SD / O2Cbeginner

SD Picking and PGI Part 1: From Delivery to Goods Issue — The Process Flow

Key takeaway

What happens between delivery creation and goods issue: picking (lean, WM or EWM), picked quantity and picking status, batch and serial number assignment, and post goods issue (PGI) — which reduces stock, posts cost of goods sold, updates the sales order and enables billing.

What this complete series covers

Learn Picking and PGI in a clear, practical sequence — from the basic idea to real project use, troubleshooting, and interview-ready understanding.

Who it is for: Best for SAP consultants, developers, and learners who want a practical understanding of Picking and PGI.
Prerequisites: Basic SAP S/4HANA navigation and an understanding of the business process are helpful. Configuration or transaction steps require suitable access to a practice or project system.
Final outcome: By the end, you should be able to explain Picking and PGI clearly, follow the main end-to-end flow, apply it in a project scenario, and troubleshoot the most common issues.

Part 1: SD Picking and PGI Part 1: From Delivery to Goods Issue — The Process Flow
Introduces why picking and Post Goods Issue exist in the Order-to-Cash cycle, what business and system events they represent, and how they connect sales, warehouse and finance.
Part 2: SD Picking and PGI Part 2: Picking Relevance, Storage Location Determination and PGI Posting Logic
Explains how picking relevance, storage location determination, and PGI account posting are configured and how they interact at delivery item level.
Part 3: SD Picking and PGI Part 3: Picking Confirmation and Its Integration with Inventory and Accounting
Explains how confirmed pick quantities on the outbound delivery drive real-time inventory management, batch/serial determination, and the financial postings triggered at PGI.
Part 4: SD Picking and PGI Part 5: Architecting Picking and PGI for Scale
An architect-level treatment of designing picking and PGI processes across complex landscapes, covering warehouse system selection, batch job architecture, performance at high volu
Part 5: SD Picking and PGI Part 4: Warehouse Integration and Mass PGI Performance
Covers how Warehouse Management (classic LE-WM or embedded/decentralized EWM) drives picking through transfer orders and handling units, and how to design and troubleshoot high-vol

System and release assumptions: Examples focus on SAP S/4HANA. Exact apps, transaction codes, configuration paths, and field names can vary by release and deployment model.

Explanation

📌 KEY POINTS
✅ Picking moves goods from storage to the shipping area; the delivery records picked quantities and picking status.
✅ Picking can be manual (lean), via WM transfer orders or via EWM warehouse tasks — the delivery is always the reference.
✅ PGI posts the goods movement (601), reduces stock, posts COGS vs inventory, and makes the delivery billable.
✅ After PGI, delivery quantities cannot change — corrections need reversal (VL09).
⚠️ For picking-relevant items, picked quantity must equal delivery quantity before PGI.

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▶ WHAT THIS SERIES COVERS
Part 1: From delivery to goods issue
Part 2: Picking relevance, storage location determination and PGI posting logic
Part 3: Picking confirmation and its integration with inventory and accounting
Part 4: Warehouse integration and mass PGI performance
Part 5: Architecting picking and PGI for scale

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▶ 1. PICKING

Delivery items relevant for picking (item category) get a picking status.
Picking location = storage location (determined or entered).
Picked quantity entered manually or confirmed from WM/EWM.

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▶ 2. BATCHES AND SERIAL NUMBERS

Batch determination in delivery (strategy) or manual assignment.
Serial numbers per serial number profile.

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▶ 3. POST GOODS ISSUE

Movement type from schedule line category (601).
Material document and accounting document created.
Stock reduced at plant/storage location; sales order requirement cleared.

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▶ 4. STATUS AND FOLLOW-ON

Goods movement status complete → billing due (delivery-related).
Document flow: delivery → WL goods issue → invoice.

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▶ 5. CORRECTIONS

Before PGI: change delivery quantities, repick.
After PGI: reverse with VL09, then correct.

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▶ STEP BY STEP

Create a delivery.
Enter picked quantity (lean) in VL02N.
Post goods issue.
Check material document, accounting document and document flow.

✅ CHECKPOINT: you can explain which accounts moved and why the order is now fully delivered.

Code example

ABAP Code

===== STEP 1: picking (lean) =====VL02N > Picking tab: storage location, picked quantity (= delivery quantity)Picking status (LIPS/Delivery status): A not picked | B partially | C fully picked ===== STEP 2: post goods issue =====VL02N > Post Goods Issue   |   VL06G collective PGIMaterial document: movement type 601 (from schedule line category)Accounting: Cr inventory (BSX) | Dr COGS (GBB/VAX) ===== STEP 3: reversal =====VL09 reverse goods issue → movement 602 → correct delivery → PGI again

Real project scenario

A spare-parts company posted goods issue immediately after delivery creation without real picking confirmation (picking not relevant). Stock records drifted because warehouse staff shipped substitutes and short quantities without updating the delivery. Making items picking-relevant with picked quantity confirmation before PGI, and training for VL09 corrections, brought inventory accuracy back above target within two months.

Common mistakes

PGI without actual picking confirmation.
Changing quantities after PGI instead of reversing.
Ignoring batch/serial requirements.
Confusing picking status with goods movement status.
Billing before PGI in delivery-related billing.

Best practices

Confirm picking before PGI.
Use VL09 for corrections after PGI.
Keep batch and serial settings aligned with warehouse practice.
Monitor deliveries picked but not goods-issued.
Explain status fields to users.

Interview angle

Questions: "What happens at PGI?", "What is picking status?", "How do you correct a delivery after PGI?"
Strong answer: picking records picked quantities (lean/WM/EWM), PGI posts 601 material document and COGS/inventory accounting, clears requirements and enables billing; picked = delivery quantity for picking-relevant items; corrections via VL09 reversal.

Practice this lesson

Quick check

1. Which document makes a standard delivery item billable in delivery-related billing?

2. A delivery quantity must be corrected after PGI. What is the correct sequence?

3. What does post goods issue (PGI) update for an outbound delivery?

Interview questions

1. What is the functional relevance of picking and packing confirmation in the outbound delivery process before goods issue is posted?

Answer it in your own words first, then compare.

2. What happens in the system when Post Goods Issue (PGI) is executed for an outbound delivery, and why is it a critical event in the order-to-cash process?