Abbreviations used in Warehouse

3PL: Third party logistics

ADC: Automated data collection

APS: Advanced planning and scheduling

ASN: Advanced shipment notifications areused to notify a customer of a shipment. Often including
purchase order numbers, SKU numbers, lot numbers, quantity, pallet or container number, carton
number

ASRS: Automated Storage Revival system

ASP: Application service provider

AIDC: Automatic identification & data collection

BOM: Bill of material is a list materials required to produce an item

CCD: Charged coupled device is a barcode scanner that takes digital image of the barcode instead
of laser scanning, can only scan at short distance of a couple of inches

COGS: Cost of Goods Sold

CPG: Consumer Packaged Goods

DC: Distribution Centre

EPC: Electronic product codeis the RFID version of the UPC barcode. EPC is intended to be used
for specific product identification

FMCG: Fast Moving Consumer Goods

FIFO: First in first out

GVW – Gross Vehicle Weight

LIFO: Last-in-first-out

NIFO – Next In First Out

POD – Point of Delivery

RFID: Radio frequency identification

SCM – Supply Chain Management

SKU: Stock keeping unit

SSCC: Serial Shipping Container Code

VNA: Very narrow aisle

WIS: Warehouse Inventory system

WS: Warehouse storage

WD: Warehouse Distribution

WMS: Warehouse Management Solution

WHM/WHS/WHSE: Warehouse

Material handling abbreviations

3PL – Third Party Logistics

ACH – Automated Clearinghouse

AGV(S) – Automatic Guided Vehicle (Systems)*

ANSI – American National StandardsInstitute
AS/RS – Automated Storage/Retrieval Systems*
ASG – Automation Solutions Group*
B2B – Business-to-Business

CASE – Computer-Aided System Engineering

CICMHE – College – Industry Council on Material Handling Education

CMAA – Crane Manufacturers Association of America*
CRM – Customer Relationship Management

CSCMP – Council of Supply Chain Management Professionals

CSS – Conveyor and Sortation Systems*
DC – Distribution Center

DRP – Distribution Resources Planning

EASE – Ergonomic Assist Systems and Equipment Council*

ECMA – Electrification and Controls Manufacturers Association*
FMCSA – Federal Motor Carrier Safety Administration
HMI – Hoist Manufacturers Institute*
ICE – Internal Combustion Engine

ICWM – Institute of Caster and Wheel Manufacturers*

IoT – Internet of Things

IPR – Intellectual Property Rights

IQR – Inventory Quality Ratio

ISSG – Information Systems Solutions Group*
KPI – Key Performance Indicator

LIFT – Lift Manufacturers Group*

LODEM – Loading Dock Equipment Manufacturers*
MHEDA – Material Handling Equipment Distributors Association
MHEFI – Material Handling Education Foundation, Inc.
MHICTE – Career and Technical Education Program
MMA – Monorail Manufacturers Association*
OEM – Original Equipment Manufacturer

OFS – Order Fulfillment Solutions Group*

ORM – Other Regulated Material

PLM – Product Lifecycle Management

ProGMA – Protective Guarding Manufacturers Association*

RMI – Rack Manufacturers Institute*
ROI – Return on Investment

RPI – Raw Product Inventory

SCM – Supply Chain Management

 Introduction to Source documents
This chapter looks at how purchases, sales, labour and materials are recorded and
controlled.

The material control cycle

The material cycle can be depicted as:

At each stage there should be documents or other procedures that allow control to be
exercised.

Purchase requisition: there will normally be a purchase requisition note

showing:

• Sequential document number

• Date of requisition
• Stock code
• Quantity needed
• Supplier
• Supplier’s product code
• Signatures authorising the requisition

The purchase requisition notes are passed to the purchasing department where they
will be examined and approved or queried. Sometimes, despite the supplier being
entered on the purchase requisition, the purchasing department might ask several
suppliers for quotations.
 A purchase order is then raised (created). This will typically show:

• Our name, address and contact details

• Purchase order number
• Date
• Supplier’s name and address
• Details of goods required: product codes, description, unit price and total price.
• Authorisation

The order will have at least two copies: one for the supplier one for the stores to
inform them that a delivery is expected.

When goods are received, they will usually be accompanied by a delivery note. This
will show the information that is on the purchase order, except for the value of the
goods. Goods should not be accepted before checking to a copy of the order that they
have, in fact, been ordered. One copy of the delivery note is signed and kept by the
supplier. Usually the receiving company will create a standard goods received
note from the delivery note. The goods will be stored in the warehouse and stock
records on bin cards (see below) will be updated from the goods received note.

A purchase invoice showing the payment due will be received from the supplier, and
before this is approved for crediting to the suppliers account and subsequent payment,
it should be matched to the order and goods received note to ensure that the correct
goods have been received.

When materials are needed for production a materials requisition noteshould be

created requesting the release of material from the stores: part/material code, quantity,
job number and so on. This should be signed by the person requesting the goods.
Stock records will be updated as goods are issued.

There might be production order setting out goods and labour needed for the
production of the goods ordered by customers.

As goods are produced they will be transferred from the production line to the
finished goods store. Stock records there should be updated with goods description,
quantities and costs.

Customer orders will initiate sales. From those, despatch (or delivery notes) will be
produced. These can be used as the basis for taking goods from stores, updating the
bin card (see below) packing the goods and despatching them. There will usually be
three copies of the delivery note: two go with the goods and of those one stays with
the customer and one is signed by the customer and returned as proof of delivery
receipt. One copy will stay in the despatch department in case of later queries.

Central to the material control cycle is the recording of the amount of inventory as this
will determine when goods need to be ordered and will also record the receipt and
issue of goods.

In manual accounting systems bin cards are used (a bin is where a specific item of
inventory is stored). The equivalent records are now usually held in computer
systems. A typical bin card would look as follows:

This allows a continuous recording of stock quantities.

A particularly important figure to calculate is free inventory. This is

Free inventory = Quantity on hand plus units ordered less units allocated for use

The calculation of free inventory has the advantage of anticipating stock movements
so that receipts and issues that are known about are taken into account when assessing
the need to order.

To ensure that the inventory as recorded on the bin cards is accurate, companies
should carry out periodic stock counts(sometimes called cycle counts) and correct the
amounts on the bin cards. Some companies carry out one only stock count per year
 Stores - Material Request
1. When should you use the Electronic Material Request ?
If you wish to order material from the CERN Stores, then you should use the Electronic
Material Request. If you wish to take material from the Urgency Window, then you should
use the Paper Material Request.

2. Electronic Material Request

Once the Electronic Material Request has been completed, validated and authorized in
EDH then your request will immediately be transferred to BAAN (the Stores materials
management system) and you may expect delivery within 24 hours (unless a later delivery
date has been specified).
• Who may complete an Electronic Material Request ?
Any registered EDH user may raise a Material Request.
• What goods are available ?
There are over 45'000 articles which may be purchased from the Stores with a Material
Request. You may browse these articles with the electronic catalog available in EDH. If at
any time you are not sure of the exact reference (SCEM) for the article you wish to
purchase, you may call up the catalog from within your Material Request.
• What information do I need to complete a Material Request ?
In order to complete a Material Request you need to know two pieces of information :
o The reference number of the material you wish to purchase (SCEM)
o The budget code which will pay for the material

• What path will your Material Request take ?

EDH will calculate the authorization path of your Material Request according to the
financial rules which are also in use for the general documents.

3. General CERN rules

A Material Request requires the signature of one person with sufficient financial authority
on the budget code used.
A Material Request greater than CHF 10'000 requires your department leader's signature.
• General rules for the budget codes used:
Your DPO may add specific rules for the Material Request for your department.
• Specific rules for the budget codes used:
It may be the case that all requests on particular code require particular signature.
 4. Structure of the Material Request
The Material Request comprises of a header and one or more line items. A Material
Request may be for several different articles each of varying quantity. Only one budget
code may be specified The Header of the Material Request contains:
• General description (optional)
• Requestor Information
• Delivery Details
• Budget Code
Each of the line items contains:
• The SCEM
• The quantity
• The comments (optional)

5. How to complete a material request ?

• The general description
Completing the general description will facilitate the finding of your Material Request in
EDH at a later stage. It may also provide a useful indication to other EDH users who may
see your document (for instance the section leader or group leader) as to what the request
was for. This field is optional and solely used by EDH (i.e. it is not transferred to BAAN).
• The requestor
By default the requester is yourself, although you may complete a Material Request for
another person. You may either enter their detail directly or to select an other person.
• The Delivery Address
Using the default icon you may automatically select the delivery address of the requester.
Alternatively you may enter any valid delivery address.
For the gas material, a list of delivery address is mentioned.
• The Budget Code
There are two ways of entering a budget code in the EDH system. By default you may
select one of the budget codes belonging to your group. To have the Material Request
authorized as fast as possible you should select a budget code on which you have financial
authority.
Alternatively you may select any valid budget code even though they may not necessarily
belong to your group. In both cases the Material Request will automatically be routed to
the appropriate budget responsibles.
• The line items
Line items in the Material Request simply require a SCEM and a quantity. To determine
the SCEM required refer to the Stores Catalog from the Material Request. Clicking on
caddy will add a line item with this SCEM to the current Material Request (if no Material
Request is open, the catalog will generate one for you). You may also type in a SCEM
directly into the Material Request and hit return. If the SCEM is incomplete or invalid the
catalog will be displayed.
• The quantity
 As well as simply specifying a number for the quantity required, for certain items you may
also specify the nature of the quantity. For instance, for steel sold by the square metre,
you may specify that you wish to have 10 pieces of 20cm by 20 cm. EDH will also
automatically calculate the required amount of material and the appropriate price.
• Sending your Material Request
You may save the Material Request in any state (for instance leave it incomplete in order
to return to it later). You may even save your document if some of the fields are invalid.
To save your document use the SAVE button.
Once you are satisfied that the document is complete, and once it has been saved and
entirely validated you may send your document using the SEND button. Any invalid
delivery addresses, quantities, SCEMs or other fields will be highlighted and you must
correct these in order to be able to send the document.
If you have signature rights, then please sign the document with your EDH authorization
password otherwise it will come back to you for your signature. If the document is valid
then it will begin its routing path. You may no longer modify the document once it has
been sent

Stores - Material Return

The requestor is required to inspect the materiel upon receipt to ensure that it is complete,
not damaged, and that it corresponds to the material request. Requests for return shall
be submitted within two weeks following the reception of the material by internal
delivery, by submitting the form Material Return Authorization Request in Service Now,
to be approved by the Product and Store Management team.
Acceptance of return of material is subject to the following conditions*:
1. The return shall take place within two weeks after reception.
2. The materail shall not be damaged.
3. The material must still be part of the standardized range and stocked in the CERN
Stores.

After approval of the request, the following procedures apply:

1. For small equipment

1. Send small equipment by internal mail to the Stores (bldg 73-R-002) (VERY
IMPORTANT, enclose the delivery note with the returned material as well as the
reference of the associated Material Return Authorization Request ticket).

2. For average equipment which can be brought in a car

1. The user has the possibility to go directly to the Stores Urgency counter to return the
material (bldg 73-R-002).
 3. For more important equipment
1. Complete the EDH Transport request for the return of equipment: Location: 199-R-
001. Please annex the completed Material return form as well as the delivery note.

Inventory control

Overview
Inventory Control is designed to support the requisition processing, inventory management, purchasing, and
physical inventory reconciliation functions of inventory management through a set of highly interactive capabilities.
The design of Inventory Control is based on the following key objectives:

• To provide information on the availability of stocked items and the status of stocked requisitions
• To facilitate timely requisition processing
• To automatically record and service backorders
• To help minimize inventory investments consistent with service objectives by basing purchasing
decisions on usage history
• To provide automated tools to assist servicing, purchasing, and management of the inventory
• To improve financial control of the inventory by chargebacks to the user organizations
• To improve financial control of the inventory by periodic reconciliation of the inventory balances with
the physical counts

Inventory Control utilizes a set of user-maintained master tables, a set of system-maintained master tables,
transaction document types, and offline programs to meet these objectives. It also creates inventory control
management reports. These reports, batch programs, and transaction document types are explained in subsequent
sections of this chapter. For a brief description and sample copy of these management reports, see the User's
Reference.

Inventory Accounting Events

The inventory control process consists of the following accounting events:

Event Description

A request for inventory stock represents the intent to incur an obligation. Requests for
inventory stock can provide useful accounting information for internal management
Stock Requisition (SR)
purposes and are recorded in the accounting system as pre-encumbrances. Though they do
(Pre-Encumbrance)
not represent legal obligations, they are reductions to the available budget balance when
budgetary controls are being used.
 Once requested stock items are released and issued by the seller, the net accounting effect
Stock Issue
recognizes revenue for the seller (if the warehouse is able to recognize revenue) at the unit
Confirmation (CI)
price multiplied by the quantity of the stock items, and the expense of inventory at cost. In
(Buyer Expenditure,
terms of the buyer, an expenditure/expense is recognized for the same amount, and the
Seller Revenue)
pre-encumbrance created by the Stock Requisition (SR) document is reversed.

A direct issue of requested stock items from inventory recognizes the same net accounting
Over the Counter (OC)
events involved with an Issue Confirmation (CI): expenditure/expense to the buyer,
(Buyer Expenditure,
revenue to the seller (if the warehouse is able to recognize revenue), and expense of
Seller Revenue)
inventory at cost.

The return of stock items to inventory by the buyer results in reversing the accounting
Stock Return (SN)
events that took place at the issuance of these items. A decrease in revenue for the seller
(Revised Accounting at
(if the warehouse is able to recognize revenue) and a decrease in expenditure/expense for
Issue)
the buyer are the net accounting effects.

The managing warehouse may need to adjust the on-hand quantities or the unit costs of
stock items in inventory. If quantity and/or unit cost are increased, the net accounting
Inventory Adjustment
effect of this event is an increase in inventory balances with a decrease in expense to the
(IA) (Seller Expense)
seller. If there is a decrease in quantity and/or unit cost, the net accounting effect is a
decrease in inventory balances and an increase in expense to the seller.

The managing warehouse may need to adjust the on-hand quantities of stock items in
Physical Inventory inventory at a specified unit price. If quantity is increased, the net accounting effect of this
Purchase Input (IP) event is an increase in inventory balances with a decrease in expense to the seller. If there
(Seller Expense) is a decrease in quantity, the net accounting effect is a decrease in inventory balances and
an increase in expense to the seller.

As the transfer of stock items is recognized and received by the receiving warehouse, the
expenditure previously incurred by the issuing warehouse is transferred to the receiving
Stock Transfer Receipt
warehouse. The net accounting effect results in an increase in the available budget
(TR) (Transfer of
balances for the issuing warehouse and reduction in the available budget balance of the
Expenditure)
receiving warehouse. This transaction recognizes inventory and expenditure balances at
cost.

In addition, the following non-accounting or item-tracking events occur during the inventory control process:

Event Description

Pick and Issue This process prints a pick ticket and generates an associated Issue Confirmation (CI) document
(PI) for each Stock Requisition (SR) that has a reserved stock item.

Stock Transfer This tracking process initiates the transfer of items from one warehouse to another and places
Issue (TI) items from an on-hand status to an in-transfer status.

Documents
Inventory Control includes the following documents:
Document Description

Reserves quantities of stock items from an on-hand supply for later delivery. This reduces the
Stock Requisition
available quantity. If items are not immediately available, they may be backordered and later
(SR)
filled by having the Backorder Servicing program run.

Schedules previously reserved items to be picked up for delivery and releases them from a
reserved status. This function is performed by creating a Pick Ticket Report (IN80). From this
Pick and Issue
report, the warehouse can determine the stock item, the quantity, and the bin number of the
(PI)
items that are to be picked up. It also creates the corresponding Issue Confirmation (CI)
document.

Confirms to the system that previously reserved and released items have been issued from the
Stock Issue
warehouse to the buyer. The on-hand quantity of the warehouse for this item is reduced by the
Confirmation (CI)
amount issued.

Issues requested items directly from the on-hand quantity. As the items are issued immediately
upon request, in effect, "over-the-counter," backordering is not allowed. Once an "Over the
Over the Counter Counter" transaction is successfully completed, an Over the Counter Issued Report will be
(OC) produced, identifying the requestor and the stock items issued. Any request for items
unavailable for immediate issuance must be reserved through a Stock Requisition (SR). On-
hand quantity is reduced by the amount issued.

Allows the original buyer to return previously issued items. At the option of the issuing
Stock Return (SN)
warehouse, a return charge may be imposed.

Allows warehouse management to adjust quantities or unit values of on-hand items due to a
Inventory
change in on-hand quantities or unit costs. These adjustments alter inventory and cost of goods
Adjustment (IA)
expense balances.

Physical
Allows warehouse management to adjust quantities of on-hand items due to a change in on-
Inventory
hand quantities at a specified unit costs. These adjustments alter inventory and cost of goods
Purchase Input
expense balances.
(IP)

Stock Transfer
Initiates the transfer of items from one warehouse to another.
Issue (TI)

Stock Transfer Recognizes the receipt of transfer items by the receiving warehouse. On-hand quantities of
Receipt (TR) receiving/issuing warehouses are adjusted.

Offline Programs
Inventory Control is supported by several offline programs that perform the following functions:
Program Function

Attempts to fill backordered quantities of open stock requisitions. If stock replenishment has
Back Order
occurred since the stock requisition was originally processed, the on-hand quantities may
Servicing
now be sufficient to allow reservation of the backordered quantities.

Is based on a number of previously processed purchase requisitions, purchase orders, and

Lead Time
receipt of goods. The requisition and vendor lead time is calculated for each active stock
Calculation
item in inventory.

Calculates the safety stock and reorder level for each item in inventory. Reorder quantity is
Reorder Point
either the order-up-to quantity minus the on-hand quantity, or is calculated by the Economic
Calculation
Order Quantity (EOQ) model.

Forecast Demand Is based on historical issues and forecasted demand. This routine reads Inventory (2 of 3)
Calculation (INV2) and calculates and updates the forecasted demand for each stock item.

Is based on selection criteria. Stock items are flagged and frozen for the physical inventory
Physical Inventory
count. While frozen, these items cannot be issued from the warehouse. A list of frozen items
Freeze
is produced to use during the count.

Physical Inventory Updates the on-hand quantity in Inventory Inquiry (1 of 3) (INVN) to reflect the actual
Reconciliation inventory counts and posts entries to the General Ledger to adjust for stock overages and/or
Posting shortages.

Rolls back the historical information stored on Inventory Inquiry (INVN) for each item.
Annual Closing Actual quantities and forecasted quantities are both moved back one year, leaving an empty
array of 12 months for the forthcoming year of actual and forecasted quantities.

Purges closed Stock Requisition (SR) and Over the Counter (OC) documents from the open
stock requisition tables. Also, closed stock transfer receipts are purged from the open stock
Closed Transactions
transfer tables. If the Mark for Future Deletion indicator is selected on Inventory (3 of 3)
Table Purge
(INV3), and no open items exist (PCs, SRs, etc.) for an Inventory Inquiry (1 of 3) (INVN)
record, these items are purged from Inventory Inquiry (1 of 3) (INVN).

Aids in the automatic replenishment of warehouse stock. This program uses information
Autogeneration of
already in the system to automatically generate orders such Purchase Requisitions (RX). The
Purchase Requisition
program uses Inventory Replenishment (IREP) and the existing Replenishment Review
(RX)
Report to obtain this information.

Inventory Ledger
Inventory Control maintains the Inventory Ledger. This ledger provides a detailed audit trail of all inventory
transactions. It stores information regarding stock items and associated quantities, but includes the buyers'
accounting distribution for report writing purposes. All accounting transactions produced by inventory transactions
are recorded and posted to the General Ledger.

Inventory Control Tables

Inventory Control consists of the following tables and corresponding windows:

Table Name Table ID

ABC Classification Parameter ABCP

Adjustment Code ADJC

Inventory by Keyword INKY

Inventory by Parent Warehouse Inquiry INPW

Inventory by Stock Item Inquiry INVI

Inventory by Stock Item Selection INSE

Inventory INVN, INV2, INV3

Inventory Replenishment IREP

Issue Queue Inquiry ISSQ

Item Group ITMG

Item Group by Stock Item Inquiry ITMS

Keyword by Stock Item Inquiry KYWD

Open Items by Stock Number Inquiry OISN

Open Stock Requisition Account Line Inquiry OSRL

Open Stock Requisition Header Inquiry OSRH

Open Stock Requisition Issues by Issue/Return ID Inquiry OSRR

Open Stock Requisition Item Issues Inquiry OSRI

Open Stock Requisition Line Inquiry OSRC

Open Stock Transfer Receipt Header Inquiry OTRH

Open Stock Transfer Receipt Line Inquiry OTRL

Over the Counter Generation OCGN

Physical Inventory Freeze INVF

Return Code RETC

Warehouse Group WHSG

Warehouse Management WHSE, WHS2

Inventory Reports
Inventory Control includes various management and planning reports. These reports are identified by a report ID
consisting of the letters IN followed by a two-digit number.

Inventory Control reports are normally run monthly or semi-monthly, although they may also be run on request. You
can obtain any of these reports by providing two items to your system administrator:

1. Report ID
2. Report dates card information

All Inventory Control reports are listed below by report ID:

Report Title Report ID

ABC Analysis Report IN10

ABC Classification Report IN20

Forecasted Demand and Actual Item Usage History Report IN30

Inventory Management Report IN40

Consolidated Inventory Management Report IN45

Inventory Price List by Stock Item Number IN50

Stock Movement Report IN51

Lead Time Report IN60

Physical Inventory Discrepancy Report IN70

Inventory Pick and Issue Order IN80

Over the Counter Receipt Report IN85

Replenishment Review Report IN90

Inventory Freeze Report INIF