Table of Contents

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Foreword
21
Preface
23
Target Audience
24
Objective
24
Structure of This Book
24
Acknowledgments
28
1 Introduction to Sourcing and Procurement
31
1.1 Sourcing and Procurement Basics
31
1.1.1 Sourcing
32
1.1.2 Operational Procurement
33
1.2 Sourcing and Procurement from End to End
35
1.2.1 Ideal Procurement
36
1.2.2 Source-to-Pay and Procure-to-Pay
37
1.2.3 Key Process Areas
37
1.3 Procurement with SAP S/4HANA
40
1.3.1 Cloud versus On-Premise ERP Systems
41
1.3.2 Strategic Sourcing
44
1.3.3 Procurement
45
1.3.4 Accounts Payable and Invoicing
46
1.3.5 SAP Fiori Roles and Applications
47
1.4 Summary
48
2 Implementation Options
51
2.1 Implementation Overview
51
2.1.1 Deployment Options
52
2.1.2 Cloud
53
2.1.3 On-Premise
57
2.1.4 New Implementation versus System Conversion
58
2.2 On-Premise SAP S/4HANA
62
2.2.1 Complete Functional Scope
63
2.2.2 Installation
64
2.2.3 Activated Appliance
65
2.2.4 Information Technology Considerations
66
2.2.5 Integration Options
68
2.2.6 SAP S/4HANA System Conversion
69
2.3 SAP S/4HANA Cloud
74
2.3.1 SAP Best Practices Scope
74
2.3.2 Information Technology Considerations
75
2.3.3 Standard Integration and Customization
76
2.4 SAP S/4HANA for Central Procurement
77
2.5 Quick Start Approaches and Materials for SAP S/4HANA
79
2.5.1 Prebuilt Content and Templates
80
2.5.2 SAP Best Practices
80
2.5.3 SAP Model Company
81
2.5.4 SAP Activate
81
2.5.5 SAP Activate Roles
88
2.6 Summary
89
3 Organizational Structure
91
3.1 SAP S/4HANA Enterprise Management Organization Objects
91
3.2 SAP S/4HANA Sourcing and Procurement-Specific Organization Structure Objects
95
3.3 Company Code
96
3.4 Plants
98
3.5 Storage Locations and Warehouses
100
3.5.1 Storage Location and Warehouse Creation
102
3.5.2 Warehouse Creation
104
3.6 Purchasing Organizations
105
3.7 Purchasing Group Creation
108
3.8 Summary
109
4 Master Data
111
4.1 Material Masters and Material Groups
112
4.1.1 Activating a Material Master Field
113
4.1.2 Creating a Material Master
116
4.1.3 Creating a Material Group
119
4.1.4 Creating a New Product Services Type (SERV)
120
4.1.5 Select Material Master Configuration Options
121
4.1.6 Material Master Field Character Expansion in SAP S/4HANA
121
4.2 Batch Management and Serialization
122
4.2.1 Configuring Batch Numbers
123
4.2.2 Configuring Serial Numbers
124
4.3 SAP S/4HANA Business Partner Model
125
4.3.1 Suppliers as Business Partners
126
4.3.2 Loading Supplier Records in SAP S/4HANA
129
4.3.3 Setting Up the Supplier Master
129
4.3.4 Performing Customer/Vendor Integration
131
4.4 Summary
146
5 Operational Procurement
147
5.1 What Is Operational Procurement?
147
5.2 Self-Service Procurement
151
5.2.1 Creating a Requisition or Shopping Cart in SAP S/4HANA
152
5.2.2 Confirmation and Return Delivery
154
5.2.3 Shopping Cart versus Requisition-to-Pay and Migrating SAP SRM Shopping Carts
159
5.2.4 Migrating SAP SRM Shopping Carts to SAP S/4HANA
159
5.2.5 Workflow
160
5.2.6 Machine Learning-Based Purchasing Functionality via SAP Cloud Platform and SAP Leonardo
162
5.3 Requirements Processing in SAP S/4HANA Sourcing and Procurement
163
5.4 Purchase Order Processing
166
5.5 Service Purchasing and Service Confirmation
168
5.6 Purchase Order Collaboration
169
5.7 Configuring Operational Procurement
170
5.7.1 Self-Service Procurement Requisitioning
170
5.7.2 Machine Learning-Based Procurement Functionality
182
5.7.3 Requirements Processing
190
5.7.4 Purchase Order Processing
191
5.7.5 Service Order Processing
192
5.7.6 Purchase Order Collaboration
193
5.7.7 SAP SuccessFactors
195
5.8 Summary
198
6 Automated and Direct Procurement
199
6.1 What Is Automated and Direct Procurement?
199
6.2 Materials Requirements Planning
202
6.2.1 MRP in SAP ERP versus SAP S/4HANA
204
6.2.2 SAP Fiori Apps for MRP
207
6.3 Forecasting and Planning
214
6.3.1 Forecast Planning
214
6.3.2 Reorder Point Planning
218
6.3.3 Time-Phased Planning
219
6.3.4 Forecast Collaboration
220
6.4 Contract and Source Determination
222
6.4.1 Purchasing Information Record
224
6.4.2 Source List
225
6.4.3 Quota Arrangement
226
6.4.4 Scheduling Agreement
227
6.4.5 Scheduling Agreement Release Collaboration
230
6.4.6 Blanket Purchase Order
231
6.4.7 Purchase Orders and Multitier Purchase Orders
233
6.4.8 Subcontracting
234
6.4.9 Consignment Stock
239
6.4.10 Consignment Orders
240
6.4.11 Quality Management Collaboration in SAP Ariba Supply Chain Collaboration for Buyers
241
6.4.12 SAP Supply Base Optimization
242
6.5 Configuring Automated and Direct Procurement
245
6.5.1 Master Data
245
6.5.2 Document Types
246
6.5.3 Forecast Planning
251
6.5.4 Purchase Info Records
251
6.5.5 Source Lists
252
6.5.6 Quota Arrangements
252
6.6 Integration with SAP Ariba
253
6.7 Summary
254
7 Inventory Management
255
7.1 What Is Inventory Management?
256
7.2 Stock Management in SAP S/4HANA
259
7.2.1 Material Identification
260
7.2.2 Location
260
7.2.3 Usability
260
7.2.4 Ownership
262
7.2.5 Batch Identification
262
7.2.6 Serialization
263
7.2.7 Goods Movements
263
7.3 Goods Receipts
264
7.3.1 Posting Goods Receipts
265
7.3.2 Processing Goods Receipts via Inbound Deliveries
271
7.4 Goods Issues
277
7.4.1 My Purchase Orders—Due for Delivery
278
7.4.2 Manage Outbound Deliveries
280
7.5 Stock Transfers
280
7.5.1 One-Step and Two-Step Stock Transfers
281
7.5.2 Stock Transfer Execution Using Shipping Integration
284
7.5.3 Stock Transfer Reporting
284
7.6 Transfer Postings
286
7.6.1 Stock Identity
286
7.6.2 Stock Usability
286
7.6.3 Stock Ownership
287
7.7 Physical Inventory
287
7.7.1 Physical Inventory Execution
289
7.7.2 Physical Inventory Monitoring and Reporting
300
7.8 Reporting in Inventory Management
305
7.8.1 Inventory Overview Pages
305
7.8.2 Goods Movement Reporting
309
7.8.3 Stock Balances Reporting Apps
310
7.8.4 Apps for Monitoring Financial Inventory Values
316
7.8.5 Inventory Management Object Pages
318
7.8.6 Inventory Management Analytics
327
7.9 Configuring Inventory Management
332
7.9.1 General Configuration Elements
334
7.9.2 Goods Receipts and Goods Issues
338
7.9.3 Movement Types
344
7.9.4 Physical Inventory
350
7.10 Summary
354
8 Contracts Management
355
8.1 What Is Contract Management?
356
8.1.1 Contract Creation
356
8.1.2 Types of Contracts
356
8.1.3 Manage Purchase Contracts
357
8.1.4 Mass Changes to Purchase Contract
362
8.2 Contract Consumption
363
8.2.1 Value Contract Consumption
364
8.2.2 Quantity Contract Consumption
365
8.3 Contract Dashboard Reporting and Expiration Notification Setting
367
8.3.1 Unused Contracts
368
8.3.2 Off-Contract Spend
369
8.3.3 Contract Leakage
371
8.3.4 Purchase Contract Items by Account Assignment
372
8.3.5 Monitor Purchase Contract Items
372
8.3.6 Contract Expiry
373
8.4 Configuration
374
8.4.1 Configuring Contracts
374
8.4.2 Manage Workflows for Purchase Contracts
378
8.5 Scheduling Agreement
381
8.5.1 Scheduling Agreement Types
381
8.5.2 Creating Scheduling Agreements
382
8.5.3 Manage Scheduling Agreement
383
8.6 Customizing Scheduling Agreements
388
8.6.1 Define Document Types
388
8.6.2 Allowed Item Categories
389
8.6.3 Maintain Release Creation Profile
390
8.7 Summary
391
9 Enterprise Contract Management and Assembly
393
9.1 What Is Enterprise Contract Management and Assembly?
393
9.2 Enterprise Contract Management Overview App
395
9.2.1 Manage Contexts
398
9.2.2 Categories for Legal Content
401
9.2.3 Request Legal Content
401
9.2.4 Manage Legal Documents
404
9.2.5 Manage Legal Tasks
404
9.2.6 Manage Legal Transactions
405
9.2.7 SAP S/4HANA Cloud for Enterprise Contract Assembly
406
9.3 Customizing Enterprise Contract Management
407
9.3.1 Number Ranges
408
9.3.2 Reminder Types
408
9.3.3 Date Types
409
9.3.4 Internal Contacts
409
9.3.5 Entity Types
410
9.3.6 External Contacts
411
9.3.7 Technical Types for Linked Object Types
412
9.3.8 Linked Object Types
413
9.3.9 Content Types
413
9.3.10 Document Stamps
414
9.3.11 Profiles
414
9.3.12 Document Types
418
9.3.13 Background Job Definitions
422
9.4 Summary
423
10 External Sourcing
425
10.1 Sourcing Strategies
426
10.1.1 Sourcing Process Flow
426
10.1.2 Sourcing Optimization
426
10.2 Request for Quotation
428
10.2.1 Sourcing with SAP Ariba Sourcing
428
10.2.2 Quote Automation for Procurement
429
10.2.3 Request for Price
429
10.2.4 Manage Request for Quotation
430
10.2.5 Create Request for Quotation
432
10.2.6 Monitor Request for Quotation Items
433
10.2.7 Compare Supplier Quotations
434
10.2.8 Manage Supplier Quotation
435
10.2.9 Manage Workflows for RFQs
436
10.2.10 Manage Workflows for Supplier Quotation
437
10.2.11 My Inbox
438
10.3 Configuring Request for Quotation
439
10.3.1 Number Ranges
439
10.3.2 Document Types for RFQ
439
10.3.3 Document Types for Supplier Quotation
441
10.3.4 External Processing for Supplier Quotation Process
443
10.3.5 Activate cXML Message Types
443
10.3.6 Credentials and Endpoints
443
10.3.7 Assign Network ID to Company Code
444
10.3.8 Schedule Job
445
10.3.9 Output Parameter Determination and Use
445
10.4 Configuring Flexible Workflow
446
10.4.1 Scenario Activation
447
10.4.2 Register Event for Subsequent Workflow
447
10.4.3 Maintain Task Names and Decision Options
449
10.4.4 Visualization of SAP Business Workflow
450
10.4.5 Scenario Definition
451
10.4.6 Maintain Attribute for Workflow Task
452
10.5 Integration with SAP Ariba
454
10.6 Summary
454
11 Invoice and Payables Management
455
11.1 What Are Invoice and Payables Management?
455
11.2 Invoice Processing
456
11.2.1 Supplier Invoice Documents
457
11.2.2 Results of Invoice Processing
459
11.2.3 Types of Supplier Invoice Verification
459
11.2.4 Entry of Invoice Documents
461
11.2.5 Invoice Processing
465
11.2.6 Reporting in Invoice Processing
477
11.2.7 Object Pages
480
11.3 Accounts Payable
483
11.3.1 Supplier Payment Processing
484
11.3.2 Supplier Account Management
495
11.4 Invoice and Payables Management Analytics and Reporting
499
11.4.1 Accounts Payable Overview
500
11.4.2 Aging Analysis
503
11.4.3 Overdue Payables
504
11.4.4 Future Payables
505
11.4.5 Cash Discount Forecast
506
11.4.6 Cash Discount Utilization
507
11.4.7 Days Payable Outstanding
509
11.4.8 Days Payable Outstanding—Indirect Method
510
11.4.9 Invoice Processing Analysis
511
11.4.10 Supplier Payment Analysis (Manual and Automatic Payments)
512
11.4.11 Supplier Payment Analysis (Open Payments)
513
11.5 Configuring Invoice and Payables Management
513
11.5.1 Configuration Elements for Managing Incoming Invoices
514
11.5.2 Configuration Elements for Managing Invoice Blocks
521
11.6 Summary
528
12 Supplier Management
529
12.1 What Is Supplier Management?
529
12.1.1 Supplier Discovery, Qualification, and Onboarding
530
12.1.2 Classification and Segmentation
534
12.1.3 Evaluation
534
12.2 Classification and Segmentation
535
12.2.1 Purchasing Categories
535
12.2.2 Supplier Activities and Tasks
539
12.3 Supplier Evaluation
542
12.3.1 Supplier Evaluation Scorecard
544
12.3.2 Individual Supplier Evaluation
544
12.3.3 Supplier Evaluation by Time
545
12.3.4 Supplier Evaluation by Price
546
12.3.5 Supplier Evaluation by Questionnaire
546
12.3.6 Combined Scorecard
548
12.3.7 Operational Supplier Evaluation
548
12.4 Configuration
549
12.4.1 Supplier and Category Management Configuration
550
12.4.2 Classification and Segmentation
552
12.4.3 Supplier Evaluation Configuration
552
12.5 Summary
555
13 Centralized Procurement
557
13.1 What Is Centralized Procurement?
557
13.2 Central Requisitioning
562
13.3 Central Purchasing
564
13.4 Central Purchasing Contracts
566
13.5 Central Analytics
567
13.6 SAP S/4HANA for Central Procurement with SAP Ariba
571
13.7 Configuring SAP S/4HANA for Central Procurement
574
13.7.1 Establishing Connectivity to ERP Systems
576
13.7.2 Validating Data and Identifying Gaps
583
13.7.3 Configuring SAP S/4HANA for Central Procurement Scenarios
585
13.7.4 Integrating SAP Ariba Guided Buying with Central Procurement
596
13.8 Summary
597
14 Sourcing and Procurement Analytics
599
14.1 Spend Visibility
600
14.1.1 Multidimensional Spend Reporting in SAP S/4HANA Cloud
601
14.1.2 Navigation and Procurement Overview Page
601
14.2 Contract Expiration
602
14.3 Sourcing
604
14.4 Supplier Performance
606
14.4.1 Purchasing Document Reports and Embedded Analytics
607
14.4.2 Predictive Analytics
609
14.5 Reporting
609
14.6 Machine Learning
611
14.7 Configuration
612
14.7.1 Creating a Key Performance Indicator
613
14.7.2 Configuring Real-Time Reporting/Queries
613
14.7.3 Exploring Virtual Data Model and Core Data Services in SAP S/4HANA
614
14.7.4 Integration of SAP S/4HANA with SAP Analytics Tools
615
14.7.5 Integration with Cloud Applications
617
14.8 Summary
618
15 Integrating SAP S/4HANA with SAP Ariba and SAP Fieldglass
619
15.1 SAP Ariba Integration Projects and Connectivity Options
619
15.2 SAP Ariba
623
15.2.1 Key Integration Technologies
624
15.3 SAP Ariba Cloud Integration Gateway
625
15.3.1 SAP Cloud Platform Integration and the SAP Ariba Cloud Integration Gateway
625
15.3.2 Configuring the SAP Ariba Cloud Integration Gateway
627
15.3.3 SAP Ariba Strategic Sourcing Integration
628
15.3.4 SAP Ariba Buying and Invoicing Integration
639
15.4 SAP Ariba Supply Chain Collaboration
650
15.5 SAP Ariba Supply Chain Collaboration Configuration
658
15.6 SAP Fieldglass
660
15.6.1 Key Technologies
661
15.6.2 Integrating SAP Fieldglass Contingent Workforce Management
661
15.6.3 SAP SuccessFactors
664
15.7 Summary
666
16 Customizing the UI
669
16.1 User Interface Options in SAP S/4HANA
669
16.1.1 SAP Fiori
669
16.1.2 SAP General User Interface
680
16.2 Configuring SAP Fiori
681
16.2.1 Installing SAP Fiori
681
16.2.2 Embedded and Central Hub Deployment for SAP Fiori
682
16.2.3 SAP Fiori App Library
683
16.3 Customizing SAP Fiori
688
16.3.1 SAP Fiori Edit Mode
688
16.3.2 SAP Fiori User Settings
689
16.3.3 SAP CoPilot
692
16.4 Summary
694
17 Conclusion
695
17.1 Future State of Procurement Solutions
698
17.2 Future State of the Procurement Supply Chain
699
The Author
701
Contributors
701
Index
703