July 3, 2016

Inventory Management Overview

Course Purpose

This course covers the Inventory Management process to work with transfer

postings, goods movements, inventory, and receipts processes for IM

managed goods.

2

Course Objectives

Upon completing this course, participants will be able to:

• Describe key terms for inventory management

• Define the receiving, plant, and issuing processes at the plant

• Understand material movements for IM locations

• Describe how stock is managed at the IM level

• Define common movement types

• Describe the results of goods movements

• Understand the Yaskawa organizational structure

• Discuss master data elements

• Identify the difference between master data and transactional data

• Discuss stock handling tasks

• Understand physical inventory and cycle counts for IM materials

3

Agenda

• Lesson 1 – Introduction to Inventory Management

• Lesson 2 – Master Data

• Lesson 3 – Inventory Management Processes

• Lesson 4 – Physical Inventory Overview

4

Lesson 1: Introduction to Inventory

Management

Upon completion of this unit, you will be able to:

• Understand Supply Chain Management

• Define master data elements

• Describe goods movements

5

Term Definition

MM Materials Management: SAP module that governs processes from material procurement to vendor payment.

IM Inventory Management: SAP module that allows inventory data to be captured at the Plant-Storage Location level.

GR Goods Receipt: A representation of a physical receipt of goods.

GI Goods Issued: An representation of a physical withdrawal of goods.

SLOC Storage Location: An organizational unit allowing the differentiation of

material stocks within a plant.

PIR Purchasing Information Record: An element of master data that tracks

vendor specific purchasing data for a specific material.

RF Scanner Radio Frequency Scanner:

Device used for accessing warehouse data in real-time.

STO Stock Transport Order: Physical movement of materials from one plant to another.

SAP Terminology

6

SCM Process

The Supply Chain Management Process includes:

– SCM overview

– SCM terminology

– IM vs WM

7

Supply Chain Management (SCM) Overview

SCM comprises the following main areas:

INVENTORYMANAGEMENT

MATERIALSMANAGEMENT

WAREHOUSEMANAGEMENT

MATERIAL REQUIREMENTS

PLANNING

SCM

9

REQ TO CHECK

PURCHASING CONSUMPTION BASED PLANNING

INVENTORY

MATERIAL STORAGE

GOODS MOVEMENT

HIGHLYINTEGRATED!

Materials Management

9

MRP

CustomerOrders

PurchaseReqs

Inventory

OperationsPlan

PlannedOrders

MaterialMaster

Not exclusively a software function:It is marriage of

people skills, dedication to database accuracy & computer resources.

MRP : A method for the effective planning of all manufacturing resources

Materials Requirement Planning (MRP)

10

IM vs WM

• If warehouse stocks are managed with IM, you manage quantities and

values of stocks as if they are in one or several general storage locations.

You get an overview of the:

– Quantity of material in the plant/warehouse

– Value of materials in the plant/warehouse

• WM allows you to map all warehouses in total detail, right down to the

storage bin level

– You can always determine exactly where a certain material is in your

warehouse complex

• IM postings do one or the other of:

– Trigger WM activities (goods receipt, goods issue, transfer posting)

– Mark goods receipt or goods issue as complete

IM is concerned with the value of material.

WM is concerned with exact bin location.

11

IM Key Elements

Key elements of the Inventory Management

(IM) system include:

• Brings goods in and out of inventory

(goods movement)

• Interfaces with accounting for

purchasing materials

• Links with material requirements

planning (MRP), purchasing, and

invoice verification

• When goods are received from a

vendor, posts the delivery as a goods

receipt with reference to a purchase

order (PO) and verifies the quantity

and value from the PO against the

invoice

IM is concerned

with quantity

and value.

12

WM Key Elements

Most of the activities in Warehouse Management (WM) are initiated by IM movements.

Key elements of the WM system include:

• Provides expanded ability to allocate materials to bins

• Ensures book inventories in IM match stock in warehouse

• Is fully integrated into SAP

• Interfaces to:

– Sales and Distribution (SD)

– Quality Management (QM)

– Production Planning (PP)

– Radio Frequency information collection devices (RF)

WM is

concerned with

quantity and

location (storage

bin).

13

Master Data Elements

MASTER DATA IS DATA THAT DOES NOT CHANGE FREQUENTLY

MATERIAL MASTER

VENDOR MASTER

PURCHASING INFO RECORD (PIR)

SOURCE LIST

CONTRACT

14

Goods Movements Overview

Load and

ship goodsReceive

goods

Internal procurement:

production

Warehouse

Manage goods

movements

Manage goods

inventory

Receiving Operations Internal Movements Pick/Pack/Ship

External procurement

purchasing

15

Movement Types

• Goods Receipt

– Purchase Order

– Work Order

• Goods Issue

– Material withdrawal

– Material Consumption

– Shipment of goods to affiliates

• Transfer Posting

– Stock Type conversion

– Material to material conversion

• Stock Transfer

– Plant to plant

– Storage location to storage

location

– Storage bin to storage bin

• Results of a goods movement:

– Material Document Generated

– G/L Balances – Accounting documents being generated

– Updated Stock Types quantities

– Updated Inventory Balances (quantity and cost)

16

Knowledge Check

1. Define the purpose of the IM system.

2. Define the purpose of the WM system.

17

Agenda

• Lesson 1 – Introduction to Inventory Management

• Lesson 2 – Master Data

• Lesson 3 – Inventory Management Processes

• Lesson 4 – Physical Inventory Overview

18

Lesson 2: Master Data

Upon completion of this unit, you will be able to:

• Discuss plants and storage locations

• Explain master data elements

• Understand master data versus transactional data

19

Key Terms

20

Key Term Definition

Master Data Data that remains the same over a long period of time. Master

data contains information that is needed often and in the same

form.

Material

Master

A data record containing all the basic information required to

manage a material. This data is sorted according to various

criteria including data of a descriptive nature (such as size,

dimension and weight) and data with a control function

(Purchasing, MRP, Quality, Costing, Accounting etc.

Material Type A grouping of different materials that have common attributes

with respect to a business function

Plant An organizational unit, serving to subdivide an enterprise according to Production, Procurement, Maintenance, and Materials Planning. A plant is a place where either materials are produced, or goods and services are provided.

Organizational Levels

21

Purchasing

OrganizationExample:

010

Company CodeExample: Y012

Company CodeExample: Y141

Plant Plant

Storage

Location

Storage

Location

Storage

Location

Storage

Location

SAP IM/WM Organization Structure

22

Material Master Overview

• A material is defined as a product that a company produces, procures, sells, or stores

• Detailed information regarding a material is stored in the Material Master record

• Each material has its own individual Material Master record

• The Material Master record contains data necessary for processing business transactions

• The Material Master is the company's central source for storing material-specific data that:

– Provides centralized data

– Eliminates data redundancy and increases data integrity

– Integrates business processes

23

Material Master Material Types

Material types are a grouping together of materials with the same basic attributes, such as raw materials, semi-finished products, or finished products.

Material types have several control functions that determine the following:

• Whether the material is procured through external purchasing or internal production.

• Which views can be maintained in the Material Master record

• Whether standard or moving average price is used for the material.

24

Material Master Record

The Material Master record contains

organization-specific data to meet

the business requirements for

different business functions

• This data is organized in a

hierarchical structure, similar to

the organizational structure of a

company

• Some of the master data is valid

at all organizational levels, while

some data is valid only at specific

organizational levels

25

Material Master Record Structure

• A Material Master record is created at

two levels:

– Global data

– Organizational data

• Global Data

is the common information that is

shared across all Yaskawa business

locations

• Organizational Data

is designed to meet the business

requirements of different business

functions

26

Material number

Material description

Base unit of measurement

Classification

Global Data

Plant

Storage Location

Purchasing organization

Purchasing group

Organization Data

Material Master Record Views

• A Material Master record consists

of several views

• Each view contains data specific to

a business function

• The Material Master record

contains the following fields that

must be maintained or reviewed

for all views:

– Material description

– Base unit of measurement

27

Sales Data

Purchasing Data

Basic Data

Material Master

Material: UCB000598

Material Type: HALB

Industry

Description: CIRCUIT

BREAKER,3P,150A,600V,JDL36150

Unit of Measure EA

Material Master Views

28

– MRP 4

– Work scheduling

– General Plant Data/Storage 1

– General Plant Data/Storage 2

– Warehouse Management 1

– Warehouse Management 2

– Quality Management

– Accounting 1

– Accounting 2

– Costing 1

– Costing 2

– Plant Stock

– Storage Location Stock

– CR Additional Data 1

– Basic Data 1

– Basic Data 2

– Classification

– Sales: Sales Org. Data 1

– Sales: Sales Org. Data 2

– Sales: General/Plant Data

– Foreign Trade: Export Data

– Sales Text

– Purchasing

– Foreign Trade: Import Data

– Purchase Order Text

– MRP 1

– MRP 2

– MRP 3

Data Maintained in Material Master Views

Basic Data

Sales

Purchasing

Storage

MRP

Accounting

Quality Management

Costing

Yaskawa

Key fields: Material

Description, Weight, Unit of

Measure, Material Group,

Potency Factor

Plant

Key fields: Batch, Material

Group, GR Processing

Storage Location

Key fields: Storage Conditions

Plant

Key fields: Inventory Valuation,

Price

Plant, Sales Org

Key fields: Tax, Pricing

Plant

Key fields: Production

Strategy, Lot Size,

Discontinuation

Plant

Key fields: Product Costing

Methodology

Plant

Key fields: QA Controls in

Procurement & Production

Material Master Record Views

29

Exercise 2.1: Display Material Master Record

(MM03)

You need to review a material in your plant.

– Use transaction MM03 to display all of the views for the

material.

30

Knowledge Check

1. Which one of the following views of a material master record contains

information relevant for planning the production of a material?

A. Purchasing

B. Classification

C. MRP

D. Sales

2. To which organizational level can MRP data be linked?

A. Plant

B. Client

C. Storage Location

D. Sales Organization

31

Material, Vendor Master, PIR

Vendor Master

Name, Address, Phone, tax information, bank details, reconciliation account, paymentterms, payment methods, purchasing control, etc…

Purchasing Info Record#50000001

Vendor: Vendor NameMaterial: Material NumberPurchasing Org: 1000

Conditions:

Price/UOM: $1,600 USD/PaletteFreight: 3%

Payment Terms: 10 Net 30Discount: 5%

Last PO: 450000034

Purchasing group, net price, Invoice Verification indicators, delivery tolerances, etc…

Material Master

Material Name, Material Number, Material Type, Material Group Material Description, Unit of Measure, Pricing Control, MRP information, etc…

32

Master Data vs. Transactional Data

33

Master Data Transactional Data

Mostly static Dynamic

The accuracy of master data is

essential to efficient

performance of the system

Accuracy of transactional data is

dependent on master data

Creation of master data is

independent of transactional

data

Master data is a prerequisite for

executing transactional data

Examples: Cost Centers,

Customers

Examples: Sales orders, Invoices

SAP Data Levels

• Organization Data: Fundamental

data framework within SAP

– Organizational hierarchy,

tolerances

• Master Data: Static data which

serves as inputs to transactions in

SAP

– Material master, vendor master

• Transactional Data: Dynamic data

representing business events in

SAP

– Enter an invoice, run MRP

Master Data

Transactions

Org.

Structure

34

Agenda

• Lesson 1 – Introduction to Inventory Management

• Lesson 2 – Master Data

• Lesson 3 – Inventory Management Processes

• Lesson 4 – Physical Inventory Overview

35

Lesson 3: Inventory Management Processes

At the end of this lesson you should be able to describe:

• Discuss stock overview

• Process goods receipts

• Process goods issues

• Understand transfer requirements

• Process transfer postings

36

Stock Overview

Inventory restricted

due to quality

inspections

Inventory

decrease

due to order

fulfillment

Inventory increase

due to order

receipts

Planned inventory

increase due to

outstanding orders

37

Display Warehouse Stocks of Material

Use transaction MB52-”Display

Warehouse Stocks of Material” to

identify the inventory that is in Plant

4W, Storage Location QA01 with the

stock type “Unrestricted”.

This combination will be used to

identify material that has been

deemed “acceptable” and should be

putaway in storage.

38

Using the Display Warehouse Stocks of Material

Report

• The results for the material display in a list.

39

Demo 3.1: Display Warehouse Stocks of Material

(MB52)

• You want to display a material in your plant to determine which location

has the material.

– Use transaction MB52 to display the stock.

40

Material Documents

• A material document is generated

when goods movement is posted

• Material documents serve as:

– Proof of movement

– Source of information for any

applications that follow

– A data record for all IM movements

• A material document consists of:

– A header

• Contains general data about movement

(for example, its date)

– At least one item

• Each item describes one movement

41

Material Documents

• Every movement of a material has a material document to support it.

• Material documents contain information such as:

– Material(s) associated with the movement

– Movement type

– Plant

– Storage location

– Batch number, if applicable

• You can also view relevant accounting documents such as customer

invoice, material master, document date, and posting date.

42

Material Documents

• Generated when goods movement is posted

• Serves as:

– Proof of movement

– Source of information for any applications that follow

• Consists of:

– A header

• Contains general data about the movement (for example, its date)

– At least one item

• Each item describes one movement

43

Material Documents

Material documents are necessary to record:

• Stock transfers

• Transfer postings

• Material staging (IM)

• Deliveries for WM staging

44

Material Document List

• Use the Material Document List (MB51) to display transaction history for

a material or group of materials.

• Enter one material code or multiple material codes to retrieve all material

documents related to those material codes.

45

Demo 3.2: Display Material Document List

(MB51)

• Display a list of documents for a material.

– Watch the demo of transaction MB51.

46

Demo 3.3: Display Material Document (MB03)

• You need to display a material document to verify some data.

– Watch the demo of transaction MB03

47

Knowledge Check

What is the difference between a material document and a

material master?

48

Inventory Storage and Movements Overview

Goods Receipt against

Purchase Order

Receiving

Goods Receipt against

Production Order

Initial Stock

Physical Inventory

DC Returns

Goods Issue against

Outbound Delivery

Issuing

Backflush / GI against

Work Order

Goods Issue to Cost

Center

Physical Inventory

Plant

Internal Movements within the plant:· From QI to Unrestricted

· Sloc to Sloc

· Bin to Bin

· Consignment to own

...

Stock Type:· Un-resticted-Use

· Restricted-Use

· Quality Inspection

· Blocked

· In-Transit

49

Goods Movements

Goods movements include both external and internal movements. In general a transaction that causes a stock change is marked as a goods movement. You can distinguish between goods receipts, goods issues, stock transfers, and transfer postings.

Once stock is put away in the storage location or storage bin within your plant, there are several movements that will occur during your shift. You will use stock transfers to move material in various ways:

• Stock transfers within a plant

– Sloc to Sloc

• Transfer postings within a plant

– Change stock type (Ex Unrestricted to Quality)

– Material to material (Change material number)

• Goods issue to scrap

• Goods issue to a cost center

50

Goods Movements

• Goods Receipt

– Purchase Order

– Work Order

• Goods Issue

– Material withdrawal

– Material Consumption

– Shipment of goods to affiliates

• Transfer Posting

– Stock Type conversion

– Material to material conversion

• Stock Transfer

– Plant to plant

– Storage location to storage

location

– Storage bin to storage bin

• Results of a goods movement:

– Material Document Generated

– G/L Balances – Accounting documents being generated

– Updated Stock Types quantities

– Updated Inventory Balances (quantity and cost)

51

Movement Types

When you enter a goods movement in the Yaskawa system, you need to

enter a movement type to differentiate between various goods movements.

Examples of movement types used at Oak Creek include:

GR Description GI

101 GR Purchase Ord, Production Ord 261 Goods Issue to an Order

102 GR Purchase Ord, Production Ord

(Reversal)

551 Scrap

Xfer Description TP

311 Storage Loc to Storage Loc 343 Blocked to Unrestricted

311-E Storage Loc to Storage Loc (Sales

Order Stock)

343-E Blocked to Unrestricted (Sales

Order Stock)

301 Plant to Plant 344 Unrestricted to Blocked

344-E Unrestricted to Blocked (Sales

Order Stock)

52

External Receiving Putaway Process

53

• When material is received against a Purchase Order, the system

prints a label that specifies the storage location for the placement

of the stock.

• You should always confirm the placement of stock once it is

received into the plant.

Demo 3.4: Receive Material from a PO

(MIGO_GR-101)

• You have a PO that needs to be received into stock.

– Use MIGO_GR with movement type 101 to receive stock against a purchase

order.

54

Other Goods Receipts

• Yaskawa uses other goods receipts, including:

– STO’s from internal plants

– Customer returns (not returned to customer)

– Customer returns / RMA (repaired and returned to customer)

– “Text PO” – prototypes / samples

– Production receipts

55

Goods Issues

• Using a Goods Issue (GI), you can post a material withdrawal, a material

issue, or a shipment of goods to a customer.

• GI results in physical issue of stocks and decrease in stock qty

• The following business transactions normally trigger GI:

Trigger Application WMS Document

Internal Material Consumption

(cost center or scrap)

MM-IM Transfer Order

Material Staging for Production

Orders

Production Transfer Requirement

Delivery to Affiliate Customers or

DC

LE-SHP Outbound Delivery

56

Scrap Materials

You might scrap a material if you cannot use it any more, for

example:

• The quality has been reduced due to long storage time.

• It is out of date.

• The material has been destroyed

Entry into SAP is without reference and for the following stock

categories:

• Unrestricted stock

• Quality Inspection Stock

• Blocked stock

57

Results of Scrapping Materials

Results of the Post Goods Issue for scrapping are:

• Creation of material document (movement type 551)

• Creation of an accounting document

• Creation of Goods Issue Slip

• Stock Update

• Update of GL Accounts

58

Issue Material to Scrap

Material has become

unusable and must be

scrapped.

59

Issue Materials to Scrap

60

• Material has become unusable and must be scrapped.

• Use MIGO_GI and the correct movement type to perform the scrap

move.

Exercise 3.5: Create Goods Issue to Scrap

(MIGO_GI-551)

• You need to post a manual goods issue to scrap.

– Use transaction MIGO_GI-551 to issue material for scrapping.

61

Knowledge Check

1. Which movement type is used to scrap material?

62

Pick, Pack, Ship Process Overview

63

VL06N• Find the

delivery

VL71• Print pack list,

shipping label,

BOL

VL01N• Create

delivery by

sales order

VL02N•Post goods issue, enter freight costs and tracking info

Exercise 3.6: Post Goods Issue for Delivery

Document (VL02N)

You took a Pick List from your local printer and need to enter the picked

quantity and post a goods issue for the outbound delivery. Use transaction

VL02N to enter the picked quantity and process the goods issue.

• Use transaction VL02N to complete the goods issue for a delivery

document.

64

Customer Returns Process

• Customer returns are handled by warehouse clerks at the Oak Creek Facility.

• You will create a return sales order and place the material in a quality status.

• If the material will be repaired and returned to the customer, follow the RMA

process to move the material through the repair process and shipped back to the

customer.

65

Internal Goods Movements

• Used to remove material from one storage location and place them into

another storage location.

• Both stock transfers and transfer postings consist of a “goods issue” from

an issuing point and a “goods receipt” at a receiving point.

Transfer Description

Storage Location to

Storage Location

A stock transfer from storage location to storage location in the same

plant simply causes an update of the stock quantities in both storage

locations. The stock value remains unchanged, and the event is not

relevant for accounting.

A stock transfer from storage location to storage location is possible for

all stock types.

Plant to Plant A stock transfer from plant to plant not only leads to a change in stock

quantity in both plants; if both plants are assigned to different valuation

areas, an accounting document is also created.

This type of stock transfer can only be carried out from unrestricted-use

stock of the issuing plant to unrestricted-use stock of the receiving plant.

66

Transfer Orders

• A transfer order is an instruction to move materials from source storage bin to destination storage bin within warehouse at a specified point in time

• Transfer orders contain quantity of material to move

• Transfer orders specify source and destination storage bins

• You can create a transfer order based on a:

– Customer delivery

– Transfer requirement

– Posting change notice

• Transfer requirements (receipt/issue) using MIGO movement types in Yaskawa creates a material document

– Stocks are updated at the storage location (IM level)

• Transfer requirements create and confirm a transfer order for a material document

– Stocks are updated at bin level in warehouse (WM level)

67

Confirmation of a Transfer Order

• Confirmation of a transfer orders is a required step

• Goods stay in interim storage bin until confirmed

• Transfer orders are used for internal warehouse processes for stock

materials maintained in storage locations (IM level) managed at

warehouse level (IM). A goods movement document posted using

transaction MIGO_TR:

– Creates a transfer order for putaway/picking material automatically created in

WM

– After material is putaway/picked, transfer order must be confirmed

68

Knowledge Check

1. Which of these items is part of the WM process flow?

A. Transfer Requirement

B. Confirm Transfer Order

C. Transfer Order

D. All of the above

69

Stock Transfers

• From storage location to storage location in the

same plant.

• Move material from Incoming inspection to the

plant.

• Move material from the warehouse to the

Hanels.

• Move material from the Hanels to the shop floor.

– Causes update of stock quantities in both storage

locations

• Stock value remains unchanged

• Not relevant for accounting

70

Stock Transfers

• MIGO_TR transactions allow you

to move inventory from one

storage location to another.

• Movements can also be reversed

or cancelled via MIGO_TR.

• This is an Inventory Management

(IM) movement.

71

Location to Location Movements (Sloc to Sloc)

72

• You can use MIGO_TRs to remove materials from storage in one

storage location and place them in another storage location if you

do not use a scanner.

• Whether you are using a scanner or entering the movement using

MIGO_TR, the system prints a label with the destination location.

• You should confirm all movements using MMBE.

Demo 3.7: Create Stock Transfers (MIGO_TR-311)

You need to move a material from quality to unrestricted stock in your

warehouse

• Transfer Quality approved material from Storage Location QA01 to

Storage Location RM01 with MIGO_TR with Movement type 311.

73

Knowledge Check

Name the most common movement type for MIGO_TR.

74

Issuing Materials to a Production Order

Materials have to be issued to a production order using

transaction MIGO_GI-261 (Goods Issue to an order).

75

Stock Transport Orders (STOs)

Request for materials to be moved from one plant to another plant

• STO is an internal version of a purchase order (PO)

• External vendors do not need to be contacted

– Materials already stored within the enterprise

76

Plant to Plant Moves

77

• Use stock transfers to move stock between

Yaskawa plants.

• A stock transfer from plant to plant leads to

a change in stock quantity in both plants.

Stage Raw Materials for Production

78

• Use transaction MIGO_GI-261 Goods Issue to issue stock to a

production order.

• This movement takes the inventory out of the plant and makes

the material available for production.

Demo 3.8: Issue Material to a Production Order

(MIGO_GI-261)

You need to stage a raw material for production.

• Watch the demo of transaction MIGO_GI-261

79

Transfer Postings

• A transfer posting usually refers to a change in a material’s stock (for

example, release from quality inspection stock to unrestricted stock.

• In a transfer posting, the material can remain in its original storage

location or be transferred.

• The following business transactions normally trigger transfer posting

Trigger Description

Stock Type Change Need to change material quantity from one

stock type to another stock type. I.E. from

blocked stock to unrestricted stock.

Material to Material

Change

Need to change material from one material.

number to another material number.

80

Transfer Posting Stock Type/Category Change

• You need to perform a stock type change on material from unrestricted

to blocked.

• Results of the Post Change for stock type/category are:

– Creation of material document (movement type 344)

– Stock Update

81

Transfer Postings

May --or may not--be connected with a physical goods movement

• Usually involve a change in:

– Stock type

– Material number

• An example of transfer posting:

– Release from inspection into stock

– Change Material number

82

Transfer Postings

• Perform MIGO_TR

transaction to move

material from a stock type

of Unrestricted to Blocked.

• Movement type is 344

(Unrestricted to Blocked).

83

Exercise 3.9: Create a Transfer Posting from

Unrestricted to Blocked (MIGO_TR-344)

You need to create a transfer posting to change a material from unrestricted

to blocked because it needs to be reviewed.

• Use transaction MIGO_TR-344 to perform the transfer posting.

84

Knowledge Check

1. What is the definition of goods movement?

2. What is a logical movement (as opposed to a physical movement)?

85

Agenda

• Lesson 1 – Introduction to Inventory Management

• Lesson 2 – Master Data

• Lesson 3 – Inventory Management Processes

• Lesson 4 – Physical Inventory Overview

86

Objectives

Upon the completion of this Unit, you should be able to:

• Describe the three methods of performing inventory

87

Terms

Term Definition

Physical inventory document Documents created to facilitate capturing

the results of a physical count.

Storage location Area within a plant where materials are

stored.

Physical inventory Quantity of a material that is physically on

hand.

Continuous Inventory An inventory method in the WM system

which can be used any day of the fiscal year.

Keeps book inventory continuously in

agreement with stock on hand within

specified time periods.

Book inventory Inventory seen by the system.

88

Terms

Term Definition

Physical inventory status Describes status of the physical inventory

item (counted, adjusted, not yet counted,

and deleted).

Planned count date Date on which the count is scheduled to

begin.

Difference value Inventory difference summarized in a dollar

amount.

Difference quantity Inventory difference quantified in the stock-

keeping unit of the material counted.

89

Terms

Term Definition

Posting block Key that indicates no goods movements

involving the materials listed in the physical

inventory document can be posted for the

duration of the physical inventory until the

counts are entered and differences are

accepted and posted.

Freeze book inventory Key that specifies the book inventory

balance of the items not yet counted on the

physical inventory document are frozen.

90

Physical Inventory Methods

Inventory Methods

Cycle Counting

Continuous inventory

Annual Inventory

91

Annual Inventory Method

• The stocktaking of all stock in a company

on a fixed date (usually at the end of the

fiscal year)

• Entire storage location is blocked for

movement

• All bins are counted

• Counting performed at bin level

• You must count all material/batch quantities

within the bin

• Customer for this process is the Audit

department

92

Cycle Count Method

Periodic counting of materials

(period can be decided by policy)

• The stocktaking of all stock in a company on a

fixed date (usually at the end of the fiscal year)

• Entire storage location is blocked for

movement

93

Cycle Count for Inventory Management

Create system

inventory record

Print Inventory

Document

Enter Count

Print Discrepancy

Report

MI01

MI21

Create Inventory Document MI01

MI04

MI07

Print Document MI21

Save the Cycle Count MI07

Enter Count MI04

Write off in IM

(Quantity and value update)MI20 Write off inventory differences MI20

94

Continuous Inventory Method

• Can be used any day of the fiscal year

• Keeps book inventory continuously in

agreement with stock on hand within

specified time periods

• Keeps track of actual availability of goods

and determination of what the correct

time to reorder from suppliers

• Sometimes called perpetual inventory

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Knowledge Check

1. Which of the following statements are true regarding Continuous

Inventory? (select all that apply)

A. Continuous Inventory is an inventory method in the WM system

B. It can be used any day of the fiscal year

C. It keeps book inventory continuously in agreement with stock on hand within

specified time periods

D. It keeps track of actual availability of goods and determination of what the correct

time to reorder from suppliers

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Inventory Management Overview

Having completed this course you should be able to:

Describe key terms for inventory

management

Define the receiving, plant, and issuing

processes at the plant

Understand material movements for IM

locations

Describe how stock is managed at the

IM level

Define common movement types

Describe the results of goods

movements

Understand the Yaskawa

organizational structure

Discuss master data elements

Identify the difference between

master data and transactional

data

Discuss stock handling tasks

Understand physical inventory

and cycle counts for IM materials

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Questions

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Thank you

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