Unit 1: Introduction to Inventory Management

Lesson 1 · Defining Inventory Management and Physical Inventory

Key concepts

Inventory management sits at the crossroads of almost every logistics process. Purchasing delivers goods into the warehouse through a goods receipt; production consumes components and returns finished products; sales takes goods out of the warehouse through an outbound delivery whose goods issue reduces stock. Material requirements planning (MRP) reads the stock figures that IM keeps, and combines them with planned receipts and requirements to decide what must be procured externally or produced in-house. Invoice verification later compares the quantities and values of the goods receipt with the supplier invoice. In short, if IM data are wrong, planning, procurement, sales and finance are all wrong.

IM has three main jobs:

Organizational levels

When you post a movement you normally enter only plant and storage location; the system derives the valuation area and the company code from the plant assignment.

Value-based update

For each valuated movement the system simultaneously updates (1) stock quantity and stock value of the material, (2) the G/L accounts via automatic account determination (transaction keys such as BSX for the stock account, WRX for the GR/IR clearing account, GBB for offsetting entries, PRD for price differences) and (3) cost objects in Controlling if the movement is consumption-relevant.

Types of goods movements

Documents created by a goods movement

The bookkeeping rule "no posting without a document" applies. A movement entered with reference (to a purchase order, reservation, earlier material document…) copies its data from that reference; a movement without reference requires every field to be entered manually.

The two document numbers are normally different. Besides the documents, a posting also updates the stock and value fields of the material master and any other application involved (for example the purchase order history or the reservation).

Process flow

Physical inventory in a nutshell

Physical inventory is the periodic count of real stock in the warehouse. The counted quantity is compared with the book quantity; the difference is posted (movement types 701/702), which corrects both stock quantity and stock value in accounting. It can be carried out for own stock and for special stocks. Details follow in Unit 8 of this course.

Lesson 2 · Moving Goods with the MIGO Transaction

Key concepts

MIGO is the central entry transaction for goods movements. It is a single-screen ("Enjoy") transaction: header, items and details are all visible on one screen, and the user picks the business transaction and the reference document from two drop-down lists instead of navigating through separate transactions as in the old MB01/MB1A world.

Business transactions and references

The first drop-down selects the action, the second the reference. Available references depend on the chosen action.

Note that MIGO can display, change (only non-critical header/item texts and similar fields), and cancel material documents. It cannot create reservations, and material documents can never be deleted because they are the audit trail of the movement.

Important functions

• Restart – discard the current entry and start a new one without leaving the transaction.
• Check – during entry no warnings are shown; Check collects all warning and error messages and adds a status column with traffic lights per item. If you post without checking, only errors (and warnings if errors occur) are shown. Customizing can force a check before posting per transaction/reference combination.
• Help – opens an inline help pane with tips.
• Find document / last search result – searches POs, reservations or material documents; results appear in an ALV list at the bottom; a double-click transfers the document to the item overview. The last search result is lost when you leave the transaction.
• Default values – movement type and special stock indicator can be preset in the header line; via Settings › Default Values you maintain user-specific defaults per transaction/reference (movement type, special stock, stock type, plus plant, storage location, OK flag). A changed default only affects items entered afterwards.

Hold data

If entry has to be interrupted, Hold saves the entered data as a draft – no material document is created. Held data are retrieved via the menu (Goods Receipt › Held Data) or from the overview tree (last 10 entries) and are deleted automatically once you continue processing them. By selecting the Reference checkbox when holding, the held data become a reusable template (shown with a star in the overview tree) that is not deleted on use. Held data of other users are cleaned up with report MMIM_PREDOC_MAINTAIN, transaction MBPM (Manage Held Data). Batch classification, import data and profitability segments are not held and must be re-entered.

SAP Fiori app Post Goods Movement

The Post Goods Movement app is the Fiori launchpad version of MIGO, delivered for example in the business roles Warehouse Clerk (SAP_BR_WAREHOUSE_CLERK) and Inventory Manager (SAP_BR_INVENTORY_MANAGER). Functions and layout are identical; only the button placement differs: Post, Cancel, Restart, Hold and Check sit at the bottom right, and default values / held data are reached via the More menu.

GR/GI slips and labels

A printed slip accompanies the physical movement: as a shipping paper for the warehouse, as an identification (pallet) slip, or as an issue slip. Printing is controlled by message (output) determination. The standard distinguishes three slip types and three versions:

The user decides at entry (header, General tab: print indicator + version) whether a slip is printed. Labels with material document information can also be printed.

Units of measure

Application-specific default units of entry in the material master are the order unit (OUn), sales unit (SUn), unit of issue (UnI) and production unit (PUn); they are proposed directly or via the reference document.

System steps

1. Start MIGO (Fiori: Post Goods Movement).
2. Select the business transaction (e.g. Goods Receipt) and the reference (e.g. Purchase Order); enter the reference number or use Find.
3. Check the default movement type; complete header data (document date, delivery note, print version).
4. Set the OK indicator for each item, adjust quantity/storage location/stock type.
5. Choose Check, review the traffic lights, then Post. Display the result in the overview tree or with MB51.

Configuration (IMG)

Unit summary & exam focus

Inventory management records stock by quantity (storage location) and value (valuation area), documents every movement with a material document plus – for valuated movements – an accounting document, and corrects book stock through physical inventory. MIGO / Post Goods Movement is the universal entry tool.

T-codes in this unit

Self-check questions

1. At which organizational level is stock managed by quantity, and at which by value?
   Answer

   Quantity at storage location level (some special stocks only at plant level); value at valuation area level, which is the plant or the company code.
2. Does every goods movement create an accounting document?
   Answer

   No. A material document is always created; an accounting document only when the movement is valuated, i.e. updates G/L accounts (e.g. not for 103 into non-valuated GR blocked stock).
3. Which MIGO screen area cannot be closed?
   Answer

   The item overview.
4. How do you turn held data into a reusable template?
   Answer

   Select the Reference checkbox when holding; the template appears with a star in the overview tree and is not deleted when used.
5. Can you delete a material document with MIGO?
   Answer

   No. Material documents can only be cancelled (reversed), displayed or changed in limited fields.
6. Which unit is used for stock keeping, and how are other entry units handled?
   Answer

   The base unit of measure; quantities entered in alternative units (OUn, SUn, UnI, PUn or standard conversions) are converted into it.