Preface

23

The Objective of This Book

25

Who Should Read This Book?

26

What Will Be Covered?

26

Acknowledgments

28

1 SAP S/4HANA for the Supply Chain

29

1.1 Architecture

37

1.1.1 In-Memory Processing

38

1.1.2 Real-Time Analytics

38

1.1.3 Improved Data Quality

39

1.2 Solution

40

1.2.1 Streamlined Procure-to-Pay

41

1.2.2 Accelerated Plan-to-Product

42

1.2.3 Optimized Order-to-Cash

44

1.2.4 Enhanced Request-to-Service

45

1.3 Deployment Options

46

1.3.1 On-Premise

46

1.3.2 Cloud

47

1.4 Summary

48

2 Planning and Scheduling

51

2.1 Planning and Scheduling Basics

52

2.2 Master Data Simplifications

53

2.3 Simplified Sourcing

57

2.4 Materials Requirements Planning

57

2.4.1 MRP Live

58

2.4.2 MRP Cockpit

61

2.4.3 Demand-Driven Replenishment

72

2.5 Production Planning and Detailed Scheduling

75

2.5.1 Production Planning

77

2.5.2 Detailed Scheduling

77

2.5.3 SAP Fiori Applications for Production Planning and Detailed Scheduling

80

2.5.4 Combined Production Planning Approach with PP/DS and MRP Live

85

2.6 Reporting and Analytics

86

2.6.1 Resource Planning Table

86

2.6.2 Product Planning Table

87

2.6.3 Alert Monitor

88

2.6.4 Production Planning and Detailed Scheduling Standard Reports

88

2.7 Summary

91

3 Sourcing and Procurement

93

3.1 Sourcing and Procurement Basics

93

3.2 Master Data Simplifications

94

3.2.1 Business Partners

95

3.2.2 Sourcing Logic

98

3.2.3 Material Master

99

3.3 Operational Purchasing

99

3.3.1 Self-Service Requisitions

100

3.3.2 Centralized Procurement Hub

101

3.3.3 Managing Purchase Requisitions

102

3.3.4 Purchase Order Processing

103

3.3.5 Purchasing Document Approval

103

3.3.6 Purchase Order Collaboration

107

3.4 Supplier Management

108

3.4.1 Classification and Segmentation

108

3.4.2 Supplier Evaluation

110

3.5 Invoicing and Payables Management

112

3.5.1 Invoice Processing and Collaboration

112

3.5.2 Accounts Payable

113

3.6 Collaborative Sourcing and Contract Management

114

3.6.1 Source Assignment

114

3.6.2 Operational Contract Management

116

3.7 Reporting and Analytics

116

3.7.1 Procurement Overview Page

117

3.7.2 Spend Visibility

119

3.7.3 Contract Analytics

123

3.7.4 Procurement Activities Monitoring

125

3.8 Summary

125

4 Manufacturing

127

4.1 Manufacturing Basics

127

4.2 Master Data Simplifications

128

4.2.1 Material Master

128

4.2.2 Bill of Materials/Production Version

132

4.2.3 Work Centers

135

4.3 Production Execution

138

4.3.1 Production and Process Order Processing

138

4.3.2 Shop Floor Control

146

4.3.3 Scrap Management

148

4.4 Manufacturing Execution

153

4.5 Manufacturing Integration and Intelligence

153

4.6 Reporting and Analytics

156

4.6.1 Production and Process Order Reporting

156

4.6.2 Overall Equipment Effectiveness Management

158

4.7 Summary

161

5 Quality Management

163

5.1 Quality Management Basics

164

5.2 Master Data Simplifications

165

5.3 Quality Engineering

166

5.3.1 Quality Information Management

166

5.3.2 Quality Systems Monitoring

167

5.4 Quality Inspection

169

5.4.1 Inspection Planning

169

5.4.2 Sampling

178

5.4.3 Usage Decision

180

5.5 Quality Improvement

182

5.5.1 Defect Recording

182

5.5.2 Quality Notification

185

5.6 Integration with Supply Chain Processes

187

5.6.1 Materials Management

187

5.6.2 Production Planning

189

5.6.3 Sales and Distribution

190

5.7 Reporting and Analytics

191

5.7.1 Manage Quality Levels

191

5.7.2 Quality Engineer Overview

192

5.7.3 Quality Technician Overview

193

5.7.4 Inspection lot Analytics

194

5.7.5 Inspection Lot Detailed Analytics

195

5.7.6 Characteristic Analytics

196

5.7.7 Characteristic Detailed Analytics

196

5.7.8 Results History

197

5.8 Summary

198

6 Plant Maintenance and Asset Management

199

6.1 Plant Maintenance and Asset Management Basics

199

6.2 Master Data Simplifications

201

6.2.1 Managing Technical Objects

201

6.2.2 Reporting and Identifying Technical Objects

203

6.2.3 Managing Task List Master Data

207

6.3 Maintenance Processing

209

6.3.1 Schedule Material Availability Check

209

6.3.2 Maintenance Planning

210

6.3.3 Mobile Device Processing

214

6.3.4 Maintenance Work Orders

221

6.4 Preventative Maintenance

225

6.4.1 Maintenance Plan Scheduling

226

6.4.2 Maintenance Plans with Item Lists

229

6.4.3 Measurement Documents

230

6.5 Predictive Maintenance

232

6.6 Reporting and Analytics

234

6.6.1 Enterprise Asset Management Information Center

235

6.6.2 Malfunctions

236

6.6.3 Overview Pages

236

6.7 Summary

237

7 Sales Order Management

239

7.1 Sales Order Management Basics

239

7.2 Master Data Simplifications

240

7.2.1 Business Partner Grouping

240

7.2.2 Business Partner Roles

241

7.3 Sales Contract Management

245

7.3.1 Create, Change, and Display Contracts

245

7.3.2 List Incomplete Sales Contracts

247

7.3.3 Sales Contract Fulfillment Rates

249

7.3.4 Manage Subscription Contracts

249

7.4 Sales Order Management and Processing

251

7.4.1 Sales Order Processing

252

7.4.2 Sales Process Analysis

255

7.5 Available to Promise

259

7.5.1 Product Availability Check

259

7.5.2 Product Allocation

260

7.5.3 Backorder Processing

262

7.5.4 Release for Delivery

264

7.5.5 Alternative-Based Confirmation

265

7.6 Variant Configuration

266

7.6.1 Classic Variant Configuration

267

7.6.2 Advanced Variant Configuration

270

7.7 Sales Billing

271

7.7.1 Billing and Invoicing for Goods and Services

272

7.7.2 Subscription Billing and Invoicing

275

7.7.3 Contract Accounts Receivable and Payable

276

7.7.4 Credit Management

278

7.7.5 Revenue Accounting and Recognition

282

7.8 Output Management

284

7.9 Delivery and Shipping Processing

285

7.10 Claims, Returns, and Refunds Management

288

7.10.1 Rebates and Settlement Management

288

7.10.2 Complaint Management

292

7.11 International Trade

295

7.12 Reporting and Analytics

298

7.12.1 Sales Operations Artifacts

298

7.12.2 Sales Analytics

299

7.12.3 Sales Information Display

302

7.12.4 Sales Performance

303

7.12.5 Sales Order Processing

303

7.13 Summary

307

8 Transportation Management

309

8.1 Transportation Management Basics

309

8.2 Master Data Simplifications

311

8.2.1 General Master Data and Organizational Structure

312

8.2.2 Product Master Data

312

8.2.3 Business Partner

312

8.2.4 Dangerous Goods

313

8.2.5 Transportation Network

313

8.2.6 Transportation Schedules

314

8.2.7 Transportation Resources

315

8.3 Transportation Requirements

315

8.3.1 Order and Delivery Management

315

8.3.2 Forwarding Order Management

317

8.4 Capacity Management

318

8.4.1 Strategic Freight Procurement

318

8.4.2 Strategic Freight Selling

321

8.4.3 Tactical Capacity Planning

321

8.4.4 Operational Capacity Planning

322

8.5 Transportation Planning

324

8.5.1 Freight Units

324

8.5.2 Freight Orders

325

8.5.3 Freight Booking

326

8.5.4 Transportation Units

327

8.5.5 Transportation Cockpit

328

8.5.6 Manual Planning

332

8.5.7 Automated Planning

333

8.5.8 Distance and Duration Determination

336

8.5.9 Service Order

336

8.5.10 Direct Shipments

337

8.6 Carrier Selection and Subcontracting

337

8.6.1 Carrier Selection Constraints

338

8.6.2 Freight Tendering

339

8.7 Transportation Monitoring and Execution

341

8.7.1 Documentation and Output Management

342

8.7.2 Event Management

343

8.8 Freight Charge Management and Settlement

344

8.8.1 Charge Calculation

344

8.8.2 Charge Settlement

347

8.8.3 Cost Distribution and Internal Settlement

349

8.9 Reporting and Analytics

349

8.9.1 Freight Order Execution

350

8.9.2 Freight Tendering

353

8.9.3 Freight Booking Execution

354

8.10 Summary

356

9 Inventory Management

357

9.1 Inventory Management Basics

358

9.2 Master Data Simplifications

359

9.2.1 Batch Management

359

9.2.2 Material Numbers

360

9.2.3 Aggregate Tables

360

9.2.4 Blocking Customer and/or Supplier Records

361

9.2.5 Locking versus Logistics Information System

361

9.2.6 Transaction MIGO

361

9.3 Material Movements

362

9.3.1 Goods Receipt from Vendor

362

9.3.2 Stock Transfer between Storage Locations

364

9.3.3 Stock Transfer between Plants

370

9.3.4 Post Goods Movement

375

9.4 Handling Unit Management

376

9.5 Physical Inventory Management

378

9.6 Inventory Valuation

381

9.6.1 Goods Movement Valuation

381

9.6.2 Statistical Moving Average Price

381

9.7 Reporting and Analytics

382

9.7.1 Inventory Turnover Analysis

383

9.7.2 Material Document Overview

385

9.7.3 Material Document List

385

9.7.4 Material Inventory Values

387

9.7.5 Stock Overview

388

9.8 Summary

389

10 Warehouse Management

391

10.1 Warehouse Management Basics

392

10.1.1 Traditional versus Extended Warehouse Management

393

10.1.2 Basic versus Advanced Warehouse Management

394

10.2 Master Data Simplifications

398

10.2.1 Business Partners

399

10.2.2 Material Master

400

10.2.3 Batch Master

401

10.2.4 Dangerous Goods and Hazardous Data

402

10.2.5 Handling Unit Type

402

10.2.6 Remote Function Call Communication

402

10.2.7 Freight Order Management

403

10.2.8 Route Determination

403

10.3 Inbound Processing

403

10.3.1 Receiving from Vendor

404

10.3.2 Receiving from Production

405

10.3.3 Receiving for Plant-to-Plant Transfers

407

10.3.4 Quality Management Integration

407

10.3.5 Inbound Documents

408

10.4 Outbound Processing

412

10.4.1 Issuing for Customers

413

10.4.2 Staging and Consumption for Production

415

10.4.3 Unplanned Goods Issues

416

10.5 Internal Warehouse Processing

417

10.5.1 Posting Change

418

10.5.2 Replenishment

419

10.5.3 Kitting

420

10.5.4 Slotting

421

10.5.5 Ad Hoc Movements

422

10.6 Reporting and Analytics

423

10.6.1 The Warehouse Monitor

423

10.6.2 The Warehouse Cockpit

424

10.6.3 Stock Comparison

424

10.7 Summary

425

11 Reporting and Analytics

427

11.1 Business Intelligence Maturity

427

11.1.1 Reporting

428

11.1.2 Analytics

429

11.2 Tactical Reporting in SAP S/4HANA

431

11.3 SAP S/4HANA Embedded Analytics

437

11.3.1 Architecture

437

11.3.2 Benefits

439

11.3.3 Business Intelligence Tools

440

11.4 Summary

443

12 Innovation with SAP Leonardo

445

12.1 What Is SAP Leonardo?

446

12.2 Machine Learning

449

12.3 Internet of Things

450

12.4 Virtual Reality and Augmented Reality

452

12.5 Natural Language Processing

455

12.6 Robotics

457

12.7 Blockchain

459

12.8 Summary

463

13 Industry

465

13.1 What Is Industry 4.0?

465

13.2 Digital Supply Networks

468

13.3 Consumer and Industrial Products

473

13.3.1 Faster Customer Delivery Times

473

13.3.2 Material Requirements Planning and Integrated Business Planning

475

13.3.3 Accelerated Product Development

476

13.3.4 Responsive Supplier Collaboration

477

13.3.5 Manufacturing Asset Efficiency and Cost Optimization

478

13.4 Life Sciences

479

13.4.1 Unique Device Identifier

479

13.4.2 Tax-Advantaged Supply Chain

480

13.4.3 Track and Trace

482

13.5 Oil and Gas

484

13.5.1 Inventory Planning and Execution

484

13.5.2 Commodity Management

485

13.6 Summary

487

14 SAP S/4HANA and the Cloud

489

14.1 Cloud Computing with SAP

489

14.1.1 Cloud Architecture

491

14.1.2 SAP S/4HANA Cloud

492

14.1.3 Choosing the Cloud

495

14.1.4 Operating in the Cloud

496

14.2 SAP Ariba

497

14.2.1 Spend Analysis

498

14.2.2 Supplier Management

498

14.2.3 Sourcing and Contracts

498

14.2.4 Procurement and Invoice Management

500

14.2.5 Other Capabilities

500

14.2.6 Integration with SAP S/4HANA

500

14.3 SAP Integrated Business Planning

502

14.3.1 Sales and Operations Planning

503

14.3.2 Demand Planning

503

14.3.3 Response and Supply Planning

504

14.3.4 Inventory Planning

505

14.3.5 SAP Supply Chain Control Tower

506

14.3.6 User Experience

507

14.3.7 Integration with SAP S/4HANA

508

14.4 Summary

509

15 First Steps to SAP S/4HANA

511

15.1 Business Transformation Goals

512

15.1.1 Confirming Your Business Priorities

512

15.1.2 Evaluating Business Processes in SAP S/4HANA

513

15.2 Defining a Digital Transformation Roadmap

517

15.2.1 Designing Your Roadmap

517

15.2.2 Sharing Your Roadmap

520

15.2.3 Planning and Implementing Your Roadmap

520

15.3 Selecting an SAP S/4HANA Implementation Approach

525

15.3.1 New Implementation (Greenfield)

526

15.3.2 System Conversion (Brownfield)

527

15.3.3 Landscape Transformation

528

15.3.4 SAP Activate Methodology

530

15.4 Summary

533

Appendices

535

A SAP Fiori Applications for Logistics with SAP S/4HANA

535

A.1 Planning and Scheduling

535

A.2 Sourcing and Procurement

539

A.3 Manufacturing

541

A.4 Quality Management

546

A.5 Plant Maintenance and Asset Management

547

A.6 Sales Order Management

549

A.7 Transportation Management

557

A.8 Inventory Management

559

A.9 Warehouse Management

560

B The Authors

563

The Contributors

564