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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:
- Plant: A high-level physical location to which the materials are assigned.
- Storage Location: A specific area within the plant where the material is stored.
Four primary movement of goods are:
- Goods Receipt: Inventory can be approved for immediate use or be checked in.
- Goods Issue: A company may choose to process inventories for production or to sell to customers.
- Return Delivery: When materials are being returned from a customer or vendor.
- 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 be –Movilitas, 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.
61 results
Can Smart Vision Disrupt Barcode Technology?Sep 23, 2022 — In an age where supply chains have become so crucial that every hyperscaler has launched a supply chain solution on their cloud platform, what will eventually differentiate these solutions? If you look for the high-level features in these solutions, most of the features are shared across the supply chain platforms by the top three hyperscalers. So, in the current state, the differentiating aspect may not come from the solution itself but from how organizations that embrace these solutions leverage it to create differentiating capabilities. However, in the future, differentiation will come from enhanced solutions that will work in tandem with these platforms. An example is leveraging supply chain operations platforms in tandem with these planning and visibility platforms. And this is where advanced AI-enabled algorithms like deep learning algorithms can come into play. In this article, we will discuss an example of how deep learning can help transform identification and visibility processes in warehouse operations.
5 minute read
Inventory Management and Optimization Research ReportSep 15, 2022 — Inventory Management and Optimization 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 exclusively on inventory management and optimization. Why so? Well, first of all, the first aspect, which is not surprising to any of us is the […]
3 minute read
Combining Inventory Optimization With Additional Analytics ApproachesAug 19, 2022 — 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 area for SAPinsiders and is the theme of our upcoming research report in November 2022. But an important aspect to understand for those embarking on an inventory optimization journey is that inventory policies can not be formulated in silos, and inventory optimization needs to happen in tandem with many other types of analysis. In this article, we discuss few important ones like SKU level profitability analysis, Service level determination, and network design.
3 minute read
Inventory Planning ComplexitiesJul 29, 2022 — 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 post, we introduce some key challenges that inventory management function run into. In subsequent posts, we will explore how analytics can help address these challenges of and we will refer back to this article in those subsequent posts.
2 minute read
Leveraging Association-Rule Mining in Logistics PlanningJul 15, 2022 — Inventory optimization remains a key focus area for SAPinsiders, as highlighted in our most recent research report, Inventory Optimization and Management. When organizations undertake an inventory optimization initiative, they typically leverage conventional multi-echelon inventory optimization tools that leverages inventory placement in conjunction with integer programming and statistical methods to determine how much inventory to hold and where. A network model helps determine which products need to be placed in an stocking location, based on the customer demand historical data for the region. However, algorithms like association-rule mining can further help fine tune these analytical methods in the logistics world.
2 minute read
AIoT for Inventory Management and PlanningJul 15, 2022 — 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 digital twins in a supply chain context, AIoT can potentially significantly impact inventory planning processes within supply chains. This article briefly touches upon three areas where AIoT adds value to the inventory management and planning process.
3 minute read
Excess Inventory Management with AIJun 23, 2022 — 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 inventory is a key challenge in many industries, as evident from the recent challenges some top retailers have faced. Readers of this article will get answers to questions like:
• Why AI enabled tools are needed to plan excess inventory management?
• How does an AI-enabled tool identify and plan excess inventory strategy?
• What are some non-technology aspects that need to be considered to act on recommendations?
4 minute read
How to Optimize your SAP Supply Chain PerformanceJun 22, 2022 — Supply chain disruptions have become the new normal – but they shouldn’t have to be. While other companies may struggle to forecast and anticipate orders long-term, having the right tools to evaluate historical performance and spot trends can make all the difference in your organization’s supply chain performance. Hear firsthand from industry leading supply chain […]
1 minute read
How to Optimize your SAP Supply Chain PerformanceJun 22, 2022 — Supply chain disruptions have become the new normal – but they shouldn’t have to be. While other companies may struggle to forecast and anticipate orders long-term, having the right tools to evaluate historical performance and spot trends can make all the difference in your organization’s supply chain performance. Hear firsthand from industry leading supply chain […]
1 minute read
5 Ways to Enhance Your SCM with Smart Data CollectionMar 23, 2022 — For manufacturers and warehouses, the supply chain is constantly top of mind. As transportation costs soar and warehouse managers grapple with the need for more space, digitally transformed inventories have proven to be the way forward.
Modernization and streamlined technology contribute to overall operational efficiency, driving stronger business models and quicker delivery mechanisms. After all, this is what consumers want and in the rise of e-commerce, it’s the only way businesses will survive.
As companies continue to face unprecedented disruption and increased customer demand in a pandemic-driven economy, understanding the role of technology integration will be vital. This begins with an understanding of how automation impacts your mission-critical business systems.
Read this article and learn:
• How to start with the basics to digitally transform your supply chain.
• How to stand out in a competitive market by implementing efficiencies with automated workflows.
• Where to start addressing the issue of the inefficiency of insufficient labor.
• The importance of security as a key point of conversation when working with an outside vendor for mobile barcoding.
5 minute read