Physical Inventory and Inventory Analysis with SAP EWM

Hours or days of walking through shelf rows and counting goods – why should someone do this?

Indeed, there are valid reasons to do that – besides the availability of the goods and materials for the customers and the own production there are several monetary reasons, i.e.

  • with only the „correct“ goods and materials there is less fixed capital in stock, thus more capital is free to be used
  • an optimized warehouse utilization rate can be achieved – not only less warehouses capacities are tied up, but also the drive and walking distances as well as the putaway and picking times can be reduced
  • this cost reductions can be achieved.

SAP EWM is available to automize and accelerate process steps, so that the occurring efforts can be simplified and reduced.

To get a correct overview of the current inventory levels, a Physical Inventory can be a proven medium. With SAP EWM can’t just display such inventory levels via a ‘yearly physical inventory’ (“periodic”), but also offers further (“continuous”) options throughout a year.


Main Physical Inventory options in SAP EWM

Further Physical Inventory options in SAP EWM

  • Ad-hoc Physical Inventory
    • Execution at any time within a fiscal year
    • Storage-bin specific and product specific
    • RF usage
    • Document creation can be executed manually
    • Document can be assigned to an exception code
  • Putaway Physical Inventory
    • Only storage-bin specific
    • RF usage
    • Execution at the time of the first putaway in the fiscal year
    • No further physical inventory for the counted storage-bin within the fiscal year


  • Low Stock Physical Inventory
    • Only storage-bin specific
    • RF usage
    • Execution during a stock removal and its task confirmation if the source bin contains a quantity lower than the (previously) defined threshold
    • Automatic creation of the document during the task confirmation


  • Zero Stock Physical Inventory
    • Process as the Low Stock Physical Inventory, but with a threshold value of zero
    • Confirmation that the storage-bin is empty and thus free again for putaway
  • Low Stock / Zero Stock Check
    • „Light Version“ of the Low Stock / Zero Stock Physical Inventory
    • Execution during the stock removal task
    • No creation of a physical inventory document


  • Storage-bin Check
    • Check whether a material is actually stored in the storage-bin indicated by the system
    • But the quantity of the material isn’t counted (therefore no physical inventory procedure in its original form)


Within SAP EWM the main analysis tool is the ABC analysis. It can be set up based on the consumption (fast- / slow-movers) or based on the material cost. In EWM this analysis tool is used in combination with the physical inventory function ‘Cycle Counting’, but in general it also can be used for a regular inventory analysis.


Further functions for an inventory analysis can be realized with a connection from SAP EWM to SAP MM. Within MM there are i.e., the following options for an analysis:

  • Turnover Rate
    • Inventory KPI to indicate how the average inventory of a material is used completely within a defined period
    • The higher the KPI the higher is the turnover of the inventory within the defined period
  • Demand Value
    • Determination of upcoming material demands based on amount on period
  • Range Analysis
    • Determination of the period in which a material is available for different consumption requests (customer, production)
  • Dead Stock Analysis
    • Monitoring and determination of material inventory numbers, which increased over a defined period although consumption booking occurred
  • Analysis of Slow-Moving Items
    • Determination of materials which haven’t had a putaway and neither a stock removal within a defined period


Thus, SAP EWM can provide a basis for a detailed inventory analysis and a thorough inventory management with the available Physical Inventory options as well as an ABC analysis.
Which method is used, is completely up to you.

We from KARŌN gladly support you besides the implementation of the SAP EWM Physical Inventory topics also with the connection and the implementation of the analysis function in SAP MM.