Mastering SAP Inventory Management

Klee Associates, Inc.

Introduction

Mastering SAP Inventory Management SAP ECC 6.0

An ERPtips Mastery Level Workshop

Version 1 – January 2010 An ERPtips Product © Klee Associates, Inc. www.ERPtips.com

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Inventory Management Contents Introduction .......................................................................................................... 7 Unit 1: Inventory Management Business Process Overview........................... 9 Stock Overview via Stock Requirements list and Stock Overview ................ 11 Demonstration: Stock Overview via Stock Requirements List ................ 11 Demonstration: Stock Overview via Stock Overview Transaction .......... 16 Purchase Order for Stock Materials............................................................... 22 Demonstration: Purchase Order for Stock Materials .............................. 23 Goods Receipt for Purchase Order ............................................................... 25 Demonstration: Goods Receipt for Purchase Order ............................... 25 Goods Receipt – Other .................................................................................. 28 Demonstration: Goods Receipt – Other .................................................. 28 Stock Transfer................................................................................................ 31 Demonstration: Stock Transfer ............................................................... 31 Goods Issue to Scrap .................................................................................... 37 Demonstration: Goods Issue to Scrap .................................................... 37 Inventory Management Business Process Overview Exercise ..................... 40 Step 1: Stock Overview via Stock Requirements list and Stock Overview40 Step 2: Purchase Order for Stock Materials ........................................... 41 Step 3: Goods Receipt for Purchase Order ............................................ 42 Step 4: Goods Receipt – Other ............................................................... 43 Step 5: Stock Transfer............................................................................. 44 Step 6: Goods Issue to Scrap ................................................................. 45 Unit 2: Inventory Management Enterprise Structure ...................................... 46 Definitions of Enterprise Structure Values ..................................................... 46 Client ....................................................................................................... 47 Company Code ....................................................................................... 47 Plant ........................................................................................................ 47 Storage Location ..................................................................................... 49 Demonstration: Plant and Storage Location Configuration ........................... 52 Configuration of Plant .............................................................................. 53 Configuration of Storage Location ........................................................... 61 Exercise: Plant and Storage Location Configuration .............................. 64

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Demonstration: Plant Parameters Configuration for Inventory Management 65 Exercise: Plant Parameters Configuration for Inventory Management .. 71 Unit 3: Inventory Management Master Data .................................................... 72 Key Fields in the Material Master .................................................................. 73 Demonstration: Create a Material Master ............................................... 73 Exercise: Create a Material Master ...................................................... 110 Unit 4: Inventory Management Goods Movements ...................................... 111 Integration with Other SAP Modules ........................................................... 112 Overview of Goods Receipts, Goods Issues, Stock Transfers, and Transfer Postings ....................................................................................................... 113 Movement Types .................................................................................. 114 Goods Movements ................................................................................ 114 Goods Receipt ...................................................................................... 114 MIGO Navigation ......................................................................................... 121 Demonstration: MIGO Navigation ......................................................... 121 Optional Exercise: MIGO Navigation .................................................... 133 Material Documents .................................................................................... 134 Demonstration: Material Document Display ......................................... 134 Optional Exercise: Material Document Display .................................... 138 Reversal Transactions ................................................................................. 139 Demonstration: Cancel a Material Document ....................................... 139 Optional Exercise: Cancel a Material Document .................................. 141 Unit 5: Inventory Management Goods Receipts ........................................... 142 Goods Receipt Using Inbound Delivery ...................................................... 145 Demonstration: Inbound Delivery ......................................................... 147 Exercise: Inbound Delivery ................................................................... 159 Goods Receipt for Purchase Order ............................................................. 160 Demonstration: Goods Receipt for Purchase Order using MIGO_GR . 160 Goods Receipt for Unknown PO ................................................................. 167 Demonstration: Goods Receipt Unknown PO ...................................... 167 Goods Receipt for Production Order ........................................................... 172 Demonstration: Goods Receipt for Production Order ........................... 172 Goods Receipt Configuration ...................................................................... 176 Configuration Demonstration: Tolerance Keys ..................................... 176 Configuration Demonstration: Delivery Completed Indicator ............... 179 Configuration Demonstration: Define Screen Layout ........................... 182 Unit 6: Inventory Management Goods Issues ............................................... 187

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Goods Issue to Cost Center ........................................................................ 189 Demonstration: Goods Issue to Cost Center ........................................ 189 Goods Issue to Scrap .................................................................................. 193 Demonstration: Goods Issue to Scrap .................................................. 194 Goods Issues Configuration ........................................................................ 199 Demonstration: Dynamic Availability Check.......................................... 200 Unit 7: Inventory Management Stock Transfers and Transfer Postings .... 210 Stock Transfer between Storage Locations ................................................. 212 Demonstration: Stock Transfer between Storage Locations using onestep stock transfer and move to blocked stock ..................................... 212 Stock Transfer between Plants .................................................................... 217 Demonstration: Stock Transfer between Plants using 2-step stock transfer .................................................................................................. 217 Transfer Postings ......................................................................................... 224 Demonstration: Material to Material Transfer Posting ........................... 224 Unit 8: Inventory Management Movement Types ......................................... 230 Overview of Movement Types ..................................................................... 230 Configuration of Custom Movement Types ................................................. 231 Demonstration: Custom Movement Type Configuration ....................... 231 Unit 9: Inventory Management Physical Inventory ....................................... 251 Physical Inventory types .............................................................................. 251 Annual Physical Inventory ..................................................................... 251 Continuous Physical Inventory .............................................................. 252 Cycle Counting ...................................................................................... 252 Configuration of Physical Inventory ............................................................. 254 Demonstration: Configuration Settings for Physical Inventory .............. 254 Demo and Exercise of Physical Inventory using Cycle Counting Method ... 262 Step 1: Set Cycle Counting Indicator in Material Master ..................... 262 Step 2: Creating Physical Inventory Documents .................................. 265 Step 3: Printing Physical Inventory Documents ................................... 271 Step 4: Enter Physical Inventory Results ............................................. 273 Step 5: Process Inventory Differences ................................................. 274 Exercise: Physical Inventory ................................................................. 276 Unit 10: Inventory Management Managing Special Stocks ......................... 277 Special Stocks ............................................................................................. 278 Consignment ................................................................................................ 279 Demonstration: Consignment ................................................................ 280 Subcontracting ............................................................................................. 295 4

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Demonstration: Subcontracting ............................................................ 296 Stock Transfer using Stock Transport Order............................................... 308 Third-party Processing ................................................................................ 311 Sales Order Stock ....................................................................................... 314 Project Stock ............................................................................................... 316 Returns ........................................................................................................ 318 Return with Shipping ............................................................................. 318 Demonstration: Return with Inventory Management – MIGO .............. 319 Unit 11: Inventory Batch Management .......................................................... 324 Material Master Requirements .................................................................... 325 Demonstration: Material Master Requirements for Batch Managed materials ............................................................................................... 325 Batch Master Records ................................................................................. 329 Demonstration: Batch Master Records ................................................. 329 Batch Statuses ............................................................................................ 333 Inventory Management and Batch Management ........................................ 334 Goods Receipts .................................................................................... 334 Goods Issues ........................................................................................ 334 Stock Transfers and Transfer Postings ................................................ 334 Batch Classification ..................................................................................... 336 Demonstration: Configuration to require batch classification ............... 336 Batch Determination .................................................................................... 338 Demonstration: Batch Determination Configuration ............................. 338 Batch Information Cockpit ........................................................................... 341 Demonstration: Batch Information Cockpit ........................................... 341 Unit 12: Inventory Management Reservations .............................................. 342 Use of Reservations .................................................................................... 343 Managing Reservations............................................................................... 344 Demonstration: Create Reservation ..................................................... 348 Demonstration: Display Reserved Stock .............................................. 351 Exercise: Create Reservation and Display Reserved Stock ................ 353 Goods Issue to Reservation ........................................................................ 354 Demonstration: Goods Issue to Reservation ........................................ 354 Demonstration: Display Reserved Stock .............................................. 356 Exercise: Perform Goods Issue to Reservation and Display Reserved Stock ..................................................................................................... 358 Unit 13: Stock Determination .......................................................................... 359 Demonstration: Stock Determination Settings ............................................ 360 Inventory Management ECC 6.0

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Step 1: Configuration – Stock Determination ........................................ 360 Step 2: Material Master – Stock Determination .................................... 364 Step 3: Material Reservation – Stock Determination ............................ 364 Unit 14: Inventory Management Reporting .................................................... 369 Overview of Logistics Information System ................................................... 369 Demonstration: Configuration of LIS ........................................................... 371 Standard Analysis in LIS .............................................................................. 373 Demonstration: Standard Analysis ........................................................ 377 Exercise: Standard Analysis ................................................................. 384 Early Warning System ................................................................................. 386 Demonstration: Creating and Reviewing an Exception ......................... 387 Exercise: Early Warning System – Create and Execute an Exception Analysis ................................................................................................. 398 Flexible Analysis .......................................................................................... 400 Demonstration: Creating an Evaluation for Flexible Analysis ............... 400 Demonstration: Executing an Evaluation for Flexible Analysis ............. 411 Exercise: Create Evaluation and Execute Flexible Analysis ................. 413

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Introduction Written by Jocelyn Hayes Published by Klee Associates, Inc. Copyright Klee Associates, Inc., 2010

Jocelyn Hayes heads up the ERPtips SAP consulting and training practice. Jocelyn brings over 13 years of SAP experience, plus a great deal of passion and enthusiasm. She truly enjoys the challenge of solving problems creatively and collaboratively. Prior to joining ERPtips, she had worked for a big 4 consulting firm as a Sr. SAP Consultant, and then moved into independent consulting. Jocelyn's focus has primarily involved the Logistics modules of SAP and migrating clients to more business process oriented and integrated applications using SAP's most advanced solutions. Jocelyn works with clients to match our Mastery Level consultants to their training and consulting requirements. Our clients will discover, as we have, that Jocelyn excels as a consultative relationship builder -- highly effective in cultivating and maintaining positive partnerships across all levels. Having acted both in the role of consultant and client, she knows the challenges of scoping the initiative, defining team member roles, identifying the associated skill sets, and stretching the project budget to support it all. We're sure you'll benefit from this dual experience as well! Jocelyn can be reached at [email protected] or by phone at 1.877.832.2594 ext 122. Excuse us for a moment, would you?

Legal Speak:

Purchase of this book or acquisition at an ERPtips class, constitutes an implied agreement by the purchaser to a limited, license granted to the purchaser by Klee Associates, Inc., specifically for purposes limited to improving your personal knowledge of SAP software which does not in any way compete with Klee Associates. This manual is protected by copyright law, and is sold or is part of an ERPtips class with the following conditions: The manual will be used for your personal professional development. The manual will not be physically copied for distribution to other individuals or converted to an electronic copy for distribution to other individuals, unless copyright permissions for copying have been acquired from Klee Associates, Inc. The manual will not be used to conduct training classes by you or other individuals, without the written permission of Klee Associates, Inc.

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Inclusion of the concepts in this book in any internal client training material is allowed if the source of the concepts is acknowledged as follows:

Copyright 2010 All rights reserved. Used with permission. Klee Associates, Inc.

NO WARRANTY: This documentation is delivered as is, and Klee Associates makes no warranty as to its accuracy or use. Any use of this documentation is at the risk of the user. Although we make every good faith effort to ensure accuracy, this document may include technical or other inaccuracies or typographical errors. Klee Associates reserves the right to make changes without prior notice. ERPtips is a valued resource for thousands of clients and consultants worldwide. Visit our web site for more information about upcoming training, books, and newsletters. http://www.ERPtips.com/

ERPtips is a registered trademark of Klee Associates, Inc. No Affiliation: Klee Associates, Inc. and this publication are not affiliated with or endorsed by SAP AG. SAP AG software referred to on this site is furnished under license agreements between SAP AG and its customers and can be used only within the terms of such agreements. SAP AG is a registered trademark of SAP AG. All other product names used herein are trademarks or registered trademarks of their respective owners.

Ok, we're back!

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Unit 1: Inventory Management Business Process Overview Inventory Management represents a component of SAP's Materials Management module, which enables the Procure to Pay business process. The component of Inventory Management handles the transactions to bring stock into your warehouse, move stock within your plants, and remove stock from your inventory, as well as to report how the stock has been used, post financial documents to accounting, keep track of where stock is physically kept, and reserve stock for future use.

Stocks within Inventory Management can be managed by both quantity and value. Stock can also be managed by batches, as we will discuss in a later unit, and for special stock reasons, such as vendor consignment stock or stock designated for a specific customer sales order.

Inventory Management integrates heavily with other modules both within the Materials Management module and other Logistics and Financial modules. Material procured via the Purchasing procurement process is planned using Material Requirements planning based on settings in the material master and other data such as consumption, planned usage, or forecasting techniques.

Consumption Updates

MRP

Inventory Management Manage stock by quantity and value

Goods Movements •Goods Receipt •Goods Issue •Stock Transfer

Physical Inventory Stock Adjustments

Warehouse Management

Invoice Verification

Special Stocks

Accounting

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In this unit, we will cover the following:

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

Stock Overview via Stock Requirements list and Stock Overview



Purchase Order for Stock Materials



Goods Receipt for Purchase Order



Goods Receipt – Other



Stock Transfer



Goods Issue to Scrap



DEMO and EXERCISE of each of these business transactions

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Stock Overview via Stock Requirements list and Stock Overview In this section, we will review two main methods of displaying a stock overview for a material: 1. Via the stock requirements list 2. Via the stock overview transaction

Demonstration: Stock Overview via Stock Requirements List The stock requirements list provides a tool used by materials planners, inventory managers, and purchasing agents to display the current stock on hand, the status of the on hand stock, and expected incoming receipts, and usage of the existing stock. The stock requirements list will also flag exceptions when there is expected to be a situation that needs to be addressed, such as a stock shortage.

SAP also provides an MRP list, which looks very similar, but has a key difference as described below: 

The MRP List is static. It shows the stock requirements at the time of the last planning run.



The Stock Requirements List is dynamic. It shows the current stock situation.

1. To call up the stock requirements list, follow the path: Logistics  Materials Management  Materials Requirements Planning  MRP  Evaluations  Stock/Requirements – Collective Display (alternately, you can use the Stock/Requirements List to display a single material) Or, execute Transaction MD07 or MD04 2. Complete the following screen and restrict the selection as you wish:

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3. Click to view the list. The Stock/Requirements List: Material List screen will display all of the materials that meet the selection criteria.

4. Click to specify sort criteria. This allows you to pull the materials that have shortage requirements to the top and create a worklist.

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5. If you want to save your sort criteria for use later, click the Save will be stored as the future sort criteria. 6. Click the

icon. It

icon to execute the sort criteria.

7. Select all of the materials with which you want to work.

8. Click 9. Click left pane.

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. to see the list of the materials you selected in the

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10. Click

to view the material master data.

11. Click

to display the details of the MRP element.

12. Click

to display the exception message.

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13. Click

Unit 1: Inventory Management Business Process Overview

to display the user settings.

14. Now that you have your worklist set up and know some new techniques for navigating the report, let's review the stock situation. Click on the display 'details of element' icon next to the Stock MRP element as shown below.

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15. The pop-up screen appears and displays all the details of the current available stock.

On this screen, you can see the blocked stock, quality inspection stock, stock that is in transfer, and the total number of expected and planned receipts.

If you click on the button, you will navigate to the next transaction we will review – the Stock Overview screen.

Demonstration: Stock Overview via Stock Overview Transaction Another method to view stock on hand for a specific material is via the Stock Overview transaction.

1. To call up the stock overview, follow the path:

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Logistics  Materials Management  Inventory Management  Environment  Stock  Stock Overview Or, execute Transaction MMBE 2. Complete the following screen and restrict the selection as you wish:

3. Once you have entered your selection criteria, to view the stock overview, click the execute

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4. The stock overview is a drill-able report, meaning you can double-click on any storage level and see additional details about the stock situation at that level. Try double-clicking on the storage location level (0001 Warehouse 0001).

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Notice on the Stock Overview: Basic List, there are 1252 of this material on order and 216 in stock. There is no stock in 'special stock' such as consignment, quality inspection, or sales order stock.

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5. If you would like to change to another material, you can simply enter another material number in the material field and click the new selection icon as shown below.

6. From the Extras menu path, you can do the following:

This is handy if you want to view the material master, display the batches of the material, or review which units of measure are allowed.

7. From the Environment menu path, you can do the following:

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This is convenient to use if you want to switch to the stock/requirements list, a list of open purchase orders, or view the inventory in warehouse management at the bin level.

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Purchase Order for Stock Materials Companies put goods into stock for the purpose of selling or processing those goods in a manufacturing environment. In some cases, companies directly consume what they receive. This is the case when the item is expensed to a cost center and not used in the production of materials or resold to a customer.

In this section, we will cover how to create a purchase order for stock materials.

In the Purchasing for Stock scenario, you buy goods that you place into inventory; eventually, you remove the goods from inventory either for consumption by production or for direct sale to your customer. Some companies also choose to stock MRO (maintenance, repair and operations) items so they can set up reorder points and run MRP on them, which trigger automatic reordering of those items when stock is low.

When purchasing for stock, leave the account assignment category blank. The screenshot below illustrates a Purchase Order line item for stock.

Notice the account assignment category is blank.

Notice, too, that the Account Assignment tab does not exist in the details section of the screen.

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Demonstration: Purchase Order for Stock Materials 1. Follow the menu path: Logistics  Materials Management  Purchasing  Purchase Order  Create  Vendor/Supplying plant known

Or, transaction code: ME21N

2. Enter data from the table below on the header portion of the PO screen.

Field

Data

Vendor



Purchasing Organization

3000

Company Code

3000

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Enter data from the following table on the item overview portion of the PO screen.

Field

Data

Account Assignment Line 1



Material Line 1



Quantity Line 1

2

Plant

3000

Purchasing Group (Header: Org Data Tab)

2XX

Jurisdiction Code (Details: Invoice Tab)

CO0000000

Save the Purchase Order.

The next screenshot shows the result of the saved PO:

Instructor: Record your PO number here: __________________________.

We have demonstrated how to create a simple Purchase Order. Usually the process would include a planner converting the planned order to a purchase requisition and then the purchasing agent converting the purchase requisition to a purchase order.

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Goods Receipt for Purchase Order Once the Purchase Order is complete, it is transmitted to the vendor, who in turn ships the goods ordered, hopefully by the requested delivery date. When the order is received on the dock, the receiving clerk will complete the goods receipt to indicate the materials have arrived and will be placed into stock.

An alternative to the goods receipt against a purchase order is entering an inbound delivery in advance (also known as an advanced ship notice or shipping notification) and then entering a goods receipt against the inbound delivery. We will cover the inbound delivery in the Goods Receipt unit of this course.

When you post a goods receipt, you are also posting accounting documents and adding stock to the inventory. We will cover the accounting document postings in the Goods Receipt unit as well.

Demonstration: Goods Receipt for Purchase Order In this demonstration, we will post a goods receipt against the purchase order for stock we created in the previous demonstration. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction code: MIGO.

Field

Description

Purchase Order number



If you do not know the purchase order number, SAP provides some excellent search tools, which we will cover in a future unit. We will also cover an alternative transaction MIGO_GR which is only for Goods Receipts and not all the other goods movement transactions.

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2. Press the Enter key or click the Execute

icon to start the transaction.

3. Be sure to select all lines as OK.

4. Click the

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tab and enter the following:

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Field

Description

Storage Location

0001

5. Click

to post (save) the goods receipt.

Instructor: Record your material document number here: _________________

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Goods Receipt – Other In addition to receiving goods against a Purchase Order, it is possible to receive goods into stock for other reasons, such as an initial entry of stock, against production or purchase orders that are not maintained in SAP, and free of charge deliveries that are not on a purchase order. Each of these 'other goods receipts' will be covered in more detail in the Goods Receipt unit.

In this section, we will demonstrate posting an initial entry of stock. When your company is initially implementing SAP, you use this transaction to enter the stock quantities from your legacy system into SAP. A reconciliation process occurs on the Financial side of SAP to balance the postings. When you post the initial inventory, you can place the materials into unrestricted, quality inspection, or blocked stock. We will cover these stock types in a later unit.

Demonstration: Goods Receipt – Other In this demonstration, we will post a goods receipt for an initial entry of stock. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction code: MIGO.

2. Change the Goods Receipt type from 'Purchase Order' to 'Other' and change the movement type to 561.

Field

Description

Movement Type

561

3. In the details portion of the screen, enter the following and press Enter or click

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:

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Field

Description

Material



4. Click on the

tab and enter the following:

Field

Description

Quantity

15

Unit of Entry

PC

5. Click on the

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tab and enter the following:

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Field

Description

Plant

3100

Storage Location

0001

6. Click

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to post the goods receipt.

Instructor: Record your material document number: ______________________

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Stock Transfer Stock transfers are used to transfer stock from one physical location to another within Inventory Management. In this course, we will primarily focus on the inventory management transaction and not spend much time on the integration with warehouse management.

In addition to stock transfers, which change the physical location of the stock, SAP provides transfer postings, which change the stock type (like from unrestricted to blocked, or from customer consignment stock to own stock) or material number. Transfer postings will be covered in the Stock Transfer unit.

In this section, we will cover a plant to plant stock transfer.

Demonstration: Stock Transfer In the last demonstration, we placed some stock into Plant 3100. In the step prior to that, we performed a goods receipt for a purchase order into Plant 3000. In this demonstration, we will transfer stock from Plant 3100 to Plant 3000. We will do a two-step stock transfer and view the stock in between the two steps to display the stock in transit.

Before we begin the demonstration, let's take a look at the stock situation using the MMBE transaction:

You can see the 15 initial entry of stock in Plant 3100 and 218 PC in Plant 3000. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Transfer Posting (MIGO)

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Or, transaction code: MIGO_TR.

2. Change the drop-down to the following:

3. Verify the movement type is 303.

4. Enter the data as shown below:

Field

Description

Material



From Plant

3100

From Storage Location

0001

Dest Plant

3000

Dest Storage Location

0001

Unit of entry

10 PC

5. Click

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to check the data:

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6.

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Click

to post the stock transfer.

Instructor: Record your material document number: ______________________

7. Now, let's review the stock situation again using transaction MMBE:

Notice there are only 5 in Plant 3100, but plant 3000 still shows 218. If we click on Plant 3000 and click on the 'Detailed Display' button, we can see this screen:

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Now, we can see that there are 10 in 'Stock Transfer'. Once we complete step 2 of the two step stock transfer, the quantity of 10 will appear in the unrestricted stock.

Now complete the second step of the two step stock transfer.

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8. To complete the second step of the two step stock transfer, follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Transfer Posting (MIGO)

Or, transaction code: MIGO_TR.

9. Change the drop-down to the following:

10. Enter the material document recorded in step 6 and press Enter or click Execute.

11. Verify the data as shown below:

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12. Click to post the stock transfer and move the stock from stock in transit stock type to unrestricted.

Instructor: Record your material document number: ______________________

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Goods Issue to Scrap In addition to receiving and transfer stock, it is possible to remove stock from inventory. In SAP, this is called a Goods Issue or to issue goods out of stock. Many reasons for issuing materials out of stock exist, such as issuing stock to a customer order, scrapping bad, damaged, or old stock, issuing stock to the production area to make a finished product, or issuing stock for internal consumption, and many more, which we will cover in greater detail in a later unit.

Demonstration: Goods Issue to Scrap In this demonstration, we will issue stock to scrap and introduce another variation of the MIGO transaction. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Issue (MIGO)

Or, transaction code: MIGO_GI.

2. Change the drop-down to the following:

3. Verify the movement type is 551.

4. Enter the data on the Material tab as shown below:

Field

Value

Material



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5. Enter the data on the Quantity tab as shown below:

Field

Value

Qty in Unit of Entry

1 PC

6. Enter the data on the Where tab as shown below:

Field

Value

Plant

3000

Storage Location

0001

7. Enter the data on the Account Assignment tab as shown below:

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Field

Value

Cost Center

328

8. Click

to post the goods issue to scrap.

Instructor: Record the Material Document number: _______________________

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Unit 1: Inventory Management Business Process Overview

Inventory Management Business Process Overview Exercise Complete the following six steps and note your results. Use the demonstration steps in the preceding sections to guide you through the transactions and the exercises.

Step 1: Stock Overview via Stock Requirements list and Stock Overview Execute the stock requirements list for the following values:

Field

Value

Plant

3000

MRP Controller

2XX

Material

Instructor provided

What is the current stock quantity?:

_______________________

When is the next planned order for the material?: _______________________

Will there be a stock shortage?

_______________________

Execute the stock overview list for the following material:

Field

Value

Plant

3000

Material

Instructor provided

What is the unrestricted current stock quantity?: _______________________

40

What is the on order stock quantity?:

_______________________

What are the allowed units of measure?:

_______________________

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Unit 1: Inventory Management Business Process Overview

Step 2: Purchase Order for Stock Materials Create a purchase order for stock materials using the following data.

Field

Data

Vendor



Purchasing Organization

3000

Company Code

3000

Account Assignment Line 1



Material Line 1



Quantity Line 1

2

Plant

3000

Purchasing Group (Header: Org Data Tab)

2XX

Jurisdiction Code (Details: Invoice Tab)

CO0000000

What entry designates this PO item is for stock? _______________________

Write your purchase order number:

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Step 3: Goods Receipt for Purchase Order Post a goods receipt against the purchase order you created in the previous step.

Field

Data

Purchase Order



What 3 dates are available when entering a goods receipt? _____________________ _____________________ _____________________

Enter the material document number:

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Step 4: Goods Receipt – Other Post a goods receipt for initial entry of stock using the following data:

Field

Data

Material



Quantity

15

Unit of measure

PC

Plant

1000

Storage Location

0001

What movement type did you use to enter the intial entry of stock?:

_______

What is the purpose of this transaction? ______________________________________________________________ ______________________________________________________________ ______________________________________________________________

Enter the material document number:

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Step 5: Stock Transfer In this exercise, we will review the stock situation for your material, perform the first step of a two step plant to plant stock transfer, check the stock again, and perform the second step of the two step plant to plant stock transfer.

Field

Data

Material



What transaction can you use to check the stock of the material? ___________

What is the current stock situation? ___________________________________

Perform a two-step plant to plant stock transfer from using the following data:

Field

Data

Material



Quantity

10 PC

From Plant

3100

From Storage Location

0001

To Plant

3000

From Storage Location

0001

Enter the material document numbers: Step 1:

_______________________

Display the stock situation after step 1.

Does the stock in transit appear in the issuing or receiving plant? ____________

Enter the material document numbers: Step 2:

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Step 6: Goods Issue to Scrap In this exercise, perform a goods issue to scrap using the following data:

Field

Data

Material



Quantity

1 PC

Plant

3000

Storage Location

0001

Cost Center

328

Why do you think you have to enter a cost center? _____________________

Enter the material document number:

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Unit 2: Inventory Management Enterprise Structure In this unit, we will cover the following: 

Client Definition



Company Code Definition



Plant Definition



Storage Location Definition



Demonstration: Configuration of Plant and Storage Location



Exercise: Configuration of Plant and Storage Location



Demonstration: Plant Parameters Configuration for Inventory Management



Exercise: Plant Parameters Configuration for Inventory Management

Definitions of Enterprise Structure Values The Enterprise Structure is often the first area to define when implementing your SAP solution.

As you configure your solution, you may need to adjust the Enterprise Structure you defined early in your project.

Definitions for all of the Enterprise Structure settings appear in this section because they are all used in some way in Inventory Management, even though not all fall specifically under the Inventory Management module.

The Enterprise Structures are: 

Client



Company Code



Plant



Storage Location

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Client In SAP, Client represents a self-contained SAP system. The client has its own master records, configuration, and tables. Most small to mid-size companies have one Production client that runs the „live‟ environment. Larger companies may choose to have multiple clients by division or corporate group.

Company Code A company code contains a complete set of General Ledger accounts. Create a Company Code for each entity that requires you to create unique Balance Sheets and Profit and Loss statements.

Financial Accounting Business Analysts typically configure Company Code. For your reference, the configuration for Company Code shown below is maintained in the Implementation Guide (known as IMG to the SAP system).

To access the Implementation Guide, execute Transaction Code SPRO and click on

.

Menu Path: Enterprise Structure  Definition  Financial Accounting  Edit, copy, check, delete Company Code

Plant Many considerations exist when determining what to call a „plant‟ within a company. Think of a Plant as a physical location – it does not have to produce or store anything. The Delivery Address that appears in the Purchasing and Inventory Management documents comes from the Plant. So, if you have goods delivered to a different address, consider setting up another Plant.

The address can be maintained in the Storage Location or the Plant.

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You can have more than one plant represent the same physical site. For example, if you need to divide up the plant for other reasons, like having different MRP and forecast data. Also, materials may be valuated either at the company code or plant level; so, if you need to segregate material valuation, you can create multiple plants for that purpose.

Would a sales office or administrative office be set up as a Plant as well? Ask yourself the following questions before deciding whether to create one or multiple plants:

1. Do your materials need different MRP and forecast data? 2. Do your materials require different valuation methods? 3.

Do you ship from or to more than one physical location?

Here‟s how a plant relates to other organizational elements:

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

The plant is assigned to only one company code.



A company code can have multiple plants.



Multiple storage locations can belong to a single plant.



A single business area is assigned to a plant and to a division. (Division is defined when we cover the Sales area enterprise structure.)



A plant can be assigned to several combinations of sales organizations and distribution channels.



A plant can have several shipping points. (Shipping points are defined when we cover the Sales and Distribution enterprise structure.)



A shipping point can be assigned to several plants.

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The configuration for Plants shown here is maintained in the IMG: Enterprise Structure  Definition  Logistics-General  Define, copy, delete, check plant

The assignment of plants to company codes is maintained here: Enterprise Structure  Assignment  Logistics-General  Assign plant to company code

The following illustrations show the right and wrong ways to associate a plant to company codes.

Company SP01

Plant 1000

Company SP01

Plant 2000

Company SP02

Plant 1000

Storage Location Within a plant, you can have multiple storage locations. A storage location is where stock is physically kept in a plant. You must always create at least one storage location for a plant, whether you are storing inventory there or not.

The address for a storage location is only used for internal purposes and does not appear on purchasing and some inventory management documents. (An address on a purchasing document comes from the Plant field.)

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You carry out physical inventory at the storage location level. Stocks are managed by quantity at the storage location and by value (also called the valuation level) at the plant or company code level.

If you use Warehouse Management (WM), you can assign one or more storage locations to a warehouse.

The quantity of the inventory exists at the storage location level, the value is at the plant level, and the physical location of the inventory is at the Warehouse/Storage Type/Storage bin level.

Finally, you must create at least one storage location for a plant, whether you are storing inventory there or not.

Ask yourself the following questions to help determine how to set up your storage locations:

1. How do you want to perform physical inventory? 2. How will you assign storage locations to warehouses?

The following relationships apply to Storage Locations within the Enterprise Structure:

50



More than one storage location can exist in a plant.



A storage location has at least one address.



Stock is managed at the storage location level.



Physical Inventory is carried out at the storage location level.



A storage location can be assigned to one or many warehouses.



At least one storage location must be created for a plant.

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The configuration for Storage Locations is maintained in the IMG here: Enterprise Structure  Definition  Materials Management  Maintain Storage Location

The ways to associate a storage location to plants are shown in the following illustrations.

Plant 1000

Plant 2000

Food Mart

Food Mart

Storage Location 0010

Storage Location 0020

Plant 1000

Plant 2000

Food Mart

Food Mart

Storage Location 0010

Storage Location 0020

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Demonstration: Plant and Storage Location Configuration In this section, we will configure the following structures: 

Plant



Storage Location

For each of these configurations, the instructor demonstrates how to perform it, followed by a student exercise based on step-by-step instructions.

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Configuration of Plant To configure a new Plant, follow these steps:

1. Navigate to the IMG and execute the following transaction:

Transaction Code: (no unique transaction code, must use menu) Menu Path: Enterprise Structure  Definition  Logistics-General  Define, copy, delete, check plant

The following pop-up box appears with the instruction: Perform the activities in the specified order. The first step is to click on Copy, delete, check Plant, then click on .

2. Select the Copy

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icon and complete the following:

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Field

Value

From Plant

3000

To Plant

XXXX (where XX is the number assigned to you by the instructor)

3. Click

to complete the copy.

You may receive the following pop-up message. Just click to acknowledge. For further information about the message, click the Help icon.

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4. Click on the Completed Activities tab to verify the Plant was copied successfully.

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5. Click the green arrow to navigate back to the following screen:

6. Click on Define Plant and click

7. Click on

56

.

and enter your plant number:

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8. Select the Details

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icon to navigate to the details screen of the plant.

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9. Enter the following information on the Change View "Plants": Details of Selected Set screen.

Field

Value

Plant

XXXX (where XX is the number assigned to you by the instructor)

Name 1

Plant XXXX

Name 2



Yo

10. Click . The Edit Address screen appears. Complete the Address for your Plant with the values shown here:

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Field

Value

Name 1/2

PLANT XXXX

Street/House Number



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Field

Value

Postal Code



City



Country

US

Region



Jurisdiction Code



Telephone

303-555-1212

Click

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to save your entries.

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To assign your Plant to a Company Code, follow these steps:

If you copied from one plant to your plant, SAP will copy the Company Code assignment and you only need to verify it is attached to the correct company code.

1. Follow the transaction path in the IMG: Menu Path: Enterprise Structure  Assignment  Logistics-General  Assign plant to company code OR Transaction Code: OX18

2. Click on the

button.

3. Enter Company Code 3000 and your Plant, click

and

.

Make sure you select your Plant and not one assigned to another student.

You have now assigned your Plant to a Company Code.

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Configuration of Storage Location To configure a new Storage Location for your Plant, follow these steps:

1. Navigate to the IMG and execute the following transaction:

Transaction Code: OX09 Menu Path: Enterprise Structure  Definition  Materials Management  Maintain Storage Location

When you create a Storage Location, you are prompted for the Plant for which you are creating the Storage Location.

2. Enter your Plant and click

.

. Field

Value

Plant

XXXX (where XX is the number assigned to you by the instructor)

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3. Since you copied from another plant when you created your plant, you will first need to delete the existing entries. To do so, click the Select All icon and then click the Delete

4. Click on the

before continuing.

icon. Enter values based on this table:

Field

Value

Storage Location

00XX (where XX is the number assigned to you by your instructor)

Description

Storage Loc XX (where XX is the number assigned to you by your instructor)

Click

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icon. Click

to save your Storage Location.

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You can maintain an address that is different than the address of the plant by selecting your Storage Location and double clicking on Addresses of Storage Locations. However, you will need to work with your development team to ensure this address overrides the address of the Plant on transfer documents, purchasing documents, and any other documents on which you print the physical address.

To add an address, select the Storage Location and double-click on in the dialog structure pane. Click on , enter a '1' in the No. column and click on the address icon to maintain the address.

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Exercise: Plant and Storage Location Configuration

Complete the configuration for both the plant and storage location using the steps described in the previous demonstration section.

Write your plant number:

____________

Write your storage location number:

____________

Describe how your company has set up your plants and storage locations:

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

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Demonstration: Plant Parameters Configuration for Inventory Management In this section, we will cover some key configuration parameters for the plant using in Inventory Management. The instructor will demonstrate how to perform the configuration and provide details of the key settings found in this configuration.

When you create a new Plant, as you did in the previous section, you must maintain the Plant Parameters for Inventory Management. If you used the Copy function to create your plant, it has the plant parameters of the reference plant.

The plant parameters can be found in a single, consolidated transaction, which we will demonstrate here. However, the same parameters can also be found individually throughout the Inventory Management IMG node.

1. Navigate to the IMG and execute the following transaction:

Transaction Code: (no unique transaction code, must use menu) Menu Path: Materials Management  Inventory Management and Physical Inventory  Plant Parameters

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2. Select the plant and click details.

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or double-click on the plant to display the

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The following chart explains some of the key settings of the plant parameters.

Field

Description

Goods Movements Create SLoc Automatically

Select this indicator if you want to allow automatically extending a material to a storage location for which it has not already been extended in the Create Material Master transaction.

BBD/Prod. Date

Best Before Date/Production Date – Select the indicator if you want to employ shelf life expiration dates in this plant. The indicator is used for materials that have been flagged with a shelf life in the material master or purchase order. The movement type being used must also be flagged as relevant for shelf life expiration procedures.

Del. Compl. Default

Select this indicator if you want to default the delivery complete indicator on the goods receipt transaction. Otherwise, the user will have to manually select it at the time of goods receipt to indicate that no further deliveries will be made against this line item. It is automatically selected if the full ordered quantity is delivered.

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Field

Description

BOM Usage

The BOM Usage field defines the areas in which a BOM is used, such as production or sales. This field can be used to restrict only BOMs created with a specific BOM Usage.

Miss. Parts active

If selected, the missing parts check is active when performing the goods receipt. The missing parts check will issue a warning or error message at the time of goods receipt and also can be set up to notify the material planner. The transaction must be set up with a checking rule for this function to work.

BOM Application

The BOM application is a configuration function that determines which alternatives to the proposed BOM exist and prioritize the alternatives.

Summarize Miss. Parts

This indicator drives whether the materials planner receives a summary of missing parts per transaction or a single message per missing part.

Trans./Event Type

Transaction/event type determines the document storage and number assignment. It differentiates between events that occur in Inventory Management (goods issues, goods receipts, etc.). Possible Transaction/event types:

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Field

Description

BaWU deactivated

Batch Where Used List – if the indicator is selected, the batch where used list is not active and the users will not be able to execute the 'batch where used list' function to determine where else in the plant the batch is in use.

GR/GI slip number

If you wish to assign numbers to goods receipt and goods issue slips, select this indicator and maintain a number range and output determination for these slips.

BaWU synchron.postng

Selecting this indicator will update the batch where used list at the time the inventory management movement is completed.

BchNo. Auto GR AcAsst

Select this indicator if you want SAP to automatically generate a batch number for batch managed materials at time of goods receipt.

Physical Inventory Stock Type

This is the stock type for which the physical inventory is carried out. Here are the options:

Alternative Unit

If the indicator is set, you can carry out physical inventory in a unit of measure other than the standard stockkeeping UoM.

Batch in Background

SAP can run the physical inventory material selection in the background to propose a batch of inventory to be counted. Select this indicator if you would like this option. Otherwise, you will have to select the materials to be counted from a selection screen.

Change Document

Select this indicator if you want SAP to create a change document when you change a physical inventory count or document.

Adj. Book Inventory

The following selections are possible in this setting:

This indicates if the book inventory balance adjustment is active in the physical inventory documents.

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Field

Description

Reason for Difference

Provides a reason for physical inventory differences.

Reservations Movement allowed

Indicator that specifies if movements are allowed for reserved items.

Days mvt. Allowed

If movements are allowed, this indicates the number of days from the requirement date maintained on the reservation that the movements are allowed. For example, if the reservation has a date of requirement of 9/10/09, and the value of '10' is in this field, a movement can be made up to 10 days earlier – or as early as 9/1/09.

Retention period

This is the number of days for which a reservation remains active after the requirements date.

Negative stocks

With the indicators under the Negative stocks tab, you can allow negative stocks for the materials in this plant. You may want to allow negative stocks to not hinder the movements of materials in your warehouse. It is possible to have stock on hand, but SAP may show an incorrect stock quantity due to human error. To allow negative stocks, you must also set the XBKNG indicator in another customizing step found in the IMG under Goods Issue/Transfer Postings  Allow Negative Stock

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Exercise: Plant Parameters Configuration for Inventory Management In this exercise, you will be asked to set some of the Inventory Management Plant indicators for the plant you created.

1. Execute the transaction to modify the indicators for plants in Inventory Management.

2. Allow storage locations to be automatically created. What did you do to indicate this?

_____________________________________________________________

_____________________________________________________________

3. Allows movements within 15 days of a reservation requirement date. What did you do to indicate this?

_____________________________________________________________

_____________________________________________________________

4. Allow negative stocks for sales order stocks. What did you do to indicate this?

_____________________________________________________________

_____________________________________________________________

5. Save your settings.

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Unit 3: Inventory Management Master Data In this unit, we will cover the following: 

Review of key material master settings with a demonstration and exercise to create a material master

The purpose of the Material Master in SAP is to define how the material is to be handled in the various modules of SAP, such as Materials Management, Sales and Distribution, Production Planning, and Accounting (to name a few).

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Key Fields in the Material Master The Material Master is a set of many views (sometimes referred to as User Departments) that ultimately define how the material is handled in SAP. Views are represented by tabs across the top of the Display Material (Semi-finished products) screen. Views in the material master include: 

Basic Data 1



Purchasing



MRP 1, 2, 3 and 4



Forecasting



General Plant Data Storage 1 and 2



Accounting



Plant Stock



Storage Location Stock

This section of Inventory Management training provides detailed information about the key fields needed to complete the many business processes handled in the Logistics Supply Chain. Only key fields are covered in this unit with a special deep dive into the key fields for Inventory Management.

Demonstration: Create a Material Master In this demonstration, we will create a material master by copying an existing material master. There will be a student exercise following the demonstration.

1. Execute the transaction: Menu Path: Materials Management  Materials Management  Material Master  Create  Immediately

Transaction Code: MM01

2. Complete the data as shown in the following screen shot and table and press Enter.

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Field

Value

Material



Industry Sector

Mechanical Engineering

Material Type

Semi-finished material

Copy from material



3. Select the views as shown in the following screen prints and press Enter:

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You will notice we do not select ALL the views. A couple of considerations come into play when determining which views to create for the material master. The first is the type of material you are creating (for example, a semi-finished material will probably not have sales views), for what purpose you are creating the material, and what authorization you have to create materials and extend them to the various user views available.

4. Enter the Organization levels and press Enter.

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Field

Value

Plant

XXXX

Storage Location

00XX

Copy from Plant

3000

Copy from Storage Location

0001

You will need to extend the material master to each plant/storage location (and any other organization levels, such as Sales area) for each material you want to use in those respective areas. To extend a material master, you execute the Create transaction and enter the material master number into the material master number field and then enter the other organization levels on the screen shown in the screen print above.

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Basic Data 1 View The Basic Data 1 View provides information that is relevant across all Organizational Units and SAP Modules.

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Basic Data 1 Key Fields:

Field

Use

Description

The Description field defines the material. The Description field is searchable; but be warned, it is case sensitive! ERPtip

If you are using a version of SAP below ECC 6.0, the Description field is case sensitive. A good tip is to enter all of your descriptions in CAPITAL LETTERS ONLY. Base Unit of Measure

By what unit the material is measured. Warning! You can never change the base unit of measure for the material. ERPtip

You can, however, maintain an alternate base unit of measure on the Additional Data screen, which allows you to maintain conversion factors, for example from metric to English units. Material Group

The Material Group field lets you narrow the search for a particular material, and you can produce reports based on the Material Group for reporting on the use of certain material groups, consumption, values, etc. Configuration of material groups is found in the IMG here: Menu Path: Logistics-General  Material Master  Settings for key fields  Define Material Group

Division

Division represents a group of materials and services, which belongs to a company division. For example, a car company may have a division representing different lines of automobiles or different types of automobiles (truck, sedan, etc.) Configuration of Divisions is found in the IMG here: Menu Path: Logistics-General  Material Master  Settings for key fields  Define Divisions

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Field

Use

X-plant matl status

From this drop down list of restrictions, you can select how the material is purchased or placed in inventory. Setting this field on the Basic Data screen locks the status of the material across all plants. (The Purchasing view has a different field to set material status at the plant level.) If the x-plant material status is set and active here, configuration will determine whether the user receives a warning or error message. We will cover how to configure status messages in a later unit. Configuration of cross-plant material status can be found in the IMG here: Menu Path: Logistics-General  Material Master  Settings for key fields  Define Material Statuses

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Valid from

The Valid from field is the date from which the X-plant matl status field setting is valid.

GenItemCatGroup

Used for sales document processing, the general item category group determines the item category to which the material is assigned.

Authorization Group

Entering an authorization group code allows you to restrict access to materials. The codes can be created in configuration and you have your Security Administrator assign the codes to users when setting up their access to Material Masters.

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Unit of Measure

To navigate to the Unit of Measure screen, click on the button and then click on the

tab as shown below.

As you can see from the screen shot above, this is where you can maintain alternative units of measure and also maintain the conversion factor for the alternative units of measure. If you scroll to the right on screen, you can also maintain the dimensions and volume of the item to include the packaging volumes, which comes in handy if you later use these values to calculate where in the warehouse an item can be placed.

To navigate back to the main user views or tabs, click on the button.

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Purchasing View The purpose of the Purchasing view is to maintain data relevant to the Purchasing process, such as the purchasing group responsible for procuring the material.

The purchasing view is maintained for a plant. The fields that are at the plant level are noted below with a (P) following the field name.

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Purchasing View Key Fields:

Field

Use

Order unit

If you order this material in a different unit of measure than the base unit of measure, you should maintain this field.

Var. OUn

You should activate the Var. OUn (variable order unit) field to use a different unit of measure than is recorded in the Order unit field. It is generally used for specific purchase requisitions or purchase orders.

Purchasing Group (P)

A purchasing group can represent a single buyer or a group of buyers. This field allows you to assign responsibility for certain materials to a specific group. Configuration of purchasing groups is found in the IMG here: Materials Management  Purchasing  Create Purchasing Groups

Plant-sp. matl status (P)

Same as the X-plant matl status field, but this field sets the material status at the plant level.

Valid From (P)

Validity date for the plant-specific material status.

Tax ind f. material (P)

This is the tax indicator for material, which tells whether a material is taxable or tax exempt.

Autom. PO (P)

Set this indicator if you want to automatically create purchase orders as they convert from requisitions. This bypasses the Create PO screen and creates the purchase order in the background. ERPtip

Use this function to automate the transaction to create a purchase order. Purchasing value key

This key defines the number of days after which to send a vendor a reminder for a late delivery. With it ride shipping instructions, order acknowledgement, and delivery tolerance limits. Configuration of Purchasing Value Key can be found in the IMG here: Menu Path: Materials Management  Purchasing  Material Master  Define Purchasing Value Keys

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Field

Use

Unlimited overdelivery

This field allows the users to receive goods over the quantity stated on the PO. Be careful. Selecting this box means that you want to receive goods against a purchase order for an indefinite time period (maybe forever).

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GR processing time (P)

Number of days that your shipping department takes to process a goods receipt and put the inventory in stock.

Post to insp. stock (P)

Automatically posts this material to inspection stock. which is stock that is inspected by the Quality Department to ensure it meets your quality specifications.

Batch Management

Check this box if you want to maintain batches for this material.

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MRP 1 View The four views of MRP (Materials Requirements Planning) allow you to maintain the data relevant for executing Materials Requirements Planning or Consumption Based Planning against your material. You maintain MRP 1 through 3 at the plant level and MRP 4 at the Storage Location level.

MRP views 1 through 3 are maintained for a plant. The fields that are at the plant level are noted below with a (P) following the field name.

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MRP 1 View Key Fields:

Field

Use

MRP group (P)

The MRP group contains configuration for how MRP (the planning run) treats a material. It sets what type of document is created during the planning run, the average level of safety stock, the scheduling and planning horizon, and what document types to use for external procurement. ERPtip

Use MRP groups for materials that deviate from the planning run settings established for your plant. Configuration of MRP Group is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  MRP Groups  Carry out Overall Maintenance of MRP Groups ABC indicator (P)

Determines how often to count the material for Cycle Counting, a type of physical inventory. SAP supplies a standard program to set the ABC indicator based on usage.

MRP Type (P)

MRP Type determines how a material is planned for, whether according to a master scheduling profile, at a reorder point (also known as consumption-based planning), based on a forecast, or by using MRP with forecasts for planned consumption. Configuration of MRP Types is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  Master Data  Check MRP Types

Reorder point (P)

When the stock of the material drops below the reorder point, this field initiates a planning file entry that is used in the next planning run.

Planning time fence (P)

The number of days that the master plan is locked against changes. This helps stabilize the plan and improve system performance. The planning time fence is used only with MRP types that include a firming type that determines how proposals are created or scheduled within the planning time fence.

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Field

Use

Planning cycle (P)

The Planning cycle field indicates on which day the planning run is carried out for the material. You must use a time-phased planning MRP Type to use the planning cycle indicator. Configuration of the Planning Calendar is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  Master Data  Maintain Planning Calendar

MRP Controller (P)

Similar to the Purchasing Group in that it assigns responsibility of planning the procurement of the material to a specific person or a group. Configuration of the MRP Controller is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  Master Data  Define MRP Controllers

Lot size (P)

The Lot size field tells what lot-sizing procedure to use to calculate the reorder quantity in the planning run. Configuration of the Lot Size is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  Planning  Lot-Size Calculation  Define Lot-sizing Procedure

Minimum lot size (P)

The smallest lot size that can be procured in an individual planned order.

Maximum lot size (P)

The largest lot size that can be procured in an individual planned order.

Max stock level (P)

The greatest number of units of this material that can be stored in the plant. This value is used only if you select the Replenish up to Maximum Stock Level Lot sizing procedure.

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MRP 2 View

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MRP 2 View Key Fields:

Field

Use

Procurement type

Determines how the material is procured: externally, produced in-house, or both. Procurement type is determined by the Material Type field, which is defined when the material is created.

Special procurement

The Special procurement field overrides the procurement type on the material master. Use this field to avoid creating another material type. Configuration of the Special Procurement Type is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  Master Data  Define Special Procurement Type

Prod. stor. location

Shows the product storage location from which to pull stock for in-house production of an assembled material. The material stock is backflushed (removed from stock) when the production order is confirmed.

Quota arr. usage

Use this field if you have quota arrangements with your vendors. Quota arrangement usage defines which purchasing documents are considered when calculating the amount of the quota that has been satisfied. The configuration of the Quota Arrangement Usage is found in the IMG: Menu Path: Materials Management  Purchasing  Quota Arrangement  Define Quota Arrangement Usage

Storage Loc for EP

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Storage Location for External Procurement – this is the storage location that is used when SAP creates a Planned Order during the planning run for an item that is externally procured. Whether or not the item is externally procured is based on the Procurement Type indicator previously described.

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Field

Use

Stock det. grp

The combination of plant, stock determination group, and stock determination strategy define how stock is removed from stock. Setting the stock determination group on the material master can result in a different strategy than the strategy set at the plant level in configuration. This combination can result in multiple strategies for a single material. The stock determination rule comes from the movement type in Inventory Management, and a single material may have several movement types. When several movement types exist for a material, several stock placement and removal strategies based on those movement types can exist also. The Stock Determination Strategy is found in the IMG: Menu Path: Materials Management  Inventory Management and Physical Inventory  Stock Determination  Define Strategies for Stock Determination

SchedMargin key

The scheduling margin key allows you to define floats or pad the number of days after production. The scheduling margin key is found in the IMG: Menu Path: Materials Management  Consumption Based Planning  Planning  Define Floats

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Safety stock (P)

Safety stock represents spare stock in the event of a shortfall. It is used in Automatic Reorder Point Planning and Forecast Based Planning.

Service level (%)

If you plan to keep only a portion of your safety stock at your warehouse stock location, use Service level (%) to indicate the percentage of the amount of safety stock that you want to keep there.

Safety time ind.

The safety time Indicator allows you to bring forward requirements separately or all at once. Requirements include sales orders and planned independent requirements.

Safety time/act.cov.

The number of safety days brought forward from the original planned re-order date to fulfill the requirements.

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MRP 3 View

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MRP 3 View Key Fields

Field

Use

Period indicator (P)

States the period (in months, weeks, days, etc.) in which the material is forecast and planned.

Splitting indicator (P)

The splitting indicator defines forecast requirements to be split into smaller intervals. If you use the splitting indicator, the system only takes a limited number of periods into account when planning the material. The splitting indicator is only relevant when your material is set up for Forecast Based Planning. Menu path for configuring the splitting indicator is found in the IMG here: Menu Path: Materials Management  Consumption Based Planning  Forecast  Define Splitting of Forecast Requirements for MRP

Availability check (P)

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The availability check indicator specifies if and how the system checks the availability of the material and creates requirements for the material.

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MRP 4 View The primary use for the MRP 4 view is to plan the material at the storage location level, instead of the plant level.

ERPtip

If you are not planning your material per storage location, do not create this view.

The MRP 4 view is maintained for a storage location. The fields that are at the storage location level are noted below with a (SL) following the field name.

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MRP 4 View Key Fields

Field

Use

SLoc MRP indicator (SL)

Lets you exclude the storage location from MRP at the plant level. Define it when you want the system to generate requirements for that particular storage location. When this field is defined, you must then run MRP at the storage location level.

Reorder point (SL)

This is the reorder point for the storage location.

Replenishment qty (SL)

The minimum quantity to order or produce for the storage location, if the stock falls below the Reorder point.

MRP Profile The MRP Profile causes default data that you specify to be input to the Material Master. You can assign the MRP profile when creating the Material Master.

To create an MRP profile:

1. Follow the menu path: Materials Management  Material Master  Profiles  MRP Profile  Create Or execute Transaction Code: MMD1

2. Enter a four-digit value for your profile:

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3. Enter a Profile description for your profile and select the values either to be Write-protected (fixed) or Only default value (defaulted) when entering a new Material Master record:

4. Click on the button to navigate to the screen where you will enter the fixed or default values:

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5. Click on to navigate to the second data entry screen. (In this example, we selected no values to include on Data screen 2, so there is no screen shot.)

6. Click

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Forecasting View The Forecasting view provides information and parameters relevant to carry out a forecast on the material or to project the quantity of material needed during each period.

The Forecasting view is maintained for a Plant. The fields that are at the Plant level are noted below with a (P) following the field name.

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Forecasting View Key Fields

Field

Use

Forecast model (P)

This indicator defines how the system generates the forecast for the material. Various models exist in SAP, including a constant model where demand is constant, and a trend model where demand varies over time.

Period indicator (P)

The period of time, stated in days, weeks, etc., in which the forecast and consumption values are stored.

Ref.Matl: consumption (P)

With this field, you can assign a reference material whose consumption values provide the forecast basis. ERPtip

Use this field if you are phasing out one material for another, but the new material will be used in a similar fashion as the old material. Forecast values (P)

Select the Forecast values button at the bottom of the screen; this opens a pop-up window where you can either manually maintain forecast values or you can view the forecast that the system has generated based in the Forecast model and consumption values.

Consumption vals (P)

Select the consumption values button at the bottom of the screen to view the historical consumption values for your material.

Forecast Profile The Forecast Profile causes default data that you specify to appear in the Material Master. You can assign the forecast profile when creating the Material Master.

To create a Forecast Profile:

1. Follow the menu path: Materials Management  Materials Requirements Planning (MRP)  Materials Forecast  Profiles  Create Or execute Transaction Code: MP80

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2. Enter a value for your profile in the Forecast profile field.

3. Enter a Profile description for your profile and select the values either to be Write-protected (fixed) or Only default value (defaulted) when entering a new Material Master record:

4. Click on the button to navigate to the screen where you will enter the fixed or default values:

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5. Click

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to save your forecast profile.

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General Plant Data Storage 1 View The General Plant Data Storage views are maintained for a Plant and Storage Location. The data on this view describes how the material is stored in the Plant and Storage Location. The General Plant Data Storage 1 and 2 views are considered the responsibility of Inventory Management.

Field

Use

Unit of Issue

This is the unit of measure used in SAP when performing Inventory Management related transactions, such as goods issue, stock transfer, and goods receipts. If you use a unit other than the unit maintained as the base unit of measure, you must maintain the conversion factor on the Unit of Measure screen.

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Field

Use

Storage Bin

Even if you are not using Warehouse Management, you can use a simple method of WM using this field. If all of the stock of a specific material will be stored in the same location, you can create a storage bin to designate that area and assign it to the material here. The storage bin will then be used when performing Inventory Management transactions. The field is open text, so be careful with typos.

Picking Area

If you are using Lean WM, you can combine multiple storage bins into one picking area to optimize picking for these materials. Configuration for Picking areas is found in the IMG here: Menu Path: Logistics Execution  Shipping  Lean WM  Define Picking Areas

Temp. Conditions

This field can be used to indicate which, if any, temperature conditions are required for the material. Configuration of Temperature Conditions is found in the IMG here: Menu Path: Logistics – General  Material Master  Settings for Key fields  Define Temperature Conditions

Storage Conditions

This field can be used to indicate which, if any, storage conditions are required for the material. Configuration of Storage Conditions is found in the IMG here: Menu Path: Logistics – General  Material Master  Settings for Key fields  Define Storage Conditions

Container Requirements

If you have a required container in which the material must be stored, use this indicator. Configuration of Container Requirements is found in the IMG here: Menu Path: Logistics – General  Material Master  Settings for Key fields  Define Container Requirements

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Field

Use

Haz. Material number

You can enter a hazardous material number here. The hazmat number defines the material as a hazardous material and you can define further information about the specific hazmat number in the Environmental, Health and Safety module of SAP.

CC phys. Inv. Ind.

Cycle Counting Physical Inventory Indicator is used in conjuction with the physical inventory method of cycle counting, which allows you to count higher usage items more frequently than lesser used item. To automatically set the indicator based on historical consumption values, run report RMCBIN00 to set the indicator. Otherwise, maintain the values manually. Configuration of Cycle Counting Indicator is found in the IMG here: Menu Path: Materials Management  Inventory Management and Physical Inventory  Physical Inventory  Cycle Counting We will discuss this indicator and the process for cycle counting in more detail in a later unit.

CC Fixed

Select this checkbox if you would like to fix the CC indicator and not have the automatic program override your setting.

Number of GR slips

Enter the number of items that constitute a pallet here if you would like one GR slip printed per pallet.

Label type

This indicates which types of labels are printed and where for goods movements of this material. You will also need to configure the label type and assign it a form in the inventory management print control configuration.

Appr. Batch. rec. req.

If you check this indicator, an approved batch record must be selected either by the user or automatically by SAP. The approval occurs from a usage decision on a quality management record.

OB Management

This indicator specifies if an original batch can be created for the material.

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Field

Use

OB Ref. Material

The original batch reference number references another material master. The OB material must be a non-valuated material. The batch is created for this reference material and can be used to combine multiple materials into one batch number.

Batch Management

If you want to maintain batches for this material, check this box.

Max. storage period

Information only field. Not used for shelf life expiration.

Time unit

The unit of time used for the storage period.

Min. rem. Shelf life

This indicates the minimum number of days the item must be kept on the shelf before being issued.

Total shelf life

Used for shelf life expiration – enter the number of periods (period is the time unit, which can be a day or other period of time) on which the material expires from the receipt date.

Period ind. For SLED

The time unit used for the shelf life values.

Rounding rule SLED

If the period indicator is weeks, months (anything larger than days), the rounding rule determines how to round partial periods.

Storage percentage

If you have requirements to transfer materials from one plant to another after a portion of the shelf life has been used, enter the storage percentage required here.

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General Plant Data Storage 2 View

Field

Use

Weight/volume

These fields are self explanatory. Using these fields allows you to use these values in various transactions in SAP, like shipping and receiving related transactions.

Neg. stocks in plant

Selecting this indicator allows the user to perform a transaction that will drive the stock to a negative stock situation. This is helpful if you have timing issues between receiving and shipping or transferring items in your warehouse. You must also have selected Negative Stocks Allowed in the parameters for the plant.

Log. Handling group

Useful in handling materials with different handling requirements, like bulky, hazardous, or fragile materials.

Serial no. profile

For materials that require serialization, enter a serial number profile, which contains a list of serial numbers that can be assigned to the individual materials.

Profit Center

Used for Profit Center Accounting to determine which profit center charges for this material are assigned.

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Field

Use

Stock Determination group

The combination of plant, stock determination group, and stock determination strategy define how stock is removed from stock. Setting the stock determination group on the material master can result in a different strategy than the strategy set at the plant level in configuration. This combination can result in multiple strategies for a single material. The stock determination rule comes from the movement type in Inventory Management, and a single material may have several movement types. When several movement types exist for a material, several stock placement and removal strategies based on those movement types can exist also. The Stock Determination Strategy is found in the IMG: Menu Path: Materials Management  Inventory Management and Physical Inventory  Stock Determination  Define Strategies for Stock Determination

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Plant Stock View The Plant Stock view displays the quantities of the stock and stock type in inventory. This information can also be found in the Stock Overview (MMBE) transaction.

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Storage Location Stock View The Stor. location stock view displays the quantity and type of stock in the storage location.

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Accounting View

Field

Usage

Valuation Class

Valuation class is used in conjunction with account assignment – or the program SAP uses to determine to which accounts to post inventory transactions. There are usually one or two valuation classes per material type. We will further discuss account assignment and material valuation in a later unit.

Price Control

Select either standard or moving price here. The decision is usually made by the accounting department on which price control method to use.

Moving Price/Standard Price

Depending on the price control selection, this is the value at which stock is valued on your stock accounts.

Press Enter one final time and save the material. Instructor: Write material master number here: __________________

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Exercise: Create a Material Master Follow the steps in the demonstration to create a material master. Use the following data:

Field

Value

Material



Industry Sector

Mechanical Engineering

Material Type

Semi-finished material

Copy from material



Plant

XXXX

Storage Location

00XX

Copy from Plant

3000

Copy from Storage Location

0001

Material Description

semi finished product

As you complete each view – review the fields described in the demonstration section. Take extra time reviewing the fields on the two General Plant Storage views, since they are most important to inventory management.

Save your material and write your material number here:

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________________

Inventory Management ECC 6.0

Unit 4: Inventory Management Goods Movements In this unit, we will cover the following: 

Integration with other SAP Modules



Overview of Goods Receipts, Goods Issues, Stock Transfers, and Transfer Postings



MIGO Navigation



Material Documents



Reversal Transactions

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Integration with Other SAP Modules Inventory Management integrates tightly with many other SAP modules, primarily the Financial and Cost Accounting and Purchasing and Production modules. Each step (module) of production relies on documents to move stock and processes along; for example, a document that is created in the Inventory Management module will flow to the Accounting module when Production materials are backflushed.

Examples of how Inventory Management integrates with other SAP modules include:

Financial and Cost Accounting: When inventory is placed into stock or removed from stock, an accounting document and controlling document are posted automatically based on the configuration you have performed in Account Determination (see Unit 9 for more information on Material Valuation and Account Determination).

Purchasing and Production: Purchasing and Production control where materials come from and are placed into stock; and Inventory Management provides the goods receipt.

Inventory Management stages materials in the Production area that are required to produce the finished products. Finished products are then backflushed from Production to Inventory Management after they are produced. Once materials are put into stock as finished products, they are available for sale to a customer.

Sales and Distribution: Dynamically checks inventory when a sales order is placed and reserves the stock material.

Quality Management: It is possible to flag materials in Inventory Management transactions, like a Goods Receipt, and trigger an Inspection event in Quality Management. Materials move to a special stock called ”Quality Inspection” stock, which is blocked until the goods are inspected and released.

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Overview of Goods Receipts, Goods Issues, Stock Transfers, and Transfer Postings Inventory Management includes transactions that allow you to post goods movements in, out, and around the plant/storage location. Other transactions also let you move stock between plants and storage locations. SAP has four main goods movement transactions: 

Goods Receipt – posts stock to inventory



Goods Issue – removes stock from inventory



Stock Transfer – moves stock within inventory



Transfer Posting – moves stock from a special stock type (like consignment stock) to unrestricted stock

Each time a movement posts, SAP stores a tracking document that allows you to closely monitor movements and financial postings. You cannot delete a document; however, you can cancel a movement, which posts yet another material document with a transaction that reverses the original posting.

Document numbers are assigned according the transaction or event type; for example: 

Goods receipts for purchase orders (POs) use Transaction/Event Type WE.



Goods issues and transfer postings use Transaction/Event Type WA.



Goods issues for deliveries use Transaction/Event Type WL.

Posting a goods movement results in document postings and quantity updates as shown in the illustration below:

Post Goods Movement

Creates Material Document

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Updates Material Master Record – Plant Stock View

Updates Stock Quantity

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Movement Types Each goods movement has a corresponding movement type. This is how SAP differentiates goods movements and posts the movement to stock and to accounting (if applicable). For example, a goods receipt has multiple movement types associated to it; if it‟s for a purchase order, movement type 101 is associated. The movement type also determines which fields display when the document is being entered.

The unit titled Movement Types, later in this course, provides detailed information about goods movements and configuring movement types.

Goods Movements Each goods movement has a related movement type that is represented by a 3digit number. For example, a purchase order goods receipt is represented by movement type 101. Each movement type has a “reversal” movement type that is also represented by a 3-digit number composed of the movement type plus 1. So, the reversal movement type is 102 for a purchase order goods receipt. SAP uses reversal movement types when you cancel a goods movement.

Goods Receipt A goods receipt (GR) is the transaction that brings inventory into stock and thereby increases the quantity (and perhaps value) of goods in stock. You can receive goods externally from a vendor or internally from production or another facility. A goods receipt can refer to a reservation (used when your company is not using the Purchasing module of Materials Management) or an order (production order or purchase order), or it can be an “other” goods receipt, which is often used to load stock initially into SAP. A reservation simply puts a 'hold' on stock.

A goods receipt can be planned or unplanned. A planned GR comes from a reservation or from a purchase or production order.

When a goods receipt is entered for a PO, the Purchasing agent can see the material document in the PO history. Value on the accounting document is based on the PO value. The stock resides in the storage location indicated on the PO, but that can be overridden on the GR and posted to unrestricted stock, quality inspection stock, or blocked stock.

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Stock posted to blocked stock locks the invoice so the vendor cannot be paid until the blocked stock moves to unrestricted stock. Blocked stock is neither available in quantities nor valuated.

ERPtip

To view inventory posted to blocked stock for a specific material master, use the transaction MM03 and display the Plant Stock view.

Goods are received into stock or direct consumption (as when posted directly to a cost center). Special stock types for sales order stock or project stock do not update consumption statistics in the material master record.

Goods received into Inventory update the General Ledger (G/L) account for inventory when stored. Goods received for consumption debit the appropriate account assignment object (like cost center or asset).

Vendors may under- or over-deliver on a PO GR based on the settings on the PO. The screen capture below shows where to maintain the under and over delivery tolerances.

Receiving full quantity against a PO checks the Deliv: compl. indicator. If you have no further quantities to receive but the PO quantity is Open, you must manually select this checkbox to remove the open quantity from commitments and to eventually archive the PO.

The following reference diagram lists the commonly used goods receipt movement types:

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Movement Type

Description

101

Goods receipt for purchase order into Unrestricted stock

103

Goods receipt for purchase order into Blocked stock

105

Release of goods receipt Blocked stock into warehouse

107

Goods receipt into Valuated Blocked stock (used to post the accounting document for blocked stock when you receive it)

122

Return Delivery to Vendor (reverse movement type, which allows you to enter a reason for the return)

561

Initial entry of inventory

521

Goods receipt without Production order

Posting a goods receipt results in the following: 

Material document



Accounting document



Update to stock quantity



Update to G/L accounts and cost accounts



Update to Purchase Order



Update to planning file for MRP



Optional: Goods Receipt Slip (printed document)



Optional: Notification message to buyer of goods receipt

We will further explore the other movement types available for goods receipts in the goods receipt unit of this course as well as review the configuration for Goods Receipt transactions.

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Goods Issue A Goods Issue removes stock from inventory; it is the opposite of a goods receipt. A goods issue commonly withdraws stock for a sales order, for a production order, for consumption by a project or cost center, or for scrap.

Deliveries to customers (which result in a goods issue) are handled in the Sales and Distribution or Logistics Execution modules. If your company does not use the SD or LE modules, you can post a goods issue for sales order consumption directly in Inventory Management.

Withdrawals for production cause confirming production orders, which backflush components into SAP and automatically create the goods issue. Therefore, it is unusual to perform a goods issue in the Inventory Management module, but inventory management does see the goods receipt from the Production module. You can view the material movement within Inventory Management, even though it was posted in the PP module.

Other activities that issue a material from stock via the Goods Issue include issuing materials from stock directly to a cost center, returning deliveries to a vendor, or scrapping materials from stock.

A goods issue can refer to another document (production order, sales order, reservation) or not. If a goods issue refers to another document, SAP automatically copies the relevant information (material, quantity, etc.) from the reference document into the goods issue material document.

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The following reference lists the commonly used goods issue movement types:

Movement Type

Description

201

Goods issue for Cost Center

221

Goods issue for Project

231

Goods issue for Sales Order

241

Goods issue for Asset

251

Goods issue for Sales

261

Goods issue for Order (production order)

291

Goods issue for all Account Assignments

331

Goods issue for sampling from Quality Inspection

333

Goods issue for sampling from Unrestricted stock

335

Goods issue for sampling from Blocked stock

551

Goods issue to Scrap

ERPtip

If the movement type starts with a 2, it is for consumption; if it starts with a 3, it is for withdrawal. ERPtip

Each movement type may also have a special stock type designation, which tells if the placed or removed stock is a special stock (like consignment or sales order stock).

Posting a goods issue results in the following:

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

Material document



Accounting document



Update to stock quantity



Update to G/L accounts and cost accounts



Update to consumption statistics for the material



Optional: Goods Issue Slip (printed document)

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ERPtip

New to ECC 6.0 is the MIGO_GI transaction, which is similar to MIGO, but is only for goods issues, not all Inventory Management goods movement transactions.

Stock Transfer Stock transfer is about moving inventory from one location to another. In SAP, stock transfer moves stock either from one storage location to another or from one plant to another. A stock transfer happens in either one or two steps:

One step: Once the goods movement is posted, the inventory automatically appears in the destination location.

Two steps: After the one-step activity posts, inventory appears in an 'in-transit' storage location.

Only unrestricted stock can be moved using the two-step procedure.

Moving stock between storage locations does not trigger creating an accounting document because the material is valuated within the same plant.

In the two-step procedure, the first step triggers the reduction of stock level at the issuing storage location or plant and the increase of stock level at the receiving storage location or plant. The stock has in transit status at the receiving plant, so it cannot be withdrawn or picked until the second step completes.

In transit stock is considered for MRP in the receiving plant.

The following reference lists the commonly used stock transfer movement types:

Movement Type

Description

301

Transfer Plant to Plant (one-step)

303

Transfer Plant to Plant (step 1 of 2 step)

305

Transfer Plant to Plant (step 2 of 2 step)

311

Transfer Storage Location to Storage Location (onestep)

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Movement Type

Description

313

Transfer Storage Location to Storage Location (step 1 of 2 step)

315

Transfer Storage Location to Storage Location (step 2 of 2 step)

ERPtip

New to ECC 6.0 is the MIGO_TR transaction, which is similar to MIGO, but is only for stock transfers and transfer postings, not all Inventory Management goods movement transactions.

Transfer Posting A transfer posting does not involve physically moving stock; rather, it changes the stock type or material. Stock commonly moves from one material to another material when you ”sunset” an old product number and need to transfer existing stock to a new material master number. Stock can also move from one stock type to another; for example, from quality inspection to unrestricted stock or from unrestricted to sales order stock.

The following reference lists the commonly used Transfer Posting movement types:

120

Movement Type

Description

309

Material to Material transfer posting

321

Transfer posting Quality Inspection stock to Unrestricted stock

343

Transfer posting Blocked stock to Unrestricted stock

413

Transfer posting Sales Order stock to own Unrestricted stock

415

Transfer posting Project stock to own Unrestricted stock

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MIGO Navigation In this section, we will discuss the MIGO navigation. There will be a demonstration and optional exercise using the MIGO transaction to review the navigation.

Demonstration: MIGO Navigation In this demonstration, we will perform a goods issue to scrap movement. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction code: MIGO.

2. Click the

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button to show the overview panel.

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Here, you are presented with a list of documents your user ID has worked with in the past. If you want to remove a document from the overview, select it and click the Delete icon. Unfortunately, this is not set up as a work queue, it is simply a reference for the user of the documents with which he/she has worked in the past.

It is helpful if you use the Hold function to find a document you had placed on a hold status and did not yet post.

3. Select Goods Issue, Other, and movement type 551 as shown below and press Enter.

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4. Let's enter the data for the goods issue, then review the fields. Enter the following on the

tab and press Enter.

Field

Value

Material

1447

Equipment



5. Once you press Enter after entering the material number, notice how the screen looks:

You can see that a lot of information has been completed for you.

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6. Click the

tab and enter the following:

Field

Value

Qty in Unit of Entry

1

Unit of Entry

PC

No. containers

This field is used to define the number of containers to include in the inspection lot if you are going to trigger a usage decision for quality management.

7. Click the

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tab and enter the following:

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Field

Value

Movement type

551

Special stock indicator

This field can designate that you are scrapping from a special stock type, like sales order stock or consignment stock.

Stock Type

Unrestricted – this field defines from which stock type you are scrapping. You can also select Quality Inspection or Blocked stock here.

Plant

3000

Storage Location

0001

Goods Recipient

– this field defines who is receiving the materials. It is a free form text field, but many applications exist for using this field for workflow and other follow-on functions.

Unloading point

Ramp 1 – this field defines the location where the goods are to be unloaded. In the case of scrap materials, you may have a couple of locations to take scrap materials for disposal or recycling purposes. This is a free form text field that will print on the goods issue slip.

Reason for movement

0001 – Based on the movement type, a reason for movement may or may not be required. In the case of a scrap material, it is often a required field to define the reason for scrapping the goods. The reason for movement is defined when you define the movement type and can also be configured in the IMG here: Materials Management  Inventory Management and Physical Inventory  Movement Types  Record Reason for Goods Movements

Text

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Scrapping for shrinkage – freely definable open text field can be used to document further reason for the movement and can be printed on the goods issue slip.

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8. Click the the

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tab. From this tab, it is a good idea to click button to see what further account assignments are required for

this transaction. Here are the results of clicking the

button:

You can see that the account 890001 requires a CO object. This means that the account SAP determined via Account Determination for movement type 551 and material 1447 requires a Controlling object number to be assigned. A controlling object is usually a cost center or an internal order. To get more information from the message, click the

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icon and review this screen:

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9. Exit the previous screens and enter the following:

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Field

Value

Cost Center

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Let's go back and review some of the header information.

10. Review the

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tab:

Field

Use

Document Date

The document date is the date of the original document.

Material Slip

This is an open text field that can be used to enter an external material slip number. For goods receipts, you could reference the vendor's packing slip number.

Posting Date

The posting date defines in which period the document will be posted.

Doc. Header Text

This is an open text field and can be printed on the internal GR/GI slips.

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Field

Use

Print checkbox and dropdown

If checked, the GR/GI slip will be printed based on the output determination procedure. ERPtip

: Enter parameter NDR with value 'X' in the user parameters to have this preselected. The drop down (shown here)

indicates which version of the GR/GI slip will be printed. To print option 2, maintain quality inspection text in the material master record. Use option 3 if you want to print one slip for all the items on the MIGO transaction. GR/GI Slip No.

11. Click the

Enter a number here if you want to have an additional designation to the transaction on the paperwork other than the material document number.

and review the following:

Enter 'hayes' and press Enter to see the next screen:

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Double-click on the second entry and you will be presented with this result:

The purpose of this field is to find contact information of a person maintained in your system that is related with this transaction.

12. Now, let's review the use of these icons:

Field

Use Use these icons to sort a field ascending and descending. Click on the column of the field from the item overview portion of the window and then click one of these icons to sort by that field. If you need to search for a value of a field in the overview, enter the value here and click the binocular icon. The icon with the plus will find the next occurrence after you have clicked the one without the plus once. Click this icon to delete all the items that do not have the 'OK' checkbox marked

Or

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Field

Use If you want to copy the contents of a cell to other cells, like storage location, click the cell from which to copy, then click the icon to copy to the other cells to ease data entry. Provides a pop-up window where you can distribute the quantity across multiple storage locations for a single line item. Explode BOM – the system will copy the subitems into the material document if allowed. Stock determination for all icon – this icon will execute the stock determination program for all the items on the MIGO transaction if it has been configured and the data has been maintained. To add a new line to the transaction, click the right arrow icon. To navigate back to the previous line, click the left arrow icon. To navigate to another line item, manually type the line item number and then click the icon next to the number

13. To navigate to the stock overview of a particular line item, click on the tab and then click on the

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icon as shown below:

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14. Follow the menu path Settings  Default Values to see this screen.

This screen allows you to set user default settings for the MIGO transaction such as: 

Default storage location



Default plant



Proposing the OK function on all items



Copying the account assignments



Which movement type to use with each action/reference document combination along with special stock indicator and stock type.

15. Follow the menu path Settings  Copying Rule Transfer Posting to define which fields are copied when copying a line item. 132

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You can only use this screen for transfer posting and stock transfer movement types.

16. Here are some explanations of the use of these buttons:

Field

Usage

Hold

If you want to save your work, but are not ready to post the transaction, use this button. You can use the 'Show Overview' button later to see all your held documents.

Check

Use the Check button if you want to check the document for errors or warnings before saving and posting it.

Post

The Post button does the same as the Save icon. It will create a material document, an accounting document, adjust inventory levels, and any other actions associated to the movement type (like print a GR slip or send a note to the buyer).

17. To finish the demonstration, click the save icon or post button and record your material document number here: _____________________

Optional Exercise: MIGO Navigation Repeat the steps performed in the demonstration as an optional exercise. Write your material document number here: ___________________

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Material Documents Once you post a goods movement transaction, you can display the Material Document and also navigate to see the accounting and cost controlling documents.

Demonstration: Material Document Display 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction MIGO

2. Change the action and document type to the following and enter your material document number from the previous demonstration/exercise and press Enter:

If you do not know your document number, try using the 'Show Overview' button to locate it under the 'Material Documents' heading. Double-click on the most recent material document to display it.

3. You will be presented with this screen:

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4. Click on the

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button in the header portion of the screen.

5. From here, you can click on the Financial documents.

button to view the

6. You will be presented with the following pop-up screen, from which you can select the accounting document you want to view. The number of accounting documents presented here is defined by what functionality your FICO team has implemented.

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7. Select the Accounting document number and click the

icon.

You can see here that the two line items created four accounting entries. Each has a posting to remove inventory from the Work in process inventory account and post a cost of that inventory to the scrapped material general ledger account.

8. Now let's look at the Controlling document. Click the back to the accounting document selection screen.

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icon to navigate

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9. Select the controlling document and click the

icon.

From the controlling document, you can see the cost center has been charged the cost of the scrap material.

10. Click the icon to navigate back to the accounting document selection screen and exit the transaction.

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Selecting the accounting document returns the following view:

Here, you can see the account to which the document posted a debit and credit.

Optional Exercise: Material Document Display Repeat the steps performed in the demonstration as an optional exercise.

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Reversal Transactions To reverse a transaction, you can simply cancel the material document. SAP will automatically select the reversal movement type based on the configuration for the movement type used to post the original transaction. Unfortunately, you cannot change a material document once it has been posted. You have to cancel it and redo it.

An alternative to cancelling the material document is entering the reversal transaction (movement type) without reference to the original material document, which is NOT recommended unless SAP is preventing you from cancelling the original document.

The following demonstration and follow-up exercise will show how to cancel a material document.

Demonstration: Cancel a Material Document 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction MIGO

2. Change the action and document type to the following and enter your material document number from the previous demonstration/exercise and press Enter:

3. Click on the below:

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tab and enter a reason for movement as shown

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4. Click the POST button or save icon to cancel the original document.

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Optional Exercise: Cancel a Material Document Follow the steps in the previous demonstration to cancel the material document you created to scrap some materials in the previous section of this unit.

Write your cancellation material document number here: ___________________

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Unit 5: Inventory Management Goods Receipts In this unit, we will cover the following: 

Goods Receipt using Inbound Delivery



Goods Receipt for Purchase Order



Goods Receipt for Unknown PO



Goods Receipt for Production Order



Goods Receipt Configuration

Each section will include a detailed demonstration followed by a student exercise.

Let's review what we learned about Goods Receipts in Unit 4.

A goods receipt (GR) is the transaction that brings inventory into stock and thereby increases the quantity (and perhaps value) of goods in stock. You can receive goods externally from a vendor or internally from production or another facility. A goods receipt can refer to a reservation (used when your company is not using the Purchasing module of Materials Management) or an order (production order or purchase order), or it can be an “other” goods receipt, which is often used to load stock initially into SAP. A reservation simply puts a 'hold' on stock.

A goods receipt can be planned or unplanned. A planned GR comes from a reservation or from a purchase or production order.

When a goods receipt is entered for a PO, the Purchasing agent can see the material document in the PO history. Value on the accounting document is based on the PO value. The stock resides in the storage location indicated on the PO, but that can be overridden on the GR and posted to unrestricted stock, quality inspection stock, or blocked stock.

Stock posted to blocked stock locks the invoice so the vendor cannot be paid until the blocked stock moves to unrestricted stock. Blocked stock is neither available in quantities nor valuated.

ERPtip

To view inventory posted to blocked stock for a specific material master, use the transaction MM03 and display the Plant Stock view.

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Goods are received into stock or direct consumption (as when posted directly to a cost center). Special stock types for sales order stock or project stock do not update consumptions statistics in the material master record.

Goods received into Inventory update the General Ledger (G/L) account for inventory when stored. Goods received for consumption debit the appropriate account assignment object (like cost center or asset).

Vendors may under or over deliver on a PO GR based on the settings on the PO. The screen capture below shows where to maintain the under and over delivery tolerances on a PO.

Receiving full quantity against a PO checks the Deliv: compl. indicator. If you have no further quantities to receive but the PO quantity is Open, you must manually select this checkbox to remove the open quantity from commitments and to eventually archive the PO.

The following table lists the commonly used goods receipt movement types:

Movement Type

Description

101

Goods receipt for purchase order into Unrestricted stock

103

Goods receipt for purchase order into Blocked stock

105

Release of goods receipt Blocked stock into warehouse

107

Goods receipt into Valuated Blocked stock (used to post the accounting document for blocked stock when you receive it)

122

Return Delivery to Vendor (reverse movement type, which allows you to enter a reason for the return)

561

Initial entry of inventory

521

Goods receipt without Production order

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Posting a goods receipt results in the following:

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

Material document



Accounting document



Update to stock quantity



Update to G/L accounts and cost accounts



Update to Purchase Order



Update to planning file for MRP



Optional: Goods Receipt Slip (printed document)



Optional: Notification message to buyer of goods receipt

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Goods Receipt Using Inbound Delivery SAP provides functionality to optimize receiving multiple purchase orders at the receiving dock using an Inbound Delivery. The Inbound Delivery is a document that is created in advance of receiving the goods. The Inbound Delivery can also be created at the time the goods are received at the dock, which is less common since you loose most of the benefit of performing the work in advance of the delivery arriving.

The inbound delivery is also known as the Shipping Notification, or Advanced Ship Notice. It allows users to create a document that details all items in an upcoming shipment for a vendor. If you have a vendor that combines multiple purchase orders into one shipment, this is an excellent tool to optimize the receiving process. If you can request your vendor to send you the list (either manually or electronically) of purchase order items in an expected delivery, you can enter the inbound delivery in advance; then when the items arrive, the receiving dock simply receives the entire shipment instead of receiving it one PO line item at a time.

The purchasing agent can set up the Purchase Order line items to expect a Shipping Notification from the vendor before the receiving process can start. The setting for this type of confirmation can be found on the detail portion, Confirmation tab of the purchase order, as shown below:

Notice the user has selected confirmation control Z001 and the conf. req. checkbox has been selected. The confirmation control key, Z1, defines which confirmations are expected. The shipping notification is one of the confirmation categories associated to the confirmation control key, Z1 as shown below:

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The confirmation required (ConfReq) checkbox defines whether an entry for the confirmation categories associated to the confirmation control key is required prior to SAP allowing a user to enter a goods receipt against the purchase order line item. If the box has been selected, and a user attempts to perform a goods receipt, the user will be presented with a message that states the following:

If the user double-clicks on the message to view more information, the following screen will appear:

As you can see, the information provided here does not provide a lot of detail. SAP does not suggest checking that all confirmations have been entered for this PO, so be careful when using this functionality.

In the following demonstration, we will perform the following tasks: 1. Copy an old purchase order to create two new POs 2. Review the PO settings for confirmation control 3. Create an inbound delivery against the two purchase orders 4. Perform a goods receipt for the inbound delivery 5. Review the purchase order history of the two purchase orders

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Demonstration: Inbound Delivery Follow along as your instructor demonstrates the Inbound Delivery process.

Step 1: Copy old purchase orders to create two new purchase orders 1. Using the menu path: Logistics  Materials Management  Purchasing  Purchase Order  Create  Vendor/Supplying Plant Known

Or, transaction ME21N

2. Click on

3. Click on the

to view the Document Overview panel.

icon and select 'My Purchase Orders'

4. From the list of purchase orders you have created, copy one of them to a new purchase order by selecting it and while holding your left mouse button, dragging it from the overview pane to the shopping basket as shown below:

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5. Once you have copied the old PO to a new PO, click the Save icon to save the new PO.

Enter your Purchase Order number here:

______________________

6. Without leaving this screen, repeat step 4 and 5.

Enter your 2nd Purchase Order number here:

Step 2:

______________________

Review the PO settings for confirmation control

1. Without leaving the ME21N transaction, refresh your document overview panel by clicking the refresh icon. You should now be able to see your old PO numbers and your two new PO numbers.

2. Double-click on one of the two new Purchase Orders.

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3. Click on the

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tab as shown below:

Your vendor may or may not be set up with a confirmation control key or require the confirmation, but this illustrates whether or not a confirmation is expected and/or required.

The location of these settings comes from either the vendor master or information record, as shown below:

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Vendor Master: Purchasing view Transaction: MK03

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Information Record: Purchasing view Transaction: ME13

Step 3:Create an inbound delivery against the two purchase orders In this step, we create an inbound delivery for the two POs we created in Step 1.

ERPTip

This step can be automated if you have an electronic interface with your vendor. 1. Using the menu path: Logistics  Materials Management  Purchasing  Purchase Order  Inbound Delivery  Create

Or, transaction VL31N

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2. On the initial screen, you can enter the vendor number and then click on the button to have SAP search for all purchase orders for that vendor that require a shipping notification.

3. Once you have clicked the selection screen:

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button, you will receive this

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4. Click on the Execute icon to get a selection screen with possible purchase orders for this criteria.

If you get multiple purchase orders in the following screen, you can combine them into one inbound delivery document if your vendor notified you that they are shipping multiple PO items on one shipment.

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5. Select the two purchasing documents from Step 1 using the CTRL key to select more than one and click the button to continue to the Shipping Notification: Create: Overview screen shown below.

On this screen, you can modify the delivery date and delivery quantity, which is then reflected in your stock/requirements overview and on the purchasing document Confirmations tab.

During the demonstration, the instructor will explain some of the key fields and tabs in the inbound delivery document.

6. Click

to save the inbound delivery (also known as shipping notification).

Record your Inbound Delivery number: ______________________________

If you review the Purchase Order – Confirmations tab now, you can see the inbound delivery as shown on the screenshot below:

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Step 4:

Perform a goods receipt for the inbound delivery

1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction MIGO

2. Change the action and document type to the following and enter your inbound delivery document number from the previous demonstration step and press Enter:

3. Review the data on the following screen before posting the Goods Receipt for Inbound Delivery.

4. Click on the Purchase Order Data tab:

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Notice the 'Del.Completed' Ind. Setting. It is currently set to 'Set Automatically'.

This indicator drives whether or not the delivery complete indicator is flagged on the Purchase Order line item, which basically 'closes' the line item in SAP for further expected receipts. In the Goods Receipt Configuration section of this unit, we will discuss the configuration behind the indicator. For now, here is what indicating that a line item is completed for delivery does: 

Item is considered closed, even if the delivery quantity was less than the ordered quantity.



No additional deliveries are expected, but SAP does not prevent additional deliveries unless they are over the delivery tolerance.



If another goods receipt occurs, the item will be available to receive, but no proposed quantity is suggested in the quantity field.



If the full line item quantity is delivered, the flag is irrelevant.

5. Change the quantity of one of the line items to receive the item short. This will preserve the remaining quantity for a future demonstration/exercise. Record the PO number of the line you received short: __________________

6. Post the goods receipt.

Record the material document: __________________________

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Step 5: orders

Review the purchase order history of the two purchase

In this step, we will review the PO history and illustrate where to see the inbound delivery. 1. Using the menu path: Logistics  Materials Management  Purchasing  Purchase Order  Display Or, transaction ME23N

2. If one of the two purchase orders you created in the previous demonstration/exercise does not appear, click the Other Purchase Order number

icon and enter the PO number as shown below.

3. Now, you should be viewing the Purchase Order. Click on the Confirmations tab in the detail portion of the screen, as shown below:

Here, you can see the Shipping Notification, or Inbound Delivery.

4. Now, click on the Purchase Order History tab, as shown below:

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Here, you can see the Goods Receipt document.

5. Click on the material document number to view the Goods Receipt document.

6. Click on the Doc Info tab to view a link to the Financial Document.

7. Click on the Financial Documents

button.

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9. Review the Accounting document postings:

10. Exit the transaction.

Exercise: Inbound Delivery Follow the Steps 1-5 in the previous demonstration to practice creating an Inbound Delivery and reviewing the associated documents.

Receive one of your PO line items SHORT and record which PO number you received short here: _____________________

You will be using this PO in the next exercise.

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Goods Receipt for Purchase Order In the first unit, we demonstrated and practiced how to perform a goods receipt for a purchase order. We also indicated that we would explore how to search for the PO number and perform the goods receipt using the MIGO_GR transaction, which is what will do in this section. We will also look at some of the other options when performing the goods receipt, we will discuss tolerances, and from where some of the data is copied.

Demonstration: Goods Receipt for Purchase Order using MIGO_GR 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Receipt  GR for Purchase Order

Or, transaction MIGO_GR

2. Change the action and document type to the following, and instead of manually entering your PO number, we will use the search function.

3. To search for your PO number, click the field.

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The search screen allows you to find a Purchase Order using multiple criteria searches. You can either click through all the tabs or click on the a list of the various search tabs.

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4. Select 'Purchasing Documents per Material' and enter your material number to find your PO.

The list below includes all POs for material 2097. Unfortunately, it does not restrict the list to only OPEN POs. You can work with your development team to modify or add custom tabs that include that logic.

5. An alternative option is to search by Vendor, which results in the following:

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Review a couple other tabs and then select the PO for which you are searching.

ERPTip

SAP also provides some reports, such as ME2L and ME2M that will allow you to report on Open Purchase Orders, which would be a useful tool for your receiving department to learn if your developers cannot support the changes to the search screens and they have problems finding the Purchase Order numbers in SAP.

6. Once you have reviewed some of the search options, select your PO number from one of the lists and press Enter twice to reach this screen:

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7. The next topic of discussion is on goods receipt tolerances. Click on the Purchase Order History tab.

Double-click on the Purchase Order number to display the PO.

Once you are displaying the PO, click on the Delivery tab and let's review the tolerances set up on this PO.

This particular PO does not have an over or under delivery tolerance. Therefore, SAP will not allow an overdelivery quantity, but will allow any amount of underdelivery.

For example, if the user enters 36 units, but only 35 were specified in the PO, the user will receive a warning or error message as shown in the next screen shot.

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Whether or not a warning or error message is issued depends on the configuration, which we will discuss in the configuration section of this unit.

If the user enters a quantity less than what appears on the PO, no message will appear. If the PO had a percent of underdelivery, that percent would define what is the minimum percent of delivery that will be accepted. For example, if the order quantity was 40, and there was an underdelivery tolerance of 50%, SAP would not accept a delivery for less than 20 pieces.

8. Now, let's review from where some of the values are populated.

The following values come from the Purchase Order: 

Material



PO Quantity/Ordering Unit of Measure



Plant



Storage Location (if populated – it can be left blank on the PO)



Vendor



PO number and line item



Delivery Date



Requisitioner

The following comes from the Inbound Delivery: 

Qty in Delivery note

The following come from the Material Master: 

Material Description



Material Group



Unit of Entry

The following comes from the Information Record: 

Vendor Material Number (can be overwritten in PO)

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The following setting comes from configuration: 

Delivery complete indicator

9. For this demo, we will not post the goods receipt.

Exercise: Goods Receipt for Purchase Order using MIGO_GR Follow the Steps 1-9 in the previous demonstration to practice creating a goods receipt and reviewing the behavior of tolerances and looking into from where the data in the GR is populated.

As an optional exercise, try changing the tolerances on the PO and posting different quantities on the Goods Receipt to see the behavior of the under and over delivery tolerances.

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Goods Receipt for Unknown PO In this section, we will review the Goods Receipt transaction where no PO number exists. This transaction should only be performed in your SAP production system with the approval of your Accounting department. We will display the postings associated to the accounting side after posting the GR.

Demonstration: Goods Receipt Unknown PO 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction MIGO

2. Change the action, document type, and movement type to the following.

3. Click on the Material tab and enter the Material number. Press Enter.

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If there is only one possible unit of entry, SAP will populate it as soon as you click on the drop-down box next to the field. If there is more than one possible entry, you will be presented with a selection box.

5. Click on the Where tab and enter Plant 3000, Storage Location 0001, and press Enter.

6. Click on the Partner tab and enter Vendor 99098, and press Enter.

7. Click on the

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You should receive the following message at the bottom of your screen:

You do have the option to click on the Account Assignment tab and override the G/L account to which the stock will post – but it is unlikely you will be able to do so in your production environment.

8. Click

to post the Goods Receipt.

Write your material document number here: _______________________

9. Now let's review the accounting document. To do so, change the action and document type to the following. The last material document should automatically populate.

10. Press Enter to view the material document.

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11. Click on the Doc Info tab.

12. Click on the

to view the accounting document.

13. Select the accounting document number and click the display icon.

Notice the inventory is posted to a Work in process inventory account and to an Inventory change account – not to the vendor account. There is no tie to the vendor since the GR was not against a PO. You can still post a direct invoice for the vendor in FICO, but you cannot post a Logistics based invoice in MM.

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Exercise: Goods Receipt for Unknown PO Follow the Steps 1-13 in the previous demonstration to practice creating a goods receipt for an unknown PO.

Enter your Material Document here: ________________________

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Goods Receipt for Production Order When production completes a finished product, the finished product is received back into inventory and later shipped to a customer. The components used to produce the finished product are removed from inventory and consumed by the production order. Usually, these steps are done via the Production Order Confirmation. If you have a production process that is not in SAP, the process can be done manually via the MIGO transaction. The prerequisite to this occurring is you still need to maintain a production order number against which to post the goods receipt, which also carries some accounting information .

Demonstration: Goods Receipt for Production Order 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement (MIGO)

Or, transaction MIGO

2. Change the action, document type, and movement type to the following.

3. Enter production order number 60003503 and press Enter.

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4. Let's review some of the key fields on this document. As you can see from the above screen shot, the material is a pump and we are receiving 1000 of these pumps into inventory. Click on the Where tab to see to where we are receiving the pumps.

Using movement type 101, we are receiving the pumps into Plant 3000, Storage Location 0001 into unrestricted stock.

Selecting the Order Data tab, we can review the order number.

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5. Now let's post the goods receipt (click Save or Post) and then review the material document.

6. To review the material document, change the action, document type, and document number as shown below and then press Enter.

7. Click on the Doc Info tab.

8. Now, click on the document.

button to review the accounting

9. The accounting document is shown below.

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Note that the inventory was posted to the finished goods inventory stock account and removed from the factory output account where it remained during the production process.

10. Exit the transaction.

We will not complete an exercise on this transaction.

Instructor: Cancel the document to allow the production order to be used for future use.

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Goods Receipt Configuration In this section, we will cover the following areas of configuration specific to the Goods Receipt: 

Tolerance Keys



Delivery Completed Indicator



Define Screen Layout

Note: We do not cover every area of Goods Receipt configuration, but what we feel are the most important and most commonly used/modified.

Configuration Demonstration: Tolerance Keys Tolerance Key configuration is not related to goods receipt quantity tolerances, but to tolerances related to the value of the material being received. When you perform a goods receipt, SAP checks to see if the receipt varies from either the PO or Material Master data.

You maintain the tolerance keys per company code.

Two variances are checked when performing a goods receipt: 

Variance in PO price quantity PO price quantity is a confusing concept. Here is an example to illustrate the concept. You can maintain a PO quantity in one unit of measure, say EACH, and the PO price in another unit of measure, say KG. You would need to maintain the conversion factor in the Material Master from EACH to KG. This variance gets checked only if the user is entering the GR in the order price quantity unit of measure (KG) instead of the order quantity (EACH). This tolerance can have two values – one that provides an ERROR and one that provides a WARNING.



Variance for moving average price of material If a material is maintained with price control V – moving average – SAP will automatically adjust the value of the materials in inventory based on the purchase price in the PO. Therefore, it is good practice to set up a

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variance level at which SAP issues a warning message if the PO price differs greatly from the current moving average price in material master.

1. Navigate to the IMG and follow the menu path: Logistics  Materials Management  Inventory Management and Physical Inventory  Goods Receipt  Set Tolerance Limits

2. Click

to enter the configuration transaction.

3. Click to position the cursor on the desired Company code (this is faster than scrolling through the long list of company codes).

4. Enter Company code 3000 and press Enter.

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5. Select the line with Company code 3000 and Tolerance key (TlKy) B1 as shown below.

6. Click on the Display

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The tolerance limit for both the lower and upper limit is 50%. Let's look at an example to illustrate.

You maintain a PO quantity unit of measure in EACH. You maintain a PO price unit of measure in KG. You enter a Goods Receipt using the PO price unit KG. You enter an invoice receipt that would result in a price variance of 50% or more and you would receive an error message.

Configuration Demonstration: Delivery Completed Indicator The delivery completed indicator configuration is used to define the default value of this field found on the Purchase Order tab of the goods receipt screen.

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To configure which of these options is the default – follow these steps.

1. Navigate to the IMG and follow the menu path: Logistics  Materials Management  Inventory Management and Physical Inventory  Goods Receipt  Set "Delivery Completed" Indicator

2. Click

.

3. Click

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Field

Value

Plant

XXXX – where XX is your assigned student number

4. Check the setting.

If it is selected, the delivery completed indicator will default if the quantity received is within the under/over delivery tolerance specified on the Purchase Order line item.

The indicator is only relevant when the delivered quantity is less than the ordered quantity because it causes SAP to consider it fully delivered. If the delivery quantity equals the ordered quantity – the indicator is not required to be set to mark it as complete and for SAP to consider the line item closed.

Exercise: Configuration Delivery Completed Indicator Complete steps 1 -4 in the previous demonstration and note the setting for your plant.

Field

Value

Plant

XXXX

What was your plant's setting: ____________________

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Configuration Demonstration: Define Screen Layout SAP provides a tool that allows you to modify the behavior of fields in certain transactions. The behavior causes the field to be: 

Hidden (suppressed)



Optional



Required



Display only

If you have business requirements that require a specific field to be completed, you can modify the field behavior in this configuration.

In this demonstration we will modify the behavior of two fields.

We will make the Goods Recipient field required and we will suppress the Vendor field.

1. Navigate to the IMG and follow the menu path: Logistics  Materials Management  Inventory Management and Physical Inventory  Goods Receipt  Define Screen Layout

2. Click

3. In this demonstration, we will change the configuration of movement type 502 (no special stock indicator).

4. Select movement type 502 and click the Details icon.

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The fields are divided into field selection groups, such as General Data and Materials Management.

5. Double-click on General Data (or click it once then click the detail icon) to display the fields assigned to this field selection group. Make the Goods recipient a required field.

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6. Click the to navigate to the Materials Management field selection group and make the Vendor a suppressed field.

7.

You can use the field check button to make sure you have not performed configuration that would create a conflict.

8. Save the configuration.

9. Execute transaction MIGO and cancel the material document you created in the demonstration for Goods Receipt for Unknown PO.

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10. Click on the tab to see that the Goods Recipient field is now required.

Is it? No, it is not. This demonstration was a bit of trick to reinforce that it is not always that easy in SAP! In order to modify the behavior of a field, you have to understand the order of precedence SAP uses to determine how a field behaves. The user can set up one behavior on the movement type, but if the field selection is different in the configuration found in this transaction: Logistics  Materials Management  Inventory Management and Physical Inventory  Settings for Enjoy Transactions  Field Selection per Mvt Type

It overrides whatever you did in the other configuration.

11. Try changing it here:

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12. Now try to enter a goods receipt – other, with movement type 502. Click on the Check box and you will get this error message:

You can also see the field is highlighted indicating that it is required:

Exercise: Configuration Define Screen Layout Taking turns in teams of 2 to 3, complete steps 1 - 12 in the previous demonstration and enter a movement type 502 'Goods Receipt for Unknown PO' to test your settings.

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Unit 6: Inventory Management Goods Issues In this unit, we will cover the following: 

Goods Issue to Cost Center 



Goods Issue to Scrap 



Review of FICO postings

Review of FICO postings

Goods Issues Configuration 

Dynamic Availability Check

We will cover goods issue to a reservation, stock determination, and batch determination in later units.

Let's review what we learned about Goods Issues in Unit 4.

A Goods Issue removes stock from inventory; it is the opposite of a goods receipt. A goods issue commonly withdraws stock for a sales order, for a production order, for consumption by a project or cost center, or for scrap.

Deliveries to customers (which result in a goods issue) are handled in the Sales and Distribution or Logistics Execution modules. If your company does not use the SD or LE modules, you can post a goods issue for sales order consumption directly in Inventory Management.

Withdrawals for production cause confirming production orders, which backflush components into SAP and automatically create the goods issue. Therefore, it is unusual to perform a goods issue in the Inventory Management module, but inventory management does see the goods receipt from the Production module. You can view the material movement within Inventory Management, even though it was posted in the PP module.

Other activities that issue a material from stock via the Goods Issue include issuing materials from stock directly to a cost center, returning deliveries to a vendor, or scrapping materials from stock.

A goods issue can refer to another document (production order, sales order, reservation) or not. If a goods issue refers to another document, SAP automatically copies the relevant information (material, quantity, etc.) from the reference document into the goods issue material document.

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The following table lists the commonly used goods issue movement types:

Movement Type

Description

201

Goods issue for Cost Center

221

Goods issue for Project

231

Goods issue for Sales Order

241

Goods issue for Asset

251

Goods issue for Sales

261

Goods issue for Order (production order)

291

Goods issue for all Account Assignments

331

Goods issue for sampling from Quality Inspection

333

Goods issue for sampling from Unrestricted stock

335

Goods issue for sampling from Blocked stock

551

Goods issue to Scrap

ERPtip

If the movement type starts with a 2, it is for consumption; if it starts with a 3, it is for withdrawal. ERPtip

Each movement type may also have a special stock type designation, which tells if the placed or removed stock is a special stock (like consignment or sales order stock).

Posting a goods issue results in the following:

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

Material document



Accounting document



Update to stock quantity



Update to G/L accounts and cost accounts



Update to consumption statistics for the material



Optional: Goods Issue Slip (printed document)

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Goods Issue to Cost Center Some companies stock items that they will issue to a cost center or to another cost object, such as a project, an asset, a sales order, a network or to an internal order. In this example, we will issue an item to a cost center. We will also use the special MIGO_GI transaction.

Demonstration: Goods Issue to Cost Center 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  MIGO_GI – Goods Issue (MIGO)

Or, transaction MIGO_GI

2. Change the action, document type, and check the movement type. Press Enter.

3. Click on the Material tab and enter the Material number. Press Enter.

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4. Click on the Quantity tab and enter the Quantity and Uunit of Entry. Press Enter.

5. Click on the Where tab and enter the Plant and Storage Location. Press Enter.

6. Click on the Account Assignment tab and enter the Cost Center. Press Enter.

7. Post the goods issue.

Record the Material Document number: _____________________

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8. Now, let's look at the material document. Without leaving the screen, change the action and document type and the last Material Document number should automatically populate.

9. Press Enter and the Material Document will display.

10. Click on the Doc. Info tab and then click on

.

11. Select the Accounting document and click the Display icon.

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12. The Accounting Document appears below.

Notice that stock value is removed from Work in process inventory and the value is posted to an Inventory change account with an associated cost center. Remember that we did not select this account number – this is part of the automatic account assignment, which we will discuss in a later unit.

13. Return to the previous screen. Select the Controlling document and click the Display icon to display the document.

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14. The Controlling Document appears below.

Here, you can see the cost center is charged the amount of the inventory that was issued to the cost center.

Goods Issue to Scrap At some point, every company needs to scrap some of their inventory. It may be past its expiration date, damaged, or simply no longer needed or usable. You can scrap materials from all stock types – unrestricted, blocked, and quality inspection. It is just necessary to designate the stock type in the transaction. When you perform the goods issue to scrap transaction, it results in the following: 

The inventory of the stock item is reduced.



An accounting document is posted, reducing the amount in the inventory stock account and increasing the amount posted to the G/L scrap account.



A controlling document is posted, charging the associated cost account for the value of the scrapped stock.



Optionally, you can print some form of output for your records.

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Demonstration: Goods Issue to Scrap 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  MIGO_GI – Goods Issue (MIGO)

Or, transaction MIGO_GI

2. Change the action, document type, and check the movement type. Press Enter.

3. Since we have performed these transactions multiple times now, I will simplify the demonstration steps and provide the input data below.

Field

Value

Material



Quantity

1 PC

Plant

3000

Storage Location

0001

Cost Center

328

4. Once all the data has been entered, check and post the goods issue to scrap.

Write down the material document number: ______________________

5. Again, let's review the Accounting Document. Without leaving the screen, change the action and document type; the last material document number should automatically populate.

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6. Press Enter, and the material document will display.

7. Click on the Doc. Info tab and then click on

.

8. Select the Accounting Document and click the Display icon.

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9. The Accounting document appears below.

Notice that stock value is removed from Work in process inventory and the value is posted to the Scrapped material account with an associated cost center. And again, remember that we did not select this account number – this is part of the automatic account assignment, which we will discuss in a later unit.

10. Return to the previous screen. Select the Controlling document and click the Display icon to display the document.

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11. The Controlling Document appears below.

Here, you can see the cost center is charged the amount of the inventory that was scrapped to the cost center.

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Exercise: Goods Issue to Cost Center Using the data provided below, enter a two-line goods issue – one line to a cost center and one to scrap.

You can use the steps in the previous two demos, but there is a challenge here to enter two lines on one material document. Review the documents and make sure you understand what you see in the Accounting document.

Field

Value

Movement type

201 and 551

Material



Plant

XXXX

Storage Location

00XX

Quantity

1 PC

Cost Center

328

Enter your material document here: _______________________

What G/L account was debited for the scrap transaction? _______________

What G/L account was credited for the GI to cost center transaction? _________

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Goods Issues Configuration Two types of availability checking exist in SAP. The more commonly used type is for checking for available stocks during Material Requirements Planning. However, Inventory Management also provides a dynamic availability check function that allows you to define what stocks are taken into account when checking for material availability.

Within the Inventory Management availability check, there are two types of dynamic checking. The first is checking availability when creating a reservation and the other is during a goods movement. The availability check is a procedure defined by SAP that defines how the availability is calculated and what is taken into account. The checking rule and availability check, when combined, define the various stock types, movements, etc., that define what stock is considered available and when.

The availability check occurs when the following prerequisites are fulfilled:

1. The material master has a checking group for the availability check defined in MRP view, as shown below:

2. The checking rule is assigned to the transaction in configuration.

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For each movement type, you can define what message (error, warning, information) is displayed. You can also define which checking rules are supported.

Within each checking group/rule combination, you can define which objects (stocks, documents, materials requirements) are to be included in the availability check.

For each inventory management transaction type, you can define which checking rule applies.

Checking rule 03 is provided for use in Inventory Management in the standard SAP system. We will review the setting of that checking rule in the demonstration. It is possible to configure additional checking rules and assign them to the transaction type if you require different checking rule parameters.

Demonstration: Dynamic Availability Check 1. Navigate to the IMG and follow the menu path: Logistics  Materials Management  Inventory Management and Physical Inventory  Goods Issue/Transfer Postings  Set Up Dynamic Availability Check

2. Click

3. Click

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4. Let's focus on the highlighted line below:

This line represents movement type 201 – Goods Issue for a cost center for materials that are not special stock types (sales order stock, consignment stock) managed both by quantity and value. The material type of the material determines whether a material is managed by quantity and/or value.

For this line, the dynamic availability check is 'A':

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Therefore, a warning message is issued in the case of non-availability.

5. Click

6. Click

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As mentioned in the introduction, we know that checking rule 03 is specifically for Inventory Management transactions. The checking rules you see here are used for other purposes – specifically in Sales and Distribution and Production Planning to ensure components and finished goods will be available when product is to be shipped to a customer or a raw material is needed in production.

7. Click

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8. Click

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9. Click on

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, enter the following, and press Enter:

Remember, we saw availability check '02' on our material master.

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10. Once your cursor is on the line for Availability Check '02' and Checking rule '03', click the Details icon or double-click on the line.

The above screen shot defines what stocks are considered in the availability check using the checking rule. It also defines what inward and outward movements contribute to the availability check.

11. Click the Back arrow

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12. Click

.

Here, you can define which checking rule is used with which transaction.

So, to determine which checking rule/availability check is invoked, you need to know: 

The material master setting for availability check



The movement type is assigned a dynamic availability check type



A checking rule is defined for your availability check



Your checking rule is assigned to the transaction code you are using to execute the goods movement transaction.

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13. Exit the transaction.

14. Now, let's test it out and see the behavior while executing the transactions. We will perform a Goods Issue to Scrap. Let's try to issue more than what is in stock. First, check the stock quantity of the material using MMBE – Stock Overview.

15. We can see from the following screen shot that we have 321 in stock.

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16. Execute MIGO_GI to scrap, movement type 551, for material 2097 for a quantity of 322 from Plant 3000, Storage Location 0001.

17. You can see from the following message, that we have exceeded the available amount of stock by 1.

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Unit 7: Inventory Management Stock Transfers and Transfer Postings In this unit, we will cover the following: 

Stock Transfer between Storage Locations



Stock Transfer between Plants



Transfer Postings

Before we start the demonstrations, we will review the concepts we covered in the Goods Movement unit.

We will cover Stock Transport Orders in the unit on Managing Special Stocks later in this course.

Stock Transfers Stock transfer is about moving inventory from one location to another. In SAP, stock transfer moves stock either from one storage location to another or from one plant to another. A stock transfer happens in either one or two steps:

One step: Once the goods movement is posted, the inventory automatically appears in the destination location.

Two steps: After the one-step activity posts, inventory appears in an 'in-transit' storage location.

Only unrestricted stock can be moved using the two-step procedure.

Moving stock between storage locations does not trigger creating an accounting document because the material is valuated within the same plant.

In the two-step procedure, the first step triggers the reduction of stock level at the issuing storage location or plant and the increase of stock level at the receiving storage location or plant. The stock has in transit status at the receiving plant, so it cannot be withdrawn or picked until the second step completes.

In transit stock is considered for MRP in the receiving plant.

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The following table lists the commonly used stock transfer movement types:

Movement Type

Description

301

Transfer Plant to Plant (one-step)

303

Transfer Plant to Plant (step 1 of 2 step)

305

Transfer Plant to Plant (step 2 of 2 step)

311

Transfer Storage Location to Storage Location (onestep)

313

Transfer Storage Location to Storage Location (step 1 of 2 step)

315

Transfer Storage Location to Storage Location (step 2 of 2 step)

Transfer Posting A transfer posting does not involve physically moving stock; rather, it changes the stock type or material. Stock commonly moves from one material to another material when you ”sunset” an old product number and need to transfer existing stock to a new material master number. Stock can also move from one stock type to another; for example, from quality inspection to unrestricted stock or from unrestricted to sales order stock.

The following table lists the commonly used Transfer Posting movement types:

Movement Type

Description

309

Material to Material transfer posting

321

Transfer posting Quality Inspection stock to Unrestricted stock

343

Transfer posting Blocked stock to Unrestricted stock

413

Transfer posting Sales Order stock to own Unrestricted stock

415

Transfer posting Project stock to own Unrestricted stock

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Stock Transfer between Storage Locations In this demonstration, we will illustrate how to move stock from one storage location unrestricted stock to another storage location's unrestricted stock. In a second step, we will move the stock from unrestricted to blocked stock.

Demonstration: Stock Transfer between Storage Locations using one-step stock transfer and move to blocked stock

It is always a good idea to view the stock overview before practicing a new transaction. Let's take a look at the Stock Overview first using MMBE transaction.

1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Transfer Posting (MIGO)

Or, transaction code: MIGO_TR.

2. Change the drop-down to the following:

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3. Enter the following data on the Transfer Posting tab:

Field

Value

Material



From Plant

XXXX

From Storage Location

00XX

Unit of Entry

1 PC

Destination Storage Location

0002

4. Click the

button to check the entries. You can also click the and

tabs to

review the data that appears.

Material tab:

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Quantity tab:

Where tab:

General tab:

Employee (contact) tab:

5. Once you have reviewed the information, click the storage location to storage location stock transfer.

Record your material document number:

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button to post the

_________________

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6. Review your material document:

7. Let's also review the material document using the MB51 transaction:

Notice that there are two items. Item 1 represents the 1 PC of material 2097 being removed from storage location 0001 and item 2 represents that material being placed into storage location 0002.

8. Review the new stock situation.

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Exercise: Stock Transfer between Storage Locations using one-step stock transfer Complete the steps in the previous demonstration.

Review the material document using the MB51 transaction and be sure you understand why there are two lines for this posting.

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Stock Transfer between Plants In this demonstration, we will repeat the exercise we did in the overview unit to reinforce two-steps stock transfers.

Demonstration: Stock Transfer between Plants using 2-step stock transfer Before we begin the demonstration, let's take a look at the stock situation using the MMBE transaction:

You can see the 15 initial entry of stock in Plant 3100 and 218 PC in Plant 3000. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Transfer Posting (MIGO)

Or, transaction code: MIGO_TR.

2. Change the drop-down to the following:

3. Verify the movement type is 303.

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4. Enter the data as shown below:

Field

Description

Material



From Plant

3100

From Storage Location

0001

Dest Plant

3000

Dest Storage Location

0001

Unit of entry

10 PC

5. Click

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to check the data:

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6.

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Click

to post the stock transfer.

Instructor: Record your material document number: ______________________

7. Now, let's review the stock situation again using transaction MMBE:

Notice there are only 5 in Plant 3100, but plant 3000 still shows 218. If we click on Plant 3000 and click on the 'Detailed Display' button, we can see this screen:

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Now, we can see that there are 10 in 'Stock Transfer'. Once we complete step 2 of the two-step stock transfer, the quantity of 10 will appear in the unrestricted stock.

Now complete the second step of the two-step stock transfer.

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8. To complete the second step of the two-step stock transfer, follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Transfer Posting (MIGO)

Or, transaction code: MIGO_TR.

9. Change the drop-down to the following:

10. Enter the material document recorded in step 6 and press Enter or click Execute.

11. Verify the data as shown below:

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12. Click to post the stock transfer and move the stock from Stock in transit stock type to Unrestricted.

Instructor: Record your material document number: ______________________

13. As we did in the last exercise, let's take a look at the material documents using the MM51 transaction.

Exercise: Stock Transfer between Plants using 2-step stock transfer Using your data, transfer 1 PC of stock between Plants 3000 and 3010 using the 2-step stock transfer process. Follow the steps in the demonstration.

What error (if any) did you receive? Do you know how to fix it? If not, ask the instructor for help. Otherwise, try 'the fix' and try the transaction again.

Write your material document numbers here:

Step 1 document number: ______________________

Step 2 document number: ______________________

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** The fix is to extend the material master to plant 3010. You can only automatically extend the material to a storage location using inventory management transactions – you cannot automatically extend the material to a plant.

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Transfer Postings As discussed in the introduction to this unit, a transfer posting differs from a stock transfer because there is no physical movement related to the transaction. It simply changes the material number or stock status of the material. The stock status can change between unrestricted, quality inspection, and blocked. You can also change a material to/from a special stock type, like Sales Order stock or Project stock.

Demonstration: Material to Material Transfer Posting In this demonstration we will perform a material to material transfer. This is a common business transaction when you are discontinuing an old material master number to start with a new version. At the end of the demonstration, we will display the financial posting document to show how the value differences of the two materials are accounted. 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Transfer Posting (MIGO)

Or, transaction code: MIGO_TR.

2. Change the drop-down to the following:

3. Verify the movement type is 309.

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4. Enter the data as shown below:

Field

Description

From Material



From Plant

3100

From Storage Location

0001

Dest Material



Dest Plant

3000

Dest Storage Location

0001

Unit of entry

1 PC

5. Click

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6.

Click

to post the stock transport – material to material.

Record your material document number: ______________

7. Now let's review the material document and the financial documents. Change the action and document:

8. Click on the Doc. Info tab.

9. Click the Financial Documents

button.

10. Click on the Accounting document and click the Display icon.

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11. Review the document below.

Notice there are two values for the work in process inventory account. If we look at the material master accounting views associated to these two materials in Plant 3000, we will see that they carry different standard costs. So when SAP converts material 1447 to material 2097, which carries a lower standard cost, it must post the difference to an inventory Losses account. The next two screen shots show the standard cost of the two material masters.

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Material 1447 – Accounting View:

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Material 2097 – Accounting View:

Exercise: Material to Material Transfer Posting In this exercise, convert 1 PC of your material to 1 PC of your instructor's material using the steps provided in the demonstration.

Record your material document number: ___________________

Review your material document and look at the accounting document.

What is the amount posted to the inventory losses account? _______________

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Unit 8: Inventory Management Movement Types In this unit, we will cover the following: 

Overview of Movement Types



Configuration of Custom Movement Types

Overview of Movement Types Movement Type, as previously discussed, refers to all types of stock movements in SAP – receipts, issues, and transfers. SAP defines its movement types in the range 101 to 899. You can define custom movement types for which SAP has reserved movement types in the range 900 to 999 in the customer namespace. In ECC 6.0, you can also use letters in the movement types.

The Movement Type controls how SAP updates the quantity fields and the stock and consumption accounts. And, it controls what fields must be maintained when entering the movement, and if documents will be printed.

ERPtip

It is highly recommended to copy from an existing movement type to create a new movement type, rather than creating one from scratch.

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Configuration of Custom Movement Types Even though SAP also recommends that you accept the standard movement types, some cases arise where you will want to configure a custom movement type. For the demonstration and exercise presented in this manual, our business scenario is:

Management has decided to interface multiple legacy production systems to SAP. Part of the interface creates goods movements in SAP (Goods Receipt without Production Order – Movement Type 521). Management requested a special movement type for each legacy system to make it easier to identify which movements came from which legacy systems.

Demonstration: Custom Movement Type Configuration To configure a custom movement type, follow these steps:

1. Navigate to the IMG and follow the path: Materials Management  Inventory Management and Physical Inventory  Movement Types  Copy, Change Movement Types

2. To narrow the selection of movement types, select Movement Type from the Field Selection pop-up window:

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3. Select the movement type from which you will be copying (in the demo, movement type 521).

Click 4. Because you narrowed the selection to a single movement type, SAP navigates directly to the Change View "Movement Type" Details screen. Click the Copy icon movement type.

to copy the existing movement type to a custom

5. Clicking the Copy icon prompts you to enter a new movement type number. For this demo, enter 921.

6. Click

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and you will receive the following pop-up:

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7. Click to copy all the relevant settings for this movement type. You will see the following information window:

Note the number of dependent entries copied! Now do you see why you do not want to create one of these custom movement types from scratch?

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Now, we will walk through each of the screens.

8. Detail Screen for Movement Type:

Field

Description

Print item

Making a selection here allows the user to print a document (like a GR slip). The following displays the standard options:

The output type is determined from a combination of the movement type and the transaction/event type.

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Field

Description

Check SLExpri.date

Requires that a shelf life expiration date be entered when the GR is performed.

Selection parameter

Used to aid the search for purchase orders when performing a goods receipt. The selection parameter limits the possible values.

Account control

Determines whether it is required to enter a G/L account. The possible entries are:

Classif.batches

Indicator allows you to branch to batch classification at time of GR, or to have the system classify the batch relevant receipts in the background.

Control Reason

Indicates whether the reason for movement is required, optional, or suppressed. This field is configured following the IMG menu path: Materials Management  Inventory Management and Physical Inventory  Movement Types  Record Reason for Goods Movements ERPtip

The Control Reason field is useful in tracking reasons for vendor returns. Create New Batch

Determines whether to create a batch automatically or manually upon Goods Receipt.

Stck determination rule

The combination of the stock determination rule and stock determination group fields determine the Stock Determination Strategy – or how stock is placed into or removed from existing stock. For example, Stock Determination Strategy 0001 withdraws stock from unrestricted stock first, then from consignment stock. The stock determination group is maintained on the Material Master at the plant level.

Ext.classific.

Set this indicator if you plan to use a custom function call to use Extended Classification to assign values of characteristics.

RevGR despite IR

Set this indicator to allow users to post a GR for an item that already has an Invoice Receipt posted against it.

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Field

Description

Create SLoc. automat.

Setting this indicator automatically extends (or creates) the material master to the Storage Location for which the Goods Movement is performed.

Statistically relev.

The statistically relevant indicator sets whether the movement type is recorded in the Information System for reporting.

Ind. rqmts reduction

If the movement type is linked to a document that has a planned independent requirement associated to it, like a sales order, selecting this indicator will reduce the requirement by the amount in the goods movement

Consumption posting

Indicator that controls how consumption is recorded on the material master.

Generate ph.inv.doc.

The generate physical inventory document indicator works in conjunction with Warehouse Management – it tells whether or not a corresponding movement exists in Warehouse Management.

Automatic PO

Shows that a goods receipt automatically creates a PO.

Rev. mvmnt type ind.

Indicates that the movement type is a reversal movement type. Copying an existing SAP standard movement type automatically creates the corresponding Reversal movement type.

236

Debit/Credit ind.

Indicates whether the posting will create a Debit (S) or Credit (H) posting. A goods receipt is a Debit (think positive) and a goods issue is a Credit (think negative).

CostElem account

Use this indicator when a posting from another application generates this movement. For example, when a Quality Management transaction scraps a material, the system can either post the scrap to a cost element that is costing relevant or not.

Reserv. cat.

Indicates the account assignment category (i.e., Asset, Order, Project) for a reservation.

Mvt type category

The movement type category defines if the movement type is allowed for a specific transaction. Do not modify – SAP field.

GR blocked stock

Used for movement types 103, 104, 105, and 106, which are GR into and out of blocked stock.

Direction Indicator

Used for cross-system relevant movement types.

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9. Double click on Short Texts in the left pane:

Note the ECC 6.0 environment in Unicode!

10. Click on short texts:

and enter EN to navigate to the English

Notice that when we copied the movement type, it copied all the special stocks and various consumption methods.

11. You can change the Movement Type Text here to something more meaningful that shows the system where the interface happens.

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12. Double click on Allowed Transactions.

This displays the transactions that can be used for this movement type.

13. Double click on Help Texts and use the navigate to the English section for the movement type:

icon to

The texts that appear here are used for specific transactions. For example, if you manually enter the 921 Movement Type via transaction code MB11, you see the text circled on the following screen:

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This text is used for specific transaction codes and is different than what appears in the Short Text.

ERPtip

MB11 controls the help text for MIGO. Change the Help Text to Receipt w/o production order into unrestr.-use stock – LEG1.

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14. Double click on Field Selection (from 201)/Batch Search Procedure.

This allows you to enter a Search procedure when withdrawing batch relevant materials from stock.

Since this movement type is a goods receipt and not a goods issue or withdrawal, the screen is not relevant.

15. Double click on Field Selection Enjoy.

This indicates which fields on the Enjoy transaction (MIGO) are required and which are optional. It is possible to add fields to this screen. The fields are shown with their technical field names, but you can use the drop-down selection button

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In this example, Order, Text, and Goods Recipient are Optional fields.

Add Reason for Movement as an Optional Field. Click the following:

and enter

16. Double click Update control / WM movement types. This transaction controls the following: 

If values and quantities are updated when the movement type is executed



How availability is checked when movement type is posted



The reference movement type for WM

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

The receipt and movement indicators (with or without reference to another document like a sales or production order)

Select the entry circled above, click the Display icon

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17. Double click on Account Grouping. Account grouping allows more detailed definitions of transaction/event keys for account determination. The account group is maintained for each movement type, material masters that have value/quantity updates or not, special stock indicator, movement indicator, and consumption posting type. An example of using the Account Grouping is Transaction/Event key – Offsetting entries for stock postings (GBB). It is possible to assign different accounts via the use of Account Groupings, which are represented in the account modification (Acct modif) column on the following screen print. The standard system defines account grouping ZOF for goods receipts without Production orders (movement type 521 – the movement type we copied to create 921 for this example).

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Select the entry circled above, click on the entries.

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Display icon, and review the

This entry controls the following:

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

Account postings for movement type 921 for non-special stock



Material masters that are maintained for both value and quantity

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

Movement indicator equal to blank (the movement is not based on a specified document)



Not posting consumption to a consumption or asset account.

Field

Description

Value string

The posting string for values is used for automatic account determination (determine which GL accounts have the transaction posted).

Current Entry

Values under the Current Entry tab: 2 – This is the serial counter, which is just a placeholder in the table. GBB – Transaction key, which is used to determine accounts or posting keys. Cost (price) differences – The description of the transaction key. ZOF – Account modification or account grouping.

18. Double click on Reversal/follow-on movement types.

Field

Description

FCode

Function code passed as default value to calling program. ST represents the Reversal transaction.

Type of posting

Determines if the movement is a reversal, a return delivery, or a transfer posting. Possible entries include:

19. Double click Reason for Movement. Click New Entries. Enter the following:

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20. Double click Deactivate QM inspection / delivery category.

Selecting the checkbox in the QM not active column deactivates QM for the specified movement type, special stock, movement indicator, receipt indicator, and consumption indicator.

21. Double click LIS Statistics Group.

Select the first entry and click the display icon:

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Field

Description

Statistic group

The statistics groups listed under the Group allocation tab can be used to gather statistics for a group of movements.

Type of movement

The indicators under this tab show if the movement type is a stock transfer, return, physical inventory movement, or inventory correction movement. Selecting the indicator tells SAP how to handle reporting of this movement type in Logistics Information Systems reports.

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Exercise: Custom Movement Type Configuration In this exercise, you will create a custom movement type and test it using your material.

Use the steps described in the Demonstration to complete the first step of the exercise.

1. Copy Movement Type 521 to Movement Type 9XX. Field

Value

Movement Type

9XX (where XX is your group number)

2. Change the Short Texts and Help Texts.

3. Add a Reason for Movement. Field

Value

Reason

1

Reason for Movement

GR ProdOrd from LEG1

There is a trick here. Write it down and how you discovered it: __________________________________________________________ __________________________________________________________

4. Save the movement type.

5. Test the movement type. Use transaction MIGO and select the following:

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Field

Value

Movement Type

9XX

Material



Quantity

1

Plant



Storage Location



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Field

Value

Order



6. Post the transaction. 7. Review the material and accounting documents – How do you do that? __________________________________________________________

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Answers to Exercises: 3 – Answer: The Reason for Movement is actually maintained using transaction OMBS. 7 – Answer: Can use MMBE to view material documents.

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Unit 9: Inventory Management Physical Inventory SAP provides a few different options for carrying out physical inventory in your plant. If you are running a warehouse-managed warehouse, you will use the Warehouse Management component of physical inventory; if you are only managing your stock at the storage location level, you will use the Inventory Management component of physical inventory. In this unit, we will cover performing physical inventory using Inventory Management.

In this unit we will cover: 

Physical Inventory Methods



Configuration of Physical Inventory with Demonstration



Demo and Exercise of the Physical Inventory Process

Physical Inventory types SAP provides the following physical inventory types: 

Annual Physical Inventory



Continuous Physical Inventory



Cycle Counting

Annual Physical Inventory Annual Inventory simply means counting every stock item you store in your inventory once per year. Most companies have adopted a continuous method of physical inventory because it allows you to keep your inventory stock levels more accurately. However, some companies still perform annual physical inventories due to constraints they have in their warehouse.

Physical Inventory is either executed for your company's own stock or for your special stock types like customer consignment or vendor consigned stock. Each requires a different physical inventory document. You can carry out physical inventory for your unrestricted, blocked, and quality areas collectively.

You can also use this method to count inventory that has not had any physical movements in a one year period.

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The following diagram illustrates the process flow: Create physical inventory documents

Block Materials for posting

Enter the results of the count

Print the inventory count sheets

Recount, if required

Complete the counts

Post inventory differences

Continuous Physical Inventory In the previous section, we discussed annual physical inventory. The steps for Continuous Physical Inventory are the same in SAP, except the inventory is carried out over a year period versus in a single major inventory event.

When carrying out continuous physical inventory, you will select which storage locations and materials you will count.

Since continuous inventory is done throughout the year, you can perform it at idle times during the year instead of concentrating a major effort in a single event once per year.

Cycle Counting The cycle counting procedure is a form of continuous inventory, except you can set the system up to suggest a list of materials and locations that you should count. You can count your higher volume materials more frequently than the lower volume materials. You configure how often you want to count each “volume type” material. Volume type refers to the frequency of use of the material. You can either manually mark a material with a volume type (A for high volume, B for moderate, C for lower volume, or any other type you would like) or have a program mark it based on its historical consumption.

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The cycle counting indicator is on the Material Master, plant/storage data view:

The transaction that can be run to automatically set the cycle counting indicator is MIBC. The following screen shot displays the selection criteria for running the program:

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Configuration of Physical Inventory Demonstration: Configuration Settings for Physical Inventory Prior to creating a physical inventory document, some configuration settings must be maintained. If you copied your plant from another plant that already had these settings, it will already be set up. Otherwise, follow these steps:

Field Selection of Physical Inventory 1. Navigate to the IMG and follow the menu path: Materials Management  Inventory Management and Physical Inventory  Physical Inventory  Field Selection for Physical Inventory

2. The following screen appears:

The above setting is the standard setting. If you have additional fields you wish to require, hide, or allow input, you can add additional fields here or change the behavior of the fields shown. The field shown here is the reason code for the inventory difference when posting a physical inventory document. The setting allows for user input, but does not require it. The HiLi checkbox allows you to highlight the field for input.

3. Save your changes and exit.

Define Default Values 1. Navigate to the IMG and follow the menu path: Materials Management  Inventory Management and Physical Inventory  Physical Inventory  Default Values for Physical Inventory

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2. For each plant for which you want to run physical inventory, maintain an entry in the following table:

3. Navigate to your plant and click the Details icon to view the following:

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Field

Description

Stock Type

Indicates the default stock type for which physical inventory is to be carried out.

The user can override the stock type when creating the physical inventory documents. Batch in background

Select this checkbox if you wish for SAP to run automatic batch selection. Do not select it if you would like to select the batches to be counted manually.

Alternative unit of measure

If selected, SAP will use the unit of entry maintained on the material master – plant/storage view as the default unit of measure to be counted in the physical inventory count.

Reason for difference

If you wish to default a reason for difference, make a selection from the dropdown box. Additional values can be configured.

4. Save your changes and exit.

Settings for Physical Inventory 1. Navigate to the IMG and follow the menu path: Materials Management  Inventory Management and Physical Inventory  Physical Inventory  Settings for Physical Inventory

2. For each plant for which you want to run physical inventory, maintain an entry in the following table:

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3. Navigate to your plant and click the details icon to view the following:

Field

Description

Change document

Indicates a change document will be created if you change a physical inventory count instead of changing the existing document.

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Field

Description

Adj. Book Inventory

The function describes how the system reacts when you post a goods movement for a material that has an open physical inventory count and the user chose to freeze the book inventory balance. 

When you set the indicator to 1 (active, physical inventory before goods movement on same date), the system assumes that the physical inventory was carried out first.



When you set the indicator to 2 (active, goods movement before physical inventory), the system assumes that the goods movement was carried out first.

SAP recommends you do not activate this function.

4. Save your changes and exit.

Define Tolerances for Physical Inventory Differences In this step, you will create tolerance levels against which specified users can post physical inventory difference documents per company code.

1. Navigate to the IMG and follow the menu path: Materials Management  Inventory Management and Physical Inventory  Physical Inventory  Define Tolerances for Physical Inventory Differences

2. The following screen will appear:

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3. Click the

button.

4. Check the entry for Tolerance Group 0001, Company Code 3000.

This shows how much a person with the assigned tolerance group is allowed to post as a difference in a physical inventory. In the next step, we will assign users to the tolerance group.

5. Click the green back arrow to return to this screen:

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6. Click the

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button.

7. Here, you can see which users have which tolerance groups assigned to them.

Cycle Counting If you choose to utilize the cycle counting method, you must complete the following configuration:

1. Navigate to the IMG and follow the menu path: Materials Management  Inventory Management and Physical Inventory  Physical Inventory  Cycle Counting

2. For each plant in which you want to run Physical Inventory, maintain your cycle counting indicators.

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Field

Description

CC phys. Inv. Ind.

Cycle Counting physical inventory indicator – key assigned to each material master at the plant level to determine how often the inventory must be counted in a fiscal year. The indicator is found on the material master record. The configuration here dictates how often the material is to be counted.

No. of phys. Inv.

Number of times in a year that the material must be counted.

Interval

Specifies the number of workdays that should pass until another round of counting that material should occur.

Float Time

Number of workdays that can pass in addition to the interval between the last time the material was counted and when it should be counted again.

Percentage

The percentage of total materials that should belong to the cycle counting indicator. The total of percentages for a single plant should be 100.

The standard SAP method of determining the ABC stratification will not work in all environments, and is one place you may decide that a break from standard SAP procedure is required to account for criteria other than usage or consumption (inventory turns). Inventory value is a typical reason to change from the standard SAP consumption-based ABC stratification. If usage is not an appropriate method to set the cycle count indicator, a decision should be made determining whether the Material Master‟s cycle count indicator can be maintained manually, or whether an enhancement is required to use custom stratification criteria and update the Material Master programmatically.

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Demo and Exercise of Physical Inventory using Cycle Counting Method In this demo and subsequent exercise, we will perform the following steps:

1. Set Cycle Counting indicator in Material Master 2. Activate Physical Inventory Documents 3. Print Physical Inventory Documents 4. Enter Physical Inventory Results 5. Process WM Inventory Differences 6. Clear Inventory Management Differences

Step 1: Set Cycle Counting Indicator in Material Master In this step, we will demonstrate using the program to automatically set the cycle counting indicator for our material master. In the end of this section, we will also illustrate how to check and change it on the material master.

1. Follow the menu path: Logistics  Materials Management  Physical Inventory  Special Procedures  Cycle Counting  Set Cycle-Counting Indicator Transaction Code: MIBC

2. Enter the data shown on the following screen and table and click Execute.

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Field

Value

Plant

3000

Consumption/Usage

Check radio button and leave date defaults

3. Review the data on the following screen:

Look for your material and note the old and new CC indicator. Notice the demo material is highlighted.

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4. Click on year:

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to view the counting effort for the plant for the

5. Save your result to update the material master cycle counting indicators.

6. Navigate to the material master to view the cycle counting indicator. Use transaction code MM02.

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Field

Value

Material Master



Plant

XXXX

Storage Location

00XX

View

General Plant Data/Storage 1

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Note the CC fixed indicator on this material master. This is why our material was highlighted in the “Set Cycle Counting Indicator” program and marked as “inconsistent”.

If your material did not get a cycle counting indicator, enter A in the field now and save the material master.

Step 2: Creating Physical Inventory Documents To activate the physical inventory document for cycle counting, follow these steps.

1. Follow the menu path: Logistics  Materials Management  Physical Inventory  Special Procedures  Cycle Counting  Create Physical Inventory Documents Transaction Code: MICN

2. Enter the data as shown in the following screen shot and table and click Execute to start the process:

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Field

Value

Material



Plant

XXXX

3. On the following screen, you will get a list of materials to be cycle counted in your warehouse. If you limited your selection on the initial selection screen, you will only get your material.

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4. Click the button to generate a background batch session that will create the physical inventory documents. You will receive the following message at the bottom of the screen:

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5. To process the batch input session, follow the menu path System  Services  Batch Input  Sessions

6. Select the session you created from the list, and click

7. Select the Process/foreground option below and click

.

.

You may choose to run these as a background job once you are comfortable with what SAP is doing in the background.

8. You will receive a series of pop-up boxes with the transaction running behind them. Here is a screen shot of the pop-up box:

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And here is what a screen looks like with the pop-up box:

As you click Enter through all these screens, SAP is generating the physical inventory documents for you in the system. Continue to click Enter until you reach this screen:

9. Click

.

Now you have created physical inventory documents.

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10. To find the physical inventory document number of the documents you just created, follow the menu path: Logistics  Materials Management  Physical Inventory  Environment  Physical Inventory List

Transaction code: MI24

11. Click Execute.

Here, you have a list of the Physical Inventory documents you created.

Record your physical inventory document: ___________________________

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Step 3: Printing Physical Inventory Documents To print the physical inventory document for cycle counting, follow these steps.

1. Follow the menu path: Logistics  Materials Management  Physical Inventory  Physical Inventory Document  Print

Transaction Code: MI21

2. Enter the physical inventory document number, plant, and year:

3. Click Execute.

4. In class, we will not print the hard copy document, but let's click on the print preview button below to see what the standard printed document looks like:

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5. Pretty! OK, not really. But you can work with your developers to make it look a little better. Click the back arrow to exit.

At this time, the warehouse personnel would physically go into the warehouse and count the stock and record the results on the count sheet. The next step will input the results returned by the warehouse personnel.

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Step 4: Enter Physical Inventory Results To enter the results for the physical inventory document for cycle counting, follow these steps.

1. Follow the menu path: Logistics  Materials Management  Physical Inventory  Inventory Count  Enter Transaction Code: MI04

2. Enter the data as shown in the following screen shot and table and press Enter to start the process:

You may receive this warning message:

You can press Enter to bypass the message.

3. Enter the results of the count. Feel free to create another session and use MMBE transaction to look up the actual quantity that is in your storage location. Enter a value that is 1 less than what is actually showing in the stock overview.

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The ZC check box is to indicate a zero count.

4. Once you have entered the quantity, click Save.

Step 5: Process Inventory Differences To process the inventory differences for cycle counting, follow these steps.

1. Follow the menu path: Logistics  Materials Management  Physical Inventory  Difference  Post Transaction Code: MI07

2. Enter the data as shown in the following screen shot and table and press Enter to start the process:

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You may receive this message; press Enter.

Since in the configuration section of the demonstration, I restricted my user ID from posting differences greater than $150 per item, I do not have the priviledges to post this inventory difference.

3. Save your posting.

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Exercise: Physical Inventory Follow the steps in the demo section to complete the following as shown in the demo:

1. Set Cycle Counting Indicator in Material Master 2. Create Physical Inventory Documents 3. Print Physical Inventory Documents 4. Enter Physical Inventory Results 5. Process Inventory Differences

Use the following data:

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Field

Value

Material Master

Your material

Plant

XXXX

Storage Location

00XX

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Unit 10: Inventory Management Managing Special Stocks In this unit, we will cover the following: 

Consignment



Subcontracting



Stock Transfer using Stock Transport Order



Third-party processing



Sales Order Stock



Project Stock



Returns

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Special Stocks Each special stock belongs to one of the following categories: 

Companies Own Special Stock – includes Subcontracting stock provided to vendor, Consignment Stock at Customer site, and Returnable Packaging Stock at Customer site



Externally-owned Special Stock – includes Vendor Consignment stock, Returnable Transport Packaging, Sales Order Stock, and Project Stock



Special Procurement Types – includes Consignment, Subcontracting, Stock Transfer using Stock Transport Order, Third-party Processing, Returnable Transport Packaging, and Pipeline Handling.

The remaining sections of this unit explain some of these special stocks and special procurement types that utilize special stocks.

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Consignment Materials owned by the vendor but stored on your premises are called consignment materials or consignment stock. You manage the inventory in SAP, but by quantity only, not value.

You can also have your stock stored at your customer's site. The process for this is covered in the ERPtips Sales and Distribution course. This is called customer consigned stock. This special stock type is not included in MRP.

To order material on consignment from the vendor, you create a PO with Item Category K as shown in the following example:

To enter the goods receipt, you must have an info record maintained for the material in the plant and purchasing organization and for the item category “Consignment.” The consignment info record contains the information about how the material is priced, which can differ from how it is priced for regular stock purchases of the same material.

When you enter the GR, the quantity of the material appears in stock and under Item Category K – Consignment. The Goods receipt does not cause the inventory to be posted to the stock account since the vendor still owns the material while it resides in your stock. It is valuated at the time of withdrawal.

Since the vendor does not track its stock at your location, you must periodically settle with the vendor and issue payment for used stock. To do so, you must run Automatic Settlement in the Logistics Invoice Verification module (transaction MRKO). You can also make arrangements with your vendor, that if you do not use the stock within a specified period of time, that you take ownership of the goods and submit payment for the total goods in your stock.

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Demonstration: Consignment In the following demonstration for vendor consigned material, we will:

Step 1: Create an information record for our material/plant with item category 'consignment' Step 2: Create a Purchase Order for consignment materials Step 3: Enter a goods receipt for the consigned material Step 4: Check the inventory to view the consigned material Step 5: Perform Goods Issue of vendor consigned stock Step 6: Display liability to vendor for usage of consigned material

Step 1: Create an information record for our material/plant with item category 'Consignment' 1. Follow the menu path: Logistics  Materials Management  Purchasing  Master Data  Info Record  Create Transaction Code: ME11

2. Enter the following data into the initial screen and press Enter:

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Field

Value

Vendor



Material



Plant

XXXX

Purchasing Organization

3000

Info Category

Consignment

3. Review the following data:

If you will order this material in a different unit of measure than that maintained as the order unit of measure in the material master, maintain that information on this screen.

4. Press Enter to reach the following screen and enter the data in the table:

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Field

Value

Standard Quantity

1 PC

Net Price

10 USD / 1 PC

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5. Click the to navigate to the conditions (pricing) screen and review the data shown below:

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ERPTip

It is possible to maintain discounts, scales, surcharges, and different pricing validity periods on this screen. This Inventory Management class does not cover these concepts in detail. If you would like more information on Purchasing Pricing conditions, attend the ERPtips Purchasing Class.

6. Click the green back arrow to return to the previous screen.

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7. Press Enter to navigate to the next screen:

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Here, you can enter text that will appear on the PO when you create a PO line item for this material/vendor and designate it as a consignment item. If you entered text in the material master or vendor master, it is copied here from those pieces of master data.

8. Press Enter and save the information record.

Record your information record number:

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________________________

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Step 2: Create a Purchase Order for consignment materials In this step, we will create a Purchase Order for a consignment material. We will use the vendor/material combination we used for the information record in the previous step.

1. Follow the menu path: Logistics  Materials Management  Purchasing  Purchase Order  Create  Vendor/Supplying Plant known Transaction Code: ME21N

2. Enter the following data into the initial screen and press Enter:

Field

Value

Vendor



Purch. Org.

3000

Company Code

3000

Item Category (I)

K (consignment)

Material



Quantity

1

3. Enter the Purchasing group on the Org. Data tab.

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4. Enter plant 3000 as shown below:

Notice there is no net price and the field is grayed out. This is because the items are vendor consigned materials and if there was a price, it would show a commitment on your SAP FICO books. Since you have not committed to purchasing the materials until you use them, there are no FICO postings.

5. Click on the tab under the item data portion of the screen and change the jurisdiction code to CO0000000:

6. Save the PO.

Record your PO number: ___________________

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Step 3: Enter a goods receipt for the consigned material 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement Transaction Code: MIGO

2. Check the Document type and Action and enter the PO number as shown below:

3. Click on the

tab and review the screen below:

Notice the item category indicates K.

Also, remember that posting this goods receipt does not create any accounting documents.

4. Enter the storage location 00XX and post the goods receipt.

Record your material document number:

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Step 4: Check the inventory to view the consigned material In this step, we will look at the stock overview to see the consigned material in our plant/storage location.

1. Follow the menu path: Logistics  Materials Management  Inventory Management  Environment  Stock  Stock Overview Transaction Code: MMBE

ERPTip

You can also view vendor consignment stock using this menu path: Logistics  Materials Management  Inventory Management  Environment  Consignment  Consignment from Vendor  Stock Or transaction code: MB54

2. Enter the Material and Plant into the following screen and click the Execute icon:

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3. Double-click on the Vendor Consignment stock line on the following screen:

4. Review the consignment stock quantity in the pop-up window:

In this screen, you can see which vendor owns the material and what the stock status is (blocked, quality inspection, unrestricted).

5. Exit the Stock overview.

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Step 5: Perform Goods Issue of vendor consigned stock You can either perform a goods issue from vendor consigned stock or transfer vendor consigned stock to your own stock, both of which create a liability from your company to your vendor.

You can also transfer the vendor consigned stock from one stock type to another or from one plant or storage location to another. These transactions still keep the stock in vendor consigned status, but simply move the stock quantity with the special stock indicator.

In this step of the demonstration, we will perform a goods issue of our vendor consigned stock to a cost center.

1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement Transaction Code: MIGO

2. Check the Document type and Action and enter movement type 201 as shown below:

3. Click on the

4. Click on the

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tab and enter the Quantity:

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5. Click on the Storage Location:

6. Click on the

tab and enter the Special stock type, Plant, and

tab and enter the Vendor number:

7. Click on the

8. Click

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tab and enter the Cost Center:

to check the input and click

to post the goods issue.

Record your material document number: ____________________

Displaying the accounting document created from this goods issue, you can see a liability to accounts payable for the amount maintained as the purchase price in the information record.

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Step 6: Display liability to vendor for usage of consigned material Now that we have used some vendor consigned material in our internal process (goods issue to a cost center), we must settle with the vendor – or pay them. SAP supplies a settlement transaction that allows you to display your liabilities or settle them. We will illustrate how to display the liability in this class. A course on Logistics Invoice Verification would cover this process in greater detail.

1. Follow the menu path: Logistics  Materials Management  Inventory Management  Environment  Consignment  Consignment from Vendor  Liability Transaction Code: MRKO

2. Enter the following information and click the Execute icon to run the report:

3. On the following results screen, you can see all the consignment materials for which we are liable for payment:

4. Exit the transaction

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Exercise: Consignment Complete Steps 1-6 as shown in the demonstration for your material in your plant.

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What is your information record number?

________________

What is your PO number?

________________

What is your material doc number for the GR?

________________

What is your material doc number for the GI?

________________

Did your liability appear on the report?

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Subcontracting Subcontracting stock refers to materials that you provide to a vendor, which the vendor uses to produce a finished product. To define subcontracting stock, you must create a subcontract order using the following process:

Create Subcontract PO for Finished Product PO contains sub-items that represent the components to be supplied to the vendor

Vendor delivers finished product which triggers consumption of components

Inventory Management – Issue components to vendor

Post Invoice Receipt for Vendor for services performed

To create the purchase order for the material in your finished product, enter Item Category L (for subcontract) on the Standard PO screen:

You must also maintain a bill of material (BOM) for the finished product, which includes a list of all materials you must send to the vendor for the vendor to produce the finished product.

In addition to the BOM, you must maintain an information record, which will include the price your vendor charges you to make the finished product using components you supply.

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Demonstration: Subcontracting In the following Demonstration, we will complete the following steps: Step 1: Display the Bill of Material for the subcontract item Step 2: Create an Information Record for Subcontract item Step 3: Create a PO for Subcontract Item Step 4: Deliver components to the vendor Step 5: Perform Goods Receipt of finished product into stock Step 6: Display material movement postings and accounting documents as result of Goods Receipt of a subcontracted item

Step 1: Display the Bill of Material for the subcontract item 1. Follow the menu path: Logistics  Production  Master Data  Bills of Material  Bill of Material  Material BOM  Display Transaction: CS03

2. Enter the following information to display the bill of material:

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Field

Value

Material

101-100

Plant

1000

Alternative BOM

1 (BOM Usage)

3. If you choose to maintain a BOM, it must contain line items with the Item Category 'L" as shown on the following screen.

The materials included in the BOM are the materials you remove from stock and send to your vendor. The vendor returns the parts to you in the finished product. You can use either Inventory Management or Shipping to move the stock from Inventory to the Vendor.

4. Exit the transaction.

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Step 2: Display Information Record for Subcontract item 1. Follow the menu path: Logistics  Materials Management  Purchasing  Master Data  Info Record  Create Transaction Code: ME11

2. Enter the following information to display the information record and press Enter:

Field

Value

Vendor

5595

Material

101-100

Plant

1000

Purchasing Organization

1000

Info Category

Subcontracting

3. Press Enter twice to reach the Purchasing Org 1 data screen:

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Notice the Net Price. This indicates how much the vendor charges to manufacture this finished product.

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Step 3: Create PO for Subcontract Item 1. Follow the menu path: Logistics  Materials Management  Purchasing  Purchase Order  Create  Vendor/Supplying Plant known Transaction Code: ME21N

2. Enter the following information into the initial screen and press Enter:

Field

Value

Vendor

5595

Purch. Org.

1000

Company Code

1000

Item Category (I)

L (subcontracting)

Material

101-100

Quantity

1

Plant

1000

Purchasing Group

299

3. Notice the Net Price on the line item once you press Enter:

4. If the material has a bill of materials (BOM), the components are transferred from the BOM to the PO. To see the components, click the Material Data tab and then click the Components icon.

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5. Save the Purchase Order.

Record the Purchase Order number: ______________________

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Step 4: Deliver components to vendor In this step, we will use transaction ME2O to create a Stock Transport order that moves the stock from your own stock to subcontracting stock.

1. Follow the menu path: Logistics  Materials Management  Purchasing  Reporting SC Stocks per Vendor Transaction Code: ME2O

2. Enter the Vendor and Plant into the following screen and click the Execute icon:

3. The following screen appears:

From this screen, you can either Post Goods Issue or Create Delivery for the material; either allows you to ship it through the Shipping module.

4. Click the Select all icon and then click following pop-up screen appears:

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Click the green check mark for both materials to confirm the goods issue. Notice the movement type is 541.

5. The following screen appears to confirm that two items have been posted.

6. Rerun the transaction – now the screen appears like this:

This screen shows that the materials are at the vendor.

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7. Now, if we look at the stock overview for one of the components, it will show 1 PC in subcontract stock.

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Step 5: Perform Goods Receipt of finished product into stock 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement Transaction Code: MIGO

2. Check the Document Type and Action and enter the purchase order as shown below:

3. To receive the material back as the finished product, you perform Goods Receipt and place the final assembly into stock. The following screen shot displays how the Goods Receipt screen appears when receiving the subcontract material into stock:

Posting this goods receipt also removes the component stock from subcontract stock status.

4. Click

to post the goods receipt.

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Step 6: Display material movement postings and accounting documents as a result of Goods Receipt of a subcontracted item 1. Follow the menu path: Logistics  Materials Management  Inventory Management  Material Document  Display Transaction Code: MB03

Field

Value

Material Document

5000011991

Material Doc Year

2008

2. The following screen shot displays the material document. Notice the movement type for each item. The subcontracted item 101-100 is moved into stock with movement type 101. The other components, which are the semi-finished materials, are moved out of stock using movement type 543.

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3. Click on

and view the accounting document:

4. Exit the transaction.

The final step, not covered in this course, is to enter an invoice receipt against the PO, which will pay the vendor $1150 for the service of producing the finished product.

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Stock Transfer using Stock Transport Order A stock transport order provides some additional features, benefits, and functionality over a standard stock transfer from plant to plant. 

It is possible to plan the goods receipt in the receiving plant



It provides a mechanism for the receiving plant to request the materials from the issuing plant



It can allocate delivery costs to the material valuation



It is integrated with MRP



It is possible to ship the stock transport order using the shipping functionality provided in SAP delivery processing



The goods receipt can be directly consumed without going into stock.

You also have the option of processing a stock transport order with billing. The main difference is that it will create a billing document in the SD module, invoicing the receiving plant for the materials; the pricing is maintained in SD.

If you want to use the Shipping component to complete the stock transport order shipping between plants, you must perform the following:

1. Assign a delivery type to the purchasing document in configuration here: Logistics  Materials Management  Purchasing  Purchase Order  Set up Stock Transport Order  Assign Delivery Type and Checking Rule

2. Maintain the customer number of the receiving plant in configuration here: Logistics  Materials Management  Purchasing  Purchase Order  Set up Stock Transport Order  Define Shipping Data for Plants

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3. Maintain Shipping Point Determination configuration for the supplying plant here: Enterprise Structure  Assignment  Logistics Execution  Assign Shipping Point to Plant

4. Maintain shipping information in material master record. Extend the material master to have sales views.

The process for the stock transport order is the following: 1. Create a material master for the material to be ordered in both the supplying plant and the receiving plant. 2. Create a customer master to represent the receiving plant. This is the customer indicated in the screen shot under step 3 in the customizing section above.

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3. Create a Purchase Order using document type UB, the supplying plant vendor master, and the receiving plant, as shown in the screen shot below:

4. Perform a goods issue against the purchase order created in Step 3 above which will remove the material from stock of the supplying plant (vendor) and place it into the stock in transit of the receiving plant.

5. Perform a goods receipt for a purchase order in the receiving plant; this will place the material in unrestricted stock of the receiving plant.

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Third-party Processing Third Party orders are becoming more and more popular in today‟s business environment. A third party order is one in which the customer places an order with the business. The business does not stock this item, but instead turns around and sends a Purchase Order to another vendor for this item. The vendor will then ship the material directly to the customer. The vendor will bill the business, and the business will bill the customer. This is becoming popular because no warehouse space needs to be used up when it is directly sent by the vendor. This process can also be used when the business stocks the particular material, but they are in short supply, or the production lines have no capacity. The decision can then be made on the sales order to use this order as a third party order.

Third party orders are controlled by the item category of the material. Therefore, a third party item can be placed on any sales document types, including the standard "OR" order. What distinguishes an item as third party is the item category group on the material master. If you go to MM03, and the Sales: org 2 tab, you can see the item category group. In the below example, the item category group is BANS. This signifies third party processing.

This item category group, plus the sales document type, plus other factors, which are beyond the scope of this course, determine the item category of the material. On the order, the standard item category for a third party item is "TAS". This can be seen on the Overview screen of the sales order.

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Create a Standard Sales order via VA01 and enter the following criteria for testing. Field

Value

Sold-to Party

Student Created

Material

Trainer Provided

Quantity

Student Choice

Once this item category is determined, the item is a third party item. If you then go to the schedule line page of the item ( ), you can see the purchase requisition is automatically created for the line item.

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The Purchase Requisition is then converted into a Purchase Order, which is sent to the appropriate vendor. This functionality lies within the MM module, and will not be covered in this course. Both the purchase requisition and purchase order carry the ship-to address from the sales document as the ship-to address.

You can only enter a goods receipt for a third-party order if the goods receipt indicator is set in the order item.

After the invoice has been received from the vendor and posted, then the customer can be billed for these materials.

Since this is a third party item, most situations do not require a delivery to be created.

The billing document is then created via standard processes. Via configuration, and by working with your consultant, you can either bill the customer based on the order quantity, goods receipt quantity, or invoice verification quantity.

This concludes the Third Party process.

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Sales Order Stock

Sales order stock is one of the special stock types. Sales order stock 'belongs' to its assigned sales order and cannot be used or withdrawn for any other purpose than shipping against that customer order.

Sales order stock can be either valuated or not valuated. If you wish to valuate your sales order stock, you must maintain a valuation class on The Material Master Accounting view as shown in the screen shot below:

If you chose to not valuate your sales order stock, you will not be able to see the costs and value of the stock until after you run the settlement process in SAP Controlling. If you chose to value your sales order stock, each goods movement will trigger an SAP Financial Accounting posting based on the value of the material and will use the valuation class designated on the material master.

To display the valuated sales order stock from the material master, select Environment  Stock  Valuated special stock from the menu.

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The following screen shot illustrates a purchase order for inventory that will be allocated to a make-to-order sales order and sales order stock:

Any time you move the sales order stock, you must use the special stock indicator 'E' and you must specify the sales order and line item to which the stock is allocated. The example below illustrates how you would scrap sales order stock:

More information on make-to-order stock and its corresponding process is included in our ERPtips Sales and Distribution class.

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Project Stock Project stock has the same functionality as sales order stock, except the stock is allocated to a project instead of a sales order. It can be valuated or not valuated. You can transfer it around your locations, perform goods receipt and goods issue transactions on it using the special stock indicator and the project WBS element number. The screen shot below illustrates a scrap transaction for project stock:

You also must maintain the valuation class in the material master accounting view if you want to value the stock allocated to a project:

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Returns Returns are not technically considered a special stock in SAP; however, it is a special process and is therefore included in this unit on managing special stocks.

Often, you need to return goods to a vendor after you have performed the goods receipt. Perhaps due to quality of the goods or if you simply ordered more than you need.

Return with Shipping You can use the Shipping component of SAP to process the return delivery; this will provide some of the shipping paperwork that may be required by your carrier and packing slips that your vendor may require. If you wish to use the Shipping component to process the return delivery, you must complete the following prerequisites:

1. The enterprise structure must exist for the Sales and Distribution module. You must have maintained the shipping point, sales area, and assigned the plant from which you are shipping to a shipping point. These transactions are all done in the IMG under Enterprise Structure. 2. The material master must be extended to the sales area that will be shipping the material. This can be done using the MM01 – Create material master transaction, and creating the sales views. 3. The vendor master must reference a customer master (created separately) because the delivery document is created based on the customer – not the vendor. The field is found here on the Vendor Master:

We will not go into the step-by-step instructions of these pre-requisites in this class, as it is beyond the scope of the Inventory Management class.

Once all the prerequisites are complete, you can use the VL01N transaction without reference to an order to create the delivery.

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Demonstration: Return with Inventory Management – MIGO If you decide to return the goods using the MIGO transaction, you can either reference the material document posted when you brought the goods into stock or you can reference the purchase order against which the goods were purchased. In this example, we will reference the material document against which the goods were received. Let's first look up a suitable Purchase Order – one that has not been invoiced, but has been received. We will later discuss the differences between a return delivery that has not been invoiced versus a return delivery that has been invoiced.

1. Follow the menu path: Logistics  Materials Management  Purchasing  Purchase Order  List Displays Transaction Code: ME2L

2. Enter the following data and click the Execute icon:

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3. The following results screen appears:

The screen displays all POs that have an outstanding open invoice. We will select one of these POs to use for our return delivery.

4. Select one of the PO line items from the results screen that has 0 quantity to be delivered and an open quantity to be invoiced and click the Display icon.

Click on the Purchase Order History tab as shown above. Here, you can see the goods receipt performed on this PO. We will create a return delivery for this PO line item.

5. Click on the material document from the Purchase Order History screen to view the material document.

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Record the Material Document number: ________________________

6. Enter press Enter.

in the fast path transaction code box and

7. Change the Action and Document Type and check the Material Document number. Press Enter.

8. The screen is populated from the reference document. Review the screen below:

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Notice the movement type is a 122 – RE return to vendor.

9. Enter a reason for movement (your choice from the drop-down box).

10. Click

to post the return delivery.

Record your material document number: _________________

Now let's review the return delivery.

11. Change the action and document type as shown below:

Check the Material Document Number from the previous step and press Enter.

12. Let's click on the

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Review the accounting postings. You can see inventory is removed, the GR/IR amount is cleared, and the difference between the vendor price and standard price is expensed from inventory.

13. Exit the transaction.

Exercise: Return with Inventory Management – MIGO Follow the steps in the previous demonstration.

Record your material document for the original goods receipt: ______________

Record your material document for the return delivery: ______________

Already Invoiced Return Delivery vs. Not Invoiced Return Delivery So, how would this process differ if there was already an invoice posted against the PO?

Most SAP systems will not allow you to enter a return delivery against a material document that has an invoice posted against it. The setting is in configuration for the movement type. If it is not allowed, you must cancel the invoice first, then you can enter the return delivery to the vendor.

If it is allowed, you can cancel the invoice later, or you can enter the next goods receipt for the PO with reference to the return delivery to keep the link intact. This option is not recommended because it is a challenging business process for your users to follow.

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Unit 11: Inventory Batch Management In this unit, we will cover the following: 

Material Master Requirements



Batch master records



Batch Statuses



Inventory Management and Batch Management



Batch Classification



Batch Determination



Batch Information Cockpit

Batch Management allows you to store materials not only under their unique material master number, but also under an additional identification tag called a “batch”. If you have materials that require additional classification based on some specific characteristics, you can further define them, and store them according to their batch. The batch is also useful if you need a way to specify a lot of materials produced on a certain day, say, if you need to recall everything from a production lot.

You can define the batch number when a purchase order is created for materials procured externally, when materials are received into inventory (either through a production process or from an external source), or the batch can be created when the production is created.

Batches can also have statuses defined that either restrict or do not restrict a batch from being used.

When working in the system with materials that are batch managed, all transactions related to the material will utilize and specify which batch is being received, issued, or transferred.

Each batch can have its own classification, which includes values of characteristics that describe the material.

SAP also has functions that allow the system to automatically specify a batch to be used based on batch determination procedures.

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Material Master Requirements Once you have determined that a material will be stored according to its specified batch, you must flag it for Batch Management on the material master record. To do so, follow these steps:

Demonstration: Material Master Requirements for Batch Managed materials 1. Execute the Change Material Transaction: MM02 or follow the menu path: Logistics  Materials Management  Material Master  Change  Immediately

2. Enter the material master number as shown below:

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3. Click and select either the Purchasing view or the General Plant Data/Storage 1 view (both will be shown).

4. Click and enter the Plant in which you would like to activate Batch Management for the material:

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5. Click and select the Batch Management checkbox on one of the two following screens:

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Other fields from the Material Master record are described below:

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Field

Description

Appr. Batch rec. req

Approved Batch record required –a usage decision (from QM) for the inspection lot must be approved and the batch must be unrestricted. This indicator is only relevant for materials produced in house via a process order.

OB Management

This indicator specifies whether an original batch can be created from either the purchasing document or the production order.

OB Ref. Material

You may choose to create the original batch number in reference to another material master, which must be a non-valuated material.

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Batch Master Records It is possible to maintain additional data relevant to a batch on a batch master record.

Demonstration: Batch Master Records 1. Batch master records can be maintained following this menu path: Logistics  Central Functions  Batch Management  Batch 2. The following series of screen shots are from the “Change Batch” transaction.

Change Batch: Basic Data 1

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Change Batch: Basic Data 2

Change Batch: Classification

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Change Batch: Material Data

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Change Batch: Changes

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Batch Statuses Batches can either be restricted or unrestricted and this status is stored as a characteristic in classification of the batch. The value of this characteristic is then used when SAP is determining whether or not to use the material assigned to that batch.

You can modify the status of the batch either by setting it to restricted on the Quality Management Usage Decision or by updating the batch master record using the Change Batch transaction.

If users attempt to select a restricted batch at the time of goods issue, they will receive an error message indicating the batch is restricted and cannot be used.

Stock types can also be considered restricted and unrestricted. If the stock type is unrestricted and all of the stock belongs to the same batch, but you want to manage some of that stock as a restricted batch, you must transfer that quantity to another batch and mark the individual batch “restricted”.

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Inventory Management and Batch Management Whenever you are working with a batch-managed material in Inventory Management, you must specify the batch of that material.

Goods Receipts In some cases, you may perform a goods receipt on a material that you are immediately consuming. It is therefore not required to enter a batch. However, if you want to later track the usage of the batch, you should enter it on the goods receipt and you can later use the “where-used” batch list to find this usage.

When you perform a goods receipt for a batch-managed material, the following are updated in SAP: 

The batch is either created or updated



The goods receipt date and vendor are updated. The goods receipt date stored here is used later in batch-determination strategies in order to follow FIFO or LIFO rules.



The expiration date can be entered if the material requires it.



For goods receipts from a vendor, the vendor number is also updated in the batch record. If you later try to receive more of that material on that batch using a different vendor, the system will issue a warning or error message.

If you are using batch classification, you can also enter the values of the characteristics of the batch at the time of goods receipt.

Goods Issues When you create a delivery or reservation, SAP will reserve the material for that delivery. If the delivery is for a batch-managed material, it can actually reserve a specific batch. Materials can be reserved at the plant, storage location, or batch level. If you choose to reserve materials by batch, you will not be able to change the batch at the time of goods issue.

If you have configured and activated batch determination (covered in a later section in this unit), SAP will display the batch determination screen and automatically select a batch for you. If you have not configured or activated batch determination, you will be prompted to select a batch at the time of goods issue.

Stock Transfers and Transfer Postings Stock Transfers move materials between plants and/or storage locations. Transfer posting move materials “virtually” from one material master to another material master or from one stock type to another stock type. When you perform

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either of these transactions for a batch-managed material, you will need to indicate the batch.

For all stock transfers, except 2-step Plant-to-Plant stock transfers, the issuing batch is the same as the receiving batch.

In the first step of the 2-step Plant-to-Plant stock transfer, you enter the issuing plant, storage location, and batch and the receiving plant – but not the receiving storage location or batch. In the second step of the 2-step Plant-to-Plant stock transfer, you will enter the receiving storage location and batch.

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Batch Classification In order to use batch determination, you must also use batch classification. Batch classification allows you to define the characteristics of the batch as displayed in the screen shot below:

Using batch classification allows users to search (or SAP) for batches that have specific characteristics. Characteristics can either be user defined or come from fields that exist in the batch master record, such as expiration date or batch status.

At time of goods receipt, you can require the user to enter the batch characteristics that will be stored in the batch master record.

Demonstration: Configuration to require batch classification Configuration to require batch classification at time of goods receipt can be found in the IMG here:

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Logistics – General  Batch Management  Batch Valuation  Valuation of Goods Movement in Inventory Management  Activate Batch Classification for Goods Movements in IM

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Batch Determination Batch Determination configuration uses the condition technique. The conditions are maintained for each module of SAP that uses batch managed materials (Production, Inventory, Sales and Distribution, Warehouse Management).

Demonstration: Batch Determination Configuration The configuration steps are displayed below:

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1. Determine condition tables to be used.

2. Define access sequence referencing condition table(s).

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3. Define strategy types referencing an access sequence.

4. Define batch search procedure.

5. Allocate batch search procedure to movement types.

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Batch Information Cockpit The Batch Information Cockpit provides a tool to search for batches.

Demonstration: Batch Information Cockpit 1. The batch information cockpit can be found by following the menu path: Logistics  Central Functions  Batch Management  Batch Information Cockpit Transaction Code: BMBC

2. As you can see by the above screen shot, you can search for batches using material information, batch characteristics, classification, stock, usage, and shelf life data.

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Unit 12: Inventory Management Reservations In this unit, we will cover the following: 

Use of reservations



Managing Reservations



342



Demonstration: Create a Reservation



Demonstration: Display Reserved Stock



Exercise: Create a Reservation and Display Reserved Stock

Goods Issue to Reservation 

Demonstration: Perform Goods Issue to a Reservation



Demonstration: Display Reserved Stock



Exercise: Perform Goods Issue to a Reservation and Display Reserved Stock

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Use of Reservations Reservations provide a mechanism to reserve inventory for a future requirement. Inventory can be reserved for a specified account assignment object, such as a cost center, an internal order, a project, or a sales order.

Reservations can also streamline the goods issue process in the warehouse, giving the warehouse staff a mechanism against which to plan their picking processes.

Reservations can feed demand to Material Requirements Planning to increase the demand for a stock item. If an item on a reservation is not in stock, or if the reservation exceeds the amount available on the requested date, MRP can trigger a procurement proposal in the form of a purchase requisition (for externally procured materials) or planned order (for internally produced materials).

If you do not utilize the Purchasing module of SAP to enter your incoming materials, it is possible to use Reservations to plan goods receipts. It is also possible to use a reservation to plan one-step stock transfers (plant to plant or storage location to storage location).

Reservations have header and line item data. The following data is maintained at the header level: 

Movement Type



Created by (user ID)



Account Assignment



Plant

The following data is maintained at the line item level: 

Material



Quantity



Requirement Date



Storage Location (optional)



Batch (optional)

Automatic Reservations: Automatic reservations can be created using two methods: 1. Automatic Reservations for an order, network, or WBS element 2. Via MRP Reorder Point planning procedures

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Managing Reservations It is possible to create, change, display, and delete manually created reservations. It is not possible to change automatically created reservations. You can change the requirement date, quantity, and movement allowed indicator; you can also check availability and delete a single item from a reservation. SAP also provides functions to allow you to delete an entire reservation and to perform a mass change on a list of reservations.

SAP also contains configuration that determines for how long a reservation reserves inventory past the requirements date. The configuration is found in the plant parameters settings in Inventory Management. This configuration was covered in the Plant Parameter configuration section of this course; a screen shot is provided below for reference:

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Field

Use

Movement allowed

Indicator that specifies if movements are allowed for reserved items.

Days mvt allowed

If movements are allowed, this indicates the number of days from the requirement date maintained on the reservation that the movements are allowed. For example, if the reservation has a date of requirement of 9/10/09, and the value of '10' is in this field, a movement can be made up to 10 days earlier – or as early as 9/1/09.

Retention Period

This is the number of days for which a reservation remains active after the requirements date.

Additional transactions to manage reservations are: MB25 – Reservations List – will provide a listing of all reservations based on selection criteria.

MBBR – Create Reservations in mass – allows a user to provide an upload spreadsheet to create reservations in mass. The following displays the execution screen:

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The user would need to ask a developer for the upload template and the SAP Basis Admin team to get access (and perhaps training) to run and view the background job. MBVR – Manage Reservations – this transaction allows the user to select a group of reservations and manage them in mass; e.g., change the reservation date or delete them.

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MB26 – Reservations Picking – this transaction allows the user to generate a pick list for reservations based on selection criteria.

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In the following demonstration and exercise, we will create a reservation for a cost center and display the stock situation illustrating the reservation in the stock overview and stock requirements list.

Demonstration: Create Reservation 1. Using the menu path: Logistics  Materials Management  Inventory Management  Reservation  Create

Or, transaction MB21

2. On the initial screen, enter the data as shown in the table below and press Enter:

Field

Value

Base date

The base date represents the expected date of the goods movement, or the date on which the material is required to be issued from stock.

Movement Type

201

Plant

3000

Note: It is possible to create a reservation based on a reservation created previously by entering the previously created reservation number in the Reference: Reservation field.

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3. On the Create Reservation: Collective Processing screen, enter the data as shown in the table below:

Field

Value

G/L Account

You can enter a G/L account number here, but most likely your system is configured to automatically determine the G/L account number based on your material and movement type, so once you enter the material number and press Enter, the G/L Account field disappears.

Cost Center

328

Goods recipient



Material



Quantity

10

Storage Location

0001

Batch

(n/a – our material is not batch managed)

M

Leave selected This checkbox drives whether or not a material movement is allowed for the reservation.

If the material and movement type have an availability check defined, the system will check availability of the item on the requested date and provide either a warning or error message if the material cannot be made available by the date requested. 4. Press Enter, then click on the item and click the Details

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5. Review the details. Notice you can add an unloading point and some text, and you can fix the quantity, which will prevent a user from overriding the quantity at the time of the goods issue.

6. Save

the reservation.

Record the reservation number:

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Demonstration: Display Reserved Stock 1. Using the menu path: Logistics  Materials Management  Inventory Management  Environment Stock  Stock Overview

Or, transaction MMBE

2. On the initial screen, enter the data as shown in the table below and click Execute:

Field

Value

Material



Plant

3000

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3. Double-click on the Plant stock line of the stock overview screen to display the following detail screen:

Notice the quantity in 'Reserved' stock. 4. Exit the transaction.

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Exercise: Create Reservation and Display Reserved Stock Using the steps in the previous demonstrations, enter a reservation and check the stock overview to see the reservation.

Record the reservation number:

________________________

Can you see the reserved quantity in the stock overview? __________________

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Goods Issue to Reservation In this section, we will perform a goods issue to the reservation we created in the previous demonstration and exercise, then once again review the stock overview to see that the reservation quantity is depleted. There are two main methods of issuing inventory to a reservation – either using the MB26 Pick Reservations transaction (discussed in the Managing Reservations section of this unit) or using the MIGO Goods Movement transaction.

Demonstration: Goods Issue to Reservation 1. Using the menu path: Logistics  Materials Management  Inventory Management  Goods Movement  Goods Movement

Or, transaction MIGO

2. On the initial screen, change the action to Goods Issue and the type to Reservation as shown below:

3. Enter the reservation number from the previous exercise in the document number field and press Enter:

Field

Value

Document number



4. All of the information from the reservation is populated into the material document – review the screen below:

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5. Click

Save to post the goods movement. This will:



complete the reservation (the screen shot below displays the reservation after the goods movement is posted – the fields highlighted indicate the final goods issue has been posted against the reservation)



create a material document for a goods issue to a cost center



create the accounting documents



remove the inventory from stock

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Demonstration: Display Reserved Stock 1. Using the menu path: Logistics  Materials Management  Inventory Management  Environment Stock  Stock Overview

Or, transaction MMBE

2. On the initial screen, enter the data as shown in the table below and click Execute:

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Field

Value

Material



Plant

3000

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3. Double-click on the Plant stock line of the stock overview screen to display the following detail screen:

Notice the quantity in 'Reserved' stock. 4. Exit the transaction.

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Exercise: Perform Goods Issue to Reservation and Display Reserved Stock Using the steps in the previous demonstrations, perform a goods issue to a reservation and check the stock overview to see the reservation quantity is back down to zero.

Record the material document number:

________________________

Can you see that the reserved quantity is zero in the stock overview? ____________

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Unit 13: Stock Determination

Unit 13: Stock Determination Stock determination in SAP facilitates the process of selecting inventory in a predefined priority based on the stock determination group and stock determination rule within a plant. The stock determination group is defined on the material master and the stock determination rule is set in configuration for the corresponding application. The stock determination rule is available to be set for the following applications: 

Inventory Management – provides the ability to assign the stock determination rule to movement types within inventory management.



Production Order – based on the plant and production order type, stock determination can be checked during backflushing, picking, and batch determination.



Repetitive Manufacturing – allows you to assign a stock determination rule to the repetitive manufacturing profile.



Pull List – controls the stock determination rule for the pull list for material staging.



KANBAN – controls the stock determination rule for KANBAN.



Delivery – assignment of the stock determination rule to delivery processing based on the item category.



Warehouse Management – stock determination for the warehouse movements based on warehouse.

In this unit, we will review the configuration for stock determination and perform a demonstration of using stock determination for inventory management.

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Demonstration: Stock Determination Settings In this demonstration, we will configure stock determination for inventory management pick list using reservations, set the stock determination group in the material master, create a material reservation, and demonstrate our stock determination configuration.

Step 1: Configuration – Stock Determination Stock determination is defined to determine the method of selecting inventory within SAP. First, define the stock determination group, then the stock determination rule, and last define the stock determination.

To define stock determination, perform the following: 1. From the IMG, select the menu path: Materials Management  Inventory Management and Physical Inventory  Stock Determination  Define Strategies for Stock Determination.

2. Select the and description.

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3. Double click on the

folder and click the

button.

4. Enter the stock determination rule and click the button, double click on the folder, and click the button.

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The following table describes the key fields in the stock determination rule header.

Section

Use

Sorting

Defines the fields and sort order of the items when performing stock determination.

Quantity Distribution

Defines how quantity distribution is performed – there is one standard option for top down distribution. A user exit can be implemented for the quantity proposal. The number of splits defines the number of partial quantities determined in stock determination.

Other Settings

The following Other Settings are definable: 

WM processing – defines which stock determination method has priority when warehouse management is invoked.



Stock determ. online – defines whether stock determination runs in the background or online.



Pipeline withdrawal – defines whether a pipeline material is allowed during stock determination – used in case the other materials cannot cover the requirement.



User exit for item table – Exit EXIT_ SAPLMDBF_002 is defined for stock determination.

5. Enter the stock determination header and click the button, then double click on the folder to add the storage locations for stock determination.

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6. Click the

button.

The following table describes the key fields in the Stock Determination rule item.

Field

Use

S

Special stock indicator for company stock and consignment.

SLoc

The storage location used for inventory selection in the stock determination rule.

Priority Indicator

The priority of the entry in the item table.

Valuation Type

The valuation type of the inventory in the stock determination.

7. Enter the stock type, storage location, and priority, and click the

button.

8. To define stock determination in the applications for inventory management, perform the following: From the IMG, select the menu path: Materials Management  Inventory Management and Physical Inventory  Stock Determination  Assign Stock Determination Rule in the applications  Inventory Management.

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9. Enter the stock determination rule and click the

button.

Step 2: Material Master – Stock Determination In the material master on the MRP 2 view, the stock determination group is set for organizational level for the plant. If this is not set for the material, stock determination will not occur for the material.

1. To update the material master, perform one of the following: 

Enter transaction code MM02.



Select the menu path: Logistics  Materials Management  Material Master  Material  Change  Immediately

Step 3: Material Reservation – Stock Determination Stock determination for goods issue movement type 201 was defined to pull inventory during goods issue of a material based on using consignment inventory before unrestricted inventory. In this step we will simulate the selection of stock determination during picking of reservations; reservations are previously defined in this manual.

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1. To create a material reservation, perform one of the following: 

Enter transaction code MB21.



Select the menu path: Logistics  Materials Management  Inventory Management  Reservation  Create

2. Enter the Movement Type and Plant and press Enter.

3. Enter the Cost Center, Material, Quantity, and Storage Location, and click the

button.

4. To pick using stock determination and post goods issue, perform one of the following: 

Enter transaction code MB26.

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

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Select the menu path: Logistics  Materials Management  Inventory Management  Reservation  Picking

5. Enter the Material and Plant, and click the

6. Highlight the material item and click the

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button.

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7. The stock selection of the material is displayed. To display the header information in the strategy, click the

button.

8. To view the stock determination of the item data, click the then the

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9. Return to the pick list screen and click the in the pick list.

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button to post the goods issue

Inventory Management ECC 6.0

Unit 14: Inventory Management Reporting In this unit, we cover: 

Overview of Logistics Information System



Configuration of LIS



Standard Analysis in LIS with Demo and Exercise



Early Warning System with Demo and Exercise



Flexible Analysis in LIS with Demo and Exercise

Overview of Logistics Information System Logistics Information System (LIS) is used throughout different SAP modules: 

Materials Management (Purchasing and Inventory Management)



Sales and Distribution



Production Planning (Shop Floor)



Plant Maintenance



Quality Management (Analysis and Reporting)

This unit concentrates on the use of LIS for the Inventory Management module.

Once learned, the LIS tool is relatively easy to use, and it is quite useful for analytics and reporting. You can use LIS to evaluate actual data and create planning data. It also provides an Early Warning System where you can set parameters to watch and alerts that activate when parameters fall outside the acceptable limits.

However, LIS is what it is; no updates or enhancements are scheduled for Logistics Information System because SAP is driving customers to use Business Information (BI) solutions like Business Explorer (BEx) for reporting and analysis. Still, many companies can benefit from using LIS.

To use LIS, you must have it active in your system. This happens through configuration. Some LIS modules come pre-configured as active and some come inactive; for example, Inventory Controlling comes activated and Sales Information System does not. Once activated, a module passes updates to structures (like tables) that hold the data until you run analytics on it.

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LIS uses information structures, called info structures, to combine various fields used for reporting. The main structures you use for MM Purchasing and Inventory Management are: 

S011 – Purchasing Group



S012 – Purchasing



S031 – Movements



S032 – Stocks

ERPtip

If LIS is not active, the structures are not populated; and there is no way to retroactively populate the tables to get historical information. Therefore, if you are preparing to go live and you plan to use LIS, you should validate whether the LIS components you need are active.

Events that cause the updates to LIS info structures include: 

Creating or changing a purchasing document



Performing a Goods Movement or Invoice Receipt

This unit reveals the LIS configuration necessary to complete the following activities:

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

Running a standard analysis



Creating an exception analysis



Creating and running a flexible analysis



Setting up early warning system

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Demonstration: Configuration of LIS You configure LIS to allow updating for the info structures, which are the tables populated and reported against when running reports out of LIS.

To check or set updating of a specific information structure and how often the structure is updated, follow these steps: 1. Navigate to the IMG, and follow this menu path: Logistics – General Logistics Information System (LIS) Logistics Data Warehouse  Updating  Updating Control  Activate update

2. Choose the following activity:

3. The following screen appears:

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4. Double-click on info structure S031:

The above screen shot illustrates that this info record is only aggregated monthly.

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Standard Analysis in LIS Standard Analysis allows you to use the standard info structures for reporting and analysis. You can format and search the data in many different ways. You can also save an analysis and review it later to do historical comparisons.

Use info structure S011 to access information about purchasing groups and use S012 to access information about vendors, material groups, and materials.

To see the data basis (data included in the structure), complete the following tasks: 1. Navigate to the IMG, and follow the menu path: Logistics – General  Logistics Information System (LIS) Logistics Data Warehouse  Data Basis  Information Structures  Maintain Self-Defined Information Structures

OR Transaction MC23.

2. Select Display and click

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3. Click

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get to the following Info Structure pop-up menu:

To see only information structures that are relevant for Purchasing, go to the restrictions section and limit the selection to 02. You can do the same for Inventory by specifying 03.

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4. Select S012 (Purchasing) from the info structure column:

5. Click

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to display the fields for Info structure S012.

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6. The Display Info Structure: Fields screen displays the Characteristics and Key figures used in the Info Struct. S012. Characteristics are the parameters for which the key figures (quantitative amounts) are calculated in the analysis.

You can also create your own info structures. It is easiest to copy from an existing info structure. All Info structures between S500 and S999 are custom info structures.

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Demonstration: Standard Analysis In this demonstration, we do the following: 

Run a standard analysis using a variant



Save a standard analysis as a selection version



View the selection version

Run Standard Analysis using Variant Let's run a standard analysis and look at the characteristics, key figures, and difference options in the Analysis screen. 1. To start the transaction, follow the menu path: Logistics  Logistics Controlling  Inventory Controlling  Standard Analysis  Material

Or Transaction Code MCBE.

2. Click on Get Variant

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3. Selecting the Variant completes the fields as shown on the Analysis Selection screen below:

4. Click

to execute the analysis.

On the Basic List screen above, the report shows how much stock was received and issued for each material in the period selected.

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5. Double click on the Material number 1447.

The Drilldown screen reveals the plant and storage location that issued and received the material. At the top of the screen, you can see the top level of the analysis drilldown. The key values have not changed, just the characteristic that was Material changed to No. of Storage Locations.

6. Click on

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7. Click

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to switch to the Material group Drilldown.

You now see that the characteristic is Month, but you have now drilled into the material in addition to the plant/storage location. Try switching the drilldown back to Storage Location, then double click on Storage Location. This takes you to the data for that Storage Location only and into the Month.

Each standard analysis is set up with a specific drilldown path that activates when you double click on the characteristic, but you can use the switch drilldown function to expand your characteristic selection.

Other options on this screen include:

Icon

To Do This Change the currency value used in the analysis. Send the analysis via SAP Mail. Save to a PC file, like Excel. Switch to another info structure. Choose key figures.

Using Settings from the menu path, you can change the currency designation, the value display (percent or absolute), whether the analysis shows the characteristic description and/or number assignment, and the column width. You can also save some of these settings.

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ERPtip

When exiting the analysis, you are asked if you want to save your analysis. 

You can save your analysis as a selection version and view it later. Think of it as a “snapshot in time” of the analysis you just ran.



You can also schedule your analysis to run and save the results as a selection version to be viewed later or sent to a distribution list. This is helpful if you have a large analysis with long runtime that has multiple viewers. You can schedule it during night hours and have it sent to a distribution list.

Save a Standard Analysis as a Selection Version When you exit a standard analysis, you receive the following message:

Click to save the analysis as a selection version and fill in the Selection version name and a Description field.

Click

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ERPtip

Another option to create a selection version is to use Transaction Code MCM9, which allows you to create a dynamic calculation for your Selection version with a Variant that you define. You can select your characteristics and key value, the distribution list, the currency, the periods to analyze, the characteristic display, and the column width.

ERPtip

You can also schedule the selection version using Transaction Code MCMB.

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View the Selection Version There a couple of different options to view a selection version; they are: 

Using Transaction Code MCKJ to see a list per info structure.



Using standard analysis.

From Transaction MCKJ, you see the following:

The above example shows selection versions J001 and J003, which were created differently. 

J001 was saved after executing a standard analysis. MCBE is a standard analysis. From MCBE, you can click selection versions saved for that standard analysis.



to view a list of

J003 was created using Transaction MCM9, Create Selection Version.

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Exercise: Standard Analysis In this exercise, we analyze the goods movements that you have created in class. We will save that analysis as a selection version; and finally, we view the saved selection version. Menu Path: Logistics  Logistics Controlling  Inventory Controlling  Standard Analysis  Material

Transaction: MCBE

1. Enter the following parameters on the selection screen:

Field

Value

Plant

Leave blank – will provide more results

Month

Previous month and current month

2. Practice navigating through this screen by adding another key figure.

What key figure did you add? ___________________.

Switch the drilldown to Plant.

What plants are represented? ___________________.

Change the characteristic display to Key and Description.

What is the key of a Plant? __________________. What is the description of the Plant? __________________.

Change to Info Structure S094.

What changed? _________________.

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3. Save the analysis as a selection version.

Field

Value

Selection Version

Z0XX

Description

Selection Version Group XX

4. Using Transaction MCBE, view the selection version.

Do you see yours? __________________.

If no, why not? _____________________.

5. Using Transaction MCKJ, view the selection version.

Do you see yours? ________________.

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Early Warning System The Early Warning System provided with LIS allows you to set warnings for exceptions. You can run it on an as needed basis or schedule it with a background job that sends results to a designated recipient or distribution list.

When you define an exception, you select an info structure that the exception runs against. Then, you select characteristics that run the exception. You assign requirements to the characteristics that represent the level at which the exception is flagged. You can also set up follow-up processing, such as sending an email or transferring a task to workflow.

You can run either an exception analysis or a standard analysis with an exception. When you run the exception analysis, you see only the data that meets the exception requirement.

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Demonstration: Creating and Reviewing an Exception In this demonstration, we create an exception that highlights all materials with goods receipts with a quantity of over 100 during a month.

Create the Exception To create the exception, follow these tasks: 1. Follow the menu path: Logistics  Logistics Controlling  Inventory Controlling  Early Warning System  Exception  Create

OR

Transaction: MC/1.

2. Enter the following:

Field

Field Description

Exception

Number and name fields that describe the exception you are creating.

Info structure

The info structure against which you will run the exception. It is where you get your characteristics and key figures that are used in calculating the exception.

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3. Click

to go to the Create Exception: Characteristics screen.

4. Click

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When selecting the characteristics, take note that they define the aggregation level at which the aggregation occurs. The key figure check is at the lowest characteristic level. The sequence of the characteristics selected determines the drilldown sequence when the analysis runs.

5. Click next to each characteristic that you want to run the exception against and click the to move it to the Selection criteria column. For this demo, we'll select Material, Month, Plant, and Storage Location.

6. Click

7. Click

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to limit the exception analysis to the course plants.

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8. Click on to enter the requirements that limit the exception to only materials for the previous month with Goods Receipt values over $1,000.

9. Click

.

10. Select PO value on the Choose Key figures screen.

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11. Click

.

12. Click anal.; then click

and choose Threshold val. .

13. Enter Val stock receipts > 100 and click Inventory Management ECC 6.0

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During the analysis run, the Threshold value is calculated over the specified period. So, if you are running the analysis for 3 months in the No. forecasting per. field, the exception is triggered when the total GR value exceeds the threshold of 100 over 3 months. If you select the Separate periods checkbox, the Threshold value is calculated for each one month period.

14. Click

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to define:



How the exception appears (the color) in the analysis



Whether it is active for Periodic analyses



If it transfers to Workflow



If it is emailed or faxed to a user or distribution list.

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Active for periodic analysis means that the system automatically triggers workflow or notification if the exception situation occurs.

15. Click

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Test the Exception The two ways to review an exception are: 

Run an exception analysis.



Run a standard analysis with the exception as part of the selection criteria.

In this demonstration, we use both methods to review the exception. We are looking for all materials with goods receipts over quantity of 100 for the last month period.

To run the exception analysis, do the following: 1. Follow the menu path: Logistics  Logistics Controlling  Inventory Controlling  Standard Analysis  Exception Analysis

OR

Transaction Code: MCYG.

2. Enter the exception number in the Exception field.

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3. Click

.

Remember, we limited our exception analysis to the plants used in this course. You can also limit them on this selection screen, or you can run it wide open by not selecting anything on this screen. In this training environment, you see data only for our plants because there is little activity in the training environment; however, in your production environment, you may want to use this screen to limit the selection for data.

4. Review the Basic List shown next:

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To test the exception analysis using standard analysis: 1. Follow the menu path: Logistics  Logistics Controlling  Inventory Controlling  Standard Analysis  Material

OR

Transaction Code: MCBE.

2. Enter the exception number in the Exception field.

3. Click

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Note the differences in the results of an analysis run for the exception only as opposed to one run including the exception. Analysis for the exception returns only the materials that have GR quantities over 100. Analysis that includes the exception returns all GR quantities for all Plants with relevant highlighting to bring your attention to the exception.

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Exercise: Early Warning System – Create and Execute an Exception Analysis In this exercise, we'll create an exception and run the exception analysis. The business scenario is that Management wants to know which materials have goods receipts over $1000 in value.

Use the steps provided in the Demonstration section to create your exception with the following data:

Field

Value

Exception

EX00XX

Exception Description

Exception Group XX

Info Structure

SO39

Characteristics

Select the following characteristics: Material Month Plant Storage Location

Characteristics Values

Select class Plants, 3000 and XXXX

Requirement – Key Figure

Value Stock Received Value

Type of Condition

Threshold value

PO Value

> 1000

Now that your exception is created, test it using the steps provided in the Demonstration section.

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Answer the following questions.

What materials have an exception? ___________________.

What plants have an exception? __________________.

What is the value of one the material exceptions? ______________.

What different ways can you see the exception? ___________________.

How can you turn off your exception? _______________________.

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Flexible Analysis Flexible analysis allows you to use formulas and combine existing info structures to aggregate the key figures of an info structure in different ways. You can choose different layouts and add formulas.

Each existing info structure has an evaluation structure that includes the characteristics and key figures. You can create a new evaluation structure to use with an existing info structure and change the formulas and layout.

The data is collected into the structure when flexible analysis runs and creates Report Writer objects in the background. Report Writer is a standard SAP tool used to develop reports.

Demonstration: Creating an Evaluation for Flexible Analysis The scenario for this demonstration is to create a Flexible Analysis to compare the quantity received and the dollar amount received for two different materials in a single plant. Assume the material performs the same function (i.e., the materials can be substituted for each other). The required layout is shown in the following table:

Total $ GR Characteristic

Material 1

Material 2

Total Qty GR Material 1

Material 2

Plant Period 1. To create the evaluation, follow the menu path: Logistics  Logistics Controlling  Inventory Controlling  Flexible Analysis  Evaluation  Create

OR

Transaction Code: MCB5.

2. Using the table below, fill in the fields on the following screen:

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Field

Field Description

Evaluation Structure

Evaluation Structure corresponds directly to the info structures. You can select standard SAP info structures, or you can select one you have created.

Evaluation

The first Evaluation field is the label you give your custom evaluation. You cannot start the evaluation name with S. It is recommended you start your naming convention for custom objects with Y or Z. In the field next to that Evaluation label, enter the description of your custom evaluation.

(Copy from) Evaluation

You can create your custom evaluation from an existing evaluation. Under the Copy from tab, enter the existing evaluation label in this Evaluation field.

Choose Characteristics and Key Figures

3. Click

to define the characteristics.

The order in which you select the characteristics for an evaluation determines the level of aggregation; so the first characteristic you select is the highest level. This screen is a bit tricky, so let‟s walk through the steps here.

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4. Select the characteristics as shown below and then click

:

5. From this selection, the current sequence for evaluation aggregation is:

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To change the sequence, double click on Month; this highlights Month. Click one time on Plant, and then click the move Month.

icon to move Plant above

Now the sequence is:

Click to copy the characteristics into the Create Evaluation: Definition screen.

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6. Click on

Klee Associates, Inc.

to select the key figures for the evaluation. Select

Val. Stock receipts and Val. Stock rec. value and click the following screen shot.

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7. Using the same method as described for changing the order of the characteristics, change the order of the key figures sequence to the following and click copy:

Define Display Types Use display types to format your report. Display types let you compare the key figures of different characteristics in side-by-side columns.

To define the display type, follow these steps:

1. Position your cursor on the characteristic Material, and use the menu path: Edit  Type.

2. On the pop-up that appears, select the radio button for Comparison of char. per key figure (type 1).

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ERPtip

Select the radio button for Comparison of figures per char. (type 2) if you prefer the following for your layout:

Material 1 Characteristic

Total $ GR

Material 2 Total GR Qty

Total $ GR

Total GR Qty

Material Period

3. Click

4. Click

to see a preview of the layout:

and then click

to copy the layout into the evaluation.

Define Formulas To calculate your own key figures, you can define formulas based on existing key figures. For example, to formulate the ratio of PO value to invoice value, divide Total $ GR by Total GR Qty.

1. To define the formula in the example above, position the cursor on the key figure Total $ GR and click

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2. Enter a name for your formula.

3. To create the mathematical expression, click in the expression field; double click on Total $ GR, type /; then double click on Total GR Qty.

The following operators are available for use in the formula:

Operation

Symbol

Addition

+

Subtraction

-

Multiplication

*

Division

/

Brackets

()

The result looks like this:

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4. Click to copy the Formula into the Key figures and see the following result:

Design a Layout To edit the layout attributes (such as margins, line totals, line texts, column totals, and column texts), follow the menu path: Edit  Layout  Page/Control (see below).

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1. When you want to change the layout, selecting any of the options shown above displays this screen:

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2. Selecting opens all the fields on the screen and lets you make changes to the layout. Change the width to 160 so the entire report fits on the screen when it is executed.

3. Selecting Layout Control, or F8, displays the preview screen of the report.

Save the Evaluation You can save the evaluation with or without generating it. You can also add the evaluation to a transport request. To save time, you can save the evaluation without generating it and later generate multiple evaluations at the same time. To generate a single evaluation, follow the menu path: Evaluation  Generate. Generating the evaluation also saves it; then you are prompted to transport the evaluation or not.

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Demonstration: Executing an Evaluation for Flexible Analysis In the previous demo, we created an evaluation to compare the quantity received and the dollar amount received for two different materials in a single plant with the following layout:

Total $ GR Characteristic

Material 1

Material 2

Total Qty GR Material 1

Material 2

Plant Period

In this demonstration, we execute (or run) that evaluation. To execute an evaluation for flexible analysis, follow these steps: 1. Follow the menu path: Logistics  Logistics Controlling  Inventory Controlling  Flexible Analysis  Evaluation  Execute

Or Transaction Code: MCA7.

2. Enter values in the Evaluation Structure and Evaluation fields:

3. Click

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4. You are prompted to enter the comparison values and the characteristics:

5. Click

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Exercise: Create Evaluation and Execute Flexible Analysis In this exercise, we create an evaluation that includes creating a flexible analysis that looks like this:

Total $ GR Characteristic

Material 1

Material 2

Total Qty GR Material 1

Material 2

Plant Period

Using the steps outlined in the Demonstration section, create and execute the evaluation.

What methods can you use to change the analysis?

_________________________________________.

Try changing the evaluation and modify the layout of the report. Try saving without generating and run it.

Does it take the changes to the layout? ____________. If not, generate the evaluation, and re-run it.

In this unit, we learned how to configure the Logistics Information System (LIS) and use it to create, execute and review the following functions: 

Standard analysis



An exception in the Early Warning System of LIS



Flexible analysis

These functions are useful for analysis and reporting, and they can often be set up by super users or business analysts without the aid of ABAP developers.

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