Explaining the Material Numbering Solution

Objective

After completing this lesson, you will be able to describe the Defense and Security Material Numbering Solution

How the Defense and Security Numbering Solution Works

The image depicts the central role of the Material Master Record in a defense organization's material management processes. It shows that the organization maintains basic data on all materials it buys, produces, stores, and sells in the Material Master. This central record is used to retrieve material-specific data and define processes related to purchasing, planning, storage, accounting, warehousing, and other functional areas within the SAP S/4HANA system.

The Material (Product) Master is the centerpiece of Logistics Master Data. It directs and impacts processes in many functional areas, such as Procurement, Inventory, Maintenance, MRP, and so on.

The image explains the NATO Stock Number (NSN) system, which provides a standardized definition for material items of supply recognized and used by all NATO countries, as well as some non-NATO countries. The NSN acts as a single identification number for each unique item of supply, linking it to the manufacturer's part numbers and the organizations that use the item, including the navy, army, air force, and other nations. The image illustrates this concept with examples of manufacturer part numbers associated with a single NSN.

The NATO stock number (NSN) is part of the NATO Codification System (NCS) and is used as an alternative material number for standardized and NATO-wide grouping and classification of materials. All NATO stock numbers have the same structure and length. For every material managed in the NATO states, a unique NATO stock number exists, which forms the basis for an effective supply chain and interoperability.

Every NATO stock number is represented by a 13-digit code, which is divided into three parts that characterize the materials according to a specific schema. It is constructed as follows:

XXXX - XX - XXXXXXX (for example, 5905-12-3264478)

The benefits of NATO codification fall into three main categories:

Operational benefits
Such as cross-service supply, interoperability between countries, quicker identification of supply items.
Economic
Inventory reduction, avoid new inventory, lower purchase prices, account for supply costs.
Asset Management
Reduced equipment downtime.
The image explains the structure and components of the NATO Stock Number (NSN), a standardized identification system for material items of supply used by NATO and non-NATO countries. The NSN is broken down into a 4-character NATO Supply Classification Group (NSCG) and a 9-digit NATO Item Identification Number (NIIN). The image also shows detailed information for an NSN, including the item name, manufacturers, and part numbers. The purpose of the NSN system is to provide a unified identification and cataloging system for material items used by various military and government organizations.

The first four digits represent the NATO Supply Classification (NSC) code. The first two digits stand for the material group, which groups materials with identical physical or functional properties. The third and fourth digits indicate the material class, which further distinguishes materials within a material group. The fifth and sixth digits represent the country ID number.

The last seven digits form the material sequence number, which itself has no significance, but together with the country ID number, uniquely identifies a material.

In the example above, 59 represents the material group of electric and electronic components, 05 the material class of the resistance, and 12 the country ID number for Germany. 3264478 is the sequence number for the respective material.

The image explains how information about the NATO stock number is displayed in the Basic Data 1 view of the material master record in the SAP S/4HANA system. It states that the first four digits of the material group and material class can be displayed in the Group/Class field. Additionally, the nine digits for the country ID and material sequence number can be entered, changed, and displayed in the NSN ID field. SThe image also includes a visual representation of the NATO stock number structure, showing its components such as the group, NCB code, and material sequence number.

The NATO Stock Number is a separate Master Data object in SAP S/4HANA, which is then assigned to the Material Master record. In nations managing their own material numbers, a many-to-one assignment is possible between own material numbers and NSN.

The image explains the concept of Material Types in SAP S/4HANA. It states that materials with the same basic attributes are grouped together and assigned to a Material Type, which allows the organization to manage different materials in a uniform manner. The image then lists the key factors that a Material Type determines, such as the material's intended purpose, numbering, number range, screens, departmental data entry, procurement type, and valuation method. It also notes that a Material Type can be changed, but there are downstream impacts to consider.

Before talking specifically about the Defense and Security Material Numbering solution, it is important to provide a recap on Material Types.

Material Types are used to group materials with the same basic attributes.

A Material Type is defined when the material is first created.

The Material Type then defines how that material will behave - in terms of internal/external numbering, what screens appear, what fields are mandatory and optional … and so forth.

When it is defined, a Material Type can be changed but this is not something that is 'normally done'.

Material Types - Considerations (1 of 2)

In a Defense organization, it is common to have:

  • Materials that are valuated (inventory) and materials that are non-valuated (assets). Typically, these require different Material Types.
  • Materials that are Item-managed (either NSN-managed, or own numbering with NSN reference):
    • One Item of Supply (IoS) can represent several Items of Production (IoP) – for example, made by various producers, which do not have to be distinguished from the viewpoint of logistics requirements (that is, same Fit Form Function).
    • For example, NSN 007345199 Resistor Fixed Film is made by multiple manufacturers (Butler, Raytheon, and so on). If the item is Item-managed, then it will be stored in the same Storage Bin (there is no divisibility by manufacturer).
    • Items that military forces can use in the battlespace may require a NSN.
    • Items that are not going into the battlespace (for example, tables, chairs) may not require a NSN.
  • Materials that are MPN-managed:
    • These are typically used for Aviation and Maritime platforms, but can also relate to Land platforms. The requirement is typically Air Worthiness or Sea Worthiness (it can also due to commercial reasons).
    • In this scenario, the Item of Supply (IoS) represents a single Item of Production (IoP).
    • For example, a Filter provided by Boeing is not the same as a Filter provided by another manufacturer. These need to be treated separately by the Supply organization and stored in different Storage Bins (there needs to be divisibility by manufacturer because the Form Fit Function is different).
    • MPN-managed materials can be assigned a NSN if required.

In a Defense Organization, there are normally different Material Types.

Some will be valuated (inventory) and some will be non-valuated (assets). Typically, these will require different Material Types.

In all Defense Organizations, there will be materials that are Item managed (or NATO Stock Number managed for those nations who use NSNs). Hence regardless of the manufacturer, if the item has the same Fit Form Function, it is the same item.

In some Defense Organizations, there will be materials that need to be managed at a Manufacturer Part Number (MPN) level. In this case, even if the material appears identical, the Fit Form Function is different if it comes from a different Manufacturer. It is not the same item.

The image shows a decision matrix used by a defense organization that uses external numbering (NSN/MPN) to determine which Material Types will be used. The matrix starts with the question Is the item a Capital Asset?. Depending on the answer, the material is managed either by NSN or MPN, and assigned to different Material Types such as NSN-managed Capital Asset, MPN-managed Capital Asset, NSN-managed Inventory, or MPN-managed Inventory. The image emphasizes the importance of considering the NSN and MPN implications for each Material Type in this decision process.

A Decision Tree such as the following is common for Defense Organizations.

There is business logic that determines when to use each Material Type.

Hence for each Material Type, what is the Material Master Number that the user will interact with? Is it the NSN? Is it the MPN:NCAGE? Or is it something else?

Introduction to Defense and Security Material Numbering

The image is a diagram that explains a solution for organizations who choose to number their materials in accordance with NSN and/or MPN. It shows that for MILN-managed material, the internally generated MATNR with NIIN is displayed to end-users, and for MPN-managed material, the internally generated MATNR with MPN:NCAGE is displayed to end-users.

The purpose of the Defense and Security Material Numbering solution is to enable users to interact with an attribute of the material master (either the NSN or the MPN:NCAGE) instead of the internal Material Number.

Therefore, the user will see the NSN (NIIN) or the MPN:NCAGE instead of the Material Master number.

Behind the scenes, the internal Material Number still exists, but it is not seen by the users. The masked number is seen instead.

This solution is configured by Material Type and it is optional to use. There are Defense customers who use their own numbered materials and would not choose not to use this solution. For nations that do not have a strong connection with NATO, the NSN (NIIN) can be stored as an alias in the NATO Stock Number record, but there may be no desire to replace the Material Number and show the NSN (NIIN) instead.

The image is a diagram that explains the process of changing material numbers in a product master system. It shows the material master interface, user types for material numbers, customization for NSN or MPN management, and how BADI converts the material number to NSN/MPN format. The diagram also indicates the display of material/product master with the exchanged number.

This figure provides you with an overview of how the Defense and Security Material Numbering solution works.

Advantages, Considerations, and Implications of adopting the Defense and Security Material Numbering Solution

Advantages of the Defense and Security Material Numbering Solution are:

  • For NSNs, note the following:
    • It is possible to catalog a material (create the material master record) before codification is completed (that is, the NSN is known). The user will see/transact against the internal material number.
    • When the NSN is known, it can be added to the material record, and this is what the end-user will see/transact against (for NSN-managed items).
    • There is no need to perform customizations in SAP S/4HANA to add the NSN onto various SAP screens because the end-user will see the NSN.
  • For MPNs, note the following:
    • It supports Long MPNs and MPNs with special characters (for example: '*', '&', ',').
    • It supports the change of MPN and NCAGE.

There is a number of reasons why this solution was developed this way.

Some nations have used temporary Material Types to allow materials to be cataloged, purchased, and stored before NATO codification. Therefore, stock holdings would be purchased against one number, and then need to be transferred to a new Material Master Record with an externally assigned Material Number equal to the NSN. This is a cumbersome process.

Some nations have used Material Types with internal Material Numbers and then had to perform customizations to add the NSN onto various SAP screens so that it is visible to the end-users.

The existing MPN:NCAGE solutions did not support Long MPNs (as per the NATA Data Exchange Redesign (NDER) project - with lengths up to 66 characters), nor did they support special characters.

Considerations and Implications:

  1. The impact on Physical items (for example, labels) needs to be considered:
    • For example, if a material is stocked and labeled before codification has been performed, the label will refer to the internal material number.
    • For example, if a material is stocked and labeled with a NSN, but then the NSN changes, the label will still refer to the old NSN.
    • Similarly, if the material is stocked and labeled with a MPN:NCAGE and then the NCAGE changes, the label will still refer to the old NCAGE.
  2. Duplicates must be prevented and eliminated within the Material Display Type:
    • For those Material Types that will be displaying NSN (instead of internal material number, where available), there must not be any duplicate NSNs.
    • For those Material Types that will be displaying MPN:NCAGE (instead of internal material number, where available), there must not be any duplicate MPN:NCAGEs.
    • If there are duplicates within the Material Display Type, the Defense and Security 2020 Material Numbering solution will not be able to determine which material master record the end-user is selecting.

When adopting the solution, the impact to physical items must be considered (especially labels).

In addition, duplicates within the Material Display Type must be prevented (or identified and removed). The concept of Material Display Type is explained further in this lesson, but it essentially is either NSN or MPN:NCAGE.

Therefore, for example, if there are 3 Material Types that will display NSN (where one exists, instead of the internal material number), then there must be no duplicates of the NSN value across the materials within those 3 Material Types. If there are duplicates, the Defense and Security Material Numbering solution will not be able to derive which internal material number needs to be selected when the user keys in a NSN.

Another example: If there are 2 Material Types which display MPN:NCAGE, then should be no duplicates of the MPN:NCAGE value across the materials within those 2 Material Types. However, there is no problem if there are duplicate NSNs across the materials within these 2 Material Types - this is a valid business scenario.

Customizing Prerequisites

The image shows a screenshot from a software configuration interface. It displays the configuration settings for the NSN/MPN solution, specifically the settings for Materials Management and NATO Stock Number/Manufacturer Part Number. The key areas highlighted are the General Settings for Long Manufacturer Part Number, Format Rules for Material Number Output, and Assign Material Display Type to Material Type.

There are two parts to setting up the Defense and Security Material Numbering Solution:

  1. There are three configuration steps as described here (and on the subsequent slide).
  2. There is also sample code that leverages this configuration, which is provided as part of Note 3034816.

Note that the standard solution provided in Note 3034816 leverages Material Types. It would be possible to adapt the sample code provided to use other business rules, if required.

Note

*Note 2804477 - The Manage Product Master SAP Fiori app currently does not support maintenance of HERS records. This is being worked upon.

The image shows a product master screen in a software application. It displays information about a product called AUS Adrenaline Acid Inj, including its Long Manufacturer Part Number and Manufacturer Part Number. The text explains that the short (current) Manufacturer Part Number is populated from the Long Manufacturer Part Number based on configuration rules, and in this example, the last 34 characters from the Long Manufacturer Part Number are stored in the MPN field.

When the customizing has been completed, the Long MPN can be maintained using the Manage Product Master SAP Fiori app.

The Short MPN is populated based on the configuration rules in the preceding steps. In this example, the last 34 characters from the Long MPN field are stored in the MPN field.

The Short MPN is the basis of the Material Search Helps (using MAT1 Search Help).

Behavior of the Material Numbering Solution

The image shows a product master data screen in a software application. It displays a search field with the text NSUP and a product named AUS Adrenaline Acid Inj with its NSN and MPN:NCAGE numbers. The text explains that searching by a fragment of the NSN and MPN:NCAGE in the Fuzzy Search field returns a match.

In the screenshots within these figures, the masking is demonstrated for a NSN-managed material (top) and a MPN-managed material (bottom).

The internal material number is masked and instead either the NSN or the MPN:NCAGE is shown. This is dependent upon the Material Type, which is also shown in these images.

Searching for a fragment of the NSN and MPN:NCAGE using the Fuzzy Search returns a match, however searching for a fragment of a NSN or a MPN:NCAGE within the Material or Product field is not supported.

The image shows a material coverage monitoring screen in a software application. It displays information about the material AUS Adrenaline Acid Inj with the material number GHU123456789ABCDEFGHIJ123456789ABCDEFGHI. The screen also shows a purchase requisition for this material, with the vendor name AUS Gastroger and the purchase order number 6505000001. Additionally, the screen displays information about the status and availability of this material.

The included screenshots show examples from SAP Fiori, SAP GUI and also EWM RF.

The technical prerequisites are as follows:

  1. SAP S/4HANA 2020 FPS1.
  2. One of the following Switches must be active: i. The Defense and Security Business function IS_S4DFS_1 must be active (which is true for Defense customers), or, as in ii. ii. The Business function that we have created especially for non-Defense customers: IS_S4DFS_MPN must be active. This does not require the Defense BF to be active at the same time.
  3. Note 3034816 contains sample BAdI code that can be used.

Note

Special attention has to be given to extending the solution across the SAP ecosystem, Standalone SAP S/4HANA systems, Disconnected systems, SAP Ariba Network and Applications, Integrated Business Planning (IBP). We recommend evaluating the solution carefully, before the transition to S/4. SAP services provide a specialized service to plan the transition to this solution.

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