Page 244 -

226 CHAPTER 7 Inventory and Warehouse Management Processes

Figure 7-2: One-step and two-step procedures

Material movements consist of two tasks: issue and receipt. Issue refers
to removing the materials from storage at the supplying or sending location,
and receipt involves placing them into storage at the receiving or destination
location. In the one-step procedure, as the name implies, both tasks are accom-
plished in a single step. Consequently, a decrease in quantity at the supplying
location and an increase at the receiving location are recorded simultaneously.
This strategy is appropriate when the two locations are physically close to each
other and there is no signifi cant time lag between issue and receipt.
By contrast, in a two-step procedure the two tasks are completed in
separate steps. The fi rst step (issue) occurs when the materials are removed
from storage. At this time the quantity of inventory is reduced at the supply-
ing location and simultaneously increased by the same amount at the destina-
tion location. However, because the materials do not arrive immediately at the
destination location, they are placed in the in-transit stock status at this location.
Later, when they are physically received at the destination location, a second
step (receipt) changes their status from in transit to unrestricted use (or another sta-
tus). Companies utilize the two-step movement when there is a time lag between
the two steps, for example, when the locations are geographically separated by
distance. The in-transit status alerts the destination location that materials are
due to be received. Another situation in which the two-step movement is used
is when the same person does not have authorization to make changes at both
locations. Signifi cantly, although stock transfers and transfer postings are
conceptually different, they are both accomplished via a transfer posting in
SAP ERP. The distinction is in the specifi c movement type that is used.
As in any goods movement, a material document is created during both
the one-step and two-step procedures. In the one-step procedure, one mate-
rial document is created. This document contains two line items for each
material moved, one for the issue at the supplying location and one for the
receipt at the receiving location. During the two-step procedure, two material

31/01/11 6:41 AM
CH007.indd 226
CH007.indd 226 31/01/11 6:41 AM