Inventory Management

Maintaining stock by value or by quantity is called inventory. The total inventory management deals with the goods movement of the material.

Goods movement: -

It is a process in which transaction resulting change in stocks. It is further sub-divided into three categories

1. Goods Receipt (GR)

2. Goods Issue (GI)

3. Transfer Posting (TP)

Goods Receipt (GR): - It is a goods movement in which receipt of goods is posted for vendor or for production. A GR posted in the system will leads to increase in stock. No Concept of Price or value

Goods Issue (GI): - It is goods movement in which material withdrawal is posted for consumption or for a customer. A GI posted in system will leads to decrease in stock.

Stock Transfer (ST): - It is method of removal of material from one location and transferring it to another location. This process is performed between two plants and two storage locations.

Transfer Posting (TP): - It is a general term of stock transfer that changes the stock type or stock categories. The difference between transfer posting and stock transfer is: -

TP is logical stock transfer and ST is a physical stock transfer.

Movement Type: - It is a three-digit code, which plays a role of important control function in inventory management. It acts as a central role in automatic account determination. It determines which stock account or consumption account is updated in financial accounting.

Reservation: - It stores requisition created from the particular cost center to a particular department for issuing the material reservation posted in the system. It leads to decrease in stock.

Stock Types: - The different stock types are

1. Unrestricted use stock

2. Quality inspection stock

3. Blocked stock

4. Warehouse stock

Transaction code: -
1. To Create GR - MIGO

2. To Create GI - MB1A

3. For Transfer Posting - MB1B

4. To display Material/GR document – MB03

5. To create reservations - MB21, MB22, MB23

6. To See Stock Overview - MMBE

7. To enter Other GR - MB1C

When GR is posted in the system
1. Material document is created - MB03

2. Accounting Document is generated - MB03

3. MMR updated - MM02, MM03

4. PO history updated - ME23N

Movement Type’s

Movement Types under GR - 101, 331,333,335,501,503,505,551,553,555,

561,351 (For all Mov Type’s there is a reversal e.g. 101 has 102. Note: No reversal for 121)

Movement Type’s under GI - 201, 331,333,335,551,553,555

Transfer Posting: It is performed in three ways

1. TP B/W Plant to Plant

2. TP B/W Storage Location to Storage Location

3. TP B/W Stock to Stock

Movement Types under TP B/W Plant to Plant
301 - 1 step

303 & 305 - 2 step

Movement Type under TP B/W Storage location to Storage Location
311 - 1 step

313 & 315 - 2 step

Movement Type under TP B/W stock to stock

321, 323, 325, 343,349

To Cancel the GR Movement type 102

Return delivery to vendor movement type 122 & T Code MIGO

Transfer Posting Stock to Stock
From Blocked stock to Quality Inspection
T Code MB1B & Movement Type 349

From Blocked stock to Unrestricted Stock

T Code MB1B & Movement Type 343

From Quality Inspection to Unrestricted Stock
T Code MB1B & Movement Type 321

Transfer Posting from Plant to Plant
For One Step: Movement Type 301

For Two Steps: Movement Type 303 & 305

After posting stock will display in Stock in Transit (Plant)

To receive material by receiving Plant Movement Type 305

Transfer Posting B/W Storage Location to Storage Location
Under One Plant B/W two Storage Location’s Movement Type 311

Back to Parent storage Location Movement Type 313 (It Show stock in transfer) use Movement type 315 at Parent storage location

To create Goods Issue (GI) T Code MB1A and  Movement Type 201

To Create Reservations T Code MB21, MB22 and  MB23

Creation of GI w.r.t Reservations
T Code MB1A & Movement Type 201

Click on the Reservation, Enter Reservation Number �� Click on Adopt + Details

GR w.r.t Reservations: T Code MIGO & Select as Reservation instead of GR

GR without PO Movement type 501 & T Code MB1C, Select others instead of Purchase order, Enter Material, Quantity, Plant, Storage Location �� Press Enter

Partner Option will be visible (Vendor) �� Save it

Invoice: - Invoice is a document, which is issued to a buyer (Company) from the supplier (vendor) for the payment. The following information is maintained in the invoice

Invoice date, Posting date, Invoice ref number, tax amount, amount, tax code, terms of payments, vendor address, banking accounting information etc.

When an invoice document is posted in the system
• Invoice document created

• Accounting document is generated (MIR4)

• PO history updated (ME23N)

• FI document created (FB03)