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Inventory Management and Sales of LPG


We are using SAP ECC 6.0, we have a new business requirement where we want to procure, store, transfer and sell LPG (Liquid Petroleum Gas). LPG is stored in Metric Tons (MTO) in bulk tanks and is sold in Litres or KGs in cylinders.

Detail Description:

Company 'A' has five storage plants with LPG storage tanks and warehouses.
2. Company 'A' procures LPG from local vendors and also thru import.
3. LPG is procured in Metric Tons (MTO) and stored in bulk tanks located at different Plants (also in MTO).
3. LPG is also stored in Cylinders of various sizes (11.8,45.4,30,2,6,18,9.786), the unit of measurement in this case is KG.
4. Cylinders are procured as Asset and is treated as a returnable item from customers. Furthermore, stock of filled and empty cylinders is maintained and monitored at various Plants.
5. There are two types of customers i.e Retail (dealers and individuals) and Bulk (commercial customers)
6. Retails sales is made thru cylinders in KGs
7. Bulk sales is made in MTO & Litres

Following are the formulas for conversion of LPG quantities in different UOMs

a. Tons to Liters -> (qty*1000)/0.564
b. Liters to Ton -> (qty*0.564)/1000
c. Cyls to Tons -> (qty*weight of cyls)/1000, for example: (qty*11.8)/1000

Would certainly appreciate if someone guide me how to configure LPG inventory management and its conversion to different UOMs and containers (empty and filled cylinders).

Thanks and regards

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1 Answer

  • Jul 31, 2017 at 08:43 PM

    I do not claim to be an expert on LPG, but I believe, that you need to discuss the subject of unit conversion with some of the engineers in the plant.

    From the little I know, you never fill the container up to the maximum, but always leave some space. How much you must leave empty depends on a few factors, among which are temperature conditions, combination of ingredients, density, pressure, probably different grade/type of containers also play a role. This is strictly regulated (hazardous materials) and I believe that your engineers could provide you with very accurate documentation on the min./max./avg. fill percentages for these materials in specific containers.

    As to tracking containers - SAP already has solutions for tracking returnables. One possible approach is Empties Management.

    Another important topic, which you probably need to discuss with the technical experts is container inspections and additional legal regulations, which can be country-specific.

    I would strongly advise you to raise the subject to your solution architect and business process expert/business process lead, as what I have briefly outlined as important is just the tip of the iceberg.

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