Inventory Configuration

8/17/2019 Inventory Configuration

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A Step by Step Guide to the SAP MM Inventory Management and Physical Inventory Configurations

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Table of ContentsObjective ............................................................................................................................................... 3

IMG Menu – The Starting Point ........................................................................................................... 4Start of the SAP MM Inventory Management Configurations............................................................. 5

The Basic Material Master Configuration : Units of measurement...................................................... 5

Where does the user maintain the UOM?............................................................................................. 7Industry Type for Material Master........................................................................................................ 8

Delete or Add in Storage Location for the new Plant ......................................................................... 11

General Plant Settings in Inventory Management .............................................................................. 11

Define the Attributes of System Messages ......................................................................................... 13Start of the Number Range Configurations ........................................................................................ 15

Define Number Assignment for Accounting Documents................................................................... 15

Define Number Assignment for Material and Phys. Inv. Docs .......................................................... 18Define Number Assignment for Reservations .................................................................................... 19

Start of the Individual Fields IMG Settings........................................................................................ 20

Field Selection for Goods Movements Initial/Header Screens........................................................... 20

Field Selection for MIGO................................................................................................................... 21Field Selection per Mvt Type ............................................................................................................. 21

Define Screen Layout for Movement Type ........................................................................................ 22Settings for Transactions and Reference Documents ......................................................................... 24

Create Storage Location Automatically.............................................................................................. 26

Set Manual Account Assignment for Movement Type ...................................................................... 27

Maintain Copy Rules for Reference Documents ................................................................................ 28Set Up Dynamic Availability Check................................................................................................... 29

Generate Physical Inventory Documents for Goods Movements....................................................... 32

Allow Negative Stocks ....................................................................................................................... 33Set Missing Part Check....................................................................................................................... 34

Default the “Delivery Completed” Indicator ...................................................................................... 35For GR-Based IV, Reversal of GR Despite Invoice ........................................................................... 36Record Reason for Goods Movement................................................................................................. 37

How to Define, Copy or Change a Movement Types?....................................................................... 38

Default Print Control for Material Document..................................................................................... 41Define Stock List Display for MMBE................................................................................................ 47

Define Valuation Class ....................................................................................................................... 49Configure Automatic Postings to G/L Accounts ................................................................................ 51

Storage Location Indicator to allowed/disallowed Physical Inventory Freezing ............................... 58

Configuration for Vendor Consignment ............................................................................................. 59

Business Process Flow for Vendor Consignment............................................................................... 60The Initial Inventory during Implementation ..................................................................................... 63

Static versus dynamic data conversion ............................................................................................... 66

A Sample note on Inventory Balance Conversion.............................................................................. 66Appendix A: The Inventory Goods Movement Configuration Links Explain ................................... 67

Appendix B: Restrict the Storage Location from any Goods Movement........................................... 68

Appendix C: Allows/Disallowed Goods Movement Posting to Previous Period............................... 70Appendix D: How to Archive the Materials Documents? .................................................................. 71

Appendix E: Configure the Cycle Count in SAP................................................................................ 76


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Objective

The objective of this paper is to provide the SAP MM consultant with a step-by-step guidesat configuring the SAP MM Inventory Management module. It is structure in the form ofhow-to-do configurations method.

When you do the SAP configuration, sequence is not really important as long as allthe MM Inventory Management modules Features that need to be used have beenconfigured.

Notes:Initial IMG Action : Required (this are dynamic data which are unique to the company)Initial IMG Action : Usually Not required (it depends on the customer requirement) Initial IMG Action : Not required (normally this kind of configuration is quite static, most ofthe customer will accept the SAP default and may request for changes after going live for aperiod of time)


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IMG Menu – The Starting Point

Before doing any SAP Configuration (or IMG), all SAP consultants MUST be aware of thetransaction SPRO. This transaction code is the heart of the whole SAP configuration.

Click the button and you will be shown all the configuration tree for thevarious SAP modules like SD, PP, FI, CO etc.

Transaction SPRO

The SAP IMG configuration t ree for all the modules


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Start of the SAP MM Inventory Management Configurations

Now, you will go through each of the SAP Inventory Management Configurations to getyour SAP Inventory transaction functioning. After all the configurations are completed,

Appendix A: (The Inventory Goods Movement Configurat ion Links Explain) will link allthe related configurations for you so that you can understand the relationship.

The Basic Material Master Configuration : Units of measurement

Initial IMG Action : Usually Not Required

As a rule of thumb, always RECOMMEND the user to set the base unit of measure for amaterial to the smallest unit that can be used. That is, don't set it as FT (foot), but set itas IN (inch). Never set EA as base unit for something that can be divided and consumed insmaller quantities.

Please take note that you CANNOT change your Base Unit of Measure once there areany OPEN TRANSACTIONAL POSTING done by the user. For e.g. Available Stocks,

Open Purchase Order, Open Production Order, Dependent Reservations already exists,Open Sales Order etc.

If you try to change, a SAP message will appear asking you to click thebutton. It will list all the OPEN DOCUMENTS to you.

Tip: Determine the lowest UOM as the Base Unit of Measure

Transaction :CUNI

Menu Path : IMG – General Settings – Currencies – Check units ofmeasurement

Click the button Units of measurement to see the UOM settings.


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Where does the user maintain the UOM?

For this IMG settings, the user will maintain it in the Material Master Record (MM01/MM02).

Maintain the Base unit of measure

Transaction :

MM02

SAP Menu Path : Logistics – Materials Management – Material Master –

Material – Change – Immediately – Select Basis data 1


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Maintain the UOM Conversion

Transaction :MM02

Menu Path : Logistics – Materials Management – Material Master –Material – Change – Immediately - Select Basis data 1 - AdditionalData – Units of measure

For e.g. assuming that the Materials Master Base UOM is SH - Sheet and you need totransact in KG. Input the X (Denominator) and Y (Numerator) for Conversion to Base Unitsof Measure column and the system will automatically calculate the Number column for youonce you hit the Enter key.

Please note that you may enter only whole numbers in the numerator and denominatorfields; that is, if 3.14 m² correspond to one piece, you must enter integer multiples (314 m²= 100 PC). In this case, the quotient is therefore 100/314 (the numerator being 100 and thedenominator 314).

Industry Type for Material Master


Industry type are used for classifying your company industry sectors. SAP used it tocontrol the Field attributes of your Material Master . There are no other usage.

The SAP default industry sectors are :

• A for plant engineering and construction

• C for the chemical industry

• M for mechanical engineering

• P for pharmaceuticals

Note: You cannot change the industry type after it is being input.The only way to change the industry type to is to Flag the materials for deletion andarchive it. Then create a new material with the correct industry type.

Define new or Change the existing Industry Type

IMG Shortcut :OMS3

Menu Path : IMG – Logistics General – Material Master – FieldSelection - Define Industry Sectors and Industry-Sector- Specific FieldSelection


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The Field reference above points to the Fields in Tcode MM01/MM02/MM03 where theuser used for maintaining their Material Master Record.If you intend to create a new Field ref., it has to begin with a y or z.

IMG Shortcut :

OMS9

Menu Path : IMG – Logistics General – Material Master – Field

Selection - Maintain Field Selection for Data Screens

Double click on Field ref.

Double click on and you will see the Fields of each Material Master.

The attributes of Field Sel. Group have a higher prior ity than the Field reference.


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For e.g. Field selection grp 1 contains the following fields which are all Required Entry asyou can see from the above screen.

Default the Material Industry TypeIf you have only one industry type, you can default and hide it. This saved the users theneed of entering the industry type. When there are different Industry Sector for differentusers, you can also teach them to default it in MM01 – Defaults -> Industry sector

IMG Shortcut :OMT3U

Menu Path : IMG – Logistics General – Material Master –Configuring the Material Master – Maintain User Settings


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Delete or Add in Storage Location for the new Plant

Initial IMG Action : Required

A storage location is the place where stock is physically kept within a plant. Somecompanies will break their area to be managed by different Plant and Storage Location and

you will define IMG Storage Location Plant by Plant.

Each Plant may have different storage location requirement to track the movementand quantities of stocks. For e.g. defective stocks, warehouse stocks etc. For namingconvention, you can recommend them to use the building number follows by two charactersto represent the inventory type. For e.g. Building 9, the storage location for Finished Goodscan be 09FG, Defective Goods can be 09DF etc.

Storage Location is a required fields when user do entries for Goods Movement relatedtransaction code such as MB1A – Goods Issue, MB1B – Transfer Posting, MB1C – OtherGoods Receipts etc. User must know where they want to keep the Inventory.

Configure the Storage Location

Transaction :OX09

Menu Path : IMG – Enterprise Structure – Definition – MaterialsManagement - Maintain Storage Location

Click the New entr ies button to enter a new Storage Location.

General Plant Settings in Inventory Management

IMG Action : Not required

You should not make any IMG settings using this overall maintenance screen. Use thisscreen for checking purpose as you can view all the Individual Configuration on a singlescreen.

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory - Plant Parameters - Double click the Plant and you’ll be able to see thePlant Inventory Settings


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Double click on the Plant to view the next screen.


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Define the Attr ibutes of System Messages

Initial IMG Action : Not required

In any of the Inventory Management goods movement transactions posting, the systemwill issues messages to the user screen to inform the user about certain system

responses or data situations (for example, a message indicating that the order item isflagged "delivery completed").

An example is given in Appendix B: (Restr ic t the Storage Location from any GoodsMovement) to see how you can make used of the Attributes of the System Messages.There are three attributes where you can define the type of system message for a version: W – You can set a warning message and after reading the message, the user is allowed

to hit enter and proceed with the entries and save the record. E – You can set an error message and the user have to correct the mistake or the

system will not allow the user to proceed further or to save the record entry. Space - No message will be issue to the user.

TransactionOMCQ

Menu Path : IMG - Logistics – Materials Management – Inventory Managementand Physical Inventory – Define attributes of System Messages - Settings forSystem Messages

From the System Messages screen, you can see that the SAP default for all messages thatcan be controlled are stored in version 00 and the Inventory Management, the applicationarea M7 is predefined.


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You are allow to create a new version (for example, ZZ) and this is maintained as aparameter ID MSV in the user master record, thus representing a user or a user group.

Transaction :SU01

Menu Path : IMG - Logistics – Materials Management – Inventory Managementand Physical Inventory – Define attributes of System Messages - Maintain Users

Step to configure the SAP System MessagesProceed as follows to control messages according to your needs:1. Copy the messages (for which you would like to change the type) into a separate

version (for example, ZZ ).2. Change the type of these messages in the new version.3. Allocate the corresponding version to the users as follows: Define a value (for example,

ZZ ) for the parameter ID MSV in the user master record by selecting Goto ->Parameters .

Please note that if you did not specify any parameter ID for a given user, the system usesversion 00. If there are no entry maintain in the table for a certain version the defaultmessage is a warning.


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Start of the Number Range Configurations

In the SAP Inventory Management modules, for every valuated post ing, the system willauto create a Material and a Financial Document. These documents will be pre-assigned with a range of running numbers. During the initial number range IMG, no actionis required on your side (unless your company want to changed it) as SAP have pre-

configured the system with a set of pre-defined running numbers.

Define Number Assignment for Account ing Documents

Initial IMG Action : Might be required for Account ing Documents

For every Valuated Inventory Posting, two documents (a material document and aaccounting document) will be generated automatically by the system.

By default, SAP has already defined a range of unique number for each document type.Companies are allowed to change them if they prefer another set of numbers.

Transaction :OMBA

Menu Path : IMG – Materials Management – InventoryManagement and Physical Inventory - Number Assignment –Define Number Assignment for Accounting Documents


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Configure the Financial Document Type with the relevant Number RangeFinancial Accounting documents are split into document types in order for the system todifferentiated document number assignment, which is the basis for distinguishing betweenthe various accounting operations. A number range is assigned to each document type. Ina company code, you have to define number intervals for each number range and fiscal

year. In inventory management, the transaction determines which document type is used.

To view the Financial Accounting Document Types: Click Financial accounting document types

Double click on Type AA to view the details

Copy down the Number range No For e.g. 04

To maintain the number assignment for accounting documents.- Click the Financial accounting number ranges button

Input your company code and click

Click to input the Number range For e.g.


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In the standard SAP Inventory Management System, no change is required as the followingthe document types have been predefined:

• WA for goods issues, transfer postings, other goods receipts

• WE for goods receipts with reference to purchase orders

• WF for goods receipts with reference to production orders

• WI for inventory differences • WL for goods issues with reference to deliveries (SD)

• WN for net posting of goods receipts

• PR for revaluation documents

Click the Goods issue document type and you can view the default Doc. Type that havebeen pre-defined.

You can see that each document type has been assigned a number range. In companycode 0001, number intervals are defined for each number range both for the current andthe previous fiscal year.

• Number range 49 with the year-related interval 4900000000 to 4999999999 is assignedto the document types for all goods movements, except goods movements with

reference to purchase/production orders.• Document type WE is used for goods receipts with reference to purchase orders and

production orders. This document type is assigned number range 50 with the year-related interval 5000000000 to 5099999999.

Please note that the net postings of goods receipts (document type WN) are not active inthe standard system. If you want to post goods receipts net, you have to assign documenttype WN (instead of WE) to the transaction MB01.

• Document type WI is used for posting inventory differences. This document type isassigned the number range 01 with the year-related interval 0100000000 to019999999999.


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Define Number Assignment for Material and Phys. Inv. Docs


The Physical Inventory module is used to adjust your company Stock balance after thecompany Physical stock-take. Physical Inventory Documents are created to captured the

stock data entries.

No action is required unless you wish to change the number assignment for the followingdocuments: material documents physical inventory documents

Transaction :OMBT

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Number Assignment – Define Number Assignment forMaterial and Phys. Inv. Docs

Refer to OMBA – Allocate Document Type to Transaction


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Define Number Assignment for Reservations


You can only used internal number assignment for reservations.

The default number range 01 with the interval 0000000001 - 9999999999 has been pre-defined for reservations.

No action is required from you unless your company preferred another range of numbers.

Transaction :OMC2

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Number Assignment – Define Number Assignmentfor Reservations

(a) OMJK - Maintain Number Range Interval

(b) No. range res/dep.rq


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Start of the Individual Fields IMG Settings

As you probably know, SAP is a pre-written software that caters to many companiesaround the world. There will be data fields that your company does not required,optional or fields that are mandatory. Therefore, SAP provides you the flexible to controlthose non-critical fields so that each companies can set their own fields attribute although

they may used the same transaction screen to input the data.

Field Selection for Goods Movements Initial/Header Screens


The goods movement screen, MB1A, MB1B, MB1C contains many fields for data entry.Some companies may prefer to hide those un-used fields not required for any data input.

Note that the field selection for the item screens depends on the movement type and isconfigured in separate steps.

For testing, click Hide for field Document header text.Goto transaction MB1A, MB1B, MB1C and have a look.Change it back to Input and check again.

Double click on the Modifiable field for more fields.


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Field Selection for MIGO


MIGO is the new enjoy transaction code for Inventory Goods Movement. It combines thetransaction MB1A, MB1B, MB1C and MBST

The IMG here allows you to change the attribute of those fields in MIGO.

Transaction :OMJX

Menu Path : IMG – Materials Management – InventoryManagement and Physical Inventory – Settings for EnjoyTransactions – Settings for Goods Movements (MIGO) – FieldSelection for MIGO

To change to field attribute, just tick accordingly on the one of the option buttons.

Field Selection per Mvt TypeInitial IMG Action : Not required

Here you maintain all the settings for field selection by movement type. This step replacesthe activity Define Screen Layout for the Enjoy transactions. The settings from DefineScreen Layout are adopted in these settings automatically so that you do not need tomaintain new entries here.


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You can specify for each field whether it is an optional entry or a mandatory entry. In thetable, you see all fields that are visible. You can access the setting Field Invisib le bydeleting the appropriate entry from the table.

There is no distinction between different special stock indicators in these entries. Special

stock fields are always suppressed automatically.

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory – Settings for Enjoy Transactions – Settings for Goods Movements (MIGO) –Field Selection for Mvt Type

Define Screen Layout for Movement Type


Here you set the field selection for the movement types including goods issues and transferpostings.

When creating a goods movement, the field selection determines which fields

• can be filled (optional entry)

• must be filled (required entry)

• are suppressed fields

In Inventory Management, the field selection depends on the movement type. The field selection defined for a movement type is valid for entering goods movements andreservations.

Transaction :OMBW

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Goods Issue / Transfer Postings – Define ScreenLayout

Transaction :OMCJ

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Goods Receipt – Define Screen Layout

Transaction :OMJ9A

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Automatic Movements – Define Screen Layout


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This is the first screen. Double click on the Movement Type

This is the Second screen. Double click on any of the Select group Field e.g Generaldata


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This is the Last screen where you change the Field Input Options

Settings for Transactions and Reference Documents


No action is required here unless you want to limit the number of selectable transactions(goods receipt, goods issue, and so on), reference documents (material document, delivery

note), and movement type that the system propose for every reference document intransaction MIGO, MIGO_GI, MIGO_GO, MIGO_GR

For example in MIGO, you can see the Selectable posting transaction and ReferenceDocuments type on the top left of the screen.

Transaction :MIGO

SAP Menu Path : SAP menu – Logistics - Materials Management – Inventory Management – Goods Movements (MIGO)


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If you need only certain transactions (for example, goods receipts or goods issues), youcan choose from the following preset transactions code: MIGO - Used to enter all goods receipts. MIGO_GR - Used to enter goods receipts from external procurement. MIGO_GO - Used to enter goods receipts for production orders.

MIGO_GI - Used to enter goods issues.

Configure the settings for transactions and reference documents:1. Choose the transaction with which you want to enter goods movements. 2. For each transaction, define which transactions and reference documents you want to

reference when you post goods movements.

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory – Settings for Enjoy Transactions – Settings for Goods Movements (MIGO) –Settings for Transactions and Reference Documents

To configure the Reference document, select a Tcode and click Reference document of theleft screen.

Just Tick or Untick the Active column and the Reference document will appear ordisappear accordingly when the user use the transaction MIGO - Goods Receipt forPurchase Order .


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Create Storage Location Automatically

Initial IMG Action : Usually Not required

The default setting for all the storage location data is created automatically for all inventorygoods movement that results in a change in the INVENTORY STOCK BALANCE.

The setting does not apply to Create Reservation transaction movement (MB21). This isbecause no actual goods movement has taken place during materials reservation.

Note: if you need to create a reservation to a storage location that have not beencreated, you can use transaction MMSC to create the storage location.

For each configuration, first of all you have to allow automatic creation per plant and thenyou have to explicitly allow the creation of storage location data for each movement type.

A tick means storage location created automatically and vice versa.

Automatic Creation of Storage Location for Goods Issues and Transfer PostingsSpecify whether the automatic creation of storage location data is allowed for goods issuesand transfer postings. This is advisable if you work with negative stocks and a material's

first movement may be an outward movement. Note that the reversal movement for agoods issue, for example, movement type 202 or 262, is not considered as an issue but asa receipt.

If you only use the automatic creation of storage location data for reversals of goodsissues, you do not have to allow negative stocks. The storage location data is only createdif the quantity is posted to 'standard' storage location stock. It is not created for receipts intoa special stock (for example, into sales order stock).

Transaction :OMB2

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Issue / Transfer Postings – Create Storage

Location Automatically

Automatic Creation of Storage Location for Goods ReceiptsSpecify whether the automatic creation of storage location data is allowed for goodsreceipts. This is advisable if you want to post a goods receipt without having to maintainthe storage location view of the material master record in advance.


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The storage location data is only created if the quantity is posted to 'standard' storagelocation stock. It is not created for receipts into a special stock (for example, into salesorder stock).

Transaction :

OMB3

Menu Path : IMG – Materials Management – Inventory Management and

Physical Inventory - Goods Receipts – Create Storage Location Automatically

Automatic Creation of Storage Location for Automatic Goods MovementsSpecify whether the automatic creation of storage location data is allowed for automaticgoods movements. This is advisable for goods movements via Shipping or when you postphysical inventory differences, for example. The storage location data is only created if thequantity is posted to 'standard' storage location stock. It is not created for receipts into aspecial stock (for example, into sales order stock).

Transaction :

OMJ8


Physical Inventory - Automatic Movements – Create Storage Location Automatically

(a) Plant

(b) Movement Type

Set Manual Account Assignment for Movement Type


In the R/3 System, account assignment is predefined via the automatic account

determination facility. When you enter material movements that are assigned to a costaccount, you can enter the account number manually. In doing so, you change the accountassignment predefined as offsetting entry for inventory posting.

Define the movement types for which you want the G/L account to be ready for input.

This happens to movement type “ 201 – Consumption for cost center from warehouse” ,where user are required to enter the cost center which is tied to a G/L a/c.


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You can specify this four choices:

These are the IMG transaction and Menu path where you can configure the Set Manual Account Assignment. You can have a look but no changes are necessary.

Transaction :OMB6

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Goods Issue / Transfer Postings – Set Manual

Account Assignment

Transaction :OMCH

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Goods Receipt – Set Manual Account Assignment

Transaction :OMJ9

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Automatic Movements – Set Manual Account

Assignment

Maintain Copy Rules for Reference Documents


Configure whether the items of the reference document are proposed as selected on theitem selection list when entering a document with reference, or not. In the standardsystem, the items are proposed selected.

The user can delete the check marks manually on the item selection list if she/he does notwant to adopt some items. It is useful to set this indicator if usually all or most of the items

of the reference document are to be adopted.

Specify for every transaction whether the items of the reference document are to bepre-selected or not by making a Tick on Untick on the Selection Box.

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory - Goods Issue / Transfer Postings – Maintain Copy Rules for ReferenceDocuments

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory - Goods Receipt – Maintain Copy Rules for Reference Documents


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Set Up Dynamic Availability Check


Dynamic availability check is link to the SAP Material Requirement Planning system. Thesystem checks whether the material to be withdrawn is available and issues a message, if

necessary.

In Inventory Management, two types of availability check are carried out. availability check during the entry of reservations availability check during the entry of goods movements

The availability check is only carried out if:

• the material master record contains a checking group for the availability check(MM01/MM02 - MRP 3 View)

• a checking rule is assigned to the transaction in Customizing

Transaction :OMCP

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Issue / Transfer Postings – Set Up Dynamic

Availability Check

Transaction :OMCM

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Receipt – Set Up Dynamic Availability Check

Figure 1: The Main Menu for Availability Check


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You can define

• for each movement type which type of message is issued (object Movement type)

• which checking rules are supported (object Checking rule)

• per checking group and checking rule: which objects (documents, stocks, materialrequirements) are included in the availability check (object Define checking rule)

• per transaction of Inventory Management: which checking rule applies (objectTransaction codes)

In the standard system, the message type A (warning in the case of non-availability,otherwise no message) is set for all relevant movement types.

The Movement Type button:

For Inventory Management, the checking rule 03 is provided.

The checking rules are also used by other applications (Sales & Distribution) and can alsobe maintained by them. If you want to define new checking rules or change existing rules, itis recommended that you contact and work with the other applications consultants for Sales& Distribution, Material Requirements Planning.

Steps to carried out:1. Define the movement types for which an availability check is to be carried out and which

type of message is issued. 2. Check the checking rule that you want to use in Inventory Management. Define a new

checking rule, if necessary, and define for each checking group which objects areincluded in the availability check for this checking rule.

3. Check the availability checking rules for each transaction. Assign other checking rulesto the transactions, if necessary.

In the Define Checking Rule button, Double click on the Check Rule for the IndividualSettings


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The IMG settings is straight forward. Just tick or untick those stocks or documentsyou want to inc lude or exclude during the MRP checking. Normally, accept thestandard default and change it as the user get familiar with the system.

In the Transaction code button, accept the standard default checking rule assigned.Changes are usually not necessary for other tcode.


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Generate Physical Inventory Documents for Goods Movements


Define for each plant and movement type whether a physical inventory document isautomatically generated when posting a goods movement. You can create a physical

inventory document in addition to the material document at the time of a goods movement.

This function is important when inventory differences are posted from the WarehouseManagement System. These inventory differences are thereby documented in InventoryManagement with a physical inventory document.

In order to create an inventory document in addition to a material document for a goodsmovement, the following conditions must be met:

• In the plant, you must define the transaction/event type WV for automatically generatedphysical inventory documents. You must define the document number assignment forthis transaction/event type.

• Automatic generation of physical inventory documents must be allowed for themovement type.

You may only enter the transaction/event type WV (inventory difference from WarehouseManagement system).

In the R/3 System, automatic generation of physical inventory documents is allowed formovement types 711 to 718.

Transaction :

OMCC

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Issue / Transfer Postings – Generate Physical

Inventory Documents for Goods MovementsTransaction :

OMJC

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Automatic Movements - Generate Physical InventoryDocuments for Goods Movements

1. Specify the plants for which you want the R/3 System to create a physical inventorydocument. Enter transaction/event type WV for these plants.

2. Check the movement types for which you want a physical inventory document to becreated. Set the number assignment for the given transaction/event type.


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Al low Negative Stocks


Although negative stocks are allowed by the system, most companies prefer not to usedthis function as it is not a good business practice to draw stocks in advance. Most auditorswill also disapprove of this bad Inventory Movement practice. It is similar to your BankOverdraft facility where you are allowed to draw more than what you have in your BankBalance.

You can configure whether negative stocks are allowed for the unrestricted-use stock in thevaluation area, in the plant, and in the storage location.

The default IMG setting is negative stocks are not allowed.

If negative stocks are needed in your company, proceed as follows:1. Set the indicator Neg. stocks allowed in the valuation areas in question. (A valuation

area can be a plant or a company code, depending on the configuration.)2. Choose a valuation area and specify per plant whether negative stocks are allowed for

special stocks.3. Choose a plant and specify in which storage locations of the plant negative stocks are

allowed.

4. Save your settings.5. Afterwards, you must change the plant data of all materials for which negative stock

balances are allowed. The indicator for negative stocks is contained in the Sales:general/plant view of the material master record (MM01/MM02).

Transaction :OMJ1

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Issue / Transfer Postings – Allow NegativeStocks

You can allow Negative Stocks at Plant or Storage Location level. To define atStorage Location Level, select the Valuation area and click the word Storage locationon the left screen.


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Set Missing Part Check

With the aid of the missing parts check, the system checks at the time of a goods receipt,other receipt, or transfer posting whether the material posted is a missing part. If so, thesystem issues a warning message and sends a mail message to the responsible MRPcontroller in the plant.

Activat ing the missing parts check The missing parts check is only carried out if it is active in the plant

• a checking rule is defined for the transaction

• a checking group is defined for the availability check in the material master record (MRPdata)

Transaction :OMBC

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Receipt – Set Missing Parts Check

Transaction :

OMJD


Physical Inventory – Automatic Movements – Set Missing Parts Check

(b) Transaction Code


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Default the “ Delivery Completed” Indicator


Define the system to automatically suggests the delivery completed indicator forgoods receipts if the delivered quantity lies within the under/over delivery tolerances.

The "delivery completed" indicator has the following effects:

• The item is regarded as closed, even if the total quantity was not delivered.

• A further delivery is not expected, may, however, arrive.

• In the next goods receipt, the item appears on the selection list but has no selectionindicator.

• The item can be reorganized even if the total quantity has not been delivered.

Even if the "delivery completed" indicator has not been set, an item is considered closedonce the total quantity has been delivered. This means that the "delivery completed"indicator is not necessary in this case.

Specify for each plant whether the R/3 System proposes the "delivery completed" indicatorautomatically.

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory - Goods Receipt – Set “Delivery Completed” Indicator


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For GR-Based IV, Reversal of GR Despite Invoice


Here you specify for each movement type whether, with GR-based invoice verification, areversal with reference to the purchase order or a return delivery can be entered, even if

the invoice relating to the goods receipt document has already been posted.

If reversals are not allowed, you must cancel the invoice before you enter the reversal ofthe goods receipt or the return delivery.

If reversals are allowed, you can post the material document and enter cancel the invoiceat a later time. If you do not wish to cancel the invoice, you can enter the goods receipt withreference to the reversal document or the return delivery, so that the reference to theinvoice continues to exist.

Tips : Majori ty of the companies will not allowed material document to be cancelled

without fi rst canceling the Invoices as this can cause data inconsistencies after aperiod of time.

Transaction :OMBZ

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Goods Receipt – For GR-Based IV, Reversal of GRDespite Invoice


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Record Reason for Goods Movement

Initial IMG Action : Usually Required

When you enter a goods movement, you can only enter reason which have been definedfor the movement type here. Most of the time only movement type that deduct stocks need

a reason as a form of control.

Reason for Goods Movement are a required field when posting Goods Issue with MB1A for movement type 551 – Withdrawal for scrapping. Normally, in a company, the QualityDepartment will be the one that are allowed to used this movement type as they are theone who approved whether the materials should be scrapped or not.

Transaction :OMBS

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory - Movement Types – Record Reason for GoodsMovements

(a) Control Reason – Accept the default , cl ick the Reason f ield to change the options

(b) Reason for Movement – Click New entries button to enter the Reasons


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How to Define, Copy or Change a Movement Types?


When you enter a goods movement, you must always enter the movement type. Themovement type has important control functions in Inventory Management. It is essential for:

• updating the quantity fields• updating the stock and consumption accounts

• selection of the fields used for entering documents

• printing

• goods receipt/issue slips

Note : Never tried to create a new movement type without copying an existing one.

Additional movement type are sometimes required to differentiate the different purpose ofthe Goods Movement Transaction. For e.g. Companies may create additional movementtype to differentiate between an Internal Scrap 551/552 or Customer Scrap Z51/Z52.

Transaction :OMJJ

Menu Path : IMG – Materials Management – InventoryManagement and Physical Inventory - Movement Types – Copy,Change Movement Type

Always copy an exist ing movement type to the new one you wish to create. Don’tforget to copy the reversal movement type and change it. To copy, just select the

movement type you want to copy and click the button.


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Double click on the Movement Type to view the detail IMG SettingsFor e.g. if you Tick the Automatic PO Field, a purchase order is created automatically atthe time of goods receipt.


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For example, if you create a new movement type Z51 copy from 551, don’t forget to copythe reversal Z52 copy from 552.


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Default Print Control for Material Document


After saving their records, users are allowed to print the goods receipt/issue slips for thegoods movements. In this IMG, you can make the following settings:

• on which printers the goods receipt/issue slips can be printed • whether these printers support barcode and multiple printout

• for which movement types goods receipt/issue slips can be printed

• which printer is located in a specific plant/storage location and how the printout of anoutput type is controlled for this printer

Transaction :OMBR

Menu Path : IMG – Materials Management – InventoryManagement and Physical Inventory – Print Control – GeneralSetting

First find out the Print version that is use for the Inventory Transaction code


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Depending on the Print Method you used, you may need to check the Print Item settings forthis Movement Type.

Menu Path : IMG – Materials Management – Inventory Management and PhysicalInventory – Print Control –OMB5 - Maintain Print Indicator for Goodds Recept Documents

OMB4 - Maintain Print Indicator for GI/Transfer Posting DocumentsOMJL - Maintain Print Indicator for Automatic Movements

Once you have the Print Version and Print Item Setting, proceed to MN21 to create thecondition records for which Output Type you want to used to activate the printing.

Transaction :MN21 / MN22

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Output Determination – Maintain Conditions –Create/Change Condition: Inventory Mgmt

For eg. WA03

For this example:Trans./event type – WA (look at the Title bar, only the first 2 char. Is required)

Print version – 3 (Collective goods receipt/issue slip)Print item – 1 (Material document printout)


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Double click on line item Material document printout

Leave the rest as it is, only specify the Number of messages (1 for print once, 2 for printtwice etc.)

Other Print Settings you need to check:

Transaction :M706

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Output Determination – Maintain Output Type

Double click on WA03 to reach the next screen:

Check the Print param. to ensure that it ties with the Print Method you used.


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For the default print out of the Material Document, you can specify One of the method.Most will use Method 3 which is the easiest or Method 1 (can be a bit tricky due to theStorage Location).

Method 1:

Transaction :OMJ3 Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Output Determination – Printer Determination –Printer Determination by Plant/Storage Location

Specify the Plnt, Sloc, Output Device, whether to print Immediate or Not

Method 2:

Transaction :OMJ4

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Output Determination – Printer Determination –Printer Determination by Plant/Stor. Loc./User Group

Specify the Plnt, Sloc, User grp, Output Device, whether to print Immediate or Not


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Method 3:

Transaction :OMJR

Menu Path : IMG – Materials Management – Inventory Management andPhysical Inventory – Output Determination – Printer Determination –Printer Determination by Output Type/User

Specify your Condition type

Specify the User Name, Output Device, whether to print Immediate or Not


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Although you have configure the default printer for the user, when they want to print theMaterial Document Slip automatically after saving the record, they have to tick the Printfield indicator in order for the configuration to work.

The Print field indicator can be pre-selected if the parameter NDR (Print via output control

in MM - Inventory management) has been set to X (capital letter) in the user master record(SU01).


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Define Stock List Display for MMBE


In this step, you define which fields are displayed in stock lists (transaction MMBE).

The R/3 System distinguishes between stock lists using version numbers. For eachversion number, you can open up to three windows in which you can displaydifferent stock lists. For each window, you can define up to three stock types (forexample, blocked stock returns or unrestricted-use stock).

The following list versions are preset in the standard SAP R/3 System:

• 1 standard display, long

• 2 standard display, short

• 3 special display

Action for you:

Maintain the default settings as follows: 1. Under Display version

• Assign a version number for each version

• Define which fields are to be displayed 2. Under Rules for display of stock balances, assign the following to each versionnumber:

• The windows you want to open

• The stock types in the columns 3. Under Detail screen for stock balance display, define additional stock categories.

Transaction :

OMBG

Menu Path : IMG – Materials Management – Inventory

Management and Physical Inventory – Reporting – Define Stock ListDisplay


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The Rules for Stock Balance Display button decide the column in MMBE

To check your Configuration:Transaction :MMBE

Menu Path : SAP Menu – Logistics - Materials Management –Inventory Management – Environment – Stock – Stock Overview


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Define Valuation Class


If a user creates a material in MM01, he must enter the Material's Valuation Class in Accounting View 1. The R/3 System uses your default settings to check whether the

valuation class is allowed for the material type. The valuation class is a group ofmaterials with the same account determination .

If a transaction is to be posted to different accounts depending on the valuation class,create an account determination for each valuation class in the step Configure AutomaticPostings (transaction OMWB).

The valuation classes allowed depend on the material type. Several valuation classes aregenerally allowed for one material type. A valuation class can also be allowed for severalmaterial types.

The link between the valuation classes and the material types is set up via the accountcategory reference (transaction OMSK). The account category reference is a combinationof valuation classes. Precisely one account category reference is assigned to a materialtype.

The Valuation Class is very important because it define the General Ledger Accountcode that will be posted in Financial Accounting. This will impact the Profit andLoss Account.

Valuation Class cannot be change once transaction posting begins for the Material.If you want to change it, all Open Sales Order, Purchase Orders, Production Orders

etc. have to be close.

Transaction :OMSK

Menu Path : IMG – Materials Management – Valuation and Account Assignment – Account Determination - Account Determination WithoutWizard – Define Valuation Classes

1. Define the Account category reference2. Define the Valuation class for which Account category reference3. Define the Material type for which Account category reference


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Account category reference

Valuation class

Material type for which Account category reference


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Configure Automatic Postings to G/L Accounts


For this IMG settings, you will configure the link between Inventory Management andFinancial Accounting.

What do you mean by automatic postings?For many years, SAP has study and fine tune the Business Accounting practice around theworld. The current Inventory programs is able to Debit or Credit correctly any transactionpostings that are made to the system. The programs will find all the necessary G/Laccounts codes that have been configured by you and automatically post it to the relevantFinancial Entries. For e.g.: Posting lines are created in the following accounts in the caseof a goods issue for a cost center:

o Credit - Stock account (Inventory Deducted)o Debit - Consumption account (Increase in Consumption)

During inventory goods movement, the user does not have to enter a G/L account, sincethe R/3 System automatically finds the accounts to which postings are to be made usingthe following data:

The Company Chart of accountsIn the R/3 system, every company is identified by a company code and each StrategicBusiness Unit in the company is identified by a plant. User are required to entered a plantfor every data entry and the System will determine the chart of accounts which is valid forthe company code. The Finance department user will maintain the Master record for theChart of Account in transaction “FS00/FSP0/FSS0” before you define it inside the IMGunder the automatic account determination individually for each chart of accounts.

Valuation grouping code of the Valuation Area (per Plant) Group the various valuation areas into a single valuation group help to reduce the numberof entries both in the configuration and creation of G/L accounts code.For example:With Valuation Grouping, you only need one entries for the configuration irregardless ofhow many valuation area you have.

Valuation Group Valuation Class G/L Account

0001 01 12345

0001 02 12345

Without Valuation Grouping, you will need to maintain each entry for every valuation areayou have.

Valuation Group Valuation Class G/L Account

0001 01 12345

0001 01 65432

0002 02 67890

0002 02 56565

Grouping all the Valuation area as one is the recommended configuration method.


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Configure the Valuation Class Grouping

Transaction Menu Path

OMWM IMG – Materials Management – Valuation and Account Assignment – Account Determination - Account Determination Without Wizard – DefineValuation Control

OMWD IMG – Materials Management – Valuation and Account Assignment – Account Determination - Account Determination Without Wizard – GroupTogether Valuation Areas

To use the Valuation grouping, first set Valuation grouping code to active in “OMWM”.

You can now do the grouping in “OMWD”. For example, you group all the Valuation area tothe same valuation group.

Val. Area CoCode Company name Chrt/accts Val.grpg.code

AA 0001 ABC Engineering Ltd XYZ 0001

BB 0001 ABC Engineering Ltd XYZ 0001

CC 0001 ABC Engineering Ltd XYZ 0001

Transaction/event key (internal processing key) The posting key refers to the inventory movement that the user has to specific during any

inventory posting. The movement type will enable the system to determine the correctentries record to post into the system.

Account grouping (only for offsetting entries, consignment liabilities, and pricedifferences)

The posting transaction "Offsetting entry for inventory posting" is used for manydifferent transactions posting (for example, goods issue, scrapping, physical inventory),which are assigned to different G/L accounts (for example, consumption account,scrapping, expense/income from inventory differences). Therefore it is necessary to dividethe posting transaction according to a further key: account grouping code. An accountgrouping is tied to each movement type in inventory management which make use of theposting transaction "Offsetting entry for inventory posting" . In the posting transaction"Offsetting entry for inventory posting" , you must assign a G/L accounts for everyaccount grouping. If you wish to post price differences to a different price differenceaccounts in the case of goods receipts for purchase orders, goods receipts for orders, orother movements, you can define different account grouping codes for the transaction key.With the account grouping, you can also have different accounts for consignment liabilitiesand pipeline liabilities.


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Valuation c lass of material or (in case of spli t valuation) the valuation type The valuation class allows you to define automatic account determination that is dependenton the material. The user will define the valuation in the Material Master (MM02 –

Accounting 1 View ) decided by Finance which will tied each Valuation class to a G/L Account code. For example: you can post a goods receipt of a raw material to a different

stock account than if the goods receipt were for trading goods, even though the user entersthe same transaction for both materials. You can achieve this by assigning di fferentvaluation classes to the materials and by assigning different G/L accounts to theposting transaction for every valuation class. If you do not want to differentiateaccording to valuation classes you do not have to maintain a valuation class for atransaction.

The G/L account assignments for the charts of accounts INT and the valuation groupingcode 0001 are SAP standard.

Configure the Valuations Class Link to the G/L Account

Transaction :OMWB

Menu Path : IMG – Materials Management – Valuation and Account Assignment – Account Determination - Account Determination WithoutWizard – Configure Automatic Postings

(a) At the Initial screen, click the Account Assignment button to view this screen.


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(b) Double above line item to this screenDefine the Valuation and G/L Account code. If you have multiple Company codes, thenyou have to maintain for multiple Chart of accounts.When you fi rst enter this screen, the system will prompt you to enter the Chart of

Accounts. Subsequently, if you wish to change the Chart of accounts click Edit – Change

chart/acct. Notice the first column Valuation modif., if you did not group the Valuation Area, thenyou’ll have to define each Valuation Area for each Valuation class for each G/L Account. Ifyou have four Valuation Area, then everything will be multiply by four.

At the above screen, click the Rules button and you are allowed the followings options onhow your G/L Accounts are determined. Most common options will be to tick the

followings:


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Take note of the General modification column in GBB

You can find the relevant Account Modification for each of the movement types.

IMG Shortcut Menu Path :

OMWN IMG – Materials Management – General Settings for MaterialsManagement – Valuation and Account Assignment – AccountDetermination – Account Determination without wizard – Define AccountGrouping for Movement Types

For example, Vendor Consignment movement type is 411 and special stock K. You cansee that the Account modification is VBR.


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For you to be able to configure the Valuation Class and G/L Account, you’ll have to workwith the Finance Department or FI Consultant as they need to provide you with all theG/L Account for the Material Valuation Class.

The followings are the Inventory Transaction that you need to configure:

Define Single G/L AccountDescription Tranaction

Expense/revenue from consign.mat.consum. AKO

Expense/revenue from stock transfer AUM

Materials management small differences DIF

Purchase offsetting account EKG

Freight clearing FR1

Freight provisions FR2

Customs clearing FR3

Customs provisions (optional) FR4

External activity FRL

Materials management exch.rate diffs KDMMM exchange rate rounding differences KDR

Price diff. offset. entry (cost object) (optional) KTR

Price differences (cost object hierarc.) PRK

Neutral provisions (optional) RUE

Gain/loss from revaluation UMB

Unplanned delivery costs (optional) UPF

Input tax VST

GR/IR clearing acct (mat. ledger) (old) (optional) WRY

Define Valuation Class t ies to G/L Account

Description TranactionChange in stock account BSV

Inventory posting BSX

Purchase account EIN

Purchasing freight account FRE

Offsetting entry for inventory posting GBB

Consignment payables KON

Cost (price) differences PRD

GR/IR clearing account WRX


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Click the Account assignments button and from the system message, you will be able totell if there are errors in your Account assignments.

You can also check which G/L Accounts is tied to which Valuation Class by clicking the

button in transaction “OMWB”.

Enter the company code and click the Execute button.

The report will list all the Valuation Class under the G/L account.

Storage Location Indicator to allowed/disallowed Physical Inventory Freezing

Initial IMG Action : Usually Required

It is not necessary to have stock count for all the storage location. At time, certain storagelocation might not be subject to stock-take and you can untick the field Freeze bookinventory.

Menu Path : IMG – Materials Management – Inventory Management and Physical Inventory – Physical Inventory - Allow Freezing of Block Inventory Balance in Storage Location

‘ ‘ – Disallowed Physical Inventory Freezing

Tick – Allowed Physical Inventory Freezing


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Configuration for Vendor Consignment

Vendor consignment means that the vendor will provides the materials and stores them onyour premises.

The advantage for this arrangement is that the vendor remains the legal owner of the

materials until you withdraw the materials from the consignment stores. Payment to thevendor is then activated. There are less downtime as materials are always available atyour company premises.

The disadvantage is that you need to provide a warehouse, insurance, manpower tomanage the warehouse for the Vendor materials.

To use the SAP Vendor consignment, you have to do the followings IMG:Step 1: Act ivate Consignment Prices via Info Records


OMEV IMG – Materials Management – General Settings for Materials

Management – Activate Consignment Prices via Info Records - ActivateConsignment Prices via Info Records

Step 2: Configure the Consignment Automatic Posting Account Code


OBYC IMG – Materials Management – General Settings for MaterialsManagement – Valuation and Account Assignment – AccountDetermination – Account Determination without wizard – Configure

Automatic Postings

Description Transaction

Offsetting entry for inventory posting GBB

Consignment payables KON

Cost (price) differences PRD

You must define the Account Assignment for Consignment payables – KON GBB and PRD can be optional as the G/L account code can be the same.


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Business Process Flow for Vendor Consignment

There might be a slight difference with the business process of your company but overall,your company will still have to go through the same SAP tcode.

1. First a contract will be drawn and sign between your company and the vendor. The

vendor will provide you with the materials price which the Purchaser will input to tcodeME11 – Creating Info Records for Consignment Stocks.

2. For any materials that you need from the vendor, the Purchaser will create a PurchaseOrder with tcode ME21N – Create Purchase Order for Consignment . The system willidentify the Consignment PO by the Item category K which the Purchase enter in thePO. In a consignment PO, no material price is required to be entered.

3. Once the Vendor delivered the materials to your company premises, the Storepersonnel will entered a Goods Receipts with reference to the PO with tcode MIGO –Goods Receipt for Purchase Order .


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4. You can view the consignments for each materials with tcode MMBE – StockOverview. A line item with the field named Vendor consignment will appear. Doubleclick on the Quantity and you will be able to view the Vendor who supply the materials.

Any stocks that remain in the line item Vendor consignment belongs to the Vendor andno payments is required. To view all the Open Consignment stocks, use tcode “MB54”.

5. To used the consignment stocks, the Purchaser have to transferred it to your companystocks which is the field Unrestric ted used column. The Purchaser will used tcodeMB1B – Enter Transfer Posting with Movement type is 411, Special Stock ‘K’ and theVendor code that the materials you want to used (assuming that you have multipleVendor that supply the same materials). At this point, the system will read the PRICE from the Vendor Materials Info Record (ME12) and create a Financial documents.

After the transfer, the stocks belongs to your company and payment will be madeaccording to the agreement.


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6. At the payment intervals agreed, Finance department will print the ConsignmentSettlement list with tcode “MRKO” . The list will be passed to the Purchase Departmentfor verification. Once verified, Finance will do a Consignment Settlement with tcode“MRKO” and the Vendor will be paid.


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The Initial Inventory during Implementation

Task 1: Set the Initial MM Period for your Company Code

During the Initial MM Implementation, ensure that the start of the MM Period for thecompany code is maintain in OMSY. This IMG will allows the user to start inputting the

Material Master Records which later allows them to input the Inventory Records.

Transaction :OMSY

Menu Path : IMG – Logistics General – Material Master – Basis Settings – Maintain Company Codes for Material Management

Maintain the Current Period (Start of your Implementation) and hit Enter.For e.g. going live on 2004 01 (January 2004). Please note that 2004 01 doesn’t alwaysrepresent January 2004. It depends on how your period is begin setup by the FIconsultant. Some company go-live on July 2004 and the period begins 2004 01. Soremember to check how your company period is begin organized.

Subsequently, every end of the month, you will close the current month Inventory and Openthe Next Inventory Period with transaction MMPV. The Period is always the Next Period.

Transaction :MMPV

Menu Path : SAP Menu – Logistics - Materials Management – MaterialMaster – Other – Close Period


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To enter the Initial Opening Inventory

Transaction :MB1C

Menu Path : SAP Menu – Logistics – Material Management – InventoryManagement – Goods Movement – Goods Receipt - Other

SAP have assigned movement type 561 as the initial Inventory value entry. For wrong

entry, enter the same information with movement type 562 and the Inventory figures will bereverse. After the Initial Inventory transferred, no one should be author ized to used561/562 anymore.

On the second screen the user just need to enter the Material and Quantity. To enter morematerials click on the Menu Edit – New items


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Static versus dynamic data conversion

In general, data could be classified as begin either static or dynamic data.

Static data includes items that are relatively stable such as vendor master, material master,BOM, routing, work centers, customer master, price agreement, material group, activity

prices, cost centers etc.

Dynamic data includes items such as inventory balances, A/R balances, A/P balances, GLbalances, Open Production Orders, Open Sales Orders, Open Purchase Orders andPlanned Independent Requirements.

In general, we will have lots of time to convert the static data but insufficient time to rushthe dynamic data into the system. This is because dynamic data must be converted with aclear cut-off date. This means that the balances must be that of the same point intime in order to ensure the integrity of data.

Where the volume of data in relation to the number of end users is high, we will considerautomating the conversion, provided that data is available from the old system.

If the volume is low or if data is not available from the present system, users should key thedata directly into SAP. This approach has an added and important benefit of trainingthe end users in the operation of the SAP system.

A Sample note on Inventory Balance Conversion

This information will be extracted from the current system and uploaded into SAPautomatically. The conversion process will generate the following accounting entries:

Dr Inventory Control Accounts Cr Inventory Conversion Control Account (e.g. 999999)

If done correctly, the balance in the Inventory Conversion Control Account should becomezero.

Both the existing system extraction program and the SAP batch input record formattingprogram must be ready by Month 99 for the trail run.


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Appendix A: The Inventory Goods Movement Configuration Links Explain

Now, let see what are the Inventory Goods Movement Configurations that are relatedbefore the user can post any Goods Movement:-

1. Configure the Valuation Class (OMSK) which the user will then maintain it in transaction

MM01/MM02 – Accounting 1 View . The Valuation Class will allows the system topost to the correct General Ledger Account in the Financial Accounting Modules.

2. Maintain the Storage Location by Plant (OX09) which the user will then have to specifywhen they do any Inventory Posting with the Goods Movement transaction like MB1A,MB1B, MB1C, MB01, MB31, MIGO. If you have accept the default configurationCreate Storage Location Automatically (OMB2, OMB3, OMJ8), then user does not needto create the Storage Location (MMSC) for the material manually every time they post anew Storage Location for the material.

3. Set the Printer Determination (OMJ3 or OMJ4 or OMJR) if the user wish to print the

Material Document after Goods Movement have been successfully posted.

4. Maintain the Reason for Movement (OMBS) for the Material Scraps Movement type551.

5. Optionally, you may want to Hide Unnecessary Fields by Movement Type (OMJX,OMBW, OMCJ, OM9A) that your company does not need.


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Appendix B: Restr ict the Storage Location from any Goods Movement

If you want to restrict the users from performing any Goods Movement, first Flag forDeletion the Material Storage Location and then set the Message M7 127 to ‘E’.

Step 1 :- Flag for deletion the Sloc

To Flag for Deletion the Storage Location, goto transaction MM06


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Next, tick the Storage location and Save

Step 2 :- Set Message M7 127 to ‘E’ (Error)


OMCQ IMG – Materials Management – Inventory Management and PhysicalInventory - Define Attributes of System Messages

This SAP Message will pop-up when the users try to do a Goods Movement :-Material Testing Plant SLOC flagged for deletionMessage no. M7 127

The material master record V has been flagged for deletion.

Depending on the system setting, the system issues either a warning or an error message.

• If the message is a warning (W), the system will accept your entry, butsimultaneously issues a warning to prevent you from making the wrong entry.

• If the message is an error message (E), the system will not accept your entry.