Innovations in Backorder processing in S/4 HANA
This blog post highlights on the set up procedure and innovations that SAP offers in the area of Back Order processing (BOP) as part of SAP S/4 HANA offering and how this can help Business realize much more business value than in an ECC environment.
Many a times we have seen Business asking, with my Invenvory/Demand/Supply situation changing every day
- How can Business determine if already confirmed quantities are still realistic to be fulfilled as requested?
- How can Business automate rescheduling and redistribution of materials that are in limited supply?
As the Inventory situation changes and also there is change in demand/supply, Business would like to perform automated backorder processing (BOP) to check if enough quantity of Material is available in Inventory to fulfill order line items that are in back-order status and also check if previously confirmed requirements in business documents are realistic to fulfill.
SAP S/4HANA offers multiple FIORI apps for setting up, configuring, and executing backorder processing. These apps are easily configurable by Supply Chain Leaders without need of any programming and has much more customizable parameters than in an SAP ECC environment.
BOP Segment Variant Strategies
SAP S/4 HANA offers different Back order processing strategies as shown below
Back Order Processing Strategies
Win strategy – Example – Rush Orders, Orders from Priority 1 customers
Gain strategy – Example – All orders from Priority 2 customers that are due today and tomorrow
Redistribute strategy – Example – All other standard sales order that are due in the current week
Fill strategy – Example – All STO’s
Lost strategy – Example – Orders on Credit or other kinds of block
Skip strategy – Example – Free of charge sample orders
Procedure to set up BOP in SAP S/4 HANA
Setting up BOP involves below listed 5 steps
Configuration of Back Order Processing in SAP S/4 HANA
Configure BOP Segment
This is the most innovative and important step in the configuration which is different to what we see in SAP ECC environment. SAP S/4 HANA provides multiple inclusion/exclusion parameters that can be configured for selection of Sales Order and STO documents for back order processing. The prioritizer includes the sort conditions that should be applied when multiple inclusion/exclusion parameters are selected
Document type selection – Sales order or STO or Mixed (Both Sales order and STO)
Inclusion /Exclusion parameters – Sales Document type/Sales Item Category/Shipping Point/Plant/Material/Sales Org/Distribution Channel/Customer group/Material Group etc
Sort conditions example – Ascending / Descending / Custom sort sequences
Configure Custom BOP Sorting
This is where system allows to create your own sort sequences (apart from ascending/descending). Often, we have seen a business need to configure business rules where certain parameters have to take precedence over others in a given Business Scenario. Here system allows to specify the order in which the processing of back orders should be sorted so that business rules can specify to prioritize requirements based on the sort sequence. This helps of avoid writing of custom code to determine a custom sort sequence.
Configure BOP Variant
Here you will assign the BOP segments configured in Step1(configure BOP segment) above to one of the strategies (Win/Gain/Improve/Resdistribute/Fill/Lose). BOP Variant determines which requirements are included in the run and how they are checked, the variants that are configured here will be used in the next step to schedule BOP run. After setting up the configuration, system allows to simulate the variant in real time and also copy the variant to assign to another strategy
Schedule and Monitor BOP Run
These are the last steps in the set up where system allows the schedule the BG Job for the BOP run using multiple technical parameters, simulate and monitor the results of the BOP run. Once the Job is run scheduled and run successfully, the results can be monitored in Monitor BOP run to analyze the logs and take any corrective action as required to the selection parameters/sort sequences in Configure BOP segment app.
Below table highlights the differences in BOP set up between ECC and S/4 HANA
To conclude, BOP in S/4 HANA offers much more innovative and flexible options than current ECC offerings. Industries where there is high fluctuation in demand/supply can make best use of BOP functionality in their supply chain area to meet Business demands. It is not mandatory to use all available strategies for BOP run, based on Business value and demand, required strategies can be configured to gain maximum value to the Business. All of the BOP functionalities can be configured using FIORI Apps and there is no need of any programming skills.
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