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.
This component allows you to handle materials like these throughout the entire logistics chain.
These material consist of one or more active ingredients, concentrates, carrier materials, or impurities, and so on. The potency of the active ingredients varies from batch to batch.
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 (ratio of active ingredient quantity to total or physical quantity) remains constant for each batch. The active ingredient quantity can therefore be calculated from the physical quantity and vice versa. This means that you only ever need to specify one unit, as the other can be calculated automatically.
You buy a medicine in kilograms. The price of the quantity purchased is based on the quantity of the active ingredient it contains. The active ingredient potency fluctuates from batch to batch.
These materials are handled in batches. Among other things, these batches convey the product’s grade. There is a fixed relationship between the number of pieces and the weight of each batch; the weight per piece. The quantity in the purchase order is listed in pieces, but billed in kilograms.
The dimensions of the individual parts in each of the batches are different, but they still belong to the same material.
V2A pipes with a length of between 2 meters and 2.10 meters are managed in a batch. Batch 1 contains pipes with an average weight per piece of 100kg; batch 2 contains pipes of the same quality with an average weight of 110kg per piece. Both batches belong to the same material: V2A pipe with an average weight per piece of between 100 kg and 120 kg.
The component works with Batch-Specific Material Units of Measure.
For conversion of total quantities to batch-specific quantities, such as proportion quantities or product quantities, generally:
· the planned conversion factor is stored as a 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.
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
· 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.
· inventory correction factor to take into account the actual available proportion stocks at plant level and storage location level for materials planning and the availability check
For more information, see Calculating the Inventory Correction Factor.
For Product Units:
· Automatic calculation of the conversion factor
¡ By entering two units of measure in documents, for example, for reservations or goods receipts
¡ Using object dependencies from batch specifications
· Quantity conversion for all product units of a material, with rounding adjustment and check for errors after the decimal point. Among other things, this ensures that only quantities with whole numbers are moved.
· It is not possible to define a moving average price (MAP) for an active ingredient. You can only use a standard price.
· The distribution of batch-specific units is not supported by Application Link Enabling (ALE).
· In sales (SD), you cannot use batch-specific quantities for:
¡ scheduling agreements for the automobile tier 1 market
¡ discounts in kind
¡ Material determination
· You cannot link the material specification with substances and substance compositions in the substance database of the Product Safety component.
· Materials planning and the availability check are carried out in base units of measure. The inventory correction factor is taken into account in the case of proportion units.
· Inventory management is carried out in base units of measure. Parallel inventory management, with update of two or more quantities in the stock segments, is not supported.