SAP – Logistic Execution

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Introduction

In this lecture we will cover the business process of packing or

Handling Unit Management in SAP

By the end of this course you should be able to describe

packing process and how it is executed in SAP.

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Introduction

Introduction

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Order To Cash – Case Study

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 SAP – Logistic Execution

Introduction

• On completion of the picking activities, the materials are placed in an area

where they will be prepared for shipping. This activity involves use of
packing materials to ensure that the materials are not damaged in transit,
and to place them in one or many containers for transportation.
• In SAP the packing activity is represented by the handling unit (HU)
document. Similar to that of a delivery, the document will have a header
and item record.
• The header contains information such as the weight, volume, and
Handling Unit number, while the item would contain information on what
was packed, for example the packed materials, batch, plant and storage
location

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Introduction

SAP allows the packing of materials either in the delivery or shipment,

which allows the packing of materials from multiple deliveries into a single
HU.

Note : You can pack multiple smaller Handling Units into a larger
Handling unit. This is known as multiple level handling units.

• EAN number
• SSCC number
• Packing material
• Weight, volume,
dimension
• Status

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Benefit of Packaging

The benefits of using packaging materials and handing units

are:
• Management of the inventory of packaging materials as to have an
accurate level of stock as to procure more when necessary.
• Record the packaging and HU as it is shipped to the customer.
Information such as the serial shipping container code (SSCC) can be
created for each HU, stored and shared with the customer in an Advance
Shipping Note (ASN)
• Enforce weight and volume limits on what the packaging materials can
manage.
• Enable SAP to propose the packaging materials if there are complex
business rules to determining the packaging materials.
• Generate the packaging label to go on the Handling units.
• Accurate reporting of packaging materials especial for environmental
reporting.

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Management of Packaging Materials

The perquisite of using the HU functionality is the creation of the packaging material
(material group VERP). The management of these materials is driven by how they are
to be used in the system.
• The simplest level is to management the inventory of materials in the Inventory
Management module, and not used the materials in the sale order or delivery
document. While physically they are being used to pack the deliveries, this action is
not recorded in SAP. Periodically the materials are counted and the inventory
reduced by consuming the materials via a material movement document. Once the
stock level reaches a pre set level, the materials are procured using a purchase order.

• Further integration can be done by adding the packaging materials to either the sales
order or delivery but with no handling unit information. In this scenario, the
packaging materials are manually added to the documents, or automatically added to
an ordered material as a sub item of the BOM.

• The finial scenario is when the HU is done in SAP and the packaging materials is
automatically added to the document. This is a configuration option on the delivery
header.
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Scenarios of Packaging Materials

Packaging – No sale
• The packaging materials appears on the delivery, but the customer is not charged for them.
• The price of the packing materials have already been included as part of the selling price.
Returnable packing.
• Where the packaging material is considerable value and can be reused after the ordered materials are
delivered.
• Rather than pass the cost of the packaging materials to the customer, the business allows the customer to
return the packaging materials in order for it to be re-used.
• For this scenario, the packaging materials must be on the delivery document to be shipped to the customer.
There are two common methods in which to manage returnable packaging.
Returnable Packaging – Outright Sales
The packaging material appears on the delivery and is sold to the customer.
• The ownership of the materials is transferred to the customer.
• They maybe also be allowed to return the packaging material via the standard return process and credited
once the material has been returned.
• This scenario is commonly used when the lead time of the material is high and there is a probability that
the customer will not return the material. An example is in the case of pallets, which could be used by the
customer for their own products rather than returning it.
Returnable Packaging – Consignment
• In this scenario, the ownership of the packaging materials is never transferred to the customer and the
materials are on “loan” to the customer on the assumption that the packaging materials will be return. As
before, the return packaging must be on the delivery but in this scenario, the customer is not invoiced for
the item.

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Packing Demo

SAP Demonstration

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Packing demo

The requirements are :

• Packing material
• Create packing material
• Item cat group VERP for HUPM
• Item cat group LEIH for TAL – Return packaging
• Material group pack materials
• Define Packaging Material Types
• Define Allowed Packaging Materials
• Pack material in delivery
• Automatically place the packing material on the item
• Define Delivery Types
• Define Packaging Material Types

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Packing config

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Post Goods Issue

Post Goods Issue

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Post Goods Issue

The “Post Goods Issue” (PGI) marks the completion of the logistic execution and the start of the
shipment. When a delivery is PGI, SAP carries out these processes:
• Validates if the document is complete and can be posted. For example, it would ensure
that the storage location has been populated and if relevant the document has been
picked.
• Based on the material movements on the item lines, change status of the stock and post
the relevant G/L accounts. In normal deliveries the stock is reduced in the plant and for
stock transport orders, the materials are moved to the “in transit” status.
• Mark that the document is now complete
• Update the sales order that the delivery is complete along with the shipped quantities. In
most cased, the order is now relevant for billing.
• If configured, create outputs using the message output procedure. This can be as simple as
a printed delivery document to an ASN Idoc that will be transmitted to the customer.
The PGI can be done using transaction VL02N, by pressing the “Post Goods Issue” button. You
can also PGI deliveries collectively by using the transaction VL06.
For deliveries that have been assigned to shipments, the PGI will be done when the “Shipment”
complete button is pressed and will be covered in the chapter on SAP shipments.
Note : The PGI can be reversed by using the transaction VL09, provided that the delivery has
not been invoiced.

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Post Goods Issue

Demo – Normal PGI and shipment PGI

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