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Inventory Management and Physical Inventory (MM-IM) : Purpose

Inventory Management deals with managing material stocks by quantity and value, planning and documenting all goods movements, and carrying out physical inventories. It allows for the management of stocks located in warehouses, ordered but not received, reserved for production or customers, and in quality inspection. Stocks are managed not just by quantity but also value, updating quantities, costs, and financial accounts with each goods movement. Goods movements include receipts from procurement and production and issues for sales and internal purposes, with documents created to update stocks and serve as proof of movement. Inventory Management is fully integrated into the logistics system, accessing shared master and transaction data.

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117 views2 pages

Inventory Management and Physical Inventory (MM-IM) : Purpose

Inventory Management deals with managing material stocks by quantity and value, planning and documenting all goods movements, and carrying out physical inventories. It allows for the management of stocks located in warehouses, ordered but not received, reserved for production or customers, and in quality inspection. Stocks are managed not just by quantity but also value, updating quantities, costs, and financial accounts with each goods movement. Goods movements include receipts from procurement and production and issues for sales and internal purposes, with documents created to update stocks and serve as proof of movement. Inventory Management is fully integrated into the logistics system, accessing shared master and transaction data.

Uploaded by

MayankSautiyal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Inventory Management and Physical Inventory (MM-IM)

Purpose
This component deals with the following tasks:
_ Management of material stocks on a quantity and value basis
_ Planning, Entry, and Documentation of all Goods Movements
_ Carrying out the Physical Inventory [Page 155]
Features
Managing Stocks by Quantity
All transactions that bring about a change in stock are entered in real time, as are the stock
updates resulting from these changes. You can obtain an overview of the current stock situation
of any given material at any time. This, for example, applies to stocks that:
_ Are located in the warehouse
_ Have already been ordered, but have not yet been received
_ Are located in the warehouse, but have already been reserved for production or a customer
_ Are in quality inspection.
If a further subdivision by lots is required for a material, one batch per lot is possible. These
batches are then managed individually in the stock.
Special Stocks
Inventory Management can manage various types of a company’s own special stocks and
externally owned special stocks separately from standard stock.
For more information on special stocks, refer to Managing Special Stocks [Ext.].
Managing Stocks By Value
The stocks are managed not only on a quantity basis but also by value. The system automatically
updates the following data each time there is a goods movement:
_ Quantity and value for Inventory Management
_ Account assignment for cost accounting
_ G/L accounts for financial accounting via automatic account assignment
The valuation area is the organizational level at which a material's stock value is managed. The
valuation area can be plant level or company code level.
In Inventory Management, work is basically done at plant and storage location levels. When you
enter a goods movement, you only have to enter the plant and the storage location of the goods.
The system derives the company code from the plant via the valuation area.
For more information on managing material stocks by value, refer to MM Material Valuation
[Ext.].
SAP AG Inventory Management and Physical Inventory (MM-IM)
Inventory Management and Physical Inventory (MM-IM)
April 2001 9
Planning, Entry, and Documentation of all Goods Movements
Goods movements include both "external" movements (goods receipts from external
procurement, goods issues for sales orders) and "internal" movements (goods receipts from
production, withdrawals of material for internal purposes, stock transfers, and transfer postings).
For each goods movement a document is created which is used by the system to update
quantities and values and serves as proof of goods movements.
You can print goods receipt/issue slips to facilitate physical movements and monitor the
individual stocks in the warehouse.
Inventory Management and Physical Inventory (MM-IM) SAP AG
Integration of Inventory Management in the Logistics System
10 April 2001
Integration of Inventory Management in the Logistics
System
Use
Inventory Management is part of the Materials Management module and is fully integrated in the
entire logistics system:
Material is procured from external or internal sources on the basis of the requirements
determined by Material Requirements Planning. The delivery is entered in Inventory
Management as a goods receipt. The material is stored (and managed under Inventory
Management) until it is delivered to customers (Sales & Distribution), or is used for internal
purposes (for example, for production).
During all transactions, Inventory Management accesses both master data (such as material
master data) and transaction data (such as purchasing documents) shared by all Logistics
components.

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