Re: Inventory flow
Inventory refers to the raw materials or the finished goods that are readily available for sales. For any type of business, the sales and purchasing processes are based on the currently available inventory. The inventory cycle involves linking the ‘purchases’ and ‘uses’ of raw materials and their transformations into goods that can be used for the benefit of the company either for production or for sale. Inventory flow involves the receipt of raw materials to the delivery or sales of the finished goods.
There are various phases in the inventory flow process:
- Items or goods receipt.
- Items inspection.
- Storage.
- Warehousing and maintenance.
- Stock removal.
Items or goods receipt. When receiving the shipment, the first step is to check if the items ordered are complete and intact as per the standards agreed upon with the vendor. Verification is needed for the quantity and quality of items received against the specifications included in the shipping documents. Depended on whether or not the specifications are met, the receiving department can accept, conditionally accept, or reject the shipment.
Items inspection. After accepting the received items, they are examined with specific procedures, depending on the type of the materials and their specific requirements. Occasionally, the items are inspected at specialized locations equipped with the infrastructure to carry out special testing procedures.
Items Storage. After the items are spot checked, the storage phase is in place for keeping those inspected items in the selected warehouses according to the company’s specifications.
Warehouse maintenance. In the warehousing and maintenance phase, the items that are stored in side the warehouses are periodically inspected and maintained for future use.
Stock removal. The stock removal phase involves the delivery of items from the warehouses to the production sites or to the retail locations.
Within SAP B1, the Inventory module can be used to manage all items purchased, produced, or those for future resales. Additionally, the Inventory module can be used to track information on the item master data, item management, inventory transactions, price lists, pick and pack, and inventory reporting.
Hope that this document can provide some insights on the Inventory flow process in SAP B1 within the Inventory module.
Regards,
Owen