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.

40 results

  1. How to identify the value of optimising MRO inventory in your organisation

    As asset-intensive organisations looking for ways to significantly reduce costs and unplanned downtime, optimising MRO inventory is an urgent strategy – but how do you evaluate the value and opportunity of inventory optimisation in your particular organisation.

  2. barcode

    Enhanced Inventory Performance with RFgen’s Mobile Barcoding

    Published: 07/July/2023

    Reading time: 3 mins

    In this technologically advanced landscape, businesses are increasingly channeling their resources toward adopting innovative technological solutions. These solutions are pivotal in furnishing real-time information and granting quick access to data. Especially in supply chain operations, any error in tracking inventory movements can lead to inefficiencies and bottlenecks. Relying on manual or antiquated procedures is not…

  3. Demand-Driven Planning – Step 4 – Demand Driven MRP (DDMRP)

    Published: 12/June/2023

    Reading time: 3 mins

    Demand-driven Material Requirements Planning (DDMRP) is a modern approach to supply chain management that focuses on meeting customer demand efficiently while minimizing inventory costs. Unlike traditional Material Requirements Planning (MRP) systems, which rely on forecasted demand and fixed lead times, DDMRP uses actual customer demand signals to drive replenishment decisions in real time. By continuously…

  4. Why Continuous Availability is a Must for SAP Users

    Published: 22/May/2023

    Reading time: 5 mins

    Inventory management is crucial for supply chain strategies. Today, organizations need to quickly extract valuable insights from real-time data and promptly adapt to market changes. However, achieving this level of agility requires embracing technology. Unfortunately, most organizations have not prioritized the adoption of agile-enabling technology. According to RFgen’s recent Digital Inventory Report, only 16% of…

  5. Optimising Inventory Management at Hydro Tasmania

    Hydro Tasmania knew there was a problem but was unsure where to start. What we faced was a confluence of out-of-date process documentation, lack of awareness around inventory management and underutilization of SAP to do the heavy lifting. This has been an eye-opening experience to say the least. Come hear our story of both how we set…

  6. RFgen Revolutionizes Mobile Warehouse Data Operations

    Published: 16/May/2023

    Reading time: 4 mins

    Warehouse and inventory operations present significant challenges for organizations in terms of ensuring data reliability and transparency. Addressing such complexities necessitates a comprehensive approach that integrates technology advancements and process refinement. RFgen, a distinguished provider of barcoding software solutions for mobile data collection, warehouse automation, and inventory management, specializes in resolving inventory issues in several…

  7. inventory management

    Demand Driven Planning – Dynamic Adjustment – Step 3

    Published: 17/April/2023

    Reading time: 3 mins

    Buffers need to be re-calculated dynamically if material, market or company-related parameters change. This can be done with the consulting solution safety stock and buffer simulation. Buffers must be recalculated if the average daily usage changes and changed daily, weekly, or monthly depending on the analysis period. If the average daily usage is calculated based…

  8. inventory management

    Steps to success for building inventory management and optimization strategies

    Published: 23/March/2023

    Reading time: 2 mins

    SAPinsider’s benchmark report on Inventory Management and Optimization focuses on how organizations are recognizing the significance of supply chain visibility and the need for improved management and optimization to mitigate inventory-related risks and difficulties. The key challenges that organizations face are the lack of: clearly defined inventory strategy and policy, internal skillset for implementation, strategy…

  9. Supply Chain Optimization

    Factors Driving Inventory Management and Optimization in Supply Chains

    Published: 21/March/2023

    Reading time: 4 mins

    Effective inventory management and optimization require a deep understanding of the supply chain and its various components, including demand, supply, lead times, and costs. Companies that can effectively balance these factors can improve customer service levels while minimizing costs and improving overall supply chain performance. But a multitude of internal and external factors can pose…

  10. Optimised inventory

    Maximizing Efficiency and Cost-Effectiveness Through Inventory Optimization

    Published: 20/March/2023

    Reading time: 3 mins

    The COVID-19 pandemic served as one of the significant disruptors to global supply chains, highlighting the vulnerabilities of traditional inventory management practices that made maintaining optimal inventory levels challenging for business leaders. While holding excessive inventory can be expensive and tie up valuable resources such as warehouse space and capital, having too little inventory leads…