Inventory Management Process

In SAP MM ( Part 1)

René Efila Minkoulou

[email protected]
 Process overview
1)Movement type :
 Roles of movement types
 Customizing movement types
2) Goods Receipt ( Functionality and customizing ) :
 Goods receipt into : unrestricted; quality inspection ; blocked stock
 Automatic Creation of Purchase order during Goods Receipt
 Return delivery for goods receipt
 Enter a subsequent delivery
 Goods receipt without purchase order or production order
 Checking and Calculating the Shelf Life Expiration Date ( SLED )
3) Units of measure in Inventory Management
4) Cancellation in MIGO
5) Reservation :
 Role of reservation
 Goods Issue With Reference to a Reservation
 1) Movement type :
Roles of movement types

Movement types : is a technical field we have in the system it has

three digits number like : 101; 201; 501; 601 for example
In this field this is how SAP identify what you are doing in the
product
Sap identify different transaction we do in inventory management
base of the movement type .
Movement types is very important because it control many things
for example :
➢ Updating the quantity field
➢ Updating the stock and consumption account
➢ Determine the screen structure of the document entry
➢ Automatic account determination
 1) Movement types :
Example movement type control : Account determination

Here Movement types are linked to transaction keys via valuation string
and account modification
1) Movement types :
Example of movement types
 1) Movement types : Customizing movement types
SPRO/Material management / inventory management and physical inventory /
Movement Types / Copy; change Movement Types
T-CODE: OMJJ
Note : it’s rare in the implementation project to create a new movement types
because all movement types who existing in the standard configuration are already
enough to covert all business processes . But if it’s required you should copy one existing
and change .
Before we talk about goods receipt we should understand this very
important topic :quantity/ value updating
Quantity Updating Specifies that the material is managed on a quantity
basis in the material master record for the relevant valuation area. Value
Update: Specifies that the material is managed on a value basis in the
material master record for the valuation area concerned.
Important : valuation area is a plant where you want to maintain
quantity/ value updating
2) Goods Receipt :

 Unrestricted Stock: Unrestricted stock refers to stock which can

be used readily and which is always available for use on
premises.
 Quality Inspection Stock: Quality inspection stock is delivered
material that is retained for quality inspection. It is not regarded
as unrestricted and cannot be readily used.
 Blocked Stock: If a material is rejected due to bad quality then
it is moved to blocked stock in SAP. This can also happen
during production when some irregularities are found with the
stock and thus blocked for further use.
 2) Goods Receipt :
Goods receipt into stock quality inspection

Here we can assign material in inspection stock in 3 levels :

1) Default value in material master you can decide that this
material will always go in the inspection stock
2) In purchase order : in field delivery
3) In MIGO
In this 3 ways you have the same result
2) Goods Receipt :
Goods receipt into stock quality inspection
2) Goods Receipt :
Goods receipt into : blocked stock
 2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt

Example: your client demanded that when we will post goods receipt that time
purchase order has to create automatically.
We need to do 5 customizing :
1) Material master : this material should be valuated material
2) In customizing you have to set automatic PO generation for movement type
IMG-> Materials Management-> Inventory Management and Physical
Inventory-> Goods Receipt-> Create Purchase Order Automatically
 2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt

3) The third customizing is to be sure that Plant is assigned to a standard purchasing

organization
 2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt

4) The fourth customizing : Purchasing info record must exist for vendor,
material and purchasing organization
 2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt

5) Define default values for document types

IMG-> Materials Management-> Purchasing -> Define default values for document
types
 2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt

In MIGO : click on Non-Ordered Item : enter material and vendor who

have PIR
 2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt

After post go to display and you will see a purchase order

2) Goods Receipt :
Automatic Creation of Purchase order during Goods Receipt
 2) Goods Receipt :
Return delivery for goods receipt

Example: If you want to return delivered goods to the vendor for some reason (for
example, due to poor quality or because they are damaged), you can use this
function to return the goods, even if you have already posted the goods receipt..
Go to the MIGO select return delivery enter document number or delivery note
and enter reason of movement
2) Goods Receipt :
Return delivery for goods receipt

Check in the PO history : ME23N

 2) Goods Receipt :
Enter a subsequent delivery

If the vendor sends you a substitute delivery after the return delivery, you can enter the new
goods receipt as a subsequent delivery. In a subsequent delivery, you refer to the material
document of the original goods receipt or to the material document of the return delivery.
 2) Goods Receipt :
Enter a subsequent delivery
Go to the MIGO and select subsequent delivery
 Customizing reason of movement

Example: our business required to create a new reason for movement

Under SPRO →, MM → Inventory Management and Physical Inventory → Movement
Type → Record Reason for movement types.
T-code: OMBS
Control reason : Any movement types you can assign a reason if is ( suppressed;
optional; required )
 Customizing reason for movement

Reason for movement : here you can see which reason is assign for any movement
types and here you can create your own ( copy and change )
 Goods receipt without purchase order or production order

If you have to record an external receipt of goods without having previously created a
corresponding purchase order or scheduling agreement in the SAP system, you must enter it
as an other goods receipt. The same applies to an internal receipt from production for which
no production order has previously been created.
You can decide the stock type to post the receipt to for these goods receipts too:
 1. Unrestricted-use stock (without PO: movement type 501; without production order:
movement type 521)
 2. Stock in quality inspection (without PO: movement type 503; without production order:
movement type 523)
 3. Blocked stock (without PO: movement type 505; without production order: movement
type 525)
 Goods receipt without purchase order or production order

Go to MIGO select goods receipt and other movement type : 501

 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

Important : When you receive goods from a vendor, the system may
check the minimum shelf life of the goods during the goods receipt.
You can therefore ensure that goods are only placed in storage if
their shelf life corresponds with your requirements.
If a total shelf life is not specified, you must manually enter the SLED in
the goods receipt document.
SLED= Date of Production + No. of Days/Months/Years
Note: The term shelf life expiration date (SLED) is predominantly used
in the pharmaceutical industry and food industry. In the chemical
industry, the term expiration date is used as a synonym.
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

Prerequisites : You must activate the automatic calculation of the shelf life expiration
date or the shelf life expiration date check in Customizing for Batch Management
SPRO → Batch Management→ SLED → Set Expiration Date check (OMJ5)
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

2. Activate SLED check at 101 movement type = 1 (Enter and check

manufacturing/expiry date during GR)
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

3) Be sure that this view is maintain << General Plant Data / Storage 1 >>
Minimum Remaining Shelf Life : Minimum amount of time for which the material must keep
upon goods receipt for the goods receipt to be accepted by the system
Total shelf life : Period for which the material will keep in total, that is, from the date of
production to the shelf life expiration date.
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

After PO when we try to post Goods receipt we receive this error : Enter the date of production
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

For example, your total autonomy of a product is 48 months.

And you have maintained Rem. Minimum personal life for 2 months.
Thus, after 46 months from the date of manufacture, the system does not provide for any
publication of stock.
Below is an error of mention.
Shortfall of 27 days against remaining shelf life in current item (2 Month)
( because today is 27/10/2020 )
Message no. 12007
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )

How you can understand this in 2 steps :

1) Total shelf life
Life of the goods is 48 months ( 4 years )
Today is 27/10/2020
48 months back : 27/10/2016
Goods manufacturing date : 27/10/2016
The system allow you to do goods receipt on – Between
21/10/2016-27/10/2020
 2) Goods Receipt :
Checking and Calculating the Shelf Life Expiration Date ( SLED )
2) Minimum Remaining Shelf Life :
Our case is 2 months
Goods manufacturing date : 27/10/2016
2 months means the system will accept this transaction after 2
months of the day of manufacture that is to say : 27/12/2016
Why :
you can understand that like the date of manufacture of the goods
and the date of entry into stock system, a time will pass and during
this time the total lifespan of the goods already decreases.
you should memorize the date of manufacture because this date
allows the system to perform checks .
 4) Units of measure in Inventory Management

That mean you can purchase raw material with unit measure (kg) but in your inventory
management you can maintain the same goods with other unit of measure (pc)
 4) Units of measure in Inventory Management

A) Maintain conversion in MM02

Into the material master data (basic data 1 view → additional data → unit of
measures)
we can keep the conversion rules for the material unit of measure.
Example : Considering that 1 KG = 10 PC
4) Units of measure in Inventory Management
4) Units of measure in Inventory Management
 4) Cancellation in MIGO

Example : we mistakenly entered this stock in blocked stock now we should cancel
this transaction how can do this
 4) Cancellation in MIGO

Choose A03 Cancellation, R02 Material document, enter the material document
that has been created after posting the GR (goods receipt) from purchase order.
Execute.
 4) Cancellation in MIGO

Check the indicator that item is Okay and post & then check MMBE stock
Overview
 5) Reservation :

Reservation :
sometimes stock need to be blocked in advance so that it can be available at a particular
point of time & this known as reservation.
Ensures that stock is available and it can be used when required.

What information is on a reservation?

 In a reservation information is stored that is relevant for goods issues and for MRP. For
example
 What ? (Which material ?)
 How much (In which quantity ?)
 When ? (For which requirement date ?)
 From where (From which plant or warehouse ?)
 To where ? (To which recipient or customer ?)
5) Reservation :
5) Reservation :

Base date : the day we will use this reservation

Movement type : Specifies a key for the type of goods movement. Each goods
movement (for example, purchase order to warehouse) is allocated to a
movement type in the system.
Here will use Movement type 311 for stock transfer from one storage location to
another in one step.
 5) Reservation :

Here enter receiving storage location our case is 0002 ;

Number of material and sending storage location our case is
0001
 5) Reservation :

Checked stock in t-code : MMBE

 5) Reservation :
Goods Issue With Reference to a Reservation

Go to MIGO select A08 Transfer Posting and R09 Reservation enter number
 5) Reservation :
Goods Issue With Reference to a Reservation

Checked stock t-code : MMBE

Next document : coming soon
Inventory Management ( part2 )

In this document I will explain another

important topics like : Goods issue ;
Transfer posting …………..