What is Batch Management?
Batch Management in SAP allows companies to manage materials produced or procured in batches (lots) with unique identifiers. It enables tracking and tracing of products throughout the supply chain and helps manage shelf life and quality characteristics.
Key Benefits
- Trace materials throughout the supply chain
- Manage product shelf life and expiration dates
- Store quality characteristics specific to each batch
- Comply with regulatory requirements in industries like Pharmaceuticals and FMCG
- Implement inventory strategies like FIFO (First In, First Out) and FEFO (First Expired, First Out)
Exp: 01.04.2023
Exp: 15.04.2023
Exp: 01.05.2023
In the example above, a single material has been received or produced in three different batches. Each batch has its own batch number, production date, quantity, and expiration date. Without batch management, the system would only show a total quantity of 450 without distinguishing between these batches.
Batch Management in SAP Value Chain
Record batch numbers when receiving goods, including vendor batch numbers and quality data
Track which raw material batches are consumed to produce which finished good batches
Store quality characteristics for each batch and manage inspection results
Manage inventory by batch, including batch-specific picking strategies
Identify which batches to ship to customers and include batch numbers in delivery documents
Batch Levels in SAP
In SAP, batch uniqueness can be defined at three different levels. This configuration determines how batches are identified across plants and materials.
Important Note
The batch level configuration (T-code: OMCT) is a critical setting that affects all modules. This should be decided at the design phase and implemented by the design lead with approval from the project manager. Changing this setting after implementation is extremely difficult.
Client Level
Batch number is unique across the entire client, regardless of material or plant.
Use case: When batch numbers come from third-party systems and need to be unique across all materials.
Material Level
Batch number is unique for a material, regardless of plant.
Use case: Most common setting (95% of projects). When batch characteristics should remain consistent when transferring between plants.
Plant Level
Batch number is unique for a material at a specific plant.
Use case: When batch characteristics need to be different at each plant, such as when plants in different countries have different measurement standards.
Understanding Batch Levels with Material Transfer Example
Activation vs. Level
Don't confuse batch level with batch activation:
- Batch Level (T-code: OMCT): Defines how unique batch numbers are across the system
- Batch Activation (Material Master): Determines whether a specific material is batch-managed
Regardless of which batch level is configured, you must activate batch management for each material in the material master.
Batch Management Use Cases
Batch management serves several critical business needs across industries:
Traceability
Track materials throughout the supply chain to identify the source of quality issues.
Shelf Life Management
Manage expiration dates and implement FEFO (First Expired, First Out) strategies.
Characteristic Management
Store batch-specific characteristics like color, pH value, density, etc.
FIFO vs. FEFO Strategies
FIFO (First In, First Out)
Consume or ship batches in the order they were received or produced.
Used when: Production date is the primary concern or when materials don't have expiration dates.
FEFO (First Expired, First Out)
Consume or ship batches in order of their expiration dates.
Used when: Materials have expiration dates, especially in food, pharmaceuticals, and chemicals.
Example: Traceability in Food Industry
A juice manufacturer produces bottles in batches. Each batch is assigned a unique batch number with production date and expiration date.
Juice Concentrate
Mixed Juice
Bottled Juice
If a quality issue is discovered, the manufacturer can trace:
- Which raw material batches were used to create the affected finished goods
- Which other products might be affected by the same raw materials
- Which customers received the affected batches
This enables quick recalls and targeted communication with affected customers.
Implementation Considerations
While batch management offers significant benefits, it also introduces complexity. Consider these challenges before implementation:
Key Challenges
- Increased Transaction Complexity: Users must specify batch numbers in all transactions
- Physical Storage Design: Warehouse layout must support batch picking strategies
- Master Data Maintenance: Additional data for each batch must be maintained
- Difficult to Deactivate: Once implemented, reversing batch management is extremely difficult
Implementation Best Practices
- Be selective with batch-managed materials - Only activate for critical materials that require traceability or have expiration dates
- Ensure physical storage supports batch management - Warehouse layout should allow for FIFO/FEFO picking
- Verify vendor compatibility - Ensure vendors can provide batch numbers and production/expiration dates
- Train users thoroughly - Users need to understand the importance of batch data entry
- Test thoroughly - Validate the entire process flow from procurement to sales
In a construction company, management wanted to implement batch management for cement because it's a critical material that affects concrete quality.
However, the physical storage setup involved a large silo where cement from different deliveries was mixed together. Although batch numbers could be tracked in SAP, there was no way to physically separate or identify which batch was being used in production.
Lesson: The physical handling of materials must align with system batch management. If materials are physically mixed, batch management serves no practical purpose.
A company implemented batch management with FEFO without redesigning their warehouse. Their existing warehouse stored materials in stacks, with the newest deliveries at the top (most accessible).
When the system directed pickers to take specific batches based on expiration dates, warehouse staff had to remove upper layers to access the required batches, then restack everything. This reduced picking efficiency by 70%.
Lesson: Warehouse layout and picking processes must be aligned with batch management strategies to avoid operational inefficiencies.
Master Data Requirements
| Configuration/Master Data | Description | Where to Maintain |
|---|---|---|
| Batch Level | Defines batch uniqueness (Client, Material, or Plant level) | T-code: OMCT |
| Batch Activation | Activates batch management for a material | Material Master (General Data, Plant Data) |
| Shelf Life Data | Total shelf life and minimum remaining shelf life | Material Master (General Data) |
| Batch Classification | Characteristics for batches (e.g., color, pH) | T-codes: CL01 (Class), CT04 (Characteristics) |
| Batch Number Range | Number ranges for batch number assignment | T-code: OMAD |
Batch Determination
Batch determination allows SAP to automatically propose which batches should be used in transactions based on strategies like FIFO or FEFO.
Where Batch Determination Can Be Used
- Inventory Management: When transferring stock between storage locations
- Production: When consuming materials for production orders
- Sales & Distribution: When picking items for delivery
Specify sorting criteria (e.g., expiration date for FEFO)
Define strategy types and assign sort rules
Allocate batch search procedures to movement types
Define how batch determination works for specific materials
Batch Determination Example: Storage Location Transfer
Scenario: Transferring Material from Warehouse to Production
You need to transfer 10 units of a material that exists in multiple batches with different expiration dates.
In Warehouse
In Warehouse
In Warehouse
With batch determination configured for FEFO, the system will automatically propose:
- Use 3 units from Batch B001 (expires first)
- Use 5 units from Batch B002 (expires second)
- Use 2 units from Batch B003 (expires last)
Without batch determination, the user would need to manually select which batches to use.
Configuration Steps
First, create a class and assign characteristics like expiration date to it.
- Create class (T-code: CL01) - e.g., "YB_EXPIRATION_DATE_001"
- Assign standard characteristic "LMVFDATE" (expiration date) to the class
- Assign the class to materials in the Classification view (MM01/MM02)
Define sort rules based on characteristics like expiration date.
Path: IMG > Logistics - General > Batch Management > Batch Determination and Batch Check > Define Sort Rules
- Create sort rule (e.g., "Y_EXP_DATE_SORT")
- Assign characteristic "LMVFDATE" (expiration date)
- Set sort sequence (Ascending for FEFO - earliest date first)
Define strategy types for different areas (inventory management, production, sales).
Path: IMG > Logistics - General > Batch Management > Batch Determination and Batch Check > Define Strategy Types
- Use standard strategy M001 for inventory management or create your own
- Assign the class and sort rule to the strategy
- Assign access sequence (e.g., ME01 for movement type + plant + material)
Assign batch search procedures to movement types.
Path: IMG > Logistics - General > Batch Management > Batch Determination and Batch Check > Allocate Search Procedures and Activate Check
- For movement type 311 (Storage Location Transfer), assign procedure M001
- Check the 'Act.' checkbox to activate batch determination
Create condition records that define how batch determination works for specific materials.
Transaction: MBC1 (create), MBC2 (change), MBC3 (display)
- Select strategy type (e.g., M001)
- Define key combination (movement type, plant, material)
- Set dialog mode (whether system proposes batches or selects automatically)
- Specify batch splits (if multiple batches can be used for one requirement)
- Assign class and sort criteria
Implementation Tips
- Start with a pilot implementation for a few materials before full rollout
- Use dialog mode initially to let users review system-proposed batches
- Consider warehouse layout and operations when implementing batch determination
- Configure batch determination to match your inventory strategy (FIFO or FEFO)