SAP BLOG Proportion based Batch Specific Unit of Measure Introduction&Testing

1. Overview of proportion based batch-specific Uom​

1.1 Active Ingredient​

In some industry sectors (for example, the pharmaceutical, chemical, steel, or paper industry sectors), the composition or attributes of products vary to some degree. Therefore, you cannot use a fixed conversion factor to convert quantities of these products into various units of measure. Instead, each batch has to be given an individual conversion factor. [1][2]

These materials are handled in logistics in batch management using active ingredient management. The total mass of the active ingredients and the carrier materials, and so on, is the physical quantity or weighted quantity. Goods movements and stock movements for these materials are carried out in physical quantities. Valuation, costing, availability checks, and planning, however, are carried out on the basis of the active ingredient quantity.

The active ingredient proportion of the total quantity can vary between batches. However, the ratio in a batch between the active ingredient quantity and the physical quantity remains constant within each batch. This means that when posting, just one of the two quantities must be entered, as the system can calculate the other quantity automatically.

1.2 Batch-Specific Material Units of Measure​

Alternative units of a material for which the conversion ratio to the base unit of measure can be defined on a batch-specific basis. [2] Batch-specific material units of measure are:

Proportion units

• Units of measure in which you can enter proportions of the base unit of material. For example, 100 milliliters of a particular batch of fruit juice contains 30.0 milligrams of vitamin C and 10.5 grams of sugar, as well as the fruit juice proportion.

Product units

• Unit of measure that describes the total quantity of a material as an alternative to the base unit of measure. For example, a piece in a particular batch weighs 10 kilograms in total or a pipe is 1250 millimeters long.

You use batch-specific units of measure when the conversion ratio for the unit of measure to the base unit of measure varies for different batches of material. Proportion units and product units are defined for a material.

While the conversion ratio for alternative units of measure to base units of measure is predetermined in the material, for proportion units and product units you have to define:

• the planned conversion ratio in the material
• the actual conversion ratio in the batch

1.3 Integration​

Proportion and product units for materials that are managed in batches can be used in all processes throughout the Logistics chain. If the batch is not yet known, the system uses the planned conversion ratio from the material to convert to the base unit of measure. Once the batch is known, the system uses the actual conversion factor from the batch.

For conversion of total quantities to batch-specific quantities, such as proportion quantities or product quantities, generally:

• The planned conversion factor is stored as characteristic in the material master record
• The actual conversion factor is stored in the batch master record.

Until the batch or actual conversion factor is known, the system uses the planned conversion factor from the material master record to calculate the batch-specific quantities. Once the batch or actual conversion factor is known, the system uses the actual conversion factor from the batch master record to calculate the batch-specific quantities.

The planned interval for the conversion factor is stored in the material master record. At goods receipt or when a new batch is created, the system checks whether the conversion factor entered lies within the material’s planned interval.

1.4 Batch-Specific Material Uom in Logistics​

Active ingredient management affects all business processes in logistics for materials that contain one or more concentrates, or one or more active ingredients. It enables you to directly process transactions in quantities of the active ingredients.





Features

The component allows you to use both batch-specific quantities and physical quantities for the following functions:

• Entering purchase orders
• Entering sales orders and deliveries
• Batch determination
• Production orders
• Bills of material/material lists
• Reservations
• Goods movements and physical inventory, with dynamic conversion upon goods movements

At goods receipt, you can enter the total quantity in kilograms or the active ingredient quantity only.

• Valuation of batch stock
• Billing and price determination

In pricing, you include only one particular active ingredient proportion of the product, for example. This means that you can include different active ingredient proportions in pricing.

1.4.1 Purchasing​

• You can store the purchase order either in physical quantities (base units of measure) or in active ingredient quantities. You therefore enter active ingredient quantities and active ingredient proportion units as purchase order quantities and order units.
• If purchase orders are made in active ingredient quantities, the purchase order quantity and physical quantity is updated in the purchase order history. In this way, the degree of purchase order fulfillment may be determined at any time in active ingredient quantities. All fulfillments are checked against the purchase order quantity.
• In purchase requisition (BANF), you can enter the batch and the requested quantity in physical quantities.
• If the active ingredient proportion of the batch is not known at the time of goods receipt, the goods receipt is carried out according to the planned proportion. If the actual proportion is taken from the usage decision in QM, the purchase order can be subsequently debited.

1.4.2 Sales/Shipping/Billing​

• The system stores the active ingredient as the quantity sold in the sales and distribution documents. If the batch is not known, the system calculates the physical quantity using the planned proportion. If the batch is known, the system uses the current actual proportion of the active ingredient.
• You can enter requests for quotations, quotations, sales orders and deliveries in both active ingredient quantities and physical quantities. You can no longer change the unit of measure
  • if the batch is known
  • if follow-on documents exist
  • if the order was entered in active ingredient quantities within delivery
  • if a delivery exists for the order
  • after the transfer of data from the order to the billing document
• The document flow is always updated in active ingredient quantities and in physical quantities. If the planned proportion is changed, the existing sales and distribution documents are not
• For scheduling agreements, the target quantity can only be entered in physical quantities (see also Constraints).
• In the delivery, active ingredient quantities and active ingredient units are transferred from the order and displayed as quantity sold and sales unit. For partial deliveries, the physical quantity is calculated using the actual proportion (batch is known).
• In pricing, you can calculate prices, discounts, and surcharges based on active ingredient quantities and active ingredient units. When you do this, you may only use one active ingredient as a basis for calculation for each condition record, even when several active ingredients are allocated to the material.
• You can bill either batch split items or the main item.
• Requirements are listed in physical quantities. If the order is entered in active ingredient quantities, the system calculates the physical quantity from active ingredient quantities and the planned proportion, if the batch is not known. If the batch is known, the system uses the current actual proportion of the active ingredient. The requirements are processed further in the sales order according to the planned proportion.

1.4.3 Batch Determination​

• Batch determination is carried out using active ingredient quantities. First make sure that:
• The underlying transaction has been entered in active ingredient quantities
• You have set the indicator Display UoMas unit of entry in the strategy record.

1.4.4 Production​

• In the bill of material or the material list, you can enter the base quantity and component quantity either in active ingredient units or base units of measure.
• Production or process orders are processed in physical quantities as before. When generating a production or process order, the active ingredient quantities are converted into physical quantities in the BOM explosion. This applies to base and component quantities.
• The lot size is stored as a physical quantity. When exploding the next stage, the alternative BOM is determined using the physical quantity of the components.
• In the production order and process order, you must note the following when entering a batch number manually: For batch items without a batch split, you must first add a batch split and then manually enter the batch number on the batch split item.

1.4.5 Planned Order​

• In the planned order, active ingredient quantities are converted into physical quantities in accordance with the planned proportion during the BOM explosion.
• If base quantities and component quantities are maintained in active ingredient units, the physical quantities are stored and displayed in base units of measure in the planned order. The active ingredient quantity is also stored and displayed in alternative units of measure.

1.4.6 Materials Planning/Availability Check​

• Planning, materials planning, and availability checks are carried out in physical quantities. You can use an inventory correction factor to take into consideration the active ingredient quantity actually available in stock.
• in the ATP availability check
• in requirements planning

You can find this function in the material master by choosing Batch ® Active ingredient management ® Inventory corr. factor (report RVBWSCOR).

• A correction factor is useful if the following scenarios arise:
• The material contains only one active ingredient
• The material contains several active ingredients, but only one active ingredient is relevant for the availability check

For example, you may have a liquid, and it may have Liters as base unit of measure, and it may also have the percent based active ingredient that is Liters of the Active Ingredient can be an alternative unit of measure. [6]

So, every movement of material in the system will be done using 2 units of measures at the same time. E.g. goods receipt of 100 Lt Liquid (which is also 80 Liters of Alcohol, because of 80% alcohol potency), for the first batch. also goods receipt of another 100 Lt liquid (which is 60 Liters of Alcohol this time, because of 60% alcohol potency) When you look at your stock, you will see 200 LT liquid, which is equivalent to 140 LT Alcohol ingredient.

What’s the use of this active ingredient data during MRP?

When you define the batch unit of measure, you define limits for it. Say, our liquid in previous example can only be between 50% and 90%, therefore we define it like that. Every time we receive this material from vendor, we make the quality inspection and determine the Alcohol percentage. However, while running MRP, system will create purchase requisitions, but it doesn’t know the percentage of the liquid our vendor will send.

How will it determine the correct quantity?

In this case, we define a percentage for MRP, and MRP will use that percentage for calculation. e.g. if there’s an industry standard that all vendors of that liquid produce it at 75%, or if we are always working with a vendor who produces 68%, then we can enter this data (per material) and MRP will calculate with that percentage.

1.4.7 Inventory Management​

• All goods are moved, and inventories are posted in physical quantities.
• You can also display values in proportion units. You can find this function by choosing Goto ®Additional functions ® Quantity conversion.

1.4.8 Valuation​

• In addition to the types of value assignment that are already available, you can assign characteristic values based on the active ingredient quantity and active ingredient price. You can thus determine the valuation price of a batch using its active ingredient quantity.[4]

1.4.9 Costing​

• The costing lot size is stored as a physical quantity.
• If the BOM is maintained in active ingredient quantities, the system converts the active ingredient quantities to physical quantities using the planned proportion.
• The prices of components are calculated according to the valuation variant and the strategy sequence for the costing.

1.4.10 Product Costing​

• When the planned calculation is released, the future planned price is set.
• On activating the planned calculation, the new standard price is set and the new active ingredient price determined from it. The new active ingredient price is valid for all batches that are created after activation. Retroactive revaluations can only be done manually.

1.4.11 Job-Order Costing​

• When determining the cost, the system calculates the active ingredient quantity using the planned proportion, as long as no batches are known by this stage.
• When the batch is known, the system calculates the actual active ingredient quantity using the actual proportion.
• Physical quantities are used for actual costing because the goods movements are carried out in physical quantities.

1.5 Constraints​

• It is not possible to define a moving average price (MAP) for an active ingredient. This valuation is only possible for a standard price of the active ingredient.
• The distribution of data via Application Link Enabling (ALE) is not supported in active ingredient management.
• In Sales, active ingredient management is not possible for:
• scheduling agreements for the automobile tier 1 market
• discounts in kind
• material determination
• At present, it is not possible to link the material specification with substances and substance compositions in the substance database of R/3Product Safety.
• Active ingredient proportions are not considered in the stock/requirements list, and when checking material availability.

1.6 Implementation Prerequisites​

To work with active ingredient management, the following settings in Customizing must be done before using (Detailed configuration steps will be provided by another document.)[5]:

• Activate Batch Specific Unit of Measure at batch management: OMWS
• Define the Batch Specific Unit of Measure for batch management： BMA1
• Create the UOM for the Batch Specific Conversion Factor: CUNI.
• Create the class with class type Batch and Organizational view equal to S.
• Create the Conversion Factor Characteristics(Numeric and single value) for the Batch
• Assigning the Conversion Factor characteristics to Batch Class：CL02

Material needs to be maintained in the material master with the following settings:

• The active ingredient proportions are defined in the classification view as characteristics.
• In the Purchasing view or Warehouse Management view, the Batch Management indicator has been set.
• Under Additional data, Proportion/Product Unit view, you:
• enter the type of batch-specific units of measure used in the Use Un field
• enter the planned value of the conversion factor for the characteristic in the Planned value field
• enter the batch-specific unit of measure that is used in the conversion factor, for example, KGAI for the characteristic active ingredient potency in the Un field,
• set the LUM indicator (leading batch-specific unit of measure)
• set the V-R indicator (valuation based on the batch-specific unit of measure, as a precondition for Calculating the Inventory Correction Factor)
• In the Accounting view of the material master record, its valuation category has to be set as X (automatic batch) and its price control parameter has to be set as V (moving average price).[9][10]
• If you want to evaluate the batch with the standard price of the batch-specific quantity, need to choose the standard price in the group Price control for these kinds of material types.

2. Testing Active Ingredient management at IDES​

The testing Environment is IDES ERP ECC6.0 SR3 and the entire configuration needed for batch-specific unit of measure (refer to sector 1.6) has been set at the system. In this IDES scenario, you want to purchase an active ingredient. The goods receipt assumes a specific potency of the active ingredient. The actual amount of the active ingredient is measured only during the quality check. The invoice is to be paid only for the quantity of active ingredient actually received. Then the purchased material will be used to produce finished-goods while carrying the active ingredient’s actual conversion factor from batch during production process.

2.1. Data and setting Used In test Process​

From the BOM we can see the finished goods are fruit drink AI-1000 which consists of semi-finished component AI-1200 and water material CW_100. Concentrate type orange Ai-1200 will be produced by purchased raw material AI-1201 (Mixture type orange 334) and Ai-1202(Concentrated orange juice). Products unit of AI-1201 is KG, and its proportion units are customized unit KI1 stand for active ingredient kg/L which means fruit content per KG. Pay attention to BOM units for those materials which will affect batch management and inventory result.

2.1.1 Finished product Material Ai-1000​

Classification view for Ai-1000 at material master has been maintained a batch class AICL0002 (Fruit juice) along with its characteristic AIC02 fruit content which already defaults a tolerant range.



At additional data->Proportion/product units, the planned conversion factor 0.100000LIL is stored as a characteristic in the material master record. Until the batch or actual conversion factor is known, the system uses the planned conversion factor from the material master record to calculate the batch-specific quantities. The V-R indicator has been ticked (valuation based on batch-specific unit of measure, as a precondition for calculating the Inventory Correction Factor).



At units of measure, the convection relationship has been set between products unit and proportion units.



The price control is ‘V’ at accounting 1 view for material AI-1000 at material master, which means its inventory is valuated with the moving average price [M]. With moving average price control, a new material price is calculated after every goods receipt, invoice receipt, and/or order settlement. This material price is an average value calculated from the total inventory value and the total quantity of the material in stock. The price vary to various valuation type which will be batch number at active ingredient management.

2.1.2 Semi-Finished Material Ai-1200​

For semi-finished material AI-1200, also have a batch class and its characteristic Aroma which already defaults a tolerant range.



The same price control V setting for AI-1200 at accounting view at material master.



The plan value for Ai-1200 is 80% percentage.



The conversion ratio for proportion units and product units.

2.1.3 Raw Material Ai-1201​

For raw material AI-1201, also have a batch class and its characteristic Aroma which already default a tolerant range, the same characteristic as AI-1200 but with different range values.



The same price control V setting for AI-1201 at accounting view at material master.



The plan value for Ai-1201 is 40% percentage.



The conversion ratio for proportion units and product units.

2.2. Entering the Goods Receipt Without the Purchase Order​

Call transaction MB1C and enter movement 501 for goods receipt, quantity 2,000KG for material AI-1201. Automatic Batch Number Allocation will assign a batch number 0000000389, and popup batch classification screen request for active percentage when posting documents. Enter a value of 50, as the tolerances lie between 40 and 60. It will reflect at batch master for this material.



From batch classification data, we can see that 50% has been updated at Aroma characteristic for material AI-1201 which batch is 00000000389.



Check accounting1 view at material master data for material AI-1201 through MM03, and choose value type 0000000389 which is batch number, and enter. Because the purchasing standard price is 400Eur/100KG, and the plan value for the active ingredient is 40%, the moving price for this batch is 500Eur/100KG. The stock value for this batch can be seen from the below figure comes from material valuation table MBEW :

2.3. Ordering an Active Ingredient：​

PO Number->4500017327



Order 100KG raw material AI-1201 using price 10Eur/KI1, which will convert to 40KI1 using the proportion percentage automatically. Check the conversion relationship at Tab Quantities/Weights at the item level.



As the price control at the accounting 1 view for raw material Ai-1201 is V, its price control value for valuation type is controlled by the configuration for its material type at SPRO. If want to ensure the batch can be posted at the standard price. Before post the goods receipt for the ordered material component, you need to reset the price control for material type Raw material from V (moving average price) to S (standard price) in Customizing. The result is PO price is V and GR price for specific batch is S.

2.4. Posting the Goods Receipt for PO​

Using MIGO to do the goods receipt with movement type 101, and generate material document: 5000012351.

2.5. Entering the Results of the Quality Inspection​

On the characteristic Overview screen, enter a value in the Results field that varies from the planned value of 40, but still lies within the tolerance value (you can see the planned value in the material master under Extras ->Prop./Product UM). In this case, we enter a value of 50, as the tolerances lie between 40 and 60%).



In the UD-Code for the usage decision, enter A2.



Quality inspection is carried out in physical quantities. Here, enter inspection lot stock is 100KG.



Checking the Batch Classification after quality inspection, the characteristic’s value has been updated as result of inspection for purchased batch 0000000390.



At accounting1 view of master data for raw material AI-1201, displaying the Actual Value of the Batch 0000000390(valuation type) which is 500EUR/100KG, covert from 50% active ingredients compare with default plan value 40%.

100KG：400EUR->40KI1：400EUR->50KI1：500EUR

2.6. Displaying the Purchase Order History​

Currently, the only Purchase order history at the item level for material ai-1201 at PO 4500017373 is 40 KI1 goods receipt.

2.7. Adjustment Posting for the GR Inspection Lot​

After GR inspection lot adjustment from planned 40% to actual 50%, need to do the adjustment for PO at the system. By using Tcode MWBQ, enter the inspection lot number and execute, the system confirms the adjustment posting.



Check the Purchase Order History again after PO posting adjustment; we can notice that system generates a new material document 50000012361 with a value of 100 EUR.



Check this material document; we can see its movement type is 141.



From the movement type configuration view we can know that the movement type 141’s description is GR subsequence adjustment.



Corresponding FI document for material document 50000012361 is 4800000000：

S->Debit : +100EUR inventory-Debit/credit to a material from a price change

H->Credit: -100EUR losses-Revaluation from a price change

2.8. Invoice Verification using PO price with the actual proportion​

Invoice number: 5105608882



Input Purchase order number 4500017327 at PO reference Tab and enter, system will bring the PO’s item actual quantity and its amount. Because choosing Calculate tax at Basic data and tax rate is 16%, so the total amount for PO should be 50*10 + 50*10*16% = 580. Save and post this invoice.



Invoice’s corresponding FI document 5100000003 contains three items: payments for vendor, goods receives and tax fee.

If invoice price is different compared with PO price but within tolerant range, the traffic light for the balance field is green which means invoice still can be posted. At this figure, only 1EUR difference can be accepted.

2.9. Invoice Verification using PO price with plan proportion​

The material management small differences control by FI auto-posting configuration: OBYC.



Corresponding debit/credit accounts for DIF shows as above.



FSP0： view chart of account



Tolerance limit：OMR6



Tolerance limits setting



Tolerance limits for price variance.



Increase lower limit as 500 EUR for price variance.



If vendor sale raw material AI-1201 by-products unit instead of proportion unit. We change the amount price as the original PO price for planned quantity 40KI1. The FI document simulation result is:

Line item1: 160000 Fa. Herrmann & Riemer / D-37603 Holzminden 464.00- EUR



The vendor account comes from its master data. The price value is what we pay to vendor actually: 40*10 + 40*10* 16% = 464EUR.



Line item2:191100 Goods Rcvd/Invoice Rcvd (third party) 500.00 EUR





The actual GR value is 50qty* 10, and its account source information.

Line item3: 300000 Mischung Typ Orange 334 80.00- EUR



The valuation class for raw material ai-1201 is 3000 at material master.



The inventory posting accounts for valuation class 3000.

Line item4: 281000 Income – price variances 20.00- EUR



The cost (price) differences account for valuation class 3000.

Line item5: 154000 Input tax (See account assignment text) 64.00 EUR



The account configuration for input tax shows as above.

2.10. Process Orders and Order Costing​

Create a process order (not production order) for semi-finished AI-1200 which quantity is 80kg. According to its BOM, the requirement for AI-1201 is 32KG, and AI-1202 is 48kg (not KI1).



Choose goto->Costs ->Itemization to display the detailed costs. For raw material AI-1201, the price given by system is 65.69EUR/32KG = 2.05EUR/KG.



Currently, the moving price for AI-1201 is 205.28EUR/100KG ≈2.05EUR/KG where the system itemization cost estimation comes from. Please notice that the price is an overview screen and no batch or valuation type been chosen at this screen.



Choose raw material AI-1201 at the component screen, then execute batch determination for this component. Select batch 0000000390 and copy return.



After batch determination for AI-1201, choose Goto->Costs ->Itemization to display the detailed costs again. For raw material AI-1201, the value given by the system is updated as 160eur. And its price will be 160eur/32kg = 5eur/kg for batch 0000000390. Release the process order gets its document number which is 70000842.



The moving price for material AI-1201 at accounting1 view for valuation type 0000000390 is 500eur/100kg = 5eur/kg.

2.11. Material Consumption for the Process Order​

Using MB1A to do the good issue for process order 70000842 and get the material document number: 4900038312.



Using MB31 to do the Good receipt for process order 70000842 and get the material document number 5000012362. Because AI-1200 also maintained active ingredient characteristic at its batch classification, when you save this document, need to enter a characteristic value between tolerant ranges for the batch 0000000392 created and stored for this GR. Here we enter 70%.



Characteristic has been updated for semi-finished material ai-1200 with batch 0000000392.

2.12. Creating a Production Order​

Create a production order for finished goods material: AI-1000 with 80L quantity.



According to its BOM, 80* 0.8KI1 = 64KI1 require 64KI1AI-1200 and 16L water CW_100.



At the components screen for this production order, select the item of the material component (AI-1200) and choose batch determination. Select batch 0000000392 and copy return. We can get 80L*70% =56KI1 for AI-1200 from this batch, and need an extra 8 KI1 for a total requirement 64KI1.



Cost itemization analysis for Ai-1200 with batch0000000390: 240.54eur = 80KG* standard price 300.68/100.

2.13. Goods Receipt for the Production Order：​

Using MB31 to do the Good receipt for production order 60003506 and get the material document number 5000012363. Characteristic value for batch 0000000394 we enter 0.1.

2.14. Inventory Corrections for the Finished Product​

At the time of the GR posting, the stock of the finished product reflects the planned value of the stock. This now needs to be adjusted by using TCODE MWBK.



Check all batch’s stock for material AI-1000. Batch 0000000114 is old stock and batch 0000000394 is just produced from the above process. (Should be 80L here, screenshot was captured after a 2L sales order.)



The fruit content characteristic value is 0.02 LIL for batch 0000000114.



Fruit content characteristic value is 0.1 LIL for batch 0000000394. (Entered when GR.)



Actual active ingredient: 78L* 0.02 + 78L* 0.1 = 9.36LI1

Conversion to standard product unit: 9.36LI1 / 0.1 (planed value) = 93.6L



Correction factor: 93.6L/ (78L + 78L) = 93.6/156 = 60%



Display the valuation information for finished goods material AI-1000 at accounting1 view at material master. The total stock is 156L.



Detailed batch stock records stores at material valuation table MBEW.

3. APPENDIX​

Reference documents:

[1]SAP Help 4.5B-> Active Ingredient Management

SAP Help Portal

[2]Split Valuation – Valuation Category “X”

http://155.56.92.22/wiki/pages/viewpage.action?pageId=193693045

[3]SAP Help Erp2005-> Batch-Specific Units of Measure

SAP Help Portal

[4]SAP Split Valuation for Materials

SAP Split Valuation for Materials

[5]Define Batch Specific Unit of Measure

http://www.sapsword.com/home/sap-batch-management/sap-batch-specific-unit-of-measure

[6]Batch Characteristics while Running MRP

Batch Characteristics while Running MRP

[7]Material Quantity Calculation With Batch Data

http://help.sap.com/saphelp_46c/helpdata/en/f9/dde7270c2011d396fb080009c17b92/content.htm

[8]Price difference between Goods Receipt PO and AP Invoice

http://155.56.92.22/wiki/pages/viewpage.action?pageId=21693329

[9]Price Control V or S in material type

http://www.erpgreat.com/materials/price-control-v-or-s-in-material-type.htm

[10]Valuation with the Moving Average Price

http://help.sap.com/saphelp_erp60_sp/helpdata/en/d2/cb4f51455611d189710000e8322d00/frameset.htm

[11]Price Control with and Without the Material Ledger

http://help.sap.com/saphelp_erp60_sp/helpdata/en/d2/cb4f51455611d189710000e8322d00/frameset.htm

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