Browse the Book. Sourcing and Procurement. Table of Contents. Index. The Authors. Logistics with SAP S/4HANA: An Introduction.

Transcription

1 First-hand knowledge. Browse the Book Explore functionality for sourcing and procurement with SAP S/4HANA, from operational purchasing to supplier management and beyond. Discover key SAP Fiori applications that will streamline users day-to-day work, and check out reporting and analytics functionality that will help improve your S&P processes. Sourcing and Procurement Table of Contents Index The Authors Deb Bhattacharjee, Vadhi Narasimhamurti, Chaitanaya Desai, Guillermo B. Vazquez, Tom Walsh Logistics with SAP S/4HANA: An Introduction 589 Pages, 2019, $79.95 ISBN

2 Chapter 3 Sourcing and Procurement 3 This chapter continues to discuss the functional coverage of SAP S/4HANA by exploring the sourcing and procurement functionality. Recall from the previous chapter that the planning and scheduling exercise creates requirements for materials and services along with procurement proposals. These purchase requisitions are then leveraged for the external procurement process, as we ll examine in this chapter. The role of sourcing and procurement has evolved significantly over the years from a cost-driven, transaction-based step into a more collaborative innovation with business partners. Technology has been instrumental in enabling organizations to exploit global synergies and achieve economies of scale. The technology enablement has also increased the contribution of sourcing and procurement to the overall organizational value chain. The objective of this chapter is to highlight the business processes enabled by SAP S/4HANA s sourcing and procurement functionality. It begins with an overview of the sourcing and procurement process as envisioned with SAP S/4HANA and explains important master data simplifications for business partners, sourcing logic, and the material master. The chapter then explores the sourcing and procurement functionality as follows: operational purchasing (Section 3.3), supplier management (Section 3.4), invoicing and payables management (Section 3.5), and collaborative sourcing and contract management (Section 3.6). In each of these sections, we ll introduce key SAP S/4HANA functionalities and showcase relevant SAP Fiori applications. We ll close with a discussion on sourcing and procurement reporting and analytics opportunities (Section 3.7). 3.1 Sourcing and Procurement Basics Planning and scheduling for customer demand results in requirements for products and services. An organization can fulfill these requirements by manufacturing the 93

3 3 Sourcing and Procurement 3.2 Master Data Simplifications products using its core competencies. However, in some cases, materials or services will need to be procured from external sources to fulfill customer demand. The sourcing and procurement business function caters to this need within the organization. Sourcing and procurement are often used in association with the overall supply chain processes due to their close interrelation. Sourcing, as the name suggests, is the process of identifying and selecting the correct sources of supply (suppliers) that can provide the required services and products for the organization. There are several subprocesses within the sourcing process, including the following key activities: Business Partners Current users of SAP Supplier Relationship Management (SRM), SAP Customer Relationship Management (CRM), and the old SAP Financial Supply Chain Management (FSCM) modules may already be familiar with the concept of the business partner, but it might be new to SAP ERP users. In SAP S/4HANA, both vendors and customers are categorized as business partners; but considering our current focus on the sourcing and procurement line of business, data for vendors is most relevant. Business partner general data contains information such as their name and address. The account group concept of vendors and customers remains the same in SAP S/4HANA. 3 Evaluation of the company s current purchasing cycles and what is currently available in the supply market Analysis of benefits and cost saving of using other suppliers For system upgrades from SAP ERP to SAP S/4HANA, existing customers and vendors in the SAP ERP system must be migrated as business partners. Table 3.1 compares business partners in SAP ERP versus SAP S/4HANA. Evaluation of potential suppliers after the RFx process Selection and implementation of new supplier relationships Too often, sourcing has been thought of as a tactical exercise of choosing the suppliers with the lowest price quote. However, this can come with many negative tradeoffs, such as lower product quality, longer lead times, and so on. As a result, many companies have started to realize the true values sourcing can bring, including better product/service quality and shorter fulfillment lead times. Procurement, on the other hand, is a broader term. It encapsulates the entire sourceto-pay process, which includes sourcing, purchasing, and eventual acquisition of services and products. Typically, companies aim to cultivate diverse product portfolios to maximize their market share and expand their footprint across a gamut of products and services. At the same time, IT is also required to standardize the materials and services required for these products and services. These two goals seem to be conflicting each other. However, procurement if strategically used can play a critical role in creating key competitive advantages and achieving the standardization of acquired services and materials. 3.2 Master Data Simplifications One key distinction that SAP S/4HANA makes relative to SAP Business Suite is in its organization of master data. Let s walk through the business partner concept for vendors, simplified sourcing logic, and changes related to the material master. Topic SAP ERP SAP S/4HANA Vendor master general data Vendor master company code data Vendor master purchase organization data Vendor master transactions General data Company code view Purchase organization view Transactions XK01, XK02, and XK03 (Create, Change, and DIS- PLAY Vendor Centrally, respectively) Transactions MK01, MK02, and MK03 (Create, Change, and Display Vendor Purchasing, respectively) Transactions FK01, FK02, and FK03 (Create, Change, and Display Vendor Accounting, respectively) Table 3.1 Vendor Master Data in SAP ERP versus SAP S/4HANA Business partner general data. Access company code view through business partner role FI Vendor. Access purchase organization view through business partner role Supplier. The SAP Fiori app Maintain Business Partner is used to maintain vendors. Transactions related to vendor master transactions are obsolete in SAP S/4HANA

4 3 Sourcing and Procurement 3.2 Master Data Simplifications Now that you understand the business partner concept in SAP S/4HANA, let s take a closer look at how the vendor master is created through the business partner in SAP S/4HANA. In the next subsection, you ll learn how to create a business partner for vendors with the business partner grouping and business partner roles. In SAP S/4HANA, an SAP Fiori app called Maintain Business Partner is used to create, edit, and display business partners, vendors, and customers. Business partner category type Organization is always used for creation of vendors and customers. Business Partner Role The business partner is extended to applicable business partner roles. Business partner with business role Supplier (Defined) enables the Purchasing view (see Figure 3.2) and allows the maintenance of purchasing information, such as order currency and payment terms. Business partners with business partner role Supplier allow purchase orders to be created, and business partner role FI Vendor allows invoices to be received from suppliers. 3 Business Partner Grouping The business partner Grouping needs to be selected first after launching the Maintain Business Partner app in SAP Fiori. Each business partner must be allocated to a business partner grouping before creating the business partner with general data. The business partner grouping is linked to the business partner number range. The business partner is created with the name and address information and the business partner general role. Figure 3.1 shows the business partner general data creation with a business partner grouping. Figure 3.2 Purchasing View from the Supplier Business Partner Role Business partner role FI Vendor (New) enables the Company Code view (see Figure 3.3) and allows the maintenance of company code information, such as the payment method. Although not required, it s recommended to have the same number range for the business partner and vendors. Figure 3.1 Business Partner General Data Creation with Business Partner Grouping 96 97

5 3 Sourcing and Procurement 3.3 Operational Purchasing 3 Figure 3.4 Automatic Sourcing Checkbox in the PIR Material Master Figure 3.3 Company Code View from the FI Vendor Business Partner Role Sourcing Logic Another key master data simplification in SAP S/4HANA is the sourcing logic for direct procurement. In SAP ERP, material requirements planning (MRP) proposes a source of supply from the master data object source list. Hence, for materials with only one source of supply (the supplier), the source list must be maintained even though the info record is available. Moving forward in SAP S/4HANA, for materials with a single source of supply, the arrival of the Automatic Sourcing checkbox means that source list maintenance is no longer necessary; users simply need to activate this checkbox in the purchase info record (PIR). The MRP run generates purchase requisitions and assigns the source of supply based on the Automatic Sourcing checkbox in the PIR. However, to allow a source of supply for materials with more than one source of supply and allow a supplier to be blocked for a specific period, the source list can still be used in SAP S/4HANA. Users can enable the Automatic Sourcing checkbox through either the Manage Purchasing Info Records app shown in Figure 3.4 or the Create Purchasing Info Record app. From a procurement point of view, there aren t many changes in the material master. The most significant one is the field length for the material number (MATNR). In SAP ERP, the Material Number field length was set to 18 characters by default. In SAP S/4HANA, though, the Material Number field can support a material number with 40 characters. This provides flexibility to the organizations with material master nomenclature requirements that could not previously be met due to character limits. Now that we ve outlined the key master data simplifications that impact sourcing and procurement processes in SAP S/4HANA, let s turn our attention to the features and tools that enable sourcing and procurement in the new system. 3.3 Operational Purchasing Operational purchasing caters to the goods and services demands that arise due to ongoing operations in an organization. Because these requirements are repetitive, master data setup and material planning functionalities can be leveraged to efficiently plan and execute procurement activities. Operational purchasing can be divided into two different practices: Direct procurement With direct procurement, purchase requisitions are generated from the MRP run. The procurement department converts the purchase requisitions to purchase orders manually or automatically based on the purchase requisition release date 98 99

6 3 Sourcing and Procurement 3.3 Operational Purchasing (the date on which the purchase order should be initiated from the purchase requisition). Indirect procurement The employee creates purchase requisitions in SAP S/4HANA. All indirect purchase requisitions are approved by required approvers and converted to purchase orders. 3 In this section, we ll describe how SAP S/4HANA helps employees, buyers, and approvers process purchase orders manually and automatically Self-Service Requisitions Self-service requisitioning allows employees to procure goods and services through purchase requisitions. Employees can create purchase requisitions with free text items, or they can select items from an external catalog and submit the purchase requisitions. Figure 3.5 shows the three SAP Fiori apps available for employees to procure goods and services, monitor the status, and perform goods receipt: Create Purchase Requisition Employee creates purchase requisitions to procure goods and services. My Purchase Requisitions Employee monitors the status of purchase requisitions. Figure 3.6 shows a purchase requisition with status and options. Confirm Receipt of Goods Employee confirms receipt of goods and performs return delivery of goods. Figure 3.5 SAP Fiori Apps for Self-Service Requisitioning Figure 3.6 Purchase Requisition Status from the My Purchase Requisitions App Centralized Procurement Hub In the previous section, we discussed how a user can leverage SAP S/4HANA to create purchase requisitions and track their status for a business unit. This section explores the possibility of managing requisitions for multiple business units (headquarter and subsidiaries), which would allow large organizations to leverage the global economies of scale. The central procurement hub, released in SAP S/4HANA 1809, allows buyers to manage procurement for multiple business units. These business units may be operating on different SAP instances, including SAP ERP, SAP S/4HANA, and SAP S/4HANA Cloud. Application programming interfaces (APIs) are available to ensure seamless communication of these purchase requisitions into the central procurement system. Purchase requisitions can be collectively processed in the central system, and the corresponding purchase orders can be communicated to the respective subsidiaries. The responsibility management feature of SAP S/4HANA enables these requisitions to be allocated to responsible buyers. The subsequent activities, such as goods receipt and invoice processing, can be completed at the subsidiaries. The central procurement hub also helps to standardize business processes and to achieve a cleaner enterprise architecture. Instead of multiple subsidiary systems connecting with other procurement applications, such as the Ariba Network, only a central procurement system can be used for this integration and correspondence with suppliers (see Figure 3.7)

7 3 Sourcing and Procurement 3.3 Operational Purchasing Hub system SAP S/4HANA for central procurement SAP Ariba applications As shown in Figure 3.8, buyers can also use the filtering option in the header section to filter the data by Purchasing Group and Plant and download the purchase requisition data for analysis. 3 SAP S/4HANA (1709 and above) SAP S/4HANA Cloud SAP ERP (EHP 6.0 and above) Figure 3.7 Central Procurement Hub Model Next, let s discuss the purchase order processing capabilities in SAP S/4HANA Managing Purchase Requisitions Managing purchase requisitions is one of the important operational procurement activities of the buyer. In SAP ERP, buyers use Transaction ME57 to convert a purchase requisition to a purchase order. Buyers must go back and forth to change selection parameters, requiring additional effort. SAP S/4HANA offers the Manage Purchase Requisition app to manage purchase requisitions in an effective manner. Using this app, buyers can convert purchase requisitions to purchase orders and even create a request for quotation (RFQ) for unsourced items. RFQs can be sent to the SAP Ariba Sourcing module to trigger the sourcing event. Note Because the focus of this book is supply chain management with SAP S/4HANA, we ll limit our discussion of SAP Ariba here. However, if you re looking for more information about that suite of cloud procurement applications, we recommend SAP Ariba: Business Processes, Functionality, and Implementation ( SAP PRESS 2019). Figure 3.8 The Manage Purchase Requisitions App Purchase Order Processing In most scenarios, purchase orders will be created automatically from the MRP run or from converting the purchase requisition. SAP S/4HANA provides the Create Purchase Order app, allowing you to quickly create purchase orders based on search and filter options available in the header section. As shown in Figure 3.9, you can also create purchase orders from info records or contracts Purchasing Document Approval SAP S/4HANA offers the transactional My Inbox app, which allows approvers to approve purchase requisitions, purchase orders, contracts, and invoices from a single SAP Fiori app. Figure 3.10 shows a purchase order that is in the approval process and is waiting for the approver to take the next action. Users can select from several options: Approve to approve the purchase order, Reject to deny the purchase order, or even Forward to send this approval to another authorized user

8 3 Sourcing and Procurement 3.3 Operational Purchasing In addition, SAP S/4HANA also provides three SAP Fiori apps to manage approval for purchasing document workflows. These apps allow the users to manage workflows for purchase contracts (Figure 3.11), purchase requisitions (Figure 3.12), and purchase orders (Figure 3.13). 3 Figure 3.9 The Create Purchase Order App Figure 3.11 The Manage Workflow for Purchase Contracts App Figure 3.10 The My Inbox App

9 3 Sourcing and Procurement 3.3 Operational Purchasing 3 Figure 3.12 The Manage Workflow for Purchase Requisitions App Figure 3.13 The Manage Workflow for Purchase Orders App Purchase Order Collaboration Purchase order collaboration helps buyers and suppliers track purchase orders effectively and provides visibility into purchase orders. SAP S/4HANA natively integrates with the Ariba Network for purchase order collaboration, meaning that no additional add-on or IT setup is required. With this native integration, users can seamlessly communicate purchase orders, confirmations, advanced shipping notifications, goods receipt information, and so on with suppliers on the Ariba Network

10 3 Sourcing and Procurement 3.4 Supplier Management 3.4 Supplier Management In this section, we ll review the key concepts of supplier management and how it helps business users classify suppliers and generate analytical reports on supplier performance. We ll also describe supplier classification, purchasing categories, and supplier evaluation in SAP S/4HANA Classification and Segmentation In SAP ERP, there is no option to classify suppliers by means of strategic importance. In SAP S/4HANA, however, you can classify suppliers by spend, strategic importance, and supply risk. This supplier classification and segmentation is an ongoing process that helps you classify suppliers at periodic intervals and allocate suppliers to segments. SAP S/4HANA offers the following features to support classification and segmentation: Purchasing category The purchasing category allows you to manage suppliers according to specific categories of goods and services. It plays an important role in the supplier evaluation process and helps you compare evaluations of all suppliers in the same purchasing category. One or more suppliers and one or more material groups can be managed under a purchasing category. Figure 3.14 shows the creation of a purchasing category with Suppliers and Materials Groups. Supplier classification Suppliers can be classified as A, B, and C to identify strategic importance. You can also maintain information about a relationship, such as whether the supplier is designated to be a preferred supplier. Procurement activities and tasks Supplier-related activities and tasks can be managed under the purchasing category in SAP S/4HANA, as shown in Figure In comparison, in SAP ERP, supplierrelated tasks and supplier activities are managed outside the system, and no options are available to track supplier activities. Figure 3.14 Purchasing Category Creation Figure 3.15 SAP Fiori Apps for Supplier Development Activities and Task Management

11 3 Sourcing and Procurement 3.4 Supplier Management Supplier Evaluation In SAP ERP, supplier analytics requires data warehousing and doesn t provide any real-time visibility. No option is available in SAP ERP to perform supplier evaluation from internal stakeholders. 3 On the other hand, SAP S/4HANA provides real-time insights into supplier evaluation by quantity, price, and delivery date based on transactional documents through analytical SAP Fiori apps. Supplier evaluation in SAP S/4HANA offers drilldown options By Supplier, By Purchasing Group, By Purchasing Organization, By Purchasing Category, By Material Group, By Plant, Document, Trend by Supplier, and Trend by Purchasing Category. Let s explore these further. The Supplier Evaluation by Price app shown in Figure 3.16 provides a score for suppliers based on variance in price. The score is calculated based on the variance between the purchase order amount and the invoice amount over the period of one year. Figure 3.17 The Supplier Evaluation By Quantity App The Supplier Evaluation by Time app scores suppliers based on the variance between the delivery date in the purchase order and the delivered date of the item goods received date. Late and early deliveries of items are considered as variance. SAP S/4HANA also provides options to generate a supplier evaluation scorecard based on evaluation questionnaires. Evaluation questionnaires are sent to internal stakeholders within the company to collect information about suppliers. An evaluation response includes answers and scoring from internal stakeholders, which helps you generate the questionnaire score (soft score). Figure 3.16 The Supplier Evaluation by Price App The Supplier Evaluation by Quantity app provides a score for suppliers based on variance in quantity between the ordered quantity in the purchase order and the delivered quantity recorded in goods receipt over a period of one year. Excess and less delivered quantities are considered as variance. As shown in Figure 3.17, users can navigate from this app to other related SAP Fiori apps by clicking on those tiles (here on Operational Supplier Evaluation, Overall Supplier Evaluation, Supplier Evaluation by Questionnaire, etc.). Figure 3.18 Overall Supplier Evaluation Score

12 3 Sourcing and Procurement 3.5 Invoicing and Payables Management The overall supplier evaluation score can be seen holistically by combining the operational score (hard facts, e.g., supplier evaluation by price and quantity) with the questionnaire score (soft score). Figure 3.18 shows the Overall Score by combining the Operational Score and Questionnaire Score. There is no invoice collaboration functionality in SAP S/4HANA. Instead, SAP recommends that customers implement the Ariba Network, which natively integrates with SAP S/4HANA, for receiving invoices and sending invoice status updates and payment-related information to suppliers Invoicing and Payables Management The invoicing and payables management process deals with receiving invoices, processing invoices, viewing invoice open items, and processing vendor payments. In this section, we ll go through how SAP S/4HANA simplifies the process for accounts payable clerks for managing supplier invoices and provides analytical insights to the accounts payable process Accounts Payable Analytical SAP Fiori apps in SAP S/4HANA provide visibility to accounts payable key performance indicators (KPIs) such as days payables outstanding (DPO). With the Days Payables Outstanding app shown in Figure 3.20, you can analyze the top 10 suppliers with the highest DPO Invoice Processing and Collaboration As shown in Figure 3.19, SAP S/4HANA s Supplier Invoices List app serves as a dashboard for accounts payable clerks to manage supplier invoices. With this SAP Fiori app, you can use filter options such as Status, Reference, and Invoicing Party and view invoice statuses in a single page. You can drill down to another SAP Fiori app, Supplier Invoices, to create invoices, display invoice details, and reverse invoices. You can also view draft invoices received from the Ariba Network and create supplier invoices directly. Figure 3.20 Days Payables Outstanding for Top 10 Suppliers SAP S/4HANA also provides the Overdue Payables app shown in Figure 3.21 for viewing to view overdue payable amounts by supplier and by company code. This app provides a status for the overdue payable amounts and can be leveraged to identify upcoming payments and potential risks so that the responsible personnel can address them. Figure 3.19 Supplier Invoice with Status

13 3 Sourcing and Procurement 3.6 Collaborative Sourcing and Contract Management shows the Manage Sources of Supply app displaying a material from the supplier Foreign US Supplier Figure 3.22 Source of Supply with Validity Figure 3.21 The Overdue Payables App 3.6 Collaborative Sourcing and Contract Management Sourcing plays an important role in identifying new sources of supply (suppliers) for purchase requisitions without a current source of supply, creating contracts with suppliers, and maintaining valid sources of supply per business requirements. For unsourced demand (i.e., for purchase requisitions without a source of supply) and for new sourcing needs (from RFQs), buyers can initiate sourcing events from SAP S/4HANA to SAP Ariba Sourcing. SAP S/4HANA offers native (built-in) integration to the Ariba Network for sending RFQs to create sourcing requests in SAP Ariba Sourcing. In this workflow shown in Figure 3.23, the sourcing manager is notified to review sourcing requests. SAP Ariba Strategic Sourcing Sourcing request Sourcing project RFX/auction Award Source Assignment Many different sources of supply are available to fulfill procurement needs. In SAP ERP, the buyer needs to navigate to multiple transactions (Create, Change, and Dis- Ariba Network Supplier response play) to maintain contracts, quota arrangements, source lists, and PIRs. It s also difficult for buyers to view source of supply validity because they have to navigate through multiple transactions. SAP S/4HANA Purchase requisition Request for quotation Manage quotation Purchase order SAP S/4HANA offers the Manage Sources of Supply app, which provides a holistic view of the sources of supply in a single dashboard with the source of supply validity. Buyers can also create and edit source lists and contracts from this SAP Fiori app. Individual SAP Fiori apps that are one level more granular, such as Manage Info Record, Manage Contract, and Manage Source List, are also available. Figure 3.22 Manage purchase requisition without source of supply (SAP Fiori app) Manage request for quotation (SAP Fiori app) Legend: Supplier Buyer Standard integration Figure 3.23 Sourcing Request from SAP S/4HANA to SAP Ariba

14 3 Sourcing and Procurement 3.7 Reporting and Analytics Based on a relevant template, the sourcing project allows sourcing managers to manage supplier collaboration, monitoring, and execution; scoring of supplier response; and awarding the supplier. After awarding a sourcing event, the awarded supplier quotation is sent to SAP S/4HANA. The purchase order is created in SAP S/4HANA based on the approved supplier quotation Operational Contract Management Contract management involves the process of creating contracts with suppliers and monitoring contracts to ensure contract compliance. For this, SAP S/4HANA offers the Manage Purchase Contracts app. As shown in Figure 3.24, this SAP Fiori app helps you monitor important information such as contract target value, consumed value, valid from, valid to, and validity status in a single dashboard. Buyers can sort, filter, and drill down to individual contracts and supplier master data. Buyers can also renew the contracts from this screen. Spend visibility No easy way to track procurement spend by supplier, material, or cost center. Insights to procurement activities Lack of procurement insights (e.g., purchase orders running late, amount spent on nonpurchase order invoices, and contracts expiring soon). Multiple data sources Procurement data extracted from multiple sources and multiple transactions. Supplier evaluation No efficient way to generate metrics around evaluating suppliers. SAP S/4HANA offers role-based SAP Fiori apps that allow you to make decisions quickly and efficiently. Analytical SAP Fiori apps bring visibility by enabling you to track KPIs and analyze data graphically or in tabulated format. You can get real-time KPI-driven analytics in purchasing spend, invoice spend, contract compliance, and supplier evaluation. In this section, we ll show you the importance of the procurement overview page and how buyers can get all required procurement data in a single dashboard. We ll also show you how SAP Fiori apps for sourcing and procurement provide you with realtime insights and analytical reporting capabilities in spend visibility, contract analytics, and supplier evaluation. 3 Figure 3.24 List of Contracts and Statuses SAP S/4HANA offers analytical SAP Fiori apps for contract management. More detailed information about contracts is covered next Procurement Overview Page SAP S/4HANA offers the Procurement Overview Page app, which serves as a single dashboard for buyers to monitor daily tasks easily and effectively without navigating to multiple SAP Fiori apps. At the same time, this app gives the procurement manager a high-level picture the procurement activity. Thanks to this, the manager can proactively identify key areas that need improvements and address them properly. The Procurement Overview app (see Figure 3.25) contains the following components: 3.7 Reporting and Analytics In SAP ERP, there is no easy way to track supplier spend, classification of purchase order spends, nonpurchase order invoice spends, and supplier evaluation. Procurement-related analytics are dependent on the data warehousing system, and it can be difficult to view operational and strategic procurement activities. The following pain points are common in procurement analytics: Filtering option Options to filter the content by supplier, plant, material group, and purchasing group. Operational cards Information about contracts expiring soon and purchase requisitions without a source of supply to support operational procurement activities

15 3 Sourcing and Procurement 3.7 Reporting and Analytics Analytical cards Information such as purchasing spend by supplier, supplier evaluation trend, and overall supplier evaluation score to support strategic procurement activities Spend Visibility SAP S/4HANA offers key analytical SAP Fiori apps to track purchase order spend, spend variance, and nonmanaged spend (amount of spend to suppliers without purchase orders). This section introduces some key analytical SAP Fiori apps in sourcing 3 and procurement functions that add value to business by providing spend visibility. The Purchase Order Value app calculates the total purchase order value in the system and offers drilldown capabilities by purchase category, material group, supplier, and trend comparison (see Figure 3.26). By using this app, users can perform various analyses to track purchase order spend and get a clear picture of the company s total spend. Figure 3.26 The Purchase Order Value App The Spend Variance app calculates the percentage variance between purchase order, goods receipt, and invoice receipt (see Figure 3.27). This app not only helps buyers identify the variance but also offers drilldown functionality so that the root cause can be addressed and resolved. The Non-Managed Spend app shown in Figure 3.28 calculates the total amount paid to the supplier without a purchase order reference in relation to the total spend for Figure 3.25 The Procurement Overview App

16 3 Sourcing and Procurement 3.7 Reporting and Analytics that supplier. As a best practice, this spend should be minimized and controlled to avoid maverick spending. The Overdue Purchase Order Items app (see Figure 3.29) provides the total number of purchase order items that have delivery dates in the past but haven t been delivered by the supplier. With both the net values of the purchase order and the number of overdue items, users can understand the impact of this late delivery. This information can be leveraged by the procurement department to identify the source of material unavailability and take appropriate actions. 3 Figure 3.27 The Spend Variance App Figure 3.29 The Overdue Purchase Order Items App These SAP Fiori apps can be customized based on users needs. Procurement users can create user-specific thresholds and monitor the KPIs per business requirements. Figure 3.30 provides an example of the threshold definition that can be customized with the Overdue Purchase Order Items app. In this example, we ve set 300 overdue items as the Critical High threshold, 250 overdue items as the Warning High threshold, and 225 as the Target. Figure 3.28 The Non-Managed Spend App

17 3 Sourcing and Procurement 3.7 Reporting and Analytics Contract Analytics Another key area for sourcing and procurement analytics is around contract compliance. Contract analytics in SAP S/4HANA provides visibility to contracts and ensures you achieve contract compliance. We recommend several SAP Fiori apps in SAP S/4HANA related to contract analytics for getting insight into contract compliance. 3 The Off-Contract Spend app shown in Figure 3.32 measures the amount and the calculated percentage of the purchase orders created without any contract reference. By using this app, buyers can ensure contract compliance and identify vendors with high off-contract spends. This information then can be leveraged to negotiate a new contract with the vendor to create saving opportunities. Figure 3.30 Threshold Definition in the Overdue Purchase Order Items App Additionally, SAP S/4HANA enables users to quickly navigate from the analytical apps to other factsheet and/or transactional apps. Thanks to this, users can navigate to transactional object pages from any SAP Fiori app to view details related to master data and transactional data information. As shown in Figure 3.31, from the Purchase Order Value app, you can use the Open In button to learn more information, such as the supplier and the purchasing category, about the specific purchase order. Figure 3.32 The Off-Contract Spend App The Contract Expiry app in Figure 3.33 displays the number of purchase contracts that are nearing expiry within a predefined time frame. It s essential for buyers to know the contract expiration dates so that they can act on them, either by renewing the contract or by beginning to identity a different vendor for a new contract. Figure 3.31 Object Navigation Options in the Purchase Order Value App Finally, the Contract Leakage app in Figure 3.34 helps to measure the total spend of purchase orders created in the system without reference to existing contracts. This

18 3 Sourcing and Procurement 3.8 Summary data is useful to identify contract incompliance instances so that buyers can take the next step appropriately based on this Procurement Activities Monitoring SAP S/4HANA also offers several SAP Fiori apps, such as Purchase Requisition Average Approval Time and Purchasing Group Activities (Buyers), to track and monitor purchasing processes effectively and optimize procurement processes. For example, the Purchasing Group Activities app shown in Figure 3.35 shows the number of purchase orders, number of receipts, purchase order amount, and invoice amount to help you monitor procurement-related activities. 3 Figure 3.33 The Contract Expiry App Figure 3.35 Monitoring Procurement Activities in the Purchasing Group Activities App 3.8 Summary This chapter outlined how SAP S/4HANA handles sourcing and procurement business requirements. We also discussed the business partner concept for vendor master maintenance and new sourcing logic in SAP S/4HANA. Most of the chapter explained how SAP S/4HANA helps you run core sourcing and procurement processes: operational purchasing, collaborative sourcing and contract management, supplier management, and invoicing and payables management. We looked at procurement analytics and how SAP Fiori apps provide visibility to procurement spend, operational procurement, and contract management. Figure 3.34 The Contract Leakage App

19 3 Sourcing and Procurement Additional Resources For more information on sourcing and procurement in the new suite, we recommend Sourcing and Procurement in SAP S/4HANA by Justin Ashlock ( 4551, SAP PRESS 2018). The next chapter will discuss manufacturing the next step toward fulfilling customer demands. 126

20 Contents Foreword Preface SAP S/4HANA for the Supply Chain Architecture In-Memory Processing Real-Time Analytics Improved Data Quality Solution Streamlined Procure-to-Pay Accelerated Plan-to-Product Optimized Order-to-Cash Enhanced Request-to-Service Deployment Options On-Premise Cloud Summary Planning and Scheduling Planning and Scheduling Basics Master Data Simplifications Simplified Sourcing Materials Requirements Planning MRP Live MRP Cockpit Demand-Driven Replenishment

21 Contents Contents 2.5 Production Planning and Detailed Scheduling Production Planning Detailed Scheduling SAP Fiori Applications for Production Planning and Detailed Scheduling Combined Production Planning Approach with PP/DS and MRP Live Reporting and Analytics Resource Planning Table Product Planning Table Alert Monitor Production Planning and Detailed Scheduling Standard Reports Summary Collaborative Sourcing and Contract Management Source Assignment Operational Contract Management Reporting and Analytics Procurement Overview Page Spend Visibility Contract Analytics Procurement Activities Monitoring Summary Manufacturing Manufacturing Basics Sourcing and Procurement Sourcing and Procurement Basics Master Data Simplifications Business Partners Sourcing Logic Material Master Operational Purchasing Self-Service Requisitions Centralized Procurement Hub Managing Purchase Requisitions Purchase Order Processing Purchasing Document Approval Purchase Order Collaboration Supplier Management Classification and Segmentation Supplier Evaluation Master Data Simplifications Material Master Bill of Materials/Production Version Work Centers Production Execution Production and Process Order Processing Shop Floor Control Scrap Management Manufacturing Execution Manufacturing Integration and Intelligence Reporting and Analytics Production and Process Order Reporting Overall Equipment Effectiveness Management Summary Invoicing and Payables Management Invoice Processing and Collaboration Accounts Payable

22 Contents Contents 5 Quality Management Plant Maintenance and Asset Management Quality Management Basics Master Data Simplifications Quality Engineering Quality Information Management Quality Systems Monitoring Quality Inspection Inspection Planning Sampling Usage Decision Quality Improvement Defect Recording Quality Notification Integration with Supply Chain Processes Materials Management Production Planning Sales and Distribution Reporting and Analytics Manage Quality Levels Quality Engineer Overview Quality Technician Overview Inspection lot Analytics Inspection Lot Detailed Analytics Characteristic Analytics Characteristic Detailed Analytics Results History Summary Plant Maintenance and Asset Management Basics Master Data Simplifications Managing Technical Objects Reporting and Identifying Technical Objects Managing Task List Master Data Maintenance Processing Schedule Material Availability Check Maintenance Planning Mobile Device Processing Maintenance Work Orders Preventative Maintenance Maintenance Plan Scheduling Maintenance Plans with Item Lists Measurement Documents Predictive Maintenance Reporting and Analytics Enterprise Asset Management Information Center Malfunctions Overview Pages Summary Sales Order Management Sales Order Management Basics Master Data Simplifications Business Partner Grouping Business Partner Roles Sales Contract Management Create, Change, and Display Contracts List Incomplete Sales Contracts

23 Contents Contents Sales Contract Fulfillment Rates Manage Subscription Contracts Sales Order Management and Processing Sales Order Processing Sales Process Analysis Available to Promise Product Availability Check Product Allocation Backorder Processing Release for Delivery Alternative-Based Confirmation Variant Configuration Classic Variant Configuration Advanced Variant Configuration Sales Billing Billing and Invoicing for Goods and Services Subscription Billing and Invoicing Contract Accounts Receivable and Payable Credit Management Revenue Accounting and Recognition Output Management Delivery and Shipping Processing Claims, Returns, and Refunds Management Rebates and Settlement Management Complaint Management International Trade Reporting and Analytics Sales Operations Artifacts Sales Analytics Sales Information Display Sales Performance Sales Order Processing Summary Transportation Management Transportation Management Basics Master Data Simplifications General Master Data and Organizational Structure Product Master Data Business Partner Dangerous Goods Transportation Network Transportation Schedules Transportation Resources Transportation Requirements Order and Delivery Management Forwarding Order Management Capacity Management Strategic Freight Procurement Strategic Freight Selling Tactical Capacity Planning Operational Capacity Planning Transportation Planning Freight Units Freight Orders Freight Booking Transportation Units Transportation Cockpit Manual Planning Automated Planning Distance and Duration Determination Service Order Direct Shipments Carrier Selection and Subcontracting Carrier Selection Constraints Freight Tendering Transportation Monitoring and Execution Documentation and Output Management

24 Contents Contents Event Management Freight Charge Management and Settlement Charge Calculation Charge Settlement Cost Distribution and Internal Settlement Reporting and Analytics Freight Order Execution Freight Tendering Freight Booking Execution Summary Inventory Management Inventory Management Basics Master Data Simplifications Batch Management Material Numbers Aggregate Tables Blocking Customer and/or Supplier Records Locking versus Logistics Information System Transaction MIGO Material Movements Goods Receipt from Vendor Stock Transfer between Storage Locations Stock Transfer between Plants Post Goods Movement Handling Unit Management Physical Inventory Management Inventory Valuation Goods Movement Valuation Statistical Moving Average Price Reporting and Analytics Inventory Turnover Analysis Material Document Overview Material Document List Material Inventory Values Stock Overview Summary Warehouse Management Warehouse Management Basics Traditional versus Extended Warehouse Management Basic versus Advanced Warehouse Management Master Data Simplifications Business Partners Material Master Batch Master Dangerous Goods and Hazardous Data Handling Unit Type Remote Function Call Communication Freight Order Management Route Determination Inbound Processing Receiving from Vendor Receiving from Production Receiving for Plant-to-Plant Transfers Quality Management Integration Inbound Documents Outbound Processing Issuing for Customers Staging and Consumption for Production Unplanned Goods Issues Internal Warehouse Processing Posting Change Replenishment Kitting

25 Contents Contents Slotting Ad Hoc Movements Reporting and Analytics The Warehouse Monitor The Warehouse Cockpit Stock Comparison Summary Reporting and Analytics Business Intelligence Maturity Reporting Analytics Tactical Reporting in SAP S/4HANA SAP S/4HANA Embedded Analytics Architecture Benefits Business Intelligence Tools Industry What Is Industry 4.0? Digital Supply Networks Consumer and Industrial Products Faster Customer Delivery Times Material Requirements Planning and Integrated Business Planning Accelerated Product Development Responsive Supplier Collaboration Manufacturing Asset Efficiency and Cost Optimization Life Sciences Unique Device Identifier Tax-Advantaged Supply Chain Track and Trace Oil and Gas Inventory Planning and Execution Commodity Management Summary Summary SAP S/4HANA and the Cloud Innovation with SAP Leonardo What Is SAP Leonardo? Machine Learning Internet of Things Virtual Reality and Augmented Reality Natural Language Processing Robotics Blockchain Summary Cloud Computing with SAP Cloud Architecture SAP S/4HANA Cloud Choosing the Cloud Operating in the Cloud SAP Ariba Spend Analysis Supplier Management Sourcing and Contracts Procurement and Invoice Management Other Capabilities Integration with SAP S/4HANA

26 Contents Contents 14.3 SAP Integrated Business Planning Sales and Operations Planning Demand Planning Response and Supply Planning Inventory Planning SAP Supply Chain Control Tower User Experience Integration with SAP S/4HANA Summary A.5 Plant Maintenance and Asset Management A.6 Sales Order Management A.7 Transportation Management A.8 Inventory Management A.9 Warehouse Management B The Authors Index First Steps to SAP S/4HANA Business Transformation Goals Confirming Your Business Priorities Evaluating Business Processes in SAP S/4HANA Defining a Digital Transformation Roadmap Designing Your Roadmap Sharing Your Roadmap Planning and Implementing Your Roadmap Selecting an SAP S/4HANA Implementation Approach New Implementation (Greenfield) System Conversion (Brownfield) Landscape Transformation SAP Activate Methodology Summary Appendices 535 A SAP Fiori Applications for Logistics with SAP S/4HANA A.1 Planning and Scheduling A.2 Sourcing and Procurement A.3 Manufacturing A.4 Quality Management

27 Index A ABAP , 431 ABAP for Eclipse ABC Analysis for Cycle Counting app Accelerated plan-to-product Accounts payable (AP) , 276 Accounts receivable (AR) Actual sales Actual scrap , 151 Additive manufacturing Advanced Planning view Advanced shipping notification (ASN) Aggregate tables Alert Monitor tool Allocation , 320, 339 Allocation quantities Alternative-based confirmation (ABC) 252, 266 Analysis Path Framework (APF) Analytics , 471 Application programming interfaces (APIs) , 463, 491 Whitelisted APIs Ariba Network , 107, 112, 467, 500, 506 Artificial intelligence (AI) , 448, 466 Assign Product to Product Allocation app Auction Augmented reality (AR) Authority-to-load (ATL) Automatic sourcing... 98, 135 Autonomous IoT Autonomous vehicles Availability check Available-to-promise (ATP) , 474 Advanced ATP (AATP) , 259 Global ATP (gatp) Average moving price B Back order Backorder processing (BOP) , 474 Advanced Basic , 262 BOP cockpit BOP segment Barcode , 404 Batch Batch assignment Batch management , 359 Tables Batch master Benefit potential map Bias Big Data Bill of lading Bill of materials (BOM)... 52, 77, 131, 132, 152, 156, 200, 220, 266 Components Explosion Migrate Multilevel BOM Biller Direct Biller Direct app Billing , 284 Billing document , 272, 276, 284, 300 Manage Schedule Billing document request (BDR) Manage Billing output Bin location , 410 Blockchain , 451, 459 Blockchain-as-a-service Broadcast tendering Brownfield implementation Buffer level Buffer level management Business case ,

28 Index Index Business intelligence maturity Analytics Reporting Business partner... 95, 240, 312, 399, 514 Change Create Delete Business partner grouping... 96, 240 Business partner number range Business partner role... 97, 241 Business priorities Business Process Improvement (BPI) , 515 Business processes , 526, 527, 532 Business role , 299 Business Rules Framework (BRF) Business share , 338 Business Share app Business transformation Business-to-business (B2B) Business-to-consumer (B2C) C Calendar resource Capability application map Capability map Capability scope Capability segmentation Capacity leveling Capacity management , 318 Carrier selection and subcontracting , 337 Carrier selection constraints Carriers , 321 Catch weight tolerance groups Central procurement hub Centralized procurement Certification requirement Change Billing Documents app Change Complaint Settlement Management app Change Contract app Change Maintenance Order app Change management , 523 Change Sales Order app , 288 Change Technical Object app , 203 Characteristic Analytics app Characteristic Detailed Analytics app Characteristics Characteristics valuation Characteristics values , 269 Charge calculation Charge settlement Chatbot Claims management Cloud computing Benefits Considerations Deployment Operations Cloud connectors Cloud deployment Cloud first Cognitive computing , 466 Collaborative robot Collaborative sourcing and contract management... 41, 114 Commercial project management (CPM) Commodity management Commodity Pricing Engine (CPE) Complaint management Complaints Workbench Completed contracts Compliance management Component scrap , 156 Condition contracts , 291 Condition technique Configurable characteristics Configurable classes Configuration simulation Configure Alternative Control app Configure BOP Segment app Configure BOP Variant app Configure Custom BOP Sorting app Configure Order Fulfillment Responsibilities app Configure Product Allocation app Configure Substitution Strategy app Configure Your Solution app Confirm Receipt of Goods app Confirm Warehouse Task app Connected customer , 473 Connected products Consumer and industrial products industry Consumption for production Content lifecycle management (CLM) Continuous inventory Contract Contract accounts receivable and payable Contract compliance Contract details Contract Expiry app Contract Leakage app Contract lifecycle Contract management... 41, 114 Contract repository Contract template Control tower Core Data Services (CDS) , 311, 381 Views , 354, 437, 442 Core Interface Framework (CIF) , 399, 401 Corrective and preventive actions (CAPA) , 169 Cost distribution Counting Country roll-out Crate part replenishment Create Billing Document app , 275 Create Maintenance Notification app Create Maintenance Order app Create Maintenance Plan app Create Malfunction Report app Create Measurement Document app Create Multiple Billing Documents app Create Optimal Orders for Shipments app Create Outbound Delivery from Sales Order app Create Physical Inventory Documents app , 379 Create Purchase Order app Create Purchase Requisition app Create Purchasing Info Record app Create Quality Notification app Create Sales Order app Create Sales Orders app , 254 Create Single Payment app Create Task List app Create Technical Object app , 202 Create Warehouse Task app Create/Change/Display Sales Order app Credit block Credit checks Credit control Credit limit Credit Limit Utilization app Credit management Credit memo Credit memo requests Cross-docking , 454 Custom Fields and Logic app Customer , 312 Customer complaint Customer consignment Customer record block Customer return Create Search Customer Return app Customer vendor integration (CVI) Customs management Cycle counting D Dangerous goods , 313, 402 Dangerous goods check Data Migration Cockpit app Data model simplification Data quality Data volume Days Payables Outstanding app Days sales outstanding (DSO) Debit memo Decentralized SAP EWM , 398, 404 Master data Deconsolidation , 403, 405 Defect Process Record , 183 Delivery and shipping processing , 262, 265, 285, 317 Schedule Delivery blocks

29 Index Index Delivery document , 412 Delivery order Delivery performance Delivery times Demand forecasting Demand history Demand planning , 503, 508 Demand sensing Demand-driven replenishment Demand-Driven Replenishment Overview Page app Dependency Diagram tool Deploy phase Deployment options... 29, 30 Descriptive analytics Descriptive foresight Descriptive hindsight Descriptive insight Design simulations Design thinking Detailed scheduling (DS)... 75, 77 Detailed Scheduling Planning Board app Digital core , 447, 471, 472 Digital development Digital supply network Digital transformation Digital transformation roadmap , 517, 520, 523 Direct procurement Direct shipments Discover phase Discrete manufacturing Display Billing Documents app Display Billing Split Analysis app Display Complaint Settlement Management app Display Contract app , 289 Display Credit Data app Display Credit Exposure app Display Customer Balances app Display Detailed Statement Condition Contracts app Display Maintenance Item app Display Maintenance Plan app Display Master Data Information Center app Display Measurement Document app Display MRP Master Data Issues app Display MRP Material Issues app Display Physical Inventory Progress app Display PI Document Items for Materials app Display Quality Info Record for Procurement app Display Sales Order app , 288 Display Sample app Display Sampling Procedure app Dock appointment scheduling Documented credit decision Down payment Dynamic fulfillment , 473 E e-commerce Ecosystem Electronic compliance reporting Electronic data interchange (EDI) , 461, 483 Embedded analytics... 39, 437, 440 Analytical layer Architecture Benefits Integration Presentation layer Embedded EWM , 391, 404 Advanced , 398 Basic , 398 Embedded TM , 403 Basic shipping license Master data Organizational structure Professional license Enhanced request-to-service Enter and Post PI Count w/o Document app Enter Inventory Count app , 379 Enterprise asset management (EAM) Equipment , 330 Ethereum Event management Exception management Excess Component Consumption app , 156 Expected goods receipt (EGR) Expired contract Explore phase Export process Extended warehouse management Business partners Dangerous goods Hazardous data Inbound processing Master data Material master Outbound processing Product master External requirement Extract, transform, and load (ETL) F Facilities Factory shop floor Fill orders Financial Accounting Standards Board (FASB) Financial risk Financial supply chain management , 278 Find Maintenance Notification app Find Maintenance Order and Operation app Find Maintenance Order Confirmation app , 235 Find Task List app Find Technical Object app , 235 Finished product... 52, 164 Forecast Foreign trade Formula analytics Formula and average (F&A) pricing Forward scheduling Forwarding agreement quotation Forwarding order , 325 Freight agreement Freight agreement document Freight booking , 326, 354 Freight Booking Execution app Freight Booking Quantity-Driven Operational Business app Freight charge calculation Freight charge management and settlement , 344 Freight cost Freight order , 325 Freight Order Execution app , 350, 351 Freight order management Freight Order Quantity-Driven Operational Business app Freight service Freight settlement document Freight tendering , 353 Freight unit , 324, 328 Functional silos G Gain orders Gantt chart , 333 Gateway Generally accepted accounting principles (GAAP) Geographic information system (GIS) Global roll-out Global template Go-live Goods issue (GI) , 358, 376, 416 Goods movement Goods movement valuation Goods receipt (GR) , 168, 169, 358, 362, 376, 403 Governance framework Greenfield implementation Grouping business partners Guided configuration H Handling unit , 418 Manage Requirements Type Hazardous substances

30 Index Index Heuristics... 52, 77, 83 Hyperledger , 483 I Implementation approach , 525 Implementation costs Implementation risks Import processes Inbound delivery document , 403, 404, 407, 409, 411 Structure Inbound delivery number Inbound document Inbound processing From production From vendor Incoming Sales Order Flexible Analysis app Incompatibilities Incomplete contract Incompletion list Indirect procurement Industry , 445, 465, 471 Information cards Infrastructure-as-a-service (IaaS) In-memory processing Inquiry Inspection lot , 170, 173 Change Create Manage Inspection Lot Analytics app , 194 Inspection Lot app Inspection Lot Detailed Analytics app , 195 Inspection Lot Worklist app Inspection method Inspection Method app Inspection operation Inspection Operation app Inspection planning Inspection plans Inspection point , 175, 176, 178 Record results Inspection procedure Inspection results , 174 Record Integration layer Intelligent IoT Intelligent purchasing Intelligent supply Intercompany drop shipment Internal movements Internal problem notification Internal requirement Internal resources Internal settlement Internal technologies Internal warehouse processing , 417 Ad hoc movements International Accounting Standards Board (IASB) International trade Internet of Things (IoT) , 450, 466 IoT sensors , 478 Trustless IoT Inventory Inventory balance Inventory control Inventory cost Inventory count Inventory cycle counting Inventory management... 41, 357, 395 Aggregate tables Handling unit management Inventory valuation Master data simplification Material movements Optimization Physical inventory management Table MATDOC Inventory planning , 484, 505 Inventory Planning Workbench (IPW) Inventory position Inventory sampling Inventory turnover analysis Inventory Turnover Analysis app Inventory valuation , 381 Invoice , 284, 289 Block Create Invoice (Cont.) Reverse Invoice list Invoice management... 42, 112, 500 Invoice processing Item characteristic K Key capabilities requirements matrix Key performance indicators (KPIs) KPI catalog Kitting , 397, 420 Kit-to-order Kit-to-stock L Labor management , 424 Landscape consolidation Landscape transformation Legal control Letter of credit Life Cycle Status Analysis tile , 354 Life sciences industry LIMS List Contracts app List Incomplete Sales Contract app List of Sales Orders app Load planning Loading , 414 Locations Locking Logistics Information System (LIS) Logistics service provider (LSP) , 317, 318, 321 Lose orders Lot size... 52, 130 M Machine learning , 447, 449, 450, 466, 467, 503 Maintain Business Partner app 95, 96, 240, 242 Maintain Contracts app Maintenance costs Maintenance item Display Maintenance management Maintenance notification , 215, 466 Create Find Maintenance operations Maintenance Order Confirmations app Maintenance plan , 227, 229 Create , 227 Display Schedule , 228 Maintenance Plan app Maintenance planning Maintenance processing , 209 Maintenance Scheduling Board Maintenance Scheduling Board app Maintenance work order , 224 Change Confirm Create Make-to-order (MTO) , 272 Make-to-stock (MTS) , 272 Malfunction , 219, 236 Repair Report Manage Billing Document Requests app Manage Billing Documents app , 275 Manage Buffer Levels app Manage Business Partner app Manage Change Requests app Manage Characteristics app Manage Classes Manage Configuration Profile app Manage Contract app Manage Credit Cases app Manage Customer Down Payment Requests app Manage Customer Master app Manage Customer Returns Create app Manage Customer Returns Refund app Manage Info Record app Manage Inspection Lots app Manage Maintenance Plan and Item List app Manage Malfunction Reports app

31 Index Index Manage Material Coverage app... 62, 66 Manage Notification List app Manage Order List app Manage Outbound Deliveries app Manage Product Allocation Planning Data app Manage Product Allocation Sequences app Manage Production Operations app Manage Production Orders app Manage Production/Planned Orders app Manage Purchase Contracts app Manage Purchase Requisition app Manage Purchasing Info Records app Manage Quality Levels app Manage Quality Tasks app Manage Sales Contract app , 246, 250 Manage Sales Orders app , 307 Manage Sales Plans app Manage Source List app Manage Sources of Supply app Manage Stock app Manage Usage Decision app Manage Usage Decisions app Manage Workflow for Purchase Contracts app Manage Workflow for Purchase Orders app Manage Workflow for Purchase Requisitions app Manage Your Solution app Manage Your Test Processes app Manufacturing , 158, 358, 469 Manufacturing execution Manufacturing integration and intelligence Master data simplifications Production execution Manufacturing execution systems (MES) , 156 Manufacturing intelligence integration (MII) Manufacturing line Manufacturing order... 77, 406 Master data Models Master data (Cont.) Records Master Data Governance app Master Data Information Center app Master inspection characteristics (MIC) , 171 Material availability check , 220 Schedule Material Configuration Overview app Material document Material document list Material Document List app Material flow control Material inventory values Material Inventory Values app Material Ledger (ML) Material master... 57, 99, 128, 165, 400, 501 Field length... 99, 129, 165, 360 Material movement , 417 Material numbers Material requirements planning (MRP)... 51, 57, 98, 472, 475 Classic MRP... 58, 72 Material Scrap app Materials management , 358 Mean absolute percentage error (MAPE) Mean percentage error (MPE) Measurement document Create Middleware Migration , 532 Design phase input checklist Mixed reality (MR) Mobile device Processing Mobility Monitor Batches and Payments app Monitor BOP Run app Monitor Capacity Utilization app... 80, 85 Monitor External Requirements app Monitor Internal Requirements app Monitor Maintenance Request app Monitor Material Coverage app Monitor Order Progress app Monitor Production Orders app Monitor Production/Planned Orders app Movement type MRP area MRP cockpit... 57, 61, 475 MRP Live... 58, 60, 85, 472, 475, 477 MRP stock requirements MultiChain Multi-echelon inventory Multistep dispatching Multistep receiving My Inbox app My Inbox Maintenance Management app My Purchase Requisitions app My Sales Overview app N Natural language processing (NLP) , 455, 466 Near-term forecast Negative credit check New implementation Nonmanaged spend Non-Managed Spend app Notification processing Notification type O OData service , 485 Off-Contract Spend app Oil and gas industry One-step transfer , 370 Online analytical processing (OLAP) , 440, 471 Online transactional processing (OLTP) , 431, 471 On-premise deployment Open sales quotations Operating model , 518 Operation Scrap app Operational capacity management Operational capacity planning Operational contract management Operational purchasing... 41, 99 Operational reporting , 431 Optimized order-to-cash Optimizer-based planning Order and contract management Order and delivery management , 315 Order to Cash Management app Order-based integration Order-based planning Order-based replenishment Order-level data model Outbound delivery Outbound Delivery app Outbound delivery document , 412, 413, 415 Outbound delivery order Outbound delivery request Outbound packing Outbound processing , 412 For customers For production Output control Output management , 311, 342 Overdue Payables app Overdue Purchase Order Items app Overview Page for Planner app Overview pages P Package Unit Packaging Materials... 52, 57 Packing , 409, 412 Pallet Parts serialization Payment cards Payment service provider (PSP) , 288 Peer-to-peer tendering , 353 Pegged requirements Period-based data model Periodic physical inventory Personal object worklist (POWL) Physical asset tracking Physical inventory , 380, 395 Physical Inventory Analysis app , 379 Physical inventory document ,

32 Index Index Physical inventory document number Physical inventory results Picking , 412 Plan inspection , 169 Planned order... 52, 77, 135, 141 Planned replenishment Planned sales Planning Planning and scheduling Planning priority Planning profile Plant , 149, 200, 358, 370 Plant maintenance , 466 Maintenance processing Master data simplifications Predictive maintenance Preventive maintenance Platform-as-a-service (PaaS)... 47, 490 Portfolio and project management (PPM) Post goods issue (PGI) , 407, 414 Post Goods Movement app Post Goods Receipt for Purchase Order app , 363 Posting change Post-processing algorithms Predictive analytics , 287, 430 Predictive maintenance , 232, 450, 471 Prepare phase Prescriptive analytics Prevent Delivery Delay app Preventive maintenance , 225, 453 Pricing Pricing condition Principal model Process Complaints Settlement Management app Process manufacturing Process order... 67, 138, 156 Procurement , 469 Procurement analytics Procurement Overview Page app Product allocation Create Display Edit Product Allocation Overview app Product availability check (PAC) Product classification Product configuration models Product development , 476 Product master Product master data Product Planning Table tool Product quality monitoring Product Version Migration for BOM report Production cost Production engineering Production execution Production Execution Duration app Production lead time Production line Production material request (PMR) , 415 Production notification Production operations... 43, 144 Production order... 67, 138, 141, 156, 166, 169 Change Component withdrawal Confirm , 146 Cost settlement Create , 140 Display Goods receipt Process Release , 140 Status Production Order Confirmation app Production plan Production planning (PP)... 43, 75, 77, 169, 189, 449 Production Planning and Detailed Scheduling (PP/DS)... 51, 52, 75, 77, 80, 85, 88, 466, 469 Production Scheduling Board app Production staging area (PSA) Production throughput Production version... 52, 57, 69, 132, 135 Assign Progress Management Board Project control and product development Project governance Project kick-off , 531 Purchase contract Purchase info record (PIR)... 98, 502 Purchase order , 253, 315, 317, 325, 362, 363 Collaboration Create Process Spend Purchase order document Purchase order number , 363 Purchase Order Value app , 122 Purchase requisition... 52, 101, 105 Manage Self-service requisitioning Purchase Requisition Average Approval Time app Purchasing Purchasing category Purchasing document Approval Purchasing group Purchasing Group Activities (Buyers) app Purchasing Group Activities app Putaway , 403, 405, 409, 454 Q Quality control compliance Quality Engineer Overview app , 192, 193 Quality Info Record in Procurement app Quality Inspection Engine (QIE) Quality management... 44, 158, 163 Integration Master data simplifications Quality engineering Quality improvement Quality inspection , 169, 403, 449, 454 Quality management information system (QMIS) Quality notification , 182, 185 Create Types Quality Notifications app Quality parameter Quality policy Quality systems monitoring Quality task Manage Quality Technician Overview app Quantity contract Query designer Quota arrangement... 54, 57, 130 Quotation , 258 Open Quotation conversion rate Quotation Conversion Rates app R R&D Radio frequency (RF) , 462 Rate tables Raw material... 52, 57, 164 Raw material cost Realize phase Real-time analytics Rebates , 288, 289 Recast.AI , 457 Receivables processing Recipe development Record and Process Defects app , 183 Record Inspection Results app , 174 Record Results for Inspection Points app Recurring inspection Redistribute orders Refunds management , 292 Release for delivery Release for Delivery app , 265 Remote function call (RFC) , 402 Repacking Repetitive manufacturing Replenishment Replenishment Execution by On-Hand Status app Replenishment planning Replenishment Planning by Planning Priority app Report Quality Notifications app Reporting and analytics , 471 Quality management Sales order management Sourcing and procurement

33 Index Index Reporting and analytics (Cont.) Transportation management Warehouse management Reporting layer Request for information (RFI) Request for proposals (RFP) Request for quotation (RFQ) , 115, 320, 321, 502 Request Maintenance app Request Physical Inventory Recount app Resource management Resource Planning Table tool Resource scheduling Resource Scheduling for Maintenance Planner app , 211 Response and supply planning Response management Results History app , 197 Return on investment (ROI) Returns processing , 292, 396 Revenue recognition , 282 Event-based RICEFW Risk management Robotic process automation (RPA) Robotics , 466 Role-based performance metrics Root cause analysis Route determination Route guide engine Routing... 57, 137, 314 Rule-based heuristic Run phase S Safety stock Safety stock settings Sales and operations planning Sales billing Sales contract , 247 Change , 289 Create , 289 Delete Display Sales contract fulfillment rates Sales Contract Fulfillment Rates app Sales contract management Sales delivery Sales monitoring Sales operations artifacts Sales order... 67, 141, 190, 245, 251, 252, 259, 272, 278, 289, 316, 325 Change Create , 252, 254 Display , 254 Fulfill Locked Open , 300 Prioritize Reference Update With reference Without reference Sales order conversion Sales order document Sales Order Fulfillment app , 300 Sales Order Fulfillment Issues app , 281, 305 Sales order lifecycle , 271 Sales order management , 245, 251, 255 Available to promise Claims, returns, and refunds management Delivery and shipping processing International trade Master data simplification Output management Sales billing Sales contract management Sales order management and processing , 252, 271 Variant configuration Sales Performance Plan/Actual app , 303, 304 Sales Process Analysis Sales Volume Check Open Sales app Sales Volume Flexible Analysis app Sales Volume Profit Margin app Sample Display Sampling , 416 Procedure Type Sanctioned party list SAP Activate , 531 SAP Advanced Planning and Optimization (APO)... 75, 259, 484, 502 SAP Analysis for Microsoft Office , 440 SAP Analytics Cloud , 441, 496 Story SAP AR Warehouse Picker SAP Ariba , 497 Integration with SAP S/4HANA SAP Ariba Buying and Invoicing , 502 SAP Ariba Contracts , 501 SAP Ariba Sourcing , 115, 498, 501 SAP Ariba Spend Analysis SAP Ariba Supplier Lifecycle and Performance , 501 SAP Ariba Supply Chain SAP Asset Intelligence Network SAP Asset Strategy and Performance Management (ASPM) SAP Best Practices , 530 SAP Billing and Revenue Innovation Management (BRIM) SAP Business Suite SAP Business Warehouse (BW) SAP BusinessObjects SAP BW/4HANA SAP C/4HANA , 473 SAP Cloud Platform , 446, 454, 457, 472, 491, 496, 500, 518 SAP Cloud Platform Integration for data services SAP Concur SAP CoPilot , 302, 457 SAP Customer Relationship Management (CRM)... 95, 240, 289 SAP ERP SAP Extended Warehouse Management (EWM) SAP Fiori... 30, 31, 437, 507 Apps... 30, 38, 437, 471 Cards , 192, 193 Tiles SAP Fiori (Cont.) User interface SAP Fiori launchpad SAP Global Batch Traceability (GBT) SAP Global Track and Trace SAP Global Trade Services (GTS) , 482 SAP HANA... 29, 31, 38, 58, 427, 466, 475, 503 SAP HANA Enterprise Cloud... 47, 48 SAP HANA smart data integration SAP IBP for demand , 502, 503 SAP IBP for inventory , 505 SAP IBP for response and supply , 504 SAP IBP for sales and operations planning SAP Integrated Business Planning (IBP) , 482, 502 Add-on for Excel Integration with SAP S/4HANA SAP Jam SAP Landscape Transformation SAP Leonardo , 445, 446, 451, 457, 463, 472, 483 SAP Leonardo Blockchain service SAP Lumira SAP Manufacturing Execution (ME) , 483 SAP Manufacturing Integration and Intelligence (MII) Integration , 155 SAP OEE Management report SAP Predictive Engineering Insights SAP Predictive Maintenance and Service (PdMS) , 455 SAP Process Integration , 311 SAP Process Orchestration SAP Revenue Accounting and Reporting (RAR) SAP S/4HANA... 29, 427 Additional products Architecture Cloud... 47, 492 Deployment Digital core... 30, 31, 35 Embedded analytics... 39, 437, 440 External suite Line of business (LoB)... 35,

34 Index Index SAP S/4HANA (Cont.) Master data On-premise Platform Value map SAP S/4HANA Cloud... 48, 492 Public option... 48, 492, 493 Single-tenant edition (private option)... 48, 492 SAP Smart Business cockpit , 474 SAP Solution Manager , 515 SAP SuccessFactors SAP Supplier Relationship Management (SRM)... 95, 240 SAP Supply Chain Control Tower , 506 SAP System Landscape Optimization SAP Trade Promotion Management SAP Trader s and Scheduler s Workbench SAP Watch List Screening SCADA Scalability Schedule Billing Creation app Schedule Billing Output app , 284 Schedule Billing Release app Schedule Delivery app Schedule Goods Issue for Deliveries app Schedule Maintenance Plan app Schedule Material Availability Check app Scheduling... 52, 336 Scrap management , 148 Metrics Scrap Reason app Scrapping Selection profile Self-service procurement Self-service requisitioning Sell from stock Serial number profiles Service agreement management Service entry sheet (SES) Service level agreement (SLA) Service management... 45, 456 Service master data management Service order Service parts management Settlement agreement Settlement calendar Settlement Calendar for Condition Contracts app Settlement document Settlement management , 288, 294 Shared database Shop floor , 155, 158 Shop floor control , 146 Shortage quantity Simplifications... 29, 34 Simulate Configuration Models app , 270 Simulation parameters Slotting , 421 Smart factories Smart Forms SmartOps Software-as-a-service (SaaS)... 48, 489 Source assignment Source determination Source evaluation Source inspection , 189 Source list... 57, 98 Sourcing and procurement... 57, 93, 469 Collaborative sourcing and contract management Invoicing and payables management Master data simplifications Operational purchasing Supplier management Sourcing event , 116 Sourcing logic Sourcing rule Spare parts control Specifications management Speed of innovation Spend analysis Spend control Spend variance Spend Variance app Spend visibility , 119 Sprint execution Sprint planning Staging , 414, 415 Staging layer Statistical forecasting Statistical moving average price Stock Stock availability Stock buffer zone Stock change Stock checking Stock comparison Stock localizations Stock overview Stock quantity Stock removal Stock transfer , 364, 370 Stock type , 393 level Storage bin , 409 Storage location , 363, 364, 366, 370 Storage unit Strategic capacity planning Strategic design direction charts Strategic direction Strategic freight procurement , 319 Strategic freight selling Strategic intent Streamlined procure-to-pay Subscription Subscription contract Supplier classification Supplier collaboration Supplier evaluation , 117, 477 Supplier Evaluation by Price app Supplier Evaluation by Quantity app Supplier Evaluation by Time app Supplier evaluation scorecard Supplier Invoices app Supplier Invoices List app Supplier management... 42, 108, 449, 498 Supplier performance Supplier record block Supplier risk , 498 Supplier segmentation Supplier selection Supply chain control tower Supply chain network Supply Chain Operational Reference (SCOR) Supply chain planning , 503 Supply network Supply planning , 508 Supporting processes Synchronized planning , 473 System conversion T Tabular Dashboard tool Tactical capacity planning , 321 Tactical reporting , 431 Target service level Target state Task list master data Manage Task management Technical debt Technical object Identify Manage Report Technical Object Breakdown Analysis app Template architecture chart Template blueprint Tendering Analysis app , 353 Tendering profile Testing Tolerance limit Track and trace Track Sales Order app Track Sales Order Details app , 303, 307 Trade lanes Transactional system Transfer Stock Cross-Plant app Transfer orders , 394 Transfer Stock Cross-Plant app , 372 Transfer Stock In Plant app , 367 Transport order Transportation charge calculation sheet (TCCS) Transportation charge management Transportation Cockpit , 328, 331, 335 Capacity quadrant Freight Order Detail quadrant Freight Orders/Freight Bookings quadrant

35 Index Index Transportation Cockpit (Cont.) Freight Unit Stages quadrant Transportation cost Transportation lane Transportation management Capacity management Carrier selection and subcontracting Freight charge management and settlement Master data simplification Transportation monitoring and execution , 341 Transportation planning Transportation requirements Transportation mode Transportation network Transportation planning , 324, 325 Automated planning Manual planning Transportation requirements , 315 Transportation resource Transportation schedule Transportation unit Handling Resources Transportation zone Transshipment location Two-step transfers , 367, 370 U Unique device identifiers (UDI) Unloading Unpacking Unplanned goods issues Unplanned returns Unsourced demand Usage decision , 180 Manage User experience (UX)... 30, 507 V Valuation mode Value contract Value drivers Value map Value proposition Value-added services Variable cost elements Variant configuration , 272 Advanced , 270 Classic , 270 LO-VC Variant Configuration Modeling Environment app , 271 Variant Configuration Overview app , 268 Vehicle resource , 330 Vehicle Scheduling and Routing (VSR) optimizer Vendor , 312 Vendor complaint Vendor consignment Vendor evaluation Vendor master Virtual data model (VDM)... 39, 437, 440 Virtual reality (VR) Visualize and Support Buffer Positioning in Demand-Driven Replenishment app W Warehouse billing Warehouse Cockpit Warehouse execution Warehouse management , 391, 392 Inbound processing , 403 Internal warehouse processing Master data simplifications Outbound processing , 412 Warehouse Monitor Warehouse task , 409 Create Wave management , 413 Waybill Weighings Win orders Work center , 149, 210 Scheduling Work Center app Work in process (WIP)... 57, 153 Work order , 209, 217 Work order list Manage Work scheduling Workforce collaboration Work-in-process (WIP) Y Yard management

36 First-hand knowledge. Deloitte principal and partner Deb Bhattacharjee is a thought leader in supply chain strategy, supply chain planning, and inventory planning and management. He has published papers on supply chain segmentation, inventory management, and transportation. Vadhi Narasimhamurti is a principal in Deloitte s SAP consulting practice. He helps consumer products companies reduce their operating costs and improve their supply chain efficiencies through SAP-enabled business transformations. Vadhi has over 18 years of SAP and supply chain experience; during this time, he has helped design and implement SAP solutions, including SAP S/4HANA, SAP IBP, SAP EWM, SAP MII, and SAP TM. Chaitanaya Desai is a senior technology leader on the forefront of developing supply chain solutions on SAP S/4HANA. He has deep expertise in implementing complex transformations in areas of supply chain management and order-to-cash for medium- and large-scale clients. His clients include some of the top companies in A&D, C&IP, telecommunications, and the hightech industries. Guillermo B. Vazquez is a senior technology executive, leading multimillion-dollar SAP global programs with Fortune 500 companies. He has been implementing supply chain management solutions for more than twenty years. Guillermo led the fourth live SAP HANA implementation in the world. Deb Bhattacharjee, Vadhi Narasimhamurti, Chaitanaya Desai, Guillermo B. Vazquez, Tom Walsh Logistics with SAP S/4HANA: An Introduction 589 Pages, 2019, $79.95 ISBN Tom Walsh brings over 18 years of consulting experience in industrial and automotive industries. For the past decade, Tom has served on the board of National Association of Manufacturers with the Manufacturing Institute. We hope you have enjoyed this reading sample. You may recommend or pass it on to others, but only in its entirety, including all pages. This reading sample and all its parts are protected by copyright law. All usage and exploitation rights are reserved by the author and the publisher.