A step by_step_guide_to_the_sap_mm_inven

A Step by Step Guide to the SAP MM Inventory Management and Physical Inventory Configurations
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Table of Contents
Objective............................................................................................................................................... 3
IMG Menu – The Starting Point........................................................................................................... 4
Start of the SAP MM Inventory Management Configurations............................................................. 5
The Basic Material Master Configuration : Units of measurement...................................................... 5
Where does the user maintain the UOM?............................................................................................. 7
Industry Type for Material Master........................................................................................................ 8
Delete or Add in Storage Location for the new Plant......................................................................... 11
General Plant Settings in Inventory Management .............................................................................. 11
Define the Attributes of System Messages......................................................................................... 13
Start of the Number Range Configurations ........................................................................................ 15
Define Number Assignment for Accounting Documents................................................................... 15
Define Number Assignment for Material and Phys. Inv. Docs.......................................................... 18
Define Number Assignment for Reservations.................................................................................... 19
Start of the Individual Fields IMG Settings........................................................................................ 20
Field Selection for Goods Movements Initial/Header Screens........................................................... 20
Field Selection for MIGO................................................................................................................... 21
Field Selection per Mvt Type ............................................................................................................. 21
Define Screen Layout for Movement Type ........................................................................................ 22
Settings for Transactions and Reference Documents ......................................................................... 24
Create Storage Location Automatically.............................................................................................. 26
Set Manual Account Assignment for Movement Type ...................................................................... 27
Maintain Copy Rules for Reference Documents ................................................................................ 28
Set Up Dynamic Availability Check................................................................................................... 29
Generate Physical Inventory Documents for Goods Movements....................................................... 32
Allow Negative Stocks ....................................................................................................................... 33
Set Missing Part Check....................................................................................................................... 34
Default the “Delivery Completed” Indicator...................................................................................... 35
For GR-Based IV, Reversal of GR Despite Invoice........................................................................... 36
Record Reason for Goods Movement................................................................................................. 37
How to Define, Copy or Change a Movement Types?....................................................................... 38
Default Print Control for Material Document..................................................................................... 41
Define Stock List Display for MMBE................................................................................................ 47
Define Valuation Class ....................................................................................................................... 49
Configure Automatic Postings to G/L Accounts ................................................................................ 51
Storage Location Indicator to allowed/disallowed Physical Inventory Freezing ............................... 58
Configuration for Vendor Consignment............................................................................................. 59
Business Process Flow for Vendor Consignment............................................................................... 60
The Initial Inventory during Implementation ..................................................................................... 63
Static versus dynamic data conversion ............................................................................................... 66
A Sample note on Inventory Balance Conversion.............................................................................. 66
Appendix A: The Inventory Goods Movement Configuration Links Explain ................................... 67
Appendix B: Restrict the Storage Location from any Goods Movement........................................... 68
Appendix C: Allows/Disallowed Goods Movement Posting to Previous Period............................... 70
Appendix D: How to Archive the Materials Documents?.................................................................. 71
Appendix E: Configure the Cycle Count in SAP................................................................................ 76

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Objective
The objective of this paper is to provide the SAP MM consultant with a step-by-step guides
at configuring the SAP MM Inventory Management module. It is structure in the form of
how-to-do configurations method.
When you do the SAP configuration, sequence is not really important as long as all
the MM Inventory Management modules Features that need to be used have been
configured.
Notes:
Initial IMG Action : Required (this are dynamic data which are unique to the company)
Initial IMG Action : Usually Not required (it depends on the customer requirement)
Initial IMG Action : Not required (normally this kind of configuration is quite static, most of
the customer will accept the SAP default and may request for changes after going live for a
period of time)

IMG Menu – The Starting Point
Before doing any SAP Configuration (or IMG), all SAP consultants MUST be aware of the
transaction SPRO. This transaction code is the heart of the whole SAP configuration.
Click the button and you will be shown all the configuration tree for the
various SAP modules like SD, PP, FI, CO etc.
Transaction SPRO
The SAP IMG configuration tree for all the modules

Start of the SAP MM Inventory Management Configurations
Now, you will go through each of the SAP Inventory Management Configurations to get
your SAP Inventory transaction functioning. After all the configurations are completed,
Appendix A: (The Inventory Goods Movement Configuration Links Explain) will link all
the related configurations for you so that you can understand the relationship.
The Basic Material Master Configuration : Units of measurement
Initial IMG Action : Usually Not Required
As a rule of thumb, always RECOMMEND the user to set the base unit of measure for a
material to the smallest unit that can be used. That is, don't set it as FT (foot), but set it
as IN (inch). Never set EA as base unit for something that can be divided and consumed in
smaller quantities.
Please take note that you CANNOT change your Base Unit of Measure once there are
any OPEN TRANSACTIONAL POSTING done by the user. For e.g. Available Stocks,
Open Purchase Order, Open Production Order, Dependent Reservations already exists,
Open Sales Order etc.
If you try to change, a SAP message will appear asking you to click the
button. It will list all the OPEN DOCUMENTS to you.
Tip: Determine the lowest UOM as the Base Unit of Measure
Transaction :
CUNI
Menu Path : IMG – General Settings – Currencies – Check units of
measurement
Click the button Units of measurement to see the UOM settings.

Double click on the Unit to see the individual UOM settings.
Create the New button to create a new UOM.
A sample of a UOM settings.
You can ignore the ALE/EDI sections if your company is not using any EDI.

Where does the user maintain the UOM?
For this IMG settings, the user will maintain it in the Material Master Record (MM01/MM02).
Maintain the Base unit of measure
Transaction :
MM02
SAP Menu Path : Logistics – Materials Management – Material Master –
Material – Change – Immediately – Select Basis data 1

Maintain the UOM Conversion
Transaction :
MM02
Menu Path : Logistics – Materials Management – Material Master –
Material – Change – Immediately - Select Basis data 1 - Additional
Data – Units of measure
For e.g. assuming that the Materials Master Base UOM is SH - Sheet and you need to
transact in KG. Input the X (Denominator) and Y (Numerator) for Conversion to Base Units
of Measure column and the system will automatically calculate the Number column for you
once you hit the Enter key.
Please note that you may enter only whole numbers in the numerator and denominator
fields; that is, if 3.14 m² correspond to one piece, you must enter integer multiples (314 m²
= 100 PC). In this case, the quotient is therefore 100/314 (the numerator being 100 and the
denominator 314).
Industry Type for Material Master
Industry type are used for classifying your company industry sectors. SAP used it to
control the Field attributes of your Material Master. There are no other usage.
The SAP default industry sectors are :
• A for plant engineering and construction
• C for the chemical industry
• M for mechanical engineering
• P for pharmaceuticals
Note: You cannot change the industry type after it is being input.
The only way to change the industry type to is to Flag the materials for deletion and
archive it. Then create a new material with the correct industry type.
Define new or Change the existing Industry Type
IMG Shortcut :
OMS3
Menu Path : IMG – Logistics General – Material Master – Field
Selection - Define Industry Sectors and Industry-Sector- Specific Field
Selection

The Field reference above points to the Fields in Tcode MM01/MM02/MM03 where the
user used for maintaining their Material Master Record.
If you intend to create a new Field ref., it has to begin with a y or z.
IMG Shortcut :
OMS9
Menu Path : IMG – Logistics General – Material Master – Field
Selection - Maintain Field Selection for Data Screens
Double click on Field ref.
Double click on and you will see the Fields of each Material Master.
The attributes of Field Sel. Group have a higher priority than the Field reference.

For e.g. Field selection grp 1 contains the following fields which are all Required Entry as
you can see from the above screen.
Default the Material Industry Type
If you have only one industry type, you can default and hide it. This saved the users the
need of entering the industry type. When there are different Industry Sector for different
users, you can also teach them to default it in MM01 – Defaults -> Industry sector
IMG Shortcut :
OMT3U
Menu Path : IMG – Logistics General – Material Master –
Configuring the Material Master – Maintain User Settings

Delete or Add in Storage Location for the new Plant
Initial IMG Action : Required
A storage location is the place where stock is physically kept within a plant. Some
companies will break their area to be managed by different Plant and Storage Location and
you will define IMG Storage Location Plant by Plant.
Each Plant may have different storage location requirement to track the movement
and quantities of stocks. For e.g. defective stocks, warehouse stocks etc. For naming
convention, you can recommend them to use the building number follows by two characters
to represent the inventory type. For e.g. Building 9, the storage location for Finished Goods
can be 09FG, Defective Goods can be 09DF etc.
Storage Location is a required fields when user do entries for Goods Movement related
transaction code such as MB1A – Goods Issue, MB1B – Transfer Posting, MB1C – Other
Goods Receipts etc. User must know where they want to keep the Inventory.
Configure the Storage Location
Transaction :
OX09
Menu Path : IMG – Enterprise Structure – Definition – Materials
Management - Maintain Storage Location
Click the New entries button to enter a new Storage Location.
General Plant Settings in Inventory Management
IMG Action : Not required
You should not make any IMG settings using this overall maintenance screen. Use this
screen for checking purpose as you can view all the Individual Configuration on a single
screen.
Menu Path : IMG – Materials Management – Inventory Management and Physical
Inventory - Plant Parameters - Double click the Plant and you’ll be able to see the
Plant Inventory Settings

Double click on the Plant to view the next screen.

Define the Attributes of System Messages
Initial IMG Action : Not required
In any of the Inventory Management goods movement transactions posting, the system
will issues messages to the user screen to inform the user about certain system
responses or data situations (for example, a message indicating that the order item is
flagged "delivery completed").
An example is given in Appendix B: (Restrict the Storage Location from any Goods
Movement) to see how you can make used of the Attributes of the System Messages.
There are three attributes where you can define the type of system message for a version:
W – You can set a warning message and after reading the message, the user is allowed
to hit enter and proceed with the entries and save the record.
E – You can set an error message and the user have to correct the mistake or the
system will not allow the user to proceed further or to save the record entry.
Space - No message will be issue to the user.
Transaction
OMCQ
Menu Path : IMG - Logistics – Materials Management – Inventory Management
and Physical Inventory – Define attributes of System Messages - Settings for
System Messages
From the System Messages screen, you can see that the SAP default for all messages that
can be controlled are stored in version 00 and the Inventory Management, the application
area M7 is predefined.

You are allow to create a new version (for example, ZZ) and this is maintained as a
parameter ID MSV in the user master record, thus representing a user or a user group.
Transaction :
SU01
Menu Path : IMG - Logistics – Materials Management – Inventory Management
and Physical Inventory – Define attributes of System Messages - Maintain Users
Step to configure the SAP System Messages
Proceed as follows to control messages according to your needs:
1. Copy the messages (for which you would like to change the type) into a separate
version (for example, ZZ ).
2. Change the type of these messages in the new version.
3. Allocate the corresponding version to the users as follows: Define a value (for example,
ZZ ) for the parameter ID MSV in the user master record by selecting Goto ->
Parameters.
Please note that if you did not specify any parameter ID for a given user, the system uses
version 00. If there are no entry maintain in the table for a certain version the default
message is a warning.

Start of the Number Range Configurations
In the SAP Inventory Management modules, for every valuated posting, the system will
auto create a Material and a Financial Document. These documents will be pre-
assigned with a range of running numbers. During the initial number range IMG, no action
is required on your side (unless your company want to changed it) as SAP have pre-
configured the system with a set of pre-defined running numbers.
Define Number Assignment for Accounting Documents
Initial IMG Action : Might be required for Accounting Documents
For every Valuated Inventory Posting, two documents (a material document and a
accounting document) will be generated automatically by the system.
By default, SAP has already defined a range of unique number for each document type.
Companies are allowed to change them if they prefer another set of numbers.
Transaction :
OMBA
Menu Path : IMG – Materials Management – Inventory
Management and Physical Inventory - Number Assignment –
Define Number Assignment for Accounting Documents

Configure the Financial Document Type with the relevant Number Range
Financial Accounting documents are split into document types in order for the system to
differentiated document number assignment, which is the basis for distinguishing between
the various accounting operations. A number range is assigned to each document type. In
a company code, you have to define number intervals for each number range and fiscal
year. In inventory management, the transaction determines which document type is used.
To view the Financial Accounting Document Types:
Click Financial accounting document types
Double click on Type AA to view the details
Copy down the Number range No For e.g. 04
To maintain the number assignment for accounting documents.
- Click the Financial accounting number ranges button
Input your company code and click
Click to input the Number range
For e.g.

In the standard SAP Inventory Management System, no change is required as the following
the document types have been predefined:
• WA for goods issues, transfer postings, other goods receipts
• WE for goods receipts with reference to purchase orders
• WF for goods receipts with reference to production orders
• WI for inventory differences
• WL for goods issues with reference to deliveries (SD)
• WN for net posting of goods receipts
• PR for revaluation documents
Click the Goods issue document type and you can view the default Doc. Type that have
been pre-defined.
You can see that each document type has been assigned a number range. In company
code 0001, number intervals are defined for each number range both for the current and
the previous fiscal year.
• Number range 49 with the year-related interval 4900000000 to 4999999999 is assigned
to the document types for all goods movements, except goods movements with
reference to purchase/production orders.
• Document type WE is used for goods receipts with reference to purchase orders and
production orders. This document type is assigned number range 50 with the year-
related interval 5000000000 to 5099999999.
Please note that the net postings of goods receipts (document type WN) are not active in
the standard system. If you want to post goods receipts net, you have to assign document
type WN (instead of WE) to the transaction MB01.
• Document type WI is used for posting inventory differences. This document type is
assigned the number range 01 with the year-related interval 0100000000 to
019999999999.

Define Number Assignment for Material and Phys. Inv. Docs
The Physical Inventory module is used to adjust your company Stock balance after the
company Physical stock-take. Physical Inventory Documents are created to captured the
stock data entries.
No action is required unless you wish to change the number assignment for the following
documents:
material documents
physical inventory documents
Transaction :
OMBT
Menu Path : IMG – Materials Management – Inventory Management and
Physical Inventory - Number Assignment – Define Number Assignment for
Material and Phys. Inv. Docs
Refer to OMBA – Allocate Document Type to Transaction

Define Number Assignment for Reservations
You can only used internal number assignment for reservations.
The default number range 01 with the interval 0000000001 - 9999999999 has been pre-
defined for reservations.
No action is required from you unless your company preferred another range of numbers.
Transaction :
OMC2
Physical Inventory - Number Assignment – Define Number Assignment
for Reservations
(a) OMJK - Maintain Number Range Interval
(b) No. range res/dep.rq

Start of the Individual Fields IMG Settings
As you probably know, SAP is a pre-written software that caters to many companies
around the world. There will be data fields that your company does not required,
optional or fields that are mandatory. Therefore, SAP provides you the flexible to control
those non-critical fields so that each companies can set their own fields attribute although
they may used the same transaction screen to input the data.
Field Selection for Goods Movements Initial/Header Screens
The goods movement screen, MB1A, MB1B, MB1C contains many fields for data entry.
Some companies may prefer to hide those un-used fields not required for any data input.
Note that the field selection for the item screens depends on the movement type and is
configured in separate steps.
For testing, click Hide for field Document header text.
Goto transaction MB1A, MB1B, MB1C and have a look.
Change it back to Input and check again.
Double click on the Modifiable field for more fields.

Field Selection for MIGO
MIGO is the new enjoy transaction code for Inventory Goods Movement. It combines the
transaction MB1A, MB1B, MB1C and MBST
The IMG here allows you to change the attribute of those fields in MIGO.
Transaction :
OMJX
Management and Physical Inventory – Settings for Enjoy
Transactions – Settings for Goods Movements (MIGO) – Field
Selection for MIGO
To change to field attribute, just tick accordingly on the one of the option buttons.
Field Selection per Mvt Type
Here you maintain all the settings for field selection by movement type. This step replaces
the activity Define Screen Layout for the Enjoy transactions. The settings from Define
Screen Layout are adopted in these settings automatically so that you do not need to
maintain new entries here.

You can specify for each field whether it is an optional entry or a mandatory entry. In the
table, you see all fields that are visible. You can access the setting Field Invisible by
deleting the appropriate entry from the table.
There is no distinction between different special stock indicators in these entries. Special
stock fields are always suppressed automatically.
Inventory – Settings for Enjoy Transactions – Settings for Goods Movements (MIGO) –
Field Selection for Mvt Type
Define Screen Layout for Movement Type
Here you set the field selection for the movement types including goods issues and transfer
postings.
When creating a goods movement, the field selection determines which fields
• can be filled (optional entry)
• must be filled (required entry)
• are suppressed fields
In Inventory Management, the field selection depends on the movement type.
The field selection defined for a movement type is valid for entering goods movements and
reservations.
Transaction :
OMBW
Physical Inventory – Goods Issue / Transfer Postings – Define Screen
Layout
Transaction :
OMCJ
Physical Inventory – Goods Receipt – Define Screen Layout
Transaction :
OMJ9A
Physical Inventory – Automatic Movements – Define Screen Layout

This is the first screen. Double click on the Movement Type
This is the Second screen. Double click on any of the Select group Field e.g General
data

This is the Last screen where you change the Field Input Options
Settings for Transactions and Reference Documents
No action is required here unless you want to limit the number of selectable transactions
(goods receipt, goods issue, and so on), reference documents (material document, delivery
note), and movement type that the system propose for every reference document in
transaction MIGO, MIGO_GI, MIGO_GO, MIGO_GR
For example in MIGO, you can see the Selectable posting transaction and Reference
Documents type on the top left of the screen.
Transaction :
MIGO
SAP Menu Path : SAP menu – Logistics - Materials Management
– Inventory Management – Goods Movements (MIGO)

If you need only certain transactions (for example, goods receipts or goods issues), you
can choose from the following preset transactions code:
MIGO - Used to enter all goods receipts.
MIGO_GR - Used to enter goods receipts from external procurement.
MIGO_GO - Used to enter goods receipts for production orders.
MIGO_GI - Used to enter goods issues.
Configure the settings for transactions and reference documents:
1. Choose the transaction with which you want to enter goods movements.
2. For each transaction, define which transactions and reference documents you want to
reference when you post goods movements.
Inventory – Settings for Enjoy Transactions – Settings for Goods Movements (MIGO) –
Settings for Transactions and Reference Documents
To configure the Reference document, select a Tcode and click Reference document of the
left screen.
Just Tick or Untick the Active column and the Reference document will appear or
disappear accordingly when the user use the transaction MIGO - Goods Receipt for
Purchase Order.

Create Storage Location Automatically
Initial IMG Action : Usually Not required
The default setting for all the storage location data is created automatically for all inventory
goods movement that results in a change in the INVENTORY STOCK BALANCE.
The setting does not apply to Create Reservation transaction movement (MB21). This is
because no actual goods movement has taken place during materials reservation.
Note: if you need to create a reservation to a storage location that have not been
created, you can use transaction MMSC to create the storage location.
For each configuration, first of all you have to allow automatic creation per plant and then
you have to explicitly allow the creation of storage location data for each movement type.
A tick means storage location created automatically and vice versa.
Automatic Creation of Storage Location for Goods Issues and Transfer Postings
Specify whether the automatic creation of storage location data is allowed for goods issues
and transfer postings. This is advisable if you work with negative stocks and a material's
first movement may be an outward movement. Note that the reversal movement for a
goods issue, for example, movement type 202 or 262, is not considered as an issue but as
a receipt.
If you only use the automatic creation of storage location data for reversals of goods
issues, you do not have to allow negative stocks. The storage location data is only created
if the quantity is posted to 'standard' storage location stock. It is not created for receipts into
a special stock (for example, into sales order stock).
Transaction :
OMB2
Physical Inventory - Goods Issue / Transfer Postings – Create Storage
Location Automatically
Automatic Creation of Storage Location for Goods Receipts
Specify whether the automatic creation of storage location data is allowed for goods
receipts. This is advisable if you want to post a goods receipt without having to maintain
the storage location view of the material master record in advance.

The storage location data is only created if the quantity is posted to 'standard' storage
location stock. It is not created for receipts into a special stock (for example, into sales
order stock).
Transaction :
OMB3
Physical Inventory - Goods Receipts – Create Storage Location
Automatically
Automatic Creation of Storage Location for Automatic Goods Movements
Specify whether the automatic creation of storage location data is allowed for automatic
goods movements. This is advisable for goods movements via Shipping or when you post
physical inventory differences, for example. The storage location data is only created if the
quantity is posted to 'standard' storage location stock. It is not created for receipts into a
special stock (for example, into sales order stock).
Transaction :
OMJ8
Physical Inventory - Automatic Movements – Create Storage Location
Automatically
(a) Plant
(b) Movement Type
Set Manual Account Assignment for Movement Type
In the R/3 System, account assignment is predefined via the automatic account
determination facility. When you enter material movements that are assigned to a cost
account, you can enter the account number manually. In doing so, you change the account
assignment predefined as offsetting entry for inventory posting.
Define the movement types for which you want the G/L account to be ready for input.
This happens to movement type “201 – Consumption for cost center from warehouse”,
where user are required to enter the cost center which is tied to a G/L a/c.

You can specify this four choices:
These are the IMG transaction and Menu path where you can configure the Set Manual
Account Assignment. You can have a look but no changes are necessary.
Transaction :
OMB6
Physical Inventory – Goods Issue / Transfer Postings – Set Manual
Account Assignment
Transaction :
OMCH
Physical Inventory – Goods Receipt – Set Manual Account Assignment
Transaction :
OMJ9
Physical Inventory – Automatic Movements – Set Manual Account
Assignment
Maintain Copy Rules for Reference Documents
Configure whether the items of the reference document are proposed as selected on the
item selection list when entering a document with reference, or not. In the standard
system, the items are proposed selected.
The user can delete the check marks manually on the item selection list if she/he does not
want to adopt some items. It is useful to set this indicator if usually all or most of the items
of the reference document are to be adopted.
Specify for every transaction whether the items of the reference document are to be
pre-selected or not by making a Tick on Untick on the Selection Box.
Inventory - Goods Issue / Transfer Postings – Maintain Copy Rules for Reference
Documents
Inventory - Goods Receipt – Maintain Copy Rules for Reference Documents

Set Up Dynamic Availability Check
Dynamic availability check is link to the SAP Material Requirement Planning system. The
system checks whether the material to be withdrawn is available and issues a message, if
necessary.
In Inventory Management, two types of availability check are carried out.
availability check during the entry of reservations
availability check during the entry of goods movements
The availability check is only carried out if:
• the material master record contains a checking group for the availability check
(MM01/MM02 - MRP 3 View)
• a checking rule is assigned to the transaction in Customizing
Transaction :
OMCP
Physical Inventory - Goods Issue / Transfer Postings – Set Up Dynamic
Availability Check
Transaction :
OMCM
Physical Inventory - Goods Receipt – Set Up Dynamic Availability Check
Figure 1: The Main Menu for Availability Check

You can define
• for each movement type which type of message is issued (object Movement type)
• which checking rules are supported (object Checking rule)
• per checking group and checking rule: which objects (documents, stocks, material
requirements) are included in the availability check (object Define checking rule)
• per transaction of Inventory Management: which checking rule applies (object
Transaction codes)
In the standard system, the message type A (warning in the case of non-availability,
otherwise no message) is set for all relevant movement types.
The Movement Type button:
For Inventory Management, the checking rule 03 is provided.
The checking rules are also used by other applications (Sales & Distribution) and can also
be maintained by them. If you want to define new checking rules or change existing rules, it
is recommended that you contact and work with the other applications consultants for Sales
& Distribution, Material Requirements Planning.
Steps to carried out:
1. Define the movement types for which an availability check is to be carried out and which
type of message is issued.
2. Check the checking rule that you want to use in Inventory Management. Define a new
checking rule, if necessary, and define for each checking group which objects are
included in the availability check for this checking rule.
3. Check the availability checking rules for each transaction. Assign other checking rules
to the transactions, if necessary.
In the Define Checking Rule button, Double click on the Check Rule for the Individual
Settings

The IMG settings is straight forward. Just tick or untick those stocks or documents
you want to include or exclude during the MRP checking. Normally, accept the
standard default and change it as the user get familiar with the system.
In the Transaction code button, accept the standard default checking rule assigned.
Changes are usually not necessary for other tcode.

Generate Physical Inventory Documents for Goods Movements
Define for each plant and movement type whether a physical inventory document is
automatically generated when posting a goods movement. You can create a physical
inventory document in addition to the material document at the time of a goods movement.
This function is important when inventory differences are posted from the Warehouse
Management System. These inventory differences are thereby documented in Inventory
Management with a physical inventory document.
In order to create an inventory document in addition to a material document for a goods
movement, the following conditions must be met:
• In the plant, you must define the transaction/event type WV for automatically generated
physical inventory documents. You must define the document number assignment for
this transaction/event type.
• Automatic generation of physical inventory documents must be allowed for the
movement type.
You may only enter the transaction/event type WV (inventory difference from Warehouse
Management system).
In the R/3 System, automatic generation of physical inventory documents is allowed for
movement types 711 to 718.
Transaction :
OMCC
Physical Inventory - Goods Issue / Transfer Postings – Generate Physical
Inventory Documents for Goods Movements
Transaction :
OMJC
Physical Inventory – Automatic Movements - Generate Physical Inventory
Documents for Goods Movements
1. Specify the plants for which you want the R/3 System to create a physical inventory
document. Enter transaction/event type WV for these plants.
2. Check the movement types for which you want a physical inventory document to be
created. Set the number assignment for the given transaction/event type.

Allow Negative Stocks
Although negative stocks are allowed by the system, most companies prefer not to used
this function as it is not a good business practice to draw stocks in advance. Most auditors
will also disapprove of this bad Inventory Movement practice. It is similar to your Bank
Overdraft facility where you are allowed to draw more than what you have in your Bank
Balance.
You can configure whether negative stocks are allowed for the unrestricted-use stock in the
valuation area, in the plant, and in the storage location.
The default IMG setting is negative stocks are not allowed.
If negative stocks are needed in your company, proceed as follows:
1. Set the indicator Neg. stocks allowed in the valuation areas in question. (A valuation
area can be a plant or a company code, depending on the configuration.)
2. Choose a valuation area and specify per plant whether negative stocks are allowed for
special stocks.
3. Choose a plant and specify in which storage locations of the plant negative stocks are
allowed.
4. Save your settings.
5. Afterwards, you must change the plant data of all materials for which negative stock
balances are allowed. The indicator for negative stocks is contained in the Sales:
general/plant view of the material master record (MM01/MM02).
Transaction :
OMJ1
Physical Inventory - Goods Issue / Transfer Postings – Allow Negative
Stocks
You can allow Negative Stocks at Plant or Storage Location level. To define at
Storage Location Level, select the Valuation area and click the word Storage location
on the left screen.

Set Missing Part Check
With the aid of the missing parts check, the system checks at the time of a goods receipt,
other receipt, or transfer posting whether the material posted is a missing part. If so, the
system issues a warning message and sends a mail message to the responsible MRP
controller in the plant.
Activating the missing parts check
The missing parts check is only carried out if it is active in the plant
• a checking rule is defined for the transaction
• a checking group is defined for the availability check in the material master record (MRP
data)
Transaction :
OMBC
Physical Inventory - Goods Receipt – Set Missing Parts Check
Transaction :
OMJD
Physical Inventory – Automatic Movements – Set Missing Parts Check
(b) Transaction Code

Default the “Delivery Completed” Indicator
Define the system to automatically suggests the delivery completed indicator for
goods receipts if the delivered quantity lies within the under/over delivery tolerances.
The "delivery completed" indicator has the following effects:
• The item is regarded as closed, even if the total quantity was not delivered.
• A further delivery is not expected, may, however, arrive.
• In the next goods receipt, the item appears on the selection list but has no selection
indicator.
• The item can be reorganized even if the total quantity has not been delivered.
Even if the "delivery completed" indicator has not been set, an item is considered closed
once the total quantity has been delivered. This means that the "delivery completed"
indicator is not necessary in this case.
Specify for each plant whether the R/3 System proposes the "delivery completed" indicator
automatically.
Inventory - Goods Receipt – Set “Delivery Completed” Indicator

For GR-Based IV, Reversal of GR Despite Invoice
Here you specify for each movement type whether, with GR-based invoice verification, a
reversal with reference to the purchase order or a return delivery can be entered, even if
the invoice relating to the goods receipt document has already been posted.
If reversals are not allowed, you must cancel the invoice before you enter the reversal of
the goods receipt or the return delivery.
If reversals are allowed, you can post the material document and enter cancel the invoice
at a later time. If you do not wish to cancel the invoice, you can enter the goods receipt with
reference to the reversal document or the return delivery, so that the reference to the
invoice continues to exist.
Tips : Majority of the companies will not allowed material document to be cancelled
without first canceling the Invoices as this can cause data inconsistencies after a
period of time.
Transaction :
OMBZ
Physical Inventory - Goods Receipt – For GR-Based IV, Reversal of GR
Despite Invoice

Record Reason for Goods Movement
Initial IMG Action : Usually Required
When you enter a goods movement, you can only enter reason which have been defined
for the movement type here. Most of the time only movement type that deduct stocks need
a reason as a form of control.
Reason for Goods Movement are a required field when posting Goods Issue with MB1A
for movement type 551 – Withdrawal for scrapping. Normally, in a company, the Quality
Department will be the one that are allowed to used this movement type as they are the
one who approved whether the materials should be scrapped or not.
Transaction :
OMBS
Physical Inventory - Movement Types – Record Reason for Goods
Movements
(a) Control Reason – Accept the default, click the Reason field to change the options
(b) Reason for Movement – Click New entries button to enter the Reasons

How to Define, Copy or Change a Movement Types?
When you enter a goods movement, you must always enter the movement type. The
movement type has important control functions in Inventory Management. It is essential for:
• updating the quantity fields
• updating the stock and consumption accounts
• selection of the fields used for entering documents
• printing
• goods receipt/issue slips
Note : Never tried to create a new movement type without copying an existing one.
Additional movement type are sometimes required to differentiate the different purpose of
the Goods Movement Transaction. For e.g. Companies may create additional movement
type to differentiate between an Internal Scrap 551/552 or Customer Scrap Z51/Z52.
Transaction :
OMJJ
Management and Physical Inventory - Movement Types – Copy,
Change Movement Type
Always copy an existing movement type to the new one you wish to create. Don’t
forget to copy the reversal movement type and change it. To copy, just select the
movement type you want to copy and click the button.

Double click on the Movement Type to view the detail IMG Settings
For e.g. if you Tick the Automatic PO Field, a purchase order is created automatically at
the time of goods receipt.

For example, if you create a new movement type Z51 copy from 551, don’t forget to copy
the reversal Z52 copy from 552.

Default Print Control for Material Document
After saving their records, users are allowed to print the goods receipt/issue slips for the
goods movements. In this IMG, you can make the following settings:
• on which printers the goods receipt/issue slips can be printed
• whether these printers support barcode and multiple printout
• for which movement types goods receipt/issue slips can be printed
• which printer is located in a specific plant/storage location and how the printout of an
output type is controlled for this printer
Transaction :
OMBR
Management and Physical Inventory – Print Control – General
Setting
First find out the Print version that is use for the Inventory Transaction code

Depending on the Print Method you used, you may need to check the Print Item settings for
this Movement Type.
Inventory – Print Control –
OMB5 - Maintain Print Indicator for Goodds Recept Documents
OMB4 - Maintain Print Indicator for GI/Transfer Posting Documents
OMJL - Maintain Print Indicator for Automatic Movements
Once you have the Print Version and Print Item Setting, proceed to MN21 to create the
condition records for which Output Type you want to used to activate the printing.
Transaction :
MN21 / MN22
Physical Inventory – Output Determination – Maintain Conditions –
Create/Change Condition: Inventory Mgmt
For eg. WA03
For this example:
Trans./event type – WA (look at the Title bar, only the first 2 char. Is required)
Print version – 3 (Collective goods receipt/issue slip)
Print item – 1 (Material document printout)

Double click on line item Material document printout
Leave the rest as it is, only specify the Number of messages (1 for print once, 2 for print
twice etc.)
Other Print Settings you need to check:
Transaction :
M706
Physical Inventory – Output Determination – Maintain Output Type
Double click on WA03 to reach the next screen:
Check the Print param. to ensure that it ties with the Print Method you used.

For the default print out of the Material Document, you can specify One of the method.
Most will use Method 3 which is the easiest or Method 1 (can be a bit tricky due to the
Storage Location).
Method 1:
Transaction :
OMJ3
Physical Inventory – Output Determination – Printer Determination –
Printer Determination by Plant/Storage Location
Specify the Plnt, Sloc, Output Device, whether to print Immediate or Not
Method 2:
Transaction :
OMJ4
Printer Determination by Plant/Stor. Loc./User Group
Specify the Plnt, Sloc, User grp, Output Device, whether to print Immediate or Not

Method 3:
Transaction :
OMJR
Printer Determination by Output Type/User
Specify your Condition type
Specify the User Name, Output Device, whether to print Immediate or Not

Although you have configure the default printer for the user, when they want to print the
Material Document Slip automatically after saving the record, they have to tick the Print
field indicator in order for the configuration to work.
The Print field indicator can be pre-selected if the parameter NDR (Print via output control
in MM - Inventory management) has been set to X (capital letter) in the user master record
(SU01).

Define Stock List Display for MMBE
In this step, you define which fields are displayed in stock lists (transaction MMBE).
The R/3 System distinguishes between stock lists using version numbers. For each
version number, you can open up to three windows in which you can display
different stock lists. For each window, you can define up to three stock types (for
example, blocked stock returns or unrestricted-use stock).
The following list versions are preset in the standard SAP R/3 System:
• 1 standard display, long
• 2 standard display, short
• 3 special display
Action for you:
Maintain the default settings as follows:
1. Under Display version
• Assign a version number for each version
• Define which fields are to be displayed
2. Under Rules for display of stock balances, assign the following to each version
number:
• The windows you want to open
• The stock types in the columns
3. Under Detail screen for stock balance display, define additional stock categories.
Transaction :
OMBG
Management and Physical Inventory – Reporting – Define Stock List
Display

The Rules for Stock Balance Display button decide the column in MMBE
To check your Configuration:
Transaction :
MMBE
Menu Path : SAP Menu – Logistics - Materials Management –
Inventory Management – Environment – Stock – Stock Overview

Define Valuation Class
If a user creates a material in MM01, he must enter the Material's Valuation Class in
Accounting View 1. The R/3 System uses your default settings to check whether the
valuation class is allowed for the material type. The valuation class is a group of
materials with the same account determination.
If a transaction is to be posted to different accounts depending on the valuation class,
create an account determination for each valuation class in the step Configure Automatic
Postings (transaction OMWB).
The valuation classes allowed depend on the material type. Several valuation classes are
generally allowed for one material type. A valuation class can also be allowed for several
material types.
The link between the valuation classes and the material types is set up via the account
category reference (transaction OMSK). The account category reference is a combination
of valuation classes. Precisely one account category reference is assigned to a material
type.
The Valuation Class is very important because it define the General Ledger Account
code that will be posted in Financial Accounting. This will impact the Profit and
Loss Account.
Valuation Class cannot be change once transaction posting begins for the Material.
If you want to change it, all Open Sales Order, Purchase Orders, Production Orders
etc. have to be close.
Transaction :
OMSK
Menu Path : IMG – Materials Management – Valuation and Account
Assignment – Account Determination - Account Determination Without
Wizard – Define Valuation Classes
1. Define the Account category reference
2. Define the Valuation class for which Account category reference
3. Define the Material type for which Account category reference

Account category reference
Valuation class
Material type for which Account category reference

Configure Automatic Postings to G/L Accounts
For this IMG settings, you will configure the link between Inventory Management and
Financial Accounting.
What do you mean by automatic postings?
For many years, SAP has study and fine tune the Business Accounting practice around the
world. The current Inventory programs is able to Debit or Credit correctly any transaction
postings that are made to the system. The programs will find all the necessary G/L
accounts codes that have been configured by you and automatically post it to the relevant
Financial Entries. For e.g.: Posting lines are created in the following accounts in the case
of a goods issue for a cost center:
o Credit - Stock account (Inventory Deducted)
o Debit - Consumption account (Increase in Consumption)
During inventory goods movement, the user does not have to enter a G/L account, since
the R/3 System automatically finds the accounts to which postings are to be made using
the following data:
The Company Chart of accounts
In the R/3 system, every company is identified by a company code and each Strategic
Business Unit in the company is identified by a plant. User are required to entered a plant
for every data entry and the System will determine the chart of accounts which is valid for
the company code. The Finance department user will maintain the Master record for the
Chart of Account in transaction “FS00/FSP0/FSS0” before you define it inside the IMG
under the automatic account determination individually for each chart of accounts.
Valuation grouping code of the Valuation Area (per Plant)
Group the various valuation areas into a single valuation group help to reduce the number
of entries both in the configuration and creation of G/L accounts code.
For example:
With Valuation Grouping, you only need one entries for the configuration irregardless of
how many valuation area you have.
Valuation Group Valuation Class G/L Account
0001 01 12345
0001 02 12345
Without Valuation Grouping, you will need to maintain each entry for every valuation area
you have.
Valuation Group Valuation Class G/L Account
0001 01 12345
0001 01 65432
0002 02 67890
0002 02 56565
Grouping all the Valuation area as one is the recommended configuration method.

Configure the Valuation Class Grouping
Transaction Menu Path
OMWM IMG – Materials Management – Valuation and Account Assignment –
Account Determination - Account Determination Without Wizard – Define
Valuation Control
OMWD IMG – Materials Management – Valuation and Account Assignment –
Account Determination - Account Determination Without Wizard – Group
Together Valuation Areas
To use the Valuation grouping, first set Valuation grouping code to active in “OMWM”.
You can now do the grouping in “OMWD”. For example, you group all the Valuation area to
the same valuation group.
Val. Area CoCode Company name Chrt/accts Val.grpg.code
AA 0001 ABC Engineering Ltd XYZ 0001
BB 0001 ABC Engineering Ltd XYZ 0001
CC 0001 ABC Engineering Ltd XYZ 0001
Transaction/event key (internal processing key)
The posting key refers to the inventory movement that the user has to specific during any
inventory posting. The movement type will enable the system to determine the correct
entries record to post into the system.
Account grouping (only for offsetting entries, consignment liabilities, and price
differences)
The posting transaction "Offsetting entry for inventory posting" is used for many
different transactions posting (for example, goods issue, scrapping, physical inventory),
which are assigned to different G/L accounts (for example, consumption account,
scrapping, expense/income from inventory differences). Therefore it is necessary to divide
the posting transaction according to a further key: account grouping code. An account
grouping is tied to each movement type in inventory management which make use of the
posting transaction "Offsetting entry for inventory posting". In the posting transaction
"Offsetting entry for inventory posting", you must assign a G/L accounts for every
account grouping. If you wish to post price differences to a different price difference
accounts in the case of goods receipts for purchase orders, goods receipts for orders, or
other movements, you can define different account grouping codes for the transaction key.
With the account grouping, you can also have different accounts for consignment liabilities
and pipeline liabilities.

Valuation class of material or (in case of split valuation) the valuation type
The valuation class allows you to define automatic account determination that is dependent
on the material. The user will define the valuation in the Material Master (MM02 –
Accounting 1 View ) decided by Finance which will tied each Valuation class to a G/L
Account code. For example: you can post a goods receipt of a raw material to a different
stock account than if the goods receipt were for trading goods, even though the user enters
the same transaction for both materials. You can achieve this by assigning different
valuation classes to the materials and by assigning different G/L accounts to the
posting transaction for every valuation class. If you do not want to differentiate
according to valuation classes you do not have to maintain a valuation class for a
transaction.
The G/L account assignments for the charts of accounts INT and the valuation grouping
code 0001 are SAP standard.
Configure the Valuations Class Link to the G/L Account
Transaction :
OMWB
Menu Path : IMG – Materials Management – Valuation and Account
Assignment – Account Determination - Account Determination Without
Wizard – Configure Automatic Postings
(a) At the Initial screen, click the Account Assignment button to view this screen.

(b) Double above line item to this screen
Define the Valuation and G/L Account code. If you have multiple Company codes, then
you have to maintain for multiple Chart of accounts.
When you first enter this screen, the system will prompt you to enter the Chart of
Accounts. Subsequently, if you wish to change the Chart of accounts click Edit – Change
chart/acct.
Notice the first column Valuation modif., if you did not group the Valuation Area, then
you’ll have to define each Valuation Area for each Valuation class for each G/L Account. If
you have four Valuation Area, then everything will be multiply by four.
At the above screen, click the Rules button and you are allowed the followings options on
how your G/L Accounts are determined. Most common options will be to tick the
followings:

Take note of the General modification column in GBB
You can find the relevant Account Modification for each of the movement types.
IMG Shortcut Menu Path :
OMWN IMG – Materials Management – General Settings for Materials
Management – Valuation and Account Assignment – Account
Determination – Account Determination without wizard – Define Account
Grouping for Movement Types
For example, Vendor Consignment movement type is 411 and special stock K. You can
see that the Account modification is VBR.

For you to be able to configure the Valuation Class and G/L Account, you’ll have to work
with the Finance Department or FI Consultant as they need to provide you with all the
G/L Account for the Material Valuation Class.
The followings are the Inventory Transaction that you need to configure:
Define Single G/L Account
Description Tranaction
Expense/revenue from consign.mat.consum. AKO
Expense/revenue from stock transfer AUM
Materials management small differences DIF
Purchase offsetting account EKG
Freight clearing FR1
Freight provisions FR2
Customs clearing FR3
Customs provisions (optional) FR4
External activity FRL
Materials management exch.rate diffs KDM
MM exchange rate rounding differences KDR
Price diff. offset. entry (cost object) (optional) KTR
Price differences (cost object hierarc.) PRK
Neutral provisions (optional) RUE
Gain/loss from revaluation UMB
Unplanned delivery costs (optional) UPF
Input tax VST
GR/IR clearing acct (mat. ledger) (old) (optional) WRY
Define Valuation Class ties to G/L Account
Description Tranaction
Change in stock account BSV
Inventory posting BSX
Purchase account EIN
Purchasing freight account FRE
Offsetting entry for inventory posting GBB
Consignment payables KON
Cost (price) differences PRD
GR/IR clearing account WRX

Valuation Class Configuration Checking
Upon Completion, you can return to the main screen OMWB to do some Simulation.
Click the button Simulation for the next screen.
Type in a Plant, Material. Click the transaction you want to do, for e.g. GR goods receipt
and click the Choose button.

Click the Account assignments button and from the system message, you will be able to
tell if there are errors in your Account assignments.
You can also check which G/L Accounts is tied to which Valuation Class by clicking the
button in transaction “OMWB”.
Enter the company code and click the Execute button.
The report will list all the Valuation Class under the G/L account.
Storage Location Indicator to allowed/disallowed Physical Inventory Freezing
Initial IMG Action : Usually Required
It is not necessary to have stock count for all the storage location. At time, certain storage
location might not be subject to stock-take and you can untick the field Freeze book
inventory.
Menu Path : IMG – Materials Management – Inventory Management and Physical Inventory
– Physical Inventory - Allow Freezing of Block Inventory Balance in Storage Location
‘ ‘ – Disallowed Physical Inventory Freezing
Tick – Allowed Physical Inventory Freezing

Configuration for Vendor Consignment
Vendor consignment means that the vendor will provides the materials and stores them on
your premises.
The advantage for this arrangement is that the vendor remains the legal owner of the
materials until you withdraw the materials from the consignment stores. Payment to the
vendor is then activated. There are less downtime as materials are always available at
your company premises.
The disadvantage is that you need to provide a warehouse, insurance, manpower to
manage the warehouse for the Vendor materials.
To use the SAP Vendor consignment, you have to do the followings IMG:
Step 1: Activate Consignment Prices via Info Records
OMEV IMG – Materials Management – General Settings for Materials
Management – Activate Consignment Prices via Info Records - Activate
Consignment Prices via Info Records
Step 2: Configure the Consignment Automatic Posting Account Code
OBYC IMG – Materials Management – General Settings for Materials
Management – Valuation and Account Assignment – Account
Determination – Account Determination without wizard – Configure
Automatic Postings
Description Transaction
Offsetting entry for inventory posting GBB
Consignment payables KON
Cost (price) differences PRD
You must define the Account Assignment for Consignment payables – KON
GBB and PRD can be optional as the G/L account code can be the same.

Business Process Flow for Vendor Consignment
There might be a slight difference with the business process of your company but overall,
your company will still have to go through the same SAP tcode.
1. First a contract will be drawn and sign between your company and the vendor. The
vendor will provide you with the materials price which the Purchaser will input to tcode
ME11 – Creating Info Records for Consignment Stocks.
2. For any materials that you need from the vendor, the Purchaser will create a Purchase
Order with tcode ME21N – Create Purchase Order for Consignment. The system will
identify the Consignment PO by the Item category K which the Purchase enter in the
PO. In a consignment PO, no material price is required to be entered.
3. Once the Vendor delivered the materials to your company premises, the Store
personnel will entered a Goods Receipts with reference to the PO with tcode MIGO –
Goods Receipt for Purchase Order.

4. You can view the consignments for each materials with tcode MMBE – Stock
Overview. A line item with the field named Vendor consignment will appear. Double
click on the Quantity and you will be able to view the Vendor who supply the materials.
Any stocks that remain in the line item Vendor consignment belongs to the Vendor and
no payments is required. To view all the Open Consignment stocks, use tcode “MB54”.
5. To used the consignment stocks, the Purchaser have to transferred it to your company
stocks which is the field Unrestricted used column. The Purchaser will used tcode
MB1B – Enter Transfer Posting with Movement type is 411, Special Stock ‘K’ and the
Vendor code that the materials you want to used (assuming that you have multiple
Vendor that supply the same materials). At this point, the system will read the PRICE
from the Vendor Materials Info Record (ME12) and create a Financial documents.
After the transfer, the stocks belongs to your company and payment will be made
according to the agreement.

6. At the payment intervals agreed, Finance department will print the Consignment
Settlement list with tcode “MRKO” . The list will be passed to the Purchase Department
for verification. Once verified, Finance will do a Consignment Settlement with tcode
“MRKO” and the Vendor will be paid.

The Initial Inventory during Implementation
Task 1: Set the Initial MM Period for your Company Code
During the Initial MM Implementation, ensure that the start of the MM Period for the
company code is maintain in OMSY. This IMG will allows the user to start inputting the
Material Master Records which later allows them to input the Inventory Records.
Transaction :
OMSY
Menu Path : IMG – Logistics General – Material Master – Basis Settings
– Maintain Company Codes for Material Management
Maintain the Current Period (Start of your Implementation) and hit Enter.
For e.g. going live on 2004 01 (January 2004). Please note that 2004 01 doesn’t always
represent January 2004. It depends on how your period is begin setup by the FI
consultant. Some company go-live on July 2004 and the period begins 2004 01. So
remember to check how your company period is begin organized.
Subsequently, every end of the month, you will close the current month Inventory and Open
the Next Inventory Period with transaction MMPV. The Period is always the Next Period.
Transaction :
MMPV
Menu Path : SAP Menu – Logistics - Materials Management – Material
Master – Other – Close Period

Task 2: Transferring the Current Inventory Balance to the SAP System
The next thing you need to asked the User to prepare before going-live is the Initial
Opening Inventory that your company have. Assuming there is a current Manual
Inventory system that your company is using and you need to transferred the last Inventory
Balance to the new SAP system. If the Inventory transaction is not too many, you can
asked them to input manually into the SAP system with transaction MB1C.
The last day before going-live is usually declared a stock-take day by the company as they
need to freeze all Inventory Posting so that the Last Inventory Figures can be accurately
transferred to the New SAP System.
If the transaction is too many, you can suggest to them to engage an Abaper to write an
Initial Inventory Quantity transferred program. The user will maintain all the Materials
quantity, storage location and plant in the Excel file and this will then be exported into the
SAP Inventory system.

To enter the Initial Opening Inventory
Transaction :
MB1C
Menu Path : SAP Menu – Logistics – Material Management – Inventory
Management – Goods Movement – Goods Receipt - Other
SAP have assigned movement type 561 as the initial Inventory value entry. For wrong
entry, enter the same information with movement type 562 and the Inventory figures will be
reverse. After the Initial Inventory transferred, no one should be authorized to used
561/562 anymore.
On the second screen the user just need to enter the Material and Quantity. To enter more
materials click on the Menu Edit – New items

Static versus dynamic data conversion
In general, data could be classified as begin either static or dynamic data.
Static data includes items that are relatively stable such as vendor master, material master,
BOM, routing, work centers, customer master, price agreement, material group, activity
prices, cost centers etc.
Dynamic data includes items such as inventory balances, A/R balances, A/P balances, GL
balances, Open Production Orders, Open Sales Orders, Open Purchase Orders and
Planned Independent Requirements.
In general, we will have lots of time to convert the static data but insufficient time to rush
the dynamic data into the system. This is because dynamic data must be converted with a
clear cut-off date. This means that the balances must be that of the same point in
time in order to ensure the integrity of data.
Where the volume of data in relation to the number of end users is high, we will consider
automating the conversion, provided that data is available from the old system.
If the volume is low or if data is not available from the present system, users should key the
data directly into SAP. This approach has an added and important benefit of training
the end users in the operation of the SAP system.
A Sample note on Inventory Balance Conversion
This information will be extracted from the current system and uploaded into SAP
automatically. The conversion process will generate the following accounting entries:
Dr Inventory Control Accounts
Cr Inventory Conversion Control Account (e.g. 999999)
If done correctly, the balance in the Inventory Conversion Control Account should become
zero.
Both the existing system extraction program and the SAP batch input record formatting
program must be ready by Month 99 for the trail run.

Appendix A: The Inventory Goods Movement Configuration Links Explain
Now, let see what are the Inventory Goods Movement Configurations that are related
before the user can post any Goods Movement:-
1. Configure the Valuation Class (OMSK) which the user will then maintain it in transaction
MM01/MM02 – Accounting 1 View. The Valuation Class will allows the system to
post to the correct General Ledger Account in the Financial Accounting Modules.
2. Maintain the Storage Location by Plant (OX09) which the user will then have to specify
when they do any Inventory Posting with the Goods Movement transaction like MB1A,
MB1B, MB1C, MB01, MB31, MIGO. If you have accept the default configuration
Create Storage Location Automatically (OMB2, OMB3, OMJ8), then user does not need
to create the Storage Location (MMSC) for the material manually every time they post a
new Storage Location for the material.
3. Set the Printer Determination (OMJ3 or OMJ4 or OMJR) if the user wish to print the
Material Document after Goods Movement have been successfully posted.
4. Maintain the Reason for Movement (OMBS) for the Material Scraps Movement type
551.
5. Optionally, you may want to Hide Unnecessary Fields by Movement Type (OMJX,
OMBW, OMCJ, OM9A) that your company does not need.

Appendix B: Restrict the Storage Location from any Goods Movement
If you want to restrict the users from performing any Goods Movement, first Flag for
Deletion the Material Storage Location and then set the Message M7 127 to ‘E’.
Step 1 :- Flag for deletion the Sloc
To Flag for Deletion the Storage Location, goto transaction MM06

Next, tick the Storage location and Save
Step 2 :- Set Message M7 127 to ‘E’ (Error)
OMCQ IMG – Materials Management – Inventory Management and Physical
Inventory - Define Attributes of System Messages
This SAP Message will pop-up when the users try to do a Goods Movement :-
Material Testing Plant SLOC flagged for deletion
Message no. M7 127
The material master record V has been flagged for deletion.
Depending on the system setting, the system issues either a warning or an error message.
• If the message is a warning (W), the system will accept your entry, but
simultaneously issues a warning to prevent you from making the wrong entry.
• If the message is an error message (E), the system will not accept your entry.

Appendix C: Allows/Disallowed Goods Movement Posting to Previous Period
This transaction code allows you to control the Inventory Posting for the Current and
Previous Period (SAP terms for month) after the Month-end Closing.
The purpose of setting this indicator is to stop the user from posting any Inventory
transaction after the beginning of a new Month. This is usually a request from Finance
department because they will not be able to determined the Previous Month stocks figures
if user to continue to post entry to the previous month as Financial Document will be
created for any valuated materials that the user post to the previous month.
Menu Shortcut Menu Path :
MMRV SAP Menu – Materials Management – Material Master – Other – Allow
Posting to Previous Period
To prevent user from posting to the Previous Month, untick Allow posting to
previous per. and tick Disallow backposting generally as shown below and vice
versa.

Appendix D: How to Archive the Materials Documents?
In Inventory Management, for every transaction posting, the system will create a Material
Documents. After a period of time, depending on your company transaction, your database
will grow and deletion of passed data is required.
Archiving is normally done by the Basis team, but you may required to do it, if you does not
have one (For e.g. SAP server is outsource to a Data Center). Upon successful deletion,
the Basis person or the Data Center will backup the archive files into a TAPE before
removing it from the SAP server.
Archiving the Material Documents requires two steps:
1. Create the Archive files – the system will CREATE an archive files that reside in the
SAP server.
2. Actual Deletion from the SAP database – the system will READ the archive files that
have been created and remove them from the Inventory database (or tables).
First check your Material Documents Life. The formula is:
Current date – Material Documents Posting Date > Material Documents Life
Transaction :
OMB9
Physical Inventory – Define Document Life
Archiving the Materials Documents:
Transaction :
SARA
Menu Path : SAP Menu – Tools – Administration – Administration –
Client Administration - Archiving
Type the Material Documents Object name is “MM_MATBEL” and Hit Enter.
Figure 1:

Figure 2: If you are doing it for the first time, click the Customizing button.
Figure 3: In the Archiving object-specific Customizing, Click the Technical settings

Figure 4: Customize the Test Variant to Test and the Production Variant to Production:
TestSessVariant – Click Variant -> Values -> Tick Simulation and Log
Prod. Session Variant – Click Variant -> Values -> Tick Log
Save it and return to the Archiving Main Menu (Figure 2).
Figure 5: With the above settings, you can now proceed to do the Archiving. At the Main
Menu (Figure 2), Click the Archive button. Type in a Variant Name and click the Maintain
button.

Figure 6: Depending on your company Financial Year Configuration, your document year
might not follows the normal Calendar year. For e.g. 200401 refers to July 2003 and
200412 refers to June 2004. Save your Variant.
To start the Archive, Click the Start button in Figure 5, then follows by the
Save button.
The Start date will change to Green Light and you can now click the Execute button.
Check the Spool Request and reconfirmed that the Archive Material Documents are those
that you wish to delete.

Actual Deletion from the SAP Database
If everything is ok, you can proceed to Figure 2 and click the Delete button to start the
Actual Delete from the SAP database. Click the Archive selection to select the Archive
files.
Tick the Archive files and hit the Enter key. Next maintain the Start date button as
Immediate. You can tick the Test session button to do a test first before starting the
Actual Delete. Once you are comfortable, Untick the Test session button and do an
Actual run and the Material Documents will be Physically deleted from the database.
When the Deletion Jobs is completed, you can check the spool log in tcode SP01 and do a
random check with transaction MB03 to verify that those Archive documents does not
exists anymore.

Appendix E: Configure the Cycle Count in SAP
Complete the system settings for the physical inventory method of cycle counting by
defining the individual cycle counting indicators for the given plant.
The cycle counting indicators are used to group the materials together into individual
categories.
Normally, the cycle counting indicators are assigned when an ABC analysis is run.
However, different indicators can be defined, if necessary.
1. Define the allowed cycle counting indicators in the plant.
2. Make the required settings for each indicator.
Remember that the total of the percentages must be 100 if you want to assign the indicator
to the individual materials as part of an ABC analysis.
Change Settings for Cyclic Counting
Transaction:
OMCO
Menu Path: IMG – Materials Management – Inventory Management and
Physical Inventory – Physical Inventory – Cycle Counting
To set the cyclic count indicator automatically
If you does not wish to set the A,B,C,D indicator manually, SAP can help you to set it
automatically. However, take note that the auto SAP A,B,C,D classification is based on the
consumption/usage value or requirement (forecast) value.
For Example,
In a given plant, 200 materials are subject to the cycle counting physical inventory
procedure.
In Customizing for Inventory Management, the following percentage allocation has been
defined for the plant:
A materials: 50%
B materials: 25%
C materials: 15%
D materials: 10%

In the cycle counting analysis, the materials are sorted by consumption. After completion of
the analysis, the cycle counting indicator is assigned as follows:
The first 3 materials (sorted in descending order according to consumption) represent 50%
of the consumption and have the indicator A.
The next 12 materials represent 25% of the consumption and have the indicator B.
The next 49 materials represent 15% of the consumption and have the indicator C.
The remaining 136 materials represent the rest (10%) of the consumption and have the
indicator D.
Transaction:
MIBC
SAP Menu Path: Logistics – Materials Management – Inventory
Management – Physical Inventory – Special Procedures – Cycle Counting
– Set CC Indicator
Note:-
If you tick the All stock materials, all material including those who do not have the
cyclic count indicator are also taken.

Field explanation:
Field Description Mandatory
Plant Plant code for which the cycle count indicator
is to be put.
No, but at least one
selection option to be
given.
Material
Type
To enter the material type for which cycle
count indicator is to be put.
No, but at least one
selection option to be
given.
Materials
with
deletion flag
Tick this box if even the material with deletion
flag are also to be included.
No. Why include Material
that is already flag for
deletion?
All stock
materials
If this check box is ticked, all material including
those who do not have cyclic count indicator
are also taken.
No, but recommend.
Key figure
radio button
Select radio button “consumption usage” if
past consumption should decide indicator or
select “requirements” if forecast to decide the
indicator. Also put from and to date for option
chosen default is 3 months past and 3 months
future respectively.
Yes
Change cc
percentages
check box
Put tick if you want to do changes for the
default percentages set for A, B, C, D
No
Processing
radio button
Use radio button “Display list first” or “update
without list”. The names show what is the
function
Yes

Create the Physical Inventory Document for Cycle Counting
For every cycle count pre-determined period, run this program to create the physical
inventory document for your cycle count. The rest of the process is exactly like the physical
inventory count.
Transaction:
MICN
SAP Menu Path: Logistics – Materials Management – Physical Inventory
– Special Procedures – Cycle Counting – Create Phys.Inv.Docs

Processing Step for MICN - Create Phys.Inv.Docs:
Press the Execute button
On the next screen, press the Generate session button
On the next screen, select the session and press Process session button
On the pop-up screen, select Radio button for Process / Foreground OR
Background
Press the Process button
Click on the Enter key to refresh the screen
To view the completed job, press the Log icon (or F7). Check the logs for any
errors.
Double click on the screen to see the physical inventory document numbers
The transaction to carry out and enter the Physical count into SAP
Transaction Description Menu Path
MI02 Change Physical Inventory
Document
Logistics – Materials Management
– Physical Inventory – Physical
Inventory Doc. – Change (Put year
as fiscal year and not Calendar
year.
MI03 Display Inventory Document Logistics – Materials Management
Inventory doc. – Display (To print
physical inv doc. – Print)
MI11 Recount Logistics – Materials Management
Inventory doc – Recount
(recounting not without counting)
MI04 Enter Inventory Count Logistics – Materials Management
– Physical Inventory – Inventory
Count - Enter
MI05 Change Inventory Count Logistics – Materials Management
– Physical Inventory – Inventory
Count - Change
MI07 Post Difference Logistics – Materials Management
– Physical Inventory - Difference –
Post
MI20 Different List Logistics – Materials Management
– Physical Inventory - Difference –
Different List

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