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MM-2-011-Physical Inventory Management.doc

Physical Inventory Management

Ahmad Rizki
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MM-2-011-Physical Inventory Management.doc

In the R/3 System, you can carry out a physical inventory for special stocks as well as your
own stocks. However, you have to inventory your own stock and each type of special stock
(e.g. consignment stock at customer, or external consignment stock from vendor)
separately, using different physical inventory documents.
As of Release 4.0, physical inventory is linked with the Logistics Information System (LIS).
When inventory differences are updated in the LIS, they are shown both in terms of
quantity and value. The physical inventory items are aggregated to physical inventory
number, plant, storage location, and material.

The following stock types can be included in all physical inventory methods :
1 Unrestricted use stocks in warehouse
2 Quality inspection stocks
4 Blocked stock

Independent of the physical inventory procedure, the physical inventory process can be
divided into three phases:
Physical inventory preparation
This includes creating a physical inventory document, blocking materials for posting, as
well as printing and distributing the physical inventory document.
Physical inventory count
Firstly, the stocks in the warehouse are counted and the count results are entered in
the count list. These are then transferred from the count list to the system in the step
“enter physical inventory count”.
Physical inventory check
Using the list of inventory differences, you can check variances in the stocks. You

Ahmad Rizki
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MM-2-011-Physical Inventory Management.doc

should check whether the transferred count result is correct (change count) or whether
you want to initiate a recount.
If the difference is accepted, it is posted and stock is corrected.

The physical inventory number was created as an additional hierarchy above the physical
inventory document number. You can use it to group together different physical inventory
documents that belong together organizationally.
You assign physical inventory numbers when you create and change physical inventory
documents, and you can use them as an extra selection criterion for physical inventory
reports. This enables you to directly display the physical inventory documents per storage
location, customer, or vendor.

Ahmad Rizki
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MM-2-011-Physical Inventory Management.doc

(*)Differences are to be posted in this posting period.

Ahmad Rizki