SAP Business One: Inventory and Warehouse Management Module

 In Cloud, ERP Solution, Inventory, SAP Business One, Technology, Warehouse

SAP Business One is an Enterprise Resource Planning (ERP) solution that is specially designed for SMEs to run faster and simpler. With SAP Business One, you will be able to manage your warehouse more easily and track inventory data in real-time.

This inventory and warehouse management feature helps streamline inventory and production management processes, allowing inventory quantity levels and monetary value to be updated automatically with every transaction added. It provides reliable information about inbound and outbound shipments and keeps track of product inventory, quantity at each warehouse, item movement history and stock status. The module also supports multiple unit types which allows you to purchase or sell your inventory in different units.

Features of the Inventory and Warehouse Management Module

Valuation Methods

Before using the inventory management module in SAP Business One, you will have to select the best valuation method which is appropriate for your business. This will help the system determine what the Cost of Goods Sold actually is, letting you accurately define prices and item discounts.

SAP Business One has four valuation methods options available:

Valuation Methods

The valuation method you choose will serve as the default for new item groups added to the inventory system. You may change the valuation methods for existing items so long as there is zero quantity on hand and no open documents exist for the item.

Warehouse

Warehouses in SAP Business One denotes physical or virtual locations, such as to represent major vendors on a consignment basis, or to represent items in transport and such. They are the key building blocks of the company’s database. When you have inventory in stock, you may need to know at any point in time which items you have, how many of them there are and where they are located. With the warehouses in SAP Business One, this knowledge is accessible any time you need it, allowing you to make better decisions when fulfilling customer’s orders or forecasting your future purchases.

Multi-Bin Functionality

SAP Business One has a multi-bin functionality, allowing you to manage inventory by its bin location in the warehouse. You can define up to 4 sublevels within each warehouse. The sublevel represents an aisle, a zone, an area or a shelf in the warehouse. Bin locations are defined by a code which consists of the warehouse and sublevel code (an example can be seen below).

Multi-Bin Functionality

Bin Location Management

Cycle Count and Inventory Tracking

Cycle counts will have to be performed periodically to ensure that the actual physical stock on-hand in the warehouse matches that in SAP Business One. SAP Business One allows you to perform this stocktaking function while orders are being received and shipped. This allows business activity to continue without delays.

Once the cycle count has been set up, new and existing items will be updated with the appropriate cycle count code. The system will also notify the personnel assigned to the count. In the event that the cycle count falls below the minimum stock level, the system will alert the relevant personnel.

Cycle Count Setup

Inventory count documents allow you to record initial quantities, perform inventory tracking and post stock differences by warehouse, item, vendor or any custom-defined properties. It lists the items to be counted and identifies the users performing the count.

Inventory Counting

Counting documents consist of two document types:

  • Inventory Counting Document
    • This document allows you to identify the counters, the item, the quantity and the location of the item counted by them. It also allows you to assign multiple users to do the count and gives you the option to freeze items so they cannot be used while being counted.
  • Inventory Posting Document
    • In the event that there is a difference between the counted quantities and the stock quantities in the system, you can copy the inventory count to the Inventory Posting document, identify the cost of the item and post any differences to adjust the inventory levels and value.

Pick and Pack

The “pick and pack” process is an optional step in the sales and production cycle. It lets you pick lists and pull the listed items out from the inventory quickly. The “pick and pack” manager is a useful tool if you manage a large warehouse and have a dedicated team collecting, packing and shipping the items. Along with the production manager, the tool helps you scan for open sales orders, production orders and inventory transfer requests. It also allows you to reserve invoices by requested delivery date and priority and presents the accumulative available quantities that are ready to be picked and shipped.

Pick, Pack and Production Manager

Pricing

With different pricing options in SAP Business One, you can predefine prices for selling and buying items. It allows you to create an unlimited number of price lists, integrate multiple currencies, preassign prices to specific customers and define discount rules that can be automatically applied to transactions. Additional pricing options also allow your business to manage discounts on any price list based on percentages, dates, quantities, mode of payment and customer accounts.

The following shows a list of all the pricing options available in SAP Business One and identifies which options take priority. This is applicable when a business partner has more than one pricing option assigned.

Pricing Options available in SAP Business One

Gross Price Mode

A price list can be identified as a gross price list (prices in this list includes tax). SAP Business One allows businesses who often work with gross prices to have more robust functionality with the gross price mode feature.

Once this feature has been enabled for your business, additional fields will appear in your system to support this functionality. On the business partner master data in SAP Business One, you will be able to choose if a customer or vendor is using net or gross prices on the payment terms tab and assign a gross price list to them. However, note that this setting is irreversible.

So, what are the business benefits?

As a user of SAP Business One, you will be able to experience greater business efficiency as the system helps you to automate and streamline inventory and production processes. In addition, with better visibility across key functions of the business, you will be able to better predict inventory levels and reduce shortages without having to carry surplus inventory. This will help to significantly reduce your inventory costs and improve customer service due to faster and on-time delivery.

Since inventory and warehouse data are updated in real-time, you will be able to get more accurate and timely information and insights, enabling you to meet customer demand and expectations.

If you would like to find out more about the inventory and warehouse management functionality of SAP Business One, simply visit us at our SAP Business One page, request for a demo session with one of our experts or simply chat with us by clicking on the small icon at the bottom-right corner of your screen.

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