the physical stock transfer return. Unless required otherwise,

standard return delivery type NCR may be used. The customizing path in IMGis Materials Management Purchasing Purchase Order Returns Order

Store Return / Return Plant to Plant. Please note that the designatedsupplying plant in case of return will be the same as that in normal stock

transfer.

Return indicator


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3. Assign a valid sales area to the supplying plant in customizing. The delivery

document of type NCR will be created in this sales area. The customizing pathin IMG is Materials Management Purchasing Purchase Order Set upStock Transport Order Define Shipping Data for Plants.

4. Create a customer (only general data), preferably with same name as

receiving plant, and assign to receiving plant in customizing. This customerwill be used as Ship-to party in the NCR return delivery. As this is already

done earlier, no additional customizing is required. Please note that the

designated receiving plantin case of return will be the same as that in normalstock transfer.

5. NCR delivery document will be relevant for only inter-company billing andnot normal billing. This status is indicated in processing tab in the deliveryheader and is controlled by billing relevance of return delivery item category

(standard NCRN) in SD customizing. The billing relevance should be J

assuming batch determination is not required for returns. The customizingpath in IMG is Sales and Distribution Sales Sales Documents SalesDocument Item Define Item Categories.

6. Inter-company billing type IG is determined from sales order type DLR incustomizing. DLR is the default order type for delivery type NCR. The inter-company credit memo is created in the sales area of the supplying plant

(from step 3). Payer is the customer assigned to the receiving plant (fromstep 4).


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7. Goods movement type 673 for normal 2-step cross-company transferreturn is defined in standard schedule line category NS in customizing. Ensure

that this movement type is maintained in the schedule line category used.673 movement type is used for posting goods receipt in NCR return delivery.The customizing path in IMG is Sales and Distribution Sales Sales

Documents Schedule Lines Define/ Assign Schedule Line Categories.

Unless required otherwise, schedule line category NS should be assigned tostandard return delivery item category NCRN in customizing.

8. For 1-step transfer return, tick the one-step indicator in customizing for stock

transport order. In this case, the 1-step movement type 675 is used as

specified in NS schedule line category. In 1-step stock transfer return, onlyone material document is created for both goods transfer returns (movementtype 675) and goods receipt returns (movement type 161). The customizing

path in IMG is Materials Management Purchasing Purchase Order Setup Stock Transport Order Assign Document Type, One-Step Procedure,

Underdelivery Tolerance.

9. There may be a special requirement in certain industries such as ConsumerProducts to post returned goods in blockedstock instead of standard qualityinspection stock. In such cases new movement types may need to be created

by copying standard movement type 657 (GD returns blocked) and

referencing control settings of movement types 673 or 675 depending on


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whether 2-step or 1-step transfer is required. An important control setting is

the Movement type category field highlighted below. This field controls

whether the movement is cross-company. The customizing path in IMG isMaterials Management Inventory Management and Physical Inventory

Movement Types Copy, Change Movement Types. A reverse movement

type should be created for every new movement type created.

10. After the customizing steps a few steps for master data set-up are requiredfor proper execution of the process. Create a vendor in receiving companycode and purchasing organization in an account group for internal vendors.Assign the vendor to supplying plant in purchasing data view (Extras Add

purchasing data). This vendor will be used in the stock transfer order as thesupplier.

11. Extend customer assigned to receiving plant (from step 4) to the companycode and sales area of supplying plant (from step 3).

12. Extend the materials to be transferred to both supplying and receiving plants

and sales area of supplying plant (from step 3).

As you try out this set-up in a sandbox or evaluation system, it may be useful to

review the basic transactional flow in SAP for normal 2-step inter-company stocktransfer process. This process flow may be helpful during testing.


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Reference inter-company stock transfer process flow

1. Create a purchase order with transaction ME21N using document type andinternal vendor as described above and enter materials and receiving plant in

item lines (in case of stock transfer return tick the return indicator on the

item lines).2. Create replenishment cross-company delivery with transaction VL10G. The

delivery type will be determined automatically.3. Enter delivery number in transaction VL02N and post goods issue.

4. Display and check goods issue material document and accounting documentsin document flow.

5. Post goods receipt with reference to purchase order with transaction MIGO.

6. Display purchase order with transaction ME23N and check goods receiptmaterial document and accounting documents in Purchase order history at

item level.7. Create inter-company billing document with reference to delivery document

with transaction VF01. The billing type will be determined automatically.8. Display and check accounting documents related to billing in document flow.