Understanding SAP Stocks: Logical Stock, MRO, and Physical Stock

Hello All,

We were for a new engagement; while finalizing the data object list, we encountered the different types of stocks under Production Planning (PP) module.?

Let us quickly go through the stock objects and the purpose of them.

In the world of SAP (Systems, Applications, and Products in Data Processing), effective inventory management is crucial for optimizing supply chain operations. SAP offers a robust system to manage different types of stocks, which include

1. Logical Stock,
2. MRO (Maintenance, Repair, and Operations) Stock, and
3. Physical Stock

SAP Blog: Understanding SAP Stocks: Logical Stock, MRO, and Physical Stock

Understanding the differences among them is key to efficient resource utilization and inventory control. In this blog, we’ll explore each type in detail, along with real-time examples to illustrate their application in businesses.

1. Logical Stock

Definition:

Logical Stock in SAP refers to the stock that exists in the system but is not physically available in the warehouse. It is essentially a virtual representation of inventory that helps in planning and reserving stock for specific purposes, like sales orders or production. Logical stock ensures accurate stock visibility and avoids double-booking.

Types of Logical Stock:

• Blocked Stock: Stock that is not available for use due to quality inspection or other reasons.
• Reserved Stock: Stock reserved for specific sales orders or production orders.
• Consignment Stock: Stock owned by a vendor but stored at the company’s premises.

Real-Time Example:

Consider a manufacturing company that produces smartphones. They receive a batch of display screens that need quality inspection before they can be used in production. In SAP, these screens are moved to Blocked Stock, ensuring they are not allocated for any other purpose until cleared for use.

Similarly, if a customer places a large order, the required number of screens can be moved to Reserved Stock to ensure they are not used for any other orders. This helps in fulfilling commitments without stock discrepancies.

2. MRO (Maintenance, Repair, and Operations) Stock

Definition:

MRO Stock refers to inventory used for maintenance, repair, and operational activities rather than for production or sales. These are non-product-specific items like spare parts, lubricants, tools, and cleaning supplies essential for keeping manufacturing equipment running smoothly.

Characteristics:

• Not part of the final product but critical for operational continuity.
• Generally, low-cost items but vital for maintenance activities.
• Stored separately from production inventory for easy access by the maintenance team.

Real-Time Example:

A chemical processing plant uses various pumps and machinery that require regular maintenance. The MRO Stock includes spare pump seals, lubricants, safety gear, and cleaning agents. These items are not directly related to production but are crucial for maintaining equipment efficiency.

In SAP, MRO Stock is managed using Material Type "ERSA" (Spare Parts) or "FHMI" (Production Resources/Tools). This ensures they are available whenever needed without affecting production schedules.

3. Physical Stock

Definition:

Physical Stock refers to the actual inventory present in the warehouse. It is the stock that can be physically counted and verified. In SAP, physical stock is recorded in real-time and adjusted during goods receipt, issue, or stocktaking.

Types of Physical Stock:

• Unrestricted Stock: Available for immediate use in production or sales.
• Quality Inspection Stock: Stock under quality check before becoming unrestricted.
• Blocked Stock: Physically present but not available for use due to defects or other reasons.

Real-Time Example:

A retail company dealing in electronics receives a shipment of laptops. Upon arrival, the laptops are entered into SAP as Unrestricted Stock, making them available for sale. If a few units show damaged packaging, they are moved to Blocked Stock for further inspection.

During a periodic stocktaking activity, the physical count of laptops is compared with the SAP records. Any discrepancies are adjusted to reflect accurate inventory levels, ensuring reliable stock visibility and financial reporting.

Key Differences Among Logical, MRO, and Physical Stock

?Conclusion:

Understanding the differences among Logical Stock, MRO Stock, and Physical Stock in SAP is crucial for effective inventory management. Logical Stock aids in planning and reservation without affecting physical inventory. MRO Stock ensures uninterrupted maintenance and operational activities, while Physical Stock represents the tangible inventory available for production or sales.

By leveraging these stock categories effectively, businesses can optimize supply chain operations, reduce stock discrepancies, and enhance overall productivity.

Final Thoughts:

Efficient stock management is the backbone of successful logistics and supply chain operations. Implementing the right SAP strategies for Logical, MRO, and Physical Stock can significantly improve inventory accuracy and operational efficiency.

For businesses looking to enhance their inventory management practices, understanding and utilizing these stock types is a game-changer. Want to know more about SAP inventory solutions? Feel free to reach out or drop your comments below!

Thanks,

Venkatesh Golla