Module Objectives

• Upon completing this module, you will be able to:

• Understand Inventory management process
• Overview of various goods movements
• Conceptual understanding of Movement type
• Customization settings
• Demo

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Agenda

• Introduction to Inventory Management Process

• Overview of various goods movements
• Conceptual understanding of movement type
• Customizing
• Demo

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Inventory management

Inventory Management:

• It is process for monitoring the flow of goods in and out in the plant , store or
warehouse.
• It keeps track of quantity and value of the material
• Process involves managing of company stock and different special stocks
like Consignment Stocks, Pipe line handling ,Third party Stocks, Returnable
Transport Packaging (RTP) Stock, Sales Order Stock, Project Stocks etc.
• Inventory management is part of material management and is integrated with
different modules sales and distribution, production planning , Quality
management ,warehouse management and finance.
• Multiple documents like goods receipt, goods issue, transfer posting ,
physical inventory as per the requirement are created

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Inventory management

Management of stock by quantity:

• All transactions that bring about a change in stock are entered in real time, as
are the stock updates resulting from these changes.
• For each goods movement a document is created which is used by the
system to update quantities and values and serves as proof of goods
movements. This document is called the material document.
• So we can track the stock levels for any material at any instance in the
system. We can see how much stock is lying in the warehouse, on-order, in
transit, in quality inspection, blocked etc. and how much stock do we have
under consignment, reservation against WBS or sales order etc.

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Inventory management

Management of stock by value:

• The stocks are managed not only on a quantity basis but also by value. The
system automatically updates the following data each time there is a goods
movement:
• Quantity and value for Inventory Management
• Account assignment for cost accounting
• G/L accounts for financial accounting via automatic account assignment
• When you enter a goods movement, you only have to enter the plant and the
storage location of the goods. The system derives the company code from
the plant via the valuation area and updates G/L accounts accordingly.

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Agenda

• Introduction to Inventory Management Process

• Overview of various goods movements
• Conceptual understanding of movement type
• Customizing
• Demo

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Inventory management

Goods Movement:

• Goods Movement is any transaction resulting in change in stock

• We can post following types of goods movements:

• Goods receipt :
• A goods receipt is a goods movement with which the receipt of goods
from a vendor or from production is posted.
• A goods receipt leads to an increase in warehouse stock.

• Goods Issue:
• A goods issue (GI) is a goods movement with which a material withdrawal
or material issue, a material consumption, or a shipment of goods to a
customer is posted.
• A goods issue leads to a reduction in warehouse stock.

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Inventory management

• Stock Transfer:
• A stock transfer is the removal of material from one storage location and
its transfer to another storage location.
• Stock transfers can occur either within the same plant or between two
plants.

• Transfer Posting:
• A transfer posting is a general term for stock transfers and changes in
stock type or stock category of a material.
• It is irrelevant whether the posting occurs in conjunction with a physical
movement or not. It can only be a logical goods movement.
• Examples of transfer postings are:
• Release from material from quality inspection stock or blocked stock
• Transfer of consignment material into company's own stock
• Transferring from one WBS to another

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Inventory management

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Agenda

• Introduction to Inventory Management Process

• Overview of various goods movements
• Conceptual understanding of movement type
• Customizing
• Demo

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Role of movement type

• Movement Type
• Movement type is the 3 digit identification key of the goods movement. It
helps to differentiate the between various goods movement.

• Movement type controls many functions

• Controls quantity update
• Stock and Value update for material
• Field selection control for the inventory documents in system
• Determination of G/L account
• Printing GI/GR slips

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Role of movement type

• Movement Type
• Each movement type defines a different action in which movement of stock
can take place.
• For e.g. Goods may be received (101), returned to vendor(122), issued for
consumption, scrapping (551), sent to be assembled (541) etc.
• Movement type decides which transactions should be allowed to post a
particular type of goods movement. This can be configured by maintaining
the set of allowed transactions from where a particular movement type can
be posted.
• The field selection at item level for material document posting is determined
by the movement type.
• The movement type determines the valuation string and thus the account
entries for corresponding G/L accounts maintained.

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Role of movement type

• Movement Type
• Reversal: Configuration of movement type allows us to set the possible
reversal movement actions. We can define the reversal movement and
assign the same in the movement type.

• Output Determination: Movement types can be used to set up the printing of

GR/GI slips in the system.
• For e.g. We can define to print a GR slip every time goods are received from
vendor (movement type 101).

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Role of movement type

• SAP provides preconfigured set of movement types.

• These covers various different movements that are possible.
• 1** - GR against reference document
• 2** - GI for consumption
• 3**/4** - Transfer postings
• 5** - Goods movement without reference
• 6** - Goods movement with reference to deliveries
• 7** - Physical Inventory

• New movement types if required to be created should be created as 9**/Y**/Z**

and by copying one of the existing movement type if possible and then making
required changes to it.

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Role of movement type

• SAP provides preconfigured set of movement types.

• These covers various different movements that are possible.
• 1** - GR against reference document
• 2** - GI for consumption
• 3**/4** - Transfer postings
• 5** - Goods movement without reference
• 6** - Goods movement with reference to deliveries
• 7** - Physical Inventory

• New movement types if required to be created should be created as 9**/Y**/Z**

and by copying one of the existing movement type if possible and then making
required changes to it.

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Role of movement type

• Settings to be maintained while creating new movement type:

• Allowed transactions
• Reversal movement types and reasons
• Account grouping
• Quantity/Value update
• Field selection

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Role of movement type

• Allowed transactions:
• Maintain the list of transactions that can be used to post documents using
new movement type. They can be enjoy transaction (MIGO) or any of the
other transaction.

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Role of movement type

• Reversal movement types and reasons

• Maintain the reversal movement types that should be triggered in case of
cancellation. Also maintain the reasons allowed for reversing this movement
type.

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Role of movement type

• Account grouping:
• Assign the valuation key string to and link with the transaction/event key.
Also, maintain a account modifier if required.

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Role of movement type
• Quantity/Value update :
• Define whether a quantity or a value update should be posted for the
movement type.

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Role of movement type

• Field Selection:
• Define whether a quantity or a value update should be posted for the
movement type.

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Role of movement type

• Some key movement types

Mvmt. Type Description Mvmt. Type Description
101 GR goods receipt 321 TF quality to unrest
102 Reversal of GR 325 TF blocked in plant
103 GR into blocked stck 341 TF [Link] restr.
105 GR from blocked stck 343 TF blocked to unre.
122 RE return to vendor 349 TF blocked to qual.
124 GR rtrn blocked stck 351 TF to stck in trans.
161 GR returns 411 TP own to own
201 GI for cost center 415 TP SLoc to project
221 GI for project 501 GI receipt w/o PO
231 GI for sales order 541 GI whse to [Link]
241 GI for asset 543 GI issue [Link].
251 GI for sales 544 GI receipt [Link]
261 GI for order 545 GI rcpt SC by-prod.
281 GI for network 551 GI scrapping
301 TF [Link] plnt. 561 GI entry of st. bals
303 TF [Link] pl 601 GD goods issue:delvy
305 TF [Link] [Link] pl. 641 TF to stck in trans.
309 TF [Link] mat 701 GR [Link].: whse
311 TF tfr. within plant 702 GI [Link].: whse
313 TF [Link] 711 GI InvDiff.:whouse
315 TF [Link] [Link] SLoc 712 GR InvDiff.:wrhouse
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Special stock type

• Special Stocks
• Special stocks are stocks that are managed separately, Because they do not
belonging to your company or being stored at a particular location

• Special stocks and special procurement types are divided into the following
areas.
• Consignment
The vendor provides materials and stores them in your premises. The
vendor remains the legal owner of the material until you withdraw materials
from the consignment stores.

• Pipeline handling
A pipeline material is a material that flows directly into the production
process from a pipeline (for example, oil, tap water, electricity).

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Special stock type

• Returnable transport packaging

It is a multi-trip packaging medium (for example, pallets or containers) in
which goods can be transported more than once between vendors and
customers.

• Sales order stock

Stock that is used for a sales order and materials can only be produced or
procured only when they are ordered by the customer and the finished
product can only be delivered to the customer via the sales order. You can
manage valuated or non-valuated sales order stock.

• Project stock
Quantity of Material which is kept in stock for the completion of a project.
The project stock is allocated to a work breakdown structure (WBS)
element and the items can only be withdrawn for the WBS element. You can
manage valuated or non-valuated project stock.
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Agenda

• Introduction to Inventory Management Process

• Overview of various goods movements
• Conceptual understanding of movement type
• Customizing
• Demo

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Inventory Management Customization
Objective Inventory Management Customization

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Inventory Management Customization
Objective Define Plant Parameters

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Inventory Management Customization
Objective Define Attributes of System Messages

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Number assignments
Objective Define Number Assignments For Goods Receipt/Issue Slips

29
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Field Selection for Goods Movements
Initial /Header Screens
Objective Field Selection for Goods Movements Initial /Header Screens

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Field Selection For MIGO
Objective Field Selection For MIGO

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Field Selection Per Movement Type
Objective Field Selection Per Movement Type

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Create Storage Location Automatically
Objective Create Storage Location Automatically

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Define Screen Layout
Objective Define Screen Layout

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Allow Negative Stocks
Objective Allow Negative Stocks

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Set Tolerance Limits
Objective Set Tolerance Limits

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Create Purchase Order Automatically
Objective Create Purchase Order Automatically

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Set Delivery Completed Indicator
Objective Set Delivery Completed Indicator

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Set Missing Parts Check
Objective Set Missing Parts Check

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Record Reason For Goods Movements
Objective Record Reason For Goods Movements

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Copy, Change Movement Types
Objective Copy, Change Movement Types

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Reports for Inventory

Below are the transaction code for reports for inventory management
• MB51- Material document list
• MMBE Misplay material stock
• MB52 - Warehouse Stock
• MD04 - Stock/Requirements List
• MB5M - Expiration Date List
• MB5T - Stock in Transit
• MBLB - Stock with Subcontractor
• MR51 - Accounting Document for Material

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Agenda

• Introduction to Inventory Management Process

• Overview of various goods movements
• Conceptual understanding of movement type
• Customizing
• Demo

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Demo
Tcode MIGO – Goods Receipt against Purchase Order

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Demo
Tcode MIGO – Goods Issue

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Quiz/Check point

• Questions/Discussions :
• What are different movement type and its
impacts?

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Questions and Comments

• What questions or comments

do you have?

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