Page 270 -

252 CHAPTER 7 Inventory and Warehouse Management Processes

Execute Warehouse Movement
When a warehouse employee is ready to pick materials from the warehouse,
he or she generates a transfer order based on the delivery document. At
this time, the ERP system proposes bins from which to move the materials.
In our example, the employee creates a TO to pick 50 bikes from the ware-
house. Signifi cantly, no physical movement has yet taken place. Consequently,
a review of the storage location and warehouse inventory will not show any
change in quantities (see Figure 7-29, column 4).

Confi rm Warehouse Movement
After the TO is created, warehouse employees pick the bikes from the pro-
posed storage bins and place them in the interim shipping storage area. They
then update the TO to indicate the quantity picked and the bins from which
they were taken. Again, refer to Figure 7-10 and the discussion of storage types
for an explanation of the shipping area. In our example, the 50 bikes are picked
from bins in the warehouse and placed in the interim shipping storage area.
As in the case of procurement, the interim storage area is the physical link
between the fulfi llment and WM processes.
At this point, a physical movement of materials has occurred.
Consequently, a review of warehouse inventory will show a reduction of
inventory in the warehouse bins and an increase in the bins in the interim
storage area. In our example (see Figure 7-29, column 5), 450 bikes remain in
the warehouse bins, and 50 bikes are available in the interim shipping storage
area. No goods issue has occurred, so the quantity in storage location inventory
is unchanged (500).
After the transfer order is updated, it is confi rmed and saved. At this point
the reference document that triggered the warehouse movement is updated to
indicate the quantity of materials moved. In our example, the delivery docu-
ment is updated to indicate that 50 bikes have been picked. (This might be a
good time to review Figure 5-34 and the accompanying discussion in Chapter 5
regarding the relationship between a delivery document and a transfer order.)
At this point the materials can be shipped and a goods issue can be posted,
which generates material, FI, and CO documents, as we discussed in Chapter
5. Note again that the FI impact and the recording of the material movement
occur in IM, not WM. The fulfi llment process then continues through the
invoice and payment steps.
A review of warehouse inventory after goods issue will show a reduction
in the interim storage area of inventory. Further, the storage location inven-
tory will now indicate a reduction in inventory, because a goods issue has been
posted. In our example (see Figure 7-29, column 6) the storage location inven-
tory is reduced by 50 to 450 bikes, and inventory in the interim storage area
is reduced to zero. Note that, as explained in the discussion of WM in procure-
ment, the total warehouse inventory (bins plus interim storage area) is always
equal to the storage location inventory.

31/01/11 6:41 AM
CH007.indd 252 31/01/11 6:41 AM
CH007.indd 252