Cycle counting Configuration, Process flow and Implementation by Rajen Patel in SAP ERP Logistics Materials Management (SAP MM)

7/25/2019 Cycle counting Configuration, Process flow and Implementation by Rajen Patel in SAP ERP Logistics Materials Ma

1/6

1/25/2016 Cycle counting: Configuration, Process flow and... | SCN

http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation 1/6

More blog postsin SAP ERP - Logistics Materials Management (SAP MM)

SAP ERP - Logistics Materials Management (SAP MM)

Tweet

Thisis brief overview for implementing cycle counting process ininventory management (IM).

hat is cycle counting?

Cycle counting is a method of physical inventory whereby inventory is counted at regular intervals within a fiscal year.Physical inventory may be required by financial accounting rules or tax regulations. Cycle counting process is lessdisruptive to operations. This process can be integrated in daily operations, for e.g., count 200 materials at beginning ofshift (20 people counts 10 materials each).Cycle Counting allows you to count fast-moving items more frequently than slow-moving items.

Cycle counting process is fairly easy to implement. This process increases accuracy of inventory.

Configuration

Cycle count indicator

Follow this configuration path: IMG - Materials Management - Inventory management and Physical inventory - Physical

inventory - Cycle counting (Tcode: OMCO)

Configure following parameters

1. Define the allowed cycle counting indicators in the plant.

2. Make therequired settings for each indicator.

No. of phys. inventories per fiscal year for cycle counting:Specifies how often during the fiscal year a physical inventory

is to be carried out for a material subject to cycle counting. This parameter will convert count interval in work days.

Interval:The count interval is determined automatically on the basis of the number of physical inventories specified for

he fiscal year.

Float time: Indicates the number of workdays by which the planned count date may vary from the current date.

For the plant 3000, the float time is five days. A physical inventory has been planned for a material belonging to category

C for June, 1. On expiration of the float time (after June, 6), the physical inventory has not yet been carried out.

Irrespective of the category, the material is parked for the next cycle counting run.

Percentage:Specifies the percentage allocation of the materials to the individual cycle counting categories. The

percentage value is used for automatic assignment of the cycle counting indicator during ABC analysis.

Settings for physical inventory

This is more generic physical inventory settings, but it may impact cycle counting process

Cycle counting: Configuration, Process flow andImplementation

Posted by Rajen Patelin SAP ERP - Logistics Materials Management (SAP MM)on May 13, 2013 5:38:36

AM

Share 10
http://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216028/CC-IMG-Settings.pnghttp://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216028/CC-IMG-Settings.pnghttp://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216028/CC-IMG-Settings.pnghttp://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216028/CC-IMG-Settings.pnghttps://twitter.com/sharehttp://scn.sap.com/people/rajen.patelhttp://scn.sap.com/community/erp/logistics-mm/bloghttp://scn.sap.com/people/rajen.patelhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementationhttp://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216028/CC-IMG-Settings.pnghttps://twitter.com/sharehttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/21/stock-cycle-optimizationhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/01/difference-between-material-and-articlehttp://scn.sap.com/community/erp/logistics-mm/bloghttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mmhttp://scn.sap.com/community/erp/logistics-mm/content?filterID=contentstatus[published]~objecttype~objecttype[blogpost]


2/6



Change documents are activated for physical inventory document.

The book inventory balance is adjusted in the physical inventory.

Serial number management is setup. In the above example, last five digits of serial numbers will be printed on

physical inventory document.

Reason for movement

Follow this configuration path: IMG - Materials Management - Inventory management and Physical inventory -

Movement type - Reason for movement (tcode: OMBS)

As per your business requirement configure reason code for movement type 701, 702

Master data

1. Cycle counter indicator set for the materials plant data 1 tab. (Tcode: MM02)

This indicator is set if the material is to be cycle counted. It can also determine how the count is taken and how often. It

groups the materials together into various cycle counting categories. Usually, these categories correspond to the ABC

analysis of the materials. ABC analysis can be done via report MIBC (Program RMCBIN00).

2. Cycle counting indicator is fixed:

This means that the cycle counting indicator cannot be changed for cycle counting by an ABC analysis.

Execution / Process flow chart

Here is flow chart for cycle counting process
http://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216063/CC-MM02.pnghttp://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216062/CC-IMG-Settings_for_PI-SR.png


3/6



Assuming cycle count indicator is set on materials, first step in cycle count process is to create cycle counting

documents.

MICN - Create Physical Inventory Documents for Cycle Counting

This report is to create batch input sessions physical inventory documents for the cycle counting physical inventory

procedure.

Selection

Restrict selection based on Material number, storage location, Material group etc.In addition to unrestricted-use stock, you can include stock in quality inspection and blocked stock in the selection.By specifying a threshold value, you can define that only stocks above or up to a particular level are included.

Physical inventory number

You can setup batch job with different variants for generating cycle count sheets in MICN. You can use TVARV table to

customize physical inventory number and/or physical inventory reference. For example: you want to have different

reference numbers for each storage locations for ease of reporting. You can use above reference number in setting up

next job for auto printing physical inventory document via MI21.

Posting block

Indicates that no goods movements involving the materials listed in the physical inventory document can be posted for

he duration of a physical inventory count.

The indicator is set for the affected stocks in each case (storage location stock, batch stock, or special stock), for all

associated stock types and is not cancelled until the count results are posted.

The blocking indicator can be setup in one of two ways:

Directly upon entry of the physical inventory document (if the count is to take place immediately).

Shortly before the count (if the count is to place later).

Freeze book inventory

It specifies the book inventory balances of those items in a physical inventory document that have not yet been counted

and are frozen. This indicator has the effect that the current book inventory balance is recorded in the physical inventory

document. The system compares the counted stock with the frozen book inventory balance to determine any inventory

differences. If the count results are not entered immediately after the stock has been counted, it is useful to set this

indicator so that any goods movements which may take place in the meantime will not change the book inventory

balance relevant to the physical inventory.

For example: Business process is to count inventory before shift begins, and then after few hours inventory administrator

enters counts. In this case do not set Posting block, as production will need to perform goods issue. In this case set

Freeze book inventory, so inventory count will be measured against inventory at the time when physical inventory

documents were created.

Output of MICNOutput will have all materials for which physical inventory documents can be created.

It then lists the stock management units for which a physical inventory is already active, but has not been completed

within the predefined float time and therefore must be completed urgently. These stock management units are not

included when the batch input session is created because active physical inventory documents already exist.
http://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216064/cc-flowchart.jpg


4/6



Tweet

Average User Rating

(9 ratings)

In addition, the list contains all materials for which cycle counting is required within the planned interval (specified

interval for the planned count date). If a physical inventory had already been due prior to the planned interval, the

planned count date would be highlighted.

The remaining steps are self-explanatory. Inventory reference number can be used for the rest of the transaction to

complete cycle counting process.

MI21 Print Physical inventory document

Here you can specify:

Grouping criteria e.g. Group by bin number

Sorting criteria for serial numbers

MI24 Physical inventory list

This transaction can be used as working transaction for inventory administrators. User can use inventory reference

number to group cycle counting document.

In this transaction user can enter count, monitor progress, run analysis and post counts.

Integration

hen the inventory differences are posted, the total stock is automatically adjusted to the counted quantity on the

document. When the document is posted, the difference will correspond to either a goods receipt of goods issue. This

affects following areas:

Material planning for production or sale orders Stock value on balance sheet

Tips

1. If there is any historical record for last cycle date, during cutover update field DLINL in MARD table to continue cycle

counting process

2. Refer to SAP note 518418 - FAQ: Cycle Counting

3. Physical inventory can be counted for special stocks as well e.g. MIW1 Consignment at Customer, MIO1

Material provided to vendor

Source: help.sap.com

Also posted on: http://www.sapience-solutions.com/sapeince-blog.php

PDF for above document: http://www.sapience-solutions.com/resources/May_2013_Cycle_counting.pdf

I welcome your comments/suggestions/insights.

Thanks,

29958 Views

Products: sap_erp_logistics_materials_managementTopics: enterprise_resource_planningTags: materials_management,physical_inventory, cycle_count, inventory_data

Share 10
http://scn.sap.com/community/erp/logistics-mm/blog/tags#/?tags=inventory_datahttp://scn.sap.com/community/erp/logistics-mm/blog/tags#/?tags=cycle_counthttp://scn.sap.com/community/erp/logistics-mm/blog/tags#/?tags=physical_inventoryhttp://scn.sap.com/community/erp/logistics-mm/blog/tags#/?tags=materials_managementhttp://scn.sap.com/community/erp/logistics-mm/blog/tags#/?tags=enterprise_resource_planninghttp://scn.sap.com/community/erp/logistics-mm/blog/tags#/?tags=sap_erp_logistics_materials_managementhttp://www.sapience-solutions.com/resources/May_2013_Cycle_counting.pdfhttp://www.sapience-solutions.com/sapeince-blog.phphttp://help.sap.com/http://scn.sap.com/servlet/JiveServlet/showImage/38-84935-216065/CC-MI24.pnghttps://twitter.com/share


5/6



13Comments

Like (0)

Amit AnasaneMay 18, 2013 9:55 AM

Nice blog, Rajen, many thanks for sharing information in such a simple way

with best regards,

Amit Anasane

Like (0)

Pathik ShahOct 28, 2013 12:44 PM

Nice Information shared in blog. Thanks for the same.

Like (0)

Elise CarrollApr 3, 2014 6:26 PM

This is a great article, thank you very much!! I have a question. We count materials by area at the

company I work at as it is impractical to do this by material (we tried last year). Is it possible to use this

SAP process to count materials by area?? Thank you very much in advance!

Like (0)

Rajen PatelApr 3, 2014 6:48 PM (in response to Elise Carroll)

Hi:

I am assuming by area you mean storage location or bin number. You can also user storage

bin field to record area related of information.Material 1: S1-A1001

Material 2: S1-A1002

Where S1 is stock area and A1001 is bin number (rack number etc)

In MICN, you can create inventory document by storage location and check box sort via

Storage bin description (At end of screen). By this way you will get inventory description

group by Bins.

Hope this helps.

Like (0)

Elise CarrollApr 4, 2014 12:24 PM (in response to Rajen Patel)

Thank you very much for getting back to me!

Yes, by area I was referring to storage location/stock area, rather than bin number.

We would count the materials by area as we are not able to close down several

areas at once as we operate perpetual inventory. The problem I am facing is that we

do not have necessarily dedicated areas or bins to specific materials due to storage

constraints and changing demand requirements. This would mean that I am not able

to set up a specific stock area and bin within the material master for each materials.

Would I still be able to use SAP to perform a cycle count of an area without

specifying the materials? Many thanks in advance!

Like (0)

Bisweswar SahuApr 4, 2014 12:36 PM

Nice explanation.

Regards,

Bisweswar

Like (0)

Ramesh KumarApr 5, 2014 8:38 AM

Nice Information shared in this blog.

Regards,

Ramesh Kr.

Like (0)

Gnia TchistiakovApr 7, 2014 11:44 AM

Thanks for such document. Very clear and usefull.

Gnia.

Atharva G.Apr 15, 2014 7:20 AM

Very nice document.

I have following queries.Will you please clarify those.

1) Does before every cycle count report MIBC-ABC analysis needs to be run?.This ABC analysis is

based on consumption value ?.Hope their is no co-relation between CC indicator ABCDmentioned

above with A/B/Canalysis.Why ABC analysis to be run for Cycle counting. Does this CC indicator field
http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-482103http://scn.sap.com/people/sap.1974http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-479498http://scn.sap.com/people/evguni.tchistiakovhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-479150http://scn.sap.com/people/ramesh.kumar75http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-478964http://scn.sap.com/people/bisweswar.sahuhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-478737http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-478962http://scn.sap.com/people/elise.carrollhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-478626http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-478737http://scn.sap.com/people/rajen.patelhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-478626http://scn.sap.com/people/elise.carrollhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-414567http://scn.sap.com/people/pathik.shahhttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-357301http://scn.sap.com/people/amit.anasanehttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#


6/6



Like (0)

in material master updated by any report or remain as it ? If it gets changed by which report ?.

2)When WM is not active in which field storage bin is captured.in material master other wise in normal

scenerio How on CC output storage bin will appear.

Thanks

Like (0)

Mark MorganMay 15, 2014 9:33 PM

This process sounds very promising for our IM inventory.

Q1) Does the process work with IM/ Handling Unit (HU) managed materials as well?

Q2) For our WM, we are currently using an external database process to select random bin locations to

be put into LX16 to generate the count sheets. Is there a process in SAP that will select bin locationsfor the WM items? Our Corp policy requires that we count by bin instead of by material number. We

have over 4600 bin locations.

Thank You,

Like (0)

Jrgen LMay 15, 2014 9:38 PM (in response to Mark Morgan)

what your corp policy requires is just standard in SAP WM cycle count process

Like (0)

Paul WhiteApr 20, 2015 3:57 PM

Excellent document, thanks Rajen.

Like (0)

Vasuki B SDec 24, 2015 7:16 AM

Thanks for the document!
http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-640765http://scn.sap.com/people/vasuki.bs2http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-582562http://scn.sap.com/people/paul.whitehttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-490515http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-490543http://scn.sap.com/people/jrgen.linshttp://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#comment-490515http://scn.sap.com/people/markmorgan4http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#http://scn.sap.com/community/erp/logistics-mm/blog/2013/05/13/cycle-counting-configuration-process-flow-and-implementation#