Customer Delivery - Stock in Transit

Customer Delivery - Stock in Transit (EHP5 LOG_MM_SIT functionality)
Introduction
Enhancement package 5 for Procurement business function LOG_MM_SIT allow to control
goods movements both for sales to external customers and for stock transfer processes between
plants belonging to the same or different company codes within the same company. Using
valuated stock in transit and new movement types, we can specify the time of the transfer of
title precisely. Throughout the process, material quantities and material values are recorded
transparently and can be displayed in the stock overview, the purchase order history, and the
individual stock accounts. The functions are also available for the corresponding intra-companycode and cross-company-code return stock transfers.
This document covers the customer delivery with transfer of title at customer location. The customer
deliveries with valuated stock in transit, is used to pin point the exact time of the transfer of title. The transfer of
title depends on the delivery type. The system determines this based on the sales document type. The system
finds the item categories and thereby the corresponding schedule line categories, using Customizing for item
category determination in the delivery. The process is controlled by the movement types that are assigned to
the respective schedule line categories.
Client Requirement
The requirement for our project was to recognize the COGS & Sales revenue at the same time
based on the Incoterms. Incoterms were divided into two categories as Immediate Risk transfer
& Delayed risk transfer. ICC Incoterms like EXW & FCA were classified as immediate risk transfer
as the risk transfer lies with Buyer once the Goods are loaded onto carrier from plant. The other
incoterms like FOB, CPT, CIF, etc.. were classified are Incoterms with Delayed Risk Transfer.
Based on the Delayed Risk Transfer Incoterms, the item category in the sales order would get determined.
This was one of the key developments of the project. Based on the item category the posting to COGS / SiT
account would happen at the time of PGI.
The Requested delivery date would be maintained by the Customer Service Representative while
processing the Sales Order. Based on the
RDD & route information in the sales order, the PoD is carried out through a program scheduled automatically.
Features of Business Function LOG_MM_SIT
Generated by Jive on 2016-06-06+02:00

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Customer Delivery - Stock in Transit (EHP5 - LOG_MM_SIT functionality)
Business Function LOG_MM_SIT covers below business processes. In the following processes, valuated
stock in transit specifies the exact time of the transfer of title.
Intra Company Code Stock Transfer: Transfer of title at goods issue / goods receipt / during
transit.
Cross Company Code Stock Transfer: Transfer of title at goods issue / goods receipt / during
transit.
Delivery with transfer of title at the customer location.
In a cross-company-code or intra-company-code stock transfer, valuated stock in transit allows you to retain
the quantity and value of a material that has already left the issuing plant but has not yet reached the receiving
plant. The functions are also available for the corresponding intra-company-code and cross-company-code
return stock transfers. In addition, in sales processes to external customers, you can post the quantity and
value of a material to issuing valuated stock in transit initially and then remove it when proof of delivery arrives.
Pre-Requisites
A. SD Customizing requirments:
i. Defining new Sales Order Type

IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document Header
--> Define Sales Document Types

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Create the new sales document type Delivery from Issuing Valuated Stock in Transit (ORNC) as a copy of
the sales document type Standard Order
(TA/OR).

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ii. Defining new Delivery Type

IMG Menu path: IMG --> Logistics Execution --> Shipping --> Deliveries --> Define Delivery Types
Create New Delivery Type (NCCU - Delivery from Issuing Valuated Stock in Transit) for the process
Outbound Delivery with Transfer of Title at
Customer Location.
Note: Creating a new order type/delivery types are optional. You can use the existing order types & assign
the item category for this functionality to work.
iii. Assigning the New Delivery Type to New Sales Order Type

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IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document Header
--> Define Sales Document Types
In the Shipping section of the detail view, assign the appropriate delivery type, NCCU to the sales document
type Outbound Delivery from Issuing
Valuated Stock in Transit (ORNC).
iv. Defining new Item Categories

IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Sales Document item -->
Define Item Categories
For this solution, the item category is important configuration. Item category is assigned to
schedule line category which has movement type. We can define new item categories or use
the existing item categories as per the clients requirement. But it has to be ensured that proper
schedule line category is determined.

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Ensure that the new item category Delivery from Issuing Valuated Stock in Transit (NCCU) has been
created as a copy of the item category
Standard Item (TAN).
v. Defining Item Categories in Deliveries
IMG Menu path: IMG --> Logistics Execution --> Shipping --> Deliveries --> Define Item Category
Determination in Deliveries
When the item category is copied from reference & if made relevant for copy control i.e., Is
this entry also relevant for copying control? If yes, then the delivery item category will
be created, else define delivery item category manually.

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Ensure that for all entries with delivery type Outbound Delivery (LF), a copy has been created and altered
as follows:
Delivery type LF has been changed for each entry to delivery type Delivery from Issuing Valuated Stock in
Transit (NCCU).
Item category Standard Item (TAN) has been changed for each entry to item category Delivery from Issuing
Valuated SiT (NCCU).
vi. Defining Schedule Line categories

Define Item Categories
One of the important configurations of this solution is defining the Schedule line category. When you define
the schedule line category, you see
the
changes in the screen with addition of fields MvT Iss. Val. SiT
& Spec. Iss. Val. SiT. Ensure that for the process Outbound Delivery from Issuing
Valuated Stock

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in Transit the new schedule line category NU has been created as a copy of schedule line category Material
Requirements Planning
(CP), detailed data:
Movement type = 687 (Goods Delivery to Issuing Valuated Stock in Transit)
Movement Type for Issuing Valuated Stock in Transit = 601 (Goods Issue for Delivery)
Specification for Issuing Valuated Stock in Transit = 3 (Sales-Order-Related Goods Issue from Issuing
Valuated Stock in Transit).
vii. Assigning New Schedule Line Categories to the New Item Category
IMG Menu path: IMG --> Sales and Distribution --> Sales --> Sales Documents --> Schedule Lines -->
Define Schedule Line Categories
Ensure that a new entry has been created as a copy of the entry with item category Standard Item (TAN)
and schedule line category Material
Requirements Planning (CP) with the following changes:
Item category TAN has been changed to item category Delivery from Issuing Valuated Stock in Transit
(NCCU).

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Schedule line category CP has been changed to schedule line category Delivery from Issuing Valuated
Stock in Transit (NU).
viii. Assigning New Item Categories to the Sales Document type

Assign Item Categories
Normally when the Sales Order type OR is copied & item category is copied from TAN all the related
settings are copied & the assignment will take
place. In case, if the item category is created newly
without any reference, then maintain the assignment to the Order Type.
ix. Assign PoD relevance to the Delivery Item Category

IMG Menu path: IMG --> Logistics Execution --> Shipping --> Deliveries --> Proof of Delivery --> Set PODRelevance Depending on Delivery Item
Category
Maintain the PoD relevance for the delivery item categories which are created.

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B. MM & FI Customizing requirments:

i. Create G/L account
The necessary G/L accounts has to be created by FI team for posting of the Stock in Transit Account.
ii. Define Valuation Class
IMG Menu path: IMG --> Materials Management --> Valuation and Account assignment --> Account
Determination -->
Account determination without wizard --> Define Valuation classes
The valuation class is a group of materials with the same account determination. If a transaction is to be
posted to different accounts depending on the
valuation class. The valuation classes allowed depend on
the material type. Several valuation classes are generally allowed for one material type. A
valuation
class can also be allowed for several material types. The link between the valuation classes and the material
types is set up via the
account category reference.
iii. Automatic Postings - BSX & GBB

IMG Menu path: IMG --> Materials Management --> Valuation and Account assignment --> Account
Determination --> Account determination without
wizard --> Configure Automatic Postings

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These settings are required for automatic posting of the Stock in Transit account & the Cost of Goods Sold
at the time of PGI & POD respectively.
C. Master Data requirments:
i. Customer Master
The Customer Master Data has to have the PoD relevance for this solution. This can be maintained by
using Transaction Code XD02 / VD02. Go to
the Sales Area Data, under the shipping tab, you find
the Relevant for PoD checkbox as shown below. Check the box, to make the customer relevant for
PoD.

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ii. Material Master

Based on the requirement of the client to identify the stocks & for their reporting purposes, the valuation
class can be maintained against the
VC:Sales Order Stk field as shown below. The maintenance of this
Valuation Class is to account for separate G/L when the Goods issue is done & the
stock is moved to Stock
in Transit.

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Process Demo
We will create the sales order and delivery to check the process flow. The following values are used for this:
Sales Area: 1000 / 10 /00
Material: P-100; Plant: 1000
Order Type: ORNC
Create the Sales order & save the order.

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Before proceeding further, we shall note down the stock of the material considered in MMBE & MB5SIT.

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Detials of MB5SIT before Delivery
Now, create the delibery (VL01N).
Notice that the Post Goods Issue Icon is greyed out in create mode as compared to our standard process.
Do the picking / WH TO & save the delivery.
Now, go to VL02N & do the Post Goods Issue (PGI)

Check the document flow once the PGI is done.

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Check the posting, the finished goods inventory has been credited & Stock in Transit G/L has been debited.
Now, we will have a look at the stock level MMBE & report MB5SIT

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You will see the qty under Iss. SiT column in the MB5SIT report, against the delivery.
Now, carry out Proof of Delivery (PoD) - Transaction VLPOD
Once the PoD is saved, another material document gets posted, as you could see above.
Now, we shall look into the document flow again.

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Now, the Stock in Transit G/L has been credited & Cost of Goods Sold (Inventory change fin)
has been debited.

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After PoD check the report MB5SIT
In this way, based on the requirement of the client, the posting to the COGS & thereby Sales revenue (at
the time of billing) can be controlled using the
Proof of Delivery.
References:
www.help.sap.com
Please let me have your feedback on the suggestions & improvements for this document further, if
necessary.

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Customer Delivery - Stock in Transit (EHP5 LOG_MM_SIT functionality)

Generated by Jive on 2016-06-06+02:00