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SAP EWM - Physical Inventory Optimization


image Aleksandr Piliptsevich 15. April 2021



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Tags:
physical-inventory
sap
sap-ewm
warehouse-management-system
cycle-counting
annual-physical-inventory
sap-ewm-optimization
low-stock-check
putaway-physical-inventory



Physical Inventory counting is a structured way to count every product in a company’s inventory. This process ensures that physical stocks and financial statements are accurate. Usually, physical inventory is mandatory according to the legal requirements of the particular country and should be performed annually.

In general, you count every stock that you own. This can be raw materials, spare parts,  finished products etc. Counting can be performed on a paper using printed physical inventory documents or electronically using scanning device. Usually, person responsible for inventory counting schedule it periodically. After performing an inventory, physical inventory document is kept in archive during period  defined by legal requirements.

Physical Inventory in SAP EWM

Physical Inventory in SAP EWM is realized from two different perspectives:

  • Storage bin-specific physical inventory
  • In this case, the procedure is based on the particular storage bin, which means that all products and handling units located in this particular storage bin will be counted.

  • Product-specific physical inventory
  • Here, we perform counting based on specific product that can be located in different storage bins and handling units.

Physical inventory overall can be complicated and time-consuming process. Therefore, is it highly appreciated to make optimizations where it is possible. In the following sections you will see, which techniques SAP EWM offers to optimize physical inventory process.

Low Stock Check

Low Stock Physical Inventory is storage-bin-specific check. When you remove stock from particular storage bin and confirm warehouse task, then the low stock check is being executed according to the setup of Quantity Threshold Value. You activate Low Stock Check for the desired Physical Inventory Area, which represents specific Activity Area in your warehouse.

This type of check is relevant for the storage bins, which supposed to keep small quantities of products. In case low stock check is relevant after stock removal, then during confirmation of the warehouse task, system will offer picker to count remaining quantity in the storage bin and fill the quantity into respective field in his scanning device. This is how it can look like in RFUI transaction:



Here, picker can reject physical inventory (F3 button on RFUI Interface) and move forward to confirmation of the warehouse task or he can count remaining quantity (F1 button on RFUI Interface) at a glance and then confirm it.

In case the quantity of particular storage bin falls below quantity threshold for the first time in the current fiscal year, then after confirming of the remained quantity physical inventory document will be created in the system. Physical Inventory Document will already have “Posted” status assigned and it will be referenced to the stock removal warehouse task:



To be able to perform low stock check during stock removal, some prerequisites should be met:

  • Remaining quantity after stock removal is lower than defined Quantity Threshold Value.
  • Product warehouse tasks are used for stock removal.
  • Only one quant precisely is located at the storage bin. No mixed stock is allowed.
  • No further open warehouse tasks exist for the storage bin.
  • Negative stocks are not allowed in the storage type.

Zero stock check

If the value of quantity threshold for low stock check was setup to be zero, then we can perform zero quantity check of the stock. In this case, the picker only needs to confirm that zero quantity of the product remains in the storage bin after picking. This check can be helpful since it will ensure that the bin is empty and is available for further putaway and no fitting problems will come up during confirming of the putaway task.

Putaway Physical Inventory

Putaway Physical Inventory check is similar to the beforementioned low stock check - it also helps to optimize physical inventory process. Here, we also need to activate it in the system for the desired Physical Inventory Area.

Putaway inventory check is relevant for empty storage bins when the first putaway in the fiscal year occurs. During confirmation of the putaway warehouse task system will propose to the user to confirm if the storage bin was empty before putaway:



After confirming the storage bin quantity, which is now matches confirmed warehouse task quantity, physical inventory document was created. Like with the low stock check, physical inventory document will be referenced to the warehouse task:



Once the inventory is successfully executed, no further putaway physical inventory will be performed for this storage bin during the same fiscal year.

The putaway physical inventory is triggered only if the following conditions are met:

  • Destination storage bin is empty.
  • Product warehouse tasks are used for putaway.
  • No mixed stock is allowed. Only one quant is located in the storage bin.
  • You are putting stock away for the first time in the fiscal year.

Replication of stock differences to the ERP

During performing of Low Stock Check and confirmation of stock removal warehouse tasks we can encounter some discrepancies in stocks. To keep your warehouse consistent, you post stock differences in SAP EWM if any of them were found. Since SAP EWM system can be connected to the ERP system, you also need to post any stock differences there. To be able to adjust stocks in ERP and EWM systems, Difference Analyzer transaction (/SCWM/DIFF_ANALYZER) in SAP EWM can be used. You access it according to the following path:

SAP Easy Access Menu -> Extended Warehouse Management -> Physical Inventory -> Difference Analyzer

Conclusion

The main point of the optimization techniques described above was to perform physical inventory at a glance when it is possible during other warehouse activities. Therefore, before implementing such techniques, it is important to consider storage types, products and their quantities which could be relevant for check.

Since Low Stock check and Putaway Physical Inventory cannot be applied to all storage bins, it is considered as an optimization technique. The main procedure for physical inventory can be Periodic Physical Inventory, which can be performed annually at the end of the fiscal year.

Links

1853488 - FAQ: Low-stock check/physical inventory and putaway physical inventory




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