Exploring Batch Management (BLF)

A batch is a partial quantity of a material that is managed separately from other partial quantities of the same material. 

In various industries - especially in the process industry - you have to be able to work with homogeneous partial quantities of a material or product across the entire logistics flow and value chain.

There are various reasons for this, such as:

• Legal requirements, such as the Good Manufacturing Practice (GMP) guidelines
• Hazardous goods regulations
• Tracing of defects, recalls, and regression obligation
• Need for inventory management differentiated by quantity and value, for example due to heterogeneous quality or recipe
• Production- or process-related requirements, such as the calculation of material quantities based on different batch specifications

Batch management is the identification of a quantity of material with a unique 10-digit alphanumeric code. The batch number assigned to a material quantity allows the material stock to be clearly sorted. General characteristic values, the chemical composition or product specifications at the time of production or procurement can optionally be stored in the batch master record.

For batch-managed materials, the batch number must be specified with each goods movement.

If a product is to be managed in batches, you must set the corresponding indicators in the product master record.

You first set a batch management indicator that is globally valid for the product. Basically, this indicator means that the product can be managed in batches.

Once you have set the general batch management indicator, you can set the plant-specific indicator. This enables you to decide, for each plant, whether the material should be managed in batches or not.

For example, a product may be subject to batch management in the production plant and not in the distribution plant.

Now, we’ll explore a product in the system that’s managed by batch.

Watch the following interactive demo to learn how to display a product subject to batch management.

The short dialogue below introduces the concept of creating batches in SAP S/4HANA Cloud Public Edition.

In the interactive demo, you learn how to manually create a batch master record.

The system can automatically create a batch master record in the background in several scenarios, including:

• Posting the first goods receipt for a batch
• Creating a process or production order
• Making a usage decision in Quality Management
• Carrying out a recurring inspection
• Posting a transfer, such as when splitting a batch
• Creating a purchase order

This automation helps streamline operations and ensures that batch data is consistently maintained across various business processes.

You can enter the batch number yourself during batch creation.

Whether this option is available depends on your system settings. Your configuration expert defines in the system whether manual entry is allowed.

In this case, the system generates the batch number for you automatically.

The configuration expert sets up internal number ranges that the system uses to assign batch numbers in the background.

As explained in the previous chapter, batch number assignment takes place during the inbound process. This means that when goods are received - either from external suppliers or from in-house production - a batch number must be assigned to batch-managed materials. This ensures traceability from the moment the material enters the system.

In contrast, during the outbound process, the focus shifts from assigning batch numbers to selecting the appropriate batch for withdrawal. This is where batch determination comes into play.

Batch determination is the process by which the system automatically selects one or more suitable batches when a material is issued or transferred. Instead of manually entering batch numbers, the system uses predefined selection criteria - such as:

• Expiration date
• Quality status
• Stock availability
• Customer-specific requirements
• Storage location or plant

This ensures that the right batch is used for each transaction, supporting compliance, quality control, and efficient inventory management.

When creating a purchase order, entering a batch number is optional.

In the following demo we see two cases:

• A purchase order item is created without a batch
• A purchase order item is created and the system automatically assigns a batch

In this demo, we post the goods receipt to the purchase order item that was previously created without a batch number. When entering the goods receipt, it is mandatory to enter a batch. We opt for the automatic assignment of a batch by the system.

In this demo, we look at the stock situation of our product, which is subject to batch control.

In the following demo, we create a sales order for a product that is subject to batch management. At this point, we do not enter a batch.

In the following demo, we create a delivery for the sales order and check the result of the automatic batch determination. 

In the following demo, we enter the picking quantity for each batch in the delivery and post the goods issue.

The Batch Information Cockpit serves as a central control center, offering powerful tools for monitoring and analyzing batch-managed materials.

You can use it to track batch usage and answer key operational questions such as:

• Which batches should be used before their expiration date?
• What batch stocks exist for a specific product group?
• Which batch stocks fall under the responsibility of a specific MRP controller?

When a defect or customer complaint is reported for a finished goods batch, a materials manager can initiate a top-down analysis. This allows them to:

• Review the in-house production or process orders related to the batch.
• Trace the raw materials, components, or semi-finished goods used in manufacturing.
• Access additional details such as the supplier number, purchase order, and delivery information to identify the root cause of the issue.
• Examine quality inspection results to verify whether proper quality control procedures were followed before the batch was released for consumption or delivery.

The Batch Information Cockpit supports both top-down and bottom-up analysis, depending on the level in the material structure:

• Top-down analysis starts from finished goods produced in-house and traces back to the components and raw materials used.
• Bottom-up analysis begins with raw materials procured from suppliers and follows their usage through semi-finished and finished goods.

This dual approach ensures full traceability across the supply chain, supporting quality assurance, compliance, and efficient issue resolution.

Watch the following demo to learn how to use the Batch Information Cockpit.