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inventory and warehouse management WM processes concerned w/ the

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storage and movement of materials w/in an org.

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underlying activity in inventory management

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goods movement

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four goods movements

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1. goods receipt 2. goods issue 3. stock transfer 4. transfer posting

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key organizational level associated w/ inventory management

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storage location

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goods receipt

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movement of materials into inventory -> inc. in inventory -results in financial accounting documents

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goods receipt can be recorded w/out reference to an order when

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1. initial receipt of inventory 2. an unplanned receipt from vendors or an unplanned return from customers

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initial receipt of inventory

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movement type an org. uses when SAP ERP system is first installed

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unplanned receipts occur when a

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reference document, such as a purchase order or production order, does not exist -material and financial docuemnts

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goods issue

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-dec. in inventory -fulfillment: shipment of finished goods -production: issuing of materials to a production order -FI and CO documents and material documents

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unplanned goods issue when

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issuing materials to scrap, sampling, and using materials for internal consumption

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scrapped

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when materials are no longer usable due to age or obsolescence they are discarded

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sampling

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testing the quality of the materials

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transfer postings

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change the status or type of materials in stock

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4 common stock statuses that determine the usability of materials

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1. unrestricted use 2. in quality inspection 3. blocked 4. in transit

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transfer posting doesnt need to involve

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physical movement of materials -material to material posting -consignment to warehouse stock posting -vendor owned inventory

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material to material posting

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changes the material number of a material -common in pharmaceutical and chemical industries where characteristics of a material change over time

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vendor-owned inventory

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materials that are stored in the customer's facilities although the vendor retains ownership -large companies like Walmart

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for vendor owned inventory when GBI uses the raw materials in the production process it will change the status from

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consignment to warehouse stock now there is a financial impact*

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stock transfer

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used to physically move materials w/in the enterprise from one org. level or location to another

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stock transfer can involve movements under 3 scenarios:

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1. between storage locations in 1 plant 2. between plants in 1 company code 3. between plants in diff company codes

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3 options are available for moving materials

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1. one step procedure 2. two step procedure 3. stock transport order

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2 step procedure used when

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geographically separated or person does not have authorization to make changes at both locations

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split valuation

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materials are valued differently; company maintains different material accounts for each valuation type

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only materials ____ can be moved between plants

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unrestricted use status

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plant to plant transfers like storage location to storage location transfers result in the creation of

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material documents

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plant to plant transfers has an

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FI impact

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for company code to company code transfers ___ are created

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two FI documents

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limitations of the movements above

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-cant take into account the cost of transporting materials between plants -can't track the progress of the transfer -valuation can only be based on the book value of the materials at the sending plant and not a negotiated value or price between plants

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when moving materials from one plant to another requires one of these capabilities^ one plant essentially "purchases" the materials and another plant "sells" them using a...

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stock transport order STO

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stock transport order STO

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used for plant to plant movements -sto without delivery -sto w/ delivery -sto w/ delivery & billing

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using stock transport orders STO to move materials compared to using stock transfers has numerous advantages

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-availability check -delivery costs and selected carrier can be added to the STO -quantities in the STO and planned deliveries and receipts can be included in material planning in both plants -purchase requisitions can be converted to STOs rather than POs -history can be monitored -goods can be received into different stock statuses -goods received can be posted to consumption rather than material accounts

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warehouse

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associated w/ one or more combinations of plant and storage location

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when linking warehouses to storage locations these rules apply

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-warehouse must be linked to at least 1 storage location -warehouse can be linked to storage locations across multiple plants -storage location can only be linked to one warehouse -not all storage locations must be linked to a warehouse

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warehouse hierarchy

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warehouse-> storage types-> storage sections/picking area-> storage bins (master data)

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storage type

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division of a warehouse based on the characteristics of the space, materials, or activity [shelf storage, pallet storage, rack storage]

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interim storage areas

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until WM steps are completed the materials are stored in specially designated storage types -physical links between IM and WM

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storage sections

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group bins w/ similar characteristics -based on storing or putting away materials EX: fast moving, slow moving, heavy, light, large, small

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picking area

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division of a storage area based on removing or picking materials

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key master data in warehouse management

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material master and storage bins

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organization levels relevant to the warehouse management view of master data are

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warehouse, plant, and storage type

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org. levels: ____ is required, __ are options

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warehouse is required, plant and storage type are optional

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3 types of data relevant to the warehouse management view

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1. basic data 2. data used in defining stock placement and removal strategies 3. data regarding the storage bins where the materials will be stored

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warehouse management unit of measure

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(basic data)

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placement and removal strategies

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indicate priorities and sequences in which storage types, storage sections, and picking areas are to be searched

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bin-related data

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which bins should store materials and min and max quantities in them

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storage bins

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smallest unit of space in a warehouse -where materials are physically stored -have unique addresses based on a coordinate system

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quant

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specific quantity of materials that have similar characteristics and are stored in a single bin -when quantity reduced to 0 system automatically deletes quant

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quants are generated ____ and categorized as ____

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generated as needed & categorized as transaction data

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IM goods movement automatically generates a ____

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transfer requirement

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transfer requirements

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used to plan the movement of materials in and out of bins in a warehouse

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transfer order

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actual execution of the movement

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warehouse management process steps

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1. plan movement 2. execute movement 3. move materials 4. confirm movement

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warehouse management process triggers

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-procurement -fulfillment -production -inventory management

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plan movement- triggers

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-IM activity -internal need

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plan movement- data

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-org data -master data -user input

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plan movement- tasks

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-create transfer requirement -create posting change notice

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plan movement- outcomes

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-transfer requirement -posting change notice

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data in a transfer requirement

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-master data: material storage bin -org. data: client company code etc -transaction data: material #, quantity, transfer date

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posting change notice

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request to change the status of the material, for example, from in quality inspection to unrestricted use

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reference documents for a transfer requirement

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-material document -production order -no source document

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in IM the FI impact occurs when

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a goods movement takes place

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execute movement- triggers

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-transfer requirement -internal warehouse transfer need -delivery document

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execute movement-data

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-org data -master data -user input

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execute movement- tasks

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create transfer order

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execute movement- outcomes

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-transfer order -update transfer requirement

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data in a transfer order

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-master data: material master, storage bin -org data: client etc -transaction data: source document, source storage bin, destination storage bin -user input: source document #, destination bin #

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reference documents for a transfer order

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-transfer requirement -posting change notice -material document -delivery document -no source document

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confirm movement-triggers

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completed transfer of materials

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confirm movement- data

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-org data -master data -user input

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confirm movement- tasks

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update transfer order

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confirm movement- outcomes

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-updated transfer order -updated source documents

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inventory is tracked at the ___ level and ____ level

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storage location level and warehouse level

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warehouse inventory is ____ to storage location inventory

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always equal

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in procurement the transfer requirement served as the ___ between procurement process IM and WM process

answer

information link

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FI impact and the recording of the material movement occur in ____ not ____

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occur in IM, not WM

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IM processes are responsible for managing inventory at the ___ level

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storage location level

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IM inventory management involves

answer

movement of goods in and out of plants

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warehouse management WM involves

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processes that permit sophisticated management of materials within and in-between plants

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WM is used by organizations that

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have large quantities of expensive inventory that must be managed closely

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___ and ___ are the key links between IM and WM

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transfer requirements and interim storage areas

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stock transport orders STOs used in situations

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more complex situations and simulate one plant "purchasing" materials from another plant that "sells" materials

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a warehouse must be associated w/

answer

at least one storage location

ISA 303 Chapter 7: Inventory & Warehouse Management Processes – Flashcards

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