The structure of the material master record allows you to manage stocks of a material by value at plant level or company-code level and by quantity down to storage-location level. Under certain conditions, you may need to make further subdivisions for a material and manage batches.

Certain materials' features cannot always be guaranteed to be exactly alike in production. For example, you cannot guarantee that a certain color will always have the same shade. Minor differences between production lots cannot be avoided. You need to be able to uniquely identify the individual production lots of the same material and manage them separately in inventory.

Materials that require such precise identification, for example pharmaceutical products, are identified and managed in stock not only according to material number, but also according to batch number.

With batch handling, you can manage not only production lots from in-house production, but also production lots from vendors as separate entities.

It is possible to supplement standard batch management with batch status management.

Before you can manage batches of a material in stock, you must first specify in the material master record that the material is to be managed in batches for the specified plant. To do this, you must set the batch management requirement indicator in the material master record (for example, in the Purchasing or Storage view).

If a material is subject to management in batches, every quantity of that material must be assigned to a batch. Each batch of a material is identified by a unique batch number, under which it is managed. This number is either entered by the user (external number assignment) or assigned automatically by the system.

You can define number assignment for batches at various levels:

• Uniquely at client level for a material
• Uniquely at material level
• Uniquely at plant level

In the standard R/3 System, numbers are assigned to the individual materials at plant level.

For every batch, there are two types of data:

• General data on the batch (for example, shelf life expiry date, date of the last goods receipt), which is defined in the master batch. The master batch applies to all storage locations in which the batch is located. No stocks are managed at this level.
• Stock data, which is managed separately for every storage location in which the batch is located. For example, if the batch C1 of a material is spread across two different storage locations, the stock quantity is tracked for each storage location.

Both the master batch and the stock data for the batch are created automatically during the first goods receipt. Thus, you do not need to create this data manually.

However, if you want to define specific data for a batch, such as the shelf life expiration date, you have to manually maintain the batch data.

The following stocks are managed separately at batch level:

• Unrestricted-use stock
• Restricted-use stock
• Quality inspection stock
• Blocked stock
• Stock in transfer
• Blocked stock returns

When you enter goods movements for materials handled in batches, you must enter the batch number in addition to the material number. If you do not know the batch number, you can search for the batch using the required characteristics.