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. 

• 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.     

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.

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. 

Constraints

1. In some specific cases, SAP standard serial number functionality may not fulfill all the business requirements without additional customizing. So for any gaps exist, need to review and analyze case by case in detailed design phase to develop the customized solution to meet the special requirements. 
2. SAP standard serialization numbering doesn't reflect the relevant Batch numbering. 
3. Some standard Fiori Apps don't support serial number feature, for example F1061 Transfer Stock - In Plant. In this case, classic GUI transaction MIGO will be required. (Refer to SAP Note 3459964)
4. QM inspection at serial number level in conjunction with EWM is NOT (yet) supported in S/4HANA. 
   1. Note: based on SAP Notes 2545012 - At  goods receipt no serial number transfer to inspection lot (for inspection origin from EWM). Instead at inspection result recording serial numbers need to be recorded manually (transaction QE51N).

Impacts

Serial number brings the visibility for end to end goods movements, and it can also present some challenges, which have the impacts on the followings. However, we can configure the functionality so that the functionality can be gradually introduced by material and plant. This flexibility can help mitigate potential risks and workload impacts.

1. Impacts on Processes

• Process Complexity: Serialized item management adds complexity to processes such as goods receipt, picking, packing and customer return, plus mixing with Handling Unit (HU) management, Extended Warehouse Management (EWM) and Transportation Management (TM). Each serialized item requires individual tracking, which can slow down operations compared to non-serialized items. Therefore, effective process design, such as utilizing the handheld scanner in the relevant operations and other automation mechanisms like EDI interfaces are essential to mitigate these challenges.
• Performance Optimization: if business needs to handle large volumes (eg. tens of thousands) of serialized inventory, it can impact system performance. In this case, optimizing database queries and system resources are essential to maintain performance. 
• Visualization: Since serial number doesn't directly reflect the batch numbering, user won't be able to tell the batch number by relevant serial number. However, since batch can be configured as mandatory for the relevant serialized material, batch number will be also associated with relevant serial numbers. 
• Enhancing Labelling: After SN is introduced, each piece of item will be identified by combination of the batch and serial numbers, this will need to be reflected in the relevant labels design and printing, such as material label.

2. Impacts on Other Domains

1). WM/EWM

Extra Configuration: Configuring serial number management in SAP EWM requires detailed setup. This includes defining serial number profiles, number ranges, and linking them to specific products, storage types in EWM, and handling units (HU). Configuring EWM's advanced features for serialization adds to the complexity. 

Scalability: As businesses grow, managing serialized items across multiple warehouses and locations becomes more complex. SAP EWM must scale effectively to handle increasing volumes of serialized inventory without compromising performance or data integrity.

2). Data and Migration

Data Integrity: Maintaining accurate and consistent serial number data is crucial. Each serialized item must be uniquely identified and tracked throughout its lifecycle in the processes. Any discrepancies can lead to inventory inaccuracies and operational inefficiencies.

• New data object: Serial Number
• Data Uploading/Migration: Serial Numbers need to be added when uploading the relevant stocks (Stock-on-Hand) or transactions from legacy SAP ECC systems to future S/4HANA.   

3. Impacts on Developments

Developments may be required to:

• Enhance the standard Fiori Apps to support the serial number features. Otherwise, business can also choose the Fiori version of traditional GUI transaction, which doesn't have constraints on serial number functionalities.
• Build the visual connection between the batch numbering and serial numbering. However, since serial number will always be associated with a batch, as long as both serial number and batch number are printed in relevant labels, this can be a nice to have requirement.
• Automatically copy the master roll / bulk FG batch number to subroll / packed FG batch number.           

4. Impacts on Interfaces

If serialized materials are transacted in 3PLs (Third Party Logistics) or other TPAs (Third Party Applications), such as Neptune and Weighbridge, serial number information will need to be communicated in the relevant interfaces. The implication here is the relevant applications, eg. 3PL systems or TPAs, also should have the capability to add the serial number information, either through configuration or customizing.   

5. Impacts on Change Management

Operators must be trained thoroughly on handling serialized items in SAP S/4HANA. This includes understanding the correct procedures for entering, verifying, and updating serial numbers, which are essential to ensure data accuracy and operational efficiency.

Business Rules

Potential business rule if Serial Number management is adopted:

• Serial number will be activated for the materials requiring track & trace at individual  item level, especially need to ensure the regulatory compliance.
  • Note: If any regulatory requirement exist, it will be captured in Deliverable - Regulatory Requirements.

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, different batch numbers will be generated for either Master Roll or Bulk FG, as well as each of the individual FG items. Development will be required to maintain the numbering link between the original batch and the subsequent batches.

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.

As shown in the above matrix, comparing with option B (Replicate As-Is batch number logic), although more efforts are required in change management, option A (Introduce serial number combined with batch management) is a standard SAP solution with better traceability of individual item movements. This solution can be easily implemented to any future scenarios where business needs to identify and differentiate between individual items of material, and have the visibility of the historical movements. Therefore, option A is our recommendation as we moving forward to SAP S/4HANA.     

See also

Glossary

Change log

Workflow history