SAP INVENTORY MANAGEMENT & PHYSICAL INVENTORY

Presented by :

Dodo M ,23 November 2014

SAP Inventory Management(Part of Logistic Courses)

Inventory Management

Purpose:

This component deals with the following tasks:• Management of material stocks on a quantity and value basis• Planning, Entry, and Documentation of all Goods Movements• Carrying out the Physical Inventory

All transactions that bring about a change in stock are entered in real time, as are the stock updates resulting from these changes. You can obtain an overview of the current stock situation of any given material at any time. This, for example, applies to stocks that:

• Are located in the warehouse• Have already been ordered, but have not yet been received• Are located in the warehouse, but have already been reserved for

production or a customer

Integration of Inventory Management in the Logistic System:Inventory Management is part of the Materials Management moduleand is fully integrated throughout the Logistics system:

Material MasterMaterial Master:The Material Master record is a company’s main source of material- specific data. It isused by all components in the R/3 system.The material master database (often referred to simply as the "material master",comprising all the individual material master records stored in the system) containsdescriptions of all materials that an enterprise procures, produces, and keeps in stock. It is the central repository of information on materials (such as inventory levels) for the enterprise. The integration of all material data in a single database objects prevents the problem of data redundancy. Every area, such as Purchasing, Inventory Management,Material Planning and Invoice verification can use the data stored

Material Requirement Planning (MRP)

Material is procured from external or internal sources on the basis of the requirements determined by Material Requirements Planning. The delivery is entered in Inventory Management as a goods receipt. The material is stored (and managed under Inventory Management) until it is delivered to customers (Sales & Distribution), or is used for internal purposes (for example, for production).During all transactions, Inventory Management accesses both master data (such as material master data) and transaction data (such as purchasing documents) shared by all Logistics components

Goods MovementGoods Movement can be define as: Transaction resulting in a change in stock.Goods movements include both "external" movements (goods receipts from externalprocurement, goods issues for sales orders) and "internal" movements (goods receiptsfrom production, withdrawals of material for internal purposes, stock transfers, andtransfer postings).For each goods movement a document is created which is used by the system to updatequantities and values and serves as proof of goods movements.You can print goods receipt/issue slips to facilitate physical movements and monitor theindividual stocks in the warehouse

Structure of Goods Movement:Goods ReceiptGoods IssueStock TransferTransfer Posting

Movement Type

When you enter a goods movement in the system, you must enter a movement type to differentiate between the various goods movements.The movement type has important control functions in Inventory Management.For example, the movement type plays an important role in

• Updating of quantity fields• Updating of stock and consumption accounts• Determining which fields are displayed during entry of a document

in the system

Organizational LevelPlant:Plant can be a manufacturing plant in the true sense, or can represent a branch office orsite within a company code. A plant is an organizational logistic unit that structures theenterprise from the perspective of production, procurement, plant maintenance andmaterial planning.In SAP system, a plant must be assigned to one or more purchasing organizations.Furthermore, a plant must always be assigned to a company code.Storage Location:The storage location is an organizational unit that allows the differentiation of materialstocks with in a plant. Physical inventory is carried out at storage location level.Purchasing organization:Purchasing organization is an organizational unit responsible for procuring materials andservices for one or more plants and for negotiating prices and terms of delivery withvendors. The purchasing organization assumes legal responsibility for all externalpurchase transactions.You can incorporate purchasing into the company structure by assigning purchasingorganization to company code and plants. You can have a combination of centralizedand decentralized organizations.

Physical InventoryPhysical Inventory Physical Inventory allows you to carry out a physical inventory of your company’swarehouse stocks for balance sheet purposes.In the R/3 System, physical inventory can be carried out both for a company’s ownstock and for special stock. Inventory for a company’s stock and for special stocks(such as, consignment stock at customer, external consignment stock from vendor orreturnable packaging) must be taken separately (in different physical inventorydocuments), however.Furthermore, the stock can be divided into stock types. In the standard system, aphysical inventory can be carried out for the following stock types:

• Unrestricted-use stock in the warehouse• Quality inspection stock• Blocked stock

Physical Inventory ProceduresThe R/3 System supports the following physical inventory procedures:• Periodic inventory• Continuous inventory• Cycle counting• Inventory sampling

Physical Inventory StepsThe physical inventory procedure is carried out in three steps:1. Creating a Physical Inventory Document2. Entering the Physical Inventory Count3. Posing inventory differences

SAP R/3 Inventory ManagementTable of Contents

Step 1: Goods Receipts: Purchasing OrderStep 2: Creating ReservationStep 3: Goods Receipts: ReservationStep 4: Display a ReservationStep 5: Change ReservationStep 6: Goods Issue: Purchase OrderStep 7: Goods Issue: ReservationStep 8: Stock OverviewStep 9: Stock for Posting DateStep10: Return DeliveryStep11: Stock Transfer: One step (With out Reservation)

(Storage Location to Storage Location)Step12: Stock Transfer: One step (With Reservation)

(Storage Location to Storage Location)Step13: Transfer Posting for ReservationStep14: Stock Overview: After Transfer PostingStep15: Stock Transfer from Plant to PlantStep16: Plant Stock AvailabilityStep17: Stock Transfer: Two Step ProcedureStep18: Place In Storage

SAP R/3 Inventory ManagementTable of Contents

Step19: Stock for Posting DateStep20: Physical Inventory:

Creating Physical Inventory DocumentStep21: Creating SessionsStep22: Changing Physical Inventory DocumentStep23: Physical Inventory CountStep24: Inventory Count With out ReferenceStep25: Changing physical Inventory CountStep26: Initiating of RecountStep27: Posting Inventory DifferencesStep28: Posting Count & Differences SimultaneouslyStep29: Physical Inventory InformationStep30: Consignment: Creating Info RecordStep31: Procurement of Consignment MaterialStep32: Stock Movement: Goods Receipts (Consignment Material)Step33: Displaying Consignment OverviewStep34: Goods Issue: Consignment StockStep35: Transferring Consignment MaterialStep36: Settling Consignment StockStep37: Pipeline: Creating Pipeline MaterialStep38: Pipeline: Creating Info RecordStep39: Goods Issue: PipelineStep40: Settling Pipeline Liabilities

Thank You

Presented by :Dodo M, 23 November 2014