2    Inventory Management

This chapter will focus on changes to the SAP ERP Inventory Management module with the SAP S/4HANA product offering, including backend changes to table structures and functionality.

The objective of this chapter is to highlight the business processes enabled by SAP S/4HANA’s Inventory Management (IM) functionality. It begins with an overview of the inventory process as supported by SAP S/4HANA and explains master data simplifications (the material master). The chapter then explores the inventory functionality (goods processing, physical inventory, valuation, etc.), calling attention to places where substantial improvements have taken place, to relevant operational reports, and to SAP Fiori applications. The chapter ends with an explanation of key strategic inventory reports.

2.1    Inventory Management Basics

Inventory Management in SAP S/4HANA is fully integrated with both supply chain and finance functions. Inventory Management enables users to manage stock of materials on a quantity and value basis at the plant and storage location level. Inventory Management doesn’t support bin-level goods movements and tracking. Inventory Management also enables the goods movements of inventory and helps carry out physical inventory.

The following goods movements are included:

• Internal movements
  Goods receipt/issue for production orders, stock transfer, scrap, inventory adjustments, and maintenance, repair, and operations (MRO) inventory management for plant maintenance.
• External movements
  Goods receipt of purchase orders (POs) and goods issue to sales orders.

SAP ERP Inventory Management is integrated with the following modules:

• SAP ERP Materials Management (SAP ERP MM ; procurement)
  Receive deliveries from suppliers with POs and the management of vendor returns.
• SAP ERP Quality Management (SAP ERP QM)
  Identify quality relevant parts and receive then with separate stock status
• Production Planning
  Goods receipt of finished products and goods issue of components to production orders.
• SAP ERP Plant Maintenance (SAP ERP PM)
  Withdraw MRO parts of equipment’s for maintenance orders.