1. MM-03 Inventory Management & Physical Inventory
SUMITOMO CHEMICAL ASIA PTE LTD
MM-03 Inventory Management & Physical Inventory
MM Training
August 2007

2. Agenda Inventory Management Concept Overview SCA Processes
Logistics Exception Process
Other Stock Transfer
Physical Inventory Concept Overview
SCA process for Physical Inventory
Inventory Management Reporting MM
SAP
ECC 6

3. At the end of this course, you will be able to understand the various components of Inventory Management
Inventory Management
Goods Issue
Transfer
Physical Inventory
Goods Receipt

4. Inventory Management Concept Overview
SUMITOMO CHEMICAL ASIA PTE LTD
Inventory Management Concept Overview
MM Training
August 2007

5. *Text in red – Not in SCA process
Goods Movements
Delivery
Cust Return
Purch Ord 1
Goods
Receipt
Inventory 2
Inventory
Transfer
Posting 3
Goods
Issue
Goods
Issue
A goods movement is any event that causes a change in stock. The change could be a quantity or value change, a change in status or stock type, or a physical stock movement to a new location.
Goods movements are divided into goods/services receipting, issuing of materials and stock transfers.
The quantity of stock and normally the value of stock are updated when a goods movement is posted. At the same time, documents are created to record the event. These include accounting documents to record the financial impact of goods movement and material documents to record changes in physical inventory.
Consumption
Disposal
Sales Order
*Text in red – Not in SCA process

6. Effects of a Goods Receipt Posting
Material
Acctg
Post
Goods Receipt
Out of scope
Material
Document
Accounting
Document
Goods
Receipt
Slip
Out of scope
Purchasing Group
G/L Account
Consmpt A/C
Stock A/C
Asset A/C
Out of scope
Purchase
Orders
History
- Data
MM/WM
Transfer
Order $
Cost Centre
Quantity
Stock Qty
Asset Qty
The following are results of a goods receipt posting:
Material and possibly an accounting document is created
Stock quantity is updated
General ledger accounts are updated
Point of consumption is updated (if applicable) - cost center
Start of Asset capitalization (single account assignment)
Purchase order history is updated
Goods Receipt Slip (GR Slip) is printed (if applicable)

7. Under and Over delivery
Purchase order quantity 100
Underdelivery tolerance 10%
Overdelivery tolerance 20% 70 80 90
100
110
120
130
140
No message
within the
tolerance range and PO will be automatically marked as delivery completed
Underdelivery
warning
Overdelivery
error message
In the case of a goods receipt with reference to a purchase order, the system proposes the open purchase order quantity of an item for the goods receipt. You can change this quantity if the delivered quantity differs from this.
When you enter a GR item, the system compares the GR quantity with the open purchase order quantity. This way, under- or over-deliveries can be identified.
As a rule, under-deliveries are allowed in the standard system. In the order item, it is also possible to enter a percentage under-delivery tolerance.
A quantity of goods received which is smaller than the order quantity minus the under-delivery tolerance is interpreted and accepted as a partial delivery. The system points out the under-delivery to the user and also takes the under-delivery tolerance into account when issuing the dialog message.
Over-deliveries are not allowed in the standard system. If over-deliveries are to be allowed, a percentage over-delivery tolerance can be specified in the order item. The over-delivery tolerance check can be suppressed in the order item, thus allowing unlimited over-delivery.

8. *Text in red – Not in SCA process
Goods Issue
Material
Document
BOM
Reservation
Production
Order
Inventory Management
Goods
Issue
From
Warehouse
From Vendor
Consignment To
Consumption
Cost Centre
Asset
Project
Sales Order
Planned
Planned
Scrap
Unplanned
Sampling
A goods issue generally leads to a reduction in the quantity of stock in the plant/warehouse.
Goods issues can be planned via sales order, reservation or unplanned via manual entry without reference.
Depending on the type and reason for a goods issue the data required to be entered varies.
*Text in red – Not in SCA process

9. Effects of a Goods Issue
Material
MateriaL
Acctg
Accounting
Document
Stock quantity
Consumption statistics
...
Point of Consumption:
Cost Centre
Sales Order …
Posting of
Goods Issue
Material
Document
G/L accounts:
Stock account
COGS
Expense account
Material
The effects of a goods issue include:
Updating of the reservation for the issue (if applicable)
Creation of a material and accounting documents
Updating of general ledger accounts
Updating the point of consumption - cost centre, sales order etc.
Updating of the stock quantity

10. Stock Transfer & Transfer Posting
Company Code
Company Code
Master
Product
H00010
Master
Product
H00011
Out of scope
SCA
SCE
Blocked
Unrestricted
Use
Plant
1000
Plant
8000
Acctg X X
Vendor
Consignment
Stor. Loc.
1001
Stor. Loc.
1001
Acctg X
Stor. Loc.
1101
Out of scope
The physical movement of stock between locations is called a stock transfer. A logical change in stock type or status is a transfer posting.
Stock transfers can be within a plant or between plants even when the plants are in different company codes.
Stock transfers can be carried out in a single step or a two step transaction.
No accounting posting for storage location to storage location transfer within a plant as well as transfer between stock status (blocked to unrestricted and vice versa).
Stock Transfers (physical)
Transfer Postings (logical)

11. Material Document Number Ranges
Goods Receipt
Goods Issue (MM)
Transfer Posting
Physical Inventory
Goods Issue (SD Delivery)
The Material Document number ranges are automatically reset every year.
The first 2 digits of the Material Document are aligned with the Accounting Document number, if there is any accounting posting.

12. Unit in which stocks are managed
Unit of Measures
Unit in which stocks are managed
Base UoM / SKU
Unit in which stocks are issued from warehouse
Unit of Issue
Unit in which material is ordered in purchasing
Order Unit
Order Price Unit
Unit in which material is invoiced by vendor

13. Movement Types (for SCA)
Stock Movement
Mvt Type
Reversal
Description
Goods Receipt
101
102
Goods Receipt from PO
651
652
Returns for Direct Shipment (to non-valuated stock)
657
658
Returns for Hub Sales (to valuated blocked stock)
Stock Transfer
301
302
Plant to Plant transfer (one-step)
311
312
Storage to Storage location transfer (one-step)
Transfer Posting
309
310
Material to Material transfer
343
344
Transfer from Blocked Stock to Unrestricted-use
453
454
Transfer from Non-valuated Return to Unrestricted-use
459
460
Transfer from Non-valuated Return to Blocked stock
Goods Issue
601
602
Goods Issue to Sales Order (normal sales)
901
902
Goods Issues to Sales Order (sample)
551
552
Goods Issue to scrap from Unrestricted-use stock
555
556
Goods Issue to scrap from blocked stock
Physical Inventory
701
702
GR/GI (gain/loss) during stock take to /from UR stock

14. Stock Types Inventory Valuated Non-Valuated Qty: Qty: Qty: Qty: Qty:
Unrestricted-
Use Stock
Stock in
Quality Inspect.
Blocked
Stock
Transfer
Valuated
Non-Valuated
Customer Return
Blocked Stock
GR Blocked
Qty:
Qty:
Qty:
Qty:
For managing inventory, it is essential to know not only the quantity of a given material on hand at a certain storage location or plant, but also the quantity within certain stock types.
There are various stock types, some of which include:
Unrestricted-use stock: quantity of a material physically on hand at a plant or storage location.
Stock in quality inspection: company’s own stock that is in quality inspection. It is valuated but does not count as unrestricted use stock. You can control whether stock in quality inspection is available for ATP.
Blocked stock: company’s own stock that should not be used. It does not count as unrestricted-use stock and is not available for ATP.
Customer return blocked stock: quantities of a material that were returned by customer from sales and conditionally accepted. Customer return blocked stock is not valuated and does not count as unrestricted-use stock.
Other stock types include stock in transfer, open purchase order quantity, stock scheduled for delivery etc.
Out of scope
Out of scope
Out of scope

15. SCA – Logistics Exception Process
SUMITOMO CHEMICAL ASIA PTE LTD
SCA – Logistics Exception Process
MM Training
August 2007

16. Logistics Exception Process

17. Availability Overview / Stock Reqmt List
Include in ATP
Exclude from ATP
July 2007
UR stock
on-hand
Open PO
Open PO
Material
SALES
ORDER
Inventory management forms the basis for material requirements planning, which takes into account not only physical stock but also planned movements. The stock requirements list is a dynamic list that allows you to view the requirements for a material at any point in time. It tracks the current stock on hand plus any planned receipts (such as for open purchase orders), planned issues (sales orders, deliveries) or reservations. X
Open PO
Planned mvt : Tfr to Blocked Stock

18. TCode: CO09
4, ,000
4,499
4,499

19. Customer Returns (Stock and Movement Types)
PGI in SD delivery will post the stock to Valuated Blocked stock (mvt type 657)
Transfer from Blocked stock to UR-use stock (mvt type 343) after inspection
Return for Hub Sales
PGI in SD delivery will post the stock to Non-Valuated Return stock (mvt type 651)
Transfer from Non-valuated Return stock to valuated UR-use stock (mvt type 453) or blocked stock (mvt type 459) after inspection
Return for Direct Shipment

20. List RETURN Batches at Month-end
TCode: MB52
Enter Batch = RETURN
Enter Mat Type = ZPMR
Select
Display Batch Stocks
Non zero stock lines
Select
Non-Hierarchical Representation

21. Customized Table: ZLMM_SLOC_CC Customized Table: ZLMM_RC_GL
Disposal / Write-off
TCode: MIGO
Scrap from UR use stock
- Mvt type 551
Scrap from Blocked stock
- Mvt type 555
Customized Table: ZLMM_SLOC_CC
Cost Center Determination
SLoc
Description
Cost Center
1001
SG-Buroh
1101
SG-PSA
1801
SG-MNR
1802
2001
BEL-PMR
2101
ITA-PMR
2201
SPA-PMR
3001
TUR-PMR
7001
JPN-PMR
8101
SHA-PMR
8801
ZJG-MNR
8802 X
Customized Table: ZLMM_RC_GL
GL Account Determination RC
Loss Reason
Account 1
Off-spec 2
Repackaging 3
Receiving 4
Mis-handling
Based on the Loss Reason and Storage Location entered in the issue to scrap transaction (MIGO), system will validate the GL account and the Cost Center before posting.

22. Display Material Documents by Mvt Reasons
TCode: MBGR

23. ------- ------- --------- ------- ------- ---------
Downgrade
material
Material
H00010BG0025
material
Material
H00011BG0025
“Prime” Product
“Off-Prime” Product
“Issuing” material must be in unrestricted-use stock
Batch number of the “receiving” material will be defaulted to the same batch number
Receiving material will have the same material valuation price as the issuing material
A transfer posting from material to material requires that both materials are managed in the same stockkeeping unit.
A transfer posting from material to material can, for example, become necessary if a material changes in the course of time. It then no longer corresponds to its characteristics or specifications, but to those of a different material number.

24. Q&A / System Demonstration / Exercise – Logistics Exception

25. SCA – Other Stock Transfer Process
SUMITOMO CHEMICAL ASIA PTE LTD
SCA – Other Stock Transfer Process
MM Training
August 2007

26. Other Stock Transfer Process

27. Q&A / System Demonstration / Exercise – Other Transfers

28. Inventory Management – Physical Inventory Concept
SUMITOMO CHEMICAL ASIA PTE LTD
Inventory Management – Physical Inventory Concept
MM Training
August 2007

29. Physical Inventory (PI)
What is PI?
Physical inventory is the procedure used to maintain an accurate count of material.
This involves physically counting the quantity of stock at storage locations.
How to post PI?
Once actual counts are entered into a PI doc, the values are posted online, resulting in creation of Material and Accounting documents
Tolerance groups can be established to place value limits on users ability to post inventory differences.
How to reverse PI?
Note that the Material document created from PI process cannot be cancelled.
To reverse the posting, post the PI document again with the correct count.
Material

30. Stock Types for Physical Inventory
Unrestricted Use
Quality Inspection 1 2
Blocked Stock 3
Out of scope
Each Physical Inventory (PI) document is created for one storage location
Different stock types within a storage location can be posted in a PI doc
Each PI line item is for a material/batch/stock type combination
Physical inventory can only be carried out for the above stock types.
Physical inventory takes place at storage location level. A separate physical inventory document is created for every storage location.
Within a single storage location, inventory of all allowed stock types can be handled in a single inventory document. Within the inventory document, a separate item is created for each material/batch/stock type combination.

31. SCA – Physical Inventory Process
SUMITOMO CHEMICAL ASIA PTE LTD
SCA – Physical Inventory Process
MM Training
August 2007

32. Physical Inventory Process

33. The SAP Physical Inventory (PI) Process (before LES)
Physical Stock
Take
Create PI doc and
Enter Count
Arrange for
Recount
List of
Differences
Material
Document
Change Count
Post
Differences
Accountg
Document
To perform a physical inventory, you must perform two main tasks in the system:
Create a physical inventory document and enter count results after stock take
Review and post inventory differences
Prior to posting the differences, you can arrange for a recount of all or some of the items in the physical inventory document.
Posting the differences results in the creation of a material document and an accounting document.

34. Q&A / System Demonstration / Exercise – Physical Inventory

35. Inventory Management : Reporting
SUMITOMO CHEMICAL ASIA PTE LTD
Inventory Management : Reporting
MM Training
August 2007

36. Inventory Management Reports
ATP
CO09 – Availability Overview
MD04 – Stock / Requirement List
Material & Accounting Documents
MBSM – List of Cancelled doc
MBGR – Mat doc by reason
MR51 – Accounting doc for Materials
MB03 – Display Material and Accounting doc
Stock Movement
MB51 – Material Document List
MB5B – Stocks for Posting Date
MB5S – GR/IR Balances
Stock Balances
MMBE – Stock Overview
MB5L – List of Stock Values
MB52 – List of Warehouse Stocks on Hand

37. ABAP List Viewer : Display Variants
Displayed fields
Supply of fields
Column cont.
Pos
Lgth
SUM
Column cont.
Lgth
Material 1 12
Costs 1
Mat. description 2 39
Costing version 2
Plant 3 4
... 3
Costing version 4 7
... 4
Costs 5 8
... 5
The “ABAP List Viewer” can be used to view both single-level lists and multilevel sequential lists.
Single-level lists contain any number of lines that have no hierarchical relationship to each other.
Multilevel sequential lists consist of a number of lines that have two hierarchical levels. Multilevel lists have header rows and item rows; the item rows are subordinate to the header rows. For each header row there can be any number of subordinate item rows. Some of the important functions are:
Navigation within the list
Choosing detail
Sorting in ascending/descending order
Selecting and deselecting rows
Setting and deleting filters
Totaling values and deleting the totals
Creating subtotals
Displaying the list status
Choosing display variants
Saving display variants
Management of display variants
Save as a display variant

38. Q&A / System Demonstration / Exercise – IM Reporting