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230 CHAPTER 7 Inventory and Warehouse Management Processes

When moving materials from one plant to another requires any of these
capabilities, the company utilizes a process in which one plant essentially “pur-
chases” the materials and another plant “sells” them. This process involves the
use of a stock transport order (STO). An STO is very similar to a pur-
chase order in the purchasing process, except that it is used for plant-to-plant
movements. An STO can involve steps from three previously discussed
processes—procurement, fulfi llment, and inventory management—depending
on the specifi c scenario. In this section we discuss the following three scenarios:
STO without delivery, STO with delivery, and STO with delivery and billing.

Stock Transport Orders without Delivery

This scenario involves steps from purchasing and inventory management, as
illustrated in Figure 7-5. The receiving plant creates a stock transport order,
either directly or with reference to other documents such as a purchase requi-
sition. At the supplying plant, a goods issue is posted against the STO. At this
point the quantity in unrestricted use is reduced at the sending plant, and stock
in transit is increased at the receiving plant. A material document with two
line items is created to record this movement. When the materials arrive at the
receiving plant, a goods receipt is recorded, just as in the procurement process.
Recall that in the procurement process the goods receipt was recorded against a
purchase order. In this case, the STO is used instead of a purchase order. At this
time, the quantity in transit is moved to unrestricted use at the receiving plant,
and a corresponding material document with one line item is created. The FI
impact (and therefore material valuation) occurs at the time of the goods issue

Figure 7-5: Stock transport order without delivery

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