Inventory Management Overview

July 3, 2016
 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
 SAP Terminology
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.

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:

MATERIALS MATERIAL REQUIREMENTS

MANAGEMENT PLANNING

SCM
INVENTORY WAREHOUSE
MANAGEMENT MANAGEMENT
 Materials Management

PURCHASING CONSUMPTION HIGHLY

BASED PLANNING INTEGRATED!

REQ TO CHECK
MATERIAL STORAGE

GOODS MOVEMENT
INVENTORY
9
9
 Materials Requirement Planning (MRP)
Not exclusively a software function:
It is marriage of
people skills, dedication to database accuracy & computer resources.

Purchase
Customer Reqs
Inventory
Orders

MRP Material
Master

Operations Planned
Plan Orders

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

10
 IM vs WM

IM is concerned with the value of material.

WM is concerned with exact bin location.

• 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

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 IM is concerned
planning (MRP), purchasing, and with quantity
invoice verification and value.
• 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

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 WM is
• Ensures book inventories in IM concerned with
match stock in warehouse quantity and
• Is fully integrated into SAP location (storage
bin).
• Interfaces to:
– Sales and Distribution (SD)
– Quality Management (QM)
– Production Planning (PP)
– Radio Frequency information
collection devices (RF)

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
Warehouse

External procurement
purchasing
Manage goods
inventory

Receive Load and

goods ship goods

Manage goods
Internal procurement: movements
production

Receiving Operations Internal Movements Pick/Pack/Ship

15
 Movement Types

• Goods Receipt • Goods Issue

– Purchase Order – Material withdrawal
– Work Order – Material Consumption
– Shipment of goods to affiliates
• Stock Transfer
– Plant to plant • Transfer Posting
– Storage location to storage – Stock Type conversion
location – Material to material conversion
– 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

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 A data record containing all the basic information required to
Master 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.

20
 Organizational Levels

Purchasing
Organization
Example:
010

Company Code Company Code

Example: Y012 Example: Y141

Plant Plant

Storage Storage Storage Storage

Location Location Location Location

21
 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 Global Data

two levels:  Material number
– Global data  Material description
– Organizational data  Base unit of measurement
 Classification
• Global Data
is the common information that is
shared across all Yaskawa business Organization Data
locations
 Plant
 Storage Location
• Organizational Data
 Purchasing organization
is designed to meet the business
 Purchasing group
requirements of different business
functions

26
 Material Master Record Views

• A Material Master record consists Sales Data

of several views
Purchasing Data

• Each view contains data specific to Basic Data

a business function Material Master

Material: UCB000598
• The Material Master record Material Type: HALB
contains the following fields that Industry
Description: CIRCUIT
must be maintained or reviewed BREAKER,3P,150A,600V,JDL36150
for all views: Unit of Measure EA

– Material description
– Base unit of measurement

27
 Material Master Views

– Basic Data 1 – MRP 4

– Basic Data 2 – Work scheduling
– Classification – General Plant Data/Storage 1
– Sales: Sales Org. Data 1 – General Plant Data/Storage 2
– Sales: Sales Org. Data 2 – Warehouse Management 1
– Sales: General/Plant Data – Warehouse Management 2
– Foreign Trade: Export Data – Quality Management
– Sales Text – Accounting 1
– Purchasing – Accounting 2
– Foreign Trade: Import Data – Costing 1
– Purchase Order Text – Costing 2
– MRP 1 – Plant Stock
– MRP 2 – Storage Location Stock
– MRP 3 – CR Additional Data 1

28
 Data Maintained in Material Master Views

Material Master Record Views Yaskawa

Plant, Sales Org Key fields: Material
Description, Weight, Unit of
Key fields: Tax, Pricing Basic Data Measure, Material Group,
Potency Factor

Sales Plant
Plant Key fields: Batch, Material
Purchasing Group, GR Processing
Key fields: Production
Strategy, Lot Size,
Discontinuation MRP
Storage Location
Plant Storage Key fields: Storage Conditions
Key fields: QA Controls in
Procurement & Production Quality Management

Accounting Plant
Plant
Key fields: Inventory Valuation,
Key fields: Product Costing Price
Methodology Costing

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
Material Master Purchasing Info Record
#50000001

Vendor: Vendor Name

Material: Material Number
Purchasing Org: 1000
Material Name, Material Number,
Material Type, Material Group
Material Description, Unit of Conditions:
Measure, Pricing Control, MRP
information, etc…
Price/UOM: $1,600 USD/Palette
Vendor Master Freight: 3%

Payment Terms: 10 Net 30

Discount: 5%

Last PO: 450000034

Name, Address, Phone, tax
information, bank details,
reconciliation account, payment Purchasing group, net price, Invoice
terms, payment methods, Verification indicators, delivery
purchasing control, etc… tolerances, etc…

32
 Master Data vs. Transactional Data

Master Data Transactional Data

Mostly static Dynamic
The accuracy of master data is Accuracy of transactional data is
essential to efficient dependent on master data
performance of the system
Creation of master data is Master data is a prerequisite for
independent of transactional executing transactional data
data
Examples: Cost Centers, Examples: Sales orders, Invoices
Customers

33
 SAP Data Levels

• Organization Data: Fundamental

data framework within SAP
– Organizational hierarchy, Org.
Structure
tolerances

• Master Data: Static data which

serves as inputs to transactions in Master Data
SAP
– Material master, vendor master
Transactions
• Transactional Data: Dynamic data
representing business events in
SAP
– Enter an invoice, run MRP

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 increase Inventory restricted

due to order due to quality
receipts inspections

Inventory
decrease
Planned inventory due to order
increase due to
fulfillment
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

Receiving Plant Issuing

Goods Receipt against Internal Movements within the plant: Goods Issue against
Purchase Order · From QI to Unrestricted Outbound Delivery
· Sloc to Sloc
· Bin to Bin
Goods Receipt against · Consignment to own Backflush / GI against
Production Order ... Work Order

Initial Stock Goods Issue to Cost

Stock Type: Center
· Un-resticted-Use
· Restricted-Use
Physical Inventory · Quality Inspection Physical Inventory
· Blocked
· In-Transit
DC Returns

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 • Goods Issue

– Purchase Order – Material withdrawal
– Work Order – Material Consumption
– Shipment of goods to affiliates
• Stock Transfer
– Plant to plant • Transfer Posting
– Storage location to storage – Stock Type conversion
location – Material to material conversion
– 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 551 Scrap
(Reversal)

Xfer Description TP
311 Storage Loc to Storage Loc 343 Blocked to Unrestricted
311-E Storage Loc to Storage Loc (Sales 343-E Blocked to Unrestricted (Sales
Order Stock) Order Stock)
301 Plant to Plant 344 Unrestricted to Blocked
344-E Unrestricted to Blocked (Sales
Order Stock)

52
 External Receiving Putaway Process

• 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.

53
 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 MM-IM Transfer Order
(cost center or scrap)
Material Staging for Production Production Transfer Requirement
Orders
Delivery to Affiliate Customers or LE-SHP Outbound Delivery
DC

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

• Material has become unusable and must be scrapped.

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

60
 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

VL06N • Find the

delivery

• Print pack list,

VL71 shipping label,
BOL

• Create
VL01N delivery by
sales order

•Post goods issue,

VL02N enter freight costs
and tracking info

63
 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 A stock transfer from storage location to storage location in the same
Storage Location 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)

• 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.

72
 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

• 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.

77
 Stage Raw Materials for Production

• 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.

78
 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 Need to change material from one material.
Change 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

Annual Inventory

Cycle Counting

Continuous 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 MI01 Create Inventory Document MI01

inventory record

Print Inventory MI21 Print Document MI21

Document

MI04 Enter Count MI04

Enter Count

Print Discrepancy MI07 Save the Cycle Count  MI07

Report

Write off in IM
MI20 Write off inventory differences  MI20
(Quantity and value update)

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

95
 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

96
 Inventory Management Overview
Having completed this course you should be able to:

 Describe key terms for inventory  Understand the Yaskawa

management organizational structure

 Define the receiving, plant, and issuing  Discuss master data elements
processes at the plant  Identify the difference between
 Understand material movements for IM master data and transactional
locations data

 Describe how stock is managed at the  Discuss stock handling tasks

IM level  Understand physical inventory
 Define common movement types and cycle counts for IM materials

 Describe the results of goods

movements
97
 Questions

98
 Thank you

99