Posting Goods Issues for Production Orders

Let's continue with the next step in the production process of our new bike. After order release, goods issues are posted by the warehouse clerk or shop floor personnel. From an inventory perspective, the number of components on stock is decreased. In our scenario, this means that the bike components (for example frame, wheels, chains, etc.) are withdrawn from the warehouse, the respective on stock quantity is decreased and the component consumption is posted against the order.

How do you know which components shall be withdrawn from inventory? When an order is created, the system automatically determines the bill of material and creates a reservation for all required material components in the required quantity. Each material component of the order receives a separate item number within the reservation. You can only withdraw the reserved materials from the warehouse if the operation to which the materials are assigned in the order has already been released. For each reservation item, the following information is available:

• Component material number

• Required quantity of the component

• Storage location where the component is stored in your plant (the system automatically determines the storage location)

As you can see in the figure above, material staging might precede the goods issue posting: This is a warehouse process that organizes the staging of a material from a central storage location to your production storage location before you can post the goods issue in the system, for example, if purchased components are delivered to the Bike Company's central warehouse, but their shop floor corresponds to a separate storage location in the SAP S/4HANA system.

The Bike Company can use two methods for goods issue posting to a production order: Manual or automatic. These two options are illustrated in the following image:

Assuming that the required component materials are already available at the production storage location, 101B in our example, you can post a goods issue to a production order using one of the following options:

• Manual goods issue posting, for example, using the Post Goods Movement or Pick Components for Production Orders apps.

• Automatic goods issue posting together with the order confirmation, for example, using the Confirm Production Order app.

• Automatic goods issue posting together with the operation confirmation, for example, using the Confirm Production Order Operation app.

In the case of manual goods issue posting, the system proposes the component quantity and the issue storage location since both are maintained in the reservation item. You can either accept the proposed values or change the quantities and/or storage locations as required. You can withdraw a lower quantity if, for example, you only manufacture a fraction of the ordered quantity, or a higher quantity if, for example, some components were destroyed during the assembly process.

In the case of automatic goods issue posting (→ component materials with a backflush indicator) together with a confirmation posting, the system automatically posts a goods issue at the storage location maintained in the reservation item when the operator posts the order or operation confirmation. The withdrawn quantity scales linearly with the confirmation quantity. For our bike example, confirming five bikes would result in a goods issue posting of five frames and ten wheels, respectively.

After the goods issue has been posted, several processes are triggered.

Watch the following video to learn more.

The following functions are executed when a goods issue is posted. The on-stock quantity of the withdrawn components is decreased by the goods issue quantity. Reservations are reduced. If the entire reserved quantity was withdrawn, the final issue indicator is set. At the same time, the reservation is removed from the Stock and Requirements list as it is not relevant anymore. Actual component costs are determined and accounted to the order. The order header status Goods Movement Posted is set. Material documents are generated. To be able to easily analyze goods issues to production orders, SAP recommends enabling the documentation of goods movements in customizing.

Now that you know the options to post goods issues, let's see how to do this in SAP S/4HANA. In the following demonstration, you will learn how to analyze a production order using the order report. Afterward, you will see how you can post the goods issue of assembled components. Finally, you will learn how to analyze the effect of the goods issue posting on the production order.