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Upload account assignment( cost centre/project based) based PO stock after consumption to inventory

Dear All,

I need a best practice solution for below scenario.

As we know project based(Q)/Cost Centre (K) based stock immediately gets consumed after GRN. There will be no stock in unrestricted quantity for such stocks.

Sometimes project owners doesn't require the material immediately and want to put it in warehouse. Stores do 501 movement to upload the stock directly in storage location which is not a best practice as per the audit recommendation.

1. we suggested that in such case such kind of material to be received as without account assignment directly to stores and then issue to the respective cost centers/project WBS when they need it in future. Stores are in disagreement to this process as it will increase their minimum inventory value maintenance KPI's.

Please suggest what is the best practice we can follow to do a GRN so that stock value is not booked against stores and also they can keep it on behalf of project/cost centre and issue it when they require it.

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7 Answers

  • Apr 12, 2018 at 06:30 PM

    What is the alternative to handle such scenario for cost centre based items without 501

    What is the ideal process being followed for recieving cost center based items if after grn it has to given back to stores for warehousing

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  • Apr 12, 2018 at 04:07 PM

    I think you have to sort this out yourself in your company by bringing the 2 parties together.

    Your inventory manager already said that inventory would causing him KPI troubles.

    What does it mean? you either have to adjust the KPI or the inventory manager or need to order differently and later and ask your vendor to keep it in his premises until you need it.

    As we do not know how the KPI is defined we can't really give you arguments to convince your inventory manager to keep inventory for those parts. And using Excel to track inventory which is not in SAP is probably the most stupid idea, as the inventory still occupies space in the warehouse then and is even less to manage from SAP and will cause problems in planning too.

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  • Apr 12, 2018 at 06:06 PM

    Thanks for your quick response !

    Is it possible for a valuated material to be consumed instantly during GRN and also show stock quantity only (no value) in the plant X (plant generally used for PO's with account assignment)

    Later on from this plant X it will be moved to Plant Y (however in plant Y(used by stores) the material should show as a stock quantity only. No value of material to be shown in this plant as otherwise again stores will have problem as their inventory value will increase)

    Please support

    Currently stores are just doing 501 to update quantity of the stock for goods lying outside the warehouse which was actually ordered for cost centre consumption. what are alternatives we can do to achieve the same without using 501(no value is to be shown in stores inventory, they are doing this just for recording purpose of goods)

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  • Apr 12, 2018 at 06:17 PM

    a valuated material with quantity update only, this is just paradox.

    And if your warehouse KPIs are based on value instead of quantity then it is totally wrong from my point of view and I wonder how the warehouse manager could ever accept this, he will probably not meet his KPIs when the market price goes up then.

    Creating separate plants because of account assignment is even among the worst what I ever read.

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  • Apr 12, 2018 at 06:39 PM

    Just following a normal logical logistics process is the best practice process, every bending of normal processes for sake of KPI is a step into the wrong direction, it is better to adjust the KPI to measure normal processes.

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    • I am again explaining the scenario

      1.Po 100 qty raised for a cost centre

      2. After Grn 100 qty good consumed and charges to cost center

      3. The buyer used 50 qty anf want to enter remaining 50 in warehouse.

      What best practice says

      The 50 qty unused goods cannot be taken back in warehouse and should remain at site


      Do a 501 to put those 50 qty unused in warehouse and if we do 501 whether value will also be updated in inventory

  • Apr 12, 2018 at 08:10 PM

    You define a material type as valuated or non-valuated in OMS2

    And based on that fundamental decision one material master is either valuated or non-valuated, but cannot be both.

    If it is valuated then value if flowing with each of your movements.

    If you do a 501 for a valuated material then the movement is valuated depending on its price control either with moving average or standard cost and written on to your inventory stock account.

    The very same happens for a 202 movement, only that it also reduces the consumption from a cost center wile it is writing on inventory in the warehouse.

    Theoretically you could use split valuation, with a valuation type for external purchase and a second valuation type for parked inventory. Where the external purchasing would have the normal moving average valuation while the parked returned quantity would have a 0.01 with standard price. I said theoretically, because split valuation is as well a fundamental decision, and if you have already a material master without, then you cannot just change this to be split valuated. You could only achieve this with a new material master or a hell of work with archiving most recent business cases and thus screwing up the basis for reporting.

    Your buyer want put 50 into the warehouse, your inventory manager does not want that because of his KPI. This is almost crying for a decision of the organization level above those two if they can't reach an agreement.

    Why did the buyer order 100 if he only needs 50 right now? Is this eventually wrong planning? Where will the goods be physically? Is there space in the warehouse to take such excess quantity? Why is there space for non-valuated goods and no space for valuated goods?

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    • the batch only gets a value if you post the receipt to stock and issue it from stock to your cost center, one step more.

      Remember that I mentioned split valuation at a time where you still wanted to return it without value.

      A further option would be to maintain the value manually in the movement, which means the person who does the movement would first need to lookup the price from the PO and calculate the value and enter it in the detail of the movement (field need to be made available through customizing of field selection). This procedure would be pretty risky and auditors would have there problems with it.

  • Apr 13, 2018 at 05:34 AM

    Thanks for the response.

    If after GRN is done for consumption based PO. Cant we do 202 Goods issue reversal to bring the stock back to inventory if yes then can you provide more clarity. Please do not think about KPI of stores as of now at least this scenario happens only for few cases.

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