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PrasannaG
Explorer

Introduction:

An essential aspect of supply chain management is maintaining the accuracy of inventory records. SAP Extended Warehouse management is the most powerful module in the SAP ERP portfolio to manage physical inventory. This blog covers how to do physical inventory in SAP EWM, its importance, and how to manage the warehouse effectively.

Physical inventory involves counting the goods in a warehouse and comparing stock to records to verify stock level and condition. This process helps you identify discrepancies between the actual physical stock in the warehouse and the system records to correct them and show any data entry, theft, or damage issues.

Process flow:

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Create Physical Inventory:

Physical inventory document creation is vital in inventory management since it is the base for a successful inventory count. PI can be created with reference to either storage bin, material, or activity area. We must use the transaction code /N/SCWM/PI_CREATE to create a physical inventory document.

Count:

The count refers to the activity performed to check the physical stock quantities available in the warehouse against the recorded inventory data in the system.

Post:

The post refers to validating and updating inventory movements on a warehouse management system. 

Recount and Post:

Recount is an activity directly related to taking another look at certain items or areas of inventory that had a ‘Discrepancy’ reported against them during the initial physical inventory count.

Difference Analyzer:

Difference Analyzer is a tool to analyze the difference between physical inventory documents of stock levels in a warehouse and actual inventory levels in the warehouse. 

Difference Analyzer is a tool to analyze the difference between physical inventory documents of stock levels in a warehouse and actual inventory levels in the warehouse. 


Physical Inventory Execution in SAP:

Step 1: Physical Inventory document creation.

a) To Create the Physical inventory document, navigate to Transaction code /N/SCWM/PI_CREATE).

b) PI document can be created with reference to either storage bin, material, or activity area. Provide the material number and then click on the execute key

Select the line item displayed.

Navigate to the “Set Flag” button and select the option set flag, as shown in the screenshot below.

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c) Select the line item and click the “Set Initial status Active” button.

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d) Once activated, The PI document is created.

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Step2: Count

a) To Count the Physical inventory document, navigate to Transaction code /N/SCWM/PI_PROCESS).

b) Enter the PI document number created in Step 1 and click the execute key.

c) Select the line item and click the “Count” button.

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d) In the dialog box, provide the counter and count date and execute

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e) Then, provide the Actual qty in the count items section and save. 

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Step3: Post

a) Click on the Activate option and save.

PI status changes to POST.

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Actual qty = 9080.5 EA

Book qty = 9084 EA

Difference = 3.5 EA

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Step4: Difference analyzer

a) Since there is a difference in stock, we need to perform the difference analyzer.

Navigate to the transaction code /N/SCWM/DIFF_ANALYZER

From the drop-down option, select product, provide the product number, and then execute.

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b) Select the displayed line item and then click on the Post+save option in the line item.

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c) Post difference dialog box appears with the message as “Do you really want to clear 1 differences?” Select option “Yes”.

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d) The material document will be created.

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Conclusion:

The physical inventory process is a vital part of a warehouse organization in SAP EWM. When a proper approach to physical inventory is understood and deployed, businesses can improve their operational efficiency, reduce losses, and increase their profitability and customer satisfaction.

1 Comment
RaviDave
Active Participant

Hi,

Thank you for sharing. Very informative. 

 

Regards,

Ravi.

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