Innovations in Logistics with S4HANA Enterprise Management 1511

S/4HANA - SAP Business Innovations in Logistics with S/4HANA Enterprise Management

25/03/2016 SAPience.be USERday 2016 1

1. S/4HANA Materials & Operations Management 1511 Intro

2. S/4HANA M&OM : Inventory Management & Material Valuation

3. S/4HANA M&OM : Procurement & Sales Order Management

4. S/4HANA M&OM : MRP , ATP & Backorder Processing

5. S/4HANA M&OM : Master Data Maintenance & Capacity Planning

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© 2015 SAP SE or an SAP affiliate company. All rights reserved. 3

Source: Shell energy scenarios 2050, 2015

Digital Core

SAP HANA Cloud Platform

SAP’s Digital Business Framework Business leaders need to digitally transform across five key pillars

SAP HANA Platform

Workforce Engagement

How can I better engage my workforce?

Supplier CollaborationBusiness Networks

How can I better increase supplier collaboration?

Assets and the internet of things

How can I better utilize my products and assets?

Customer-experienceOmni channel

How can I deliver an omnichannel experience?

v

Source: Shell energy scenarios 2050, 2015

Digital Core

S/4 HANA M&OM 1511MAJOR SIMPLIFICATIONS AND INNOVATIONS IN LOGISTICS

Re

qu

est

to

S

erv

ice

Co

re

Fin

an

ce

Reliable, scalable & instant Insights into all material value & material flow is at the heart of a modern

ERP system, and provides the basis for all innovations in Sales, Procurement, Manufacturing, Supply

Chain, Finance and Analytics

Inventory management

Material Valuation

Material Requirements Planning

Availability-to-Promise &

Backorder Processing

Procurement

Order Management &

Billing

Capacity Planning

Master data maintenance


What are some key overall benefits in S/4 HANA M&OM 1511?

• Live analytics at the lowest level of

granularity on primary transactional

data, without aggregates. Analyze at

any level without exporting data.

• Increased business user productivity

with beautiful, role-based UIs and

availability on multiple devices

• Optimized system landscape

and reduced number of

systems gives customer high

performance with lower TCO

• Increased system throughput by

eliminating data redundancies and

reduced data footprint (simpeler

data model)

• Eliminate Batch processing,

improve user satisfaction by

reducing waiting time.

• Explore the impact of business

decisions on outcomes


SAP S/4HANA – Simplification List

Master Data

SA

P B

usin

ess S

uit

e

SA

P B

us

ine

ss

Su

ite 4

SA

P H

AN

A =

Dig

ital C

ore

Simplification List

Area

Simplification Item

Simplification Item

Simplification Item

Area

Simplification Item

Simplification Item

Simplification Item

Area

Simplification Item

Sales

Procurement

Logistics

Finance

HCM

Cross Topics

…..

Core HR

Core Finance

Optimized

Order to Cash

Streamlined

Procure to Pay

Accelerated

Plan to Product

Enhanced Request

to Service

https://help.sap.com/s4hana_op_1511#section3

Agenda


1. S/4 HANA Materials & Operations Management 1511 Intro


3. S/4 HANA M&OM : Procurement & Order Management

4. S/4 HANA M&OM : MRP , ATP & Backorder Processing

5. S/4 HANA M&OM : Master Data Maintenance & Capacity Planning


Key Innovations and use cases in inventory management and material

valuation


Inventory Management: Real use case of operations before S/4 HANAE.g. International Car Manufacturer

7Car Models

550Daily output per model

3,500BoM materials

per model, on 10 levels, 60% common parts

480Trucks per day

>15,000,000Material movements per day

Business Pain

• Locked tables prevent movements

• No parallel postings

• High volume back flush = batch jobs and bulk postings

– with delay

• Multiple tables, inconsistent information

• Auto ID technology > queue

• No real-time transparency on stock and on exact

material flow

• No actual costs and intercompany profit transparency

• Need to split system load into multiple distracted

systems


S/4HANA Simplifying the data model :

SIMPLE DATA MODEL THROUGHPUT INCREASE

Busin

ess S

uite

MATDOC ACDOCAMaterial

PricesMaterial

MBEW

OBEW

QBEW

OBEW

MBEWH

OBEWH

QBEWH

OBEWH MLHD

MLPP

MLIT

MLCR

Document

MLPPF MLCRF

CKMLPP CKMLCR

Totals

CKMI1

Index

GLPCA

ZZFISLA

FAGLFLEXA

GLFUNCA

COFIS

BKPF

BSEG

COBK

COEPANEK

ANEP

GLPCT

ZZFISLT

FAGLFLEXT

GLFUNCT

COSP

COSS

COFIT

BSIMBSID

BSAD

BSIK

BSAK

BSIT

BSAT

BSIS

BSAS

MARD

MARC

MSTQH

MSTEH

MSTBH

MSSQH

MSSAH

MSPRH

MSLBH

MSKUH

MSKAH

MKOLH

MCHBH

MARDH

MARCH

MSTQ

MSTEMSTB

MSSQ

MSSA

MSPR

MSLB

MSKU

MSKA

MKOL

MCHB

MKPF

MSEG

Totals tables

Document

Totals

Totals

Indices

Documents

BKPF

PRINCIPLE OF ONE

Inventory Mgmt.(Quantities)

Inventory Mgmt.(Valuation via „MBEW)

Material Ledger(multi GAAP, multi currency)

Accounting

Master Data Inventory Mgmt(Quantities)

Material Ledger(multi GAAP, multi currency)

Accounting

VBAK LIKP VBRK

LIPSVBAP VBRP VBFA

VBUK

VBUP

VAPMAVAKPA

VLPMAVLKPA

VRPMA

VBOX

S066

S067EIKP

EIPO

NAST

Sales and Distribution

VRKPA

Primary

Document tables

Index

tables

Sales and Distribution

Status tablesLIS

tables

Rebate index Output mgmt

Export/import

tables

VBAK LIKB VBRK

LIPSVBAP VBRP VBFA

History tables


Material Valuation in S/4HANA

Actual Costing

Optional enablement for selected

valuation areas

To enable inventory valuation at

actual costs AND improved

throughputs, customers can use

actual costing (based on ML) using

a moving average price.

Allows for detailed material flow,

revaluation and actual cost

components (all steps at any time).

Realtime Insights Analyze & Optimize the Inventory

Flow

Use real-time KPI‘s (Inv. turnover)

Predict/ Simulate

Up to 3 currencies and 3 valuation methods Tracking historic rates in material master

Local legal valuation & e.g. hard or trading

currency

Standard Price (S-Price)

Moving average Price (V-Price)

Actual Costing (new)

Transferprices* Legal Costing

Corporate Costing (w/o

intercompany)

Transfer prices (political)

¥$€

Digital Core


Inventory Management: Simplifications in the material movements

transactions (MB…)

MB01 MB02

MB03

MB04 MB05

MB0A

MB11 MB1A

MB1B

MB1C MB31

MBNL

MBRL MBSF

MBSL

MBST MBSU

17Transactions

removed

MIGORemains

S/4 HANAECC


Inventory Management

Real-time alerts of supply problems

System generated proposals to resolve problems

Improved company-wide real-time visibility of stock

Removal of “locking” constraint allows continuous update of material movement in high volume environments – transaction throughput of goods receipts and issues is radically increased

More timely and detailed inventory postings lead to higher accuracy of the inventory

Move from batch processing to real-time processing

Decreased safety net (e.g. reduce buffers) due to increased transparency

Support smaller lot sizes passing through the logistic operations

Inventory Management

(Stock Valuation)

Simplified valuation method with valuation managed in single table removing multiple aggregates and table locking bottlenecks so parallel postings are possible

Valuation analytics carried out on primary data with clear separation between master data and transaction data

No table joins results in increased evaluation speed allowing greater insight into actual costs in real-time across business entities

S/4HANA Enterprise Management 1511 Inventory Management Key Benefits

Use Cases enabled by S/4 HANA Business Processes improvements

Agenda



2. S/4 HANA M&OM : Inventory Management & Material Valuation

3. S/4 HANA M&OM : Procurement & Sales Order Management




Demo purchasing analysis


SAP S/4HANA Enterprise ManagementFiori Apps for Procurement

Transactional Analytical

Insight to Action

Visual overview over a complex topic

for monitoring or tracking purposes

Task-based Access

Access to tasks like change, create, or entire

processes with guided navigation

1. All Approvals via Fiori

Inbox (Purchase

Requisition, Purchase

Order, Contract and

Supplier Invoice)

2. Create Purchase

Requisition*

3. My Purchase

Requisitions*

4. Confirm Goods and

Services*

5. Manage Purchase

Requistions

6. Manage Purchase

Orders (incl. Create)

7. Manage Purchase

Contracts*

8. Manage Sources of

Supply

9. Manage Supplier

Invoices (incl. Create)

10.My Purchasing

Document Items

11.Supplier Invoice List

12.Post Goods Receipt for

Purchase Order

13.Evaluate Suppliers*

14.Evaluation Responses*

15.Supplier Evaluation

Response*

1. Purchase Order Value

2. Non-Managed Spend

3. Unused Contracts*

4. Contract Expiry*

5. Off-Contract Spend*

6. Contract Leakage*

7. Purchasing Spend

8. Invoice Price Change

9. Purchase Order

Average Delivery

Time

10.Spend Variance

11.Overdue Purchase

Order Items

12.Purchasing Group

Analysis*


On-time delivery*


Price Variance*


Quantity Variance*

16.Supplier Evaluation*

Object Pages with Contextual

Navigation

Search and Explore

View on essential information

about an object and contextual

navigation between related objects

1. Purchase Requisition

2. Purchase Requisition Item

3. Purchase Order

4. Supplier Invoice

5. Purchasing Info Record

6. Purchase Contract

7. Purchase Contract Item

8. Purchasing Category

9. Supplier

10.Material

* On Premise Only


Three Step Shopping

Key Message

Unique Value of S/4HANA

The S/4HANA requesting process allows employees to search and request goods / services in a cross-catalog search with a consumer-

grade user experience

• Possibility to load internal

and external catalog

content into HANA

• HANA based cross-catalog

search

• Shopping Cart + Purchase

Requisition simplified in

one business object

• Highly integrated

requesting process into the

SAP S/4HANA processes

and existing master data

• One user experience for

the whole process

SAP S/4HANA Enterprise ManagementComprehensive Self-Service Requisitioning


Supplier Management

Increased insight to purchase categories and supplier portfolio

Holistic view across strategic and operational activities allowing instantaneous vendor tracking against real-time KPI updates

Sourcing and Contract Management

All available supply sources immediately visible to facilitate best price from best vendor

Dynamic and flexible searches across contract worklists with capability to navigate directly to Contract and Supplier Factsheets

Insight to Action capabilities to support critical activities such as contract renewal

Advanced analytics to identify discount and pricing opportunities

Improved PO quality reducing downstream issues

Reduced operating costs through real time, self service operational procurement supported by real-time data analysis and mobile support

S/4HANA Enterprise Management 1511 Procurement Key Benefits



S/4HANA Enterprise Management 1511 Procurement Key Benefits


Good, Timely Decision Making

Advanced, real-time analytics.

Fiori Apps providing user-friendly interface.

Improved user-satisfaction to reduce/eliminate “off-line” reports

Invoice & Payables Management

Flexible search in Supplier Invoice List with integration to detailed factsheets.

Improved detection of invoice issues with rapid resolution

Seamless integration with Ariba Network

Operational Procurement

All purchasing can be performed in a single system with harmonised User Interface for direct materials, indirect materials

and services.

Procurement Factsheets with links to follow-on activities.

Improved spend compliance

End-to-end collaboration on order fulfilment using the Ariba

Network


Key Innovations and use cases in Order Management and Billing


Contract Management

Streamlining system support when negotiating and approving long-term sales agreements.

Improved monitoring of sales contracts throughout the lifecycle.

Facilitates rapid intervention when a customer is dissatisfied or contracts are up for renewal.

Deeper insights into contract performance .

Data Maintenance Simplified data model to deliver a single, company wide version of

sales master data to maximize consistency.


Sales Order Management

Improved Sales productivity through seamless order management

from quote to shipment and from billing to booking revenue

Improved customer retention by enhancing the flow of information

on order status and tracking

Improved user interface through Fiori Apps and the Order

Management Cockpit

Accelerated complaints and returns management reduce

operational costs and increase customer satisfaction

S/4HANA Enterprise Management 1511 Sales Order Management Key Benefits


Inventory Management (Shipping)

Increased user efficiency through Order Fulfilment Cockpit to speed process stages and issue identification

Central point to initiate execute and monitor the shipping process

Internal and external collaboration with SAP JAM

Receivables Processing

Automated, specialised functions for a broad variety of billing and

invoicing scenarios, to reduce billing errors, decrease DSO and

improve overall cash flow while lowering administration costs

Analytics and Evaluation Role based KPI driven Fiori Apps


S/4HANA Enterprise Management 1511 Sales Order Management Key Benefits

Agenda


1. S/4HANA Materials & Operations Management 1511 Intro


3. S/4HANA M&OM : Procurement & Order Management

4. S/4HANA M&OM : MRP , ATP & Backorder Processing

5. S/4HANA M&OM : Master Data Maintenance & Capacity Planning


Key Innovations and use cases in MRP


Common issues in MRP in current systems….

Detecting the Most Critical Issues

A material planner is responsible for hundreds of materials

Challenged by dozens of exceptions a day , time is limited

Focus on the most important and urgent issues

Manually intensive analysis of the stock requirements list

Additional information from multiple sources required

Batch-Driven and Multiple ERP Transactions

Resource & data-intensive (long execution times)

Manual changes to Planned Orders, Production Orders, etc.

MRP plan

immediately out-

dated

Poor visibility

Poor Decision

Making


MRP in SAP S/4HANA Enterprise Management 1511

Real-time Information

Enterprise-Wide

Visibility

Consumer-Grade User Experience

MRP S/4 HANA

Solution Recommendation Highlighted Issues

Time-Critical

Perspective (Graphs)


Business Benefits

» Fulfill an order on time and

in the desired quantity using

different kind of checks for

different business scenarios

» Perform automatic back-

order processing

» Reduce inventory carrying

cost

Business Challenges

» Difficult to fulfill customer orders on

time with the proper quantity

» Inability to promise accurate and

reliable order dates

» Inefficient strategies to fulfill orders

from the entire network - or to

substitute products automatically

» Inefficient strategies to sell scarce

products in a fair manner

» Inefficient ways to manage order

backlogs

SAP S/4HANA Capabilities

» SAP HANA-enabled mass

product availability check for

sales-, planned- and production-orders.

» ATP check for all items of an order at once

» Significant performance

improvements for releasing large

production orders

» Data and process innovations in Backorder

processing and Sales

Product Allocation (planned innovations)

Key Innovations and use cases in ATP


Availability check : Comprehensive stock level and demand

overview

Enables immediate detection of material shortages based on real-time data.

Considers multiple shortage definitions (=rules that define how shortages are determined)

Shows all supplies and demands in chronological order and determines available stock for each day.


Available to Promise : further integration of APO G-ATP in S/4HANA

ERP

Data replication via CIF

APO Code Pushdown to HANA

SAP S/4HANA

…

Product Availability Check

Product Allocation

Rescheduling

Substitutions

Etc.


Product Allocation

Rescheduling

Substitutions

Etc.


Product Allocation

Rescheduling

Substitutions

Etc.

Current functional model With SAP S/4HANA Materials

Management & Operations

Agenda



2. S/4 HANA M&OM : Inventory Management & Material Valuation

3. S/4 HANA M&OM : Procurement & Order Management




Simplification of vendor and customer master data

FD01 FD02 FD03

FD05 FD06 FD00

FK01 FK02 FK03

FK05 FK06 FK08

MAP1 MAP2 MAP3

MK01 MK02 MK03

MK05 MK06 MK12

MK18 MK19 V-03

V-04 V-05 V-06

V-08 V-09 V-11

V+21 V+22 V+23

VAP1 VAP2 VAP3

VD01 VD02 VD03

VD05 VD06 XD01

XD02 XD03 XD05

XD06 XD07 XK01

XK02 XK03 XK05

XK06 XK07

54Transactions

removed

BP

S/4 HANAECC

1Transaction


Material field length MATNR CHAR 18

Material field length MATNR CHAR 40

ECC

Material number field extension from 18 to 40 characters

S/4 HANA


SAP S/4HANA Enterprise Management : Capacity planning related

Business Benefits

» Fulfill an order on time and in the

desired quantity using different

kind of checks for different business scenarios

Business Challenges

»On-time delivery

performance

»Days in inventory

»Revenue loss due to stock-

outs

»Adapting to changing plant

conditions

SAP S/4HANA Capabilities

» PP/DS side-by-side to SAP S/4HANA

» Integrated Production Planning and

Detailed Scheduling (PP/DS) in SAP

S/4HANA (planned innovations)

» Advance planning and

optimization and production

planning and detailed scheduling

» Live cache-based, finite-capacity

planning as an integral part of

SAP HANA, requiring just one

database to manage

» Advanced analytics

» One materials requirements

planning

» Simplified data integration

» Intuitive maintenance of master

data and integration models


Comprehensive Plan to Produce in ONE System

Sales Order Entry

MRP Run +Constrained

Planning

Interactive Planning

Release to Production

Production Execution

Monitor and

Control

Planned Improvements

» UI Harmonization

» CIF Simplification

» Master Data

Harmonization

» Analytics

APO-PP/DSHANA Platform

incl. Live cache

ERPHANA Platform

incl. Live cache

CIF

HANA Platform incl. Live cache

PP/DS

ERP

Current functional model Planned


Production Planning

Much faster MRP runs across all Plants – performance increase up

to 10x with a reduced memory footprint by factor 5 – allowing ad-

hoc planning and scenario planning

Demand information is propagated faster through the supply chain

Increased visibility of product availability (planned and actual)

Improved visibility and prioritized view of material flow issues

Real-time alerts and increased decision support (system generated

proposals) to aid pro-active decision making

Flexible tailoring of available capacities and receipts to meet

required quantities

Constraint based planning, using various heuristics and optimizers

by bringing PP/DS on ERP, reducing integration efforts and

allowing seamless master data & UI harmonization (planned)

Reduced TCO due to inclusion of PPDS functionality in Core ERP

running on HANA database and removal of integration requirement

for master data of material and work center resource

Increased visibility of bottlenecks

Improved ability to respond quickly to new demands


S/4HANA Enterprise Management 1511 Production Order Management Key

Benefits


Production Execution

Advanced, real-time analytics allowing fast, ad-hoc queries

Real-time alerts to ensure prompt corrective action

Improved visibility of current supply and demand elements

across all company entities (if all run on one instance)

Capability to plan “on the fly” given changing circumstances to

identify impact on customer and determine best course of action


S/4HANA Enterprise Management 1511 Production Order Management Key

Benefits

THANK YOU!

For regular S/4 HANA and other SAP updates follow me on Linkedin and twitter.

https://www.linkedin.com/in/dannykarsai

https://twitter.com/danny_karsai

Daniel Karsai

Customer Solution Manager, SAP Belux

https://www.linkedin.com/in/dannykarsai

https://be.linkedin.com/in/dannykarsai

https://be.linkedin.com/in/dannykarsai




Innovations in Logistics with S4HANA Enterprise Management 1511

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