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246 CHAPTER 7 Inventory and Warehouse Management Processes
distination bins are often proposed automatically by the ERP system. However,
they can also be provided by the individual who is executing the transfer.
A transfer order consists of a header and one or more line items, as illus-
trated in Figure 7-24. The header includes data that are applicable to all line
items. Examples are the transfer order (TO) number, reference document
number, dates, and warehouse movement type. Line item data include mate-
rial number; source storage type, bin, and quant; destination storage type, bin,
and quant; target quantities; and actual quantities moved. Note that a particu-
lar material can have more than one line item if the material has to be moved
from multiple source bins or to multiple destination bins. This scenario can
occur in the case of picking when there is insuffi cient quantity in one source
bin and in the case of putaway when the destination bin is not large enough to
hold all of the materials moved.
Figure 7-24: Structure of a transfer order
Tasks
The key task in the execute warehouse management step is the creation of a
transfer order, with or without a reference document, as illustrated in Figure 7-25.
Transfer orders can be created either manually or by the ERP system. When they
are created manually, the user selects the appropriate reference document or
documents, verifi es the data in these documents, and then creates the orders.
When a reference document is not used, the user must provide all of the data
that would have been contained in the reference document. The ERP system
can create the TOs automatically, but only when a reference document exists.
The system also can be confi gured to automatically create transfer orders from
reference documents that meet certain criteria (e.g., transfer date). Finally, the
system can be programmed to directly create transfer orders as soon as a mate-
rial document or an outbound delivery for shipment to a customer is created.
Outcomes
The obvious outcome of this step is a transfer order. When the TO is created, the
reference document used to generate it is updated to indicate that this step
has been completed. In addition, the storage bin data for the source and des-
tination bins are updated to note planned movements (an example of this is
provided in the section on reporting later in this chapter). As in the case of
a transfer requirement, creating a TO has no FI impact. The transfer order
essentially is a transaction document that authorizes warehouse employees to
physically move the materials from the source storage bin(s) to the destination
storage bin(s) indicated in the document.
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