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Highlights for Supply Chain in SAP S/4HANA 2020

Beginning of October this year we released SAP S/4HANA 2020.

In the following blog, I will summarize the highlights for the LoB Supply Chain.

If you follow my SAP S/4HANA Cloud for Manufacturing & Supply Chain blog series, you may already be familiar with many of the new functions described here because they are already available in SAP S/4HANA Cloud. In others words: Many new Supply Chain features which were already delivered with the SAP S/4HANA Cloud releases 1911, 2002, 2005, and 2008, are now also available with the On Premise release 2020.


This blog focuses on the following business areas for the LoB Supply Chain (for quick access, just click on one of the business area links):

Advanced Available-to-Promise (aATP)

Kanban

Inventory Management

Extended Warehouse Management

 

Advanced Available-to-Promise (aATP)

Internal sales representatives, order fulfillment managers and order fulfillment specialists require mechanisms to configure, execute and monitor availability checks and optimize the distribution of supply. This is particularly important when the availability of materials needed to confirm requirements is limited.
You can use the advanced Available-to-Promise (aATP) capabilities to confirm on which date and in which quantity a requirement can be fulfilled.

Fig.1: Intelligent Order Promising with SAP S/4HANA advanced Available-To-Promise

 

New ATP-check method for supply protection

In many cases companies do not want to sell their articles according to the sequence of the incoming sales orders – they want to reserve certain quantities for special groups and perhaps they also want to prioritize these groups.

The idea of supply protection (SUP) is to allow a protection of quantities and to prioritize the demand.

A good example is typically the fashion industry. Here, sales orders from wholesale customers will come very early in the season while sales orders from the own eCommerce channel will come later. However, margins are typically higher for eCommerce and for strategic reasons it might be important to always have at least a minimum quantity for every channel. At the end of the season it is no longer relevant to protect demand – at the end of a season rather a first-come, first-served principle is usual.

Supply protection can be done as core (horizontal) protection where complete groups are protected against each other or as prioritized (vertical) protection where the protection is prioritized, and every group is only protected against the demand of a lower priority. Core and prioritized protection can be combined.

The next figure shows an example for Horizontal and Vertical Protection.

A Sales Order matching with “Germany”, Distribution Channel S2 must respect the protection for France (completely) and the protection in the own Supply Protection Object which is of the same or higher priority.

In this example, only 4.000 would be left for the demand matching with Ger. S2.

Fig.2: Horizontal and Vertical Supply Protection

 

A protected quantity is always defined for the combination of a material with a plant and one or more characteristics. The characteristics are typically attributes of the sales order or the customer and can be assigned via a characteristics catalog.

In the video below the Order Fulfillment Manager opens the SAP Fiori app Manage Supply Protection and reviews the data of an activated supply protection object like core protection, prioritized characteristics, and protected groups.

Fig.3: SAP Fiori app Manage Supply Protection

By the way: In contrast to the usual delivery schedule aATP Supply Protection was delivered in October with the On Premise release 2020 first and is now also available in Cloud with the November release 2011.

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Partial confirmations in multiple plants through Alternative-Based Confirmation in an ATP check

Alternative-Based Confirmation (ABC) is used to check for all possible alternatives to confirm a requirement when the availability in the requested material-plant combination is insufficient to confirm the original requirement. With ABC, the SAP S/4HANA system can exchange the originally requested delivery plant with alternative plants, with the aim of providing a higher confirmed quantity and/or alternative delivery dates that improves the confirmation for the customer’s originally requested requirement.

With the 2020 release, the automated confirmation capabilities are increased by enabling of partial confirmations for requirement items in sales orders from multiple delivering plants through Alternative-Based Confirmation in an ATP check. In doing so, you can configure your system to flexibly consider multiple plants during availability checks executed with Alternative-Based Confirmation (ABC) and Backorder Processing (BOP).

Fig.4: Configure Alternative Control app – Partial confirmations in multiple plants

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Simulate potential requirement selection in Backorder Processing (BOP)

The Configure BOP Segment app has been enhanced with functionality for simulating the potential selection of requirements. Use the Simulate pushbutton to display the requirements that would potentially be selected for processing in a backorder processing run, based on the segment’s current selection criteria. This feature ease the setup of backorder processing by enabling users to directly validate the result list of individual segments.

Fig.5: SAP Fiori app Configure BOP Segment with new segment simulation option

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Product Allocation

Inclusion of classification characteristics from variant configuration types in characteristics catalog of product allocation

With this feature you can add classification characteristics from Variant Configuration to the characteristic catalog in the Manage Characteristic Catalogs app. Classification characteristics represent characteristic master data of the classification system and, in Variant Configuration, are typically used to describe the different values of configurable materials, such as color, type, or size. You can add classification characteristics to catalogs with use type Product Allocation (catalog type: Base (Sales Order)) to define allocations for materials with classification characteristics.

Fig.6: Manage Characteristic Catalogs app – Add Classification Characteristics from Variant Configuration to Product Allocation Catalog

 

Mass uploads and downloads of data using the spreadsheet files of value groups or authorization groups in the SAP Fiori app “Manage Characteristic Catalogs

You can use now spreadsheets (files in CSV and XLSX formats) in the SAP Fiori app “Manage Characteristic Catalogs” to upload or download:

  • Characteristic value group data
  • Authorization group data

 

Quick Edit for Product Allocation Planning Data

The Manage Product Allocation Planning Data app provides a Quick Edit mode which allows you to make immediate changes to the planning data of a product allocation object, for example, change quantities or change the constraint status. Changes via the Quick Edit mode are immediately visible for the product allocation check. The Quick Edit mode will not be available as long as another user is editing the same characteristic value combination in parallel.

Fig.7: SAP Fiori app Manage Product Allocation Planning Data provides a Quick Edit mode

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Kanban

Use the graphical kanban board to monitor circulation and change the status of containers

The new SAP Fiori Kanban Board app enables you to constantly monitor your control cycles with their circulating Kanban containers. The graphical monitoring for Kanban replenishment is easy to understand. The SAP Fiori app allows you to personalize views for different business users. You can supervise and improve your Kanban processes through ad-hoc analysis by using quick access to Kanban control cycle and container real-time information. The Kanban Board allows quick actions, for instance, to set the container status directly. Visual alerting supports you to identify and eliminate errors quickly.

Watch the next video which shows how to:

  • add the Kanban Board app to the Kanban Monitoring launchpad by using the App finder,
  • interpret the color codes of the containers,
  • display container quick info and container details,
  • add additional columns and put them in a certain order,
  • act directly and set the container status,
  • filter containers for instance with specific status, and
  • save the personalized view as a variant.

 

Fig.8: New SAP Fiori Kanban Board app 

 

Several customer interviews have influenced the design phase of developing the new Kanban Board app. Thanks to all participants for their great input. As a result we have merged the table view and graphical view in one app and enable the user to take action directly.

An interesting challenge during the design phase of this app was the question how to enable users who cannot distinguish different colors to use the graphical Kanban Board. Regardless of the question of accessibility many interviewees expressed the wish to change the label of the container box. Some users want to display the container ID, others the control cycle item, and still others the quantity in the container box. The board settings allow the user to personalize the container box.

The animated figure below shows how to display container labels by selecting one of the options: Container IDControl Cycle ItemControl Cycle Item (Container ID for Event-Driven)Quantity, or No Text. Additionally the user decides in the board settings that the status text is displayed always as subtitle in the container box so that the container color is not needed for distinguishing the container status.

Fig.9: Kanban Board app – Personalization

 

Additionally field extensibility is now available for the Kanban Board at control cycle level.

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Inventory Management

Prediction of Slow or Non-Moving Materials

Figure 10 illustrates the general progress of a material in the product life cycle. In the initial phase the consumption and stock quantity is very high but both graphs almost run in parallel which continues to happen in in the fast mover and medium mover phase of the material.  But in the transition from the medium mover to slow mover, consumption and stock value is drifting apart – consumption is dropping more less drastically which results in a stock surplus. With the slow moving indicator customers can now categorize their materials according to their individual criteria. The Slow Moving Indicator (SMI) represents a key figure which is a consumption to stock ratio normalized by a time period. If the customer uses the prediction / predictive model, it is now possible to anticipate the transition phase to a slow mover in a better way. The prediction in combination with the active Bill of Material (BOM) usage of a material can give valuable hints on the position of a material in the product life cycle so that customers can take early and informed actions.

Fig.10: Product life cycle: Transition from fast to slow mover

The analytical list page Slow or Non-Moving Materials enables inventory managers to determine slow-moving materials via the Slow-Moving Indicator which is calculated based on the consumption to stock ratio. Now, with the 2020 release, we have introduced a detailed page that provides additional insights on the future development of a material in the product life cycle, using predictive analytics. The new detailed page provides a lot of information from different perspectives on various charts:

  • Slow-Moving Indicator over Time
  • Stock Situation and BOM Usage over Time
  • Active BOM Usage
  • Slow-Moving Indicator by Plants

The Active BOM Usage chart provides an overview of all valid Bills of Material for a specific reference date, which are using the selected material as a component.

The new Slow or Non-Moving Material Details by Plant/Material page offers several navigation links to other apps like Material Documents Overview or Transfer Stock – Cross Plant which allows an inventory manager directly to create a stock transport order. If you assign additionally the BOM engineer role to your user profile, you can use the BOM navigation links from the Active BOM Usage chart.

It is even possible to receive the forecast information for the Predicted Slow-Moving Indicator using the Predictive Analytics Model. For doing this activate the Predictive Scenarios for Consumption and Stock Level.

Fig.11: For using the Prediction of the Slow-Moving Indicator you have to activate two Predictive Scenarios, one for the Consumption and another for the Stock Level.

 

Fig.12: New SAP Fiori detailed page Slow or Non-Moving Materials by Plant/Material

 

Watch also a short system demo without voice:

This video was recorded in September 2019, so the app predicted the Slow or Non-Moving Indicator for the next months Oct 2019, Nov 2019, and Dec 2019 which you can see in the Slow-Moving Indicator over Time chart as orange dots.

Fig.13: Short system demo showing the new detailed page of the Slow or Non-Moving Materials app with predicted Slow or Non-Moving Indicator

The benefits are obvious: Using these capabilities you can lower warehousing costs and increase supply chain efficiency, avoid or reduce scrap materials, and last but not least classify materials for instance suitable for cycle counting in physical inventory.

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Physical Inventory

Physical inventory is predestined for automation. Figure 14 shows a user story with three different levels of automation for physical inventory.

Fig.14: Intelligent Situation Automation: User Story – Physical Inventory

First, let us have a look on automation level 0. Here the user manually sends reminder to monitor physical inventory documents.

But there is great potential even at automation level 0 to automate the physical inventory process, namely through cycle counting.

Cycle Counting in Physical Inventory

Cycle Counting is an important method for assessing physical inventory to count materials at regular intervals within a fiscal year. You use the physical inventory method of cycle counting when a continuous inventory is desired. By assigning materials to various classes via the cycle counting indicator, you specify for those materials, at which intervals or cycles the inventory is to be performed. This allows you to count fast-moving materials in your warehouse more often than slow-moving materials, for example.

With the 2020 release, we have enhanced the filter and the table view of the SAP Fiori app Create Physical Inventory Documents with the cycle counting parameters which allows you to trigger a mass creation of physical inventory documents for the selected materials.

Fig.15: Mass creation of physical inventory documents for a particular Cycle Counting Type via SAP Fiori app Create Physical Inventory Documents 

 

The new SAP Fiori app Cycle Counting Classification enables an inventory manager to improve operation efficiency by classifying materials for cycle counting as part of the physical inventory process. You can

  • manage classifications for materials in stock based on the cycle-counting settings maintained in the self-service configuration UI Cycle Counting,
  • remove an existing classification if the material should not be part of the cycle-counting method anymore,
  • establish classification settings that mirror company requirements and that optimize preparation for your physical inventory process; define these settings once or whenever an adaptation is necessary.

Fig.16: SAP Fiori app Cycle Counting Classification

 

The new SAP Fiori app Schedule Physical Inventory Document Creation supports you in the automatic and scheduled creation of physical inventory documents in the background to get the results at the right time when you need them. For more details watch the openSAP Microlearning Schedule the Creation of Physical Inventory Documents which explains how to create and schedule a job to create physical inventory documents for your physical inventory process.

Fig.17: SAP Fiori app Schedule Physical Inventory Document Creation

For more details watch the openSAP Microlearning Schedule the Creation of Physical Inventory Documents which explains how to create and schedule a job to create physical inventory documents for your physical inventory process.

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Situation Handling for Physical Inventory Monitoring

With the new Situation Handling for Physical Inventory Monitoring we’re enriching our intelligent ERP capabilities by leveraging process steps in cycle counting.

Figure 18 shows three selected situation handling scenarios (marked with yellow arrows) from the physical inventory process flow. These are from left to right:

  • Counting reminders for Warehouse Clerks
  • Notification on physical inventory difference
  • Posting reminders for Inventory Managers

Fig.18: Physical Inventory Process Flow (three possible situation handling scenarios are marked with yellow arrows)

With the Manage Situation Type app you can now easily create ready-to-use situation types for Physical Inventory Monitoring out of the standard template. The standard template provides a variety of filters for maintaining conditions based on which situation occur. You have the flexibility to maintain texts to inform users about situations, to embed variables into notifications, and to define recipient groups for notifications.

The benefit is obvious: This situation handling use case increases overall inventory accuracy because responsible persons are informed automatically and immediately.

Watch the video in which a warehouse clerk receives a reminder for physical inventory counting automatically triggered via situation handling.

Fig.19: Warehouse Clerk receives a reminder for physical inventory counting

For more information watch the openSAP Microlearning Situation Handling for Physical Inventory Counting which explains in detail how to set up a situation handling scenario for physical inventory counting in the system. The shown system demo contains four parts:

  • Set up a team and assign functions
  • Define your own member function
  • Create a ready-to-use situation type by using the situation template
  • Receive a notification after the situation occurred

Fig.20: openSAP Microlearning Situation Handling for Physical Inventory Counting

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Intelligent Situation Automation for the Physical Inventory Process

Last but not least, let us have a look on automation level 2 in physical inventory as shown in figure 14.

Intelligent Situation Automation for the Physical Inventory Process drives next-generation business processes by intelligently increasing efficiency and quality while unleashing users time to focus on expert tasks. For this purpose, the rules engine on the SAP Cloud Platform enables the user to define rules for enhancing the situation types which are maintained in SAP S/4HANA. While situation handling in SAP S/4HANA is used to automatically notify responsible persons, the Rules Engine automates the situation handling by making decisions. As a result, Intelligent Situation Automation for the Physical Inventory Process automatically checks whether recount shall be triggered, or inventory differences can be accepted.

In the video below the user opens the Manage Situation Automation app on the SAP Cloud Platform (SCP) and creates a new configuration for a physical inventory monitoring situation type which is enabled for Intelligent Situation Automation in the SAP S/4HANA system. In the text rule editor of the rules engine the user defines the following rule: If the difference between the counted and booked physical inventory is less than 5%, the counted value will be posted, else a recount will be triggered automatically,.

At the end of the video, the user opens the Situation Dashboard app which shows you different charts like the Time Saved with Automation and the Situation Status.

Fig.21: Manage Situation Automation app

Note, that only those situation types are available here which are enabled for Intelligent Situation Automation in the SAP S/4HANA system.

The rules engine is currently in pilot phase and not general available with the SAP S/4HANA 2020 release. At the moment we are looking for customers who are willing to pilot this solution. If you are interested, please contact SAP for further information.

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Direct recount and post to process on physical inventory documents

Let me finish the chapter about physical inventory with a useful enhancement of the SAP Fiori app Physical Inventory Document Overview. In this app, you can now use two new functions (actions) (Recount and Post) to process physical inventory documents more efficiently. These actions are active for physical inventory documents with material items that are counted but not yet posted. You can directly initiate a recount for the selected items. The app creates a new physical inventory document with the option to add an attachment to the new physical inventory document. You can also directly post the value of the counted quantity. Depending on your individual settings, you can add a reason when posting inventory differences.

Fig.22: Physical Inventory Document Overview app – New functions for direct recount and post

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Extended Warehouse Management

In the area of SAP S/4HANA Extended Warehouse Management there are so many innovations with the 2020 release, the list of which would go beyond the scope of this blog.

Before I refer to a four-part blog series, I would like to emphasize one innovation here, namely the lean integration between production and warehouse:

Bin Managed Production Stock & Synchronous Postings

Fig.23: Process Overview of lean integration between production and warehouse

To produce semi-finished and finished products it is usually necessary to stage components that are needed for the production process to the production supply area close to the machines where they will be consumed. So far, production supply areas used in SAP S/4HANA could only be assigned to Inventory (IM) managed storage locations. With the 2020 release, production supply areas can be assigned to Warehouse (EWM) managed storage locations as well.

The brand new openSAP Microlearning Lean Integration between Production and Warehouse explains how to optimize the integration between production and warehouse for consumption components and goods receipt.

SAP® Extended Warehouse Management 2020 Development Overview

The following blog series provides you an overview of 2020 release highlights in SAP Extended Warehouse Management:

There are still more details to discover, which you can find in our

document.

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For more information on SAP S/4HANA 2020, check out the following links: 

Follow us via @SAP and #S4HANA, or myself via @GerhardWelker and LinkedIn

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