Batch Determination in Inventory Management: (FEFO,FIFO,LIFO)
Batch Management increases production, improves quality, reduces cycle times, and facilitates compliance for your company to meet most industry standards. A batch is a consistent unit of material that’s defined in your SAP system with unique specifications. A batch represents a single subset of the total quantity of material that is held and produced during a production run. Many production runs can be used to produce a production lot.
In a real-world scenario, you’ll be receiving one material in a number of batches, and this will be kept in storage location stock or in warehouse storage bins. When you want issue the issue the material to production, you need to have a strategy to choose the batch. You can define the strategy in the system, where the system determines and offers up the right batch to pick. This process is called batch determination.
Batch determination uses the condition technique. Strategy records of the respective application determine batch determination. Different strategy records in the system have to be created for different purposes such as goods issue to production, goods issue to customer and so on. Batch determination can be used in the goods movement, production/process order, sales order/delivery and transfer order functions.
Step 1: Creation of Condition table.
Spro—Log Gen –Batch Management—Batch Determination and Batch check—Condition table—Define Inventory Management Condition tables—Create Condition table for Inventory Management.
Step 2: Define Access Sequence
Spro—Log Gen –Batch Management—Batch Determination and Batch check—Access Sequence —Define Inventory Management Access Sequence —Create Access Sequence for Inventory Management.
Standard is ME01.
Step 3: Strategy Type
Spro—Log Gen –Batch Management—Batch Determination and Batch check—Strategy types—Define Inventory Management Strategy type. (and assign access sequence which defined above)
Step 4: Batch Search Procedure.
Spro—Log Gen –Batch Management—Batch Determination and Batch check—Batch Search Procedure –Define Inventory Management Search Procedure.
Define Procedure and assign strategy type.
Step 5: Batch Search Procedure allocation
Spro—Log Gen –Batch Management—Batch Determination and Batch check—Batch Search Procedure allocation and check activation – Allocate IM search procedure/Active check.
Spro—Log Gen –Batch Management—Shelf life Expiration Date—Set Expiration Date Check.
Step 7: Use T -code BMSM when you are batch determination first time in client by which system will copy all standard char from 000 Client.
Step 8: Create Class (CL02)—BATCH_CLS
Below assigned char’s are standard Characteristics
Step 9: Create Material Master : 5000000040
Step 10: Create selection class (CL02)– BATCH_SEL_CLS
Easy Access—Logistics—Central Functions—Batch Management—Batch Determination—Selection and Sort—Selection Classes—Create (BMC1)
Step 11: Create Sort rule
Easy Access—Logistics—Central Functions—Batch Management—Batch Determination—Selection and Sort—Sort rule—Create(CU70)(Ascending = First in First out)
Step 12: Define Batch search strategy.
Easy Access—Logistics—Central Functions—Batch Management—Batch Determination—Batch Search strategy—For Inventory Management (MBC1) Create.
From step 8 and 9
Step 13: GR with 501 Movement type here enter the date of manufacturing.
Stock in MMBE:
Step 14: Goods issue against cost centre.
If we observe based on the batch which is expiring, system is proposing that batch First(FEFO—First expiry first out)
Let’s change the Sorting from Ascending to descending in Strategy in CU70 and issue goods.
LEFO (Last Expiry First out)
Step 15: Now will check FIFO and LIFO based on GR Date for which we need to create new sort sequence in CU70 as shown below.
Step 16: Now assign the new sort rule in Strategy in MBC2 and strategy Type
Do Goods issue.
Lets change to ascending in CU71(LIFO)
From the above steps, one can understood how the batch determination works in Inventory Management for FEFO,FIFO,LIFO processes, and also how to alter these processes in ascending and descending order to meet the business requirement. with the help of this, we can now configure the batch determination process according to the client requirement.
Pre requisite: Should have Basic knowledge of materials management.
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