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.

22 results

  1. IoT RFID

    Combining IoT and RFID in Warehousing and Inventory Management

    Reading time: 4 mins

    if you consider RFID technology on its own, it has probably reached its plateau of productivity, but within the areas, it has conventionally been leveraged. The beauty of technology and algorithms is that you are limited only by your imagination and intuition. My perspective is that RFID technology was never harnessed to its full potential…
  2. 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…
  3. Barcode RFID

    Difference Between Barcodes and RFID

    Reading time: 3 mins

    When it comes to inventory management, both barcodes and RFID technologies have played key roles for the last few decades in helping organizations build visibility into their inventory and plan their inventory better. That is why these technologies were among the focus areas in 2021 SAPinsider research report, Modernizing Logistics and Inventory Tracking, and are…
  4. Inventory Optimization

    Combining Inventory Optimization With Additional Analytics Approaches

    Reading time: 3 mins

    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, inventory policies are also evolving. Hence, it is unsurprising that inventory management and optimization remain a key focus…
  5. Inventory Planning

    Inventory Planning Complexities

    Reading time: 2 mins

    Inventory planning and management have taken a whole new form in the COVID era. Optimal inventory planning and management were never easy, but the challenges have now increased manyfold. As organizations changed their inventory strategies, many of them moving from just-in-time to just-on-case, the associated planning, and management challenges also need to be addressed. In this…
  6. Analytics Inventory Management

    Analytics Levers for Inventory Management & Planning

    Reading time: 4 mins

    Adoption of advanced analytics methodologies in supply chains has definitely  increased recently but many areas within supply chains are still using approaches that may not be optimal in this era. We have seen the havoc wrecked on supply chains across the globe during the pandemic because of the just in time approach. Another approach that…
  7. AIoT Inventory Management

    AIoT for Inventory Management and Planning

    Reading time: 3 mins

    There is no doubt that the AI-enabled Internet of Things (IoT) has the capability to transform the way supply chains run significantly. This is why we will cover this aspect, among others, in our November research report, Inventory Planning and Optimization State of The Market. While we predominantly think of the usage of AIoT in…
  8. Supply Chain Planning Analytics

    Excess Inventory Management with AI

    Reading time: 4 mins

    Inventory planning and management have taken a whole new form in the COVID era. Optimal inventory planning and management were never easy, but the challenges have now increased manyfold. As organizations changed their inventory strategies, many of them moving from just-in-time to just-on-case, the associated planning, and management challenges also need to be addressed. Excess…
  9. Optimizing the balance sheet through inventory management and finance analytics

    September 26, 2021

    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…
  10. 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…