SAP Inventory Management


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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.

16 results

  1. Optimizing the balance sheet through inventory management and finance analytics

    The Covid pandemic created economic and logistical shockwaves across companies as their operating models rapidly needed to adapt. Operational disruptions caused a cash flow imbalance, which coupled with financial misalignment made it extremely challenging to manage inventories. The result? Finance has now become a strategic enabler on how operational excellence is achieved and controlled. Join…
  2. Optimizing the balance sheet through inventory management and finance analytics

    Reading time: 0 min

    The Covid pandemic created economic and logistical shockwaves across companies as their operating models rapidly needed to adapt. Operational disruptions caused a cash flow imbalance, which coupled with financial misalignment made it extremely challenging to manage inventories. The result? Finance has now become a strategic enabler on how operational excellence is achieved and controlled. Join…
  3. Leveraging IoT Data for Inventory Planning and Management

    Reading time: 3 mins

    by Kumar Singh, Research Director, Data & Analytics, Supply Chain Management, SAPinsider   There is no doubt that Internet of Things (IoT) has the capability to significantly transform the way supply chains run. While we predominantly think of their usage in digital twins in a supply chain context, IoT has the potential to impact inventory…
  4. Real-Time Inventory and Order Visibility: Key for Successful Supply Chain Management

    Reading time: 7 mins

    With advancements in technology such as Internet of Things (IoT), cloud, and big data, demands and expectations for supply chain management have continuously grown over the past few decades. Greater organization of real-time data and visibility into inventory and orders can be a crucial tool in achieving more efficient operations and greater customer value. Large-scale…
  5. New Solutions for Real-Time Inventory Replenishment Amid Covid-19 Disruption

    How does a responsive supply chain dynamically flex itself to avoid business disruption?  How to ensure that customer satisfaction and experience is safe guarded from a stock-out situations? These are questions being asked across all industries in the wake of a global pandemic and its impact on the global supply chain.  A more agile and…
  6. Digital transformation with SAP – Omnichannel Inventory and Sourcing with SAP Customer Activity Repository (CAR)

    Reading time: 9 mins

    Going live on your digital transformation journey, writes Rizing Principal Consultant Chris Veli, is only the first step in a larger journey. To maximize your SAP S/4HANA investment, you should add two key transformation functionalities that will help you vastly improve customer experiences while following through with cost-effective and timely deliveries: omnichannel inventory visibility, which…
  7. Post-COVID: Lessons Learned from the Crisis and How our Supply Chains Need to Change

    In economic turmoil cash is especially king. CEO: “How come we have so much cash tied up in working capital and in some cases not enough inventory for the immediate need.” Products, materials, and therefore inventory is what we sell. To do that we need components and materials, i.e., inventory. How much we carry is…
  8. Case Study: Johns Hopkins improves inventory management

    As a company operating healthcare facilities, Johns Hopkins Health Systems (JHHS) faces heavy regulations and must operate 24/7 with no downtime. JHHS Affiliates used to manage all inventory on non-SAP software. At the time, JHHS struggled to share all the information across its supply chain units and manage inventory in a way that guaranteed the…
  9. Aggregate Inventory Management in SAP, Part II of II

    Reading time: 14 mins

    by Venkata Ramana Nethi CSCP, CPIM.; Business Process Lead – Operations, Schlumberger Organizational inventory policy drives the threshold values and guidelines on how individual material should be managed in manufacturing or procurement processes. Putting the right information in the hands of the right people at the right time can save millions of dollars for companies…....…
  10. Aggregate Inventory Management in SAP, Part I of II

    Reading time: 16 mins

    Organizations strive to achieve high standards in customer service with balanced investment inventory. Material planners, from the plant to managerial to the corporate level, work on managing inventory on a periodic basis to maintain balance between inventory to carry vs. customer satisfaction. The right tools can replace spreadsheets to help organize this information effectively on…
  11. Reducing Inventory Levels and Boosting Customer Service

    Watch this video to learn how SAP Ariba Solutions for Direct Spend and SAP Integrated Business Planning can help manufacturers achieve intelligent enterprise transformation.
  12. Logistics and SCM: Case study: How Minuteman International worked collaboratively across business units to achieve supply chain transformation and a 34% inventory reduction

    Reading time: 1 min

    Hear how Minuteman International was able to maintain superior customer delivery performance with lower inventory using best practice techniques and a laser-focused approach of balancing demand and supply across its supply chain. SCM2017_Boebel_Casestudyhowminutemaninternational Steve Boebel If you have comments about this article or publication, or would like to submit an article idea, please contact the…...…
  13. Process optimization through capacity utilization and intelligent use of cloud services

    Reading time: 4 mins

    Audio pioneer Dolby Laboratories, which has been delivering audiophiles a superior sound and sight experience since the 1970s, decided in 2016 that it wanted an equally stringent level of quality assurance for its business process testing. The business sought a risk-based automated testing solution to reduce or eliminate regression test coverage gaps and lengthy testing…
  14. How to Accelerate Your Inventory Sorting Using Batch Search Strategy

    Reading time: 29 mins

    Discover how to set up and use a batch search strategy to accelerate inventory sorting with business scenarios. Learn certain precautions to take while implementing the use of batch search strategy functionality. Key Concept The SAP system has provided a system strategy to efficiently sort materials or product batches in inventory using batch search strategy…...…
  15. A Look at Demand Sensing for SAP Customers

    Reading time: 3 mins

    SCM 2017: One on One with Sujit Singh of Arkieva Sujit Singh is chief operating officer at Arkieva, which made its debut as an exhibitor at SCM 2017. Singh also spoke for the first time at this event. I asked Singh a few questions about key points in his session. Your session was on implementing…
  16. Next-generation inventory management: Q&A on optimizing inventory levels while improving customer service

    Reading time: 20 mins

    An integrated approach offers a powerful way to meet all of these requirements for modern supply chains. SAP Enterprise Inventory and Service-Level Optimization and SmartOps solutions provide predictive analytics and advanced reporting functionality that allows the delivery of enhanced customer service with accurate, real-time inventory investment levels. When integrated with SAP Advanced Planning and Optimization…...…