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SAP Omnichannel Promotion Pricing for SAP Retail Omnichannel Commerce

Last update: Dec 4, 2017

Dear SAP Retail Community,

The new SAP Omnichannel Promotion Pricing (OPP) is a true “omni channel” solution.

Based on SAP CAR’s Retail Applications Bundle it ensures the calculation of correct and consistent effective sales prices and cart values across ALL sales channels, along with the ability to introduce new pricing rule and promotion types with low implementation effort. The new promotions, promotion rules etc. become immediately effective across all sales channels.

But let us start from the beginning.

Typical Situation in Retail Sales Applications

A typical retailer has plenty of applications in place to calculate sales prices, e.g. POS systems, web shops, mobile apps, CRM, SD orders in the SAP back end(s), etc.

Each solution typically has its own price basis (let’s call it “repository”) and its own price calculation logic (let’s call it “pricing service”):


Fig.1: Typical situation in retail IT sales applications

This multitude of pricing tools often leads to price inconsistencies in the various sales channels. Even worse, promotional offer types and rules are not fully and consistently supported across all sales channels.

This leads to massive development and test efforts, to get things “quasi-consistent”:

  • When introducing new promotional offer types and rules, retailers have to change the coding in each of their sales applications. This can take weeks and months.
  • Even when retailers have implemented these changes, they can still not be 100% sure that the various pricing engines are applying promotion rules in a consistent way.

A whole family of mobile apps emerged because of this unfortunate situation, pointing consumers to such unintended “bargains”.When customers become aware of “better” prices, or find their fortunate bargain order rejected, a poor customer experience is the result. This has a profound effect on customers’ satisfaction and loyalty.

What is SAP’s solution for Omnichannel Retailers?

SAP Omnichannel Promotion Pricing (OPP), first introduced with SAP CAR 2.0 FP2, was designed to ensure correct and consistent effective sales prices across all sales channels, along with the ability to introduce new promotional offer types and rules quickly and with low implementation effort.


Fig.2: SAP Omnichannel Promotion Pricing for SAP Retail

The value for omnichannel retailers is obvious:

  • Consistent price and promotion information available at all touch points
  • Faster time to market of new creative promotional offer types and rules
    designed by marketers
  • Increase revenue by higher customer satisfaction and loyalty
  • Save costs with low implementation and test efforts when introducing new promotional offer types and rules

Omnichannel Price and Promotion Repository in SAP CAR

A new Omnichannel Price and Promotion Repository in SAP CAR stores all relevant information needed to calculate the effective sales prices and cart value in all sales and communication channels.

This comprises regular sales prices as well as offers.

  • Typically, regular sales prices like sales list prices and sales net prices are calculated by the SAP ERP based SD pricing plus condition technique. These prices act as a “start” value for the new Omnichannel Promotion Pricing calculation.
  • Many offer types are supported, from simple discounts via Mix’n Match offers to offers which are combined with an incentive.

So simply all price and promotional offer types and rule information that is needed to calculate the effective sales prices and cart value are centrally held in the Omnichannel Price and Promotion repository in SAP CAR and stored in the Demand Data Foundation (DDF).

Transformation of Offers into OPP Promotions

Promotional offer types and rules, simply called “offers”, are typically created in

After an offer has been created, it is transformed into a format that complies with the Promotion format of the Association for Retail Technology Standards (ARTS). The ARTS Promotion is a widely accepted standard for defining promotional rules.

An offer with this format is called “OPP Promotion”. An OPP Promotion is the runtime model for offers within the Omnichannel Promotion Pricing. The OPP Promotion was introduced to allow easier mapping of promotional rules for external consumers.

There is no application that allows the direct maintenance of “OPP Promotions”.

Omnichannel Promotion Pricing Service

In addition to the central repository, a new Omnichannel Promotion Pricing Service is introduced, which calculates the effective sales prices and cart value by using the price data stored in the Omnichannel Price and Promotion Repository.

The Omnichannel Promotion Pricing Service is a JAVA based SAP HANA XS Advanced application (XSA). Therefore the configuration of database service and back-end connection information is done during deploy time. Find more information here.

Excerpt: Offer Recommendation

Offers can not only serve for mere effective sales price calculations. Retailers can use offers to propose them as “incentives”, to encourage consumers to do something in order to collect the benefit.

Here some examples:

  • “If you buy product A and B today, you get 2$ off on product B”
  • “If your purchase total is above 100$, you don’t pay any shipping costs”
  • “If you buy one item of category A and 2 arbitrary items of category B, you’ll get 500 loyalty points”
  • “If you buy a product of category A and show coupon code ABC, you’ll get 2% off on your purchase”
  • “If you’re member of target group “young urbans” and buy a pair of trousers, then you’ll get 15% off on trousers”
  • “If you buy this cell phone together with mobile contract, you will get a 10$ coupon for your next purchase”

The Offer Recommendation in SAP Marketing Cloud picks for every consumer, in every sales channel and in every moment the best of all thousands of available offers, based on the real-time context and matched with historical information.

However, Offer Recommendation does not include the creation and maintenance of an offer. In a SAP Retail Omnichannel Commerce scenario, offers are typically created in SAP Promotion Management for Retail (PMR) or in the Fiori app “Manage Promotional Offers”. After the creation these offers are replicated from SAP CAR into SAP Marketing Cloud, where they are used for Offer Recommendation.

The Recommendation application of SAP Marketing Cloud is integrated with SAP Commerce Cloud / on prem web content management system (WCMS), allowing the recommended offers and products to be proposed in a web shop, mobile app, kiosk, etc.

More information about Offer Recommendation is available in this blog.
After this divagation with Offer Recommendation let’s come back to the Omnichannel Promotion Pricing and learn, how it can be deployed to the various sales channels and applications.

OPP Deployment Options

A SAP Retail Omnichannel Commerce system landscape comprises various applications to address the individual sales channels. Some high volume sales channels typically run “standalone” and are only asynchronously connected to SAP back ends, e.g. POS systems and commerce platforms. This independency allows them to meet mandatory performance and reliability requirements.

To meet the requirements of the various sales applications various deployment options are available:

  • Local deployment in the corresponsing sales channels
    • SAP Commerce on-prem, SAP Hybris Commerce (high volume, standalone webshop)
    • SAP Omnichannel POS by GK Software
    • Black Box deployment for non-Java environments
  • Central deployment withiin SAP CAR
  • Public Cloud service deployment (aka OPPS)
    • find more information in this blog
    • can run independent from SAP CAR !

For store retailers a central Price and Promotion Repository in SAP CAR is highly recommended for an Omnichannel Promotion Pricing scenario and the de-facto basis for OPP implementations. Non-retail companies can use the local and cloud deployments without having a SAP CAR. However, the OPP data replication formats have to be thouroughly applied.

 

So typically retailers implementing OPP across their sales channels have a SAP CAR in place, which holds the single-source-of-truth repository for base sales prices and promotions/offers in its DDF repository, no matter where this data have been created.

From this “central” = CAR DDF repository an extract can be created (as OPP idocs), which is then replicated to the respective “local” sales application.

To ensure consistency local extracts are periodically updated from the central repository (via the Data Replication Framework (DRF) with new OPP iDoc types ROP_PRICE and ROP_PROMO).

This is depicted as the “Outbound” layer in SAP CAR (see also chapter “Focused Business Solution” below):


Fig.3: SAP Omnichannel Promotion Pricing with central and local deployment options.

The Promotion Pricing Service can be deployed centrally in SAP CAR, and/or locally in the sales applications. In contrast to the price repository, it is not necessary to have a central Promotion Pricing Service, but to totally rely on local pricing service(s).

Here some examples of typical deployment options. Each can be implemented independently per sales channel:

  • The web shop calls a local pricing service using a local price extract
  • A POS system calls a local pricing service using a local price extract
  • A mobile app calls the central pricing service using the central price repository

A local extract of the repository combined with the local deployment of the pricing service ensures correct and consistent effective sales prices even in asynchronously connected “standalone” sales applications, along with the ability to introduce new offer types with low implementation effort.

This allows high volume sales applications like POS servers in the stores and commerce platforms like SAP Hybris Commerce to avoid high data traffic (load, latency) in the network communication, and performance issues (speed) for the many concurrent users for a (remote) price calculation.

A hybrid scenario is also possible, where e.g. a web shop uses a central pricing service, while a POS solution uses a local deployment.

Make Pricing Fast!

The SD price condition technique in SAP ERP covers even the most complex B2B industry pricing requirements. In contrast, B2C consumer businesses typically need just regular sales prices, combined with a handful of promotional rules and offer types to calculate the effective sales price and cart value.

Omnichannel Promotion Pricing is consequently designed for B2C Pricing in consumer industries, which means high volume businesses with low pricing complexity.

Therefore the Omnichannel Promotion Pricing service starts the calculation with pre-calculated base sales prices, and applies the relevant offers. That’s it – fast and simple.

OPP in SD Sales Order

The central OPP Pricing service in SAP CAR can also be called from the SAP SD Sales order, from SAP S/4HANA 1709SAP ERP EhP8 SP7 resp. SAP ERP EhP7 SP14. This allows the application of retail promotion types like mix’s match (bonus buy), time dependent promotions etc. for the first time in the SD order. The OPP integration with the SD Sales Order used the formula extension concept in SD. Learn more with the links on the corresponding SAP back end release.

What happens with all the other pricing engines? 

The Retail Pricing (“Handelskalkulation”) in the SAP back end and the price condition technique remain relevant, as they typically calculate regular sales prices out of thje purchasing price. This regular “base” sale price (condition e.g. PR00) is replicated to SAP CAR and is used as the base price to start the promotion price calculation by OPP. Therefofe, the SAP back end SD pricing does not affect the actual promotion pricing calculation of the Omnichannel Promotion Pricing.

In SAP (Hybris) Commerce based sales channels, the built-in Commerce pricing engine will not be used and therefore “bypassed” in an Omnichannel Promotion Pricing based scenario. The integration of Omnichannel Promotion Pricing with SAP Hybris Commerce from release SAP Hybris Commerce 6.1. For the integration of OPP with SAP (Hybris) Commerce on-prem editions the so-called SAP (Hybris) Commerce, integration package for SAP for Retail is required. This provides extensions to SAP (Hybris) Commerce in order to support SAP Retail features.

Regarding POS solutions, GK Software supports the new Omnichannel Promotion Pricing service in their latest releases of the SAP Omnichannel POS by GK (likely version 12), and provides standard import capabilities of the OPP idocs sent from SAP CAR. Other POS vendors need to be implemented on project basis via the so-called OPP Black box deployment.

Accelerated Project Implementation

SAP Omnichannel Promotion Pricing is part of the RDS Package for SAP CAR. Newer RDS packages might be available. 

Summary
SAP Omnichannel Promotion Pricing ensures correct and consistent effective sales prices and cart values across all sales channels along with the ability to introduce new pricing rule types with low implementation effort, which then become effective across all sales channels almost immediately:

  • One central offer maintenance
  • One central price and promotion repository
  • Identical price calculation logic in all sales channels
  • Different deployment options (central, local, hybrid)
  • Extensibility concept – easily extensible by SAP customers and partners
  • Faster time to market of new creative promotional rules designed by marketers
  • Save costs due to low implementation and test effort when introducing new offer types and bonus buy rules
  • Increase customer satisfaction and customer loyalty
    by having consistent price and promotion information at all touch points

Minimum System Requirements

The SAP Omnichannel Promotion Pricing is located in SAP CAR Application Bundle and integrates with SAP ERP Retail and SAP Hybris Commerce. The standard integration with SAP Hybris Commerce is provided by the SAP (Hybris) Commerce, integration package for SAP for Retail.

Depending on the leading SAP CAR release the SAP backend as well as the SAP Hybris Commerce release have to be compliant, please check the SAP Product Availability Matrix.

Here the minimum release requirements of the required SAP components.

  • On Premise
    • SAP CAR 2.0 Retail Applications Bundle 1.0 Feature Package 3 (CAR RETAIL APPL BUNDLE)
    • Focused Business Solution (FBS) “SAP CAR, omnichannel price and promotion service” (material# 7018887)
    • In case you integrate OPP with SAP (Hybris) Commerce
  • Cloud-based
    • SAP OPP Cloud service (operated by SAP on SAP Cloud Platform)
    • pre-integrated with SAP Commerce Cloud 1905, extension package 1905.08.

More Information

  • Offer Maintenance applications

OSS Components

  • CA-DDF-RT-PPR – ABAP based Omnichannel Pricing Repository and outbound capabilities
  • CA-DDF-RT-PPS – JAVA based Omnichannel Pricing and Promotion Service
  • LO-MD-OPP – SAP ERP and S/4 order integration

Enjoy,
Ingo

 

Dr. Ingo Woesner
Product Manager, SAP CX Sunset and Move (ex Retail Omnichannel)
SAP SE
Follow me on SAP Community Network

 

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30 Comments
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  • Dear Ingo, thanks for the blog.

    As far my understanding is that SAP ERP is more intended to calculate prices for B2B where promotions are not as many as in B2C scenarios.

    What could be the options to ensure that if I create a sales order in SAP ERP versus an order in GK / Hybris I get the same end customer price ?

    Thanks

    Quentin

     

  • Hi Quentin,

    with the upcoming ERP enhancement packages (and S/4 1709) the SD Sales Order can Access the central Promotion pricing Service in CAR. This ensures the same Promotion Price as in POS, Hybris Commerce and any sales channel using OIPP pricing.

     

    Please note OPP is built for B2C pricing, which is typically starting from the sales list/net Price, and then applying promotions/Bonus buy/customer gruop Discount and that’s it.

    B2B pricing is typically way more complex. OPP is not designed for pricing complexity but for high volume and speed.

    For fast B2B pricing there is a RFC available called SD_PRICING in ERP/S/4. This API is increadibly fast and performs a B2B pricing on line item Level for multiple line items at once. However, this is not the Retail omnichannel pricing, but SD pricing.

    Best regards,

    Ingo

     

     

     

    • Hi Robert,

      in case you are looking for a chance to learn more about OPP you might want to join the free online training I am offering right now.

      Check here:

      openSAP course „SAP Retail Omnichannel Commerce“, starting May 29, 2018.
      This free online training is publicly available. Enroll now!

      You have to “enroll” the course in order to access the learning assets. In week 2 there are 5 learning units all about OPP:

      • Consistent Pricing and Promotions Across Sales Channels
      • Managing Promotional Offers
      • OPP Deployment Options
      • Using Offers for Offer Recommendation
      • Demo – Promotion Pricing Across Sales Channels

      Enjoy,

      Ingo

       

       

       

  • Hi there, I understand from this explaination that it is possible to use Promotion Pricing Service as standalone mode.  We have our own POS implementation that will like to integrate with it, however I am not able to find the java libraries in order to deploy it. The provided link for local deployment only addresses how to transfer the prices from the central to the local system but does not provide instructions on how to actually deploy as standalone. Am I missing something here? Any help will be much appreciated. Thanks

  • Hi Ingo

    i have 2 questions for you today:

    1. Am I correct in my understating of the following:
      • The Demand Data Foundation (DDF) stores DDF Offers and Regular Sales Prices.
      • The Price and Promotion Repository (PPR) stores the transformed DDF offers, now OPP Promotions and also replicates and stores the Regular Sales Prices from the DDF.
    2. If you implement a local deployment of Omnichannel Promotion Pricing (OPP), will it be possible to use the local pricing engine (for example a 3rd party POS system and a 3rd party E commerce system) to calculate the Effective Sales Price instead of the Promotion Pricing Service (PPS) and ensure consistent pricing across all sales channels?

    Thank you,

    Mark

    • Hi Mark,

       

      ad 1: This is correct. Offers are stored in DDF, e.g. when created by SAP PMR, Fiori app “Manage promotional offers”, or by importing ERP promotions. The DDF offer “format” is modeled for best flexibility when defining promotions (design time), while the OPP Promotions format is optimized for price calculation performance (run time). That’s why there is a transformation of DDF offers into OPP promotions.

      ad 2: – prices: prices don’t have to be “transformed”, that’s why they are stored in DDF and just “read” by the OPP outbound service when exporting OPP price idocs to a local deployment instance.

      ad 2 – 3rd party pricing engines: You can certainly “feed” an 3rd party pricing engine with OPP prices and promotions and make it calculate the effective sales prices. But then you cannot ensure that the eligible OPP promotions are prioritized, selected and interpreted in the same way as it will be when using the very same (OPP) pricing engine across all channels. The 3rd party pricing engines often are not compatible with promotional rule or type that is created by PMR for example. One pricing engine of channel A understands a promotional rule, the engine of channel  B might not, or worse: mis-interprets a promotional rule (without prompting an error). That is THE key argument for one OPP pricing engine across all channels!

       

      Best regards,

      Ingo

        • Hi Patrick,

           

          OPP accesses offers that are stored in the CAR DDF repository (so-called DDF offers), and transform them into “OPP promotions”.

          So OPP doesn’t care how and where DDF offers are created.

          ECC resp. S/4 can export Bonus Buy promotions (via DRFOUT interface), and CAR can import these Bonus Buy promotions. in CAR they become DDF offers, which can be transformed into OP promotions like any other DDF offer in CAR, wherever these may come from.

          I think CAR can even change such bonus buy promotions, but then they cannot be brought back into ECC for offer compatibility reasons. Not 100% sure. Please check the docu if this is relevant.

          Here a process flow about how promotions and prices are imported into CAR.

           

          Best regards,

          Ingo

          P.S. This was covered in my openSAP course, in week 2 (OPP) unit 2 (offers and promotions). See here: https://open.sap.com/courses/hyb2

           

           

           

          /
  • Hi Ingo

     

    Any suggestions on how can I use coupon with OPP in Hybris Commerce.

    I have created a coupon in PMR and sent it to Hybris commerce and trying to use it.

    But seems like it is not available in OOTB sappspricing extension.

    Could you please provide some implementation details on this.

     

    Thanks In advance

    Tanima

    • Hi Tanima,

      please excuse the long delay. I actually asked a colleague to answer but just found he hasn’t.

      You can create a promotion in PMR related to a coupon xyz.

      However the coupon itself

      • has to be created (e.g. one coupon code for all, coupon code only valid once per eligible person, …) >> this needs to be done in a separate / 3rd party solution.
      • In Commerce or any other channel, the coupon has to be validated, for eligibility, if it was used before, etc. The result of that check is then applied to OPP, so OPP can grant the promotion that comes with it.

      Please note OPP does not validate coupons – this needs to be done before calling OPP by a coupon solution. Typically a POS server is connected to a coupon solution. The same is needed for Commerce Cloud.

      Best regards,

      Ingo

  • Dear Ingo,

     

    Thank you very much for your writeup. It is great at giving an introduction to SAP OPP.

    Now that a couple of years have passed, some of the links are unfortunately dead. Would it be possible to get them updated. I am thinking of the ‘SAP Promotion Management for Retail’ in particular, but also others result in 404.

    Best regards

    / Lasse

    PS. This comment may be deleted to free up clutter.

    • Thank you, Lasse,

      I have now updated all the links down to the section “more information”, which I will do tomorrow.

      Take care,

      Ingo

       

  • Hi Ingo,

     

    Very informative article, thank you.

    Please help to clarify some of my questions

    Q1: Which system is recommended to send the Regular prices and offers to the downstream systems (Online, Brick & Motor POS) for displaying the Price and Promotion information.

    If S/4 is the source of Regular price and offer creation, is it recommended to send the directly from S/4 to Online/POS? or should be still use the SAP CAR Outbound?

     

    Q2: If the POS is decentralized, should we need to do the local deployment for PPS in every single store POS?

     

    Q3: What are the key benefits for the client to use SAP Fiori “Manage Promotion offers” Instead using the S/4 to create the offers (Bonus Buy) and replicate through DRF into CAR DDF.

     

    Regards
    Ram

    • Hi Ram,

      thank you for your questions.

      Before the year 2013, the SAP ERP/S/4  Retail system (aka SAP Retail, IS Retail) was used to export prices and promotions to the external POS systems via the so-caled POS outbound interface via idocs.

      Meanwhile, since 2013 this function was outsourced to a separate system, SAP Customer Activity Repository (aka CAR). In CAR, all prices and promotional rules are collected in a central repository (called DDF, demand data foundation). The (base sale) prices typically originate from the SAP ERP Retail system and are transferred to CAR. Promotions are typically created and maintained in CAR, owhich offers the most complete set of applications and promotion types. However, SAP ERP Retail (r S/4 Retail) also offers capabilities to create promotions, but only a limited set of promotion types are supported.

      I recommend to watch week 2 of my (free) openSAP course to learn more about how to manage promotions and how OPP works. https://open.sap.com/courses/hyb2/items/3rioaYbhrzLNfvf1Fqlrvk

      You have to “enroll” the course first in order to watch it.

       

      Coming back to your question: you can either send prices along with ptomotional offers via CAR outbound or OPP outbound to the POS systems. This is the recommended way. However, there are still retailers out there who send prices from the Retail backend directly to POS (because the interface is up and running for 1-2 decades …), while sending promotions to POS via CAR.

       

      Ad Q2) a local OPP would be required for each POS server (not client/station).

      ad Q3) the options to create promotions/offers in SAP CAR (either thru PMR or the Fiori app) are a lot more comprehensive compared to the simple options in the ERP promotion management. bonus buy is integrated, temporary promotions, promotions for product GROUPS, vendor funds, promotions for target groups, … the benefits are quite large.

       

      Please watch week 2 of the course and come back to me here. Then we can discuss further.

       

      Best regards,

      Ingo

       

      • Hi Ingo,

         

        Thanks for your reply. I have gone through the Open SAP tutorials and has clarified most of my questions. Will connect back if i need to check anything again.

         

        Regards
        Ram

  • Dear Ingo,

    Thanks for the blog. it was really helpful that I implemented too many OPP projects by reading and watching your videos.

    I have just one question for you.

    Some retailers have two sales prices for some period for some articles. (for some reasons generally having scratched prices)

    Is there any way to manage two regular prices?

    I need to send two prices from S/4Hana to CAR, CAR to Commerce, CAR to OPP.

     

    • Dear Omer,

      Thank you for the flowers. Several OPP projects sounds good!

      I have forwarded your question to a colleague. She will reply soon.

       

      All the best and many more projects:-)

      Ingo

       

  • Hi Ingo,

    Thank you for supporting this community!

    I’m currently in a project with OPP & PMR and I need to implement promotions triggered by the use of a specific tender type or special conditions, for example: Get a 10% discount if you pay by credit card or Get a 20% on your first purchase (the POS system can know if it is the customer’s first purchase), is there a way to create this kind of promotions in PMR and then export it to OPP? Could you give me an idea on what aspects I need to keep in mind while setting up the promotion in PMR and some considerations regarding to the structure of the request to consume the PPS in these particular scenarios?

    I hope you can help me.

    Thank you in advance.

    Ramon M.-

  • Hi Ingo,

    it is just like a workaround solution, PMR and OPP does not know that it is a payment type, it is just a static customer group.

    PCE : promotion calculation engine. when we send it in the request, it is possible to execute promotions only have target group “CASH”.

                <LoyaltyProgram>
                    <LoyaltyProgramID>CASH</LoyaltyProgramID>
                    <LoyaltyProgramID>X</LoyaltyProgramID>
                </LoyaltyProgram>
  • Ingo-san,

    Hello,

    Thank you for checking!

    We are relieved that it will be supported by SAP Customer Activity Repository Ver.3.0.

    We also welcome the contact of CAR product owners.

    Best regards,

    Kenji Eimura

     

     

    • Hello Kenji-san,

      I am not 100% sure if it is 3.0, but the product owner surely can answer. He is based in the US, so you hopefully have your reply tomorrow.

      I am checking my inbox for former discussion with experts on the SAP ERP/S/4 Standard integration with CAR.

      I learned that the ease of integration of a standard ERP/S/4 with CAR heavily depends on the actual scenarios in CAR.

      Here an excerpt of those emails:

      it heavily depends on the usage scenarios. Where we are using DDF as the foundation, it should be relatively straight forward, especially as we can use “customers” on this side of the world.

      For POS DTA related processes it is a bit more challenging as this would still rely on stores being set up as plants and this will not be the case in a standard S/4. This has a direct impact on OAA as it directly uses stock and consumption from “PLANTS”.

      You can work around that but it is some work to be done. And it has only been done for very narrow CAR scenarios.

      If you are looking at OAA without inventory visibility (for stores) it should be relatively straight forward. Please note: OAA needs ATP elements that are only available from S/4 1709 onwards, that’s why 1610 is not supported.

      Maybe you can leverage a bit of your desired scenarios you plan to integrate/implement.

       

      Best regards,

      Ingo