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SAP Stock Transfer Processes

SAP Stock Transfer Processes

A comprehensive guide to Intra-Company Transfers and 3rd Party Processes

Stock transfers in SAP allow organizations to move materials between different locations while maintaining proper inventory and financial control. This guide explains the two major types of transfers: Intra-Company Transfers (within the same organization) and 3rd Party Processes (vendor to customer direct shipping).

What are Stock Transfer Processes?

Stock transfer processes in SAP allow you to move materials between different plants or storage locations within your organization. These processes ensure proper inventory tracking, financial accounting, and documentation.

Intra-Company
Same Company Code Plant to Plant

Transfer between plants that belong to the same company code, with financial postings at the time of goods issue.

Inter-Company
Different Company Codes Invoicing Required

Transfer between plants that belong to different company codes, requiring invoice postings between companies.

3rd Party
Direct Shipping Trading Scenario

Process where your vendor delivers directly to your customer while your company handles the commercial transaction.

Intra-Company Transfer

Intra-Company Transfer Types

An intra-company stock transfer involves moving materials between plants that belong to the same company code. There are three main types of intra-company transfers:

One-Step
Two-Step
STO without SD

Plant to Plant One-Step

Used when plants are within the same premises or nearby locations. The material is directly transferred from one plant to another in a single step.

Movement Type: 301
Transaction: MIGO
Same Premises
Check Prerequisites
Verify plants, storage locations, material extension, and available stock
MIGO Transaction
Select "Transfer Posting" and "Other" MIGO
Select Movement Type
Choose movement type 301 for plant-to-plant transfer 301
Post Transfer
Material instantly reduces from source plant and increases in destination plant

Note: When performing a one-step transfer, financial documents are created immediately. The stock value is transferred from one plant to another in the same posting.

1
Go to MIGO Transaction

Navigate to MIGO transaction in SAP (in older ECC systems, you might use MB1B)

Select "Transfer Posting" and then "Other"

2
Choose Movement Type 301

Select movement type 301 "Plant to Plant Transfer Posting"

This movement type handles both the goods issue and goods receipt in a single step

3
Enter Transfer Details

Enter the material, quantity, and plants information:

  • Material number
  • From Plant and Storage Location
  • To Plant and Storage Location
  • Quantity to transfer
4
Check and Post

Review the details, click "Check" to validate the movement, then "Post" to execute the transfer.

The system will immediately reduce stock in the source plant and increase it in the destination plant.

Document Generated: Material Document with accounting document for financial posting

Plant to Plant Two-Step

Used when plants are at a significant distance from each other. The stock is first removed from the supplying plant and put into transit, then received at the destination plant once it arrives.

Issue Movement: 303
Receipt Movement: 305
Transit Status
Check Prerequisites
Same as one-step process, but plants are at a distance
Goods Issue
Remove stock from supplying plant 303
Stock in Transit
Material shows as "stock in transit" in receiving plant
Goods Receipt
Receive stock at destination plant 305

Note: In the two-step process, financial posting happens during the goods issue (303) step. When the goods receipt (305) is posted, there is no additional financial posting.

1
Goods Issue - MIGO with Movement Type 303

In the supplying plant, go to MIGO and select "Transfer Posting"

Choose movement type 303 "Transfer Posting Plant to Plant - Removal from Storage"

Enter the material, quantity, from plant/storage location, and destination plant (no destination storage location)

Document Generated: Material Document with financial posting
2
Stock in Transit Status

After posting the 303 movement, stock is reduced in the supplying plant

The material appears as "Stock in Transit" in the receiving plant's inventory display

The material is physically in transit between locations

This allows tracking of material that has been shipped but not yet received at the destination.
3
Goods Receipt - MIGO with Movement Type 305

When the material arrives at the receiving plant, go to MIGO again

Choose movement type 305 "Transfer Posting Plant to Plant - Placement in Storage"

Enter the material and destination storage location

Specify the quantity received (may differ from issued quantity if damage occurred)

Document Generated: Material Document (no financial posting)

Stock Transfer Order without SD and Billing

Used for transfers requiring documentation, especially for state-to-state transfers where shipping documents are needed for legal purposes.

Document Type: UB
Item Category: U
Issue Movement: 351
Create STO
Create Stock Transfer Order with document type UB ME21N
Goods Issue
Issue goods with reference to STO 351
Stock in Transit
Material shows as "stock in transit"
Goods Receipt
Receive goods with reference to STO MIGO

Note: This process creates purchase order-like documentation (STO) that can be used for transport between different states or locations that require formal documentation.

1
Create Stock Transfer Order (STO)

Navigate to ME21N transaction

Select document type "UB" (Stock Transfer Order)

The system will ask for the supplying plant instead of a vendor

Enter material details, quantities, and both plants information:

  • Supplying Plant (from which plant)
  • Receiving Plant (to which plant)
  • Material number and quantity
  • Storage location at receiving plant
Document Generated: Stock Transfer Order (UB) with item category U
2
Goods Issue with Reference to STO

In MIGO, select "Goods Issue" with reference to the purchase order (STO)

Enter the STO number created in step 1

The system automatically selects movement type 351 for stock transfer in transit

Specify the storage location from which goods will be issued

Document Generated: Material Document with financial posting
3
Goods Receipt with Reference to STO

When goods arrive at the receiving plant, go to MIGO

Select "Goods Receipt" with reference to the purchase order (STO)

Enter the STO number

The system will show the items to be received

Verify the quantity and storage location, then post

Document Generated: Material Document (no financial posting)
Plant A (SG25)
Acts as Supplier/Vendor
Has Material X in Stock
Material X
STO / GI / GR
Plant B (SG15)
Acts as Customer/Receiver
Needs Material X
Prerequisites for Intra-Company Transfers
At least two plants in the same company code

Both plants must be created and assigned to the same company code in the Enterprise Structure.

Storage locations maintained for both plants

Both the supplying and receiving plants must have proper storage locations configured.

Stock availability in supplying plant

The supplying plant must have sufficient stock of the material to be transferred.

Material extended to both plants

The material master must be extended to both plants with appropriate views (MM01 transaction).

Additional for STO process

For stock transfer orders, the receiving plant needs the purchasing view, and the supplying plant needs the sales view for the material.

Configuration Steps for Intra-Company Transfers

  1. Create Plants and Assign to Company Code

    Navigate to Enterprise Structure → Definition → Logistics General → Define, copy, delete, check plant
    Then assign the plant to a company code

  2. Create Storage Locations for Plants

    Navigate to Enterprise Structure → Definition → Materials Management → Maintain Storage Location

  3. For STO Process: Additional Setup
    • Define Document Types for Stock Transfer (typically UB is standard)
    • Configure Item Categories (U for stock transfer)
    • Set up Special Procurement Key if you want MRP to generate STRs automatically
  4. For Two-Step Process: Activate Material Ledger

    If not already active, activate Material Ledger for proper valuation during transfers

3rd Party Process

3rd Party Process Overview

In a 3rd party process (also known as a trading scenario or drop shipping), your company acts as an intermediary between a vendor and a customer. The vendor ships goods directly to your customer while your company handles the commercial transaction.

Vendor
Supplies the Material
Ships directly to customer
Customer
Receives the Material
Orders from your company
Purchase Order
Sales Order

Key Point: In a 3rd party process, your company never physically handles the goods. The material flows directly from the vendor to the customer, but your company manages the documents and financial transactions.

Sales Order
Create sales order with third-party item category VA01
Auto PR Generation
System automatically creates purchase requisition
Purchase Order
Create PO to vendor with customer delivery address ME21N
Optional GR
Statistical goods receipt (no stock impact) MIGO
Invoicing
Post vendor and customer invoices MIRO/VF01
1
Create Sales Order

Navigate to VA01 transaction to create a sales order

Use a sales order type and item category configured for third-party processing

Enter customer, material, and quantity details

Document Generated: Sales Order with third-party item category
The item category in the sales order must be configured to trigger a purchase requisition automatically.
2
Purchase Requisition (PR) Auto-Generation

When you save the sales order, the system automatically generates a purchase requisition

This PR is linked to the sales order and contains:

  • Material from the sales order
  • Quantity from the sales order
  • Customer delivery information
Document Generated: Purchase Requisition linked to Sales Order
3
Create Purchase Order to Vendor

Convert the purchase requisition to a purchase order in ME21N

Alternatively, create a PO directly and reference the sales order

Key elements of the PO:

  • Vendor who will supply the goods
  • Material and quantity
  • Delivery address of the customer (not your company)
Document Generated: Purchase Order with customer delivery address
4
Optional: Statistical Goods Receipt

This step is optional and depends on your business process

When the vendor confirms shipment to the customer, you can post a statistical GR:

  • Go to MIGO and select Goods Receipt against the PO
  • System creates a material document but does not affect stock levels
  • No physical GR occurs as goods never come to your company
Document Generated: Statistical GR (no stock impact, documentation only)
Statistical GR can be used for tracking purposes or to satisfy your process requirements.
5
Invoice Processing

Two invoices need to be processed:

  1. Vendor Invoice (MIRO):
    • Process the invoice received from your vendor
    • Reference the purchase order
  2. Customer Invoice (VF01):
    • Create an invoice for your customer
    • Reference the sales order
Documents Generated: Vendor Invoice and Customer Invoice with financial postings
The difference between the customer invoice amount and vendor invoice amount represents your profit margin in this transaction.

Configuration Requirements for 3rd Party Process

The 3rd party process requires configuration in both SD (Sales & Distribution) and MM (Materials Management) modules:

SD Configuration (done by SD consultant)

  • Configure item categories in sales orders to trigger purchase requisitions
  • Set up special item category determination for third-party processing
  • Configure schedule line categories to control delivery and requirements generation
  • Set up copy control for PR generation from sales order

MM Configuration

  • Ensure vendors are properly created and maintained
  • Configure source list or maintain purchasing info records if needed
  • Set up third-party item category in purchasing documents

Important: The 3rd party process requires close collaboration between SD and MM teams. Most of the configuration is done on the SD side, while MM handles the purchasing process.

Comparison of Transfer Processes

Comparison of Stock Transfer Methods
Feature Intra-Company One-Step Intra-Company Two-Step Intra-Company STO 3rd Party Process
Movement Types 301 303 (GI), 305 (GR) 351 (GI) + GR against PO N/A (No physical movement)
Physical Flow Plant to Plant (nearby) Plant to Plant (distance) Plant to Plant (documented) Vendor to Customer (direct)
Document Flow Material Document only 2 Material Documents STO + Material Documents SO + PO + Invoices
Financial Posting At transfer posting At goods issue (303) At goods issue (351) At invoice posting
Stock Ownership Same company throughout Same company throughout Same company throughout Vendor → Customer (company never owns)
Use Case Simple internal transfers Transfers with transport time State-to-state or documented transfers Trading business, drop shipping

Key SAP Transactions

Key Transactions for Stock Transfer Processes
Intra-Company Transactions
  • MIGO - Goods movement (all types)
  • MB1B - Transfer posting (legacy transaction)
  • ME21N - Create stock transfer order
  • ME23N - Display stock transfer order
  • MMBE - Stock overview
  • MB51 - Material document list
  • MB5T - Stock in transit report
3rd Party Transactions
  • VA01 - Create sales order
  • VA03 - Display sales order
  • ME51N - Create purchase requisition
  • ME21N - Create purchase order
  • MIRO - Post vendor invoice
  • VF01 - Create billing document
  • VL33N - Combine billing due list
Configuration Transactions
  • SPRO - SAP Implementation Guide
  • MM01 - Create material
  • MM02 - Change material
  • XK01 - Create vendor
  • XD01 - Create customer
  • OX18 - Plant parameters
  • OMS2 - Storage locations

Important Note: Stock transfer processes require proper master data setup and configuration. Always verify that the necessary prerequisites are met before executing transfers. For 3rd party processes, collaboration between MM and SD modules is essential.

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