As a component of Materials Management, Inventory Management is directly linked with Material Requirements Planning, Purchasing, and Invoice Verification. Inventory Management provides information for MRP, which takes into account not only physical stocks but also planned movements (requirements, receipts). When a material is ordered from a vendor, Inventory Management posts the delivery as a goods receipt with reference to the purchase order. The vendor invoice is processed later by Invoice MRP Financial Acctg Consumption/Sales Master data Material Batches Vendor G/L accts Customer Storage bins ... Goods receipt Warehouse Mgmt A B Inventory Mgmt External procurement Purchasing Int. procurement Production Goods issus Trans. Invoice verification posting ? Invoice receipt SAP AG Inventory Management and Physical Inventory (MM-IM) Integration of Inventory Management in the Logistics System April 2001 11 Verification. Here, the quantities and values from the purchase order and the goods receipt document are checked to ensure that they match those in the invoice. Integration in Production Planning Inventory Management is closely linked to the Production Planning module: _ Inventory Management is responsible for staging of the components required for production orders _ The receipt of the finished products in the warehouse is posted in Inventory Management. Integration in Sales & Distribution As soon as you enter a sales order, you can initiate a dynamic availability check of stocks on hand. When the delivery is created, the quantity to be delivered is marked as "Scheduled for delivery". It is deducted from the total stock when the goods issue is posted. It is also possible to create sales order stocks. Integration in Quality Management In the case of a goods movement, the system determines whether the material is subject to an inspection operation. If so, a corresponding activity is initiated for the movement in the Quality Management system. Integration in Plant Maintenance Inventory Management is linked with Plant Maintenance as follows: _ It is possible to post goods movements with reference to equipment BOMs. _ It is possible to withdraw parts for maintenance orders. _ When serial number management is active, the individual serial numbers are entered in the case of every goods movement. Serial numbers are managed in the Plant Maintenance system. Integration in the Logistics Information System With the Inventory Controlling component, the Logistics Information System offers a tool for collecting, compressing, and evaluating inventory management data. Inventory Management and the Warehouse Management System The Inventory Management system can be extended by the Warehouse Management system (LE-WM) which manages storage bins in complex warehouse structures. While Inventory Management manages the stocks by quantity and value, the Warehouse Management component reflects the special structure of a warehouse, and monitors the allocation of the storage bins and any transfer transactions in the warehouse. Inventory Management and Physical Inventory (MM-IM) SAP AG Goods Movement 12 April 2001 Goods Movement Definition Transaction resulting in a change in stock. Structure _ Goods receipt A goods receipt (GR) is a goods movement with which the receipt of goods from a vendor or from production is posted. A goods receipt leads to an increase in warehouse stock. _ Goods issue A goods issue (GI) is a goods movement with which a material withdrawal or material issue, a material consumption, or a shipment of goods to a customer is posted. A goods issue leads to a reduction in warehouse stock. _ Stock transfer A stock transfer is the removal of material from one storage location and its transfer to another storage location. Stock transfers can occur either within the same plant or between two plants. _ Transfer posting A transfer posting is a general term for stock transfers and changes in stock type or stock category of a material. It is irrelevant whether the posting occurs in conjunction with a physical movement or not. Examples of transfer postings are: _ Transfer postings from material to material _ Release from quality inspection stock _ Transfer of consignment material into company's own stock SAP AG Inventory Management and Physical Inventory (MM-IM) The Document Concept April 2001 13 The Document Concept Document Principle Even in a computer-supported inventory management system, the accepted accounting principle of no posting without a document applies. According to the document principle. a document must be generated and stored in the system for every transaction/event that causes a change in stock. When posting a goods movement in the SAP System, the following documents are created: _ Material document In the Inventory Management system, when a goods movement is posted, a material document is generated that serves as proof of the movement and as a source of information for any applications that follow. A material document consists of a header and at least one item. The header contains general data about the movement (for example, its date). Each item describes one movement. _ Accounting document If the movement is relevant for Financial Accounting (that is, if it leads to an update of the G/L accounts), an accounting document is created parallel to the material document. In some cases, several accounting documents are created for a single material document. This might be the case, for example, if you have two material document items with different plants that belong to different company codes. The G/L accounts involved in a goods movement are updated through an automatic account assignment. For goods receipts for purchase orders, goods movements for stock transport orders and consignment withdrawals, business partners may have different local currencies. Therefore, as well as the local currency, the accounting document must also contain another currency for processing and postings. For this purpose, accounting documents created as a result of these goods movements will automatically be managed in the local currency and in the document currency. You can switch between both currencies by choosing Settings _ Currency display. Changes to a Document Once you have posted a goods movement, you can no longer change the document. You can only enter additional information in the document, such as the reference to the original document, or a comment on the event. If you want to reverse the movement or change the quantity of material moved, you must enter a new document. Document Numbers A material document is identified by a document number and the material document year. An accounting document is identified by the company code, the document number, and the fiscal year. Usually, the material document number and the accounting document number are different. The company code to which the accounting document is posted is derived from the valuation area defined for the plant.