inventory and warehouse management.ppt

Inventory and Warehouse Management Process Chapter 71Learning Objectives1.Discuss the four goods movements associated with inventory management.2. Describe the organizational levels in warehouse management.3.Analyze the master data associated with warehouse management.4.Identify and explain the key steps in the warehouse management processes.2Learning Objectives5.Demonstrate how inventory and warehouse management processes are integrated with other processes.6.Effectively use SAP ERP to execute the key steps in the warehouse management process.7.Extract and analyze meaningful information about the warehouse management process utilizing SAP ERP.3BackgroundInventory and warehouse management processes are concerned with the storage and movement of material within an organization.Chapter 4 introduced the underlying activity in inventory management (goods movement).The four goods movements types are:Goods receiptGoods issueStock transferTransfer posting4BackgroundWarehouse management processes that enable companies to manage materials more effectively.Linkages exist between inventory management and warehouse management.5Inventory ManagementFocus is on the extension of the goods movement.Goods movement involves specific movement types.Information needed to execute the movements.General ledger accounts are affected.The key organization level is storage location. Most relevant master data:Material masterPlant/data storage material master view6Goods Movements7Goods ReceiptMovement of materials into inventory (increase)Can take place during the production processCan result in the creation of material and financial accounting documents for both production and IM-WM processesCan post goods receipts without reference to an orderInitial receipt of inventoryUnplanned receipt8Goods IssueResults in a decrease in inventoryIn the fulfillment process, it indicates a shipment of finished goods or trading goods to a customer against a sales order.In the production process, it reflects the issuing of raw materials or semifinished goods to a production order.Can be unplanned.Materials may be withdrawn for internal consumption.9Transfer PostingsAre used to change the status or type of materials in stock.Four common stock statuses: Unrestricted useIn quality inspectionBlockedIn transitCan be used in other situations that do not necessarily involve a physical movement of materials.10Stock TransfersUsed to physically move materials within the enterprise from one organizational level or location to another.Three options are available for organizational levels: Between storage locations within one plantBetween plants in one company codeBetween plants in different company codes11Stock Transfers Three options are available for moving material, regardless of the organizational level:One-step procedureTwo-step procedureStock transport order (STO)12One-step and Two-step Procedures13Storage Location-to-Storage Location TransferA transfer between two storage locations within the same plant Reasons why:Temporary staging areaQuality inspectionA one-step or a two-step procedure can be used.One-step procedure: materials can be in any stock status (supplying location) to any stock status in (receiving location).Two-step procedure: possible only when the materials are in unrestricted use at the supplying location.14Storage Location-to-Storage Location Transfer Transfer between storage locations in the same plant does not affect valuation (same valuation).No financial impactNo financial documentSplit valuation (when valuation is not the same)Financial impactFinancial documentMultiple material accounts15Stock Transfer within a Plant16Plant-to-Plant TransferMovement of materials between two plants within the same company code A one-step or a two-step procedure can be used.Difference is the stock status at the receiving plant.Typically, only materials in the unrestricted use status can be moved between plants.Material documents are created.Financial impact (FI document)17Plant-to-Plant Transfer18Demo 7.1 Plant-to-Plant Stock Transfer (1 Step)19Review Plant-to-stock stock transfer (1 step)Company Code-to-Company Code TransferMovement of materials between two plants in different company codes A one-step or a two-step procedure can be usedTwo FI documents are created, one for each company codeOne line item is for the material account.One line item is for a clearing account created to accommodate such a transfer.20Stock Transport OrdersPlant-to-plant movements have limitations.Stock transport orders are a solution.In the STO process one plant “purchases” the materials and another plant “sells” them. Can involve steps from the procurement, fulfillment, and inventory management processes.There types of stock transport orders:Stock transport orders without deliveryStock transport orders with deliveryStock transport orders with delivery and billing21Stock Transport Orders without DeliveryInvolve steps from purchasing and inventory managementSTO created directly or referenced to other documents (PR)Only the two-step procedure can be usedMaterial document created to record movementGoods receipt recorded against the STOOne or two FI documents may be createdFinancial impactGeneral ledger accountsMaterial accountsClearing accounts22Stock Transport Orders without Delivery23Demo 7.2: Stock Transport Order without Delivery24Review stock transport order without deliveryStock Transport Orders with DeliveryDelivery document is created (picking and packing) prior to goods issue.The order is treated like a sales order.A one-step or a two-step procedure can be used.One-step procedure: Only one material document is created, and the materials are placed in unrestricted use at the receiving plant.Two-step procedure: Material movement and financial impact are identical to those associated with an STO without delivery.25Stock Transport Orders with Delivery26Demo 7.3: Stock Transport Order with Delivery27Review stock transport order with deliveryStock Transport Orders with Delivery and BillingSTO includes both the delivery document (shipping step) and the billing step from the fulfillment process at the sending plant.STO includes the invoice verification step from the procurement process at the receiving plant.Purchase price is included in the STO based on pricing conditions and info records.The supplying plant creates a delivery document authorizing the shipment.Goods issue is posted at the sending plant.Goods receipt is posted at the receiving plant.28Stock Transport Order with Delivery and Billing29Organizational Data in WMKey organizational data are the warehouse.Warehouse is associated with one or multiple combinations of plant and storage location.Association between storage locations and a warehouse provides the linkage between IM processes and WM processes. 30Organizational Data in WM When linking warehouses to storage locations, the following rules apply:A warehouse must be linked to at least one storage location.A warehouse can be linked to storage locations across multiple plants.A storage location can be linked to only one warehouse.Not all storage locations must be linked to a warehouse.31Organizational Data in Warehouse Management32Organizational Data In WM A warehouse is divided into smaller areas in a hierarchical mannerStorage typeStorage section/picking areaStorage bin33Storage TypeStorage type is a division of a warehouse based on the characteristics of the space, materials, or activity.Storage types can also be based on how materials are stored or on material specification.The assignment of storage locations to a warehouse links IM activities to WM activities.Interim storage areas represent the physical links between IM and WM.34Structure of a Warehouse35Storage SectionA storage section groups bins with similar characteristics:Fast-movingSlow-movingHeavyLight SmallEach storage type must have at least one storage section.36Picking AreaA picking area is a division of a storage area based on removing or picking materials.Storage bins are grouped based on similar picking strategies.Specific employees who are authorized to pick from specific binsA delivery can be allocated to multiple picking areas to facilitate parallel picking.37GBIs San Diego Plant Layout38Structure of GBIs Warehouse in San Diego39Bins in Rack Storage40Fabric Storage41Rolled Steel Storage42Master Data in Warehouse ManagementMaterial master and storage bins are key master data.43Material MasterMaterial master has been previously discussed in the context of several processes.Material located in a storage location associated with warehouse management requires additional data in the material master.Organization levels:WarehousePlantStorage type44Material Master Warehouse management view:Basic dataData used in defining stock placement and removal strategiesData regarding the storage bins where the materials will be storedBasic data are relevant to all processes.Some data are redefined for warehouse management.Placement and removal strategiesBin-related data45Demo 7-4 Review WM View of Material MasterReview warehouse management view of material master46Storage BinsStorage bins are the smallest unit of space in a warehouse.Can vary in sizeUnique addressCan store different materials (quants)47Storage Bin Addressing48Storage Tubs (Bins)49Quants in A Storage Bin50Demo 7-5 Review storage bins, and display stock in storage binsReview storage bins and display stock in storage bins51Processes in Warehouse ManagementThe warehouse management process is typically triggered by goods movement in other processes such as:ProcurementFulfillmentProductionInventory managementTransfer requirement is used to plan the movement of materials in and out of warehouse.Movement of materials is accomplished with a transfer order.52Warehouse Management Process 53Plan Warehouse MovementTransfer requirement is generated automatically when goods movement involves warehouse-managed storage locations.Transfer requirement is created manually to facilitate internal movement of materials.Posting change notice is used to change the status of a material.Source requirement for warehouse movement:Material documentDelivery documentProduction orderNo financial impact54Elements of the Plan Warehouse Movement Step55Data in a Transfer Requirement56Reference Documents for a Transfer Requirement57Execute Warehouse MovementCommon warehouse movements:Picking Putting awayPosting changesTransfer order is used to execute warehouse movement.Transfer order can be created directly from transfer requirement or posting change notices.Transfer order can be created manually to facilitate internal warehouse transfers.Transfer order consists of a header and one or more line items.No financial impact58Elements of the Execute Warehouse Movement Step59Data in a Transfer Order60Structure of a Transfer Order61Reference Documents for a Transfer Order62Confirm Warehouse MovementTransfer order authorizes warehouse employees to physically move materials from source bin to destination bins.Once the materials have been moved, the movement is confirmed.The same transfer order created to authorize the physical movement of materials is used for confirmationERP system automatically updates the associated reference documents such as :Delivery documentTransfer requirementPosting change notice63Elements of the Confirm Warehouse Movement Step64Warehouse Management In ProcurementPlan warehouse movementInterim storage area is the physical link between the procurement and warehouse management processes.Transfer requirement is created.Execute warehouse movementReady to put away materials from interim storage area into warehouse bins.Transfer order is created.Confirm warehouse movementPhysically move materials from interim storage area into warehouse bins.Transfer order is updated with confirmed quantity and location.65Inventory Impact - Procurement66IM and WM Steps in Procurement67Demo 7.6: Procurement Process with Warehouse MovementsReview the procurement process with warehouse movements68Warehouse Management in FulfillmentPlan warehouse movementInvolves fulfillment processes and both inventory management and warehouse management processesSales order generates a transfer requirement, which serves as the link between fulfillment processes and warehouse management processesExecute warehouse movementTime to pick materials from warehouseTransfer order created based on transfer requirement69Warehouse Management in Fulfillment Confirm warehouse movement Materials have been picked from proposed bins and placed into interim shipping storage areas.Transfer order is updated with confirmed quantity picked and bins from which they were picked.Goods issue posted after materials have been shipped.Financial and controlling impact in inventory management.Fulfillment process continues through invoice and payment steps.70Inventory Impact - Fulfillment71IM and WM Steps in Fulfillment72Demo 7.7: Fulfillment Process with Warehouse MovementsReview the fulfillment process with warehouse movements73Warehouse Management in ProductionInvolves both goods issue (production) and goods receipt (storage).Production order generates a transfer requirement.Transfer order is created for materials placed into interim storage area.Goods issue has a financial impact and material outcomes.After the production process has been completed and confirmed, finished goods are placed into warehouse bins.Transfer order is created and confirmed after the finished goods are placed into warehouse bins.74IM and WM Steps in Production75Warehouse Management in Stock TransfersWarehouse management activities can be initiated by stock transfers and transfer postings.Transfer requirements are automatically generated by ERP system when goods movement involves warehouse management storage locations.Material documents are created when IM activities involve goods issue and goods receipt; they may result in a financial impactNo FI impact generated by an internal transfer between storage locations within same warehouse.76WM Scenarios for Stock Transfers77Demo 7.8: Internal Warehouse TransferReview the internal warehouse transfer78Order of Postings in WM and IMPosting in warehouse management and inventory management by which the order inventory management and warehouse management activities are completed can vary from one scenario to anotherGoods issue in inventory management for a sales order or production posted before warehouse management activities confirmedPut away in warehouse management is before goods receipt posted in inventory management79Scenarios for WM and IM Activities80Inventory Impact When IM Precedes WM81Inventory Impact When WM Precedes IM82ReportingWarehouse management reporting is similar to reporting in other processes that have been discussed.Warehouse management reporting options are:ReportsWork listsOnline listsInformation systemDocument lists such as transfer requirements and transfer order can be generated.83List of Transfer O