If you have bought, sold, or used an item in fractional amounts (in item assemblies or bill of materials), you will not be able to turn on serialization until the quantity on hand is a whole number.
If you have been using FIFO inventory costing for this item, it is possible for two cost layers to have fractional quantities even if it looks like the quantity on hand is a whole number. For example, two layers that have quantities of 1.5 and 3.5 units. Each cost layer's inventory count must be a whole number.
If you have multiple locations turned on, the quantity on hand must be a whole number at every location.
Solution
Adjust the fractional amount out of inventory. Alternatively, you can wait until you sell or use up the remaining fraction of the item and then turn on serialization for the item.