Preface – This post is part of the SAP SD series.
Table of Contents
We have learnt that pre-sales, sales and anything after sales is logistics. So logistics is where depending on the availability of goods you create the delivery.
Delivery has three pieces to it or there are three sections to delivery.
The first one is picking, the second is packing (this is optional), sometimes you do pack, sometimes you don’t need to do it for some materials. But picking is typically a process that’s followed for all physical deliverables, meaning physical goods, all tangible goods. And the last step is PGI, which is posting the issue of goods or post goods issue. The corresponding accounts are updated and the inventory is updated. This is the delivery.
What is picking?
Depending on what the customer needs, these products will be brought to a place called a staging area, where you can do all the packing and the processing. So you get all these goods in the staging area and the next step is to get these goods ready for packing.
What is packing?
Packing is just pulling those desktops, laptops, whatever the products are, into the proper packaging format requested by the customer, weighing them on your FedEx machine or EPS machine and keeping the box ready for the truck to come in. This is packing.
After packing, when the truck comes in, the packed goods are loaded and the truck leaves. This is called picking.
What is a post goods issue (PGI)?
The goods that you have picked, packed and loaded are really no longer yours. They need to be accounted for in your inventory. All the details will be accounted for in your inventory.
Meaning what is your inventory, in our case its desktop, what’s the total as of before the packing sets, quantities, let’s say 2000. Now as part of this delivery, 500 has been reduced. So now it’s 1500. So, this process of reducing the inventory and making sure that the accounts are up to date is called the post goods issue.
So, these are the three main steps that happen in the delivery.
In the next article, we are going to actually create a delivery for the order that we have created previously and do the picking. And we’re not going to do the packing yet and we are just going to do the PGI and technically close that delivery.