1) What is Inbound delivry and why inbound delivery

Inbound and Outbound delivery are not the same as GR and GI.
Inbound is related to MM module and Outbound is related to SD module.

Inbound delivery is part of vendor confirmation and is used for optimised

purchasing. It is a notification of delivery of goods from a vendor against
a PO at a specific date.
Basically it denotes that the material has been shipped from the vendor's
location and is in transit. In the system, Inbound is made with reference to
a PO when the vendor sends his shipment notification. This Inbound is
referenced while making the GR. You can control inbounds by the Confirmation
Control Key. This can be set in the Vendor master so that all Pos for that
vendor will be inwarded by referencing an inbound. This key can be
seen/changed in the Confirmations Tab in Item Detail in ME21N. You can
customize and set whether the inbounds are considered for MRP or not. The
inbound dates will be helpful in planning more efficiently for the material.

general scenario followed most commonly in WM

A) IN MM At the time of good receipt MIGO

1.creation of transfer requirement takes place. Material Goes to Interim

Storage type (902)

2. Transfer order from TR is created ( we get destination storage type) -- In

LT04 or LT06

3. Confirmation of TO.(Put away completed )

In LT12

2) Explain posting change in warehouse management.

Posting change is a process which is carried out when there is no physical

change in the material but there are changes related to its stock keeping. For

example when you decide to allocate this material for quality but the material is
not physically moved from the bin of storage or when you are transferring from
consignment stock to own stock.
Now there are two ways of carrying this out. Either in IM separately and then
doing it in WM, else doing it simultaneously in LQ02. Although the material is
carried out with a posting change, it is not physically moved from the Bin. So
only the status like from unrestricted to quality or consignment to own, etc.
changes.

Common Posting Change

The most common type of posting change involves goods received in the
warehouse that are posted for inspection. When goods are received into the
warehouse, they are frequently held for inspection before they are released as
stock available for issue. User use the IM component to assign the stock
category Q (quality inspection) to inspection stock.
The stock category is not removed until the goods have been inspected and
released from quality inspection. Once the release of material from inspection
is authorized, user can release all or part of the material for use. The process is
as follows:
a. Release the stock from inspection in WM or IM. QM-managed stock can
only be released in QM (usually through a usage decision).

b. Process the resulting posting change notice in WM by creating a transfer

order.
When a transfer order is created and confirmed for a posting change notice in
WM, the system removes the stock category of Q as follows:
The system:
a) Posts a negative quantity with a stock category of Q to the warehouse.
b) Posts two quantities to the posting change area:

3) What are the difference between LU01, LU02, LQ01 and LQ02?
LQ01 : With this transaction, you can post a MM-IM movement type in WM

between 2 storage location in the same warehouse.

LQ02 : You can carry out posting change notices (PCN) directly initiating in
WM and this will make the change ( corresponding inventory status change) in
IM as well. You have to do a few customization steps to be able to do this
though.
LU01 : Creation of the PCN independently without the being initiated in IM
first. Typically the PCN's are a result of IM action. With this you can carry the
same in WM.
LU02 : You can change the PCN created.

Physical Inventory:
Physical Inventory is a business process in which physical stock is
matched with book (system) stock. It is legal requirement to carry out
physical inventory at least once in a year.

Physical inventory can be carried out both for a companyu2019s own stock
(Unrestricted, Quality, Blocked Stock) and for special stocks (Customer
Consignment stock, Vendor consignment stock from vendor, Returnable
packaging). This inventory is carried out saperately for both type of stocks.

Physical Inventory Processes:

Several inventory processes available for physical inventory which includes

as follow:

1. Periodic Physical Inventory

o All stocks of the company are physically counted on the balance sheet
key date
o Every material must be counted
o Entire warehouse must be blocked for material movements during count.

2. Continuous Physical Inventory

o Stocks are counted continuously during the entire fiscal year.
o It is important to ensure that every material is physically counted at least
once during the year.

3. Cycle Counting
o In this method of physical inventory, inventory is counted at regular
intervals within a fiscal year.
o These intervals (or cycles) depend on the cycle counting indicator set for
the material in Material Master record as CC indicator in plant view data.
o With this Cycle Counting Method of Physical Inventory allows fast-moving
items to be counted more frequently than slow-moving items.

4. Inventory Sampling
o Randomly selected stocks of the company are physically counted on the
balance sheet key date.

o If found not much variance between the counted stock and the book book
stock, it is presumed that the book inventory balances for the other stocks
are correct.

Physical Inventory Process Cycle Flow

1. Creation of physical inventory document

- Physical inventory document(s) is created individually or using the batch

program, click for more information
- The transaction codes for creation physical inventory are as follow

Individual Inventory documetion creation

MI01 - Individual physical inventory creation
MIS1 - Inventory Sampling document creation
MICN - Cycle count inventory document creation

Collective Inventory document creation

MI31 - Own stock without spcial stock
MIK1 - Vendor consignment
MIQ1 - Project stock
MIM1 - Returnable Transporation material
MIW1 - Customer Consignment stock

MIV1 - Returnable material with customer

MIO1 - Material provided to Vendor (Subcontracting material)

2. Print physical inventory document

- Physical Inventory document can be printed based on the physical

inventory document status and or item status
- Transaction code MI21 is used to print the inventory document where print
default value can be populated

3. Count the physical stock

- Based on the inventory doucmen printout, the warehouse person will

check the stock of material physically and note that on print out. This is
completely physical process.

4. Enter count in system

- On completion of physical count, the count result is needs to be entered in

the system. This can be with reference (using Tcode MI04) or without
reference (using Tcode MI04) to the physical inventory document.
- If count quantity for that material is ZERO then select ZC (zero count)
column instead of putting 0 in qty field. If 0 is used for zero count then
systm will consider that as "not counted"

5. Analyze difference

- Once count is posted in the sytem, difference analysis can be carried out
using trasnaction MI20
- The output gives information based on the input criteria i.e. physical
inventory document, plant, material etc.
- The output gives information about the book quantity, Counted quantity,
difference in quantity and value.
- From this output list, you can carry out further process ie initiate recount,
change count quantity, post difference

6. Initiate recount and follow the steps 3,4,5

- If found unacceptable difference, recount is initiated using directly from

difference analysis list (transaction code MI20) or using transaction code
MI11.
- New inventory document will be created for selected items or for entire
document
- The original document items will be deactivated once recount is initiated
so original document will not be available for further process.
- On initiating recount, you need to process same as for new count
document.

7. Post the difference

- Several options are available for posting difference

- Post difference after count is posted using transaction code MI07

- Posting the count and inventory differences using transaction code MI08,
here you have created physical inventory but not counted so with this you
can count and post difference in sinle step.
- Entering the count without a document reference using trasnaction code
MI10, with this you can create inventory document, enter the count and
post difference in single step.

some more points for posting difference

- Posting period must be open to post inventory difference.

- The fiscal year is set by specifying a planned count date when creating a
physical inventory document.
- Tolerence to crear difference per user group can be set in customization.
- The system will generate material document for the difference qty and
post the value to appropriate account (for valuated stock)
- The movement type in material document will be 701 or 702 based on
gain or loss of material.

Serial Numbers in Physical Inventory

If material is managed with serial number then it is possible to carry out

physical inventory for material with serial number. There are some prerequisite before you carry out physical inventory for serialized materials.

- Serial number profile must be maintained in the material master.

- the serialization procedure MMSL (maintaining goods receipt and goods

issue documents) has to be assigned to serial number profile.
- The stock check indicator in the serial number profile should be
configured.
- Maintain basic settings for the serial numbers in customization for Serial
Number Profile.
- Configure serial number management for physical inventory in the
Settings for Physical Inventory step in Customizing for Inventory
Management.