Taking Physical Inventory

This document explains how you take a physical inventory, which is a physical count of the quantity of each item selected.

You take inventory to make sure that the item quantities recorded are correct.

Outcome

When a physical inventory has been taken, you have either chosen to update the on-hand balances or simply to print a list with the differences between the inventoried and the recorded quantities.

By taking a physical inventory, you have also fulfilled the legal requirements concerning warehouse management.

The differences between the balance reported from inventory and the recorded balance quantities will be calculated and inventory values adjusted.

Physical inventory is reviewed in 'Physical Inventory. Perform' (MMS300). Quick physical inventory can be reviewed in 'Physical Inventory. Quick Entry' (MMS310).

An inventory request is created; either selected by balance identities (MITLOC) or by stock locations (MITPCE). The MITLOC table is flagged as active and is also stored in the MITTKD table. When the inventory is approved, the new on-hand balances are updated in the MITLOC table.

If you select inventory counting selected by balance identities you can use an item selection table for detailed selection. This table consists of a field group (CRITM). This field group consists of all item (MITMAS) and style (HMSTYN) fields.

Before you start

Purpose of Inventory Counting Selected by Stock Locations

The purpose of location-based stock taking is to be able to perform stock take for certain locations or a certain area within the warehouse. Hereby, the possibility to create stock take lines also for empty locations is provided. These lines should be confirmed if the locations really are empty or, if any items are found at this location, a new line should be manually created.

This way, items that are placed in a location which is supposed to be empty are more easily discovered when inventory is being taken.

When using location-based stock take you can also sort on transportation flow code. The purpose of this is to be able to print the stock take lists in an order which minimizes travel time during stock take.

The purpose of being able to exclude allocated balance identities is to simplify the stock take and lower the risk for incorrect differences caused by picking being performed in between the creation of the stock take list and when the stock is actually counted.

Workflow in M3

  1. Select physical inventory method

    Select one of the following physical inventory methods:

    • Cyclic inventory method

      All items with a last inventory date outside a specified time cycle will be included in the inventory.

    • Periodic inventory method

      Inventory can be taken at any time and based on any selections.

    • Zero-point inventory method

      Items with a balance equal to zero or close to the reorder point will be included. This simplifies the taking of the physical inventory since items recently updated with large quantities will not be on the counting list.

    • Inventory based on deviation

      Selection is made for items that have at least one balance ID in a deviation location. This method will restrict the physical inventory lines to items that suffered from a DO deviation, that made balance inaccuracy likely.

    • Quick physical inventory

      This is a method for adjusting the stock balances without going through the entire physical inventory flow. Quick physical inventory is done from 'Physical Inventory. Quick Entry' (MMS310).

    Select whether stock take should be based on balance IDs (MITLOC) or on locations (MITPCE).

  2. Create and start physical inventory

    You create cyclic, periodic and zero-point inventory methods in 'Physical Inventory. Perform' (MMS300). On the E panel you define whether the inventory should be selected by balance identities or by stock locations.

    When the inventory is created, its status is set to 10='Physical inventory round created, but contents not yet generated'.

    If you have created an inventory selected by balance identities, you can fill in an item selection table on the (MMS300/F) panel.

    If you have created an inventory selected by stock locations, you also decide whether allocated balance identities should be included or not.

    If you have created an inventory selected by balance identities or items, you can decide whether balance IDs in transit should be excluded. Stock in transit is pending for distribution order receipt and should normally not be updated as part of a physical inventory.

    If you have created an inventory selected by balance identities or items, you can exclude balance IDs in deviation. Deviation stock is the result of a difference between what was sent and what was received on a reported distribution order. Deviation stock IDs are dummy records to track the deviation and cannot be physically counted. You can, on the other hand, ask for listing only the balance IDs in deviation when the aim is to clear them.

    The inventory's status is then set to 30='Balance identities selected'. This status is then automatically set to 40='Counting list printed' after a few minutes.

    Status 41 is displayed when you have sent the MI transaction LstStockTake to the API. You can resend the transaction by selecting option 21='Change status'. This will decrease the status to 40 again.

  3. Count

    When the inventory has been created and you the counting list is printed, you count the items in order to see how your stock corresponds to the counting list.

  4. Report results

    Report the results of your count in 'Physical Inventory. Report' (MMS301). Inventory status will then be set to 50='Feedback of physical report started'.

    Use F20='Report Zero' to report 0 on the remaining lines. This can be applicable when aiming to clear stock in deviation.

  5. Update

    Update the system with the reported values. If you want physical inventory variances entered to update the on-hand balances and to create transactions for the stock transaction history, activate the 'Update' field. The inventory status will then be set to 70='Update of physical inventory has been made'.

    If you only want to run a simulation, do not activate the 'Update' field. In this case, the inventory status will be set to 60='Difference list printed'.

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