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Inventory management @ project site

Makal
Active Contributor
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Dear Friends

We are doing customer project. Most of my client's project are Turn key projects, which usually run for 2-3 years. In the span of project life, lots of materials at different stages will be procured & will be dispatched to project site from Vendor. Once GR is done at the project site, invoice verification & payment will be made.

Now my client wants to maintain inventory of all the material @ project site with material value.

For example: On 2nd April 2009, 100 nos. of XYZ material received @ project site worth Rs.100000.

On 10th April, 25 no of XYZ are consumed for project activity worth Rs.25000.

My client wants to monitor all these activities on the system. According to him, after consumption of 25 no. of XYZ material worth Rs.25000, System should show the remaining material as 75 no. of XYZ material worth Rs.75000 is still available in the stock.

Now say, if Vendor dispatches another 100 XYZ material, system should update the stock available as 175 no. of XYZ are available.

How can it be achieved?

Because in SAP system, once we make vendor payment, its no more our responsibility. It's customers material.

But here, after payment to vendor, customer is giving back these material to us, to execute the project.

Please suggest the possible solution.

Thanks & Regards

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Former Member
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Hi,

Receive Goods as Project Stock (Q).e.g you received today qty 100 and delivered to customer 25 qty then we can see 75qty still in MMBE or MBBS as project stock.Suppose after few days you received again 75 Qty as project stock then total project stock is 75+75 as Project stock.

1.Receive as project stock (Q).

2.Either use CNS0 for delivery to customer or Use MIGO or MB1A for Goods issue( 281 Q).

Muzamil

Makal
Active Contributor
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This is fine, if procured through MRP.

If I'm material (Item category "N") buying directly from Vendor, in that case how to handle it?

Former Member
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Hi Amaresh,

If you are planning the material as a non stock (N) it has to get consumed at GR.

You can have Inventory only if you are going to plan material with category L. & for same you don't need only MRP, but you can plan material with "Reservation + PR for WBS". After GR the good will be in project stock

can you pls elaborate why you need to plan material as N & at same time expects stocking of same?

I feel conceptually it is not right..

Regards

Makal
Active Contributor
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Dear Deshmukh

Thanks for the info.

You mean to say, plan the non-stock material also with item category "L"?

Yeah I understand that not only MRP, but also "Reservation + PR for WBS" is necessary.

I didn't explore much on this side. That's why I'm asking.

My clients need is that, they'll procure material from vendor. Vendor ships material to project site. GR @ project site will happen, following this Invoice verification & Vendor payment happens. My client wants to keep track of the material at the project site.

Please explain how can it be done? What dependent changes might be required in MM/SD side.

Thanks & Regards

Former Member
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with N as item category you can't tract the inventory ............

tell me one thing, do u bill as the stock reached the site? or u bill as the material is consumed?????

if u bill as the material reached the site, take it as N ...............so, its out of stock .............take it as free issue material from customer ( non valuated stock).........and this inventory can be tracked ..............

if u don't bill the customer.............take the marerial as " L" and project site as a plant, as it reached the plant take it into inventory and track the material...............

Hope so i am clear..........

Regards

surya

Former Member
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Hi,

Please define your business process first.

1.If you Use L you can also directly create PR from project without MRP.Here you can track project stock.After MIGO you can go for MIRO.

2.If you use N then at the time of MIGO Consumption account will be debited and GR/IR Credited.But here all the materials are consumed but you can check the materials received for the projects in reports.

Muzamil

Makal
Active Contributor
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if u bill as the material reached the site, take it as N ...............so, its out of stock .............take it as free issue material from customer ( non valuated stock).........and this inventory can be tracked ..............

Surya

Vendor payment will be made once material is received (GR) at the project site.

You said, Take stock bac from the customer as free stock(non-valuated stock) & maintaining inventory.

Can you please explain a bit more detail here & possible steps involved. Here what's the role of MM/SD?

Thanks

Makal
Active Contributor
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Dear Muzamil

Thanks for the reply.

The business process is like this:

I'll procure the material from the vendor. Vendor ships the material to project site. Once material is received in project site, vendor payment will be made. Now this material, customer gives back to me, for project execution. How can this material's inventory be tracked with the value of material?

Please explain in detail.

Thanks

Former Member
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Hi Amaresh

i read the comments by everybody. The answer is already given by somebody.

You need to use the scenario " PR + Reservation" with item category (L) this is required since you want to know the value of the inventory at some point. Once you have a GR (101 Q) you will have a stock on the project. And you can find the qty and value (both) of stock in MBBS, you can see the project stock (Qty) in MBBE also.

You will have a vendor payment after GR as you said so functionally there will be no problem.

I hope you know that Cost will come on project only after you do a Goods issue Transaction (281 Q)

So you need to see this at the time of actual Goods Issue.

On the other hand, since you want to know the Stock value of the material you cannot use Non Stock scenario for this.

I hope you are little clear on this

Regards

Ashish

Former Member
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amaresh:

Vendor payment will be made once material is received (GR) at the project site: i am taking about customer billing, if customer is billed, once the material reaches site, now it is out of ur records, and u cannot take it into ur stock.....taken the material as free issue material and track it .........................

Regards

surya

Makal
Active Contributor
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Yes I agree with what you said Surya.

We are billing customer as soon as material reaches the project site. After billing customer gives back that material again to us for project execution. Now how this material received from the customer can be tracked with quantity & value.

Experts, please give your inputs.

Thanks

Makal
Active Contributor
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My clients will execute one project in different locations. Say, They have one sales order for electrical sub-station installation, in Location 1, Location 2, Location 3, Location 4. So in this case how can we track material with respect to project site wise? My client procures all the material at a time & it'll be dispatched to all the project sites with required quantity.

One more thing. For example I need 5 transformers for Location 1 site, 10 for Location 2 & 8 for Location 3. In case, by mistake 13 transformers are shipped to Location 3 & 10 for Location 2. How it can be handled in the system? Like moving/transferring 5 transformers to Location 1.

Please explain me this. This would be great help.

Former Member
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Hi,

Receive the stock in location wise storage locations and then you can track it easily.

Also if by mistake you entered wrong storage location then transfer stock from one storage location to other(Transfer posting).

Muzamil

Makal
Active Contributor
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Thanks a lot for the inputs Muzamil.

Former Member
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