The parties involved in this unit are the distribution center and the external supplier. The aim is to regularly fill up the stocks in the distribution center (DC) with merchandise ordered from the external supplier. Automatic requirements planning is used to determine the relevant order quantities.
The 4 solution processes shown in the figure, Process Overview: Requirements Planning for a Distribution Center, form this overall retail process with the intention of regularly filling up the stocks in a warehouse (distribution center). The process starts with the Replenishment Planning for Distribution Centers (solution process 3I8). As a result, purchase requisitions are created. Purchase requisitions are then used in the subsequent solution process, Procurement for Retail (5FM), as a basis for creating purchase orders for the external supplier. An inbound delivery (advanced shipping notification) from the supplier announces the delivery of the merchandise. Upon arrival, the goods receipt is posted (solution process 5FU). To complete the process, the Retailer posts the invoice received from the supplier (solution process 5FN).
Each solution process represents a lesson in this unit, and can be completed individually.
This lesson covers the solution process Inbound Logistics for Distribution Centers (5FU).
In the retail industry, specific terms differ from the standard terms used in other lines of business. The following terms are used synonymously in this document:
| Standard Terms in Lines of Business | SAP S/4HANA Cloud for Retail, Fashion, and Vertical Business |
|---|---|
| Material, Product | Article |
| Material group, Product group | Merchandise category |
| Plant, Location | Site |
A purchase order is the basis for receiving goods from the external vendor. Before the goods arrive, the vendor may confirm the actual date and quantities by sending an advanced shipping notification. This business document is stored as an inbound delivery in the SAP system. In order to prepare the system for receiving this document for a purchase order or purchase order items, a corresponding confirmation control key is maintained in the purchase order items.
Use the confirmation control key to define the sequence in which the individual confirmations (= confirmation categories) are due to arrive.
Confirmation categories define the following:
- The date and time by which the confirmation must have arrived.
- The relevancy for requirements planning and goods receipt.
- The kind of confirmation: simple order confirmation (confirmation control key 0001), advanced shipping notification (ASN) (0004), or rough goods receipt (delivery note) (0002). Also a combination of inbound delivery followed by rough goods receipt is possible (0003).
- The confirmation sequence if more than one confirmation is expected.
The confirmation control key is defined in customizing (system configuration). It can be assigned to the vendor or article master data. If the confirmation control key is assigned to the vendor master, it can be copied from there to the article data (purchasing info records) for this vendor. It is either copied to the order item from the article master data, or it can be manually entered in the order item. To use Handling Unit Management in your distribution center, the confirmation control key "Inbound delivery" is required. The inbound delivery (shipping notification) provides the detailed information for each Handling Unit, regarding packed items and their quantities as well as the packaging materials used. This is required for an efficient goods receipt posting, because the handling units should not be opened up for detailed quantity checks.
Shipping notifications, also called Advanced Shipping Notifications (ASN), are used by vendors to announce the delivery of articles. The vendor sends information about the delivery date, delivery time, delivery quantities, and the articles that are to be delivered. In addition, detailed packing information (handling units) can be included.
If the Shipping Notification is not received electronically, the document can be created manually with reference to a purchase order using the Create Inbound Delivery (VL31N) app, or in mass processing for several purchase orders using the Inbound Deliveries for Purchase Orders (VL34) app.
The shipping notification is based on one or more purchase orders that have been placed with the same vendor. An inbound delivery is created in SAP Retail for the shipping notification, which is for example received via mail or EDI. Inbound deliveries can be used as reference documents for the (rough) goods receipt subsequently. It is also possible to create inbound deliveries based on purchase orders without explicitly receiving an ASN from the vendor. In warehouse management, the goods receipt typically triggers the putaway of the merchandise into storage.
However, it is also possible to initiate the putaway of the merchandise upon arrival in the distribution center by using the inbound delivery document. With that, you execute a physical check to confirm the putaway quantity. The goods receipt can then be posted. This is particularly useful for distribution centers where the time delay between merchandise receipt (unloading) and actual placement into storage is long. The goods receipt is then only posted when the goods are physically checked, and in their destination place in the warehouse. From there, they can then be picked again (outbound process).
In our example, confirmation control key 0004 was assigned to the purchase order item, and correspondingly, an inbound delivery was maintained for the purchase order, as per Step 1 in the figure above, Inbound Delivery and Putaway. Step 2 shows that the putaway quantity was confirmed. As warehouse management is not relevant in this example (no warehouse number assigned), the putaway quantity could be maintained in the change mode of the inbound delivery document, by using the Change Inbound Delivery (VL32N) app.
The inbound delivery is now ready for goods receipt posting.
Goods receipt in a site (distribution center or store) can be done in one or two steps.
One-step:
A (complete) goods receipt is executed directly
Two-step:
A rough goods receipt (delivery note) is maintained first, followed by goods receipt.
In a one-step goods receipt in external procurement, the typical reference document is the vendor purchase order, or the shipping notification.
If no shipping notification was received from the vendor, it might be useful to prepare the goods receipt by maintaining the "paperwork" beforehand. Also, to find out about quantity differences before the actual, physical goods receipt check is carried out. In a two-step goods receipt, first the vendor’s shipping papers, specifically the delivery note, is captured in the system and matched up with the relevant reference documents.
When a goods receipt is posted, the merchandise is assigned to a storage location at the site that receives the delivery, and also assigned to a stock type. The posting is controlled by a movement type (which are 3-digit numbers). It determines if the posting is valuation relevant, if a reference document is required, and so on. If the destination storage location (for example, in the case of a distribution center) is connected to warehouse management, articles are assigned to specific storage bins (putaway). As described previously, the putaway quantity check and confirmation can be performed before or after the goods receipt posting, depending on system settings.
You can create a goods receipt (GR) with reference to a vendor purchase order, a shipping notification (inbound delivery), or a rough GR. If the merchandise was shipped from a distribution center, the goods receipt can be posted with reference to the respective outbound delivery. The central goods receipt app is the Post Goods Movement (MIGO) app. The store goods receipt (as part of the store operations apps) also allows you to directly select a Handling Unit as a reference. Goods receipt processing with reference documents has the following advantages:
The goods receiving department can check if the delivery contains the merchandise that was ordered.
When the goods receipt is maintained, data for the reference document is suggested by the system, making it easier to create the goods receipt and to monitor the development of the goods receipt.
Goods receipt data is updated in purchase order history. Therefore, the responsible employees can monitor the purchase order history, trigger the dunning procedure, and ensure that quantities and deadlines are adhered to in the system.
The relevant purchaser can be informed automatically about the goods receipt.
You can also run checks on goods receipt posting, relative to delivery quantities, shelf-life expiration dates (best before dates), shipping instructions, or GTIN.
One additional feature of the goods receipt is the possibility to enter returnable transport packaging items as special stock. Returnable transport packaging can be transport equipment, such as a pallet, or empties, such as bottles.
It is also possible to post a goods receipt without a reference document. In case of an unscheduled / unplanned return, the system automatically generates a (returns) purchase order. You can then use the regular logistics invoice verification function with price determination in the purchase order, and quantity determination from the "negative" goods receipt.
For details on goods movement and stock postings, refer to solution process BMC. For warehouse management, please refer to solution process 69L.
The figure, Effects of Goods Receipt, provides an overview of the important effects of goods receipts with reference to a purchase order. Transaction documents created with a goods receipt posting are material documents and also Financial Accounting / Controlling documents, if the goods receipt is valuation-relevant.
