In MC44 – Inventory Turnover (1) I explained the concept of Inventory Turnover and how it can be used. In this post I will explain the transaction itself. The transaction is mostly self-explanatory, but there is one option of particular importance.
Inventory Turnover is a prominent KPI in a lot of businesses. This post will give you some understanding on the concept. In another post I will give details on how the SAP report MC44 can be used to measure inventory turns and what data is used to calculate this ratio.
Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory at value
If you are not familiar with the term Cost of Goods Sold, this is the cost of your revenues.
Average Inventory is measured in value and not in volume.
If you divide both elements you know how often you sold you’re average inventory. “So what?” you ask. I will explain next.
In an earlier post I promised to give a quickguide to creating a query in SAP based in transaction SQVI. I’m going to show you how you can quickly build a custom report for reporting Sales Schedule Lines based on different filter criteria and multiple tables (VBAK, VBAP and VBEP: header, item and schedule line data resp.):
There are wonderful reports available in standard SAP’s Information Structures (E.g. MCxx reports). It can be so cruel though when data gets corrupted. You usually end up comparing report figures with whatever reasonable value you find elsewhere in SAP. If you want to be sure about the Information Structure’s reliability it is worthwhile to update an infostructure (say S021 – Production Order), store it under a temporary version ‘&(1’, and finally call this test version in a report that default uses version ‘000’.
To call up another version than ‘000’ go to System > User profile > User parameters and enter the parameter ID ‘MCR’ with the value ‘X’.
Now if you call up a standard analysis like MCP3 – Production Order Analysis a new field is visible for version selection. See picture below.
The major benefit of this procedure is that you don’t have to backup/delete current production data in version ‘000’.
It is also possible to compare the current version ‘000’ with the new test version going to Menu > Edit > Comparisons > Planned/Actual…
Stock in previous periods can be a useful indicator in analyzing your stock positions through time per material or material group. Standard SAP report MC.9 offers this functionality:
The dead stock report often leads to misinterpretations. Hence a little guidance on the dead stock report.
The dead stock report analyses what part of stock is never touched in a defined period of time. If you look at the below graph you will see stock level through time.
In analyzing stock movement between period 1 and 5, stock never drops below 30. 30 is your dead stock. It’s the part of stock that was never touched. Now what does this tell you? That’s not easy to say:
I bet that if half the SAP end-users knew what wealth of stock information is stored in the inventory information system in SAP tons of money could be saved on custom reports (either R/3 or BW). You can find some cool KPIs in there: a.o. stock turnover, dead stock analysis, slow movers, ABC-analysis. Some fundamental data to actually control your stock levels and improve your bottom line by turning stock into (investment) cash. The information system can be accessed from the main menu with transaction code MCC1. Somehow it’s not accessible when in a transaction using n. On a critical note: it is worth checking the correctness of some reports, especially time-phased stock reports may show some funny data. At some point in time “die Leute” at SAP thought they could build a business model around providing a separate information system like BW and don’t spend too much effort on the R/3 info system.