mm - inventory management.pdf

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SAP MM/ WM PRESENTATIONSAP MM/ WM PRESENTATION

VISIT US AT

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MMMMConfigurationConfiguration

Inventory ManagementInventory ManagementObjectiveObjective

To understandTo understand

Goods Movements & Movement typesGoods Movements & Movement typesStock DeterminationStock Determination

Valuation and Account AssignmentValuation and Account Assignment

Split ValuationSplit ValuationAccount DeterminationAccount Determination

Physical InventoryPhysical Inventory

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Goods Movements &Goods Movements &Movement typesMovement types

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Goods MovementsGoods MovementsAny material movement is addressedAny material movement is addressedthrough the term Goods Movement inthrough the term Goods Movement in

SAP.SAP.

Each material movement is associatedEach material movement is associatedand identified with movement type.and identified with movement type.

Material document and/or AccountingMaterial document and/or Accountingdocument will be generated for eachdocument will be generated for each

material movement.material movement.

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Goods movement Contd..Goods movement Contd..

Important classification of goodsImportant classification of goods

movements aremovements are

Goods issueGoods issue

Goods ReceiptGoods Receipt

Transfer postingTransfer posting

ReservationReservation

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Movement typeMovement typeMovement type determines theMovement type determines the

Accounting entries i.e. GL accountAccounting entries i.e. GL account

to be postedto be posted

Update the quantityUpdate the quantity

Controls field displayControls field display

Type of transactionType of transaction

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Goods IssueGoods Issue

When material is issued forWhen material is issued forconsumption or sales, it is termed asconsumption or sales, it is termed as

goods issue.goods issue.

Example:Example:Components issued for productionComponents issued for production

Products issued against sales orderProducts issued against sales order

Products issued against freeProducts issued against free

replacementreplacement

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Goods Issue (GI) movement typeGoods Issue (GI) movement type

Goods issue will reduce the inventoryGoods issue will reduce the inventoryfrom the storage location.from the storage location.

Goods issue for different purpose isGoods issue for different purpose is

identified by different movement type.identified by different movement type.

Example:Example:--

261261indicates GI for productionindicates GI for production

601601indicates GI for sales orderindicates GI for sales order

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Goods Receipt (GR) movement typeGoods Receipt (GR) movement type

When the material is received into theWhen the material is received into thestorage location, it is termed as Goodsstorage location, it is termed as Goods

Receipt.Receipt.

GR will increase the inventory.GR will increase the inventory.

Example:Example:--

101101indicates GR from vendorindicates GR from vendor

561561indicates GR initial stock uploadindicates GR initial stock upload

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Transfer postingTransfer posting

When the material is transferred fromWhen the material is transferred from

one storage location or plant toone storage location or plant to

another storage location or plant it isanother storage location or plant it isknown as transfer posting.known as transfer posting.

Transfer posting will reduce the stockTransfer posting will reduce the stock

from one location or plant andfrom one location or plant andincrease the stock in another locationincrease the stock in another location

or plant.or plant.

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Transfer posting movement typeTransfer posting movement type

Each transfer posting is identified byEach transfer posting is identified by

the different movement type.the different movement type.

Example:Example:

311311indicate transfer from oneindicate transfer from onestorage location to anotherstorage location to another

301301indicate transfer from one plantindicate transfer from one plantto another plantto another plant

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ReservationReservation

It is a request to keep materials readyIt is a request to keep materials ready

to withdraw when it is required.to withdraw when it is required.

Reservation containsReservation contains

Material numberMaterial number

QuantityQuantity

When requiredWhen required

From and ToFrom and To

p pj

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Reservation & Movement typeReservation & Movement type

Each reservation contains only oneEach reservation contains only one

movement type.movement type.

It can be created automatically orIt can be created automatically or

manuallymanually

Reservation has the documentReservation has the documentnumbernumber

MRP will consider the reservation forMRP will consider the reservation fornet requirement calculationnet requirement calculation

p pj

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Reservation

Created for

Components(Automatically)

Goods Issue

For production

Order

Mvt.type 261

Production

Order

or

ProcessOrder

GI & GR flowGI & GR flow

Goods Receipt

For production

OrderMvt.type 101

Adjust reservationsReduces inventory

Accounting entries

created

Increases stock

Accounting entries

created

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STOCK DETERMINATIONSTOCK DETERMINATION

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Stock DeterminationStock Determination

It is a strategy to withdraw material forIt is a strategy to withdraw material for

GI and Stock transfer.GI and Stock transfer.

Automatically determines the stock &Automatically determines the stock &

storage location from where materialsstorage location from where materialsare to be withdrawn.are to be withdrawn.

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Stock Determination Contd..Stock Determination Contd..

Following stocks can be handledFollowing stocks can be handled

through stock determination.through stock determination.

Unrestricted use stockUnrestricted use stock

Vendor consignment stockVendor consignment stock

Pipeline stockPipeline stock

Sales order stockSales order stock

Project stockProject stock

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Valuation andValuation andAccount AssignmentAccount Assignment

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Valuation and Account assignmentValuation and Account assignment

It definesIt defines

How the material is to beHow the material is to be

valuatedvaluated

the link between Materialsthe link between Materialsmanagement and Financemanagement and Finance

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Material ValuationMaterial Valuation

Materials can be valuated atMaterials can be valuated at

Company code levelCompany code level

oror

Plant levelPlant level

Level at which the material valuationLevel at which the material valuation

is done is known as valuation area.is done is known as valuation area.

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Valuation at company code levelValuation at company code level

Material price and price control areMaterial price and price control are

common at company code level.common at company code level.

It ensures material is valuated at sameIt ensures material is valuated at same

price at all plants belong to thatprice at all plants belong to thatcompany code.company code.

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Plant IND6

Stock 50 units

Company code level valuationCompany code level valuation

Material valuation in 9100 company:

Price = 6 Units/piece

Inventory value = 650*6 = 3900

Company code

9100

Company code

9200

Plant IND7

Stock 600 units

Plant 9201

Stock 200 units

Plant 9202

Stock 400 units

Material valuation in 9200 company:


Inventory value = 600*3 = 1800

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Valuation at plant levelValuation at plant level

Material price and price control areMaterial price and price control are

unique at plant level.unique at plant level.

Material can have a different price atMaterial can have a different price at

each plant which are under the sameeach plant which are under the samecompany code.company code.

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Plant IND6

Stock 50 units

Plant level valuationPlant level valuation

Material valuation

in IND6 plant:


Inventory value =50*6 = 300

Company code

9100

Plant IND7

Stock 600 units

Material valuation

in IND7 plant:


Inventory value =600*4 = 2400

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Valuation DataValuation Data -- Material MasterMaterial Master

Following are the essential materialFollowing are the essential material

master data for valuationmaster data for valuation

Valuation classValuation classto determineto determine

the stock account for postingsthe stock account for postingsPrice controlPrice controlmoving average ormoving average or

standard pricestandard pricePrice unitPrice unitindicates pricing unit.indicates pricing unit.

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Valuation ProcedureValuation Procedure

Valuation of inventory will beValuation of inventory will be

performedperformed

For each valuation areaFor each valuation area

According to the price controlAccording to the price control

(price control(price control SS -- standard orstandard or

VVMoving average)Moving average)

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Valuation ProcedureValuation Procedure Contd..Contd..

PricePrice Inventory valuationInventory valuation

controlcontrol

IfIfSS Qty * standard priceQty * standard price

IfIfVV Qty * moving averageQty * moving average

priceprice

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Split ValuationSplit Valuation

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Split valuation allows to use differentSplit valuation allows to use different

valuation price for different stocks.valuation price for different stocks.

Example:Example:

A material can have one price when itA material can have one price when itis procured inland and different valueis procured inland and different value

when imported.when imported.

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Over view of split valuationOver view of split valuation

A material may be subjected toA material may be subjected to

different procurement typedifferent procurement type

different country of origindifferent country of origin

different gradedifferent grade

A material can have differentA material can have differentvaluation classes.valuation classes.

Data flow in split valuationData flow in split valuationwww.sap-topjobs.com


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Data flow in split valuationData flow in split valuation

Valuation

Category

Valuation

Types

With A/c cat.

Reference

(Val.class)

Activated at

Plant level

IMG

Master Data

In create mode

For the same

Material

Mention valuationType in the

org.data

Create

Material &

Assign

Val. CategoryIn A/c 1 view

& Save

Select right

Valuation class

In the A/c.1View &

Save

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Data flow split valuation cont..Data flow split valuation cont..

During each Material transactionDuring each Material transaction

select the right valuation type.select the right valuation type.

System determines the right valuationSystem determines the right valuation

class through valuation type.class through valuation type.

One material can be posted toOne material can be posted todifferent accounts using splitdifferent accounts using split

valuation.valuation.

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Account DeterminationAccount Determination

Account DeterminationAccount Determinationwww.sap-topjobs.com


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Movement type and valuation classMovement type and valuation classtogether determines the FI accountingtogether determines the FI accountingentries through posting key.entries through posting key.

Valuation group code defined forValuation group code defined for

valuation areavaluation areaCompany codeCompany code

Chart of accountsChart of accounts

Valuation group code is linked with postingValuation group code is linked with postingkeykey

Account category & Valuation classAccount category & Valuation classwww.sap-topjobs.com


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Account category & Valuation classAccount category & Valuation class

Account category referenceAccount category reference

Valuation classes are created and linkedValuation classes are created and linkedwith account category reference.with account category reference.

Account category references are assignedAccount category references are assignedto each material type.to each material type.

Effect :Effect :--

When creating material, according to theWhen creating material, according to thematerial type, predefined valuation classesmaterial type, predefined valuation classeswill appear to select.will appear to select.

Acco nt determination & mo ement t peAccount determination & movement type

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Account determination & movement typeAccount determination & movement type

Posting key attached with eachPosting key attached with eachmovement typemovement type

Each posting key also attached withEach posting key also attached withvaluation class and GL accountsvaluation class and GL accounts

Effect:Effect:--

Movement type automaticallyMovement type automaticallydetermines the accounting entriesdetermines the accounting entries


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Movement

Type

960 (GR)

Value String

WA01

Transaction KeyFR1 (freight

Clearing A/c.)

Transaction KeyWRX (GR/IR A/c.)

Transaction KeyBSC (Stock A/c.)

Dr.Stock 600005 Cr.GR/IR 600006

Transaction keysTransaction keys ExampleExamplewww.sap-topjobs.com


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Transaction keysTransaction keys -- ExampleExample

Following are the Goods receipt relatedFollowing are the Goods receipt related

transaction keys for your ready reference.transaction keys for your ready reference.

BSXBSXInventory postingInventory posting

WRXWRXGR/IR Clearing AccountGR/IR Clearing AccountPRDPRDCost/Price differenceCost/Price difference

UMBUMBRevenue / Expense fromRevenue / Expense from revaluationrevaluation

GBBGBB -- Offsetting entry to the stock postingOffsetting entry to the stock posting

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Physical InventoryPhysical Inventorywww.sap-topjobs.com


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Physical InventoryPhysical InventoryThis is a process of physically counting theThis is a process of physically counting thematerial at storage location level to keep thematerial at storage location level to keep the

accurate stock of material.accurate stock of material.

Four types of physical inventory areFour types of physical inventory are

PeriodicPeriodic

ContinuousContinuous

Cycle countingCycle counting

SamplingSampling

Physical Inventory stock typePhysical Inventory stock typewww.sap-topjobs.com


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Physical Inventory stock typePhysical Inventory stock type

Following stocks are subjected to physicalFollowing stocks are subjected to physical

inventoryinventory

Unrestricted use stockUnrestricted use stock

Quality stockQuality stock

Blocked stockBlocked stock

Physical inventory can be performed onlyPhysical inventory can be performed onlyfor the above stocks.for the above stocks.

Physical Inventory stepsPhysical Inventory stepswww.sap-topjobs.com


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Physical Inventory stepsPhysical Inventory stepsSteps involved in physical inventory areSteps involved in physical inventory are

1.1. Physically count the stockPhysically count the stock

2.2. Set the block for the materialSet the block for the materialto avoidto avoid anyanyother posting during countingother posting during counting

3.3. Create physical inventory documentCreate physical inventory document

4.4. Post the count resultPost the count result

5.5. Post the difference in inventoryPost the difference in inventory

6.6. Posting documents generated by thePosting documents generated by thesystem in the background automaticallysystem in the background automatically

Physical Inventory tolerancePhysical Inventory tolerancewww.sap-topjobs.com


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Physical Inventory tolerancePhysical Inventory tolerance

Tolerance limit to post the inventoryTolerance limit to post the inventory

difference can be defined for each userdifference can be defined for each user

Two ways of defining the limits are:Two ways of defining the limits are: --

1.1. Maximum amount per inventory countMaximum amount per inventory count2.2. Maximum amount per document itemMaximum amount per document item

SummarySummarywww.sap-topjobs.com


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SummarySummary

You must have understoodYou must have understood

Goods Movements & Movement typesGoods Movements & Movement types

Stock DeterminationStock Determination

Valuation and Account AssignmentValuation and Account Assignment




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