Understanding Stock Transfer Order Management

Stock transfer order management is a crucial process for businesses that need to move stock from one location to another. This process involves creating a transfer order to facilitate the movement of stock between warehouses, stores, or other locations.

A transfer order typically includes details such as the type and quantity of stock being transferred, the source and destination locations, and the expected delivery date. This information helps ensure that the stock is moved efficiently and accurately.

Effective stock transfer order management is essential for maintaining accurate inventory levels, reducing stockouts and overstocking, and improving supply chain efficiency. By streamlining this process, businesses can save time and resources, and ultimately, improve customer satisfaction.

To create a stock transfer order in SAP, start the transaction ME21N or navigate to Logistics – Materials Management – Purchasing – Purchase Order – Create – ME21N – Vendor/Supplying Plant Known.

You need to provide your supplying plant, which is the branch that imported the stock and has stock available. You also have to provide your purchase organization, purchase group, and company code.

In the item overview screen, provide the material that you would like to procure from the supplying plant, along with the plant number which is ordering this material, quantity, storage location, and delivery dates.

If you have any additional charges that need to be added to the cost of the material, provide the details in the conditions tab, such as freight charges.

Here are the key fields to fill in the Order Header Screen:

Once all the details are filled in, click the button to save the document, and the SAP system will provide you with a SAP generated document number.

Configuring STO involves defining default parameters to streamline the process. You can define a default transfer order type and a default price type for transfer orders created when confirming planned orders in the Master planning module.

On the Master planning parameters page, select Transfer type and Price type in the Firm - Transfer group. However, this option is only available if the "(Stock transfer for India) Set up the default transfer type and price type for transfer orders created from Master planning" feature is enabled.

If the feature is not enabled, default transfer type and price type are defined by corresponding parameters on the Inventory and warehouse management parameters page.

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To configure Master Planning parameters, you need to define a default transfer order type and a default price type for transfer orders created when confirming planned orders.

You can find these parameters on the Master planning parameters page, specifically on the Standard update tab, where you can select Transfer type and Price type in the Firm - Transfer group.

These parameters are only available if the "(Stock transfer for India) Set up the default transfer type and price type for transfer orders created from Master planning" feature is enabled in the Feature management workspace.

If this feature is not enabled, default transfer type and price type are defined by corresponding parameters on the Inventory and warehouse management parameters page.

In this case, no inventory in transit balance is tracked.

Configuring posting is a crucial step in managing stock transfer orders. You need to specify the Interim transit account in the Inventory management module.

To post interim transit amounts, you'll want to set up main accounts with Interim transit specified in the Posting type field on the Posting validation tab of the Main accounts page.

You must also set up main accounts to post inventory cost for transfer orders to. These accounts include Inventory issue, Inventory receipt, Inter-unit payable, Inter-unit receivable, and Inventory expenditure, loss.

Here are the required main accounts for inventory cost posting:

The Inventory expenditure, loss account is particularly important, as it's required to post the scrap amount when receiving a transfer order with scrap.

You can define a default price type for transfer orders that are created manually. The default price type can be either Cost price or Transfer price.

To enable the Stock transfer functionality for all newly created transfer orders, select Stock transfer in the Transfer type field on the Inventory and warehouse management parameters page, on the Transfer orders tab. This will allow you to set a default price type for newly created stock transfer orders.

The Cost price price type uses the running average cost price, based on the inventory dimensions that are specified for an item line. This running average price is stored in the Cost price field when the line is created or updated.

The Transfer price price type uses the transfer price that is set up for the item. You can select this option if you want to use the transfer price for stock transfer orders.

Here are the options for the Price type field:

To transfer serialized items, you'll need to go to the Transfer Orders section of the Items dropdown menu in the sidebar. Click the + New button on the top-right corner to start a new transfer order.

Enter the transfer order number and select the source and destination warehouse. Then, add a serial tracked item and specify the quantity to transfer.

To choose the serial numbers for the items being transferred, click the Select Serial Numbers option under the quantity of the respective item. This will allow you to select the specific serial numbers for the number of units specified.

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Here are the steps in a concise list:

To post and receive stock transfer orders, you need to set up main accounts for inventory cost and specify the interim transit account in the Inventory management module. This includes accounts for inventory issue, inventory receipt, inter-unit payable, inter-unit receivable, and inventory expenditure, loss.

The accounts used to post interim transit amounts should have Interim transit specified in the Posting type field on the Posting validation tab of the Main accounts page. You'll also need to set up the Inventory expenditure, loss account to post scrap amounts when receiving transfer orders with scrap.

Here's a summary of the accounts you'll need to set up:

These accounts will help you accurately post and receive stock transfer orders, ensuring your inventory is up-to-date and accurate.

When you're dealing with stock transfer orders, it's essential to understand how shipment posting works.

The current inventory cost price at the moment when the shipment is posted is equal to the debit amount, in this case, 100 Rs.

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To post a shipment, you'll need to specify the ledger account name, financial dimension linked to the site, debit amount, and credit amount.

Here's a breakdown of the ledger accounts involved in shipment posting:

In a standard transfer order posting without a transit site, no posting to the General ledger occurs.

Receipt posting is a crucial step in the inventory management process. It involves recording the receipt of items from a transfer order.

To receive items in a transfer order, you need to mark the transfer order as received. You can do this by selecting the transfer order and clicking the Mark as Received button. This will update the status of the transfer order to received.

The receipt posting process involves debiting the Inventory issue account and crediting the Inventory inter-unit receivable account. This is reflected in the ledger account names, which are typically the same as the Inventory issue and Inventory receipt accounts.

Here's a breakdown of the ledger account names and their corresponding debit and credit amounts:

The balance on the inventory in transit can be calculated as InventoryIssue-Site2 – InventoryReceipt-Site2. This balance is nullified upon the receipt.

The receipt posting process also involves accounting for any tax on the transfer price. If there is tax on the transfer price, it will be debited to the GST payable account and credited to the Interim account. Conversely, if the transfer price is tax-exempt, it will be credited to the GST receivable account and debited to the Interim account.

For example, in a scenario where the transfer price is 120 Rs. and the GST rate is 10 percent, the ledger account names would be:

The balance on the inventory in transit is nullified upon the receipt, and the GST payable and Interim account balances are adjusted accordingly.

Tracking and Managing your stock transfer orders is a breeze. You can apply filters to transfer orders to refine your results, making it easy to view successful transfers with the 'Transferred' filter.

To keep track of transfers in progress, use the 'In Transit' filter. This will give you a clear picture of what's happening with your stock.

By using these filters, you can quickly identify the status of your transfers and make informed decisions about your stock management.

Tracking inventory is a crucial aspect of managing your business's stock levels. You can receive real-time updates on the whereabouts of your stock by integrating with AfterShip.

To track inventory transfers, you need to have already integrated with AfterShip. If you haven't, you won't be able to track transfer orders.

To track an inventory transfer, you'll need the tracking number of the shipped goods. This information is usually provided by your shipment carrier service.

If you're trying to track a transfer order, make sure it's in the In-Transit status. If it's not, you'll need to create a new transfer order and click Initiate Transfer.

To activate tracking on your transfer order, follow these steps:

You can then enter the tracking details provided by your shipment carrier service and enable the option to receive timely updates on the transfer status.

If you've enabled instant activation while integrating with AfterShip, you'll have the option to send status notifications. Otherwise, you'll need to provide your email or SMS information to receive tracking updates.

To view your transfer status, simply open a tracked transfer order and click on the Transfer Timeline option at the top.

Filtering your results can help you quickly find what you're looking for. You can apply filters to transfer orders to refine your results.

The 'Transferred' filter allows you to view successful transfers. This is especially useful for tracking the progress of your transfers.

Applying the 'In Transit' filter shows you transfers that are still in progress. This helps you keep an eye on the transfers that are still moving through the system.

Filtering your results helps you stay organized and focused.

Processes can be overwhelming, but breaking them down into smaller steps can make them more manageable.

A process can have multiple stages, such as planning, execution, and evaluation.

Having a clear understanding of the process stages helps to identify potential bottlenecks and areas for improvement.

In a well-structured process, each stage has a specific goal and set of tasks to achieve it.

For example, in a project management process, the planning stage involves setting project goals, timelines, and resource allocation.

A process can be linear or iterative, with some stages repeating themselves.

In a linear process, each stage is completed before moving on to the next one, whereas an iterative process involves revisiting previous stages based on new information.

Regularly reviewing and updating a process can help to ensure it remains relevant and effective.

By breaking down complex processes into smaller, more manageable tasks, you can increase productivity and reduce errors.

To set up and enable stock transfer functionality, you'll need to enable certain features in the Feature management workspace. This includes improvements in unit price and cost price handling in Stock transfer orders, setting up the default transfer type and price type for transfer orders created from Master planning, and enabling uniform tax amount and GST transaction ID for both shipment and receipt transactions of a stock transfer order.

For India-specific configurations, you'll also need to set up the India GST functionality to enable GST calculation for stock transfer orders. You can find more information on this in the India Goods and Services Tax (GST) overview.

To define a default transfer order type and price type for transfer orders created manually, go to the Inventory and warehouse management parameters page, on the Transfer orders tab, and select Stock transfer in the Transfer type field. You can then choose a default price type, either Cost price or Transfer price, which will be used for newly created stock transfer orders.

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To set up stock transfer functionality, you need to enable certain features in the Feature management workspace. This includes improvements in unit price and cost price handling in Stock transfer orders, setting up the default transfer type and price type for transfer orders created from Master planning, and enabling uniform tax amount and GST transaction ID for both shipment and receipt transaction of a stock transfer order.

You can define a default transfer order type and a default price type for transfer orders that are created manually. To do this, go to the Inventory and warehouse management parameters page and select Stock transfer in the Transfer type field.

The default price type options are Cost price and Transfer price. If you choose Cost price, the system calculates a running average cost price based on the inventory dimensions specified for an item line.

Here are the default price type options:

In the case of the Cost price price type, the saved cost price is never recalculated when shipping and receiving transactions are posted.

Using SAP STO can reduce freight costs and the price of materials, making it a cost-effective solution for businesses with multiple plants.

By implementing STO, businesses can eradicate damaged or defective stock, freeing up storage space and reducing waste.

STO allows businesses to handle capacity constraints in specific storage locations or shortage of raw materials in one plant, ensuring that production can continue without interruption.

A sudden surge or drop in demand for a material in a specific location or storage plant can be managed with STO, helping businesses to stay on top of changing market conditions.

Here are some key benefits of using STO for multi-plant businesses:

Creating a new transfer order is a straightforward process. You can start by expanding the Items dropdown menu in the sidebar and going to Transfer Orders.

To create a new transfer order, click the + New button on the top-right corner. This will take you to a form where you can enter the transfer order number, select the source and destination warehouse, and add items to be transferred.

The transfer order number is a unique identification number for the Transfer Order, and it cannot be left blank. You can also add an item to the transaction by scanning its barcode, which can save you time and effort.

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To add items in bulk, you can click the Add items in bulk option, which allows you to add several items at once to your transfer order. This feature is especially useful when you need to transfer a large quantity of items.

Here's a summary of the fields you need to fill out when creating a new transfer order:

Once you've filled out the necessary fields, you can either initiate a transfer and receive it later, or complete the transfer instantly by clicking Transfer and Receive.

In SAP STO, transaction codes play a crucial role in managing stock transfer orders. T-code ME21N is used for creating a Stock Transfer Order, while ME22N is used for changing or editing the Stock Transfer Order.

Transaction codes like ME23N display a Stock Transfer Order, while ME29N releases the Stock Transfer Order. MB1B is used for issuing goods in the Stock Transfer Order, and MIGO is used for Goods Receipt in STO.

Here are some common transaction codes used in SAP STO:

In SAP, a Stock Transfer Order (STO) is a systematic and controlled procedure for transferring stock between different plants or storage locations.

The system uses transaction codes to facilitate this process, with ME21N being used to create a Stock Transfer Order, and ME22N for changing or editing it.

To issue goods against an STO, users can execute the t-code MIGO, which is used for Goods Receipt in STO.

The movement type 351 is used for moving materials from supplying plants to stock in transit of receiving plants.

A material document is created when goods are issued against an STO, and a message will be displayed on the screen confirming this.

Transaction codes play a crucial role in the STO process, and here are some of the most commonly used ones:

Implementing SAP STO in a business can be a game-changer for managing inventory and responding to changing demand patterns.

A multinational manufacturing company can use SAP STO to transfer goods from one location to another, ensuring each location has the required raw materials for uninterrupted production.

The SAP system generates a document number upon creating a document, indicating that the document has been created.

To edit a purchase order, one can use T code ME22N, which allows for efficient management of inventory.

By clicking on "Other Purchase order (Shift+F5)" on the right side of the save option, a "Select Document window" opens, where one can see and set the Purchase order number.

This streamlined process enables companies to respond quickly to unexpected surges in demand, like the one experienced by the company with production plants and distribution centers at Location A and B.