Setting Up the Procedures for Physical Inventory

EWM supports different types of inventory procedures as follows:

• Periodic Physical Inventory (Storage-Bin Specific and Product Specific)

• Continuous Physical Inventory Procedures

  • Ad-hoc Physical Inventory (Storage-Bin Specific and Product Specific)

  • Putaway Physical Inventory

  • Low Stock/Zero Stock Physical Inventory

  • Low Stock/Zero Stock Check

  • Storage Bin Check

• Cycle Counting

• External Physical Inventory Procedures

  Use of an external system for counting or for the creation of sample-based physical inventory documents

One or a combination of these procedures can be implemented in an EWM warehouse.

You can configure EWM to carry out an annual physical inventory (storage-bin-specific and product-specific) on a certain day or within a fairly short period (in most cases at the end of the fiscal year). During this time, you can prohibit stock movements. Furthermore, if you have set up a continuous inventory process, but no stock movements have occurred during the current fiscal year for some storage bins, you can use this procedure to carry out the physical inventory. The product-specific annual physical inventory corresponds to the storage bin-specific annual physical inventory (except that you carry it out for products).

The following are continuous physical inventory procedures:

• Ad Hoc Physical Inventory:

  Executed anytime during the fiscal year that an ad hoc physical inventory may become necessary, if, for example, a product has been damaged. This procedure can be performed at the storage bin level or it can be product-specific.

• Low Stock Physical Inventory:

  This procedure is performed during warehouse task confirmation if the source bin contains only a small quantity (lower than a configurable threshold) after the stock removal. You can confirm in RF or on the printed warehouse order for the task that you have performed the physical inventory. During warehouse task confirmation, the system automatically creates the physical inventory document in the background based on information in the warehouse task. The low stock physical inventory is storage bin-specific.

• Zero Stock Physical Inventory:

  This works in the same way as a low stock physical inventory with a threshold value of 0.

• Low Stock / Zero Stock Check:

  A low stock / zero stock check is done during picking, similar to the low stock / zero stock physical inventor (and the same threshold value is used). The difference is that no physical inventory document is created.

• Putaway Physical Inventory:

  This procedure is similar to the low stock physical inventory, but it occurs only during putaway. The putaway physical inventory for a storage bin is carried out at the time of the first putaway in this bin in the fiscal year. The warehouse employee confirms during the first putaway that the stock in the storage bin matches the confirmed quantity in the warehouse task after the putaway.

• Storage Bin Check:

  The storage bin check is a procedure in which you check whether a product is actually stored in the storage bin in which it is supposed to be located. The quantity of the product in the storage bin is not counted, so it is not a physical inventory procedure in the true sense.

With cycle counting, you carry out a physical inventory of your stock at regular intervals during a fiscal year. Only a small subset is counted each day. Cycle counting is an ongoing inventory procedure and it is less disruptive (for daily business) compared to an annual inventory, where the whole warehouse is counted within a short time frame.

The following figure illustrates an example of how cycle counting could operate over a year:

ABC analysis is a business term for an analysis procedure that divides objects into different classes (A, B C) with descending importance. For example, the most frequently ordered products are most important for revenue and would be classified as A items. The products with the lowest turnover would be classified as C items. The A-B-C classification code is the Cycle Counting Indicator code in EWM. In Customizing, you define the cycle counting indicator codes with an interval (in work days) after which a new physical inventory should be performed. For example, your fast movers (A items) could be counted every two months, and the very slow movers could be counted every 12 months (as required by financial accounting).

The cycle counting indicator is maintained in the warehouse product master data in the Whse Data view.

In case of special requirements it is also possible to use external systems. You can upload and download storage bins and count data for counting in an external system or use this to create physical inventory documents for sample-based physical inventory. Details are described in the Interfaces/Reports section later in this lesson.

Physical Inventory Configuration

In the definition of the physical inventory area, you have the following options:

• Activate Putaway Physical Inventory and / or Low Stock Check with Phys. Inventory. If any of these two continuous inventory procedures is selected, you also need to enter the according type as Permitted Document Types.
• Activate Low Stock Check Without Physical Inventory. For this as well as for the Low Stock Check with Phys. Inventory the field Qty (Physical-Inventory-Related Quantity Threshold Value) controls the threshold. An additional setting controls that if an inventory difference doesn't pass a tolerance check, the system cancels the low-stock check (Tolerance Check for Low Stock Check)
• Select Simultaneous Posting After Count Entry to trigger an automatic posting if a difference is below the user related tolerance.
• The following indicators should only be set after checking with your auditor:
  • Display Book Quantity at Time of Count Entry: With this option it is possible to display the book inventory quantity when entering the count results in certain transactions.
  • Proposed Inventory Quantity at Time of Count Entry: Determines whether the inventory quantity is proposed at the time of count entry. With the No Automatic Check flag you control if this proposed quantity must be checked or not.
  • Display Item Objects at Time of Count Entry: Indicates that object information is to be displayed as suggested (default) lines when a count result is entered for a storage-bin-specific physical inventory. If you set this indicator, all objects at the storage bin will be suggested by the system for counting. Hierarchies of handling units (HUs) can thus be entered on a simplified basis.
  • Printout of Item Objects in Phys. Inventory Count Document: Indicates whether the object information is to be represented as suggested (default) lines when a physical inventory count document for a storage-bin-specific physical inventory is printed out.
  • Serial Number in Phys. Inventory for Count (Suggest): Determines whether serial numbers are to be suggested by the system when count results are entered.
  • "HU Complete" Allowed: Indicates whether the possibility of counting a handling unit (HU) as "exists and complete" is allowed. This is only relevant for storage-bin specific procedures.
• HU Counting Methods: Specifies whether you want to count collectively the number of handling units (HUs) or the number of items inside a handling unit. This is specifically for bulk storage.
• Completeness Check Online/Offline (Report): You use this indicator to determine whether the completeness check is to be carried out upon posting or in offline mode only (report).
• No Default Stock Type: You can specify a default stock type for your warehouse in the Customizing. If you select this checkbox, the system ignores the default stock type set on the warehouse level for your PI area.
• Permitted Document Types:

  In this sub-dialog you have to enter all the different physical inventory procedures you plan to use in this physical inventory area.

Tolerance groups are used to control what differences users can post during and after counting in EWM and posting corrections to ERP. These tolerance groups are defined in customizing and assigned to the user in the physical inventory settings.

• Tolerance Group for Posting Differences

  This tolerance group has a quantity-based (in percentage) and value-based tolerance value and is controlled during posting differences for a physical inventory document. For both values you have the option to set a "no tolerance check" flag. You can also set a flag to trigger an alert in the SCM Alert Monitor when the tolerance was exceeded.

  While differences can be posted with the transaction Process Physical Inventory Document (/SCWM/PI_PROCESS), differences can be automatically posted during counting when:

  • The difference is below the values in the tolerance group assigned to the user
  • The flag Simultaneous Posting After Count Entry is set for the physical inventory area

  This way small differences can be posted immediately when the counting result is entered.

  Note

  Depending how the results are entered, the assignment of the tolerance group is checked differently:

  • When entering the results on a mobile device, it is the tolerance group of the user logged in to the resource, means that this is also the counter.
  • In the desktop transaction and the SAP Fiori app for paper-based counting, it is the tolerance group assigned to the user entering the results, even when this is not the counter.
• Tolerance Group for Recounting

  This tolerance group has a quantity-based (in percentage) and value-based tolerance value ( both with the option of a "no tolerance check") and is used during entering counting results. When a tolerance is exceeded, a recounting document is automatically created. This tolerance group is always checked for the Counter, independent if the result is entered in the mobile device or in the desktop transaction.

  Note

  The field for the Counter in the desktop transaction does accept any entry, it does not check if such an user exists.

  For recounting additional settings control that:

  • A separate queue is determined for the recounting PI document
  • A different user has to execute the recounting

  In case the tolerance for recounting is exceeded again, the system does not trigger a recount a second time.

• Tolerance Group for Difference Analyzer

  This tolerance group only has a value-based tolerance (with the "no tolerance check" option) and is used for controlling the posting of differences to the ERP system in the difference analyzer. An assignment to the user is also necessary to open the node Difference Overview in the Warehouse Management Monitor. Additionally, this tolerance group has a Wait Time (in days), which is used together with the tolerance to control automatic posting of differences to ERP with the transaction Post Differences to ERP System (/SCWM/WM_ADJUST).

The Difference Analyzer is a tool in EWM that allows you to analyze the differences in EWM and reconcile stock in the ERP system, and, in particular, in financial accounting.

Using the Difference Analyzer, differences are displayed at both a cumulative and individual level. The individual differences are given a link to the document that has caused the difference. At a cumulative level, differences with the same stock key are displayed in an aggregated way. In other words, they are displayed independently of the document and process in which they occur. The objective of the cumulative display is to show the balance of the differences. This reduces the number of postings to the ERP system (where possible, to zero).

You can use this report to schedule the posting of differences to the ERP system as a background job. Like in the difference analyzer, you can post differences at a cumulative level and a item level. The system performs the tolerance check with the user settings for the user who starts the report. The EWM transaction code is as follows:

• Post Differences to ERP System (/SCWM/WM_ADJUST)

There are several transactions and reports available for special PI scenarios and for accompanying activities.

You can upload the storage bin data for which you want to carry out a physical inventory and carry out the physical inventory in EWM. Or you can carry out the physical inventory in an external system and then upload the results to EWM.

The following transaction codes can be used for uploading and downloading physical inventory related data:

• Download Storage Bins and Count Data (/SCWM/PI_DOWNLOAD):

  You can use this report to select physical inventory-relevant data within SAP EWM and download it to a file, so that it can be used by an external PI system. The program documentation for the transaction describes the details of the file which is produced.

• Upload Storage Bins and Count Data (/SCWM/PI_UPLOAD):

  With this report you upload data from a file coming from an external physical inventory (PI) system and use it to create PI documents within SAP EWM. This report can create PI documents which are then used for counting, or which already include counting values which are created in the external system.

For this you have to enable the physical inventory procedure EL External Procedure (Storage-Bin Specific) or ES External Procedure (Product-Specific) for the physical inventory area.

For sample-based physical inventory, you download the storage bin and stock data. You then determine the sample in an external system and carry out the sample-based physical inventory in EWM. In the last step you download the counting results and send it to the external system for evaluation. This is also based on an external product-specific or bin-specific physical inventory procedure.

• Download Stock Population (/SCWM/PI_SAMP_STOCK):

  You use this report to download the stock population from the Extended Warehouse Management (EWM) system, so that it can be used by a third-party system for sample-based physical inventory. This is the first step of the sample-based physical inventory in the EWM system.

• Upload Sample to Create PI Documents (/SCWM/PI_SAMP_CR):

  You use this report to upload data from a file in order to create physical inventory documents in Extended Warehouse Management (EWM).

• Download Results or Stock Population (/SCWM/PI_SAMP_UPDATE):

  The report determines the physical Inventory counting results from the PI documents and determines the current stock population within the EWM system before downloading this data as a CSV data file to a PC or server, so that it can be used by a third party system.

The following application programming interfaces is available for physical inventory: /SCWM/IF_API_PI. This API can be used to create and process physical inventory documents.