SAP MM Training - Introduction to Inventory Management (Video 24) | SAP MM Material Management Video Lecture

welcome to our next class introduction
to inventory management so from now
onwards we'll be learning
inventory management and next couple of
lectures will be all about inventory
management so inventive anime management
is one of the important and very big
topic within a set EMM and we'll go
through it step by step so the topics
we're going to cover today just an
introduction and as we move forward
we'll be learning some advanced topics
in energy management so topics that
we're going to cover in the introductory
section they are SF inventory management
and physical inventory functions of
inventory management single screen
transaction for goods movement which is
my go navigation in the single screen
transaction also go to ship to the app
turns to a document icon movements
during posting and effects of goods
movement so we'll start with the
business example so changes to stock are
made in your company on daily basis this
might be for example good sip from the
vendor or internal stock transfer
operating of material for the production
or it can be also the goods issue for
the production for example we need to
put the raw material to the production
so it can be goods issue it can be goods
received so whether it's a good received
where is the goods issue is all about in
maintaining the inventory management so
everything is revolving around our
inventory in the system so relationship
between inventory management and other
areas of the district's shall now be
checked yoga so we'll see how all the
logistics and MRP and all the goods
issue and goods received they're all are
linked within inventory management so
inventory environment of inventory
management so here basically when we
talk about
MRP MRP is basically connected to
inventory management because I will call
it IV inventory management so inventory
management is a backbone for MRP because
what is MRP em up is maturity formal
planning so for every requirement system
has to check first the stock if the
stock is there then good if the stock is
not there then system has to do further
planning which we have seen in the MRP
topic previously so in metric management
is connected to then metric so energy
management is connected to MRP and again
MRP you can if you divide them up into
two parts so like it can be your
external procurement or it can be an
internal procurement so when you talk
about external procurement that means
you need to procure the goods from the
vendor in that case what you do is go to
the ships and transfer posting and all
that and whenever you do the goods sit
your stock will be different your
inventory will be different okay in same
way for what they say internal the
procurement with I say in-house
production then still when you receive
some goods from the production or from
the vendor again you changing an venturi
so basically at the end of the day the
physical inventory which is a real
inventory in the warehouse of a company
should match exactly with what is the a
mark we set up in a city system okay so
in other words ASAP systems inventory
management should always be matching
with the physical inventory in the
business whatever is physically there in
the warehouse in the company and also
the inventory management also changes
with sales like with sales whenever for
a when we do a goods issue for a sales
order that will also affect the
inventory that means we reducing that
goods whenever we sending that goes well
whether you seen a goods for sales order
whether issuing the goods for the
purchase order production sorry
production order
purpose than in both cases you doing a
goods issue so goose issue will decrease
inventory go disap will increase annual
tree
okay now task off energy management so
with regards to tasks you can divide you
can divide material management recipe mm
into three different parts so you can
call one as purchasing other one as
inventive an event which we studying now
and third one can be logistic invoice
verification so with regards to
inventory management you can assume
these these are the tasks that are done
by inventory management so number one is
managing this material stock on quantity
and value basis that means all the
stocks would that be managing they are
managed on the s4 the quantity and also
the value basis I'll explain in a minute
planning creating and verifying all
goods moment okay so your all the good
summary planning and creating and
verifying and carry carry out the
physical inventory so let's see one by
one so managing material stock on
quantity basis so stock quantity in is
in unreceptive you stock so when you
talk about the you managing the stock on
the quantity basis so basically you have
the undisputed stock you can have the
quality inspection stock or you can have
the third one which is blog stock which
we do not consider here because it's a
block stock so you can have different
types of stock as for the quantity basis
like quality inspection unrestricted and
stock when it is already ordered but not
yet received so maybe we have sent a
purchase order to the vendor and still
we are waiting for the goods to be
received so bad stock is also considered
that means that stock which will come
sometime in the future is also
considered by the system which is called
an order or the stock stock quantities
that are in the warehouse but already
reserved for a production or a customer
okay so we can have some stock in the
warehouse but that is already reserved
for some production in-house production
or probably they are supposed to send to
some
Summa is a finished goods okay so they
can be reserved for some particular
production order or a customer order so
these are the core the managing of the
stock as for the quantity basis when you
talk about managing the stock at the
value basis so from business point of
view whatever stock we have in the
warehouse business needs to know that
how much inventory we have from the
value from the value point of view okay
how much stock vo what is the dollar
value of the stock we have okay so in
that case stock quantities and stock
value for inventory management that
means all the stocks all the quantities
are also has some stock value if we have
say hundred pieces of stock it will
maybe equal to maybe two thousand
dollars of value or something like that
so there's a link between quantity and
the value that we have then general
ledger account for financial accounting
by means of autocratic account
determination so you can notice that I
will see again in the in the next topic
later on that whenever you do our goods
are shipped system is generating a
accounting document during the micro
transaction system we'll be generating
accounting document that means system is
not only changing the stock but also
changing the value by creating a
financial document and posting the value
to the relevant GL account okay that
means whenever you receive the goods not
only you changing the stock that you
have in your warehouse but also the
value of the stock will it change
account assignment for cost accounting
again account assignment for cost
recording it is again the financial side
of a city planning entering and
verifying all goods moment so goods
movement include both external movement
such as goods saved from external
procurement or goods issue for sales
order so these are external moment where
we receiving the goods from a vendor or
we sending the goods to a customer or it
can be internal movements for example
for production probably supplying the
raw material
intervene house production or material
withdrawal from from internal purposes
for winter purpose you're drawing the
route on a stock transfer between plant
and plant between storage location store
location and transfer posting as well so
these are the example of internal
movement so for you need to understand
what is external movement or what is
internal movement but also externally is
with the vendor and the customer and
internal internal means within the
company so when goods are moved
documents are created and quantitative
value objects happen okay so whenever
there is a goods movement whether you
receiving the goods over there is
sending the goods each time that
quantity and values of the stock will be
updated in your inventory management
system carrying out physical inventory
so physical inventory is the process of
making inventory of your stock that
means whatever stock you have physically
in the warehouse that should always be
matching with your ASAP inventory stock
so physic
you