PGI in SAP: What is, Post Goods Issue Process

By : Jessica Blake Jessica Blake
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⚡ Smart Summary

Picking, Packing, and Post Goods Issue form the core outbound delivery sequence in SAP SD, moving goods from warehouse stock to the customer through transfer orders, packing materials, and ownership transfer while updating inventory and accounting records accurately.

  • 🧭 Picking Process: Withdraw ordered goods from stock using a warehouse transfer order, which serves as the basis for the picking list (T-code LT03).
  • 📦 Packing Function: Assign products to packing materials of type VERP, supporting manual and automatic, single-level and multilevel packing (T-code VL02N).
  • 🚚 Post Goods Issue: Complete delivery by transferring ownership to the customer and reducing inventory through PGI (T-code VL02N).
  • 🧾 Documents Generated: PGI creates a material document for stock reduction and an accounting document posting cost of goods sold.
  • 🔁 Reversal Option: Reverse an incorrect Post Goods Issue with T-code VL09 to restore stock and correct accounting entries.
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Picking, Packing and Post Goods Issue (PGI) in SAP

What is Picking?

It is necessary to prepare correct quantity and quality of goods as specified in sales order for shipping on schedule as required by the customer. Material picking is done by warehouse management(WM). WM picking is done via transfer order. The transfer order is the basis for the picking list, it is used to withdraw the ordered goods from stock. There are three ways of picking-

  1. Pick Delivery individually.
  2. Picking can be scheduled to run at per-defined intervals.
  3. SAP SD module can be configured to execute picking automatically.

What is Packing?

Once the correct goods have been picked, the next stage groups and protects them for shipment. Packing function is used to exchange product data between suppliers and customers. The packing of product is done by the packing material. These packing materials need to be created in the material master with material type “VERP”. Packing can we done in SAP in two ways-

  1. Manual Packing
  2. Automatic Packing

There are many Steps in packing function like manual packing and auto packing with single level and multilevel packing.

What is Post Good Issue (PGI)?

After picking and packing are complete, ownership of the goods must be handed over to the customer. Post goods issue is the last Step of delivery/shipment processing. Herein, ownership of the goods transfer to the customer and the stock is updated. The carrier in turn transfers the ownership to the final customer once goods are delivered.

Steps for Picking, Packing and PGI are as below-

The following step-by-step procedure shows how the complete outbound delivery cycle is executed in SAP, from creating the delivery document through to Post Goods Issue.

  1. Create outbound delivery with reference to sales order.
  2. Create picking request.
  3. Creating Packing.
  4. Create PGI.

Step 1) Create Outbound delivery

  1. Enter T-code VL01N in command bar.
  2. Enter Shipping Point.
  3. Enter Selection Date and sales order.

Create Picking & Packing of Goods in SAP

Click on save Create Picking & Packing of Goods in SAPbutton.

A message “Delivery 80016014” has been saved.

Create Picking & Packing of Goods in SAP

Step 2) Creating Picking Request

  1. Enter T-code LT03 in command field.
  2. Enter warehouse Number / Plant / Delivery and press enter .

Create Picking & Packing of Goods in SAP

Click on save Create Picking & Packing of Goods in SAPButton.

A Message” Transfer order 0000002638 created” will be displayed.

Create Picking & Packing of Goods in SAP

Step 3) Create Packing

  1. Enter T-code VL02N in command field.
  2. Enter outbound delivery no,which was created earlier.
  3. Click on Pack button.

Create Picking & Packing of Goods in SAP

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In the next screen,

  1. Select Tab “Pack material”
  2. Enter packing material detail.

Create Picking & Packing of Goods in SAP

Click on saveCreate Picking & Packing of Goods in SAPbutton.

Create Picking & Packing of Goods in SAP

Step 4) Post Good Issue (PGI).

By PGI (Post Goods Issue) the owner ship of the material or goods will be changed from company to the customer.

  1. Enter T-code VL02N in command field.
  2. Enter Outbound Delivery number.
  3. Click on Post Goods issue Button.

Create Picking & Packing of Goods in SAP

A message “Replenishment dlv. has been saved” is shown. When we do PGI , two documents will be created-

  • Material document (Regarding stock reduction)
  1. Enter T-code MB03 in command field and Enter sales order no in sales order field and execute the report.
  2. Material document will be displayed .

Create Picking & Packing of Goods in SAP

  • Accounting document (Cost of goods sold will credited and stock value will be debited.)
  1. Enter T-Code S_ALR_87014387 in command field.
  2. Enter Material code.
  3. Click on execute button.

Create Picking & Packing of Goods in SAP

FAQs

Picking withdraws the ordered goods from warehouse stock using a transfer order, while packing assigns those goods to packing materials for safe shipment. Picking prepares the correct quantities, and packing groups and protects them for delivery.

Yes. Use T-code VL09 to reverse a Post Goods Issue. The reversal restores the stock quantity and cancels the related material and accounting documents created during the original PGI posting.

Picking uses VL01N and LT03 for the outbound delivery and transfer order, packing and Post Goods Issue both use VL02N, and the resulting goods movement can be reviewed with MB03.

AI optimizes warehouse picking routes, predicts packing material needs, and detects errors before shipment. Machine learning models analyze order patterns to improve speed, accuracy, and resource planning across the outbound delivery process.

Yes. AI validates stock availability, flags mismatched quantities, and predicts posting errors before Post Goods Issue. This reduces inventory discrepancies and helps ensure accurate material and accounting document creation.

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