BAAN IV

ILC - Location Control

ÓBaan UK Limited - 1995

 Inventory Location Control (tdilc10010)

TABLE OF CONTENTS

1.

INVENTORY LOCATION CONTROL...................................................................

2. INVENTORY LOCATIONS...................................................................

3. LOCATION INVENTORY TRANSACTIONS.................................... 15

4. LOCATION INVENTORY INQUIRIES & REPORTS...................... 19

5. LOCATION INVENTORY HISTORY.................................................. 20

6. STORAGE CONDITIONS...................................................................... 21

7. INBOUND MOVEMENTS...................................................................... 23

8. OUTBOUND MOVEMENTS................................................................. 28

9. LOCATION CYCLE COUNTING........................................................ 32

Baan IV Inventory Location Control

ã Baan UK Limited - 1995

2
 Inventory Location Control (tdilc10010)

EXERCISE 1 - INVENTORY LOCATION CONTROL

Introduction

The following matters can be established through the “Inventory Location Control”
module:

n Registration of inventory over various locations. This can imply that a

specific item has a fixed location, but it may also imply that it is stored at
different locations.
n Efficient management of the available storage room. By using capacity
locations, the system recommends, based on the available space, where the
goods should be stored.
n Working with storage conditions. Because of their properties, certain items
cannot be stored just anywhere.
n Central registration of all inventory items. Inventory Location Control allows
you to retrieve all inventory, independent of item properties (standard as well
as customized) and location.

Once you have implemented the Inventory Location Control module, all inventory
transactions will be handled through this module. In this case, you cannot opt for
processing through the Inventory Control module in combination with the Inventory
Location Control module.
1 Master Data

Master Data set-up requires a warehouse. Companies must define at least

one warehouse, otherwise orders cannot be processed.

Step 1 Warehouses

Menu - Distribution \ Tables \ Maintain Logistics Tables

Session -Maintain Warehouses (tcmcs0103m000)

Go to the Logistic Tables to create a new normal warehouses:

Warehouse Code : (Make up one)

Description : (Make up a description)
Name : Main Warehouse
Address : (Make up a street address)
Zip : (Make up a zip code)
City : (Your choice)
Country : Your own
Finance Company : same as home company
Warehouse Type : Normal

Step 2 Generate Location System

The session “Generate Location System” (tdilc0000m000) can be used to

start working with location control directly during implementation, but it
can also be used to switch from a non-location system to a location
system at any point.

Note: If the location control module is already implemented, you will

not be able to complete exercise 1.
 Step 3 Generate a location system

Menu - Distribution \ Location Control \ Inventory Locations

Session - Generate Location System (tdilc0230m000)

Use this session to implement Location Control. Set Location Control to

off for each warehouse.

Session - Change Location System by Warehouse (tdilc0231m000)

Set your warehouse to locations as follows:-

Locations : Yes
Receipt location : REC
Inspection location : INSP
O.K. : Yes

Exit and save to ensure changes are implemented.

Set locations flag of other warehouses to no.

Step 4 Add 2 more new warehouses.

Step 5 Change the location system of your 2 new warehouses using the session
Change Location System by Warehouse” (tdilc0231m000).

2. Parameter Settings

Menu - Distribution \ Parameters

Session - Maintain ILC Parameters (tdilc0100m000)

Change the ILC parameter settings so that:

n Storage conditions are tested at inbound for items, item groups, locations,
and warehouses.
n When generating inbound advice, occupied and unoccupied locations with
available capacity may be advised.
n When generating inbound advice, fixed and free locations may be advised.
n The inbound advice steps are logged.
n Locations are blocked during cycle counting.
n History is kept for physical inventory locations.
 n The released inventory must be confirmed via the session “Maintain
Deliveries”
n A report is printed with the issued and blocked items when releasing
outbound.
n The calculated quantity in the storage unit is rounded off to whole
numbers during inbound advising.
n The default data is binding for RPL-orders while generating outbound and
inbound advice.

EXERCISE 2 - INVENTORY LOCATIONS

The object of inventory locations is to form a basis for the further use of a location
system. Locations will have to be set up for each warehouse, with specific data by item if
desired. Another objective of this business object is to be able to block locations.
Before you can control a warehouse with locations, you have to implement the location
system in the warehouse. That is:

n change the warehouse location system for the warehouse

n assign RECEIPT and INSPECTION location
n define the other locations

Locations:

n Receipt Location - an arrival location for production and purchased items.

All goods that arrive are registered through a receipt location.
n Inspection Location - a location where inspection items are booked awaiting
inspection.
n Free Location - a location all items are allowed to be stored.
n Fixed Location can in principle only contain one or a few items. Items are
thus given a fixed location where, in principle, only these items are allowed to
be stored.
n Capacity Location - a location with a limited space. A capacity location
therefore has a unit in which the available space is indicated.
Receipt and Inspection Locations

The receipt location is an arrival location for production and purchased items. All goods
that arrive are registered through a receipt location.

The Inspection Location is an arrival location for items requiring inspection.

Step 1 Receipt Location

Set the receipt location of your first warehouse as follows:-

Warehouse Your first warehouse

Location REC
Description Receipt Location
Search Key RECEIPT LOCA
Row
Level
Bin
Fixed Location no
Inspection Location no
Multi-Item Location yes
Multi-Lot by Item yes
Inbound Priority 999
Sequence on Picking List 999999
Message
Infinite Capacity Yes
Block When Exceeding Capacity
Warning When Exceeding Capacity
Inbound yes Blocked no
Outbound yes Blocked no
Transshipment (out) yes Blocked no
Transshipment (in) yes Blocked no
Blocked for all no
Transactions
Step 2 Inspection Location

Maintain the inspection location of your first warehouse as follows:-

Warehouse Your first warehouse

Location INSP
Description Inspection Location
Search Key INSPECTION L
Row
Level
Bin
Fixed Location no
Inspection Location yes
Multi-Item Location yes
Multi-Lot by Item yes
Inbound Priority 999
Message
Infinite Capacity Yes
Block When Exceeding Capacity
Warning When Exceeding Capacity
Inbound yes no

Blocked
Outbound no no

Blocked
Transshipment (out) yes no

Blocked
Transshipment (in) yes no

Blocked
Blocked for All no
Transactions

When goods are received, non-inspected goods will default to the receipt
location recorded here and goods requiring inspection will default to the
recorded inspection location.

Step 3 Attach receipt & inspection locations to the warehouse

Change receipt and inspection location data of your other warehouses as in

step 2.
Step 4 Normal locations

Locations are the parts of the warehouse where the items are actually
stored.

Create a normal location

Menu - Distribution
Session - Maintain Locations (tdilc0110m000

Enter the data based on the following:

Warehouse Your first

warehouse
Location A001
Description Normal location
Search Key NORMAL LOCAT
Row A
Level 0
Bin 01
Fixed Location no
Inspection Location no
Multi-Item Location yes
Multi-Lot by Item no
Inbound Priority 999
Sequence on Picking List 999999
Message
Infinite Capacity Yes
Inbound yes Blocked no
Outbound yes Blocked no
Transshipment (out) yes Blocked no
Transshipment (in) yes Blocked no
Blocked for All Transactions no
Step 5 Copy Ranges of Locations

Copy the location entered in step 5 as follows:-

Target Locations in the Same Warehouse:

From To Start Position End Position

Position 1:
2: Row 5 5
3: Level 6 6
4: Bin 7 8
5: A B
6: 0 2
7: 0 0
8: 1 3
Interactive Process [y/n] : no
Copy Storage Conditions [y/n] : no
Maximum Number of New Locations : 15
Exit and save to process changes

Step 6 Displaying locations

From the Inventory Locations menu arrow across to the Inquiries menu.
Session - Display locations (tdilc0510m000)
View the locations in your warehouse.

Step 7 Printing Locations

At times it may be necessary to print the locations.

Session - Print Locations (tdilc0410m000).
Print the locations to display in your warehouse.
Capacity Locations

Step 8 Create a capacity location

Create a location defining the capacity. Enter the data based on the
following:-

Warehouse Your second warehouse

Location C001
Description Capacity Locations
Search Key CAPACITY LOC
Row C
Level 0
Bin 01
Fixed Location no
Inspection Location no
Multi-Item Location yes
Multi-Lot by Item yes
Inbound Priority 999
Sequence on Picking List 999999
Message Zoom to maintain messages

Insert 2 new messages:

LIM Limited Capacity
HAZ Hazardous Materials

Choose the Message code LIM for this location.

Date of Last Status Change Skip

Infinite Capacity No
Total Capacity 100 Unit pcs
Available Capacity Skip
Expected Increase in Occupation Skip
Expected Decrease in Occupation Skip
Location Occupied Skip
Block When Exceeding Capacity no
Warning When Exceeding Capacity 80%
Inbound yes Blocked no
Outbound yes Blocked no
Transshipment (out) yes Blocked no
Transshipment (in) yes Blocked no
Blocked for All Transactions no
Step 9 Copy Locations

This session will allows you to copy one location to a range of locations

Copy your capacity location as follows:-

Target Locations in the Same Warehouse:

From To Start Position End Position

Position 1:
2: Row 5 5
3: Level 6 6
4: Bin 7 8
5: C C
6: 0 0
7: 0 0
8: 1 9
Interactive Process [y/n] : yes
Copy Storage Conditions [y/n] : no
Maximum Number of New Locations : 8

Blocking Locations

Step 10 Record reason codes for blocking

Menu - Distribution \ Location Control \ Inventory Locations
Session - Maintain Reasons for blocking

Record 3 reasons for blocking locations or inventory.

Examples:
Area under repair
Not released
Need Authorization for use
Step 11 Block a location for all transactions
Menu - Distribution \ Location Control \ Inventory Locations
Session - (Un)block Locations for All Transactions (tdilc0120m000)

Choose your second warehouse, block location C002, and attach a reason
code.

Notice you can also block a range of locations if so desired.

Fixed Locations

Step 12 Maintain Locations by Item

Record a fixed location for any item in your first warehouse with a
minimum inventory level and Replenishment quantity.

Record a fixed location in your first warehouse as follows:-

Location Fixed Inbound Minimum Minimum

Priority Inventory Replenishment
A002 Yes 1 1000 5000
EXERCISE 3 - LOCATION INVENTORY TRANSACTIONS

Inventory transactions of items comprise receipts, issues and inventory adjustments for a
particular item. Stock transactions can only be performed by authorized users and can
only concern standard items defined in the session “Maintain Item Data” (itm0101m000).

The inventory level of a particular item can be changed by six different causes:

n Purchase orders
n Sales orders
n Production issues
n Production receipt

If the Purchase Control, Sales Control and Shop Floor Control modules of BAAN IV are
implemented, you will, in principle, not have to use the four transaction types mentioned
above. The issuing and allocation of items is, in that case, controlled from these
modules.

n Inventory adjustments
n Inventory transfers

These last two transactions are controlled from the Inventory Location Control module.
Authorizations

This session controls authorizations for inventory transactions. The login code of each
user is linked to the transaction types they are authorized to use.
If a user is not authorized for a particular type of inventory transaction, the system blocks
the input, and gives a message.

Step 1 Define Authorisations

Using your assigned login code, give yourself authorisation for all 6
warehouse transaction types.

Login Code : your login code

Stock Transaction Type

Purchase Orders : yes

Sales Orders : yes
Production Issues : yes
Production Rec. : yes
Stock Adjustments : yes
Stock Transfers : yes

Location Inventory Transactions

In this session you can enter inventory transactions by item by warehouse. When it
concerns purchase and sales transactions, you must state the trade relation (customer or
supplier). Stock transfers will require you to include the warehouse being transferred to
and from.

When leaving this session, the system automatically links a transaction date and a
warehouse order number to each transaction line entered.

Step 2 Enter Inventory Transactions

Insert a new record for the first item used in Exercise 2

Warehouse : Your first warehouse

Sequence : 1
Trans. Type : Inventory Adjustment (space bar for choices)
Order date : Today’s date
Planned Qty : 50

Enter all 50 pcs into location A002.

Step 3 Enter Inventory transfers
Insert a new record for the same item as in Step 1.

Warehouse : Your first warehouse

Sequence : 2
Trans. Type : Inventory Transfer
Order date : Today’s date
Planned Qty : 20
To Warehouse : Your second warehouse

Choice “Y” to proceed

From location - A002 (or the location used in Exercise 1)

To location - Create a new location using zoom

Step 4 Using inventory transactions

Enter 6 different inventory transactions using standard items from the item
list and the normal warehouse created in the Warehouse Exercise 1.
Make use of the ‘help’, ‘Zoom’ and ‘enum’ facilities. Use the Zoom
facility to find the correct warehouse and item.
Suggested sequence:

Inventory Adjustment (Positive quantity)

Purchase Order
Sales Order (Use one of the items previously added to inventory)
Inventory Transfer (Use one of items previously added, transfer to another normal
warehouse).
Production receipt
Production issue (Use one of the items previously added)

Use the table below to keep track of your entries

Item Warehouse Transaction Type Quantity

Important - Please keep 20 pcs of your first item in your

first warehouse, in location A002.
Step 5 Displaying Inventory Transactions

1Check the results of Step 4 with the session ‘Display Inventory

Transactions by Item’ (tdilc1521m000) and ‘Display Inventory Transfers
by Item and Warehouse’ (tdilc1522m000)
2Print the Transactions to screen by using the session ‘Print Inventory
Transactions by Item’ (tdilc1421m000) and ‘Print Inventory Transfers by
Item’ (tdilc1422m000).
3The inventory transactions can also be viewed in inventory history.
However, this topic will be discussed later.

Blocking Inventory

When a location is blocked, inventory transactions are no longer possible for this
location. Using (Un)Block Location for all Transactions a user can delete only blockings
they have created. Unblock Locations will remove blockings independently of the login
code.

Step 6 Block Location for all Transactions

Block Stock of the first item used in Exercise 2 Step 4 in

Your first warehouse, location A002
add a reason code

Step 7 Print Blockings By Location

Take all ranges and print to display.

Step 8 (Un)block Locations

To un-block inventory blocked by others.

Unblock the Item blocked in Step 6 (i.e. Delete the blocking).

EXERCISE 4 - LOCATION INVENTORY INQUIRIES & REPORTS

Stock data can be displayed using seven key fields:

n Project number
n Item number
n Lot number
n Stock date
n Warehouse
n Location
n Storage unit

Key fields can serve as search criteria. There are several display or print sessions to find
where stock is located.

Step 1 Displaying Inventory

Explore the display sessions to display stocks of the items you have
previously entered, and blockings.

Inventory Reports

Printing Inventories

Explore the report sessions and print reports for stocks you have
previously created, and blockings.

Replenishment Lists

Print a replenishment list for all ranges. You should get at least one item
for one of the items you have previously entered.
EXERCISE 5 - LOCATION INVENTORY HISTORY

A parameter enables you to choose whether stock transactions are logged or not.
This parameter is located in the session - Maintain ILC Parameters (tdilc0100m000), Log
Physical Inventory Transactions by Location. Before beginning the exercises, check to
see that this parameter is set to ‘Yes’ so all stock transactions will be saved.

Step 1 Display Inventory History

Menu - Distribution \ Location Control \ Location Inventory History

Session - Display Inventory History by Location (tdilc3510m000)

Check inventory transactions. View both screens. If you have questions

about the information displayed please ask the instructor.

Step 2 Print Inventory Transactions

Menu - Distribution \ Location Control \ Location Inventory History

Session - Print Inventory History by Location (tdilc3410m000)

Print all the transactions taking place up until today.

EXERCISE 6 - STORAGE CONDITIONS

Storage conditions are used to prevent the storage of items in unsuitable locations.
The condition can be placed on the item, and unsuitable locations can be excluded.
Or, the condition can be placed on the location and the undesirable item can be excluded.
Thus, storage conditions can be defined by: location, warehouse, item, and item group.

When entering inventory transactions or generating inbound advice, storage conditions

are consulted. Conditions on locations have a higher priority than those on warehouses,
and conditions placed on items have a higher priority than those placed on item groups.

A storage condition comprises a code and a description and specifies the conditions under
which specific items are to be stored. Such conditions may be the temperature at which
goods must be stored or security, dry, dark, etc. If a certain location does not meet the
storage conditions required of an Item BAAN IV will search for another location which
does meet these conditions.

The field “Condition Type” may have one of the following values:

Present - the condition is present

Absent - the condition is absent
Common - neither present or absent

The following situations will produce a positive result:

ITEM LOCATION

Condition ‘Present’ Condition ‘Present’ or ‘Common’

Condition ‘Absent’ Condition ‘Absent’ or not included

Condition ‘Common’ Condition ‘Common’, ‘Present’ or not included.

Storage Conditions Master Data

Step 1 Maintain Storage Conditions

Record 2 storage conditions using the following data:

- Hazardous Materials
- Cold 32 degrees
Step 2 Maintain Warehouse and Location by Storage Conditions

Link the Storage Condition ‘hazardous’ to the locations below in your

first warehouse.

Add:
Location Condition Type Mandatory
B001 Present Yes
B002 Present Yes
B003 Present Yes
B201 Present Yes

Step 3 Maintain item by storage conditions

Select an item and link it to the condition ‘hazardous material’.

Add:
Project Item Condition Mandatory
Type
None Your selected Present Yes
item

Step 4 Print Storage Conditions by warehouse and locations

Print all the storage conditions that are in your first warehouse.

Step 5 Test Storage Conditions

Enter an inventory adjustment for your item in your first warehouse. Try
to locate the stock in location A001.

What is the message?

Zoom at the location, to display the storage condition by warehouse and

location to find a location with the required storage condition. Place the
item in the proper location.
EXERCISE 7 - INBOUND MOVEMENTS

The objective of the inbound procedure is to place the items that arrive in the right
location, based on space, storage conditions and item data. During ‘Maintain Receipts’
goods received are put to either the receipt location or to the inspection location. An
inbound advice needs to be generated or entered manually to move the goods to the
storage locations. This advice can then be modified, or used as is, to locate the items in
the proper storage place.

Generate Inbound Advice

The Generate Inbound Advice session (tdilc4203m000) will advise a location for each
receipt. The inbound advice steps can be logged depending on a parameter setting. If
logged the system records the sequence in which locations are considered and why they
were not suitable. Via the session ‘Print Inbound Advice Steps (tdilc4404m000)’ you
can print an inbound advice steps report.

Note: Logging inbound advice steps has a negative effect on the calculation time for
the session ‘Generate Inbound Advice (tdilc4203m000)’.

The following checks take place when generating inbound advice:

n Check to see if the location is blocked

n Check to see if the location is defined as an inbound location and not blocked
for inbound
n Check the location type (do not advise the receipt location)
n Check on the Multi-Item condition
n Check on the Multi-Lot location
n Check to see if only unoccupied locations can be advised.
n Check on minimum percentage free
n Check on conversion factor unit
n Check on storage conditions; item, item group, location, and warehouse.

The advice is stored under a run number (batch number).

Maintain Inbound Data

Allows you to modify an existing inbound advise or manually input the

information.
Release Inbound Data

Releases the items to the advised locations.

Delete Inbound Data

Used to globally delete one or more inbound recommendations or manual inbound

movements that have not yet been released.

Purchase Order Inbound Advice

Step 1 Create a Purchase Order

Create a purchase order using a suitable series, order type and supplier.
Order to your first warehouse. Order 10 of the item you identified as
hazardous, 10 of the items you allocated fixed locations to and 10 of any
other item

Remember you wish to locate these in your first warehouse.

Step 2 Maintain the receipts

Maintain the receipts for your order.

The items should all be located in the receipt location of your first
warehouse and are now ready to be inbound into a stock location.

Step 3 Display Inventories by Item/Storage Unit/Location

For the 3 items you have just received, they should be in the receipts
location of your first warehouse.
Step 4 Generate an Inbound Advice using the example below:

Run (Zoom to maintain a run number. Create a run

number using your initials)
Order Type Purchase Order - Purchase Order
Receipt Number 0 - 9999999
Warehouse Your first warehouse
Supplier _______ - ZZZZZZ
Order Number 0 - 999999
Project _______ - ZZZZZZ
Item _________________ - ZZZZZZZZZZZZZZZZ
Type of Location Both
Print Advice Yes

Step 5 Maintain Inbound Data

Assume you need to change the recommended location of an inbound.

Run Your Initials

Search From

Order Type Purchase Order

Order Enter the Purchase order from the
exercise above

Note the locations of your items.

Change the suggested pick location of your hazardous item to different

location.

You will need to delete the line and enter a new line to do this.

[NB The quantity to be stored in a particular location can be changed by

using the ‘Change’ option].
Step 6 Print Inbound Data

The Inbound Data that has not been released can be printed, and sorted by
run number or by order.

Run Your Run - Your Run

Order Type Purchase - Purchase
Receipt Number 0 - 99999
Warehouse Your first warehouse
Supplier ______ - ZZZZZZ
Order Number 0 - 999999
Project ______ - ZZZZZZ
Item ________________ - ZZZZZZZZZZZZZZZZ
Type of Location Normal Location

Print the Inbound Data (by Run Number)

Step 7 Release Inbound Data

Run From Your Initials

To Your Initials

Order Type From Purchase Order

To Purchase Order

Order From 0
To 999999

Position From 0
To 999999

Choice Y

Step 8 Display Inventories by Item/Storage Unit/Location

Note the location of the stock you have received.

Why has each receipt been located in a particular location? The hazardous
item should be placed in a hazardous location. Another item in its fixed
location. The third item is in the first available location in the warehouse.
EXERCISE 8 - OUTBOUND MOVEMENTS

The objective of the Outbound procedure is to issue inventory from location. based on
priorities defined by the user. The Outbound Movement may take place for:

n Sales Orders
n Production Orders
n Service Orders
n Replenishment Orders
n PRP warehouse orders.

An outbound advice needs to be generated or manually entered in order to issue the

inventory. This advice can be modified or used as is to retrieve the inventory from the
proper locations. Retrieval takes place on the basis of the outbound system assigned to
the item (LIFO, FIFO, or by location). Each item is retrieved from the warehouse stated
on the order line or warehouse stated on the bill of material.

Generate Outbound Advice

The Generate Outbound Advice session will advise a location for each item on hand that
has to be delivered. Upon selection an allocation occurs at the location level.
The following procedure is used:

n Check to see if item is on hand in the warehouse that is stated on the order.
n Check to see if the location is an outbound location and not blocked.
n Check the outbound priority of the item.

Maintain Outbound Data

Maintain Outbound Data allows you to modify an existing Outbound advise or manually
input the information.

Release Outbound Data

By using this session an outbound advice is released. This implies that the inventory is
issued and registered as delivered items.
Delete Outbound Data

This session can be used to globally delete one or more outbound recommendations that
have not yet been released.

Sales Order Outbound

Step 1 Create Sales Order

Create a sales order using a suitable series order type and customer with a
delivery date of today. Sell 3 each of the items you have received in the
previous exercise.

Do not add additional costs. Cost, and remember to sell from your first
warehouse.

Print order acknowledgments if necessary.

Step 2 Generate the Outbound Advice

The next step on the sales order will be to print the pick list. In order for
the advised locations to be listed on the pick list an Outbound must first be
generated.

Generate an Outbound using the following ranges:

Run (Zoom to maintain a run number. Create a run

number using your initials)
Order Type Sales Order - Sales Order
Customer _______ - ZZZZZZ
Order Number 0 - 9999999
Operation 0 - 999
Prod. Year-Week
Delivery Date Through today’s date
Project 0 - 999999
Item _________________ - ZZZZZZZZZZZZZZZZ
Route _______ - ZZZZZZ
Warehouse Your warehouse

Print Advice Yes

Once the outbound has been advised for an item it will show allocated in the advised
location.

The next step in processing the sales order will be Maintain Deliveries. When the
Inventory Location Control module is implemented the deliveries must be completed in
the Outbound movements business object.

Step 3 Print Outbound Data

Print the outbound data using your run number, by outbound priority of
location.

This can be used in place of a pick list if you leave “print picking list” out
of the sales order steps.

Note the locations from where stock will be taken.

Print Picking List if this is a required step in your sales order type.

Step 5 Release Outbound Data

Release the outbound data for your stock warehouse using your run
number. The quantities will be removed from on hand.

Step 6 Display Inventory History by Location

Note the stock movements of the items you have transacted in previous
exercises.
EXERCISE 9 - LOCATION CYCLE COUNTING

The Cycle Counting of item inventory is done to determine the current, physical stock
level of items. The importance of cycle counting is therefore to match the stock on hand
as recorded in the system with actual quantities on hand (the result of the physical count).

Location Cycle counting orders are used to manually count (physical) items inventory by
stock point and subsequently enter the counted quantities into the computer system. The
location cycle counting order shows the inventory as registered in the system. Cycle
Counting will show if the quantities of inventory in the system and those at the locations
are different.

The item’s counting frequency depends on the ABC classification and the associated
counting interval defined in the INV Parameters (tdinv4100m000)

ABC Analysis
The ABC code is an indication of the importance of the item for the turnover. The ABC
analysis can be based on cost price, sales price or quantity. Each class (A, B, C) is
assigned a counting interval which is used for cycle-counting the inventory on hand.

Step 1 Perform an ABC Analysis by item

Perform an ABC analysis on all items based on the Standard cost. Check
inventory parameters and change if necessary.

Cycle Counting

For various reasons, the inventory as registered in the system may differ from the
physical inventory on hand in the warehouse. In the cycle counting procedure, cycle
counting orders are generated listing the items to be counted. These orders can be
printed, and the actual quantities present in the inventory location recorded on them.
These quantities can then be entered into the computer system, and the inventory as
registered in the system corrected on the basis of the quantities counted, if desired, a
check report can be printed.
Step 2 Generate Cycle Counting Orders

This session allows you to define the cycle counting orders, which must
exist before you can actually start cycle counting.
The cycle counting order is created based on: the counting data for each
item (based on its ABC-code), the selected data (warehouse, location aisle,
level and bin) and the maximum number of locations to be counted.

Generate cycle count orders based on the following:

Warehouse Your warehouse

Location ________ - ZZZZZZZZ
Row __ - ZZ
Level ____ - ZZZZ
Bin ____ - ZZZZ
Max. Number of Locations to be Counted per Order 2
Max. Number of Locations to be counted 10

Step 3 Print Cycle Counting Orders

The cycle counting order is also called a counting list. After generating
the cycle counting orders, these must be printed.
If desired the system stock levels can be printed on the counting lists, and
multiple copies can be printed.

Step 4 Enter Location Cycle Counting Data

Once the orders have been printed, and the physical stock counted, the
physical quantities are entered into the system. If the physical quantity
matches the system quantity it can be collectively accepted.

Change the counted quantity of at least one of your items.

Do not process the cycle counting data when you exit this session.
Step 5 Print Cycle Counting Report

The check report shows the system stocks, the counted stocks and the
differences.

Print the check report and notice the variances.

Step 6 Process Cycle Counting Data

After the counted stock has been entered, it must be processed in the
system. This implies that inventory adjustments, if any are necessary, are
carried through. After processing, the date is retained in the item file.
This ensures that when the cycle counting is performed again, it is
compared with the last date on which the cycle count has been recorded.

Process the cycle counting data now.

Step 8 Display Inventory History by Location

Note the transactions generated by your cycle count changes.