Auto PO process through Inventory Management & Source Determination and

Evaluated Receipt Settlement - ERS

Inventory management Concept for Auto PO Creation:

we all know that in procurement -SAP, Purchase requisitions/Orders will be created automatically.
One of the processes is MRP, but here we discuss that purchase orders which will be created
automatically by the inventory management process and Source determination process.

Here we mainly discuss on 2 factors, how the PO will be created by inventory method and
requirement.

Requirement:
Many cases clients will not request to create a purchase order especially in terms of inventory,
they will be receiving the goods from the vendor as a monthly contract with vendor-Not official
contract, as per the requirements and urgency stakeholders will be ordering directly from the
vendor without a purchase order and in this cases we need PO for the payment purpose. PO is the
mandatory document for posting or paying the invoice. So, after receiving the goods GR needs to
be posted and the requirement is like while posting GR- the SAP should create a PO automatically as
per the GR data mentioned by stakeholders.
To make this requirement possible, we need to do some configurations.

Material- While posting GR- we will be entering the material and for every material, there will be a
purchasing tab where we can maintain the auto PO filed check – which is mandatory for auto PO
process.
Vendor- every purchase order contains a vendor and if a PO is creating automatically then that
should be with vendor and vendor -purchasing view also contains auto PO option, through which
we need to select the option for the further process.

If you are going to create auto PO for 100 materials with 50 vendors then all the materials and
vendors should contain these settings in master data to create PO’s automatically, you can use the
MASS option to update the data for 100 materials and 50 vendors at one time.

PIR - Mandatory, though we are creating PO automatically its good to create PIR manually because
PO should pick the price automatically without any interruption, if not while doing MIGO/MB01-
system will popup the error to maintain the price- always price in PO will be taken from PIR and PR
price will be taken from material master.

Back end settings to make auto PO

Along with the front-end settings, we need to make few back-end settings lines which document
type should be created automatically and what are movement types needs to be supported for auto
PO’s. These settings will be always available in the backend and not in the front end.

Setting 1:

SPRO- Materials Management- Purchasing- Define default values for Document types-

Here we need to define the T-code in which system should accept the auto PO’s and what is the
order type it should create while creating.
To maintain these functionalities, it’s a setting to be done in purchasing tab.
Setting 2:

SPRO- Materials Management-Inventory- Goods receipt- Create PO automatically-

Here we need to define the movement types 101 and 161, where 101 is for Goods receipt for normal
order and 161 is for return order for the vendor.

In these settings we define the two movement types and maintain the auto PO selection for both,
then based on the movement type we enter, the system will choose to accept it that auto PO will be
created based on the input.

Automatic Purchase order based on GR Configuration settings:

1. SPRO->MM->Inventory Management & physical Inventory->Goods Receipt->Create Purchase

Order Automatically-> 101-> Check Mark
2. MMR: Purchasing: Auto PO checkmark
3. VMR: Purchasing: Auto PO check Mark
4. Plant assigned to standard purchase organization( Error - MIGO - Please enter Pur.Org)
5. T.code: OMJJ : 101 -> Field selection LIFNR mandatory (Optional too)
6. Info record – ME11 ->Net Price ( Error - MIGO - Please enter net price)
7. Maintain Source list: Material + Plant + Fix indicator
8. MB01/MIGO: Goods receipts = Other

Process:

Let’s think you have received the goods to plant without purchase order based on the request from
stakeholder and now we need to maintain the invoice in the SAP for that we need to create PO but
here auto PO should work.

Now we know the quantity and the vendor we received from and we made backend and front-end
settings for the above scenario to work.

Now go to MB01- mention the movement type, plant and system will check for movement type
settings and show the popup of auto PO creation and once enter we need to maintain the
material/vendor/storage location/quantity and just execute, so that system will enter the next
screen and it will pick the price from PIR and will be saved in the next screen.

Once this step is completed, the system will create PO automatically and you can check by going to
ME2L by entering material and vendor.

We have successfully created the auto PO process through inventory.

Source Determination for Auto PO

Concept: Above we have learnt the auto PO process through inventory and now this process teaches
through source determination.

We all know that creation of PO takes more time because it should go for many approvals and its
time taking process but we cannot stop the production because of approvals, so for that, there is an
exception for particular materials with specific vendors, we can make those materials and vendors
for auto PO process so that only for those materials it’s possible to create auto PO from only from
those vendors which we are maintained as auto PO check option.
In this process, stakeholders will just create the PRs with the source of supply vendor- Where the
vendor number will be updated automatically and how and all will be explained below.

Once everything is updated in PR’s then we can create auto PO’s at a time and its very easy to
execute all at a time and SLA and approvals will be not determined for this type of processes.

Requirements:

Material- If we are creating auto PO then in material master -purchasing view auto PO option needs
to be selected as a mandatory field and vendor master purchasing view should be checked with auto
PO tab and PIR is mandatory as a source and vendor will pick in PR automatically.

Once everything is ok then PR will be created for further processing.

Material:Material master purchase view should be checked

Vendor:vendor master purchasing view auto PO should be checked

PIR:PIR is mandatory for the source of supply and price purpose

Process

Once everything is maintained like material, vendor, PIR then PR should be created with
sourcedetermination check, which will be available in the top of the screen.

Once that check is done then enter the material, quantity, plant and purchase group and press
enter, sothat vendor will be picked automatically in the PR vendor tab.

To process auto PO – go to ME59N and enter the material and vendor, so that it will show all
theopen orders for that vendor and just execute all the PR’s so that PO will be created automatically.

ERS- Evaluated Receipt Settlement

ERS is a unique process where the creation of an Invoice against a GR and PO happens automatically
ERS is a method where several companies and vendors will prefer because of fast
paymenttransactions to the vendors.
Before the vendor entering ERS, there is a process of concept where the vendor will send the goods
as perthe PO copy, but he will not send the invoice after the goods delivered.
The requester will post the GR and system will post the IR concerning GR and PO, ERSexplains
Invoice will be posted automatically once the GR is posted and payment will be made as perthat
fastly.
Normally this is the duty of Accounts payables to run the MRRL to post the invoicesautomatically as
per the GR and PO and if they are issuing any errors while posting, then SAP MMconsultant will
come into the picture to resolve the issues.

Mandatory settings:

In Vendor master Purchasing section GR based invoice verification, Autoevaluated GR settlement Del
and Autoevaluated GR Settlement Ret indicators should be made active.

We need to select all the 3 indicators so that while creating PR/PO, ERS tab will popup in the invoice
screen and the vendor is eligible for ERS payment method.
We can find those above settings in vendor master -Purchasing tab and its mandatory for
theselection of process.

PIR is optional and if we maintain price will pick from PIR or else we need to maintain manually.

PR should be created and check-in invoice screen ERS is popping up or not, and if not poppingthen
check the vendor master settings and if everything is ok then create a PO.

Here PO is created as per the PR and Tax code is mandatory in PO because the tax will be calculated
automatically and where the invoice will post automatically as per that.

Payment terms are mandatory in PO while creating ERS PO because its payment-related and here
everything is automatic, so for being that payment terms and tax code is mandatory in PO.

Once the PO is created maintain the GR, Where GR will be posted manually and with respect toPO.

Once GR is done, to post the invoice automatically, we need to run the MRRL screen, where you
need to select the material or vendor for processing the automatic invoice.

Once this is done, IR will be created in all the PO’s and concerning GR.

Now with respect to payment terms payment will be made to vendor and we can check the status in
FBL1N.

Small Concept for GR:

Under tolerance and over tolerance can be adjusted while doing MIGO, Normally if we order PO for
100 quantity for that we need to post 100 as GR but incase if we received 110 then what’s the
procedure, and let's think you need that extra 10 quantity also.

1. This scenario is quite often to receive in any plants, once they receive go to PO and delivery tab
and maintain the over tolerance quantity as 10% so that GR we can post for 110 quantity and
after we can change quantity in PR/PO.
2. Let’s think we don’t want to receive the less quantity than ordered quantity in PO, then we can
make these settings in PO that under tolerance acceptance, maintain as 0% tolerance so that
MIGO should be posted with full quantity as ordered in PO.

Accounting Entries Effect in Procurement Cycle Concepts- SAP

MM&FI:
Concept:
We have N number of activities in the procurement cycle and one of the main things is Inventory
and
to know the spend, goods inbound and outbound will take place in the plant, we need to depend on
reports in SAP and even the reports we will be taken on -which accounting entry for which type of
movement or else goods inside and outside will be calculated full based on accounting entries.
While we are defining account determination, we have something called modifiers, many things
we're surrounded to modifiers.
Each entry in procurement where stock and price are involving then automatically accounting
entries will come into the picture.
We are doing many activities in Inventory by ordering stock from vendor, Normal order from
vendor, Consumables, Subcontracting, Pipeline, Consignment, Physical Inventory, Stock movements
like STO/Inter and Intra, return PO, service PO.
Here we will study which accounting entry will affect on what scenario and the reason.

1. Standard PO Order
This is the normal order where we use to procure from vendor mainly materials like
Raw-materials and finished goods, which are physically used for production purpose.
Once the vendor delivers the goods to plant, based on the invoice we need to make a payment to
the vendor and APAY(account payables) will release the payment – Here from which GL account the
payment should release.
Because we cannot use some other GL account for these types of materials, as per the company it is
already predefined in OBYC like which GL account should hit for which type of orders-----these
settings are predefined by SAP.
While paying the amount to the vendor few accounts will hit automatically with the help of
transaction event key.
If anything like a stock is getting credited to plant or withdrawal of stock from the plant will reduce
orincrease the quantity, in those cases, BSX will hit automatically and for clearing the invoice always
WRX will hit and from this vendor account will get paidautomatically.
Accounting Entries:
Inventory Posting- BSX +
Clearing GR/IR entry- WRX

Here we have another scenario, where the material master price is coming into the picture and it
is Standard price and moving average price.

Standard price- S
Moving price- V
For every material, we have price indicator and S means standard price- Where price will not
fluctuate normally.

For material with moving average price V, the price may change as per the market.
Accounting entries for moving average price is the same as explained above like BSX and WRX.
Moving price in Material master: for moving price if we are doing MIGO/MIRO and payment to the
vendor then one more accounting entry will come into the picture that is PRD.

Inventory Posting- BSX +

Clearing GR/IR entry- WRX –
Price difference account- PRD –

2. Indirect PO/Service PO

As above if we have material then with the help of valuation class and account category reference
the GL account will hit, and accounting entries will be displayed while payment.

In Indirect PO, there will be no material and there is no Material master/valuation class, so in this
case how the accounting entries will be recorded?

Note: Indirect PO’s are always consumable materials and services and for now just consider as
Consumable material.

Now we need to maintain GL account in OBYC and without valuation class and here is the procedure
for that.

Accounting Entries:
In this case, accounting entries will be KBS and WRX
But when you see in OBYC- KBS, there are no GL accounts in that modifier.
But when you enter material in PO, based on the account assignment the direct effect will be on VBR
and we can see these settings in OME9
Here it’s an SAP recommended setting, where it explains which account assignment should hit which
modifier.

Now, in this case, VBR is an account modifier but for consumption, it’s showing KBS and WRX,but the
GL account will be taken from VBR modifier and in that search for blank valuation class GL account.

3. Sub-Contracting
We all know the sub-contracting process and in these many scenarios, but accounting entries
willbe the same for financial point of view.
( ! ) Stock transfer to vendor
(!!) Scrap
(!!!) Buying components and service from the vendor
(!!!!) Vendor to Sc. vendor
We have above 4 scenarios and process are different, but payment is the same we need to pay
to vendor finally and accounting entries will be the same.
Here main activity we are doing is transferring stock to vendor and vendor is consuming that and
providing full finale material to us, so let’s think what type of inventory effects are involving.
While stock transfer the inventory stock will get reduced
The vendor will consume and prepare final material, so service payment should be done.
Accounting Entries:
BSX, WRX, FRL,BSV
BSX- the stock we are transferring to a vendor, so stock will get reduced
WRX- we need to pay to a vendor
FRL- Service is done by vendors like manufacturing or something fittings
BSV- change in the stock account

Sub-Contracting process with Scrap and Few more Examples

Concept:

To work on all these assembly parts/Extra accessories, we need manufacturing unit where we can
do all this assembly but its costly and time taking for the preparation and we may have some
quality issues, by keeping all this in mind every company would like to go for Sub-contracting
process- Which means

Certain companies which will be outsourcing (Giving products to other companies), where they
use to work only on this assembly with the best quality and take the price for the only service.

Examples:Few of the scenarios with the explanation.

1) We have 3 child materials and we need the Parent Material (final product), but we will not
assemble or manufacture any tools but for the production/sales requirements we need the final
product to be assembled.
we will take the 3 child materials from 3 different vendors and we will maintain a BOM with
parent material, after that creating subcontracting order for parent material (BOM will be
taken automatically with child materials in components).

Do the GR for all 3 materials, and do the transfer posting for all child materials to the vendor
through MB1B or ME2O
Now do GR for subcontracting vendor, where you can see movement types 101 and 543

Child materials
1. L-shaped metallic plate
2. Spring
3. Bolts for fitting
Parent Materials
1. Metallic plate with full furnished.

Implementing:
1. First, we need to procure the materials which are required to prepare the parentmaterial,
here we need to procure L-shaped metallic plate, Spring, Bolts for fittingfrom the respective
vendor.
2. We can create 1 PR, with 3 lines mentioning 3 materials in each line individuallywith
respective vendors or the same vendor (based on your requirements)
3. Create PO for above 3 materials and as per the respective quantity and do theMIGO (Goods
receipt), so that stock will be stored in the plant premises.
4. Complete all 3 material MIGO as mentioned above
5. Now create a BOM for the parent material, so here BOM is very important for all parent
materials.
6. CS01-Create BOM
7. Enter parent material following with all child materials inside. We are maintaining BOM for-
what are the components that required to create a onecomplete parent material.
8. Now create New PO with Item category L-mention the parent material number, sothat
automatically child materials will go to Material Data-Components (BOM -wemaintained)
9. Now in components, we have 3 materials (Child)
10. All the 3 child materials will go to sub-contract vendor for assembly, to send thosematerials
to the vendor we need to perform the movement type.
11. MB1B-stock transfer- we need to transfer the stock of all 3 materials to vendor stockby using
the movement type 541,
12. Once the stock is transferred, we can see those stock in MMBE-stock under vendor.
13. Now vendor will deliver the assembled goods to plant and we need to perform theMIGO
14. Perform the MIGO with 101- now the stock should be available in MMBE for parentmaterial
15. Remaining child materials quantity will be 0

Vendor to vendor material shifting through Subcontracting process:

Scenario:

We need a parent material which will get from subcontracting vendor and child materialfrom
another vendor, the child vendor should send the material directly to the subcontractingvendor.
Eg: we would like to order a cell phone battery from child vendor, and he will directly sendthat
battery to the subcontracting vendor and subcontracting vendor will deliver the fullyfurnished
phone. We need this to be implemented in the SAP.

Step 1:

Create a normal PO with cell phone battery and go to the delivery address tab inPO, here you can
find SC vendor, check the SC vendor and mention the vendor number inthe vendor field.

1) So that SAP will pick the delivery address as vendor address automatically.
2) Now the child vendor will deliver the cell phone battery directly to the subcontractingvendor (to
view this action in SAP, follow below)
3) Now post the GR for the child material PO, MIGO and mention the PO number anddate.
4) Enter the quantity, the system will not ask for storage location and tick OK and post GR.
5) Now check in MMBE (Stock Overview), you can see the material is maintained with a vendor.

Step 2:

Now create subcontracting PO for the parent material (Phone) with item category L, as
wemaintained BOM the components will be taken automatically (Child materials) anddelivery
address to plant in the PO.

Now process for GR for the parent material and maintain the quantity.

If required explore the parent material with + icon and you can see the child materialsmaintained
with movement type 543.

541- Sending the material to the subcontracting vendor stock.

543-Consumption of material which is delivered to the subcontracting vendor.

545-scrap material while consumption or vendor material used for the parentmaterial.

Ordering Material and scrap from the Subcontracting vendor:

Subcontracting material with scrap.

As we know when the material is manufactured by the vendor, scrap will generate automatically and
few of the scraps will be costly or needs to be moved to plant scrap process, so in this case, we need
to implement such that vendor should provide the parent material along with the scrap.

E.g.: we are ordering a material of the sofa,we procure wood from one vendor to plant and willmove
that material to a subcontracting vendor through 541 and will order a subcontracting order along
with scrap.

Steps:

 Create a normal PO for procuring the wood from the vendor and once we receivethat wood
to plant(warehouse), we can follow the remaining process as mentionedbelow.
 Maintain BOM for parent material, while maintaining we will update childmaterials with
specific quantities it will multiply with PO quantity. So,maintain it accordingly.
  Here for scrap, we are taking the scrap from a vendor which are consumed for thechild
materials. If we want that material to plant, we need to create a new materialwith the name
“Scrap” and maintain in BOM as 1- and save the BOM.
 Meanwhile create a subcontracting PO with parent material with item category L, where
BOMwill be taken automatically with 1- quantity and child materials.
 Now do the transfer of the goods in MB1B with movement 541, so that stock in the
warehouse move tovendor stock and now the subcontracting vendor will perform the
manufacturing process of the sofa.
 He will create the sofas as per the quantity and delivers the goods to plant along with scrap.
 Now do the MIGO with 101 movements and post the sofas quantity and click on + icon in
parentmaterial, you will see the child materials with scrap.
 Child materials – means consumed and will be used for sofas.
 Scrap+ means waste generated and needs to bring to plant as per the PO.
 Now go to MB1B and mention the movement 542, bring back the scrap to plant (SAP
stockoverview)
 Final: if we are procuring one material with a subcontracting vendor, we need to go with 3rd
 example, where we need to process the BOM with -quantity instead of scrap we need to
post procuring extra material number.
 No need to do 542 movements, where this will be consumed for the parent material.

Consignment and Pipeline process in SAP MM

Consignment: Consignment is a process of material procurement from the vendor, but stock lies in
plant premises, but the owner of the product is vendor, even its same process of creating normal PO
but item category is K.

Concept:

Normally we use to purchase the stock from the vendor, in this case, we will purchase the stock, but
we don’t know when we will use that stock for the production. So, for that we have SAP
recommended procurement process-Consignment, where stock keep in the plant and there is
premises for vendor -we can call as vendor consignment stock, whatever the stock present in
plant the owner will be a vendor and when we require any stock then we can move that stock from
vendor consignment stock to production stock and we will post MRKO instead of MIRO, so that
the report will be generated for the transferred stock and the vendor will get paid for that.

If we withdrawal any stock from vendor consignment stock like 5 PC, then MRKO will be done
with 5 quantity and vendor will get paid for 5 PC.
The refilling process will be done by creating a PO with account assignment K for only filling the gap
stock.

Purchase Info record

If we are creating consignment PO, then few mandatory things are PIR. Where price and tax code
will be calculated from PIR itself because we don’t have a price in PO.

The reason we don’t have a price in PO is - Price will get fluctuate every month. Every month price
will be given by the vendor for the material and purchasing team will update the price in PIR and
when the stakeholders do MRKO, the price will be picked from PIR for the respective month.
One mandatory thing is PIR should be created with Consignment category K.
Process:

1) Create a material, vendor and PIR and create a PR with this thing with item category K-
consignment.
2) Once we create PO for the above PR, the stock in MMBE shown as In-order Consignment stock.
3) Then once you receive the goods to plant then do the MIGO for full quantity.
4) Now check the stock for the material and plant in MMBE, it will show as stock lying with the
vendor as vendor consignment stock.
5) When you do MIGO, the movement type 101-K will be taken automatically.
6) Here coming to accounting data- there is a material document created but there is no FI
document posted.
7) Now as per your requirements we need to transfer the goods from vendor consignment stock to
own stock by movement type 411-K.
8) Now the stock will be lying in unrestricted stock
9) If we do transfer for 5 PC then we need to do MRKO for 5 PC, so that Invoice will be posted
automatically for 5 PC and vendor will get paid for 5 PC.
10) Whenever we do stock transfer from vendor consignment stock, we need to do MRKO.
11) If we want to move from vendor consignment stock to direct production/cost centre and
department, then we need to know their cost centre so that we can transfer goods directly from
vendor consignment stock to cost centre by movement type 201K or 261K
12) While moving vendor consignment stock to direct production/cost centre and department
amaterial document, as well as accounting document,will be created with BSX and WRX.
13) Whenever there is financial document is created then GL account will hit for the debit of
theirrespective cost centre GL account.
14) We can do initial posting of goods to any plant by T-code MB1A -561 movement type, normally
wewill do this when the client is using different ERP and transferring to SAP.
15) Same as above we have MB1B for the goods movement from 1 place to other
16) We have MB1C for Goods issue, we can also have goods receipt without PO and for also
freegoods.

Running cycle for Consignment:

1) Let us thinknow we require some materials, but we don’t know about the consumption quantity
and dates, in that case,the requester has been ordered for Consignment -Created a
consignmentPR 1164 with 100 PC.
2) Now the purchasing team will create a PO 2264 for the PR 1164, few of the mandatory things
arePIR with subcategory K -quantity 100 PC.
3) Once we create PO, the stock will show in MMBE-Consignment stock for that plant as 100 PC
4) Once we receive the material to plant the respective receiver will post the GR in MIGO-
sayingmaterial has been received to plant and placed in consignment stock (Posting MIGO for
fullquantity-100 PC).
5) Now the stock will show in vendor stock in MMBE as 100 PC
6) Now check for FI postings- because the vendor has been delivered goods to plant- in normal case
aMaterial doc and FI doc will be created automatically.
7) In this case, we have only material stock gets posted, and FI doc will not be created because it’s
aconsignment- stock lying in vendor consignment stock.
8) The process has been completed for procurement,now the actual process will come into the
picture.
9) The purpose weordered material is for production requirements, now the stock is in vendor
consignment stockand we need to use for own purpose or industry purpose.
10) In this case, we need to use “Goods transfer” from one stock to other stock with the help
ofmovement types.
11) We have stock as vendor consignment stock in our plant, so we just need to move to our stock
by using movement type 541(vendor consignment stock to own stock)
12) We can also use 201 K and 261 K for directly move the stock from vendor consignment stock
tocost-centre which are using those goods.
13) Once we do the goods transfer the stock will get moved to plant own stock, once we do this
amaterial document has been posted along with that there is a financial document has
beenposted(because we are using vendor consignment stock and we need to pay to the vendor).
14) Just think we have moved only 10 PC instead of 100 PC.
15) Now we need to do the MRKO process, where we need to mention the material and plant
theselect the settle option which is not settled.
16) Once we do the MRKO for 10 PC, then APAY will run the cycle and match the
reconciliationquantity and vendor gets paid for 10 PC.
17) Whenever we use the quantity from vendor stock, we need to do MRKO, so that vendor will
getpaid.

Why MRKO and Why not MIRO?

Because in MIRO, you cannot post the split price. We need to do a full invoice.

Whereas in MRKO, we can do the split invoice

Stock transfer between two plants with delivery without billing (Intra
STO)
Here we require the help of SD Consultant, whenever you were creating STO PO, we need to take
help of SD consultant. Stakeholders need to inform the receiving plant so that they will be creating
the customer code for that particular plant and maintain some distribution channel accordingly for
that, As an SAP MM Consultant, we need to maintain the backend settings for the receiving plant, so
that will get shipping tab in the PO for that particular receiving plant.

This type of process is called MM-SD Integration

Requirements
We need to ensure that material that we are shipping from 1 plant to another plant should
beextended in material master for both the plants.
Both the materials should have sales and purchasing and accounting views mandatory.
Sales data will be given by SD Consultant and if not, we can request SD Consultant to give thesales
data to update for the material master.
Ensure to select all the 3 sales views and maintain the important data required in all the 3 screens to
avoid SD errors
In Material master, we need to maintain the standard language for those receiving plants -Additional
Data-Languages, Maintain the language like DE_ Germany
Ensure the presence of stock in supplying plant, or else we will get an error in OBD-Outbound
delivery
Back-End settings for Shipping (Intra):
To get shipping tab details in PO, we need to maintain few backend settings for PO-STO

SPRO-Materials Management-Purchasing-Purchase Order-Setup STO

(!) Define Shipping data for Plants:

Here we need to define the shipping data for plants, maintain the receiving plant details like -double
click on receiving plant-Enter Customer number, Sales organization, Distribution channel etc.,

All the Above information will be given by SD Consultant.

Enter all the details and save the screen.

(!!) Assign delivery type and checking rules:

We need to maintain the delivery type and some checking rules for this step.
Order type as Order type-UB
Supplying plant-
Delivery type- NL(Intra)
We have 2 delivery types NL and NLCC
Checking rule maintain as 01

(!!!) Assign Document type One-step Procedure, Under Tolerance

SPL plant –Rece plant-Order type-

Once we have done all this correct - shipping tab will automatically be populated in PO creation

Process:

1. We have done with backend settings, now create PO - Me21n and mention the purchasing
document as UB and item category as U.
2. Enter the material, shipping plant and receiving plant- enter the quantity and other data-PO
will pop up a Shipping tab with NL order type.
3. Now let’s think shipping plant is having stock to create OBD.
4. OBD is the process where the shipping plant will create a delivery invoice in which material
will be adjusted to move out to receiving plant.

VL10D-Outbound Delivery

Open VL10D and Purchase orders- maintain the purchase order and check the dates the PO delivery
is between that dates and execute -so that it will take to quantity screen and select line and go to
the background.
If you want to check the log- check and take the OBD number or else if any errors found, try to
resolve
Post Goods Issue – PGI:

1. Once the OBD is done, the supplying plant should issue the goods to receiving plant, for that
they require PGI-Post goods issue.
2. PGI will be done based on OBD quantity and same will be moved as stock in transit.
3. VL02N-PGI will be done with OBD reference number – just take the picking tab and mention
the quantity and post PGI.
 4. Once PGI is posted, goods will be moved to in transit and we can see in MMBE stock report-
stock in transit.
5. If we check for movement type happening it is 641 and once everything is done and goods
received to plant, then post MIGO with OBD and not with PO.
6. There will be no billing for within company code transfers

Stock transfer between two plants with delivery with billing (Inter
STO)
Inter STO is also same as intra STO, whereas we have a little difference because the vendor
(XK01) is involving in terms of supplying plant.

Why we are involving vendor because they should be billing to be done to supplying plant from
receiving plant.

Inter STO is also called as MM-SD Integration

Because higher-level credits and debits will be involved for company code level, here two
different company codes, so billing should be taken place

We will be creating material as normally and maintaining in both the plants as we did for
intraSTO by maintaining sales data for both.

Now create maintain a vendor and inside purchasing data -maintain for the plant as supplying
plant-once you enter vendor in PO -it will take supplying plant backend.

Requirements

1. Material (SP+RP)
2. Vendor-Purchasing to plant as SP
3. Customer number from SD Consultant

Back-End settings

Define shipping data for plants

Maintain the receiving plant customer code and remaining data that received from SD
Consultant

Assign Delivery type and checking rule

Here we are creating PO with Document type NB- because the vendor is involving indirectly
Document type - NB
Item category -Standard

Assign Document type One-step Procedure, Under Tolerance

The document type is NB-mention the shipping and delivery plant and save

Process

1. Now we can create a PO, with NB document type and blank item category, whereas we
already maintained vendor as the plant in XK01
2. Now as per the backend settings and XK01 vendor master shipping tab will come
automatically with delivery type NLCC
3. Now post OBD-Outbound delivery, VL10D - procedure has been explained above
4. Now post the PGI-Post goods issue with respect the OBD and once PGI is posted, goods
will be in transit.
5. Now do the billing for the plant to which we are sending through VF01 and this implies
with billing from the respective cost centre.
6. Now we can do the MIGO concerning OBD and following with MIRO.