Optimize Your Physical Inventory Processes with SAP

As we live in an era of digital transformation, one sector that has fully embraced digital transformation has been supply-chain management. But some aspects of supply chain management, like warehouse management, still require manual processes; this is mainly experienced when it comes to inventory management.

Despite the existence of automated inventory systems, it’s always recommended that you counter-check by performing a physical inventory. As a result, this article is designed to help you understand how to optimize your SAP physical inventory processes. But first, you must have a grasp of what physical inventory is, what it entails, and the process involved.

What is Physical Inventory?

Physical inventory is the process where a business physically tallies its entire inventory and raw materials at its storage location. Physical inventories require businesses to weigh, count, measure, and even compile goods issued to other supply chains, which is mainly feasible through goods receipts. When inventory counts are conducted, the data collected is usually recorded on a physical inventory document.

The physical inventory process is usually carried out either at the end or at the beginning of each fiscal year. However, that doesn’t mean that it can be carried out at any other time because it usually depends on the situation and if physical inventory data is needed. Also, it can be used to check your business’s inventory levels or raw materials inventory. To avoid errors, most firms conduct cycle counting, which acts as an inventory auditing procedure to confirm that the inventory counts align with their master data.

The physical inventory process can sometimes be challenging, hence why the SAP system was created, also known as SAP EWM. SAP EWM is a warehouse management software platform with multiple inventory management features. You can carry out a physical inventory of handling units and products using the sap system in an automated manner. These features offer you the following options

1. Storage bin specific/low stock check physical inventory – a procedure performed when confirming a warehouse task
2. Product-specific physical inventory – a document created to record data about the product in one or more storage bins and handling units.

The SAP EWM platform has to be integrated with the ERP system when posting differences in inventory using it. The SAP business platform is also available for small businesses and firms as SAP business all-in-one.

Steps Involved in SAP EWM Physical Inventory

1. Generating a physical inventory document that states what storage bins and products are to be counted
2. Activate the physical inventory document, after which you are required to print it out
3. As part of the physical inventory process, consider warehouse storage options. Also, inventory should be performed according to the physical inventory document
4. Recounting of the inventory, which is optional but just for good measure
5. Feeding the inventory counts into the SAP system
6. Post the difference in SAP EWM, after which you post the difference in the ERP system using the differential analyzer.

How Does the SAP System Help You Optimize Your Physical Inventory Process?

As a result of the digital transformation of the supply chain sector, most individuals and firms have been forced to rely on warehouse management systems like SAP EWM. This has helped them to keep track of their inventory. However, there are still some aspects that require a human touch, and that includes physical inventory. During its creation, SAP EWM was fitted with features and properties that you can use to optimize the entire physical inventory process. These features and properties include:

1.It offers an all-in-one inventory management platform

Being an inventory management tool, the SAP system boasts several features like keeping track of each issue, performing a low stock check and notifying you if the inventory levels in a particular storage bin are below the order level.

2. Its ability to integrate radio frequency technology into the system

In inventory counts, radio frequency makes the process much more efficient, simple, and quick. All you have to do is aim the scanner at the bar code or identification tag, and it will scan and record it in the system

3. Automation of processes

Since SAP EWM was built to automate warehouse management processes, you can use it also to automate warehouse processes, which include inventory counts, and you’ll be assured of correct results; thus, there won’t be the need for cycle counting.