Issue

As a good practice, batch is globally used in Syensqo to track and trace the movements for homogenous partial quantities of required materials/products. 

However, in the Composite Materials business, batches are also used to track and trace the movements for individual pieces of materials in some scenarios, even if they have the same characteristics and should belong to the same batch. This is not a standard use of the concept of batches. This KDD assesses the option of using SAP serial numbers to manage the individual pieces of items in the relevant scenarios. 

Recommendation

SAP offers serial number functionality to enable detailed tracking and tracing of individual material units throughout their lifecycle. However, for GBU Composite Material, giving the specific business requirements outlined below, Batch Management will still be the recommended approach for managing lot/sublot processes, including both raw materials, manufactured products as well as the tolling products. 

• Inventory must be managed using a continuous variable unit of measure (UoM), such as kgs or meters. In this case, a discrete UoM such as each or piece, which is a fundamental requirement for enabling serial number management, is not suitable as the base UoM.  
• The conversion between a continuous variable (eg. meters) and a discrete UoM (eg. each) can vary even across different production batches of the same material. Each conversion factor is limited to rounding to the nearest unit with decimal places.    
• The customer defines specific rules to generate the required batch numbers linked to particular specifications.  

Based on the above requirements, leveraging track and trace functionalities through serial number management would require extensive custom developments and introduce additional complexity. This approach conflicts with the project’s principles of standardization and simplification. Therefore, Batch Management remains the recommended solution.     

Additionally, the use of embedded intelligent logic in the batch numbering structure can limit scalability and flexibility. It is therefore recommended to decouple this logic from the batch number itself. The approach for achieving this will be further explored during the detailed design phase.  

Background & Context

In the following business scenarios, batch number is used to track and trace the movements for individual pieces of material in Syensqo.

1). Sublot Scenario#1

For example, Sublot Rolls are made from a Master Roll as per steps below:

• A Master Roll is a piece of carbon fabric of 1 meter wide x 100 meters long
  • A SAP batch number, for example MROLL1, is generated and assigned to the Master Roll
• A Process Order is created to manufacture Sublot Rolls
  • The master roll (batch MROLL1) is consumed
  • 5 separate pieces of sublot rolls are produced
  • Each sublot roll is 20 cm wide x 100 meters long
  • Another 5 SAP batch numbers are generated to identify each of the sublots: MROLL1 0001, MROLL10002, ... , MROLL10005  

2). Sublot Scenario#2

For example, the production of Parent Tape, Sub-rolls and Slit-rolls can be:

• The 1^st Process Order is created to produce Parent Tape with batch# PTAPE1 
• The 2^nd Process Order is created to produce Sub-rolls from the Parent Tape
  • For example, 3 Sub-rolls are produced with 3 different batch numbers: PTAPE101, PTAPE102, PTAPE103 
• The 3^rd Process Order is created to produce Slit-rolls from a Sub-roll, and pack into boxes 
  • For example, 2 Slit-rolls are produced from Sub-roll batch# PTAPE101, with different batch numbers : PTAPE10101, PTAPE10102
  • Pack 2 Slit-rolls into one box 

3). Non-Sublot Scenario 

In another case, packed FG (finished goods) are produced from a bulk FG.

F or example,

• 500 liters of a liquid adhesive (bulk FG) is produced with SAP batch BATCH1.
• The bulk liquid adhesive then has been packed in 5 liter cans (packed FG).
  • In total, there are 100 cans of the adhesive in BATCH1.
  • Business may number each individual cans by using unique numbers related to adhesive BATCH1, eg. BATCH1 001 for can#1 , BATCH1 002 for can#2 , etc.
  • Those unique can numbers look like sub-batch numbers, in some cases, they're stored in SAP, but in other cases, they are only being used to physically identify the cans and not stored in SAP. 
  • If business need to track & trace each individual can movements, they can't do so in SAP currently since the can number is not stored in the system. In this case, we need to bring the information back to SAP to match with the physical activity.

In those scenarios, business will print the Master and/or Sub Batch depending on the requirement. Batch numbers are limited to 10 characters. Most are 6+4 or 6+3, but other schemes are also possible.

Also, in the above scenarios, relevant raw materials are following the same batch naming rules as the manufactured products. 

Assumptions

1. Business needs to track & trace the historical movements of the relevant materials at the individual item level.
2. Master Roll and Sublot Rolls use different material numbers.
3. Bulk finished goods and related packed finished goods use different material numbers. 
4. Inventory must be managed using a continuous variable unit of measure (UoM), such as kgs or meters, instead of a discrete UoM such as pieces.

Constraints

Using one batch number per item to mimic serial number tracking is technically possible, but it introduces several key constraints and challenges that often make it impractical.

1. Intelligent logic embedded in the batch numbering structure limits its scalability and flexibility.
2. Assigning a separate batch to each individual item results in a significant increase in batch master records, leading to higher master data maintenance efforts.
3. Processes designed for batch handling, such as inspection lot usage decisions, become excessively granular and unnecessarily complex.
4. Batch numbers do not offer the same out-of-the-box track and trace capabilities provided by serial numbers. Custom reports need to be built to fulfill the corresponding requirements.

Impacts

In SAP, Batch Management is designed to manage groups of homogeneous material (e.g. lots or production batches), whereas Serial Number Management is specifically designed to track individual items uniquely throughout their lifecycle. Assigning one batch number per each material piece to mimic serial number functionalities is technically feasible, but it introduces several important implications.

1. Deviation from Intended Use

SAP batch management and serial number management are designed for different purposes. Repurposing batch functionality can lead to potential inconsistencies. For example, SAP allows to merge batch numbers which contradicts the intention of a unique identifier. This can also create confusion when both functionalities are used in the company. User trainings are required. To mitigate these risks, user training is essential, and clear business rules must be established to ensure proper control and governance.  

2. Performance and Data Volume

Assigning a unique batch to each material piece will significantly increase the number of batch master records and the overall database size. This can potentially slow down batch-related transactions, such as inventory movements, batch searches, and reporting.

3. Data Maintenance Efforts

Maintaining a large number of individual batches will require greater effort, increasing the risk of human error and adding complexity to automation processes.

Business Rules

• When batch number is utilized to mimic serial number, transactions such as batch change and batch merge should not be performed.
• Information such as customer specifications should be stored in the relevant batch characteristics. 

Options considered

Option A: Introduce Serial Number (SN) combined with Batch Management

With this option, during goods receipts from production, relevant Serial Numbers (SNs) will be generated and assigned to each of the material items. It is also possible to generate the required SNs in advance and prepare the relevant labels before goods receipt. SN and relevant Batch number should be printed on the label with the scannable barcode to streamline the downstream transactions such as stock transfer, stock take, picking/packing and goods issue etc.

1. Sublot Scenario

For the above Sublot scenario, with introducing SN, the Sublot Rolls will be received into the same batch number as the one for Master Roll, and with serial numbers generated for each of the Sublot rolls.

Note: a development may be required to force receiving Sublot Rolls with Master Roll batch number. Otherwise, discipline will need to be established to follow the batch rule. 

2. Non-Sublot Scenario

Similarly, for the above Non-Sublot scenario, packed FG (Finished Goods) will be received using the bulk FG (eg. 500L liquid adhesives) batch number. If business needs to track the movement of each individual cans, serial numbers can be generated for each of the packed FGs (eg. 5L cans). 

Option B: Replicate As-Is Batch Number Logic

With this option, one batch number will be assigned to each piece of sublot rolls or packed FG items. Custom developments are required to automate the processes:

• Automatically generate the batch number in process order based on the pre-defined rules.
• Automatically generate the batch number in IPA during goods receipt of sublot rolls.

1. Sublot Scenario

For the above Master Roll example:

2. Non-Sublot Scenario

For the above liquid adhesives example, sub-batch numbers can be generated in or outside SAP depends on the business track and trace requirement.

Evaluation

Based on four different criteria, the below matrix compares the pros and cons of above 2 options when tracking and tracing the movements for individual piece of materials. Each option is assigned with a Harvey Quarter to indicate the extent of alignment with each criteria. A four quarter means fully aligned, whereas a zero quarter means not aligned at all.

Although option A - serialization combed with batch management - is a standard SAP solution with better traceability of individual item movements, it requires extensive custom developments to meet specific inventory management business requirements. This reduces its overall score against the evaluation criteria outlined below.

See also

Glossary

Change log