Excess inventory in SAP: how an auto-component plant finds it
The stock and open orders your own SAP plan does not need are already visible in three standard reports. Here is how to find them, rank them in rupees and give each one an owner.
Why excess builds up in a plant that runs MRP
Most excess stock is not a planning mistake. It is what SAP does with the inputs it gets:
- The customer schedule moved down. Orders placed against last month's schedule still arrive.
- Order sizes. Minimum order quantities and rounding values buy more than the next weeks need.
- Lead times set high, once, years ago. MRP orders early to cover them.
- Variants that ended. Finished and semi-finished stock for a variant no longer in the plan.
- Parts pressed or machined ahead of need, to keep a line loaded.
Your MRP already flags many of these lines as reschedule-out or cancel messages. The problem is that nobody puts rupees, a rank and an owner on them, so the list never gets worked.
Find it with three standard reports
| Report | What it gives you | Who runs it |
|---|---|---|
| MB52 | Stock on hand, at your book value | Stores or costing |
| MD07 | Days of supply from your last MRP run | Planner |
| ME2M | Open purchase order lines (no prices needed) | Buyer |
Join them on material number. For each part, compare what you hold and what is on order with what your own SAP plan needs in the next 8 weeks (longer for long-lead parts). Value the difference at book value. Rank by rupees.
The traps that make a plain total wrong
- Units of measure. One line in kilograms against a requirement in pieces can turn a ₹1 lakh line into a ₹100 crore one. Check the base unit before you add anything up.
- Stock that is not free: quality inspection, blocked and consignment stock.
- Schedule agreements in the firm zone. The supplier cannot change them without agreement.
- Material already rolled or cut for you. A steel mill slot rarely moves.
- Long-lead parts. Eight weeks is too short a window for them.
- Deliberate buffers. Keep the buffer you chose; release only what sits beyond it.
What to do with each line
| Line type | Action | Owner |
|---|---|---|
| Open order, not yet delivered | Ask the supplier to push it back to the date you need it, or cancel | Buyer |
| Stock your plan uses later | Stop new orders until it is used up | Planner |
| Stock another plant needs | Ask that plant to take it | Planner |
| Stock no plan uses | Confirm the variant end; sell as service or write off | Planning head and finance |
Pushing orders back moves cash, it does not create savings. The real gain comes when the settings that caused the excess (order sizes, lead times, safety stock) change, so it does not come back.
Context: India's auto-component makers hold about ₹98,000 Cr of inventory (Vector Consulting, Sep 2026, as reported by Autocar Pro and Outlook Business).
Questions planners ask
Doesn't SAP MRP already tell us this?
Partly. MRP raises reschedule-out and cancel messages, but it does not rank them in rupees or give each one an owner and a date. That is the step that gets the list worked.
Why 8 weeks?
It is long enough to see what the current plan really needs and short enough that suppliers can still move orders. Use a longer window for long-lead parts.
Do we need to share purchase prices?
No. Book value from MB52 is enough to rank lines in rupees.
Get this for one of your plants, free
Your stores, planner and buyer export three standard SAP reports (MB52, MD07, ME2M), with no price lists. On working day 5 after the files, you get one page: orders your buyers can ask suppliers to push back and stock your plan doesn't need for 8 weeks, each in ₹, plus parts about to run short, checked in SAP. Your files are deleted after the readout unless you go ahead.
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