SAP Inventory Management

Inventory Management Process
In SAP MM ( Part 3)
René Efila Minkoulou
rodrigueefila9@gmail.com
Overview Process
1) Automatic Batch Determination
2) Configuration in SAP :
 Define Condition Table
 Access Sequences
 Batch Strategy type
 Batch Search procedure
 Import Standard SAP Characteristics
 Creation of a Class
 Material Master Settings
 Sort sequence in cu70 and assign your characteristic value to it. ( FEFO / FIFO )
 Create Batch Search Strategy: ( FEFO / FIFO )
3) Test Functionality :
 First Expired, First Out ( FEFO )
 First In, First Out ( FIFO)
 Last In First Out ( LIFO )
1) Automatic Batch Determination
Purpose. In the logistics process, that is from

procurement to sales, you are required time and
again to specify batches for individual business
transactions. You can use batch determination for
all types of goods movements from the warehouse
to find batches that meet defined specifications.
Define Condition Table :
Condition Table: In Batch determination process, condition table consists of
number of field. Among those fields particular fields are selected and assigned to
the condition table.
IMG > Logistics – General > Batch Management > Batch Determination and
Batch Check > Conditions Tables > Define Inventory Management Condition
Tables
Define Condition Table :
We are going to use standard condition table : 024 Movement

type/plant/material
Access Sequences
For each strategy type, there is a batch determination access
sequence. The main function of the access sequence is to allow
the strategy type to access the condition tables in the sequential
manner.
The access sequences ME01, ME02 are predefined in the SAP
system. And these access sequences should not be modified. The
user created access sequences should start with ‘Z’.
ME01: Movement Type/Plant/Material
Access Sequences
IMG—>Logistics-General—–>Batch Management—->Batch Determination and

Batch Check—->Access Sequence. Transaction key: OMCX (MM)
Batch Strategy type
It is the procedure to select what type of criteria to be used during batch
determination process.
IMG–>Logistics General–>Batch Management—>Batch determination and
Batch Check–>Strategy Type OR Transaction OMCW.
Batch Search procedure:
Batch search procedure defines how the search procedure is defined for the
batches.
IMG–>Logistics General–>Batch Management—>Batch determination and
Batch Check–>Batch Search procedure Definition for Inventory Management
OR Transaction code OMCY.
Batch search procedure activation.
In this you can assign the search procedure for the particular Movement Type.
IMG –> Logistics General –> Batch Management —> Batch determination and
Batch Check –> Batch Search procedure allocation and Check activation for
Inventory Management OR Transaction code OMCG.
activate SLED for your plant and mvt type 201.
Import Standard SAP Characteristics
You need to import all the important standard SAP characteristics, that is you
need to copy them from the client 000. These characteristics are hard coded in
the ABAP functions.
Transaction Code – BMSM
Creation of a Class
create a class named as Z-CLASS1 of Class type “Batch (023)” and assign a
standard SAP Characteristics “LOBM_VFDAT – Expiration date, shelf life” and
LOBM_LWEDT- Date of Last Goods Receipt to this class.
Material Master Settings ( MM01 )
Add the class to it in classification view.
In purchasing view activate batch management.
plant storage1 view give data for remaining shelf life and total shelf life
create sort sequence in cu70 and assign your characteristic value to it.
IMG > Logistics > Batch Management > Batch Determination and Batch Check >
Define Sort Rule
Enter Sort sequence “name” – ZFEFO1 ( if you use FEFO method )
Enter Characteristics. We will use standard Batch Characteristic LOBM_VFDAT.
This is used for Shelf Life Expiration Date (SLED). Check Ascending column.
Ascending tells the system to use the earliest batches based on SLED.
IMG > Logistics > Batch Management > Batch Determination and Batch Check
> Define Sort Rule
Enter Sort sequence “name” – ZFIFO1 ( if you use FIFO method )
Enter Characteristics. We will use standard Batch Characteristic LOBM_LWEDT.

This is used for Date of Last Goods Receipt. Check Ascending column.
Ascending tells the system to use the earliest batches based on SLED.
Create Batch Search Strategy: Initial Screen
SAP Menu > Logistics > Central Functions > Batch Management > Batch
Determination > Batch Search Strategy > For Inventory Management > MBC1 –
Create
Enter Strategy type ME01. This is the condition type for key combination
Movement Type, Plant and Material.
Enter Movement Type 201 , a plant and the material number. Fill in other fields
as required or needed.
Hit the “Selection criteria” icon

Add Classification
Hit the “Sort Rule” icon – On this screen enter the Sort Rule created in previous
step. ZFEFO1 base of the FEFO (You can add / remove Sort Rule based on your
requirements.)
Here is FEFO
 Hit the “Sort Rule” icon – On this screen enter the Sort Rule created in previous
step. ZFIFO1 base of the FIFO (You can add / remove Sort Rule based on your
requirements.)
Here is FIFO
First Expired, First Out ( FEFO )
 FEFO is a system that helps you with your inventory, especially

and most specifically your inventory organization. It also keep
track of every information about your business that you may
need and, by doing that, keeps an easier flow.
 The literal meaning of FEFO is “First Expired, First Out”, that is
basically the politics that the product that is about to expire on
stock and inventory is the one that is going to be shipped away
first.
 This generates an organization not based on the lot of the
product, but focusing on the expiring date, so nothing is tossed
away or goes bad. This also allows you organize physically
everything so the product can easily go to the next step of
production without any issues or confusion.
Do a GR using 501 and enter SLED related details.(production date and exp
date values)
Repeat the above step and enter different values for SLED details
Total Shelf life : 60 days

Min. Rem. Shelf Life : 10 days
Do a GI using 201 mvt tye in MIGO and enter * in batch field(system will
determine the batch using the SLED value based on the criteria(ascending or
descending which was set in the sort rule.).
You can see here the system offer the first expire batch :
Strategy Info
First In, First Out ( FIFO)
First In, First Out, commonly known as FIFO, is an asset-management and
valuation method in which assets produced or acquired first are sold, used, or
disposed of first. For tax purposes, FIFO assumes that assets with the oldest costs
are included in the income statement's cost of goods sold
the system offers the oldest entry
First In, First Out ( FIFO)
Strategy Info
Last In First Out ( LIFO )
What is the definition of LIFO ? The LIFO method is most commonly applied to an
organization’s inventory valuation procedures. There are a lot of different
valuation methodologies applied to inventory, and often management has to
make a strategic decision to determine the most advantageous method to use.
Under LIFO, the valuation is structured around the concept that the last unit of
inventory received (the newest inventory) is the first unit of inventory used.
Depending on the unit cost and timing of inventory transactions, the LIFO
method can generate a number of tax benefits due to profitability impacts on
the income statement.
IMPORTANT : you can create a new rule or you can use the same rule ( FIFO)
but if you use the same rule you should change configuration like this <<
ASCENDING >> to << DESCENDING >> FIFO become LIFO
the system offers the most recent entry

Strategy Info

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Inventory Management Process

René Efila Minkoulou

Purpose. In the logistics process, that is from

We are going to use standard condition table : 024 Movement

IMG—>Logistics-General—–>Batch Management—->Batch Determination and

Enter Characteristics. We will use standard Batch Characteristic LOBM_LWEDT.

Hit the “Selection criteria” icon

 FEFO is a system that helps you with your inventory, especially

Total Shelf life : 60 days

the system offers the most recent entry

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