Mastering SAP Inventory Management

(1)

Mastering SAP Inventory

Management

SAP ECC 6.0

An ERPtips Mastery Level Workshop

Version 1 – January 2010

An ERPtips Product © Klee Associates, Inc.

(2)

2 Rev. 01/10/10 Inventory Management ECC 6.0

Inventory Management

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.

(8)

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:

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.

(9)

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.

Inventory Management

Manage stock by quantity and value

MRP Accounting Consumption Updates Goods Movements •Goods Receipt •Goods Issue •Stock Transfer Physical Inventory

Stock Adjustments Invoice

Verification Warehouse Management

(10)

In this unit, we will cover the following:

 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

(11)

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

(12)

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.

(13)

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

6. Click the icon to execute the sort criteria. 7. Select all of the materials with which you want to work.

8. Click .

9. Click to see the list of the materials you selected in the left pane.

(14)

10. Click to view the material master data.

11. Click to display the details of the MRP element.

(15)

13. Click 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.

(16)

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.

(17)

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,

(18)

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).

(19)

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

(20)

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.

(21)

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.

(22)

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.

(23)

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 <instructor number 9099>

Purchasing Organization 3000

(24)

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

Field Data

Account Assignment Line 1 <blank>

Material Line 1 <instructor number 1447>

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.

(25)

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 <enter the PO number from the previous demonstration>

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.

(26)

2. Press the Enter key or click the Execute icon to start the transaction.

3. Be sure to select all lines as OK.

(27)

Storage Location 0001

5. Click to post (save) the goods receipt.

(28)

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.

Movement Type 561

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

(29)

Material <instructor material 1447>

4. Click on the tab and enter the following:

Quantity 15

Unit of Entry PC

(30)

Plant 3100

6. Click to post the goods receipt.

(31)

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

(32)

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:

Material <instructor material 1447>

From Plant 3100

From Storage Location 0001

Dest Plant 3000

Dest Storage Location 0001

Unit of entry 10 PC

(33)

6. 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:

(34)

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.

(35)

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.

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

(36)

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

(37)

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.

3. Verify the movement type is 551.

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

Field Value

(38)

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

(39)

Field Value

Cost Center 328

8. Click to post the goods issue to scrap.

(40)

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?: _______________________

What is the on order stock quantity?: _______________________

(41)

Step 2: Purchase Order for Stock Materials

Create a purchase order for stock materials using the following data.

Field Data

Vendor <instructor will assign>

Purchasing Organization 3000

Company Code 3000

Account Assignment Line 1 <blank>

Material Line 1 <instructor will assign>

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? _______________________

(42)

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 <from previous step>

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

_____________________ _____________________

(43)

Step 4: Goods Receipt – Other

Post a goods receipt for initial entry of stock using the following data:

Field Data

Material <instructor provided>

Quantity 15

Unit of measure PC

Plant 1000

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

What is the purpose of this transaction?

______________________________________________________________ ______________________________________________________________ ______________________________________________________________

(44)

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

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

Quantity 10 PC

From Plant 3100

To Plant 3000

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: _______________________

(45)

Step 6: Goods Issue to Scrap

In this exercise, perform a goods issue to scrap using the following data:

Field Data

Quantity 1 PC

Plant 3000

Cost Center 328

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

(46)

Inventory Management ECC 6.0 Rev. 01/10/10 46 Inventory Management Master

Unit 2: Inventory Management Enterprise

Structure

 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

(47)

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.

(48)

48 Rev. 01/10/10 Inventory Management ECC 6.0 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:

 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.)

(49)

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. Plant 1000 Plant 2000 Company SP01 Plant 1000 Company SP01 Company SP02

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.)

(50)

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:

 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.

(51)

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 Storage Location 0010 Food Mart Storage Location 0020 Plant 1000 Plant 2000 Food Mart Storage Location 0010 Food Mart Storage Location 0020

(52)

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.

(53)

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 .

(54)

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.

(55)

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

(56)

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

6. Click on Define Plant and click .

(57)

(58)

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 <your choice>

Yo

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

Field Value

Name 1/2 PLANT XXXX

(59)

Field Value

Postal Code <your choice> City <your choice>

Country US

Region <your choice>

Jurisdiction Code <Select from drop-down list based on your chosen Region>

Telephone 303-555-1212

(60)

60 Rev. 01/10/10 Inventory Management ECC 6.0 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.

(61)

Configuration of Storage Location

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

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)

(62)

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 icon. Click before continuing.

4. Click on the 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)

(63)

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.

(64)

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:

________________________________________________________________

(65)

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.

Transaction Code: (no unique transaction code, must use menu)

Menu Path: Materials Management  Inventory Management and Physical

(66)

2. Select the plant and click or double-click on the plant to display the details.

(67)

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

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.

(68)

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:

(69)

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.

(70)

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

(71)

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?

_____________________________________________________________

(72)

Inventory Management ECC 6.0 Rev. 01/10/10 72 Inventory Management Master

Unit 3: Inventory Management Master Data

 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).

(73)

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.

(74)

Field Value

Material <leave blank, SAP will internally assign the material master number>

Industry Sector Mechanical Engineering

Material Type Semi-finished material

Copy from material <instructor material 1447>

(75)

(76)

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.

(77)

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.

(78)

Basic Data 1 View

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

(79)

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:

(80)

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:

Settings for key fields  Define Material Statuses 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.

(81)

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.

(82)

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.

(83)

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

(84)

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).

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.

(85)

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.

(86)

86 Rev. 01/10/10 Inventory Management ECC 6.0 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.

Mastering SAP Inventory Management