Explaining the Material Movement Process

Objective

After completing this lesson, you will be able to explain the procurement, inventory management, and the integration with Device Management.

Overview of Inventory Management

Flowchart illustrating SAP inventory management, including purchase orders, goods receipt, and installation.

Once you have defined the new device category, you can now procure the devices you require.

IDES Energy Inc. has three storage locations: goods receipt warehouse, central warehouse and grid.

First of all, the devices are delivered with the function Goods Receipt to the goods receipt store, where stock records are kept for them. Later, the devices are posted to the central store with the function Goods Movement.

This unit deals with these standard Inventory Management functions. No other functions (purchasing) are dealt with in this course.

MM PUR = Materials Management Purchasing

MM-IM = Materials Management Inventory Management

Overview Functions

Material stock management

Management on a quantity basis
Management on a value basis

Planning, entry, and statement of goods movement

Goods receipt and goods issue
Stock transfer and transfer posting
Creation of documents and goods issue slips

In the Inventory Management system, physical stock is always tracked through the real-time entry of all transactions that have an effect on stock and the resulting inventory updates. The user can obtain an overview of current stock at any time.

For each material, not just the stock currently in the warehouse is tracked, but also stock that has been ordered but not yet delivered, stock in the warehouse that has been reserved for production or for a customer, stock that is in the process of quality inspection, and so on.

Special stock from suppliers and from customers (for example, consignment stock) is managed separately. Value-based inventory management is a prerequisite for accurate company accounting. Quantity and value updates occur automatically when a goods movement is entered. Creation of documents is the basis for quantity and value updates, and statements for the movement.

Goods receipt/issue slips are printed for carrying out the physical movement and for tracking individual stock in the warehouse

Flowchart illustrating SAP Materials Management processes, including procurement, delivery, stock transfer, and retirement, with associated inventory tasks.

MM-PUR = Materials Management Purchasing

MM-IM = Materials Management Inventory Management

Warehouse Structure

Diagram of a plant with two storage locations (0001, 0002) connected to Goods Receipt, Central Warehouse, and Issuing storage areas.

The storage locations are defined in Customizing in the SAP Fiori app: Home page→User Profile icon→App Finder→SAP Menu→Search in SAP Menu→Customizing- Execute Project→SAP Reference IMG→Enterprise Structure→Definition→Materials Management→Maintain Storage Location

You can use the SAP enhancement IQSM0008 to define your own rules, for example:

Define the warehouse in which certified devices can be stored.
Define the warehouse in which transformer are not allowed to be stored.
Define the warehouse (grid) what can be used as target during the function Device Installation.

Goods Receipt

Definition

Physical movement of devices into a warehouse
Leads to an increase in warehouse stock
Leads to a value-based update of the fixed assets

SAP Fiori Apps

Post Goods Receipt for Purchasing Document app, Goods receipt with reference to a purchase order
Movement Type 101
Post Goods Receipt without Reference app, Goods receipt without reference
- Movement Type 501
- Initial entry of stock during transfer from the legacy system BAPI_GOODSMVT_CREATE
- Component purchasing is not used
Equipment status ESTO

The following are the effects of a goods receipt:

Generation of a material document
Generation of an accounting document
Generation of a goods receipt slip
A message is sent to Purchasing
Update stock
Update general ledger accounts
Update purchase order
Update Status ESTO in equipment

You can use the SAP enhancement IQSM0001 to generate keys for new serial numbers to be created.

During productive use of the SAP Inventory Management, stock balances are entered in order to transfer the physical warehouse stock to the book inventory in the SAP system.

The function module which performs the posting is BAPI_GOODSMVT_CREATE.

The movement types are defined in Customizing in the SAP Fiori app: Home page→User Profile icon→App Finder→SAP Menu→Search in SAP Menu→Customizing - Execute Project→SAP Reference IMG→Materials Management→→Inventory Management→Movement Types

Goods Receipt and Device Creation

Goods Receipt	List Processing	Individual Creation
Inventory Management functions	SAP for Utilities function only	SAP for Utilities function only
Simultaneous creation of several devices	Simultaneous creation of several devices	Creation of individual devices
Inventory-based device entry	Device entry without inventory	Device entry without inventory
Connection possible to Warehouse Management	No connection to Warehouse Management	No connection to Warehouse Management
Connection possible to Purchasing	No connection possible to Purchasing	No connection possible to Purchasing

If you do not wish to use the Materials Management component, you can create the devices directly in SAP for Utilities. You can choose between individual device creation (Display Material Serial Number App), and list processing (Create Material Serial Number app ). Devices are created in both procedures, which cannot, however, be managed as stock in the Materials Management component.
If you wish to use the Materials Management functions, you need to create the devices using a goods receipt in the Inventory Management component.

Goods Receipt and Utilities-Specific Device Data

During goods receipt with reference to a material master with utilities-specific serial number profile with utilities-specific equipment category, additional utilities-specific data must be maintained.

Technical data
- Relevance for inspection
- Certification year
- Register group
- Manufacturer
Meter Readings
- Identical meter readings for all devices
- Individual meter readings
Classification characteristics

You can use the SAP enhancement EDME10L1 to implement your own data checks, which are entered during goods receipt/device creation and make default entries in the fields in the dialog box.

Goods Receipt and Current/Fixed Assets

Fixed assets
- Maintain Purchasing view in material master
- Account assignment to fixed assets for purchase order
- Activation in fixed assets after goods receipt
- Activation in fixed assets after invoice check
Current assets
- Maintain Accounting view in material master
- Valuation of material using standard price
- Valuation of material using a moving price
Mix
- Current assets for goods receipt
- Fixed assets for installation

The process during the posting of fixed assets is as follows:

The person responsible for devices creates a purchase requisition for a specific device category.
Central acquisition converts the purchase requisition to a purchase order
- with or without a supplier reference
- Material
- Quantity
- price
- account assignment to installation number
The devices arrive.
The person responsible for devices posts the goods receipt with reference to the purchase order.
The person responsible checks the invoice, and the installation is activated automatically.

Goods Issue

Definition
- Physical issues of devices from a warehouse
- Leads to reduction in warehouse stock
SAP Fiori App
Manage material documents for reservation goods issue
- Movement type 201 Issue to a cost center or project (internal consumption)
- Movement type 231 Delivery of goods to customers
- Movement type 241 Issue to an installation
Equipment Status AVLB

The following are the effects of a goods issue:

Generation of a material document
Generation of an accounting document
Generation of a goods issue slip
Update Stock
Update general ledger accounts
Update consumption statistics
Update subsequent applications
Update status AVLB in equipment

The movement types are defined in Customizing in the SAP Fiori app: Home page→User Profile icon→App Finder→SAP Menu→Search in SAP Menu→Customizing - Execute Project→SAP Reference IMG→Materials Management→Inventory Management→Movement Types

Goods Movement

The Transfer Stock – In/ Cross Plant could use the following movement types:
- 301 Transfer posting plant to plant
- 309 Transfer posting material to material
- 311 Transfer posting storage location
- U61 Transfer posting to grid warehouse
- U62 Transfer posting to grid warehouse - reversal
The movement types are defined in Customizing in the SAP Fiori app: Home page→User Profile icon→App Finder→SAP Menu→Search in SAP Menu→Customizing - Execute Project→SAP Reference IMG→Materials Management→Inventory Management→Movement Types
SAP for Utilities offers a special Goods Movement app with the feature of a serial- number-related goods movement.
If you wish to change the device category of a device, you can make a transfer posting for the material with the following restrictions:
- The device categories of source and target material must have the same division category.
- The device categories of source and target material must have the same basic device category.

Goods Movement with Serial Number

Goods Movement app, Goods Movement SAP for Utilities

Access via serial number
Material number automatically found via system
Customizing movement types must be allowed

The movement types are defined in Customizing:

SAP Home page→User Profile icon→App Finder→SAP menu→Search in SAP Menu→Customizing-Execute Project→SAP Reference IMG→Materials Management→Inventory Management→Movement Types

Goods Movement for Installation, Removal, Replacement

Precondition
- System parameter GOODSMVMT
- Movement type U61, Transfer posting to grid warehouse
- Movement type U62, Transfer posting to grid warehouse - reversal
Integration of stock transfer in installation, removal, and replacement transactions
- Target plant for device to be installed or removed
- Target warehouse for device to be installed or removed
- Movement type for device to be installed or removed
Integration of stock transfer in the reversal transaction for installation, removal, and replacement

In the utilities industry, devices don‘t leave the stock when they‘re installed. With the help of the preconfigured movement types U61 and U62, it‘s not necessary to book a goods issue before installation (what is not possible in SAP ERP standard where U61 and U62 don‘t exist).

The customizing of movement types allows the usage of U61 and U62 in utilities transactions.

Movement type U61 in transaction Installation Full and Installation Technical
Movement type U61 in transaction Removal Full and Removal Technical as well
Movement type U61 in transaction Replacement Full as well
Movement type U62 in transaction Replacement Technical Reversal

The precondition to book goods movements during installation transactions is to activate parameter GOODSMVMT in Customizing.

The process could be as follows:

Post Goods Receipt without Reference app: Goods Receipt in store Goods Receipt. The device is created, the status is ESTO.
Goods Movement app: Goods Movement in store Car of Technician. The device status is still ESTO.
Device Installation app: Installation Full including goods movement. The device status is INST.

Analyses

Inventory Management Analysis Options

Movements	Stock Situation for Individual Materials	Stock situation for Plant/Warehouse
Material document for material Accounting documents for material Reversed material documents Reason for movement Material documents for posting date	Stock overview Current stock/requirements list Availability of plant stock Shelf life expiration date list	Warehouse stock Consignment stock and returnable packaging stock at customer

The Inventory Management (MM-IM) component provides you with numerous possibilities for stock analysis: you can document all goods movements, evaluate the stock situation of individual materials at the storage location level, or for more than one warehouse or plant. You can also request a comprehensive stock overview of all materials from all plants and storage locations.

Stock Overview: Stock of a material across all organizational levels
Stocks/requirements list
- Availability of material from a requirements planning point of view
- Also covers the inward movements and reservations that are planned
Availability of plant stock: Stock situation of a material in various plants
Stock list
- Total storage location stock (quantity and value) at the plant and storage location levels
- Stock that is not located in the storage location (for example, provision stock at the vendor site, or consignment stock at this customer site) is only included if you have flagged the Special stock option.

Maintain Warehouse Structure and Manage Device Procurement

Part 1: Maintain the Warehouse Structure

Business Example

Before you create devices for the new double-rate meter category, check the warehouse structure in your company and the address to which the new devices are to be delivered.

Steps

1.1 Consider whether the following questions are true or false:
Question 1: The Inventory Management component is sufficient for simple warehouse management demands.
1. True
Question 2: Device movements are processed using the standard component Purchasing.
1. False. Device movements are processed using the component MM-IM.
Question 3: Devices placed in stock have the status AVLB.
1. False. Devices placed in stock have the status ESTO.
Question 4: If you do not use the MM-WM component for your inventory management system, the various warehouses of a plant are defined as storage locations.
1. True
Question 5: A plant is assigned to only one client and one company code.
1. True
1.2 Where do you define company code, plant and storage location in customizing?
1. Answer:
  1. Enterprise Structure→Definition→Logistics→General→Plant
  2. Enterprise Structure→Definition→Financial Accounting→Company Code
  3. Enterprise Structure→Definition→Materials Management→Storage Location
1-3 Find the address of the goods receipt warehouse (= GR store) for plant US01.
1. Answer:
  1. Display the storage locations for plant US01, as in the previous exercise.
  2. Select the entry for the goods receipt warehouse, GR Store.
  3. Choose Addresses of storage locations.
  4. Select the first entry, and then click the Address icon.

Task 1: Part 2: Manage Device Procurement

Steps

Business Example

The devices you ordered are delivered, and you record the goods receipt in the goods receipt warehouse. You also serialize the new devices so that they can then be given a device number.

2-1 Post a miscellaneous goods receipt without a purchase order in the receiving storage location for plant US01 for 10 units of the electricity meters you created (METER-ELEC-2D##).
Use the automatic serialization.
The devices were manufactured by the company Siemens and purchased by you this year. They should be available in your system from the 1st of this month.
They are certified on delivery and the meter reading is 0.
Post the document and take note of the document number.
1. Select Post Good Movement app. The fields on top must be completed by Good Receipt and Other values.
2. Enter movement type 501 (receipt without purchase order into warehouse) in Receipt w/o PO field.
3. Enter the material METER-ELEC-2D## in the Material field and select Enter.
4. Enter 10 for the Quantity field and select Enter
5. Specify plant US01 with storage location 0001 (GR store) and select Enter.
6. In the Serial Numbers folder, mark the field Auto-Create Serial Number.
7. Select Post to go to the IS-U data entry screen.
8. Enter data in the Manufacturer (SIEMENS), Construction year (current year), Valid from (first of the current year) and Inspection rel. (01) fields.
9. Enter the current year in the Certification year field.
10. Enter meter reading 0 for all devices: To do this, enter 0 in the Recorded MR field and select Assign meter reading.
11. Choose Transfer and save your entries to post the document. Take a note of the document number.
2-2 Display the material document you have just posted. What does the "+" next to the movement type mean?
1. Select the Post Good Movement app. The fields on top must be completed by Display and Other values.
2. Enter the document number. Choose Enter to display the material document.
3. The "+" in the field Direction(+/- sign for the material posting) signifies an inward movement.
2-3 Now check the stocks in the plant to make sure that the goods receipt for the devices has been posted correctly.
2-3-1 Display the stock overview of the goods receipt warehouse for plant US01. How many devices from your device category are there in the goods receipt warehouse?
1. Select the Display Stock Overview app.
2. Enter the material METER-ELEC-2D## and plant US01 and then choose Execute.
2-3-2 Display the data for one of the delivered devices (equipment).
1. Place your cursor on the goods receipt warehouse.
2. Choose Menu→Environment→Equipment/SerialNo. in the menu bar.
3. Select a line, and then choose Menu→Goto→Details in the menu bar. This displays the detailed view of the device in question.
2-3-3 What is the status of this device?
1. The device status is ESTO (in storage).
2-3-4 Display the total warehouse stock for plant US01.
1. Select the Display Warehouse Stock app.
2. Enter the plant and leave the Material and Storage location fields blank. Choose Execute.
2-4 Transfer two devices of the delivered meters from the goods receipt warehouse to the central warehouse (= Central Store). Use the transfer posting function from Inventory Management for one of the devices, and the transfer posting using serial numbers for the other one. Check the material documents. Now display a cross- plant stock overview for your device categories.
Note the following: By clicking the [Select. serial no.] pushbutton (or pressing [F6]), you can display the existing serial numbers for the device category in question, and select one of these. Simply press [F6], and, on the next screen, click the [Execute] icon. Place your cursor on the serial number you want from the list, and press [Choose] (green checkmark). You can now continue to process this serial number.
1. Transfer posting in Inventory Management: Select Transfer Stock - Cross-Plant app.
2. Enter the material METER-ELEC-2D## and choose Enter. The material Stock will be showed in Plant US01, Store Location 0001 – GR Store.
3. Click Unrestricted-Use Stock (next to the quantity in stock).
4. Click Stock Transfer (Storage Location).
5. A popup screen will be opened, in the field Receiving Storage Location. Enter the receiving storage location 0002 central store.
6. Enter the quantity 5 to be transferred and click on the Serial Numbers match code.
7. Enter the serial numbers of the transferred devices. Use the serial numbers that you made a note of in the other exercise. Choose Apply.
8. Choose Post to the stock transfer. Click on the material document created to display the document.
2-5 Your company buys devices from four different manufacturing countries. For the purpose of quality control, you want to classify your device categories according to manufacturing country.
To do this, use the classification system functions, and create a class with the appropriate characteristics.
1. In SAP Fiori, select the Manage Characteristics app (SAP GUI Transaction CT04).
2. Enter a name Country char ## and a validity date (today’s date) for the new characteristic, and choose the Create icon.
3. Enter a description for the characteristic.
4. Select the Released status in the Status field.
5. In the Data Type field, choose Character Format.
6. Enter 2 in the number of characters field.
7. Go to the Values tab page to define the characteristic values. In the Char. Value column, enter the country identification codes that you wish to use (such as FR, DE, EN, etc). Then enter the corresponding long text in the Description column (such as France, Germany, US, etc).
8. Save your entries and exit characteristics.
9. Now, in SAP Fiori, select the Create Classes app (SAP GUI TRansaction CL01).
10. Enter Country class## in the Class field. Since you wish to classify devices, you must specify an existing class type for equipment. Use Class type "IS2". Click on the Create icon.
11. Enter a description for your class and go to theChar. tab.
12. In the Char. column, enter the characteristic Country char ## that you created, and save your entry.
2-6 Create 10 new devices for one of your device categories, using the Utilities List editing function. Classify these devices according to the country in which they are manufactured, using the class you just defined. Then check to see if the devices delivered were subjected to inventory management in one of the warehouses. Also check that they have been classified correctly.
1. In SAP Fiori select the Create Material Serial Number app.
2. Enter an IS-U device category METER-ELEC-2D## in the Material field (such as a device category that you created). Enter the number of devices required (10) in the No. serial numbers field and choose Enter. The system now automatically assigns the corresponding serial numbers. Take note of one of these serial numbers.
3. Save your settings. You are now in the window for entering IS-U-specific data.
4. Maintain the fields Construct Year, Valid from, Certification year, and Inspection Rel, and enter the meter readings.
5. Choose the Classification button at the bottom.
6. The selection menu for classification appears. In the Class field, enter the class you created (or use theF4 input help function to find existing classes).
7. Choose Enter.
8. Allocate a valid characteristic value (in other words, a country of manufacture). Use the F4 input help function to display a list of valid entries. Confirm your entry by choosingEnter.
9. Choose Next screen to return to list editing.
10. Choose Transfer.
11. To check whether stock records are kept for the devices in the warehouse, select the Display Stock Overview app (SAP GUI Transaction MMBE).
12. Enter the material number of the device category for which you have just created 10 devices METER-ELEC-2D##. Choose Execute.
13. Place your cursor on a plant in the stock overview, and choose Menu→Environment→Equipment/SerialNo..The system displays a list of the serial numbers that exist in Inventory Management.
  Note that because you created the devices directly in IS-U (and not using the logistics function Post Goods Receipt), stock records are NOT kept in Inventory Management for the devices. This means that you cannot monitor stocks for these devices.
14. To check whether the devices have been classified correctly, in SAP Fiori, select the Device Display app (SAP GUI Transaction IQ03).
  Enter the serial number of one of the devices that has just been delivered and choose Enter.
15. The next screen displays the master data for the device. Now choose Class overview. If you classified the devices correctly, the class and characteristics you defined for the device will appear.

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