Current Process Step
Moving on to the next part of making Red Bike Paint, once the order is given, the warehouse clerk or shop floor personnel takes the needed items (e.g. cans, base paint, and pigment) from the warehouse. They then record this as a goods issue to the order in the SAP S/4HANA system. This means that the inventory count goes down because the items are being used. Also, the order now shows that these items have been used up.
How do you know which components to withdraw from the inventory? When the production supervisor creates an order, the system automatically determines the bill of material and creates a reservation for all the required material components in the necessary quantities. Each material component of the order is listed as a separate item within the reservation. You can only withdraw the reserved materials from the warehouse after you have released the phase to which the materials are assigned in the order. For each reservation item, the following information is available:
- Component material number
- Batch number (if the material is batch-managed and you have performed batch-determination in the process order)
- Required quantity of the component
- Storage location of the component in your plant (the system automatically determines the storage location)
As illustrated in the figure above, material staging might precede the goods issue posting: This warehouse process organizes the transfer of a material from a central storage location to your production storage location before you can post the goods issue to the order. For example, if your suppliers deliver purchased raw materials to the storage location in the Bike Company's central warehouse, but the shop floor corresponds to a separate storage location (both in the real world and in the SAP S/4HANA system).
Goods Issue Posting Options
The Bike Company can use two methods for goods issue posting to a process order: Manual or automatic. The following image illustrates these options:
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 process order using one of the following options:
- Manual goods issue posting, for example, using the apps Post Goods Movement or Pick Components for Process Orders.
- Automatic goods issue posting together with the order confirmation, for example, using the app Confirm Process Order.
- Automatic goods issue posting together with the phase confirmation, for example, using the app Confirm Process Order Phase.
In the case of manual goods issue posting, the system proposes the component quantity, the issue storage location, and - if applicable - the batch number since the reservation item includes this information. You can either accept the proposed values or change the quantity, storage location, and batch number 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, you have destroyed or scrapped some components during the production process.
In the case of automatic goods issue posting (→ for 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 phase confirmation. The withdrawn quantity scales linearly with the confirmation quantity. For example, confirming 500 cans of red bike paint would result in a goods issue posting of 500 cans and 500 liters base paint, respectively.
Note
You should always use backflushing when you do not wish to stage materials for a specific order. This assumes that the warehouse personnel has already staged the materials at the production storage location for consumption. Typical applications in process industries include reactors connected to pipes through which you stage the component materials, or staging of less valuable materials (for example, water, solvents, and so on).
In some process industry scenarios, if a raw material is supplied via pipes, an estimated component consumption is posted along with an order or phase confirmation through backflushing. Later, when the exact weight notes are available, the production supervisor updates the estimated component consumption by posting the precise value from the weight note.
Effects of the Goods Issue Posting
Posting the goods issue triggers several processes in the SAP S/4HANA system.
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 process orders, SAP recommends enabling the documentation of goods movements in customizing.
Goods Issue Posting with the Post Goods Movement App and the Pick List
Now that you are familiar with the options for posting goods issues, let's explore how to do this in SAP S/4HANA. In the following demonstration, you will learn how to post the goods issue of components using the Pick List and Post Goods Movement apps. In the latter, we will demonstrate a scenario where the warehouse clerk executes batch determination during the goods issue posting. Finally, you will see how to analyze the impact of the goods issue posting on the material and requirements list, as well as the process order.
Note
If you have access to a practice system, you can now execute the exercise Post Goods Issues for a Process Order.