Difference between non-moving material and dead stock

[aoba]

Hi,

What is Difference between non-moving material and dead stock in SAP ?

Also I would like to know what the function of app "Dead Stock Analysis" is.

I would appreciate it if someone could share some information.

Thank you

[aoba]

Thank you for the useful information.

I have a few additional questions.

Am I correct that if non-moving material exceeds a certain set value, it becomes dead inventory?

Where and how is the logic set for the criteria to be considered as dead inventory?

Thank you

[xlg00ru · Accepted solution]

Yes, you are correct that if non-moving material exceeds a certain set value, it can be considered dead inventory. Dead inventory refers to goods or materials that have not been sold or used within a specified period and are unlikely to be sold or used in the future. It ties up storage space, ties up capital, and can result in financial losses for a company.

The specific criteria for categorizing inventory as dead inventory can vary depending on the business and industry. Typically, companies set thresholds based on factors such as the length of time the inventory has been in stock, sales velocity, demand forecasts, and product shelf life.

As for how the logic is set and managed in SAP (Systems, Applications, and Products), it can be done through various means. SAP is a comprehensive enterprise resource planning (ERP) software that provides functionality for managing inventory and logistics processes. In SAP, you can define and configure parameters, rules, and reports to identify and categorize dead inventory.

Here are a few steps that might be involved in setting up dead inventory logic in SAP:

1. Define criteria: Determine the specific criteria for identifying dead inventory based on your business requirements. This could include factors like time since last sale, quantity on hand, or sales volume.

2. Configuration: Configure the SAP system to accommodate the criteria you have defined. This may involve setting up fields, data structures, and thresholds for inventory analysis.

3. Reporting: Create reports or utilize existing SAP reports to generate inventory analysis and identify non-moving items based on the defined criteria. These reports can help you track and monitor dead inventory.

4. Action planning: Once the dead inventory is identified, you can define appropriate actions to address it, such as markdowns, promotions, or liquidation.

[xlg00ru · Accepted solution]

2. Configuration: -

Configuring the SAP system to accommodate dead inventory criteria involves defining specific parameters and settings within the system. Here are some general steps that can guide you through the configuration process:

1. Access SAP configuration: Log in to your SAP system with appropriate user credentials that have authorization for configuration changes.

2. Identify relevant SAP modules: Determine the SAP modules that are relevant to your inventory management processes. Common modules include Material Management (MM) and Warehouse Management (WM).

3. Define non-moving criteria: Identify the criteria that determine non-moving or dead inventory. This could include factors such as time since last sale, quantity on hand, or sales volume. Consider your business requirements and industry best practices to define appropriate criteria.

4. Define storage locations: In SAP, storage locations represent physical spaces where inventory is stored. You may need to define specific storage locations or categories for dead inventory, distinguishing them from active or fast-moving inventory.

5. Set up material status: SAP allows you to assign specific statuses to materials based on their characteristics or movement. You can define a custom material status or use an existing one to indicate dead inventory.

6. Configure movement types: Movement types in SAP represent different types of inventory transactions, such as goods receipt, goods issue, or transfer. Configure the movement types relevant to dead inventory to reflect the desired behavior. For example, you might want to create a specific movement type for writing off dead inventory.

7. Customize reports: SAP provides various reporting tools and functionalities to analyze inventory data. Customize the reports or develop new ones that allow you to identify non-moving materials based on the defined criteria. This may involve using SAP Query, Report Painter, or other reporting tools within SAP.

8. Implement action planning: Once you have identified dead inventory, define appropriate actions to address it. You can configure SAP workflows, alerts, or notifications to trigger actions like markdowns, promotions, or disposal.

[aoba · Accepted solution]

Thank you very much for yor kindness