Introduction

Inventory is one of a company's most important assets, but also one of the most difficult to manage. Poorly managed inventory can lead to stock issues, lost sales, customer dissatisfaction, and increased operating costs.

Therefore, it's essential to have a system that allows you to effectively control your inventory and provides you with accurate, real-time information on the status of your stock, your supply needs, your merchandise movements, and your performance indicators.

In this sense, SAP is one of the most comprehensive and advanced solutions on the market, offering you a series of tools and features to manage your inventory in an integrated and automated manner, adapting to the characteristics and requirements of your business.

Configure the SAP System

SAP allows you to configure your system according to the parameters you define for your inventory management, such as material type, valuation method, level of detail, inventory cycle, chart of accounts, and more.

You can also customize your system to fit the specifics of your business, such as the use of batches, series, locations, warehouses, centers, etc. This way, you can have more precise and flexible control of your inventory and avoid errors and deviations.

Transactions for Inventory Tracking

SAP offers a variety of transactions and reports that allow you to access crucial information quickly and easily.

Some of the most used are:

MB51: List of material documents, allowing you to see the movements of merchandise in the inventory.
MB52: Warehouse stock list, showing the available stock of each material.
MB5B: Stock list on date, showing the stock of each material on a given date.
MC.9: Valuated stock list, showing the value of the inventory on a given date.

Optimization Best Practices

SAP helps you apply best practices and quality standards to optimize your inventory management, ensuring reliability, accuracy, efficiency, and profitability. Some of these best practices and quality standards include:

Conduct a periodic physical inventory, which consists of counting and verifying the actual stock of each material in each warehouse and comparing it with the theoretical stock recorded by the SAP system.

This way, you can detect and correct inventory discrepancies, which may be due to human error, theft, loss, deterioration, etc. SAP makes it easy for you to perform a physical inventory through transaction MI01, which allows you to create an inventory document; transaction MI04, which allows you to enter the physical count; and transaction MI07, which allows you to record inventory discrepancies.

Apply the appropriate valuation method, which consists of choosing the criterion used to assign a value to each material in inventory. The valuation method can be average cost, which is calculated by dividing the total inventory value by the total number of units, or standard price, which is predetermined and held constant over a period.

The valuation method influences the calculation of inventory value, cost of goods sold, profit margin, etc. SAP allows you to define the valuation method for each material using transaction MM02, which allows you to modify the material master data.

Use the appropriate requirements planning method, which involves choosing the criteria used to determine optimal quantities and times for replenishing inventory. The requirements planning method can be reorder point, which is based on maintaining a minimum stock level to avoid stockouts, or MRP, which is based on calculating material requirements based on forecasted demand and the production plan.

The MRP method influences service level, turnover rate, storage cost, ordering cost, etc. SAP allows you to define the MRP method for each material using transaction MM02, which allows you to modify the material master data.

Integrate Inventory Management through SAP

One of the greatest advantages of using SAP for inventory management is its ability to integrate with other processes and modules, such as planning, production, purchasing, sales, and logistics. This ensures coordinated and consistent management, improving the flow of information, avoiding data duplication, and increasing productivity and profitability.

Integration with planning: Synchronize inventory management with the strategic and operational plan.

Integration with production: Manage the inventory of raw materials and finished products efficiently.

Purchasing Integration: Synchronize material acquisition with inventory management.

Integration with sales: Manage inventory related to the sales process.

Integration with logistics: Manage inventory during transportation and distribution.

Conclusions

SAP is emerging as a comprehensive and advanced solution for inventory management, offering tools and features that enable effective, real-time control. The ability to configure and customize the system to meet the specific needs of each business, along with the variety of transactions and reports available, facilitates detailed inventory tracking and analysis.

Furthermore, the application of best practices and quality standards, as well as integration with other SAP processes and modules, ensure optimized inventory management that contributes to reducing operating costs and increasing customer satisfaction.