SAP Inventory Management


Supply Chain Management: SAP Inventory Management

Inventory is a fundamental part of your business. Without proper inventory management, the organization can suffer inefficiencies, profit decline, and sustainability impacts.

What is Inventory Management?

Inventory Management is the practice of controlling inventory flow for maximum organizational efficiency. It is suitable for businesses of any size and focuses on organizing and streamlining product storage and fulfillment. The management of stock can be done on a quantity or value basis. Inventory management in SAP is an important component of the Material Management (MM) module, it deals with stocks and goods movement.

With SAP, many companies have real-time data on inventories, which is vital for capacity management and expansion of complex supply chains. The application provides several management tools to help users create an organized warehousing space while uncovering valuable operational data. A couple of examples include the following.

Supply Chain Management: SAP Inventory Management

Inventory is a fundamental part of your business. Without proper inventory management, the organization can suffer inefficiencies, profit decline, and sustainability impacts.

What is Inventory Management?

Inventory Management is the practice of controlling inventory flow for maximum organizational efficiency. It is suitable for businesses of any size and focuses on organizing and streamlining product storage and fulfillment. The management of stock can be done on a quantity or value basis. Inventory management in SAP is an important component of the Material Management (MM) module, it deals with stocks and goods movement.

With SAP, many companies have real-time data on inventories, which is vital for capacity management and expansion of complex supply chains. The application provides several management tools to help users create an organized warehousing space while uncovering valuable operational data. A couple of examples include the following.

Physical locations or organizational levels:

  1. Plant: A high-level physical location to which the materials are assigned.
  2. Storage Location: A specific area within the plant where the material is stored.

Four primary movement of goods are:

  1. Goods Receipt: Inventory can be approved for immediate use or be checked in.
  2. Goods Issue: A company may choose to process inventories for production or to sell to customers.
  3. Return Delivery: When materials are being returned from a customer or vendor.
  4. Internal Movements: When inventory is transferred internally from one location to another.

Most importantly, proper inventory management allows you to move goods with as little wasted time and money as possible. It can help you to optimize demand fulfillment for e-commerce, which is quickly becoming the norm in business to business today.

Benefits of SAP inventory management are:

  • Accuracy and timeliness
  • Realistic production schedule
  • Quality checking
  • Inventory analysis
  • Proper reporting.

Technical resource partners for consideration might beMovilitas, Opsveda, SAP.

Further insights for SAPinsiders around SAP Inventory Management

  • Real Time Inventory and Order Visibility: Key for Successful Supply Chain Management. Probodh Chiplunkar from Ithena Technologies, outlines how real-time inventory transparency within a technological landscape affects business operations.
  • Pick and Choose: How Kingston General Hospital Manages its Inventory with SAP. Author Davin Wilfrid interviews Derrick Morey at Kingston General Hospital (KGH), about the complex network of systems and people managing all the tubes, bandages, needles, and other medical supplies distributed throughout KGH. As an early adopter of SAP ERP technology, the hospital adopted a centralized inventory management system to track supplies for better accuracy.
  • Next-Generation Inventory Management. Tom Chason addresses questions about the SAP Enterprise Inventory and Service-Level Optimization and SmartOps solutions. See how an integrated approach offers a powerful way to meet all these requirements for modern supply chains.

30 results

  1. inventory management

    Inventory Management and Optimization

    February 09, 2023

    Inventory management challenges and supply chain risks are growing exponentially as businesses try to manage the complexities presented by globalization. These challenges surface in the form of unprecedented fluctuations in demand and supply, inventory policies and delivery systems diversity, and geopolitical and regulatory changes. These have only intensified during the pandemic. Unsurprisingly, in SAPinsiders’s recent…
  2. Inventory Management and Optimization Benchmark Research Report

    Reading time: 2 mins

    Inventory management challenges and supply chain risks are growing exponentially as businesses try to manage the complexities presented by globalization. These challenges surface in the form of unprecedented fluctuations in demand and supply, inventory policies and delivery systems diversity, and geopolitical and regulatory changes. These have only intensified during the pandemic. Unsurprisingly, in SAPinsiders’s recent…
  3. Inventory Accuracy

    Building Foundation for Inventory Management

    Reading time: 3 mins

    As supply chain risks increase and businesses become more complex and globalized, inventory management challenges are growing exponentially. Inventory Optimization emerged as a key focus area over the next two years for SAPinsiders in our recent research, Supply Chain Planning in The Cloud. As organizations still struggle with fluctuating demand patterns developed during the pandemic,…
  4. Inventory Accuracy

    Is Your Inventory Strategy a Bottleneck?

    Reading time: 2 mins

    As supply chain risks increase and businesses become more complex and globalized, inventory management challenges are growing exponentially. Inventory Optimization emerged as a key focus area over the next two years for SAPinsiders in our recent research, Supply Chain Planning in The Cloud. As organizations still struggle with fluctuating demand patterns developed during the pandemic,…
  5. Advanced Analytics Inventory

    Pairing Data and Analytics for Inventory Management

    Reading time: 2 mins

    As supply chain risks increase and businesses become more complex and globalized, inventory management challenges are growing exponentially. Inventory Optimization emerged as a key focus area over the next two years for SAPinsiders in our recent research, Supply Chain Planning in The Cloud. As organizations still struggle with fluctuating demand patterns developed during the pandemic,…
  6. Data Management Inventory Management

    Data Management for Robust Inventory Management

    Reading time: 3 mins

    SAPinsider will publish a benchmark report on Inventory Management and Optimization in November 2022. There could not have been a better time to conduct research focused only on inventory management and optimization. Why so? Well, the first aspect, which is not surprising to any of us, is the immense focus on supply chain and inventory management…
  7. Inventory Accuracy

    Inventory Accuracy: The Struggle With the Fundamentals

    Reading time: 1 mins

    SAPinsider will publish a benchmark report on Inventory Management and Optimization in November 2022. There could not have been a better time to conduct research focused only on inventory management and optimization. Why so? Well, the first aspect, which is not surprising to any of us, is the immense focus on supply chain and inventory management…
  8. Advanced Analytics Inventory

    Advanced Analytics Requirement in Inventory Management

    Reading time: 4 mins

    SAPinsider will publish a benchmark report on Inventory Management and Optimization in November 2022. There could not have been a better time to conduct research focused only on inventory management and optimization. Why so? Well, the first aspect, which is not surprising to any of us, is the immense focus on supply chain and inventory management…
  9. Bullwhip Effect

    Measuring the Bullwhip Effect

    Reading time: 3 mins

    When the pandemic made the demand for certain products skyrocket, we started hearing the term "bullwhip effect" a lot. But the bullwhip effect has existed in supply chains for decades. The fact is, the technology to address this has existed for a few years now. The issue is more rooted in trust among the players…
  10. Inventory Management

    Stages of Inventory Management Expertise

    Reading time: 3 mins

    Inventory availability is the most critical aspect of customer service. In manufacturing and distribution domains, organizations need to define Inventory Management strategies that can help them control and minimize Inventory costs while providing the desired service levels to their customers. Inventory Management strategy can be used as a strategy of competitive advantage and as a…