You can use this business process for your inbound processing and receipt confirmation. Whenever a company requires a product to be procured from an external source of supply, whether for use in production (raw materials) or for direct consumption (C-materials), the product will be delivered according to the official procurement document (a PO) agreed between two business partners. The arrival of the goods could be announced by an advanced shipping notification (ASN) from the supplier. This states that the goods are to be delivered in a certain quantity at a defined date and time at a defined company location. For the delivered product, an inbound delivery is selected and processed for putaway. Once the goods are taken into stock, a goods receipt must be posted.
The actual physical receipt of materials at the warehouse or the receiving locations can be controlled in different levels of detail. For example, you can control the process only at a document level using purchase orders and stock transports orders for inbound deliveries and shipments, or you can go up to the pallet and material level.
The receiving process is supported in different ways depending on your needs. Optionally, you can use inbound deliveries, advanced material flow, and process control functions. These options include yard management, and warehouse management with task and resource management controlling the process down to pallet and package level using advanced strategies (see also Inbound Processing and Receipt Confirmation with WM).
Inbound processing and goods receipts are key steps in any procurement or replenishment process. They are industry-specific, but common practice for any company procuring products, whether for production of its own goods or direct consumption.
Inbound processing reflects the receipt of materials that are delivered to a receiving location. This receipt can be processed based on purchase orders, stock transport orders, or even a returns order. It includes the notification of goods to be received, the putaway, goods receipt posting, and the proof-of-delivery (POD) message to the supplier. By viewing the goods receipt from two perspectives, it is possible to follow the purchase order process and the physical material movements separately.
The processes described are goods receipt against a purchase order (in good movement transaction MIGO) without using Warehouse Management and inbound processing using the inbound delivery, the ASN message and the POD of the customer.
The goods receipt posting can be processed prior to or after putaway of the materials.
If Handling Unit Management is used for packing, you need to use an inbound delivery to pack against. An inbound delivery is also required if the warehouse is implemented in a decentralized environment.
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1. Receive advanced shipping notification (ASN) (SAP ECC)
The arrival of goods procured and received is announced by an advanced shipping notification (ASN) from the supplier to the goods recipient. The ASN contains logistically relevant data, such as date and time of delivery, material, quantities, and packing information. The ASN is typically sent by the shipper of the goods. This can be the supplier (external or internal) or a third-party logistics service provider (3PL). The message is received by the ship-to-party and mapped into an inbound delivery in SAP ECC.
Alternatively, an inbound delivery can be created by the receiving party to reflect the planning and coordination of the inbound delivery processing.
2. Create inbound delivery (SAP ECC) (optional)
When the actual shipment arrives, the inbound delivery is selected and processed for putaway. The putaway can be processed with or without Warehouse Management (see Inbound Processing and Receipt Confirmation with WM).
3. Post goods receipt (SAP ECC)
When a required product is delivered to a company from an external source of supply according to a purchase order, it must be integrated into the company’s stock and a goods receipt must be posted.
With this process description, you can also execute a goods receipt with reference to a production order.
When a goods receipt is effected, the system supports:
○ Message determination
Depending on the settings in Customizing, the system initiates the printing of a material document and labels, for example, for pallets or packages.
¡ Missing parts check
For example, if a given product is identified as a missing part in production, the MRP controller is automatically informed by e-mail that a goods receipt for this critical product has been posted.
¡ Purchase order history
The system updates the purchase order history, so that the purchasing department can monitor that the goods receipt to the PO has been posted and check delivery date, time, and quantity. This information may also be relevant for vendor evaluation.
¡ Final delivery indicator
If information about final delivery is desired, the system sets the final delivery indicator to inform the purchasing department that the last partial delivery has been effected.
¡ Material valuation
A goods receipt posting triggers an update of stock balance and stock value. After a goods receipt is posted, the system creates a material document serving as proof of the goods movement and an accounting document to initiate the update of the relevant G/L accounts. From the goods receipt you can display the material document and then the accounting document. When the product is valuated with moving average price, the material price is updated according to the price in the most recent PO.
¡ SAP SCM update
If you work with the Advanced Planner and Optimizer, the new SAP ECC stock balance data updates the SAP SCM stocks, relevant for planning.
¡ SAP Business Information Warehouse update
If you work with SAP Business Information Warehouse, new SAP ECC stock balance data updates user-defined figures in SAP BW that are relevant for reporting.
Depending on special procurement processes (identified by specific PO item categories), the consequences of posting a goods receipt are the following:
¡ Consignment
The goods receipt is posted, but material valuation is not affected, because the supplier is still the material owner.
¡ Subcontracting
The goods receipt is posted and affects the withdrawal of material components from special stock, which is necessary for the subcontractor to assemble the final product.
4. Send proof of delivery (POD) (SAP ECC)
To report the actual received quantities, times, and dates of delivery to the supplier for invoicing, the POD is sent.
5. Track and evaluate procurement process with SCEM (optional) (SAP SCM)
Optionally, the Inbound Processing/Receipt Confirmation process can be monitored with the help of SAP EM. Since the visibility process procurement describes the procurement process for production materials, it includes the purchase order processing process as well as inbound processing and invoice verification. A detailed description of the visibility steps as well as the configuration can be found in Procurement Visibility.
Procurement visibility covers:
¡ Events from purchase requisition to payment, including order acknowledgement, shipping notifications, goods receipt, and invoice functions
¡ Triggering of follow-up activities
¡ Analyzing the business process in the SAP Business Information Warehouse (SAP BW)
All relevant intermediate steps are reported by the buyer (or supplier) so that you get a complete picture of the application process:
¡ Order acknowledgement
¡ Advanced shipping notification
¡ Goods receipt
¡ Evaluated receipt settlement (ERS)/invoice
¡ Payment
Furthermore, some unexpected events may be posted:
¡ Shipment delayed
¡ Quantity change
¡ Delivery quantity change
¡ Due date change
¡ Delivery date change
¡ Deletion indicator set