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SAP S/4 HANA Enterprise Management – Sourcing and Procurement Details-

SAP S/4 HANA Enterprise Management – Sourcing and Procurement Details- for everyone (Consultants/ Business Leads & Analyst/ Business heads/Core users/ End Users in SAP)

 

This blog will help the consultants and business users and Analyst to understand -Why Sap introduced S/4 HANA and why it is important in the competitive Market and how SAP S/4 HANA brings success to the company. SAP not applied and launched S/4 HANA immediately and recommend to their client. it is not one day action. Intially SAP named it as Simple logistics and later name changed to Enterprise management.

it was well planned by SAP and they tested the HANA features in Football world cup. the Predictions on the Team success and which Team will get victory and which team will come to Quarter/Semi Final and then Finals- upto that SAP predictions is more accurate. that is why many client accepted to migrate to S4 HANA EM. it is accurate and systematic approach by SAP and kudos to SAP.. it again succeeds and standing No-1 in the ERP Market. this blog will only talk about the Sourcing and Procurement module. Each module in S4 HANA is more structured and have it’s own simplifications and Innovations. Thanks to SAP. 🙂 🙂

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One important thing is -This blog is framed based on the information given by SAP in their S/4 HANA  Webinars and SAP websites, -Help.sap.com, Service.sap.com and many authorized content published by SAP and it is not my own idea/ Content or thinking. Everything published by SAP. 🙂 🙂

Please refer

https://help.sap.com/doc/560c6fad1b03447583e7327f64f7d964/1610%20002/en-US/SIMPL_OP1610_FPS02.pdf

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Normally when discussing about S4 HANA EM – many people asking me why we need S4 HANA when SAP ECC in place and why we need to migrate ?

Answer is simple SAP S/4 HANA is simplified, Sophisticated and advanced, Flexible system.

SAP S4 HANA called Digital core/ Digital transformation- using IOT we can connect sensors which trend volume of Data.

Before Going to S4 HANA SLOG we cannot avoid HANA DB Information.

SAP is in the Process of re-design or re-structing Products/suite to align with

In-Memory (Hana) Real Time (Amount of Data Processing in memory itself)

Internet of things- to connect with different consumer groups/process/systems/business across the world.

Inter-Operability of UI (Desktop, Smart Devices)- Fiori

Mobile Orientation for any design of device..

Big Data- for better reporting in a common platform integrating all the business Process.

Social Media Integration

Business networks- Such as Vendor, Customer Integration with Banks, customer & Employees.

SaaS Offerings- connecting SAP Products ECC, CRM, APO, SRM, PLM, EWM, SNP, SNC .Etc… HCM is now called SAP Success factor

OLTP/OLAP Convergence- Keeping all the analytics sitting on transaction Level itself.

SAP S/ HANA Supports 10 LOB’s (Lines of business) and 25 Industries.

10 LOB’s

SAP S/4 HANA Finance, SAP S/4 HANA HR, SAP S/4 HANA Sourcing and Procurement, SAP S/4 HANA Supply chain, SAP S/4 HANA Marketing, SAP S/4 HANA R & D, SAP S/4 HANA Asset management, SAP S/4 HANA Sales, SAP S/4 HANA Marketing & Commerce, SAP S/4 HANA Customer Service.

SAP JAM developed by SAP function (Social network for a company) like Facebook which connects group.

Many people will have the confusion what is SAP HANA and SAP S/ HANA both are same or different? Answer is SAP HANA is a Platform or we can say Data base which was introduced in the year 2011 which is introduced as a replacement for the traditional existing databased which reduces the complexity and also bring some benefits which is not possible in current data bases such as Oracle, Sql server etc..

In-memory computing benefits I mean instead of storing the data in hard disk instead it will directly access the RAM which increases the performance and fastness in transaction and reporting.

Multi core processing –meaning that it will process multiple transactions @ the same time. Multiple process can be executed in Parallel.

SAP HANA Called Columnar Database

Third benefit would be SAP HANA can stores the data in rows as well as columns instead of the traditional data based can execute in Rows for processing high volume of Data.

We have “N” of advantages

MRP is stream lined, Credit management is streamlined and SO creation is simplified, Material ledger or Material valuation is simplified, Inventory valuation is simplified. So transaction processing is simplified and also wherever possible they increased the performance with the current existing ECC transactional system. SAP Jotted down the areas where users or clients or end users reporting issues they tried to avoid these errors and bug as the Market is moving from B2B to B2C and end customer satidifcation is more required for a company or service provide to grow in that terms SAP HANA is a next generation one.

Key Enables or Features

Due to removal of redundancy in SAP S4 HANA the speed is 10X times the ECC.

7X times throuput. Less throuput means less input and higher output.

1800X times faster analytics and reporting (speed is More Faster in SAP S4 HANA).

4X times less than the process times. Let’s say the PO creation time in ECC is 40 s but in HANA it is 10 S.

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  1. WebDynpro Applications of SAP ERP Materials Management (MM) are not available with SAP S/4HANA, on-premise edition 1511any more.

  2. Transaction not available in SAP S/4HANA on-premise edition 1511- Me21,Me22 etc

  3. BAPIs not available SAP S/4HANA on-premise edition 1511

  4. SAP Supplier Lifecycle Management (SAP SLC) are not available within SAP S/4HANA, on-premise edition 1511 Several buy-side processes: Supplier Hierarchies, Supplier Classification, Area of Validity in Supplier Evaluation, Supplier Qualification, Certificate Management, External Tasks in Activity Management

  5. Authority Concept for Supplier Invoice –

    1. The previous concept was based on checking header data against the item authorization object for all items. The system checked for all items if a user was allowed to complete certain activities in the plants.

    2. With the new concept, the behaviour of the system is more comprehensive. The new concept introduces a header authorization object that enables the system to perform the following authorization checks:

    3. Check header data against the header authorization object (M_RECH_BUK).

  1. Check item data against the item authorization object (M_RECH_WRK).

  1. Edit the values of the organizational levels for the new authorization object M_RECH_BUK.

  1. Regenerate the profiles related to the roles using PFCG.

  1. Foreign Trade and SAP Global Trade Services (GTS). Foreign Trade is part of standard Materials Management (MM).

    1. With SAP S/4HANA on-premise edition 1511, the foreign trade solution will be not available because SAP Global Trade Services is the successor for the business requirement

    2. For Intrastat a customer can leverage functionality within SAP S/4HANA, on-premise edition 1511.

    3. SAP GTS can be connected to S/4HANA to run the respective foreign trade processes.

    4. Transaction not available in SAP S/4HANA on-premise edition 1511

  1. Commodity Procurement is switched off technically in SAP S/4HANA, on-premise edition 1511 and SAP S/4HANA 1610.

  2. Transaction not available in SAP S/4HANA on-premise edition 1511 – MEI4 – Create Worklist

  1. Delete the content for automatic document adjustment of table S111 ( Report RMEBEIN6 (transaction MEI6)) and

  1. Delete the content of table WIND ( Report RMEBEIN5 (transaction MEI5)

  1. Rebuild the table entries for S111 and WIND for the used document categories by using the appropriate setup reports

  2. Check simplification pdf

  1. RFQ – was only possible to enter one Supplier Quote per Request for Quote – With the new concept, the behaviour of the system allows to send RFQ via Fiori App to external sourcing platforms without a Supplier included and to receive from them multiple Supplier Quotes.

    1. The following transactions are not strategic anymore and it is planned to replace them with corresponding Fiori Apps: ME41. 42, 43 ME47,48,49 etc

    2. Following IDOCS and Transactions related to Request for Quote are not considered as the target architecture (Functionality available in current SAP S/4HANA delivery but not considered as future technology. Functional equivalent is not available).

It is planned to replace them with cXML messages:

  • REQOTE (Basic Idoc type = ORDERS05) is the IDOC for RFQ

  • QUOTES (Basic Idoc type = ORDERS05) is the Idoc for Quote

  1. SRM – Technically, the procurement solution within SAP S/4HANA is not a successor to the SAP SRM components. Therefore, the SAP SRM software components and SAP S/4HANA cannot be installed on the same system. Technically, it is not a co-deployment, but in the future the procurement solution will evolve to take over the SAP SRM functions. The functional scope is described in the content of the feature scope description of SAP S/4HANA.

  2. The current vendor evaluation based on Logistics Information System (Note: If you use a material number longer than 18 characters – see restriction note Extended Material Number in LIS: SAP Note 2232362.) is still available with SAP S/4HANA, on-premise edition 1511, but is not considered the target architecture (Functionality available in SAP S/4HANA on-premise edition 1511 delivery but not considered as future technology. Functional equivalent is available.). We recommend that you use the SAP HANA reporting capabilities for vendor evaluation based on CDS views and smart business technology.

  3. Subsequent Settlement – Vendor Rebate Arrangements – In SAP S/4HANA, the Subsequent Settlement (MM-PUR-VM-SET) application is replaced by the new Contract Settlement (LO-GT-CHB) application. For this reason, the functional scope of subsequent settlement has been restricted, that is, in SAP S/4HANA, it is no longer possible to:

  1. Create new rebate arrangements using transaction MEB1 or

  1. Extend existing rebate arrangements using transactions MEBV / MEB7 / MEBH

  1. ERP shopping cart – The SAP ERP shopping cart function is not available within SAP S/4HANA, on-premise edition 1511 and will be replaced by S/4HANA Self Service Procurement. The shopping cart function in SAP Business Suite is associated to the business function LOG_MM_SSP_1.

  2. Few SRM transactions not available in S/4 – /SRMERP/BRFP_DSS_SC, /SRMERP/BRFP_DS_APPR , etc

  3. Internet Application Components (IAC) is not available in SAP S/4HANA.

  4. Output Management Adoption in Purchase Order – With SAP S/4HANA a new Output Management approach is in place. By design, the new output management includes cloud qualities such as extensibility enablement, multi tenancy enablement and modification free configuration. Therefore, the complete configuration differs from the configuration that is used when output management is based on NAST. The configuration is based on BRF+ which is accessible for Customers. In SAP S/4HANA, the target architecture is based on Adobe Document Server and Adobe Forms only. For the form determination rules (along with other output parameters) BRF+ functionality is used (in this sense in combination with the message determination).

  5. Material document data will be stored in MATDOC only and not anymore in MKPF and MSEG, Additionally the aggregated actual stock quantities will not be persisted anymore in the hybrid or replaced aggregation tables. Instead, actual stock quantity data will be calculated on-the-fly from the new material document table MATDOC for which some of those additional special fields are used. Hence, with the new MM-IM data model the system will work on database level in an INSERT only mode without DB locks. For compatibility reasons there are Core Data Service (CDS) Views assigned as proxy objects to all those tables ensuring that each read access to one of the mentioned tables below still returns the data as before in SAP ERP 6.0

  6. The following transactions for entering and displaying goods movements (material documents) – called “MB transactions” – below, have been replaced by the single-screen generalized transaction MIGO:

  1. MB01, MB02, MB03, MB04, MB05, MB0A, MB11, MB1A, MB1B, MB1C, MB31, MBNL, MBRL, MBSF, MBSL, MBST and MBSU

  2. The transaction MMBE_OLD has been replaced by transaction MMBE. Alternatively there is also the Fiori App Stock Overview

  1. This simplification makes it mandatory to use the Material Ledger (ML) in all SAP S/4HANA systems. After the technical SUM migration, the Material Ledger needs to be migrated.

    1. Customizing migration:

  1. from SAP ERP or SAP Simple Finance to SAP S/4HANA 1511: transaction: SPRO –> Migration from SAP ERP Accounting powered by SAP HANA –> Preparations and Migration of Customizing –> Preparations and Migration of Customizing for Material Ledger –> Migrate Material Ledger Customizing

  1. from SAP ERP or SAP Simple Finance to SAP S/4HANA 1610: transaction: SPRO –> Migration to SAP S/4HANA Finance –> Preparations and Migration of Customizing –> Preparations and Migration of Customizing for Material Ledger –> Migrate Material Ledger Customizing

  • Data migration:

  1. from SAP ERP or SAP Simple Finance to SAP S/4HANA 1511: transaction: SPRO –> Migration from SAP ERP Accounting powered by SAP HANA –> Migration –> Material Ledger Migration

  1. from SAP ERP or SAP Simple Finance to SAP S/4HANA 1610: transaction: SPRO –> Migration to SAP S/4HANA Finance –> Data Migration –> Start and Monitor Data Migration

  1. If customers are not already using the material ledger, it will be activated during the conversion process. In MM02 and MR21 material prices can now be maintained in multiple currencies.

  2. Material Valuation – Statistical moving average price – Deactivation of the statistical moving average is not mandatory in SAP S/4HANA, but is nevertheless recommended in order to achieve a significant increase of transactional data throughput for goods movements. It is important to note that the deactivation is not reversible

    1. In addition, the following database table fields are affected by the deactivation of the statistical moving average:

  1. In table MBEW, EBEW, OBEW, QBEW the fields SALKV and VERPR are not updated anymore for materials with price control Standard. The same applies to the history tables MBEWH, EBEWH, OBEWH and QBEWH.

  1. In table CKMLCR the fields PVPRS and SALKV are not updated anymore for materials with price control Standard.

  1. In table MLCR the fields SALKV, SALKV_OLD and PVPRS_OLD are not updated anymore for materials with price control Standard.

  2. As a consequence of not updating the above-mentioned fields, the statistical moving average price and the value based on the statistical moving average price are no longer available on the user interface. This concerns the following transaction codes: MM01, MM02, MM03, CKM3 and MR21.

Material ledger or Material valuation is simplified, Inventory valuation is simplified.

Principle of one- in current ECC we have many functionalities that are redundant. Same process but 2 functionalities. For example credit management. In current system we have AR SD Credit management and also FSCM Credit Management.

One more example is Inventory valuation- we have 2 functionalities one is Inventory valuation and another one is activating the material ledger. So in SAP S/4 HANA Inventory valuation is removed and keeping the functionality activation the Material ledger mandatory

If you are posting GR in ECC normally we all know affected tables are MSEG and MKPF but we know from our experience that not only 2 there are so many table getting hit when posting Material doc these are called aggregate tables and this and when we process the transaction these tables get locked on processing of data and so we are unable to process second one till end of the first one. But this is avoided in SAP S4 HANA where using power calculation functionality and it is not going for aggregate tables.. so SAP S4 HANA calculation engine is very powerful and aggregate table concept is removed.

New table was introduced called MATDOC which will hold all the data stored in aggregate tables

Related to Master data – no more XD01 or XK01 in SAP S4 HANA. We need to use business partner for Material and customer.

Material master character length extended from 18 to 40 characters.. so all the integrated system utilizes this option- EWM, APO, PLM etc..

S/4 HANA Innovations can be analyzed with the Following Process Metrics in P2P.

Generating greater efficiency, time and cost-savings through simplification and the elimination of process duplication:-

Throughout SAP S/4HANA 1610, the purchaser receives support in his daily work with the Procurement Overview Page, which is part of the real-time reporting and monitoring. With this SAP Fiori app it is easy to monitor critical business events, purchasing spend and supplier performance. Users are able to see all relevant information, analytical and transactional, on one screen, and can show all data in real-time as well as can drill-down for further details or perform direct actions. This app provides its user with a set of actionable cards that you can easily rearrange as required.

For instance can the user filter down to one specific supplier and all the charts on the screen will automatically show only the required information. This makes it so much more efficient to work as the user no longer needs to start different transactions and reports separately. Everything is visible on one single page. The purchaser immediately sees his or her most relevant tasks and can navigate to KPI drilldowns, worklists, or specific object pages to get more detailed information if needed.

Supplier Collaboration-

SAP S/4HANA delivers full transparency of process status per purchase order and invoice line items, real-time updates of business process information, increased process efficiency for buyers and suppliers. Which leads to another considerable improvement with SAP S/4HANA is the reduction in cycle time. With the 1610 release, SAP S/4HANA supports the new direction in Procurement departments and simplifies the close collaboration with other Line of Businesses. Operational procurement covers all processes and functions required for processing of purchase requisitions and purchase orders. Sourcing and contract management covers all processes and functions for creation and identifying the best source of supply, negotiating and determining prices and managing the contracts. Each action of a buyer or supplier refers to an object. Let us take a look at one example, the purchase order or the invoice. In this cases we talk about any outbound or inbound message that represents a kind of sub process of that specific collaboration process. A very basic sub process here, with regards to the collaboration process of “Order Collaboration” is the creation of a PO that is, based on the system settings of the respective SAP S/4HANA Cloud solution, sent to the SAP Ariba supplier account, instead of being printed out. The supplier sees the PO in his PO list and can react accordingly. The broader the collaboration scope, the more procurement and sourcing use cases for more and more material categories can run more efficient and digital.

Overall we can say, that the operational overhead are getting significantly reduced and the business challenges as of today become eliminated.

Native Integration with SAP Ariba Business Network- Directly share the documents with suppliers in real time.

Physical Inventory

In S4 HANA we have PI matching the Pre-determined Inventory and helps to maintain the Stocks in very accurate and live follow-up with FIORI real time application.

Safety stocks can be monitored and live update using FIORI apps which facilitates Production department and a MRP controller.

Sourcing,  Contracts management, Supplier performance Management

Now it integrated platform but we cannot mention here as we don’t have Ariba functionality in place for 1610 (Project we are working for Demo).

Powerful Inventory Analysis

Now Powerful and integrated Inventory analysis measures using FIORI which helps the business to understand the stock status, Deficit, Inventory metrics per hr, day or per week or Year. Also we have 360* visibility into spending, Suppliers and related market Information. We have new Table for Inventory Data MATDOC which simplified the Reporting Functionality. reporting is very quicker and time wastage in traditional system is avoided.

Material Search

HANA search will drill down Capabilities & Previous Supplier capabilities’ and the demand they met.

Supplier Evaluation

Real time embedded Supplier Metrics- available in the FIORI Dash board which avoids the usage of separate Data warehousing system. Very close proximity analysis on supplier.

I hope the SAP S/4 HANA Enterprise management- Procurement and sourcing related Simplifications and Innovations will help the Consultants new to S4 HANA to understand the Topics and decide on the best suite of the module while working with the client.

Regards,

G.V.Shivakkumar

Please visit my blog for SAP MM WM EWM SD PP and S4 HANA EM related details.

shivakkumar Geetha venkatesan

Again SAP is beautiful and No-1 in ERP World.

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