Inventory Management in SAP MM (Goods Issue & Receipt, Reservation)

Inventory Management in SAP (SAP MM-MI ) deals with goods. Actually the process of Procurement starts with collecting the business requirement for goods and goes to getting the goods from Vendors in SAP MM.

Once received; Goods have to be place on premise of the company in order to be accessible for consumption or reselling.

Here Inventory Management helps dealing with Goods Placement and management of SAP Stocks.

Table of Contents

SAP Inventory Management FAQ

What does SAP stand for in inventory management?

SAP Inventory Management and Physical Inventory (MM-IM) ‘s component deals with the following tasks:

Management of material stocks on a quantity and value basis
Planning, Entry, and Documentation of all Goods Movements
Carrying out the Physical Inventory

Source: Inventory Management

What is a goods receipt in SAP?

A goods receipt in the Warehouse Management system (WMS) is the physical inbound movement of goods or materials into the warehouse.

It is a goods movement that is used to post goods received from external vendors or from in-plant production.

Source: Goods receipt – SAP Help Portal

What is a goods issue ?

Goods Issue is basically movement of materail within the plant for consumption/manufacturing or outside the plant as delivery to Customer.

Speaking in Inventory terminology, Deplition(reduction in) of stock level as material is getting consumed.

source: good issue and good reciept | SCN

What are the movement types in SAP?

Read detail on Movement Types in SAP here:

Inventory Management Overview ( SAP Stock )

The main topics for Inventory Management in SAP MM are:

Stock Management: the SAP stock can be quantified by quantity or by value
Good Movement: SAP Material Document updating the stock (Value as well Quantity )
Material Document: a key document in Inventory Management. In fact, Both Document number and a year are the keys for the SAP Material Documents

When it comes to inventory management in SAP, you will hear these important objects:

Movement Type
Good Receipt
Good Issue
Reservation

Movement Type in SAP MM

Movement Type identifies the kind of stock posting. The Posting in SAP Stock can be due to an order and the Movement type is posted against a goods receipt or a goods issue.

Check this post for detail information about SAP Movement Type

The Path in SAP Menu for Movement Type is
Logistics > Materials Management > Inventory Management > Goods Movement > Goods Movement (MIGO)

Or you can directly launch the famous SAP MM Tcode: MIGO

For more information on Good Movement ininventory management sap, check alos

SAP MM Goods Receipt

Goods Receipt is issues when goods are received from vendors and the quantity & quality are validated.

Consequently Good Receipt in SAP MM will increase the Warehouse stock for received goods.

Goods Receipt, depending of Movement Type, will post stock in Inventory Management in SAP MM.

The only two actions of Goods Receipt are: creating Goods Receipts or cancelling an existing Goods Receipts.

Goods Receipts can be issues against one of multiple documents such as:

Inbound Delivery
Material Document
Order
Purchase Order
Reservation
Transport

Inventory Management will retrieve the relevant of the document in case If Goods Receipt is created based on a document.

Therefore these Data (plant, materials, quantity) will be fetched from the document.

Notice that it is MIGO tcode, ?also the SAP MM MIGO transaction is the main SAP Tcode in Inventory in SAP MM.

Reservation in SAP MM

Reservation allows blocking a certain amount of Stocks in advance for a period of time in advance as a result it ensures the availability of a SAP Material for the future expected requirement.

For example, a SAP MM reservation can be made for an order (Movement Type will be 261).

In SAP MM Inventory Management, the reserved quantity can be displayed on SAP Tcode MMBE

The SAP tcode Reservation is

MB21 to create a SAP MM Reservation.
MB22 to change a Reservation
MB23 to display a SAP MM Reservation

The Path in SAP menu for Reservation is
Logistics > Materials Management > Inventory Management > Reservation > Create

SAP MM Goods Issue

Goods Issue is the opposite of Goods Receipt.
SAP MM Goods Issue will decrease in case the Warehouse’s tock in Inventory Management.

Every time Goods Issue is created when the SAP stocks is moved out of inventory.
Goods Issue, In opposite to Goods Receipt, can be issue against SAP Document ( order ? )

In order to create a Goods Issue, navigate to
Logistics > Materials Management > Inventory Management > Goods Movement > Goods Movement

Or just launch the MIGO Tcode.

SAP MM Inventory Management recommended Ebooks

Through my experience dealing with Inventory Management, I find these 3 ebooks very usefull:

SAP MM Inventory Management Concept Presentation

This document explains about what all major concepts are involved in SAP Material Management (MM) Inventory Management. This presentation helps you to understand following Concepts

Goods Movements & Movement types
Stock Determination
Valuation and Account Assignment
Split Valuation
Account Determination
Physical Inventory

This document is in the form of PPT. You may use this document for your self study and client demo.

This readymade presentation helps you to make your client understand the potential of SAP MM Inventory Management.

SAP MM Material Management Complete Documents

This documents set provides complete implementation and support solution for SAP MM material Management.

This document will help you for during implementation and as well as during support project.

If you are looking for complete working knowledge in the area of SAP material management, this is perfect document for you.

All the SAP MM consultant and who wanted to become SAP MM consultant will be getting benefit out of these documents.

SAP MM Material Management Concept Presentation Sets

This document explains about what all concepts are involved in SAP MM Material Management. This document is in the form of PPT.

You may use this document for your self study and client demo. This ready made presentation helps you to make your client understand the potential of SAP MM Material Management functionality.

This is a base level of document. If you are new to SAP MM Material Management or you are working in other sap module (like SD, HR, FI, PP, etc). You will find this document very useful.

This will make you understand SAP MM Material Management very clearly and very quickly.