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Functional Cycle:

Now let us discuss the same steps in the functional point of view.

Before getting into the process, we would like to show you the stock of the articles that will be considered for
this process. Below screen shots will display the MMBE and MB5B report of the two articles that are
considered. The same report will be displayed again at the end of the document to show the differences
registered through the physical inventory process.

First Article MMBE and MB5B Report:

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 Creating Physical Inventory Document:

T-Code: MI01

This is the T-code which will create the physical Inventory Document, the document number will be used as
the reference further with respect to all the materials in them. The initial screen of the t-code will be as below.
You have to input the details like Plant, storage location as mandatory and other details in the screen if needed.

Once the Plant and storage locations are inputted, on enter we will get the screen as below where we enter the
articles that needs to be counted.
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We have to keep adding the materials that needs to be counted, remember we cannot enter quantity here.

This step is only to register materials that will be counted against the inventory document that is about to be
created. In the below example am entering only two materials for explaining the concept.

Once the material is entered they will disappear from the screen and the screen will prompt for next input. You
can find the same with the help of item number in the left. Since I have entered two materials already the
screen is prompting for third entry as shown below.
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On saving the T-code we will get the inventory record number generated as shown below in the bottom:

One Key point here is we are allowed to enter only 333 items as part of one inventory document. If we need to
add more items then we need to create new inventory document.
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 Changing Physical Inventory Document:

Now to know all the materials that has been entered or to add /delete any materials from the physical inventory
document we can reach out to MI02. The initial screen will be as below, input the inventory document number
along with the fiscal year and press enter.

The next screen will be as below, in case you want to delete any material click on the deletion indicator as
marked below in red. For confirmation you can find deleted check box checked as marked in blue.

If there is a need to add any other material then you can navigate through edit option a shown below, this will
take you to the screen similar to MI01 t-code. Both are shown below:
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 Counting Physical Inventory Document:

Now we should be good to proceed ahead with counting as we are sure on the materials as part of the process.
The T-code used for counting is MI04.

The initial screen looks as below, we are required to enter the inventory number and enter.
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Once you enter the next screen we will be allowed to enter the quantity for all the materials that are part of the
inventory document number as shown below. As part of our cycle am inputting quantities of 100 and 200 for
the two articles as shown below.
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One important point to note here is we must check the zero count indicator (Marked in Green above) in case
we don’t have any quantity to enter or the quantity is Zero.

Upon saving we will get the confirmation for the count entered at the bottom as shown below.

 Change the Count of Physical Inventory Document:

This step involves recounting your already counted inventory document number. The t-code is MI05, you can
straight away enter into the Inventory document number after inputting the details in the initial screen. You
will get the details of the inventory document number and the quantity field will be editable here hence we can
enter our new quantity here. Both the screen shots are given below, here am increasing the quantity of one
material from 100 to 101. If we don’t have any change we can ignore this step.
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Post changing the quantity we get a confirmation as shown in the below image at the bottom.

 Processing the differences and Posting the inventory document:

T-code: MI07
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This T-code is used clear out the differences of the quantity that was counted against the quantity that is
present in the system. The initial screen is as below, enter the inventory document number and proceed.

On entering on to the next screen we will find the difference of each material between the quantity counted and
quantity present. The difference in the sales value will also be displayed in the fields to the right as shown
below.
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This step also gives us a chance to check whether there is a huge differences or there are any suspicious
materials to be checked again, in case yes those materials can be rechecked again. We can manually recheck
the quantity. In case if there is a need to change the quantity we can do the recount using T-code MI05 as
explained above.
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If everything is positive we can go ahead and post the same quantity that has been counted. In this step the
counted quantity will be posted in the back end system. We can also find a material document number created
against it.

Please Note that MI07 is the transaction to process one inventory document at a time, in case multiple
inventory documents needs to be posted you can use MI37. The initial screen is shown below for reference.
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Now we can see the standard MM reports to inspect the quantity, it should reflect the quantity that was counted
and posted during the inventory process as discussed above.

First Article MMBE and MB5B Report:

Second Article MMBE and MB5B Report:

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Now considering we are successful until this point, there is only one step that is pending as stated below.

 Posting the differences through MI07. As discussed above if we wanted to process each document one
after another then we can go through MI07 else we can use MI37 to process Mass Data.

Thus we complete the MM Inventory cycle both through Functional cycle and Technical cycle. Hope this
document helps to understand the concept better.
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Few Important T-codes For Quick Reference:

 MI01 –> Creation of Physical Inventory Document

 MI02 –> Changing Physical Inventory Document
 MI04 –> Counting Physical Inventory Document
 MI05 –> Changing Physical Inventory Document Count
 MI07 –> Posting Individual Physical Inventory Document
 MI37 –> Mass Posting of Physical Inventory Document