mm inventory management
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8/3/2019 Mm Inventory Management
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MM – Configuration
Inventory ManagementObjective
To understand
Goods Movements & Movement typesStock Determination
Valuation and Account Assignment
Split ValuationAccount DeterminationPhysical Inventory
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Goods Movements & Movementtypes
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Goods Movements
Any material movement is addressedthrough the term Goods Movement in
SAP.
Each material movement is associatedand identified with movement type.
Material document and/or Accountingdocument will be generated for each
material movement.
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Goods movement Contd..
Important classification of goodsmovements are
Goods issue
Goods Receipt
Transfer posting
Reservation
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Movement type
Movement type determines the
•Accounting entries i.e. GL accountto be posted
•Update the quantity
•Controls field display
•Type of transaction
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Goods Issue
When material is issued forconsumption or sales, it is termed as
goods issue.
Example:•Components issued for production
•Products issued against sales order
•Products issued against free
replacement
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Goods Issue (GI) movement type
Goods issue will reduce the inventoryfrom the storage location.
Goods issue for different purpose is
identified by different movement type.
Example:-
261 – indicates GI for production
601 – indicates GI for sales order
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Goods Receipt (GR) movement type
When the material is received into thestorage location, it is termed as Goods
Receipt.
GR will increase the inventory.
Example:-
101 – indicates GR from vendor
561 – indicates GR initial stock upload
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Transfer posting
When the material is transferred fromone storage location or plant to
another storage location or plant it isknown as transfer posting.
Transfer posting will reduce the stock
from one location or plant andincrease the stock in another locationor plant.
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Transfer posting movement type
Each transfer posting is identified bythe different movement type.
Example:
311 – indicate transfer from onestorage location to another
301 – indicate transfer from one plantto another plant
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Reservation
It is a request to keep materials readyto withdraw when it is required.
Reservation contains
Material number
Quantity
When required
From and To
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Reservation & Movement type
•Each reservation contains only onemovement type.
•It can be created automatically ormanually
•Reservation has the documentnumber
•MRP will consider the reservation fornet requirement calculation
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ReservationCreated for
Components(Automatically)
Goods IssueFor production
Order
Mvt.type 261
Production
Order
or
ProcessOrder
GI & GR flow
Goods ReceiptFor production
OrderMvt.type 101
Adjust reservationsReduces inventoryAccounting entriescreated
Increases stockAccounting entriescreated
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STOCK DETERMINATION
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Stock Determination
•It is a strategy to withdraw material forGI and Stock transfer.
•Automatically determines the stock &
storage location from where materialsare to be withdrawn.
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Stock Determination Contd..
Following stocks can be handledthrough stock determination.
Unrestricted use stock
Vendor consignment stock
Pipeline stock
Sales order stock
Project stock
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Valuation andAccount Assignment
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Valuation and Account assignment
It defines
• How the material is to be
valuated
• the link between Materialsmanagement and Finance
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Material Valuation
Materials can be valuated at
Company code level
or
Plant level
Level at which the material valuation
is done is known as valuation area.
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Valuation at company code level
Material price and price control arecommon at company code level.
It ensures material is valuated at same
price at all plants belong to thatcompany code.
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Plant IND6Stock 50 units
Company code level valuation
Material valuation in 9100 company:
Price = 6 Units/pieceInventory value = 650*6 = 3900
Company code9100
Company code9200
Plant IND7Stock 600 units
Plant 9201Stock 200 units
Plant 9202Stock 400 units
Material valuation in 9200 company:
Price = 3 Units/pieceInventory value = 600*3 = 1800
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Valuation at plant level
Material price and price control areunique at plant level.
Material can have a different price at
each plant which are under the samecompany code.
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Plant IND6Stock 50 units
Plant level valuation
Material valuationin IND6 plant:
Price = 6 Units/piece
Inventory value =50*6 = 300
Company code9100
Plant IND7Stock 600 units
Material valuationin IND7 plant:
Price = 4 Units/piece
Inventory value =600*4 = 2400
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Valuation Data - Material Master
Following are the essential materialmaster data for valuation
•Valuation class – to determine
the stock account for postings•Price control – moving average or
standard price•Price unit – indicates pricing unit.
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Valuation Procedure
Valuation of inventory will beperformed
For each valuation area
According to the price control
(price control ‘S’ - standard or
‘V’ – Moving average)
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Valuation Procedure Contd..
Price Inventory valuation
control
If ‘S’ Qty * standard price
If ‘V’ Qty * moving average
price
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Split Valuation
S
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Split Valuation
Split valuation allows to use differentvaluation price for different stocks.
Example:
A material can have one price when itis procured inland and different value
when imported.
O i f li l i
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Over view of split valuation
A material may be subjected to
different procurement type
different country of origin
different grade
A material can have differentvaluation classes.
Data flow in split valuation
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Data flow in split valuation
ValuationCategory
ValuationTypes
With A/c cat.Reference(Val.class)
Activated atPlant level
IMG
Master Data
In create modeFor the same
Material
Mention valuationType in the
org.data
CreateMaterial &
Assign
Val. CategoryIn A/c 1 view
& Save
Select rightValuation class
In the A/c.1View &Save
D t fl lit l ti t
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Data flow split valuation cont..
During each Material transactionselect the right valuation type.
System determines the right valuation
class through valuation type.
One material can be posted todifferent accounts using splitvaluation.
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Account Determination
A t D t i ti
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Account Determination
Movement type and valuation classtogether determines the FI accountingentries through posting key.
Valuation group code defined for
valuation areaCompany code
Chart of accounts
Valuation group code is linked with postingkey
A t t & V l ti l
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Account category & Valuation class
Account category reference
Valuation classes are created and linkedwith account category reference.
Account category references are assignedto each material type.
Effect :-
When creating material, according to thematerial type, predefined valuation classeswill appear to select.
A t d t i ti & t t
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Account determination & movement type
Posting key attached with eachmovement type
Each posting key also attached withvaluation class and GL accounts
Effect:-
Movement type automaticallydetermines the accounting entries
Acco nt determination & mo ement t pe
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Account determination & movement type
MovementType
960 (GR)
Value String
WA01
Transaction KeyFR1 (freightClearing A/c.)
Transaction KeyWRX (GR/IR A/c.)
Transaction KeyBSC (Stock A/c.)
Dr.Stock 600005 Cr.GR/IR 600006
Transaction keys Example
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Transaction keys - Example
Following are the Goods receipt relatedtransaction keys for your ready reference.
BSX – Inventory posting
WRX – GR/IR Clearing AccountPRD – Cost/Price difference
UMB – Revenue / Expense from revaluation
GBB - Offsetting entry to the stock posting
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Physical Inventory
Physical Inventory
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Physical Inventory
This is a process of physically counting thematerial at storage location level to keep the
accurate stock of material.
Four types of physical inventory are
Periodic
Continuous
Cycle countingSampling
Physical Inventory stock type
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Physical Inventory stock type
Following stocks are subjected to physicalinventory
Unrestricted use stockQuality stock
Blocked stock
Physical inventory can be performed onlyfor the above stocks.
Physical Inventory steps
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Physical Inventory steps
Steps involved in physical inventory are
1. Physically count the stock
2. Set the block for the material – to avoid anyother posting during counting
3. Create physical inventory document
4. Post the count result
5. Post the difference in inventory
6. Posting documents generated by thesystem in the background automatically
Physical Inventory tolerance
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Physical Inventory tolerance
Tolerance limit to post the inventorydifference can be defined for each user
Two ways of defining the limits are: -
1. Maximum amount per inventory count2. Maximum amount per document item
Summary
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