Using SAP Units of Measure in Manufacturing Plants

There are several You Tube examples of SAP B1 units of measure implemented for distributors. This document shows how to implement this functionality in a manufacturing plant where products may be shipped in special pacakaging, in different size boxes / containers and on pallets.

User view of This function

There are two groups of people that need to understand this functionality - the people that set up new items in inventory; and the shipping department personnel. The personnel setting up new items in inventory must understand how each product is packaged and sold. They generally should know the size of the items and the packaging required. For instance, an item may be shipped one at a time in a 'box'. Or the item may be normally shipped 12 to a box and 20 boxes of the part on the pallet. They must understand how to define the 'package types' and the 'Units of measure' and how to set up an item with default packaging. The shipping department must be able to recognize how each item is packaged - I assume they will receive default packaging information from the item setuup team. They must also know where in SAP to review this packaging. The shipping department must also know how to ship product when the 'default' packaging cannot be used. For instance, parts may normally ship in pallet size loads, but occasionally ship in a box or sometimes as single part may be shipped - engineering prototypes for example. The shipping department needs to understand how to alter the specific shipment. If the setup is done correctly, and default packaging for shipments is the 'norm', then the shipping department simply fill orders and package product in the default packaging.

Setting up New Items

After the packaging and units of measure are set up, new and existing items must included the packaging information. The screen below shows that the 'UoM Group' is the 'Production' group. In the sales data, the 'Sales UoM Code' is 'BOX1_20'. If you refer back to the item group setup, the BOX1_20 unit of measure contains '20' parts. This part 'Auto1' therefore is normally packaged in a box that is the 'BOX1' size (18" x 18" x 18"), and contains 20 'Each' of this item. Additionally, the package type is the 'Wood Pallet' and this pallet contains 24 boxes of the item.
Let's review the math involved. First, the pallet is 6' x 4' or 72" x 48". This means that 2 but not 3 boxes at 18" can fit in the width of the pallet. Likewise the 72" of pallet will allow for 72/18 = 4 boxes - the length of the pallet. This means each layer of boxes on the pallet contains 2 x 4 = 8 boxes. With 3 levels of boxes, the pallet contains 24 boxes. If you looked at the 'Inventory Data' tab, the UoM Code is 'Each', and the weight is 0.85 pounds. The 0.85 pounds is also shown on the Sales Data tab.

Shipping UofM

The items are set up properly in the item master with the units of measure and unit of measure group defined for each item that is being shipped. A sales order is created for this item. Note that the quantity being shipped is identified in 'Boxes' - Box1_20 in the example below. The actual inventory quantity is shown as 480 = 24 x 20. The unit price is in the selling units of measure - $44.00 in this case, or 2.20 per each unit of inventory. This information defaults as the sales staff enters the order.
When the sales order is being shipped, standard SAP procedure is to 'Copy' the order to a delivery order. After doing this, let's review the default packing slip as shown below. The packaging defaults to a single pallet with 24 boxes of the part - as we would expect. NOTE: this occurred without user intervention.
UoM in action - video
UoM Setup - Video
packing slip Crystal report changes
UoM documentation - word

Units of Measure

If you access SAP B1 tutorials on units of measure the examples deal with distributors of products. The ‘paper’ sold in reams, boxes and pallets is their example. 6 packs of soda vs 24 packs of soda are other examples. Based on my experience here are more likely scenarios in a manufacturing plant: Parts are sold with part specific packaging
  • Packaging for an axle assembly for a car or truck – the packaging is designed to fit the part.
  • In many instances the packaging becomes part of the BOM for the part – because that is the only way it is shipped.
Parts are placed in standard box sizes, so many pieces to the box
  • Parts are placed in standard box sizes, so many pieces to the box
  • Most often a plant has a limited number of box sizes – perhaps 8 – 10 sizes to handle the non-designer packaging in the plant
  • In many cases boxes of parts are placed on pallets for shipment
  • Certain sized boxes are placed in ‘layers’ on a pallet
  • Depending on the box size and the weights of parts, only so many ‘layers’ of boxes can be placed on a pallet. This is known in advance and most plants are shipping the same parts on a regular basis.

UofM Setup in SAP

There are three setup functions within SAP to perform for units of measures. The first is that the default 'packages' need to be input. In our example, only the 'Pallet' and 'Loose' needs to be defined.
The second is that units of measure must be defined. In our example below there are 6 box sizes set up. Your plant could have many more sizes. You also need an 'Each' unit of measure as that is likely the smallest unit of inventory for many parts.
The third setup is the units of measure 'group' setup. This provides the means to assign different U of M groups depending on the types of products you are shipping. This links the U of M groups to the units of measure - review the screens below for examples. Note: you could set up different UoM groups if you had products that used specific packaging.

Benefits of UoM Definitions

The units of measure and default packaging default on the delivery order. So what are the benefits of this? First of all, the shipping department does not have the 'extra' work of defining the packaging. This means that a packing list report can be generated immediately and it would show the pallet and box information. An example is shown below. Second, with the packaging all pre-defined the user could use Boyum and B1 Print and Delivery to automatically create labels for this shipment. In this instance, the labels recommended would be 48 box labels - 2 per box so the labels are visible from more than one side, and then 2 more pallet labels - again for accessibility. Note: Depending on your label needs you may need to buy bar code fonts - and integrate this with Crystal Report writer. Note: Check out the QR Code usage within SAP - described in detail on Mascidon's web site. This may be the alternative bar code you want to use.