Physical Inventory Process

Physical Inventory Process

This process captures different ways of carrying out physical inventory count in a plant / storage location. Depending upon the number of materials and company’s inventory norms, a physical inventory procedure is adopted. Following two procedures are more commonly used in industry:

•Cycle Counting
•Periodic Inventory (usually Annual Inventory count)
In Annual physical inventory, all materials are counted once in a year on a pre-determined date. On this date, all materials are blocked for any inventory movement till the physical inventory count is complete. This is more common for Plant / Storage locations which do not hold too much inventory. For warehouses with a lot of inventory, this method tends to become impractical to implement.

In cycle counting, all materials need not be treated the same way. It allows fast moving materials to be counted more frequently than slow moving materials or high value items to be counted more frequently than low value items. A cycle counting indicator is set in material master which determines for a given plant, how frequently the material has to be counted, as in, once a year, twice a year, thrice a year and so on.

SAP process flow:
1. MI01 – Create Phsical inventory document : Initial screen
2. MI22 – Display Physical Inventory Documents for material
3. MI21 – Print physical inventory document
4. MI04 – Enter inventory count: Initial screen
5. MI20 – List of Inventory Differences
6. MI11 – Enter recount: Initial screen
7. MI22 – Display Physical Inventory Documents for material
8. MI21 – Print physical inventory document
9. MI04 – Enter inventory count: Initial screen
10. MI20 – List of Inventory Differences
11. MI07 – Post inv. Differences: Initial screen

While creating physical inventory document in Step 1, material can also be blocked for posting. Otherwise transaction MI32 can be used after Step 1 to block the materials.

Steps 6 to 10 above are optional. If re-count is required then only these steps need to be carried out. Step 11 creates a material document, which leads to updating of SAP book inventory. In other words Step 11 leads to write-on or write-off of inventory based on physical inventory count.

SAP also provides T Codes to automate the process carried out in Step 1. By these transactions Physical Inventory Documents can be created in background in batch processing mode. MI31 enables creation of Physical inventory documents in bulk based on selection parameters for Periodic Inventory Count. Similarly MICN enables bulk creation of physical inventory documents for Cycle Counting.

There is an alternate ways of processing inventory count, where inventory data can be entered without reference to any physical inventory document, as mentioned below:

•MI09 – Enter count w/o reference to document: Initial screen
•MI20 – List of Inventory Differences
•MI07 – Post inv. Differences: Initial screen
Master Data Setting – Cycle Counting

•In Material Master Plant data / stor. 1 view maintain the “CC phys. inv. Indicator”.
•MIBC – “ABC Analysis for Cycle Counting (Phys. Inv.) can be used to assign materials to different cycle counting categories viz. A, B, C and D. This transaction analyses the materials based on the configuration of category A, B, C and D and proposes / assigns a corresponding cycle counting indicator.
•If “CC fixed” indicator is checked in Material Master Plant data / stor. 1 view, “CC phys. inv. Indicator” cannot be changed by running MIBC.
Master Data Setting – Periodic Inventory

•In Material Master Plant data / stor. 1 view, “CC phys. inv. Indicator” should be blank.
The above two processes can also be used to count physical inventory of special stocks such as Consignment Material as well as different stock types like Quality Inspection Stock and Blocked stock.

To count physical inventory for say consignment material, maintain “K” in special stock field in the physical inventory document. To include different stock types like Quality Inspection Stock and Blocked stock in physical inventory process, you need to enter a new line for the same material in physical inventory document for each stock type.

Info for SAP Release Strategy

The release strategy for purchase requisitions or purchase orders is not determined.

Other terms
T16FS, T16FG, T16FC, frgzu, frgrl, M06E0005, FAQ.

Reason and Prerequisites
1. Settings in Customizing
a) Release group:
For every release object (1=PReq, 2=Purchase order) only one class may be used.When you use the overall release (as of Release 4.0A), only one class may be used for the overall or individual release.If you use the overall release for purchase requisitions, this must be marked for document type (TA:OMEB, flags at V_T161-GSFRG) and release group (TA:OMGQ, flags at V_T16FG-FRGFG).In the overall release, the system only takes the characteristics into account which are identical for all items.If, for example, item 10 of a purchase requisition contains material group 001 and item 20 material group 002, the material group is set to BLANK for the strategy determination.

a) Release indicator:
A release strategy must contain two release indicators at least.The first indicator must be defined as blocked, the last release indicator as released.If this is not the case, the release status is not displayed correctly.If a value is entered in field 'Value changes' (V_161S-TLFAE), only a check for value increases is performed.

a) Release statuses:
A release indicator must be assigned to every theoretically possible release status.That is, for example you have to maintain 32 entries for 5 release codes which can be released in any sequence. Caution:If the release strategy contains many release codes, not all statuses are displayed in the window.In order to display these release statuses, you have to use the page down or page up keys on the keyboard since the window has no scroll bar.

1. Settings in the classification
a) The characteristics of the class used must all be linked to the corresponding fields of structure CEBAN or CEKKO (for purchase orders).
b) The characteristics must be entered as they are specified on the database, that is, the item category must be entered in the internal format, for example (value 0-9), cost centers or material numbers must be entered with leading zeros.
c) If intervals are used for the characteristics, the corresponding characteristic must be marked as multiple value in the classification.
d) If a characteristic is nonvaluated (blank entry), this field must actually be filled with blanks in the document.A blank entry can be useful when the overall release is used. A blank entry is not to be seen as a wildcard (*). If, for example, all material groups of a release strategy should be subject to an update strategy, these must be entered explicitly in the classification. It is not possible to use a placeholder (wildcard).
A blank entry can be maintained as follows:
- Enter the characteristic in Transaction CT04 (for releases < 4.6, Transaction CT02)
- Select 'Value'
- do not maintain any entry in column 'Characteristic value'
- in the column 'Characteristic name', enter a text such as, for example, 'Blank entry' and save the settings
- the blank entry that is maintained as such can now be selected from the F4 help in the Customizing of the release strategy (Button: Classification).
e) If you make changes to the class (Add or delete characteristic) no determination of the release can occur for this class.Then you must adjust all release strategies correspondingly (new characteristic was added = characteristic value must be maintained!)
f) A working strategy must have classification status '1' (active) in Transaction CL24 or CL24N.If release strategies are deleted, ensure that the strategy is also deleted in Transaction CL24 with the deletion in Customizing.
You can use Transaction CL30 to execute an object search using the data of the purchase requisition/purchase order.Here, it is important that the object search determines exactly one strategy.If this is not the case, this indicates that overlapping strategies exist in the system or that the release strategies in Customizing do not correspond with those from Transaction CL24. See the preceding point.If the object search returns more than one result, the system subsequently determines no or the incorrect release strategy.
2. User Exit
During the individual release for purchase requisitions, the user exit is called in function module ME_REL_STRATEGIE_EBAN, in the overall release, it is called in function module ME_REL_GENERAL_STRATEGY_EBAN.
(Enhancement M06B0002, EXIT_SAPLEBND_001, ZXM06U13)
During the release for purchase orders the user exit in function module ME_REL_STRATEGIE_EKKO is called, in releases > 3.1X in program MM06EF0S_STRATEGIE_CEKKO (Enhancement M06E0004, EXIT_SAPLEBND_002, ZXM06U22).
The data is available in the user exit in structure I_CEBAN or I_CEKKO.The transfer from this structure to the calling program runs via structure E_CEBAN or E_CEKKO.In the user exit, I_CEBAN must be copied to E_CEBAN or I_CEKKO must be copied to E_CEKKO anywhere in the user exit, for example E_CEBAN = I_CEBAN.

3. Important notes in connection with a non-working release strategy:
Note 117391 --> as of Release 4.0, for the release of purchase requisitions; Release strategy does not work sporadically.
Note 378718 Symptom: Release strategy works depending on the user.
Documents which are created by users who have no authorization for class type 032(object:C_TCLA_BKA) are not subject to any release strategy.
Note 086900 -> Instruction for the transport of Release strategies
Note 010745 -> Copying class data to other client
Note 045951 -> Transport of class data: System / client.
Note 435150 -> User exit deactivated after importing R/3 Support Packages
4. Deletion of release strategies:
In the tables T16FK, T16FV, T16FS, T16FC and T16FG, entries from the former Customizing
settings (for example, old release groups)
can exist although already deleted in the Customizing, but that do not exist in the tables. This is an inconsistency.

To eliminate the inconsistency, proceed as follows:
Carry out all the deleted release settings in the Customizing again, save them, and then make a deletion in the following sequence:

1. Delete the release strategies
2. Delete the release indicators
3. Delete the release codes
4. Delete the release group
5. Delete the class (Transaction CL02), provided a new one was created for the new
release strategies.

Then use Transaction SE16 to check as to whether the entries in the tables mentioned above were deleted. Execute the check report in Customizing (Transaction OMGQCK or OMGSCK)
and make sure that no red traffic light is displayed. Also consider Note 350703 in connection with this.