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The Importance of Batches for Metals Companies

Metals companies very often use configurable materials in their make-to-order sales process. The best practice in Mill products foresees that the semi-finished materials or products when they are put to stock use the batch concept to carry the actual configuration as batch characteristic. 

An example would be steel sheets, where the alloy specification, the coating and the dimensions are entered as configuration into the sales order. In stock the sheet would have the same parameters now as batch characteristics. When using such a concept, important for the usability is the fast entry of characteristics in sales order, purchase order, production order and goods movements: SAPhelp on Fast entry of Characteristics

In standard a powerful transaction when using batches is the batch info cockpit, where a very good overview over batches and their characteristics together with their stock situation is given, and also where-used lists are available: Batch Info Cockpit  

Further helpful is the concept of the WIP (work in process) batches that supports the batch tracing in production scenarios where not all production steps are modelled with stock materials. The WIP batch provides visibility in the relationships within the production order. An example would be that 5 cold-rolled coils, handled in batches go into a production order and after hot rolling, cutting and coating a number of sheets in different sizes are posted to stock as individual batches. Using WIP batches would create transparency on the way how each individual sheet was produced: WIP Batches 

(Remark: WIP batch available since ERP 6.0 EhP4, or as proccess batch (Mill Products enhancement since R/3 Enterprise 4.71) Process Batches

See also the related article in BPX that describes how batch history information can be consolidated from different systems using SAP MII: How-to-Guide

With the latest ERP enhancement packs the WIP batch is now even integrated into the highly relevant order split functionality Order Split

A ‚light-weight’ batch management can be achieved using the documentary batch, where just the batch info is maintained but materials in logistics are not handled as batches:

The concept of batch specific units of measure is often found in metals companies, e.g. to handle a steel sheet parallel in square meters and kilograms, or to measure ore in total tons, dry tons and kilograms of metal content: Batch UoM

Another new development in ERP 6.0 enhancement packs is the make-to-stock production of configurable material, where the material valuation issue is solved by using individually valuated batches which receive their batch value form the production order costing. That approach allows a sufficiently precise accounting and provides more flexibility in logistics compared to a full make-to-order approach, where all production steps from the slab to the sheet are performed under assignment to a sales order: batch valuation of configurable materials

The described concept of the batch usage is an integral part of SAP’s Best Practice for Flat Steel. The chapter T04 MM & Batch Configuration gives all the details for the scenario configuration. The best practice might be used to accelerate implementations or as a knowledge source.

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  • Hej Udo,

    this concept of handling deviations in production  (Planned attributes in variant configuration, and actual attributes after production in batch classification) is common in several other industries like paper, textiles or plastics.

    This leads to the immediate recommendation to obviously use the same characteristic name for the same semantic object in the different class types. Why would you do that? First, this makes copying planned to actual values easy, which is interesting when manufacturing & receiving new batches . Secondly, this makes looking for a batch within batch determination also easier.
    Thirdly, if you would like to use the concept of characteristic dependent planning and match supply to demand, the characteristic name needs to be the same.

    Overall, batches are a long story, and there seem to be always to many of them.


  • Great and very useful article!
    We are going to use batch valuation in our project (primary metals industry) because we want very precise cost accounting. But im very doubt about ML perfomance because there seem to be a lot of batches (about 200 000 - 300 000/month). And this is the only our trouble with batch valuation.
    So, what do you say about ML perfomance with batch valuation? Have you seen live productive systems with ML and batch valuation in CO? How many batches was there and how long did it take to close ML?
    • Hi Alexey,
      200.000 - 300.000 batches per month is really a lot.
      An indication about performance impact by number of materials is given in Note 668170 - Performance and material ledger system resource usage. You see there that there are big variations, but the number you give is at the upper limit. Then assuming that each month adds new batches this becomes indeed critical. Material Ledger learnt to deal with higher numbers and there are tricks that have the effect that the systems does not care about batches that are no longer active: Note 980475 - Period-end closing processes too many materials. But still I would be hesitant to recommend the combination under the circumstances. I am afraid only a serious test could give a definitive answer.
      best regards,   Udo