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Author's profile photo Marko Lange

Growing Profitable Business Globally with SAP Business Suite Powered by SAP HANA – Part 3: Improving Best Practices for Chemicals making use of HANA optimizations

In previous 2 parts of this blog series I introduced the business value of Suite on HANA for the Chemical Industry and gave use case examples. At this point of time when a new Best Practice for Chemicals version is planned to be run on Enhancement Pack 7 of SAP´s ERP it is a good point of time to discuss how this template can benefit from improvements made for ERP on HANA. In order to do that we have first of all to look at what Best Practices for Chemicals means.

SAP Best Practices offers an industry-specific approach for accelerated and risk-mitigated implementations of SAP ERP for the chemical industry, based on the tremendous experience gained through thousands of customer projects over the years. The solution consists of two packages, SAP Best Practices for Chemicals (based on ERP) and Best Practices for EHSM (based on SAP Environment, Health and Safety Management).

Both templates provide preconfigured business processes, along with detailed process descriptions and technical documentation. SAP Best Practices for Chemicals and EHSM are primarily designed to help accelerate implementations, reduce costs, and mitigate the risks associated with an implementation project.

To unleash the full power of SAP ERP for the chemical industry, SAP Best Practices for Chemicals and EHSM has been developed with the help of 20+ partners (system integrators and chemical industry solution providers), chemical industry associations, and by cooperation with top industry analysts. SAP Best Practices for Chemicals and EHSM is based on the experience gained with close to 3,000 SAP chemicals customers and 5,000 installations in this industry worldwide.

SAP Best Practices for Chemicals and EHSM comprises nearly 100 pre-configured scenarios across all business functions. And this is where these scenarios can benefit from HANA improvements made:

1)    Financial Performance Management: Reading data directly from SAP HANA instead of a much slower traditional OLTP database results in virtually instantaneous report response times, significantly accelerated processes and a largely increased, real-time data pool on line item level for user-directed self-service reporting. It helps to increase operating margin by getting right information to decision makers increasing productivity in IT and Financials by reducing manual efforts. The following scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       Cash Management (160)

b.      Cost of Sales Accounting (161)

c.       Asset Accounting (162)

d.      Asset Acquisition for Constructed  Assets (Investment Orders) (164)

e.      Segment Reporting (166)

f.        General Cost Center Planning (175)

g.       Internal Order for Marketing and Other Overhead Planning (180)

h.      SAP ERP Reports for  Accounting (221)


       Accounting and Financial Close: Acceleration of  long-running batch period-end processes provides more time for analysis, reduces over-time, or earlier publishing of financial results and Deeper and faster insight down to the lowest level of detail – delivering quality at source, transparency, and efficiencies. This leads to reduced costs of equity and reduced time to close the books. It enhances compliance and accuracy while efficiency and productivity in Financials is increased. The following scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       Period End Closing Financial Accounting (159)

b.      Period End Closing Activities (224)


C     Collaborative Financial Operations: Real-time insight into payments obligations and incoming payments instead of batch processing helps to improve the process and handle exceptions better freeing headcount to focus on value-added activities. With that working capital and days outstanding can be reduced. Moreover cash position through targeted choice of payment behavior can be optimized and costs of goods and services can be driven down by unlocking the usage of cash discounts not to forget cost reduction of finance operations. The following scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       Accounts Receivable (157)

b.      Accounts Payable (158)


       Operational Procurement: In this area long lasting processing of purchasing documents due to a magnitude of  line items and due to a long purchase order history can be accelerated and real-time decisions based on access to and easy manipulation of procurement information can be made. This leads to higher process effectiveness increasing procurement performance and reduction of procurement operations costs. The following scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       ConsumablePurchasing (129)

b.      Procurement without QM (130)

c.       Procurement and Consumption of Consigned Inventory (139)

d.      Procurement of Batch-Managed Stock Materials (901)

e.      Procurement of Warehouse-Managed Stock Materials (902)

f.        Procurement of Pipeline Materials (903)

g.       Procurement of External Services (904)


       Material Requirement Planning: More frequent MRP runs in shorter cycles allow faster re-planning in response to demand changes. Material demand and supply planning can be better synchronized and suppliers instantly updated to reduce bullwhip-effect and react faster to changing planning conditions. This results in reduction of stock-outs, allows reduction of inventory and safety stocks and better synchronizes demand and supply. In this area the highest number of scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       Bulk Manufacturing (without PI Sheet) (907)

b.      Bulk Manufacturing (with PI Sheet and SAP ODA Integration) (908)

c.       Make-to-Stock (Process Industry) with Warehouse Management (909)

d.      Make to Order (Process Industry) (910)

e.      Multiple  Product Campaign Run including MQC (911)

f.        Stock Transfer with Delivery (134)

g.       Stock Transfer without Delivery (135)

h.      Supply and Demand Planning (900)

i.         Tank Trailer Filling (919)


       Asset Planning and Scheduling: Here due to performance improvement all existing maintenance plans can be scheduled now within a specific (shorter) timeframe performing an automatic pre-selection of due maintenance plans with no further need for any parameter restrictions. With that asset uptimes and utilization can be maximized while scheduling information in maintenance operations is up-to-date and safety in use of assets can be increased. The following scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       Operational Maintenance (929)

b.      Preventive Maintenance (930)

c.       Investment Management in Plant Maintenance (932)

d.      Work Clearance Management (888)


P     Project Management (PS): Acceleration of transactions, reports and project related business process steps along the end-to-end process results into enhanced project efficiency and user productivity including Timely identification of deviations and exceptions and accelerated corrective measures. With that project risk, budget and schedule overruns can be reduced. If used in shut down processes asset downtimes can be reduced as well which touches following scenario:

a.       Overhaul Management (886)


       Warehouse Management: Here HANA optimizations help to provision real time stock insight and inventory monitoring with high performance to support demand driven procurement so that both working capital and risk of stock shortfall can be reduced. The following scenarios can be improved (number refers to scenario number in Best Practices documentation):

a.       Stock Transfer with Delivery (134)

b.      Stock Transfer without Delivery (135)

c.       Physical Inventory / Inventory Count and Adjustment (137)

d.      SAP ERP Reports for Logistics (222)

e.      Supply and Demand Planning (900)

f.        Outbound Logistics (923)

g.       Totes Handling (927)

h.      Tank Trailer Filling (919)

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