hme pdd mm 10 physical inv 041110 v01

7/31/2019 HME PDD MM 10 Physical Inv 041110 v01

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IBM

Process Definition Document

Materials Management Physical Inventory Process

Client: Hill Metals Establishment.

Author: Sulman Ahmad Khan/ Aamir Masood Arbab


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Table of Contents

1. INTRODUCTION TO PHYSICAL INVENTORY ................................................................... 5

2. PHYSICAL INVENTORY PROCESS ........................................................................................ 6

3. OUTPUTS (FORMS) ................................................................................................................. 9

4.

STANDARD REPORTS ........................................................................................................... 10

5. KEY PERFORMANCE INDICATORS ................................................................................... 11

6. INTEGRATION CONSIDERATIONS .................................................................................... 12

7. TESTING SCENARIOS ............................................................................................................ 13


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Document History

AUTHORS & PARTICIPANTS

Role Name

HME Project Process Owner Mr. Abdul Aziz Sajid

HME Business Unit Process Owner Mr. Chaudhary Javaid Iqbal

HME Business Unit Process Owner Mr. Samiullah Khan

HME Business Unit Process Owner Mr. Mohammad Anees

HME Business Unit Process Owner Mr. Shahid Saeed

HME Business Unit Process Owner Mr. Mohammad Ashraf

HME Business Unit Process Owner Mr. Imran Khalid

HME Business Unit Process Owner Mr. Ahtesham Awan

IBM Consultant Sulman Ahmad Khan/ Aamir Masood Arbab

IBM Project Manager Adeel Hashmi

Workshop Participant

REVISION HISTORY

Date Document Version Document RevisionDescription

Author

04-11-2010 1.0 Customer review Sulman/ Aamir


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REVIEWED AND APPROVED BY

Name Title Date Approved

Mr. Abdul Aziz Sajid HME Project ProcessOwner

Mr. Chaudhary Javaid Iqbal HME Business Unit ProcessOwner

Mr. Samiullah Khan HME Business Unit ProcessOwner

Mr. Mohammad Anees HME Business Unit ProcessOwner

Mr. Shahid Saeed HME Business Unit ProcessOwner

Mr. Mohammad Ashraf HME Business Unit ProcessOwner

Mr. Imran Khalid HME Business Unit ProcessOwner

Mr. Ahtesham Awan HME Business Unit ProcessOwner

Sulman Ahmad Khan/ AamirMasood Arbab

IBM Consultant

Adeel Hashmi IBM Project Manager


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2. Physical Inventory Process

The physical inventory process comprises three phases:

Creation of physical inventory documents

Entry of count

Posting of inventory difference

In the first phase, you create the physical inventory (PI) documents. It is possible to generate

inventory documents in large quantities using batch input. After selecting the stocks to be counted

and creating the PI documents, you print out the documents in order to start the counting process.

You enter the count results in the system in the second phase. The system calculates the inventory

differences. If some of the results seem doubtful, you can arrange for a recount of the stock

management units affected. In this case, further PI documents are generated.

In the third phase, you post the inventory differences that have been identified. The quantities and

values of the stock are updated. The stock accounts are updated in FI.


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2.1.1. Process Flow To-Be

Physical Inventory Process

Authorized PersonStore

Process End

Process Start

Manual sign-off by

HOD

2.1.2.5

2.1.2.6

Create Physical

Inventory (PI)

Document

Take print output

of PI for approval

Conduct physical

count of materials

listed in PI

document

Check

variances if too

large

YesEnter Count

Results

Post Inventory

DifferencesNo

Material &

Accounting

Document

generated by SAP

2.1.2.1

2.1.2.2

2.1.2.4

2.1.2.72.1.2.3

No Difference


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2.1.2. Functional Description of Process Steps

If differences are Zero in Book inventory and physical inventory then zero indicator is check to closed

the physical inventory cycle

ActivityNo Business Activity SAP Process

SAPTransaction Input / Remarks

2.1.2.1Physical Inventorydocument

The Store Officercreates the PhysicalInventory Document inthe system

MI01Materials are blockedfor movements.

2.1.2.2 PrintoutThe Physical Inventorydoc printout is takenout for approval.

MI21

2.1.2.3 Approval Outside SAPThe HOD approval isobtained.

2.1.2.4Conduct Physical

Inventory

Outside SAP

The store keeper visitsthe store and conducts

the physical inventorycount.

2.1.2.5 Enter count resultsThe store officer entersthe count results in thesystem.

MI04Release material formovementautomatically.

2.1.2.6 Variance check

If the variance to toolarge, another physicalinventory document iscreated with referenceto first PI document.

MI01Complete data isadopted from the first PIdocument

2.1.2.7 Post Difference

The authorized personpost the inventorydifferences in thesystem

MI07/ MI20

Differences can beposted individually orfrom the differences list.

Material and accountingdocuments aregenerated by thesystem.


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3. Outputs (forms)

Physical Inventory Document


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4. Standard Reports

Stock Overview MMBE

Materials Document MB51

Reason for Movement MBGR

Physical Inventory Overview MIDO

Physical Inventory List MI24

Changes to Physical Inventory Document MI12

Count/ Difference MI08

Difference List MI20


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5. Key Performance Indicators

Physical Inventory for material with higher value can be undertaken more frequently than

others, thereby providing a constant check to minimize the value/quantity differences.

SAP can be configured to automatically enable the concerned dept. to undertake the physical

inventory exercise (with list of materials already prepared) which requires physical inventory, via

batch processing.

Activating the Blocking function in SAP ensures that no goods movement of the material takes

place until physical inventory process is completed, thereby minimizing any chances of

discrepancy between the time physical inventory results recorded in SAP and any movements of

goods that took place while the inventory count was going on.

List of difference enables both quantity and value differences to be available for decision-making

purposes, that is, those requiring a re-count and those where reasonable difference is

acceptable.


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6. Integration Considerations

The entire goods movements processes, that is, receipts, issuances, transfer postings provides

an instant source of information to form the basis of physical inventory in SAP and to cross-

check the information from SAP to that of physical inventory.


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7. Testing Scenarios

Following are the scenarios which were listed by the user for the above mentioned processes:

Store check physical stock on quarterly basis and match the quantity of the book quantity and

physical quantity.

hme pdd mm 10 physical inv 041110 v01

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