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Within just few months after the release of SAP S/4 HANA, SAP’s next generation business suite with Logistics solution lined up for  release to the customer this month. A quick analysis of the features in the planning component has been analyzed and some of my observations are shared here. Although my initial guess was that the primary focus of SAP was on the simplification of tables. Code optimization and release of Fiori apps, but there are quite a good number of changes in transactional part side in planning area.


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Sales and Operations Planning:  The current ECC functionality of SOP is going to be replaced with integrated business planning (IBP) in a long run. Since IBP (S&OP on HANA)  supports all SOP features along with advanced statistical forecasting techniques, multi-level demand and supply planning, collaboration tools and the most user-friendly excel based UI and web-based UI, what-if scenarios which will definitely going to bring much value than ECC-SOP for new customers and for the existing customer who are planning to implement IBP-SOP. Also since SAP has been investing more effort in enhancing IBP functionality than APO, it is a right thing to invest in IBP rather than go with conventional SOP approach. Of course, there is an additional cost associated to install and implement IBP functionality but it is worth enough to invest.

Storage location based MRP run is no longer supported – With S/4 HANA Logistics, there is no provision to exclude MRP run for a single storage location from the pre-defined MRP parameter set for plant-material combination. In ECC 6.0, the MRP run of the excluded storage location can be handled using reorder point planning with a maximum lot sizing procedure. Since storage location MRP area concept will be used to take care of the planning of each storage location, it reduces number of fields from material master related to storage location MRP planning. It also helps to plan storage location MRP with any planning type such as PD, P1 etc…

MRP run on HANA: MRP run has been optimized to the maximum extent using MRP live (MD01N transaction) functionality and Customers are having an option to go in the path of either classical MRP on HANA platform   or to go with MRP live. Since MRP Live reads the data, calculates shortage and writes planned orders at database level instead of performing at Application server level, there will be a considerable improvement in performance.


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MRP live differs from classic MRP in the following ways.

  1. 1. MRP live does not generate MRP list: By using S/4 HANA, there is much improvement in the performance of the system, hence MD04 ( stock requirement list ) output will be much faster which eliminated the need to view the old results i.e  MRP list.
  2. 2. Multi-level, make to order planning ( MD50) is not optimized for HANA: Since this transaction is to take care of performance issue, there is no further refinement required. With HANA platform, it will be optimized further.
  3. 3. Individual project planning (MD50) not optimized for HANA.
  4. 4. MRP live always creates purchases requisitions: It is an unnecessary process step of converting planned order to purchase requisition that has been eliminated by SAP. This help the amount of work to be performed by purchaser ( in some cases MRP controller  used to handle)  who used to take care of converting planned orders to purchase requisition.

  1. S/4 HANA no more support net change plan in the planning horizon (NETPL).  With the improvement in MRP run with HANA (both classic and MRP live), NETPL is a redundant one and the system can generate planned orders outside planning horizon. Thanks to HANA platformJ.   A new planning file (PPH_DBMV) replaced the old planning file entry tables MDVM/MDVL and DBVM/DBVL to improve the performance in reading planning file entries.

Forecast based planning:  Going forward with S/4 HANA Logistics, Forecast based planning will be moved out and the suggested approach is to go with a normal MRP type PD, P1,P2,P3 or P4.  As per SAP team thought process, Forecast based planning approach is symmetrical to planned independent requirement maintenance table derived from statistical forecasting. This may be true for finished product where PIR functionality used. But in some scenarios where PIR maintenance functionality not used, Forecast based planning is a required functionality.

Graphical planning table for capacity evaluation: The classical graphical planning table has lot of disadvantages such as complicated customizing, non-user friendly, not suitable for web-based environment, Capacity locking issues etc.  With the revised approach,  a drag and drop approach has been used to change the start dates of the operations and resources. But there is no major investment made to make it user friendly and also to make it a web based tool.

LIS replacement with a powerful HANA based platform: with a powerful UI s which will provide reports dynamically with a multi-dimensional reporting. Once the production planning analytics reports are available, the LIS can be switched off which will take out lot of redundant data, pre-aggregated data, locking conflict which in turn will improve the performance. Also LIS supports with material number of 30 characters and SAP is not going to invest time in LIS anymore.

Heard in the beginning that APO component – PPDS (Production Planning and detailed scheduling) will be a part of S/4 HANA logistics first version, but it looks like that SAP has postposed this task to the next release.  With a major shift in SAP strategy to match with digital transformation, there is a lot of learning required for the SAP professionals to enable the technology changes to fit into the business needs. Please share your thoughts…

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14 Comments

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  1. Bhavesh Nainani

    Dear Ranga

    Very informative, Can you also share if any of APO-Functionality like Statistical Forecasting ,Supply network planning, Inventory norms setting etc will become part of standard S4-Logistics or will it continue to sell as separate Solution

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    1. Ranga Davala Post author

      Dear Bhavesh,

      Thank you. for your comments. As per SAP strategy, APO components such as DP and SNP remain stay back but what I hear is that there will not be any development/new functionality be added and support will be provided till 2025. The strategy is to put effort in developing Integrated business planning (IBP) components such as S&OP on HANA, IBP-Supply, IBP-Demand, IBP-Inventory, IBP- Response and Supply chain control tower built of SAP HANA platform. Hope this answers your question. So going forward for consultants the focus needs to upgrade their skills in IBP to meet the market demand 🙂 .

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  2. Pierre-Edouard Hamon

    Thank you for this very interesting blog.

    I come back on one of your statement saying that MRP Lists are no more existing with S/4 HANA. But how a planner could check what are the new created proposals since last run and also abnormal terminations that you cannot see with MD04/MD07 transactions if no MRP list are generated?

    Another thing: you write that MRP creates directly purchase requisitions. But for materials with procurement type ‘X’: how do you give the choice for internal or external sourcing in this case if no planned orders are created? Or is it only for F procurement type?

    Thank you for your feedback.

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    1. Caetano Almeida

      Hello Pierre-Edouard

      On the S/4 Hana On-Premise edition, the classic MRP transactions, such as MD01 still exist and an MRP List is still created. If it’s really necessary for you to have MRP Lists created, you can run MRP using the classic transactions.

      In addition, materials with procurement type X are treated by MRP as in-house produced materials. This is a standard behavior for all the releases and the same system behavior should be observed on S/4 HANA.

      BR
      Caetano

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  3. Jay Gandhi

    Hi there,

    Does anybody know when standard S&OP (PP-SOP) will no longer be supported on S/4HANA systems?

    The 1511 Simplification List says it will “soon” become replaced by IBP so I’d like to understand when SAP will stop support for it and/or decommission it so we are not implementing a solution that our customers cannot use going forward post go-live.

    Thanks in advance.

    (1) 
    1. Caetano Almeida

      Hi Jay

      I don’t think that a specific date for that was defined, but the SAP strategy to replace SOP with IBP is very clear. I have just been testing IBP lately and it is a much more complete tool than SOP, so if you are planning a new implementation, I would strongly suggest you to use IBP instead of SOP.

      BR

      Caetano

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      1. Jay Gandhi

        Hi Caetano,

        I do not disagree with the above. However, the fact of the matter is that IBP is extremely expensive therefore there is a large portion of the market that simply cannot afford the license for it.

        That’s why I’d like to understand when the replacement will happen and/or the support will be lost for standard SOP.

        Thanks for your response.

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