Warehouse ManagementWarehouse Management(Part 2)(Part 2)

EGN 5622 Enterprise Systems IntegrationEGN 5622 Enterprise Systems Integration

Spring, 2015Spring, 2015

Process Management and ControlProcess Management and Controlandand

Physical InventoryPhysical Inventory

SAP ImplementationSAP Implementation

WM Part 2 OverviewWM Part 2 Overview

WM Process Management and Control◦Logistics Execution: Goods Issue (outbound

delivery)◦Goods movement: Stock transfer and transfer posting

WM Physical inventory procedures

Logistics Execution - Process Overview: Goods issue

Goods Issue Process for Outbound Delivery Steps

Goods Issue Process for Outbound DeliveryGoods Issue Process for Outbound Delivery

The next step after sales order is to create an Outbound delivery.

•During creation of outbound delivery, a picking storage location is determined for each item in the outbound delivery. If the storage location has been assigned a warehouse number, the outbound delivery displays the warehouse number.

•In addition, the system assigns an overall picking status and a stock removal status.

Goods Issue Process for Outbound Delivery: Goods Issue Process for Outbound Delivery: Transfer orderTransfer order

•After outbound delivery, the removal from storage is carried out using transfer order.

•There is no transfer requirement for creating a transfer order for a delivery.

•The completion of picking process is reported to the system through confirmation of the transfer order.

Goods Issue Process: Good IssueGoods Issue Process: Good IssueAfter confirmation of transfer order (TO), the nest step is to post the goods issue for the outbound delivery in inventory management (IM).

Goods issue is a goods movement activity in which we issue goods from our inventory system.

During goods issue, we need to reference that sales order and retrieve data from the sales order to verify material, quantity, and so on.

Effects of Goods: 1) Update physical inventory and stock value.2) Update inventory G/L account automatically.3) Update sales order history with the good issue.

Goods Movements

Goods Movement: Transfer posting and Goods Movement: Transfer posting and stock transferstock transferTransfer posting: A change in the stock ID (material number) or the stock category of a material (unrestricted, under QA, or blocked). Transfer posting is not necessary to involve an actual (physical) goods movement.

Stock transfer: Movement of materials from a particular storage location into another storage location. Stock transfer can take both within the same plant and between two plants. The two plants can be in the same company code or between different company codes. Physical goods movement is involved.

Goods Movement: Transfer posting and Goods Movement: Transfer posting and stock transferstock transferExample of Transfer posting: - Stock to stock (Under QA to unrestricted) - Material to material

Example of Stock transfer: - Storage location to storage location - Plant to plant

Transfer Posting/Physical Stock Transfer

Only for unrestricted stocks and one FI document is created

Only for unrestricted stocks and two FI document are created

Goods Movement: Transfer posting and Goods Movement: Transfer posting and Stock TransferStock TransferOne-Step and Two-Step Procedures:A stock transfer/transfer posting consists of a goods issue from issuing point and a goods receipt at a receiving point.

For one-step procedure, a transfer posting or stock transfer can be done with a single posting for all transfer posting or stock transfer. - Advantage of one-step procedure is that only a single transaction is generated.

Goods Movement: Transfer posting and Goods Movement: Transfer posting and stock transferstock transferTwo-Step Procedures:For some stock transfers, two-step procedure may be selected and two separate postings will be created. - Advantages for two-step procedure are enable to monitor stock status. Once goods issue has been posted from the issuing point, the stock is regarded as in transfer as the receiving point. - In the case of stock transfers between plants, the two-step procedure must be used if users have operation authorization only for one plant.

One-Step/Two-Step Procedures

Goods Movement: Transfer posting and Goods Movement: Transfer posting and stock transfer: Financial Accountingstock transfer: Financial AccountingFor a plant-to-plant transfer, both financial accounting and material requirement planning are affected. - A cross-plant stock transfer (in the same company code) leads to a value update in the stock accounts. An accounting document is generated parallel to the material document for the stock transfer. The stock transfer is valued at the valuation price of the material in the issuing point. - in the case of a cross-company-code stock transfer, two accounting documents are created: one for each company code. The offsetting is then made to a company code clearing account.

Cross-Plant Stock Transfer

In the case of a plant-to-plant stock transfer, the two plants can be belong to the same company code or to different company codes.

Plant to Plant: One-Step/Two-Step Procedures

In the case of one-step procedure, the goods issue and goods receipt are posted in a single material document. In two-step procedure, valuation always take places at the time of the first step.

Goods Movement: Stock Transport OrderGoods Movement: Stock Transport Order1) Stock transport order is similar to a purchase

order, but the vendor is replaced by a supply plant.2) Stock transport order is integrated with MRP. A purchase

requisition generated by MRP can be converted into stock transport order.

3) The receipt by stock transport order can be planned at the receiving plant.

4) Can add delivery costs and a forward/carrier in the stock transport order

5) Goods receipt can be posted directly to consumption.6) In the case of a goods receipt into the warehouse, you

may post the material to stock in quality inspection or blocked stock.

7) The entire process (goods issue and goods receipt) can be monitored via the PO history.

Stock Transport Order

Physical Inventory

Reasons for physical inventory:

- Material requirement planning: for correction of incorrect stock quantities.

- Accounting: Determination of material stocks for current assets.

Physical Inventory

Physical inventory is carried out on the basis of stock management units, or stock keeping unit (SKU).

A stock management unit is a non-divisible part of a stock of materials for which a separate book inventory exists. A stock management unit is uniquely defined by:

1) Material2) Plant storage location3) Stock type4) Batch5) Special stock, such as consignment stock

Each stock management unit of a material is counted separately, and the inventory differences are posted per stock management unit. For example, you must record the quantities of unrestricted-use stock, stock in quality inspection, and blocked stock of a material at a storage location of a plant separately in each case.

Phases of the Physical InventoryThe physical inventory process comprises three phases:

1). Creation of physical inventory documents2). Entry of count3). Posting of inventory difference

1.In the first phase, you create the physical inventory (PI) documents and print out the documents in order to start the counting process.

2.In the second phase, you enter the count results in the system. System then determines the inventory differences. If some of the results seem doubtful, you can arrange for a recount of the stock management units affected. In this case, further PI documents are generated.

3. In the third phase, you post the inventory differences that have been identified. In the process, the stock quantity and stock value are updated and the stock accounts are updated in accounting.

Phases of the Physical Inventory

Physical Inventory DocumentPI document is created per plant and storage location.

For special stocks, PI document may be created per plant, storage location, special stock, and vendor or customer or project.

Storage bin or material group may be specified as futher grouping values.

When creating a PI document, you can specify a physical inventory number in the document header (this number should not be confused with the number of the PI document). The physical inventory number facilitates selection of the PI documents to be processed during entry of the count data, posting of differences, and in evaluations.The status of an item indicates whether or not the item has been processed, counted, posted, or recounted. You can use the status of a PI document item as a selection criterion in searches for physical inventory documents.

Physical Inventory Document- You can make the following changes to a PI document header:

1) Change the planned count date2) Set or unset the posting block or freeze book inventory3) Create or change the physical inventory number

- In a not-yet-counted item• Change the stock type or change the count unit of measure• Set the deletion indicator

- Enter new items (as long as no count has yet been entered)- Delete the document

Physical Inventory Document

Figure 256

You can block all goods movements relating to a stock management unit for the purposes of a physical inventory. The system blocks all the stock management units of the relevant PI document by means of the Posting Block indicator in the PI document header. In the Storage Location view of the material master record, the Physical Inventory Block indicator shows the value X (material blocked for movements due to physical inventory).

If it is not possible to block the goods movement for organizational reasons, you can freeze the book inventory in the PI document at the time of the count.

To do so, you set the Freeze Book Inventory indicator in the PI document. This prevents goods movements from changing the book inventory figure that is relevant to the inventory-taking process.

Figure 257

Blocking Goods Movements

Blocking Goods Movements

Freezing the Book Inventory

Physical Inventory Status of an Item

For physical inventory count, you must print out the PI document and distribute to the persons responsible for the count.

The stock figures can be entered with or without reference to a PI document.

When entering the physical inventory count, you can enter a percentage variance of the count quantity from the book inventory, above which the system issues a warning message. When the entered data is saved, the system determines the book inventory in the system. The difference between the count result and this book inventory is the inventory difference.

Physical Inventory Status of an Item

You can analyze this difference via the list of differences. The list of differences contains the following information on each item:

1) Quantity counted2) Book inventory3) Difference quantity4) Difference dollar amount

You can perform the following functions with the list of differences: 1) Enter, change, display count

2) Post difference3) Display or change document4) Recount document or item

Physical Inventory Status of an Item

Posting of Inventory Differences

Figure 260

You can post the inventory differences either via the list of differences or via separate transactions. When an inventory difference is posted, the system creates a material document that corrects the stock figures, and an accounting document recording the necessary account movements.

If a document exceeds the document tolerance defined for the user group, a user who is assigned to this physical inventory tolerance group may not post an inventory difference for this document. If the total value of the document lies below the document tolerance, but certain items exceed the maximum amount per item, the user may not post the differences for these items. User can process the other items.

Posting of Inventory Differences

Figure 260

Combining Physical Inventory StepsRegular three basic phases for PI: 1) Create PI document 2) Enter count 3) Post inventory difference

You have options of combining individual phases and performing them in a step.

1) Enter count without PI document (1 and 2 combined)The system will automatically create a PI document.

2) Enter count and post PI difference (combined 2 and 3)The counts are entered for an already existing PI

document, and PI differences are immediately posted when these results are saved. 3) Enter count without PI and post PI difference (combined 1, 2, and 3)

All three phases are carried out in one step. When count results are posted, the system generates PI document and posts the PI difference.

Combining Physical Inventory Steps

Figure 261

Global Bike, Inc. Global Bike, Inc. WM WM

Organizational StructureOrganizational Structure

Outbound Delivery Status 1: Outbound Delivery Status 1: Outbound delivery createdOutbound delivery created

Outbound Delivery Status 2: Outbound Delivery Status 2: after Transfer order createdafter Transfer order created

Goods Issue Process for Outbound Delivery Goods Issue Process for Outbound Delivery – Transfer order– Transfer order

Outbound Delivery Status 3: Outbound Delivery Status 3: after Transfer order confirmedafter Transfer order confirmed

Outbound Delivery Status 4: Outbound Delivery Status 4: after goods issuedafter goods issued

Outbound Delivery Status 4: Outbound Delivery Status 4: after Billingafter Billing

WM Multiple Choice QuestionWM Multiple Choice QuestionName: ________________________

How can you assign organizational levels in SAP Warehouse Management? Please choose the correct answer. (One correct answer)

a) O You can assign a plant-storage location and a storage area combination to one warehouse number.

b) O You can assign several plant-storage location combinations to one warehouse number.

c) O You can assign the plant-storage location combination to several shipping points.

d) O You can assign a plant-storage location to multiple warehouse numbers.

ExercisesExercises: : (Due Date 4/3/2015)(Due Date 4/3/2015)

Case Study 3: Process outbound delivery

1. Create sales order2. Display materials inventory3. Create outbound delivery4. Display material inventory 5. Pick materials with transfer order6. Run Bin status report7. Confirm transfer order8. Run bin status report9. Display materials inventory value10. Ship material11. Display materials inventory12. Display materials inventory Value13. Create invoice 14. Receive payment