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Introduction

     Enhancement package 5 for Procurement business function “LOG_MM_SIT” allow to control goods movements both for sales to external customers and for stock transfer processes between plants belonging to the same or different company codes within the same company. Using valuated stock in transit and new movement types, we can specify the time of the transfer of title precisely. Throughout the process, material quantities and material values are recorded transparently and can be displayed in the stock overview, the purchase order history, and the individual stock accounts. The functions are also available for the corresponding intra-company-code and cross-company-code return stock transfers.

     This document covers the customer delivery with transfer of title at customer location. The customer deliveries with valuated stock in transit, is used to pin point the exact time of the transfer of title. The transfer of title depends on the delivery type. The system determines this based on the sales document type. The system finds the item categories and thereby the corresponding schedule line categories, using Customizing for item category determination in the delivery. The process is controlled by the movement types that are assigned to the respective schedule line categories.

Client Requirement

    

     The requirement for our project was to recognize the COGS & Sales revenue at the same time based on the Incoterms. Incoterms were divided into two categories as ‘Immediate Risk transfer’ & ‘Delayed risk transfer’. ICC Incoterms like EXW & FCA were classified as immediate risk transfer as the risk transfer lies with ‘Buyer’ once the Goods are loaded onto carrier from plant. The other incoterms like FOB, CPT, CIF, etc.. were classified are Incoterms with Delayed Risk Transfer.

     Based on the Delayed Risk Transfer Incoterms, the item category in the sales order would get determined. This was one of the key developments of the project. Based on the item category the posting to COGS / SiT account would happen at the time of PGI.

     The Requested delivery date would be maintained by the Customer Service Representative while processing the Sales Order. Based on the
RDD & route information in the sales order, the PoD is carried out through a program scheduled automatically.

Features of Business Function LOG_MM_SIT

     Business Function LOG_MM_SIT covers below business processes. In the following processes, valuated stock in transit specifies the exact time of the transfer of title.

  •      Intra Company Code Stock Transfer: Transfer of title at goods issue / goods receipt / during transit.
  •      Cross Company Code Stock Transfer: Transfer of title at goods issue / goods receipt / during transit.
  •      Delivery with transfer of title at the customer location.

In a cross-company-code or intra-company-code stock transfer, valuated stock in transit allows you to retain the quantity and value of a material that has already left the issuing plant but has not yet reached the receiving plant. The functions are also available for the corresponding intra-company-code and cross-company-code return stock transfers. In addition, in sales processes to external customers, you can post the quantity and value of a material to issuing valuated stock in transit initially and then remove it when proof of delivery arrives.

Pre-Requisites

A. SD Customizing requirments:

     i. Defining new Sales Order Type

     IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document Header --> Define Sales Document Types

     Create the new sales document type Delivery from Issuing Valuated Stock in Transit (ORNC) as a copy of the sales document type Standard Order           (TA/OR).

        

     ii. Defining new Delivery Type

     IMG Menu path: IMG --> Logistics Execution --> Shipping  --> Deliveries  --> Define Delivery Types

     Create New Delivery Type (NCCU - Delivery from Issuing Valuated Stock in Transit) for the process Outbound Delivery with Transfer of Title at                     Customer Location.

    

     Note: Creating a new order type/delivery types are optional. You can use the existing order types & assign the item category for this functionality to work.

     iii. Assigning the New Delivery Type to New Sales Order Type

    

     IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document Header --> Define Sales Document Types

     In the Shipping section of the detail view, assign the appropriate delivery type, NCCU to the sales document type Outbound Delivery from Issuing       Valuated Stock in Transit (ORNC).

    

     iv. Defining new Item Categories

     IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document item --> Define Item Categories

     For this solution, the item category is important configuration. Item category is assigned to schedule line category which has movement type. We can      define new item categories or use the existing item categories as per the client’s requirement. But it has to be ensured that proper schedule line           category is determined.

              

     Ensure that the new item category Delivery from Issuing Valuated Stock in Transit (NCCU) has been created as a copy of the item category      Standard Item (TAN).

     v. Defining Item Categories in Deliveries

    

     IMG Menu path:  IMG --> Logistics Execution --> Shipping  --> Deliveries --> Define Item Category Determination in Deliveries

     When the item category is copied from reference & if made relevant for copy control i.e., “Is this entry also relevant for copying control?” – If yes,      then      the delivery item category will be created, else define delivery item category manually.

    

     Ensure that for all entries with delivery type Outbound Delivery (LF), a copy has been created and altered as follows:

     Delivery type LF has been changed for each entry to delivery type Delivery from Issuing Valuated Stock in Transit (NCCU).

    

     Item category Standard Item (TAN) has been changed for each entry to item category Delivery from Issuing Valuated SiT (NCCU).

 

    vi. Defining Schedule Line categories

    

     IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document item --> Define Item Categories

    

     One of the important configurations of this solution is defining the Schedule line category. When you define the schedule line category, you see      the      changes in the screen with addition of fields MvT Iss. Val. SiT & Spec. Iss. Val. SiT. Ensure that for the process Outbound Delivery from Issuing                Valuated Stock in Transit the new schedule line category NU has been created as a copy of schedule line category Material Requirements Planning           (CP),  detailed data:

     Movement type = 687 (Goods Delivery to Issuing Valuated Stock in Transit)

     Movement Type for Issuing Valuated Stock in Transit = 601 (Goods Issue for Delivery)

     Specification for Issuing Valuated Stock in Transit = 3 (Sales-Order-Related Goods Issue from Issuing Valuated Stock in Transit).

    

     vii. Assigning New Schedule Line Categories to the New Item Category

    

     IMG Menu path:  IMG --> Sales and Distribution --> Sales  --> Sales Documents  --> Schedule Lines  --> Define Schedule Line  Categories

     Ensure that a new entry has been created as a copy of the entry with item category Standard Item (TAN) and schedule line category Material                          Requirements Planning (CP) with the following changes:

     Item category TAN has been changed to item category Delivery from Issuing Valuated Stock in Transit (NCCU).

     Schedule line  category CP has been changed to schedule line category Delivery from Issuing Valuated Stock in Transit (NU).

    

     viii. Assigning New Item Categories to the Sales Document type

     IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document item --> Assign Item Categories

    

     Normally when the Sales Order type OR is copied & item category is copied from TAN all the related settings are copied & the assignment will take                place. In case, if the item category is created newly without any reference, then maintain the assignment to the Order Type.

     ix. Assign PoD relevance to the Delivery Item Category

     IMG Menu path: IMG --> Logistics Execution --> Shipping --> Deliveries --> Proof of Delivery --> Set POD-Relevance Depending on Delivery Item      Category

     Maintain the PoD relevance for the delivery item categories which are created.

    

B. MM & FI Customizing requirments:

    i. Create G/L account

     The necessary G/L accounts has to be created by FI team for posting of the Stock in Transit Account.

     ii. Define Valuation Class

     IMG Menu path: IMG --> Materials Management --> Valuation and Account assignment --> Account Determination -->       Account determination without wizard --> Define Valuation classes

     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. 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.

    

     iii. Automatic Postings - BSX & GBB

    

     IMG Menu path: IMG --> Materials Management --> Valuation and Account assignment --> Account Determination --> Account determination without         wizard --> Configure Automatic Postings

    

    

    

     These settings are required for automatic posting of the Stock in Transit account & the Cost of Goods Sold at the time of PGI & POD respectively.

C. Master Data requirments:

     i. Customer Master

   

     The Customer Master Data has to have the PoD relevance for this solution. This can be maintained by using Transaction Code XD02 / VD02. Go to                the Sales Area Data, under the shipping tab, you find the Relevant for PoD checkbox as shown below. Check the box, to make the customer relevant for      PoD.

    

      ii. Material Master

     Based on the requirement of the client to identify the stocks & for their reporting purposes, the valuation class can be maintained against the      VC:Sales Order Stk field as shown below. The maintenance of this Valuation Class is to account for separate G/L when the Goods issue is done & the      stock is moved to Stock in Transit.

     

Process Demo

     We will create the sales order and delivery to check the process flow. The following values are used for this:

    

     Sales Area: 1000 / 10 /00
     Material: P-100; Plant: 1000
     Order Type: ORNC

     Create the Sales order & save the order.

    

     Before proceeding further, we shall note down the stock of the material considered in MMBE & MB5SIT.

    

     Detials of MB5SIT before Delivery

    

     Now, create the delibery (VL01N).

    

     Notice that the Post Goods Issue Icon is greyed out in create mode as compared to our standard process. Do the picking / WH TO & save the delivery.

    

     Now, go to VL02N & do the Post Goods Issue (PGI)

     Check the document flow once the PGI is done.

    

     Check the posting, the finished goods inventory has been credited & Stock in Transit G/L has been debited.

    

     Now, we will have a look at the stock level MMBE & report MB5SIT

    

    

     You will see the qty under Iss. SiT column in the MB5SIT report, against the delivery.

     Now, carry out Proof of Delivery (PoD) - Transaction VLPOD

Once the PoD is saved, another material document gets posted, as you could see above.

Now, we shall look into the document flow again.

      

     Now, the Stock in Transit G/L has been credited & Cost of Goods Sold (Inventory change –fin) has been debited.

     After PoD check the report MB5SIT

    

     In this way, based on the requirement of the client, the posting to the COGS & thereby Sales revenue (at the time of billing) can be controlled using the      Proof of Delivery.

     References:

     www.help.sap.com

    

     Please let me have your feedback on the suggestions & improvements for this document further, if necessary.

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