Preface

21

Target Audience

21

Objective

22

Structure of this Book

22

Acknowledgments

25

1 Introduction to Sourcing and Procurement

27

1.1 Procurement from End to End

27

1.1.1 Ideal Procurement

28

1.1.2 Procure-to-Pay

29

1.1.3 Procurement Process Areas

29

1.1.4 Disadvantages

30

1.1.5 The Next Wave

31

1.2 Operational Procurement vs. Strategic Procurement in SAP

32

1.2.1 Operational Procurement

32

1.2.2 Strategic Procurement

34

1.3 Procurement with SAP S/4HANA

35

1.3.1 SAP Ariba

36

1.3.2 Strategic Sourcing

38

1.3.3 Procurement

38

1.3.4 Accounts Payable and Invoicing

40

1.3.5 Sourcing and Procurement Roles within SAP S/4HANA

41

1.3.6 SAP S/4HANA Sourcing and Procurement SAP Fiori Apps

42

1.4 SAP S/4HANA Enterprise Management: SAP’s Digital Core

42

1.5 Summary

44

2 Implementation Options

45

2.1 Implementation Overview

45

2.1.1 Deployment Options

46

2.1.2 Cloud

47

2.1.3 On-Premise

50

2.2 On-Premise SAP S/4HANA

55

2.2.1 Complete Functional Scope

55

2.2.2 Installation

57

2.2.3 Activated Appliance

58

2.2.4 Information Technology Considerations

59

2.2.5 Integration Options

60

2.2.6 SAP S/4HANA System Conversion

61

2.3 SAP S/4HANA Cloud

66

2.3.1 SAP Best Practices Scope

66

2.3.2 IT Considerations

67

2.3.3 Standard Integration and Customization

68

2.4 SAP Activate, SAP Best Practices, and SAP Model Companies: Quick Start Approaches and Materials for SAP S/4HANA

69

2.4.1 Prebuilt Content and Templates: SAP Appliance, SAP Best Practices, and SAP Model Company

70

2.4.2 SAP Best Practices

70

2.4.3 SAP Model Company

71

2.4.4 SAP Activate

71

2.4.5 SAP Activate Roles

77

2.5 Summary

78

3 Organizational Structure

79

3.1 SAP S/4HANA Enterprise Management Organization Structure

79

3.1.1 Organization Structure Terminology

80

3.1.2 Example Organizational Structure

83

3.2 Organizational Structure Objects

83

3.2.1 Plants

84

3.2.2 Storage Locations

84

3.2.3 Warehouses

84

3.2.4 Purchasing Organizations

85

3.3 Company Code, Plant, Storage Location, Purchasing Org, and Purchasing Group Creation

87

3.3.1 Company Code Creation

87

3.3.2 Plant Creation

90

3.3.3 Storage Location and Warehouse Creation

91

3.3.4 Warehouse Creation

93

3.3.5 Purchasing Organization Creation

94

3.3.6 Purchasing Group Creation

97

3.4 Summary

97

4 Master Data

99

4.1 Material Masters and Material Groups

100

4.1.1 Creating a Material Master

101

4.1.2 Creating a Material Group

104

4.2 Batch Management and Serialization

105

4.2.1 Batch Number Configuration

105

4.2.2 Serial Number Configuration

106

4.3 Material Master Updates in SAP S/4HANA

108

4.3.1 SERV Product Type

108

4.3.2 Select Material Master Configuration Options

109

4.3.3 Material Master Field Character Expansion in SAP S/4HANA

110

4.4 Supplier Master Setup and Supplier Creation

111

4.4.1 Customer/Vendor Integration

111

4.4.2 Supplier Master Setup

113

4.5 Business Partner

114

4.5.1 Business Partner Objectives

115

4.5.2 SAP S/4HANA Business Partner Implementation

117

4.5.3 Customer/Vendor Integration: Conversion of SAP ERP Customers and Vendors to SAP S/4HANA Business Partners

118

4.6 Summary

130

5 Operational Procurement

133

5.1 Overview

134

5.2 Requisition-to-Pay Process

135

5.3 Procurement of Stock, Consumable, and External (Service) Items

136

5.4 Self-Service Procurement

137

5.4.1 Creating a Requisition or Shopping Cart in SAP S/4HANA

138

5.4.2 Confirmation and Return Delivery

140

5.4.3 Purchase Order Collaboration

144

5.4.4 Shopping Cart versus Requisition-to-Pay and Migrating SAP SRM Shopping Carts

145

5.4.5 Migrating SAP SRM Shopping Carts to SAP S/4HANA

146

5.4.6 Workflow

147

5.5 Requirement Processing in SAP S/4HANA Sourcing and Procurement

148

5.5.1 Buyer-Driven and Automated Requirements Processing

149

5.5.2 Navigation in SAP S/4HANA Sourcing and Procurement: Requirements Processing

151

5.5.3 Purchase Order Processing

152

5.6 Configuration for Self-Service Procurement

154

5.6.1 Configuration Steps: Self-Service Procurement Baseline

155

5.6.2 Configure Catalogs (Optional)

156

5.6.3 Cross-Catalog Search (Optional)

157

5.6.4 Importing Catalog Data and Images

160

5.6.5 Import JSON File

162

5.6.6 Import Catalog via Web Service

162

5.7 Integration with Cloud Applications

164

5.7.1 Service Purchasing and Entry with SAP S/4HANA and SAP Fieldglass

164

5.7.2 SAP S/4HANA Cloud: Services Procurement Integration

165

5.7.3 SAP Ariba

165

5.7.4 SAP SuccessFactors

168

5.8 Summary

170

6 Automated and Direct Procurement

171

6.1 Automated and Direct Source-to-Pay Processes

172

6.2 Materials Requirements Planning

173

6.2.1 MRP in SAP ERP versus SAP S/4HANA

175

6.2.2 MRP SAP Fiori Apps

178

6.3 Forecasting and Planning

185

6.3.1 Forecast Planning

185

6.3.2 Reorder Point Planning

188

6.3.3 Time-Phased Planning

189

6.3.4 Forecast Collaboration

189

6.4 Contract and Source Determination

192

6.4.1 Purchasing Information Record

193

6.4.2 Source List

194

6.4.3 Quota Arrangement

195

6.4.4 Scheduling Agreement

196

6.4.5 Scheduling Agreement Release Collaboration

198

6.4.6 Blanket Purchase Order

199

6.4.7 Purchase Orders and Multitier Purchase Orders

201

6.4.8 Subcontracting

201

6.4.9 Consignment Stock

206

6.4.10 Consignment Orders

208

6.4.11 Quality Management Collaboration in SAP Ariba Supply Chain Collaboration for Buyers

209

6.4.12 SAP Supply Base Optimization

209

6.5 Configuration

211

6.5.1 Defining Master Data

212

6.5.2 Configuring Automated and Direct Procurement

212

6.6 Integration with SAP Ariba

219

6.6.1 SAP Ariba Supply Chain Collaboration

219

6.6.2 SAP Ariba Supply Chain Collaboration for Buyers and SAP S/4HANA

220

6.7 Summary

221

7 Inventory Management

223

7.1 Inventory Management in SAP S/4HANA

224

7.1.1 Inventory Management Data Model

225

7.1.2 Material Master

226

7.1.3 SAP S/4HANA Simplifications

226

7.2 Stock Management in SAP S/4HANA

227

7.2.1 Material

228

7.2.2 Location

228

7.2.3 Usability

228

7.2.4 Ownership

230

7.2.5 Batch Management

230

7.2.6 Serialization

231

7.2.7 Goods Movements

231

7.3 Goods Receipts

232

7.3.1 Posting Goods Receipts Using Inventory Management Apps

233

7.3.2 Apps Used for Processing Goods Receipts via Inbound Deliveries

239

7.4 Goods Issues

244

7.4.1 Create Outbound Deliveries

245

7.4.2 My Purchase Orders—Due for Delivery

246

7.4.3 Manage Outbound Deliveries

247

7.5 Stock Transfers

248

7.5.1 One-Step Stock Transfers

248

7.5.2 Two-Step Stock Transfers

248

7.5.3 Transfer Stock—In-Plant

249

7.5.4 Transfer Stock—Cross-Plant

250

7.5.5 Stock Transfer Execution Using Shipping Integration

251

7.5.6 Stock Transfer Reporting

251

7.6 Transfer Postings

253

7.6.1 Changes in Stock Identity

253

7.6.2 Changes in Stock Usability

253

7.6.3 Changes in Stock Ownership

254

7.6.4 Apps Used for Transfer Postings

254

7.7 Physical Inventory

254

7.7.1 Creation of Physical Inventory Documents

255

7.7.2 Entry of Physical Counts

256

7.7.3 Posting of Physical Inventory Differences

256

7.7.4 Physical Inventory Apps

257

7.7.5 Physical Inventory Execution Apps

257

7.7.6 Physical Inventory Reporting Apps

266

7.8 Reporting in Inventory Management

270

7.8.1 Inventory Overview Pages

270

7.8.2 Goods Movement Reporting

271

7.8.3 Stock Balances Reporting Apps

273

7.8.4 Apps for Monitoring Financial Inventory Values

279

7.8.5 Inventory Management Object Pages

281

7.8.6 Inventory Management Analytics

288

7.9 SAP Ariba Integration

290

7.10 Summary

291

8 Contracts Management

293

8.1 Contract Creation

294

8.1.1 Types of Contracts

294

8.1.2 Manage Purchase Contracts

295

8.1.3 Mass Change to Purchase Contract

298

8.2 Contract Consumption

299

8.2.1 Value Contract Consumption

299

8.2.2 Quantity Contract Consumption

299

8.3 Contract Dashboard Reporting and Expiry Notification Setting

300

8.3.1 Unused Contracts

301

8.3.2 Off-Contract Spend

302

8.3.3 Contract Leakage

303

8.3.4 Purchase Contract Items by Account Assignment

303

8.3.5 Monitor Purchase Contract Items

304

8.3.6 Contract Expiry

304

8.4 Configuration

305

8.4.1 Configuring Contracts

305

8.4.2 Configuring Contract Workflow

309

8.5 Scheduling Agreement

309

8.5.1 Scheduling Agreement with Release Document

310

8.5.2 Scheduling Agreement without Release Document

310

8.5.3 Stock Transport Scheduling Agreement

310

8.5.4 Creating Scheduling Agreements

311

8.5.5 Manage Scheduling Agreement

311

8.6 Customizing Scheduling Agreements

312

8.6.1 Define Document Types

312

8.6.2 Define Item Categories

313

8.6.3 Maintain Release Creation Profile

314

8.7 Legal Content Management

315

8.7.1 Legal Content Management in SAP S/4HANA

315

8.7.2 Manage Context for Legal Content

316

8.7.3 Categories for Legal Content

318

8.7.4 Request Legal Content

319

8.7.5 Manage Legal Transactions

321

8.8 Customizing Legal Content Management

322

8.8.1 Define Number Ranges

322

8.8.2 Define Reminder Types

323

8.8.3 Define Date Types

323

8.8.4 Define Internal Contacts

324

8.8.5 Define Entity Types

324

8.8.6 Define External Contacts

325

8.8.7 Define Technical Types for Linked Object Types

326

8.8.8 Define Linked Object Types

327

8.8.9 Define Content Types

328

8.8.10 Define Document Stamps

328

8.8.11 Define Profiles

329

8.8.12 Define Document Types

333

8.8.13 Background Job Definitions

337

8.9 Summary

337

9 External Sourcing

339

9.1 Sourcing Strategies

340

9.1.1 Sourcing Process Flow

340

9.1.2 Sourcing Optimization

341

9.2 Request for Quotation

341

9.2.1 Collaborative Sourcing

341

9.2.2 Quote Automation for Procurement

342

9.2.3 Request for Price

342

9.2.4 Manage Request for Quotation

343

9.2.5 Create Request for Quotation

344

9.2.6 Monitor Request for Quotation Items

345

9.2.7 Compare Supplier Quotations

346

9.2.8 Manage Supplier Quotation

347

9.2.9 Manage Workflows for Supplier Quotation

348

9.2.10 My Inbox

350

9.3 Request for Quotation Configuration

350

9.3.1 Define Number Ranges

350

9.3.2 Define Document Types for RFQ

351

9.3.3 Define Document Types for Quote

352

9.3.4 Assign Output Channels

354

9.3.5 Assign Form Templates

355

9.3.6 Map Application and Output Type to cXML Message

355

9.3.7 Activation of Scope-Dependent Background Job Definitions

356

9.3.8 Define Document-Specific Message Customizing

357

9.3.9 Map cXML Price Modifications to SAP S/4HANA Conditions

358

9.4 Flexible Workflow

359

9.4.1 Scenario Activation

359

9.4.2 Register Event for Subsequent Workflow

360

9.4.3 Maintain Task Names and Decision Options

362

9.4.4 Visualization of SAP Business Workflow

363

9.4.5 Scenario Definition

364

9.4.6 Maintain Attribute for Workflow Task

365

9.5 Integration with SAP Ariba

367

9.6 Summary

367

10 Invoice and Payables Management

369

10.1 Invoice Processing

370

10.1.1 Innovations in Invoice Processing in SAP S/4HANA

370

10.1.2 Supplier Invoice Documents

371

10.1.3 Results of Invoice Processing

373

10.1.4 Types of Supplier Invoice Verification

373

10.1.5 Entry of Invoice Documents

375

10.1.6 Invoice Processing

379

10.1.7 Other Invoice Processing Apps

381

10.1.8 Reporting in Invoice Processing

389

10.1.9 Object Pages

391

10.2 Accounts Payable

393

10.2.1 Supplier Payment Processing

393

10.2.2 Supplier Account Management

403

10.2.3 Create Correspondence

405

10.3 Invoice Collaboration with the Ariba Network

407

10.4 Summary

408

11 Supplier Management

409

11.1 Supplier Discovery, Qualification, and Onboarding

410

11.1.1 SAP Ariba Discovery and SAP Ariba Supplier Lifecycle and Performance

410

11.1.2 SAP Supplier Lifecycle Management

411

11.2 Supplier Management

411

11.2.1 Supplier Management with the Ariba Network

412

11.2.2 Buyer-Side Processes in SAP S/4HANA

412

11.2.3 Classification and Segmentation

413

11.2.4 Supplier Segmentation and Classification Apps

414

11.3 Supplier Evaluation

421

11.3.1 Supplier Evaluation Scorecard

423

11.3.2 Individual Supplier Evaluation

423

11.3.3 Supplier Evaluation by Time

424

11.3.4 Supplier Evaluation by Price

425

11.3.5 Supplier Evaluation by Questionnaire

425

11.3.6 Combined Scorecard

427

11.3.7 Operational Supplier Evaluation

427

11.4 Configuration

428

11.4.1 Supplier and Category Management Configuration

428

11.4.2 Supplier Evaluation Configuration

430

11.5 Integration with SAP Ariba

432

11.6 Summary

433

12 Reporting and Analytics

435

12.1 Spend Visibility

436

12.1.1 Multidimensional Spend Reporting in SAP S/4HANA Cloud

437

12.1.2 Navigation and Procurement Overview Page

437

12.2 Contract Expiration

438

12.3 Sourcing

439

12.4 Supplier Performance

441

12.4.1 Purchasing Documents Reports and Embedded Analytics

442

12.4.2 Predictive Analytics

443

12.5 Accounts Payable Analytics and Reporting

444

12.5.1 Aging Analysis

445

12.5.2 Overdue Payables

446

12.5.3 Future Payables

447

12.5.4 Cash Discount Forecast

448

12.5.5 Cash Discount Utilization

450

12.5.6 Days Payable Outstanding

451

12.5.7 Invoice Processing Analysis

452

12.5.8 Supplier Payment Analysis (Manual and Automatic Payments)

454

12.5.9 Supplier Payment Analysis (Open Payments)

455

12.6 Configuration

456

12.6.1 Creating a Key Performance Indicator

456

12.6.2 Configuring Real-Time Reporting/Queries

457

12.6.3 Exploring Virtual Data Model and Core Data Services in SAP S/4HANA

457

12.6.4 Integration of SAP S/4HANA with SAP Analytics Tools

458

12.7 Integration with Cloud Applications

460

12.7.1 SAP Fieldglass

461

12.7.2 SAP Ariba

461

12.8 Summary

462

13 Customizing the SAP Fiori UI

463

13.1 The SAP Fiori User Interface

463

13.1.1 SAP Fiori Launchpad

464

13.1.2 SAP General User Interface

467

13.1.3 SAP Fiori Architecture

469

13.2 User-Driven UI Tuning Options

474

13.2.1 SAP Fiori Edit Mode

475

13.2.2 SAP Fiori User Settings

475

13.2.3 SAP CoPilot

478

13.3 SAP Fiori Configuration

480

13.3.1 Installing SAP Fiori

480

13.3.2 Embedded and Central Hub Deployment for SAP Fiori

481

13.3.3 SAP Fiori Apps Reference Library

482

13.4 Summary

486