SAP MM- Physical Inventory and Organization structure

SAP MM- Physical Inventory & LSMW with RFQ and Organization structure

Physical Inventory:

Every company will have a stock of materials in a warehouse for their production activities and every day the respective persons need to update the entry and exit of stock in the plant and sometimes it may affect the production if we are not doing this properly.

Example: we all know PRs will be created by System and manually but if incise system wants to create PR then it will check the level of stock in the plant and once the level of the stock decreases then automatically system will create PR for that material. To do that correctly the system stock should be updated correctly and there are many scenarios in that people tends to forget the updating the inventory with correct numbers and for that SAP has recommended the physical inventory.

If the level of the stock decreases by 50% then the system will create auto PRs with fixed vendors.

End of the day of physical inventory both the stocks need to match -if not we will post the differences and match them in SAP.

Physical Inventory:

the concept is the warehouse stock should match with the physical stock in the plant and this counting will be done manually in the plant.

Overview:

 Every company will follow this physical inventory process and its recommended by SAP to do this, every 3 months or 6 months this physical inventory check should happen and this is the process done in SAP, and warehouse persons will update and provide the stock to the respective person to update in SAP.

Few companies will check this physical inventory monthly because they don’t to be in trouble of production loss.

Procedure:

This activity is mostly done on weekends and once we are doing this will mark the freeze option or block option to avoid incorrect count in physical inventory.

Once we are decided to check for physical inventory then the respective team will open T-code MI01 and create a physical inventory.

Create Physical Inventory: MI01---

Where we will enter the plant, material, and storage location and save the screen

Now the physical inventory has been created.

1.      Posting Block:

We are marking the posting block indicator such that there will be no inventory postings done in SAP before completing this physical inventory for this material.

If the physical inventory is taking 10 days, then up to 10 days there will be no postings done in SAP.

2.      Freeze book inventory:

If we select this option, then system will allow for postings in SAP, but the physical inventory number will be frozen or locked with that number such that there will be no difference in number of counts.

Most of the companies will prefer this option because we don’t know how much time it may take for counting.

Print Physical Inventory: MI21

Enter physical documentary number and execute, so that it will allow you to print.

Whatever they created for material they need to segregate as per the material group wise and take a printout of that what we created.

Once we have taken the print of that physical inventory then we need to send that print to the respective warehouse person then they will count and update in paper that stock is this much.

Enter count for Physical Inventory: MI04

Once we get the count from the warehouse person, then the count needs to be entered in the system as per the material through MI04.

Update the physical inventory number and execute then it will show the material then update the quantity in quantity field and save the screen.

MI05- if we need to correct the number what they have updated then we can update it.

Post Physical inventory: MI07

Once you have posted above step now, we need to do the posting the difference.

Go to MI07 and enter the physical inventory number then system will automatically show the difference in quantity and just check with original quantity in system then post the differences -Save

Here we have only 2 cases the quantity in the physical stock is more than the system stock

Quantity in the system stock is more than the physical stock

Or else both the stocks are matching with correct quantity.

Here once we are posting the differences the system will automatically generates the movement types accordingly.

Movement types-

701/702- Unrestricted Stock

703/704- Quality Inspection

707/708- Blocked Stock

System will automatically pick up as per the stock selected in MI01- here we have 3 options to select that physical inventory needs to be done from which stock.

701- Goods receipt for Warehouse Unrestricted stock

               It Means Counting stock is more than System stock

702- Goods issue for Warehouse Unrestricted stock

               It Means System stock is more than Counting stock

703- Goods receipt for Warehouse QI stock

It Means Counting stock is more than System stock

704- Goods issue for Warehouse QI stock

It Means Counting stock is more than System stock

707- Goods receipt for Warehouse Blocked stock

It Means Counting stock is more than System stock

708- Goods issue for Warehouse QI stock

It Means Counting stock is more than System stock