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The SAP HU is used for tracking the handling units used by the materials.  Some common handling units are packagings materials like cartons, pallets etc.

In the SAP system, the handling unit (HU) expands on the shipping unit. Handling units can be nested and you can also create new handling units from several handling units as often as you like. At the material item level, HUs contain the complete material identification, the quantity, and, in the case of serial numbers, the respective object list. Handling units have unique,
scannable identification numbers that can be developed according to standards such as EAN 128 or SSCC.

Handling units contain all inventory management information of the materials they contain that are maintained in Inventory Management. There are also status messages that you can call up at any time that indicate whether a handling unit is only planned or if the ship-to party has been notified of the arrival of this handling unit, or whether it is in the warehouse or has already been posted to goods issue. The integrated history function also records each business process in
the life cycle of each handling unit, meaning that you can track the handling unit's path and development at any time.
Refer to : Logistics -> Central Functions -> Handling Unit Management

In HU-managed storage locations, all goods movements are executed through the specification of the respective HUs, and Inventory Management is performed through the handling units. If you are working without HU-managed storage locations, you can work with handling units (without stock information) as before in the delivery and in the shipment.

In HU-managed storage locations, materials can be managed in HUs only. Mixed stock made up of packed and non-packed materials within the same storage location are not supported. HUs can also be managed in interim storage types. Unpacking a material from a HU means that the stock of the material is posted to a storage location that is not HU-managed.

If you call up normal material movements in connection with an HU-managed storage location, a delivery is created, rather than a direct material posting, which has been the procedure up to now.

Please note that if you want to use 311 to move the material already in stock, but in a non HUM Storage Location and you want to transfer those materials into a HUM Storage Location 304.  If this is the case you can use the transaction VLMOVE with the destination plant and storage location. Before that you have to create the HU with the transaction code HU02 Storage location: where the material is and the status: in stock.

Handling units are unique at client level in at least one system. Using an indicator at client level, you can control whether you are going to work with the HU functions. Since the handling unit is a physical unit, the central logistics processes are controlled through the input of the handling unit identification. These processes include putaway, picking, and stock transfers, as well as goods receipts and goods issues.

A handling unit's mobility can be limited if quality checks are active. Changes in the stock category caused by a quality inspection are made using a posting change in the handling unit.

There is also a report available that you can use to find and display handling units using different selection criteria such as material, packing instruction, or storage location.

Although the handling unit is basically a unit that remains constant in the system, you can change it by repacking the materials it contains. All the packing functions, such as packing, repacking, and unpacking, are completely supported by the handling unit functionality. In this way, handling units can be created in production, during goods receipt, or in the packing areas of the warehouse. If you have automatic packing, the handling unit is created from the packaging proposals defined in the system (from the packing instructions, for example).