Issue

This Key Decision Document (KDD) outlines the decision, considerations and recommendations essential for determining and managing what materials will be serialized and whether equipment serialization is required to support business processes and incorporate new functionalities S/4HANA will bring to Syensqo. 

This needs to provide Syensqo with a consistent approach to determining what materials are eligible for serialization from a maintenance perspective so that a global standard is followed for all sites. 

Recommendation

Based on a comprehensive evaluation and various business workshops held, we recommend implementing Material Serialization as the preferred approach.

• Equipment Serialization is not recommended because the identified use cases (e.g. seals, motors, pumps) require tracking at a spare-part level, not as installed equipment in the asset hierarchy.

• Material Serialization provides the necessary ability to track individual spare parts by serial number across plants, warehouses, and maintenance orders, without creating unnecessary complexity in the equipment master data.

• This approach would ensure global harmonization, support compliance needs, and balance business requirements with system simplicity.

Background & Context

Syensqo is currently using serialization at some plants. While this solution has served its purpose, it has reached a point where it must evolve to accommodate the evolving needs of the organization. The SyWay project is introducing several new capabilities and functionalities that require a standard solution. Among these capabilities are enhanced Fixed Asset and Equipment integration, with seamless integration embedded in the SAP S/4HANA platform.

The primary goal is to standardize the way in which serialization is handled. The transition to SAP S/4HANA presents specific challenges that need to be addressed, particularly around integration and process optimization. In addition, the organization seeks to streamline maintenance workflows, ensuring greater operational efficiency and real-time access to data. The new approach should offer a comprehensive, user-friendly experience that enables users to manage tasks and responsibilities more effectively, while also improving data visibility and supporting informed decision-making.

This evolution is aimed at ensuring a smooth operational transition during the ERP upgrade, enabling Syensqo to fully capitalize on the new features within SAP S/4HANA such as real-time asset tracking. 

Assumptions

• Serialization is only required for spare parts (e.g. seals, pumps, motors) where traceability is critical.

• No requirement to create equipment master data for these parts, since they will not be installed or dismantled within the functional location structure.

• All sites will adopt the same global rules for identifying serialized materials.

• Material type ZIND will be used to group serialized spare parts.

Constraints

Project Timeline: The serialization solution must be implemented within the timeline set for the SyWay project.

Master Data: Requires harmonization of material master records across business units to avoid duplicates.

Change Management: Business users must adapt to new processes in stores and maintenance orders involving serialized spare parts.

Training:

Impacts

Positive:

• Improved traceability of critical spare parts across plants and orders.
• Reduced master data complexity by avoiding unnecessary equipment creation.
• Consistent global approach across all Syensqo business units.
• Better support for regulatory, warranty, and compliance tracking.

Negative:

• Training required for warehouse and maintenance users to handle serialized materials.

• Additional process checks needed when issuing or returning serialized spares.

• Reporting needs to be adapted to leverage serialization fields.

Business Rules

Guiding principles - how to define materials requiring serialization, e.g. 

• Criticality                                        
• Value 
• Regulatory
• Warranty
• Inventory Controls (tracking against specific maintenance requirements)
• Bad Actors

Options considered

List the options (viable options or alternatives) you considered. These often require a longer explanation with diagrams, or references to other documents (links are best, but attachments are also possible). Use enough detail to adequately explain what you considered so that a project or business stakeholder reviewing this decision will not come back and ask "did you think about...?"; this leads to loss of credibility and questioning of other decisions. This section also helps ensure that you considered enough suitable alternatives rather than just copy/pasting SAP's recommendations.

Option A: Fully Fledged Equipment Serialization

In this approach, each serialized part is created as an equipment object in SAP, meaning every individual spare part, such as a seal, pump, or motor, exists in the equipment master and can be installed or dismantled within the asset hierarchy. This enables full lifecycle traceability from procurement to decommissioning. Each item can be linked to a functional location, capturing detailed usage history. It also supports advanced scenarios such as preventive maintenance, performance monitoring, and digital twins at the part level, with strong integration into Asset Accounting and other SAP modules.

However, this approach creates significant master data volume, potentially tens of thousands of new equipment records for parts that may never require equipment-level management. It adds complexity to maintenance processes due to install and dismantle transactions, requiring additional data entry for each spare part. End users would face higher training and governance efforts, and the solution is generally over-engineered for the stated business need of tracking spare parts rather than managing their installed lifecycle. Furthermore, system performance and storage requirements would increase.

Option B: Equipment Refurbishment without Serialization

This approach manages spare parts through material classification only. Materials can be refurbished and reused, but no unique serial number is assigned. It offers a very simple setup with minimal master data requirements and avoids system complexity, as materials remain generic. End users benefit from easier stock management because there is no need to handle serial numbers. This method works well when part interchangeability is high and unit-level traceability is not required.

The downside is that unit-level tracking is impossible, meaning it is not possible to distinguish between identical parts. Lifecycle information for individual items, such as refurbishment history or usage location, cannot be captured. Support for warranty management, compliance reporting, or investigation of recurring failures is limited, and visibility across plants and maintenance orders is lacking. This approach fits low-value, low-criticality spare parts or consumables with short lifecycles where tracking effort outweighs benefit.

Option C: Material Serialization - Recommended

With material serialization, materials are serialized in the material master so that each unit receives a unique serial number, but no equipment object is created. Serial numbers are tracked through logistics and maintenance processes, including goods receipt, issues to orders, returns, and stock transfers. This approach provides unit-level traceability without the overhead of creating unnecessary equipment records.

Material serialization aligns directly with business needs, allowing spare parts to be tracked in stores, across plants, and within maintenance orders. It supports regulatory, warranty, and compliance requirements where unit-level visibility is mandatory, while remaining simpler to manage than full equipment serialization, reducing training needs and process overhead. The approach ensures a globally harmonized process and offers a balanced solution that avoids over-engineering while still delivering traceability.

The main limitations are that detailed maintenance history per unit, such as install and dismantle information within the asset hierarchy, cannot be recorded. Some reporting adjustments are required to fully leverage the serialization fields, and users must be trained to handle serialized materials correctly in inventory and maintenance orders. This approach is ideal for spare parts such as mechanical seals, motors, and pumps where the business needs to know the part’s location and usage but does not require installation tracking. It also works for refurbished or reusable items that move between plants and for materials subject to warranty, compliance, or high-value risk where unit-level visibility is essential.

Evaluation

The evaluation focused on four dimensions: complexity, feasibility, implementation effort and cost, and ongoing operational impact, while also testing each option against the program principles of simplicity, standardization, and global harmonization.

	Option A - Equipment Serialization	Option B - Refurbishment w/o Serialization	Option C - Material Serialization
Traceability & Compliance	Full lifecycle traceability, strong compliance support Over-engineered for spare parts	No unit-level traceability Limited compliance and warranty tracking	Unit-level traceability across plants and orders Supports regulatory and warranty needs
Complexity & Master Data Effort	Significant increase in master data records Complex maintenance processes	Very low complexity, minimal data effort	Balanced effort – serial numbers without equipment objects Some reporting and training adjustments needed
Business Fit / Process Alignment	Misaligned – designed for installed assets, not spare parts	Simple fit for low-value consumables Insufficient for critical spares	Aligned to business needs – tracks spares without equipment overhead

Option A would deliver maximum traceability but with very high complexity, cost, and master data overhead, making it disproportionate to Syensqo’s needs. Option B is simple and low-cost but fails to provide unit-level traceability, creating compliance and warranty gaps. Option C strikes the right balance: it enables serial-level tracking without unnecessary equipment records, is feasible to implement, aligns with program principles of simplicity and harmonization, and minimizes ongoing operational impact.

See also

Insert links and references to other documents which are relevant when trying to understand this decision and its implications. Other decisions are often impacted, so it's good to list them here with links. Attachments are also possible but dangerous as they are static documents and not updated by their authors.

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