SAP S/4HANA Cloud, Private Edition, and SAP S/4HANA for Sourcing & Procurement | 2022 Product Update
This blog covers the highlights that our developers at SAP work for 🙂 Check out the following innovations to increase your business’s profitability while obtaining goods and services with SAP S/4HANA 2022.
Note that this blog still does not cover the complete range of new features and functions as I had to select some innovations to spotlight. For the 2021 release check out this blog.
Quick links for headline topics:
- Procurement Planning
- SAP Product Sourcing
- Operational Procurement
- SAP Central Procurement
- SAP Ariba Integration
What is SAP S/4HANA for procurement planning?
SAP S/4HANA for procurement planning is a stand-alone project management application running on BTP (Business Technology Platform). Procurement planning optimizes direct material sourcing by offering project management capabilities for new product launches (NPI – New Product Introductions). It allows users to setup a project structure to which items from a bill of material (BOM) can flexibly be assigned to. Planning capabilities include milestones and activity planning like tasks and events at both the project and individual part levels. They also include the planning of investments, such as tooling costs for selected parts. Furthermore, Procurement Planning offers the ability to transfer bundles of parts, which are groups of items based on purchasing needs, to SAP Product Sourcing and initiate sourcing projects. The sourcing progress is being tracked and updates are triggered in case of changes to the BOM.
With SAP S/4HANA for procurement planning SAP wants to address these common challenges procurement professionals are facing:
- How can I make sure, that all externally procured parts are ready for delivery until start of production?
- How can I gain transparency about the current sourcing progress of all BOM items and related investments?
- I would like to manage a common start of production and backward-calculated milestones from that.
- Accelerating time to market by enabling the procurement of key suppliers to stay on schedule before manufacturing begins
- Boosting procurement efficiency and alignment across complex product launches involving hundreds of sourcing events
- Simplifying procurement project management for complex product launches and programs
- Reducing firefighting by helping ensure that all components in a bill of material are sourced and required investments are agreed on
More info can be found here.
Watch the demo below to see the application running as part of an end to end demo in the context of an automotive company that is developing a new product.
Collect and manage cost breakdown information of direct materials during sourcing process
In order to identify cost-reduction opportunities and to negotiate a win-win deal, sourcing manager needs to understand the drivers of each ‘Item’ being sourced from suppliers. This is generally performed by collecting ‘Cost breakdown’(CBD) information from the suppliers during the sourcing process. Thus, we aim to address more-advanced sourcing requirements specifically for automotive industry and industrial manufacturing & components industries.
Users can create and publish templates to record the cost breakdown details of items included in sourcing. Using these templates, suppliers can provide details of cost breakdown for the items they propose to supply, to meet the sourcing requirements. So a full end to end scenario from creation of cost breakdown templates as excel spreadsheet, while creating the sourcing project define relevant items for cost breakdown and choose the appropriate template. After successful publication to the suppliers, they can – on their side – download the spreadsheet and fill all relevant fields. Finally attaching the spreadsheets to the Quotation items and submitting back to the Sourcing Manager. Sourcing managers can now compare granular cost elements in the ‘quotation comparison’-app and further negotiate with suppliers to get the best price with maximum savings. This helps in creating and managing multiple formats of cost breakdown templates and using them during the sourcing process to collect granular cost information from the suppliers. Of course this requires additional products like SAP S/4HANA Quotation management application which is a BTP application (Supplier facing app).
- Gain additional insights into the cost drivers of material being sourced
- Enable fact-based negotiation with suppliers
- Build trust with suppliers
Check out the nice video below to understand the full process or read this blog.
User Experience Improvements
Please check out note 3034864 to find the latest User Experience Improvements. This note documents continuosly the UX / UI improvements that impact end-users, key-users and administrators which can be perceived as visual or behavioral change.
Service Purchasing and Recording
Reduce the costs of procurement by offering holistic service procurement
The following illustration shows the requirements from different customers which we took as a starting point to improve our offering within the last three years on service procurement. Besides improving data handling and data structures, we wanted to transform classical service procurement and bring into it new features which provide additional business benefits while keeping the classical processes the same. The result is a much more collaborative and cohesive experience for all three personas: buyer, purchaser as well as the service provider.
Lean Service procurement in the source-to-pay process now offers the option to mix services and materials with a harmonised product master and in a hierarchical structure
With the app ‘model product specification‘ you can create and categorize structured sets of related service and material items. Thus, you can group together items that are frequently ordered together to complete a particular task. Structure your service and material demand with max. 5 levels of hierarchies closely structured to the physical world. See the picture below for an example. From ‘MPS’ the item hierarchy can then be included in a contract with item hierarchies as well. Easily use the item hierarchy for all follow on documents (PR/PO/SES..). Please read the blog by Amit to dig deeper into this topic.
- Enhanced process efficiency
- Flexible integration into line-of-business products
- Possibility to mix procurement of services and products
The ‘Manage Service Entry Sheet’-app now supports the display of the approver. Once a service entry sheet is sent for approval, all workflow recipients are displayed in the approver column.The workflow recipients are all authorized persons to approve the service entry sheet. As soon as an eligible approver claims the work item in the ‘My Inbox’-app, only this workflow processor is displayed in the approver column. If necessary, adjust your settings to display the approver column. The approval process of Serivce Entry Sheets is documented here.
Carbon Footprint data
We offer more transparency into the impact of the company’s sustainability efforts, to reach overall sustainability goals. Thus we display carbon footprint data in the following SAP Fiori apps for purchase requisitioning – ‘Manage Purchase Requisition Professional’ (on the line-item level) and ‘Monitor Purchase Requisition Items’. Furthermore, we display carbon footprint data in the SAP Fiori app ‘Process Purchase Requisitions’ as a sort able work list column and an adjustable filter field and as part of the search help for available sources of supply. With that we want you to increase visibility of footprint data to achieve sustainability targets and deliver on the “green line” objectives of your organization and reduce the overall carbon footprint through conscious purchasing decisions.
On top, we add the following innovations as well:
- Integrated checks against international trade compliance during the creation and editing of a purchase requisition, from the moment a supplier is assigned as the source of supply. Assignment of “blocked” mode to a purchase requisition failing a compliance check because of a non-compliant supplier, which stops any follow-on document creation until the trade-compliance issue has been resolved
- Provisioning of a configuration user interface, which enables business process experts to define customer-specific document types and number ranges for purchase requisitions
- Provisioning of extensibility options for the integration of custom fields into the following SAP Fiori apps Purchase Requisition fact sheet and Edit and Approve Purchase Requisition
- Extensibility enabled through e-mail templates for configuring customer-specific e-mail notifications upon approval or rejection of purchase requisitions
Landing page for casual requestors in self-service requisitioning
The new self-service procurement app serves to offer the employees or casual users a consolidated one-stop solution that provides a quick, intuitive, and efficient shopping experience. The well laid out sections in the app provide a seamless experience with reduced clicks and navigation. The reduction in redundancy and improved usability makes this new app an effective replacement to the existing ’Create Purchase Requisition’ and ’My Purchase Requisitions’ app. Employees can create and manage the purchase requisitions using a single application with all necessary details available.
Provisioning of a requestor-centric landing page for local purchase requisitions, enables users to:
- Integrate external catalogs with internal cross-catalog searches and create free-text line items within a single SAP Fiori app
- Quickly access and track the status of their latest self-service requisitions
- Minimize the number of clicks by introducing split-screen navigation to the requisition overview and item details pages
- Work with several draft requisitions in parallel
On top, we add the following innovations as well:
- Configuration option providing the approver with a predefined set of customer-specific decision reasons to choose from when approving a purchase requisition
- Straightforward integration of the Purchase Requisition fact sheet app directly into the My Inbox workflow app
- Display of carbon footprint data in the Purchase Requisition fact sheet app for purchase requisitioning (also integrated into the SAP Fiori app “My Inbox”)
- Ability to implement your own custom logic to dynamically determine requestors who can substitute for other users in confirming the receipt of goods, using the SAP Fiori app “Confirm Receipt of Goods”
Purchase Order Processing
Increased transparency and enablement of intercompany processes for sales and procurement
With the Advanced Intercompany Stock Transfer process, you can transfer stock between different legal entities of a coporate group. Within the group, you can transfer stock from one plant to another if the plants belong to different companies (that is, have different company codes). We improve the sales and procurement processes between two companies within one group to include:
- Shared view of purchase orders and sales orders for both companies
- Automatic customer and supplier invoice process
- Valuated stock in transit
- Process-flow monitor on both sides to provide the most-accurate information about document status
Please see this set-up guide attached to this note.
- Enhanced process efficiency
- Increased transparency of the intercompany process
Central Purchase Contract Processing
Multilevel item hierarchy
Similar to the topic above on service hierarchies, we also integrate hierarchical product line items (material and service) into central purchase contracts by: a) manually building up a multilevel item hierarchy and b) adding child items underneath central contract line items. An item hierarchy can consist of one or multiple item sets with subitems. This way you can structure and sort your items. For example, if you are purchasing materials and services for different departments of a company, you can use item hierarchies to group items by department.The built up multilevel item hierarchy can then be distributed to purchase contracts in connected SAP S/4HANA systems.
Editability of distributed outline agreements in connected systems
Customers of SAP Central Procurement will be able to control which of the fields of a distributed outline agreement, either in a local purchase contract or a scheduling agreement, can still be edited by a local purchaser or logistics expert in the respective connected system. Especially those fields, which are not directly part of a central contract, as they are too specific to the given nature of a particular backend system (e.g. the accounting details), can be centrally declared as either being locally editable or read-only. In contrast to the former locking of the complete backend purchasing document, this partial editability now allows for a controlled maintenance of additional, local outline agreement data.
Simulation of Central Purchase Contract distribution
Distributing a Central Purchase Contract to various connected systems is an asynchronous background task, which can only show any success or error messages after the fact when the distribution has already finished. In order to guarantee flawless distribution, Central Purchasers will now receive the capability of triggering a distribution simulation upfront, while they are still in preparation of the final central contract.
This simulation can also be triggered as a background process and once it is finished, the purchaser can display any potential distribution errors in the same way as an actual distribution would have been carried out. Potential issues, such as material masters that are marked for deletion or if there are blocked suppliers, can be identified very early during the contract creation process and can be corrected in time before the final release of the contract.
This helps to reduce distribution errors by offering Central Purchasers the opportunity to validate the correctness of Central Contract data before the final release of the contract.
On top, we add the following innovations as well:
- Ability to search central purchase contracts directly using the integrated enterprise search functionality in SAP Fiori launchpad
- Provisioning of a configuration user interface:
- Enables business process experts to choose a set of fields from various document levels of a central purchase contract
- Retriggers the contract’s approval workflow based on the given field configuration
- Support for the line-item type “consignment” (item type K) in central purchase contracts and its distribution to the local: Purchase contract and Scheduling agreement
- Ability to implement your own custom logic to dynamically extend a set of configurable fields for retriggering the approval workflow for a central contract, if changed by the purchaser
- Mapping of the backend material numbers to the material number in the central purchase contract of the hub system through the unified key mapping service (UKMS)
- Exchange of the material numbers based on the maintained UKMS mappings during contract distribution to the connected system
- Inclusion of the fields for expected value and overall limit for unplanned service items in central purchase requisitions
- Transfer of the limit fields into the connected system as either:
- Enhanced limit items (item type E) for backend SAP S/4HANA systems
- Limit items (item type B) for backend SAP ERP Central Component (SAP ECC) systems
- Ability to transfer the purchase order price type from the central purchase requisition into the back-end purchase requisition and backend purchase order of the connected system
- Ability to replicate central purchase requisitions that are still in status “awaiting approval” to the connected system without the need for any prior approval
Manage supplier confirmations from a central hub system
Customers can now leverage a new introduced SAP Fiori app in Central Procurement – ‘Manage Central Supplier Confirmation’- to centrally process and manage supplier order confirmations for purchase orders residing in the local, connected systems. In its first release, the central supplier confirmation will allow for the manual maintenance of confirmed delivery dates and quantities, along with an approval workflow, which can be triggered in case of deviations compared to the corresponding backend purchase order. After its approval, the confirmation data will be written into the respective tab of the local purchase order and also shown in the object page of the centrally managed order within the central procurement hub. With this innovation we increase the flexibility in handling of supplier confirmations by a) Centralizing the processing of confirmations in a single, central system and b) Decoupling the management of confirmations from the editing of actual purchase orders.
For more details, please watch the following demo:
On top, we add the following innovations as well:
- Search for centrally managed purchase requisitions and purchase orders directly using the integrated enterprise search functionality in SAP Fiori launchpad
- Implement custom logic to transfer custom-field content: From a centrally managed purchase requisition to the follow-on purchase order within the connected system
- Extend the ability to create central requests for quotation beyond approved purchase requisitions to include non approved purchase requisitions
SAP Ariba Sourcing
Lean service support for the Central Sourcing integration scenario with Ariba Sourcing (4QN)
This feature enables buyers to execute the sourcing process with the support of lean services in the central sourcing integration scenario with Ariba Sourcing. It’s now possible to add line items of product type group “services” and transfer them to Ariba Sourcing for sourcing activities.
SAP Business Network (Ariba Network)
Enable Item Attachments in Purchase Order Outbound Interface (42K)
In addition to being able to send attachments from the header level, the buyer has the ability to send multiple attachments to suppliers on the purchase-order line item level. In addition each item attachment can be classified for internal or external usage:
- Classify attachments as “external” for delivery to suppliers visible in Ariba Network
- Classify attachments as “internal” for visibility by only the buying organization
Comments on Header and Item level for Purchase Order Confirmation Inbound (42K)
Suppliers can add comments on header and item level in Purchase Order Confirmations. This results in more flexibility and better collaboration between Suppliers and Buyers.
Supplier Comments visible for buyers on SAP S/4HANA side:
Multi ERP Support (42K)
By enabling Multi ERP, customers can now connect multiple ERP and SAP S/4HANA systems by using one buyer ID instead of having multiple buyer accounts.
For more information on SAP S/4HANA Cloud, private edition, and SAP S/4HANA | 2022, check out the following links:
- SAP S/4HANA release info: sap.com/s4hana
- SAP S/4HANA Community here
- SAP S/4HANA PSCC Digital Enablement Wheel here
- Inside SAP S/4HANA Podcast here
- Join the SAP S/4HANA Movement
- Best practices for SAP S/4HANA here
- Help Portal Product Page here
- Feature Scope Description here
- What’s New here
*** Not part of SAP S/4HANA shipment; requires additional products