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248 CHAPTER 7 Inventory and Warehouse Management Processes

are entered into the transfer order, and the order is saved. If all of the materials
have been moved, then the step is complete.

Outcomes
When a confi rmation of warehouse movement is recorded, the ERP system
automatically updates the associated reference documents such as the delivery
document, transfer requirement, and posting change notice to refl ect the fact
that the transfer of materials has been completed.
In this section we explained the warehouse management process in gen-
eral terms. In the following sections we examine WM as it relates specifi cally
to procurement, fulfi llment, production, and stock transfers. We also review the
fi nancial and material impact of the various steps. We begin with procurement.

WAREHOUSE MANAGEMENT IN PROCUREMENT
To illustrate the warehouse management steps as they relate to procurement,
we will use the following scenario. GBI wishes to increase the inventory of
t-shirts in its San Diego plant. To accomplish this task, it has sent a purchase
order for 1,000 t-shirts to its vendor, Spy Gear. Recall that we used a similar
scenario in Chapter 4. In this scenario, however, the materials are to be deliv-
ered to the San Diego plant, which is warehouse managed, rather than the
Miami plant, which is not. We will assume that GBI has 500 t-shirts in stock.
Figure 7-27 illustrates the inventory impact of the steps in the procurement
process. It indicates that GBI has 500 t-shirts in storage location inventory and
in the warehouse prior to the start of the process (column 2).

Figure 7-27: Inventory impact—procurement

Plan Warehouse Movement
Figure 7-28 diagrams the steps in the procurement process. The fi gure includes
both IM activities and WM activities. The bottom part of the fi gure illustrates the
physical movement. Recall from Chapter 4 that the procurement process
involves a goods receipt from a vendor and that the materials are placed into a
specifi c storage location. In our example, when GBI receives the 1,000 t-shirts
from Spy Gear, the warehouse personnel place them in the interim receiving
storage area and record a goods receipt into the trading goods storage location
the ERP system. (You might want to refer back to the San Diego plant layout
illustrated in Figure 7-10 and the discussion on storage types regarding the use

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