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Bernd Roedel, Johannes Esser

Inventory Management with SAP S/4HANA®

Dear Reader,In college, I learned that managing supplies for a three-day hike in the Grand Canyon is easier said than done.

How do you divvy out snacks, water, and Band-Aids at a sustainable rate as eight hikers grow hungry, thirsty, and blistered? What’s the best way to distribute supplies—includ-ing a 36-pound communal tent—across eight backpacks of varying sizes? How should you store the trail mix so it’s always within reach, and how often should you stop to monitor consumption? In our case, you make it up as you go and hope for the best.

So if a spring break hike is hard, imagine inventory management for global operations. But, dear reader, if you have SAP S/4HANA to handle your processes and expert authors Bernd Roedel and Johannes Esser to guide you through them, you can manage inventory with the precision missing from our adventure in the Grand Canyon.

What did you think about Inventory Management with SAP S/4HANA? Your comments and suggestions are the most useful tools to help us make our books the best they can be. Please feel free to contact me and share any praise or criticism you may have.

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Contents

Preface ..................................................................................................................................................... 15

1 Introduction to SAP S/4HANA and SAP Fiori 21

1.1 SAP HANA Database ........................................................................................................... 22

1.1.1 Basics ........................................................................................................................ 22

1.1.2 In-Memory Database Limitations and Mitigation Strategies ............... 24

1.1.3 Database Benefits and Features ..................................................................... 27

1.2 A New Data Model .............................................................................................................. 29

1.2.1 Material Documents (Table MATDOC) .......................................................... 29

1.2.2 Accounting Documents (Table ACDOCA) ..................................................... 37

1.3 Functional Changes ............................................................................................................ 37

1.3.1 Simplification List ................................................................................................. 37

1.3.2 Industry Solution Retrofitting .......................................................................... 38

1.4 SAP Fiori ................................................................................................................................... 38

1.4.1 A New User Paradigm ......................................................................................... 39

1.4.2 SAP Fiori Applications .......................................................................................... 41

1.4.3 SAP Fiori Launchpad ............................................................................................ 50

1.5 Summary ................................................................................................................................. 64

2 Inventory Management Basics 65

2.1 Inventory as a Staple of the Supply Chain ............................................................... 65

2.2 End-User Role Templates ................................................................................................. 68

2.3 Key Considerations ............................................................................................................. 69

2.3.1 Service Levels, Inventory Costs, and Operational Profit .......................... 69

2.3.2 Lot Sizes, Replenishment Times, and Safety Stocks .................................. 71

2.3.3 Local versus Global Inventory Management ............................................... 74

2.3.4 New Technologies ................................................................................................ 75

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Contents

2.4 Inventory Optimization in SAP S/4HANA ................................................................ 79

2.4.1 Optimization Schema ......................................................................................... 79

2.4.2 Plan and Adjust ..................................................................................................... 82

2.4.3 Execute .................................................................................................................... 82

2.4.4 Analyze .................................................................................................................... 84

2.5 Summary ................................................................................................................................. 85

3 Configuring Inventory Management 87

3.1 Implementation Guide Configuration ....................................................................... 87

3.1.1 Implementation Guide Overview ................................................................... 88

3.1.2 Organizational Units ........................................................................................... 91

3.1.3 Inventory Management ..................................................................................... 95

3.1.4 Procurement .......................................................................................................... 112

3.1.5 Logistics Execution .............................................................................................. 119

3.1.6 Production Planning ........................................................................................... 119

3.2 Cross Functions .................................................................................................................... 125

3.2.1 Date Functions ...................................................................................................... 125

3.2.2 Responsibility Management ............................................................................ 127

3.2.3 Situation Handling .............................................................................................. 130

3.2.4 Extensibility ........................................................................................................... 136

3.3 Servers ...................................................................................................................................... 143

3.3.1 Frontend .................................................................................................................. 144

3.3.2 Backend ................................................................................................................... 146

3.4 Basic Interfaces .................................................................................................................... 147

3.5 SAP Fiori ................................................................................................................................... 148

3.5.1 SAP Fiori Entities ................................................................................................... 149

3.5.2 Roles and Users ..................................................................................................... 150

3.5.3 SAP Fiori Apps Reference Library ..................................................................... 153

3.6 Summary ................................................................................................................................. 155

8

Contents

4 Planning and Adjusting Inventory 157

4.1 Planning Strategies ............................................................................................................. 158

4.1.1 Production Planning ............................................................................................ 160

4.1.2 Discrete versus Process Manufacturing ........................................................ 163

4.1.3 Demand-Driven versus Plan-Driven Planning ............................................ 163

4.2 Production Master Data Overview .............................................................................. 165

4.2.1 Bill of Material ....................................................................................................... 165

4.2.2 Work Center/Resource ....................................................................................... 166

4.2.3 Routing/Master Recipe ....................................................................................... 166

4.2.4 Production Version ............................................................................................... 166

4.2.5 Production Supply Area ...................................................................................... 167

4.3 MRP Overview ....................................................................................................................... 167

4.3.1 Generic MRP Capabilities in SAP S/4HANA .................................................. 168

4.3.2 Planning Process ................................................................................................... 168

4.3.3 MRP Live ................................................................................................................... 171

4.3.4 DDMRP ..................................................................................................................... 172

4.4 Kanban Overview ................................................................................................................ 173

4.5 Capacity Planning and Production Master Data ................................................... 174

4.5.1 Manage Work Center Capacity ........................................................................ 174

4.5.2 Display BOM, Display Multilevel BOM Explosion, and Find BOM

for Components .................................................................................................... 176

4.5.3 Display Routing/Display Master Recipe ........................................................ 180

4.6 Make-to-Order and Make-to-Stock ............................................................................. 182

4.7 MRP Live ................................................................................................................................... 186

4.7.1 Monitor Requirements and Material Coverage ......................................... 186

4.7.2 Manage Planned Orders ..................................................................................... 201

4.7.3 Convert Planned Orders ..................................................................................... 201

4.7.4 Schedule MRP Runs .............................................................................................. 202

4.7.5 Display MRP Key Figures .................................................................................... 207

4.7.6 Display MRP Master Data Issues ..................................................................... 211

4.7.7 Monitor External Requirements ...................................................................... 212

4.7.8 Monitor Internal Requirements ....................................................................... 214

4.7.9 Detect Unnecessary Supply Elements ........................................................... 217

9

Contents

4.8 DDMRP ..................................................................................................................................... 221

4.8.1 Configuration Process ........................................................................................ 221

4.8.2 Buffer Profile Maintenance .............................................................................. 222

4.8.3 Product Classification: Mass Maintenance of Products ......................... 223

4.8.4 Buffer Adjustment ............................................................................................... 225

4.8.5 Product Classification: Schedule Product Classification ........................ 226

4.8.6 Buffer Positioning ................................................................................................ 228

4.8.7 Schedule Lead Time Classification of Products .......................................... 231

4.8.8 Schedule Buffer Proposal Calculation ........................................................... 233

4.8.9 Manage Buffer Levels ......................................................................................... 236

4.8.10 Planners Overview ............................................................................................... 243

4.8.11 Replenishment Planning ................................................................................... 244

4.8.12 Replenishment Execution ................................................................................. 246

4.9 Kanban ..................................................................................................................................... 248

4.9.1 Manage Control Cycle ........................................................................................ 248

4.9.2 Summarized JIT Call Scheduler ....................................................................... 252

4.9.3 Kanban Calculation ............................................................................................. 254

4.10 What’s Ahead for Inventory Planning and Adjustment? .................................. 255

4.10.1 Prerequisites .......................................................................................................... 255

4.10.2 Schedule Predictive MRP Simulation Creation ........................................... 256

4.10.3 Process Predictive MRP Simulations .............................................................. 260

4.11 Summary ................................................................................................................................. 262

5 Goods Receipt 263

5.1 Purchase Order ..................................................................................................................... 263

5.1.1 Purchase Orders for Inventory ......................................................................... 264

5.1.2 Stock-Related Procurement .............................................................................. 268

5.2 Inbound Delivery ................................................................................................................. 272

5.3 Production Order ................................................................................................................. 274

5.4 Goods Receipt without Reference ............................................................................... 275

5.5 Process Variants ................................................................................................................... 277

5.5.1 Batch-Managed Materials ................................................................................ 277

10

Contents

5.5.2 Goods Receipt Blocked Stock ............................................................................ 280

5.5.3 Mandatory Quality Inspection ......................................................................... 280

5.5.4 Decentralized Warehouse Management ..................................................... 281

5.5.5 Return Delivery ...................................................................................................... 281

5.5.6 Single- or Multi-Account Assignment ........................................................... 282

5.6 What’s Ahead for Goods Receipt? ................................................................................ 285

5.7 Summary ................................................................................................................................. 285

6 Core Inventory Management 287

6.1 Monitoring Core Inventory Documents .................................................................... 288

6.1.1 Material Document Components ................................................................... 288

6.1.2 Use Enterprise Search to Identify Inventory Documents ........................ 289

6.1.3 Material Documents Overview ........................................................................ 291

6.1.4 Analyze the Document Flow via the Material Document

Object Page ............................................................................................................. 296

6.2 Stock Identification ............................................................................................................ 298

6.2.1 Stock – Single Material ....................................................................................... 299

6.2.2 Stock – Multiple Materials ................................................................................ 305

6.2.3 Display Stock Overview ...................................................................................... 307

6.3 Stock Transfer ........................................................................................................................ 309

6.3.1 Stock Transfer – In-Plant .................................................................................... 310

6.3.2 Transfer Stock – Cross-Plant ............................................................................. 314

6.3.3 Post Goods Movement ....................................................................................... 316

6.3.4 Working with Stock Transport Orders ........................................................... 318

6.4 Initial Entry and Scrapping .............................................................................................. 321

6.4.1 Manage Stock ........................................................................................................ 321

6.4.2 Post Goods Movement ....................................................................................... 324

6.5 Reversals .................................................................................................................................. 325

6.5.1 Reversals within the Material Document Object Page ............................ 326

6.5.2 Partial Material Document Reversal .............................................................. 326

6.6 Physical Inventory ............................................................................................................... 327

6.6.1 Physical Inventory Phases .................................................................................. 328

11

Contents

6.6.2 Create Physical Inventory Documents .......................................................... 330

6.6.3 Enter Inventory Count ........................................................................................ 333

6.6.4 Process Physical Inventory Count Results .................................................... 334

6.6.5 Physical Inventory Document Overview ...................................................... 335

6.7 What’s Ahead for Core Inventory? .............................................................................. 337

6.8 Summary ................................................................................................................................. 338

7 Production Execution 339

7.1 Working with Reservations ............................................................................................ 340

7.1.1 Automatic Creation of Reservations ............................................................. 341

7.1.2 Manual Reservation Management ................................................................ 341

7.1.3 Display Reservation List ..................................................................................... 343

7.2 Scheduling and Manufacturing Execution .............................................................. 345

7.2.1 Schedule Production ........................................................................................... 345

7.2.2 Monitor Work Center Schedules ..................................................................... 349

7.2.3 Stock Requirements List .................................................................................... 351

7.2.4 Display Planned Orders, Production Orders, and Process Orders ........ 352

7.2.5 Manage Change Requests ................................................................................ 356

7.2.6 Check Material Coverage ................................................................................... 359

7.2.7 Monitor Production Orders and Process Orders ........................................ 359

7.2.8 Manage Production Orders .............................................................................. 364

7.2.9 Confirm Production Operations ...................................................................... 370

7.2.10 Create Goods Receipt for Production Order ................................................ 372

7.3 Production Performance Monitoring ......................................................................... 372

7.3.1 Material Scrap ....................................................................................................... 372

7.3.2 Operation Scrap .................................................................................................... 374

7.3.3 Scrap Reason .......................................................................................................... 375

7.3.4 Excess Component Consumption .................................................................. 377

7.3.5 Monitor Production Execution Duration ..................................................... 379

7.4 Working with Kanban ....................................................................................................... 380

7.4.1 Display Kanban (Demand View) ..................................................................... 380

7.4.2 Display Kanban (Supply View) ......................................................................... 383

7.4.3 Due Replenishment Elements ......................................................................... 384

12

Contents

7.4.4 Correct Kanban ...................................................................................................... 386

7.4.5 Unlock Kanban Container .................................................................................. 387

7.4.6 Collective Kanban Print ...................................................................................... 387

7.4.7 Set Kanban Container Status ........................................................................... 388

7.5 What’s Ahead for Production Execution? ................................................................. 389

7.6 Summary ................................................................................................................................. 392

8 Inventory Analysis 395

8.1 Inventory Analytics in SAP S/4HANA ......................................................................... 396

8.1.1 Advances in Analytics .......................................................................................... 396

8.1.2 Choosing the Right Analytics Tool .................................................................. 397

8.2 Posted Stock Change Analysis ....................................................................................... 398

8.2.1 Stock Single Material and Stock Multiple Materials ................................. 398

8.2.2 Goods Movement Analysis ................................................................................ 398

8.2.3 Physical Inventory Document Analysis ......................................................... 403

8.3 Key Performance Indicator Monitoring and Analysis ......................................... 404

8.3.1 Overview Pages ..................................................................................................... 404

8.3.2 Inventory Turnover Analysis ............................................................................. 409

8.3.3 Inventory (Multiple) Key Performance Indicator Analysis ...................... 413

8.3.4 Material Valuation ............................................................................................... 419

8.4 Process Analysis Tools ....................................................................................................... 419

8.4.1 Dead Stock Analysis ............................................................................................. 420

8.4.2 Slow or Non-Moving Materials ........................................................................ 421

8.4.3 Overdue Stock in Transit .................................................................................... 425

8.4.4 Overdue Goods Receipt Blocked Stock .......................................................... 427

8.5 Custom Queries .................................................................................................................... 428

8.6 What’s Ahead for Analytics? .......................................................................................... 433

8.7 Summary ................................................................................................................................. 437

13

Contents

9 Inventory Management in the Cloud 439

9.1 SAP S/4HANA Cloud ........................................................................................................... 440

9.1.1 Solution Scope ...................................................................................................... 441

9.1.2 Implementation Methodology ........................................................................ 447

9.1.3 Configuration and Fine-Tuning ....................................................................... 448

9.1.4 Update Cycle .......................................................................................................... 453

9.2 Hybrid Deployment ............................................................................................................ 453

9.2.1 SAP S/4HANA and SAP S/4HANA Cloud ....................................................... 454

9.2.2 Decentralized Warehouse Management ..................................................... 457

9.2.3 Digital Procurement, Sourcing, and Supply Chain Process

with SAP Ariba ....................................................................................................... 459

9.3 SAP Cloud Solutions ........................................................................................................... 460

9.3.1 SAP Cloud Platform ............................................................................................. 460

9.3.2 SAP Analytics Cloud ............................................................................................. 460

9.3.3 SAP API Business Hub ......................................................................................... 464

9.3.4 SAP Leonardo Internet of Things .................................................................... 475

9.4 Summary ................................................................................................................................. 478

The Authors ........................................................................................................................................... 479

Index ........................................................................................................................................................ 481

Service Pages ..................................................................................................................................... I Legal Notes ......................................................................................................................................... I

14

0Preface

Welcome to the comprehensive book on inventory management in SAP S/4HANA.

With SAP S/4HANA as the SAP HANA-based, next-generation enterprise resource

planning (ERP) offering, SAP has also refactored core parts of SAP ERP, namely,

finance and logistics. Although SAP S/4HANA may appear just to be SAP ERP on SAP

HANA, much has been changed underneath.

First, this book will shed some light on these changes. Second, SAP S/4HANA entails

some impressive user interaction technologies often summarized as SAP Fiori. This

book will explain SAP Fiori and the advantages it brings to your daily work. Third and

most important, this book will describe the latest capabilities of SAP S/4HANA with

respect to inventory management. We understand inventory management as the

following:

� Representing logical structures to manage a company’s inventory

� Procedures to track and document physical and logical inventory changes

� As a service used by value-adding processes such as procure to pay, plan to deliver,

sell from stock, and so on

� Key differentiator when balancing service level versus capital lockup

� Part of the production planning and execution process

Looking at the evolution of ERP software, we see the next quantum leap happening

right now.

The very first (pre-) ERP systems were built on batch run processes and offered just a

few capabilities to business users to interact with the system. The second-generation

ERP started by clustering business processes into transactions so that business users

could display or manipulate data in the system in real time. The primary value add of

such an ERP system was to have all data integrated into one database instance that

could be used by any business transaction, presenting a tight integration of business

processes.

The third-generation ERP “outsourced” some business processes to separate system

instances such as the data warehouse, customer relationship management system,

and supply chain management system due to a high demand for processing power or

large data volumes to deal with. Sometimes, this was referred to as the “best of breed

approach” if each system instance ran on a different vendor’s software.

15

Preface

Now, new developments in hardware and software technology allow us to create

fourth-generation ERP systems that are built on one database instance but offer the

processing power of separate systems enriched with new methods for smart user

interaction, collaboration, built-in machine intelligence, and natural language inter-

action. Therefore, this generation of ERP systems is called the “intelligent ERP.”

Because it comes with different deployment models, such on premise, cloud, and

hybrid, the intelligence may be embedded or side by side.

It’s a safe bet that SAP would like the CIOs of every company to queue up in front of

its Walldorf-based headquarters to make sure that their company is the first to get

the latest release of SAP S/4HANA. The inventory management functionality and

improved logistics system, which we’ll explore in this book, are key reasons that the

line may start to form.

Who This Book Is For

This book addresses anyone who is interested in SAP S/4HANA with a logistics focus.

The book offers a lightweight technical background to system administrators, con-

sultants, and key users on the SAP HANA database and SAP Fiori. For experienced SAP

users in the area of logistics, this book explains the difference SAP S/4HANA makes

when it comes to designing logistics processes, which will motivate you to rethink

the current logistics implementation in SAP and to strive for improvements. To all

new SAP users, this book is a good starting point to get to know the SAP S/4HANA ter-

minology and directly start with modernized logistics, avoiding implementing a

third-generation ERP on a fourth-generation platform. If you’re a solution architect

or a system architect, you might be interested to get a glimpse of where ERP is head-

ing to in the future. As end users in logistics, you should be thrilled by all the new fea-

tures—such as the intuitive user interface (UI), the collaboration and knowledge-

sharing tools, mobilized applications, embedded analytics, and smart assistance sys-

tems described in this book—and immediately start to think how to leverage them.

As an active user of SAP S/4HANA, you’ll find the practical instructions and hints for

managing inventory in SAP S/4HANA in this step-by-step guide.

We are convinced that the main benefit of SAP S/4HANA is to run your core logistics

processes better with less effort compared to any other ERP system.

16

Preface

How This Book Is Organized

This book contains nine chapters. We recommend reading them sequentially from

Chapter 1 onward to get a comprehensive overview from technology to configuration

to inventory management and beyond.

Figure 1 shows how the chapter contents relate to each other. The white boxes refer to

content that is created on the scaffold of inventory management processes. The dark-

est box contains content explaining the planning processes, the medium-dark boxes

contain content detailing the execution processes, and the lightest box covers the

analytic processes. The book suggests organizing inventory management on the

basis of a continuous improvement process (CIP) cycle, with the following three

steps: plan/adjust (dark), execute (medium), and analyze (light). If you follow the con-

tent map while reading, it may help you find solutions for dedicated areas.

Figure 1 Content Map

Chapter 1

Introducing the SAP S/4HANAParadigms:

• Real-Time Inventory• SAP Fiori User Interface

Chapter 2

Inventory Management Basics:Establishing a Feedback Loop

Keeping Inventory Low andService-Level Agreements High

Chapter 3

Configuration: Explaining AllRequired System Configuration

Steps

Chapter 4

Planning/Adjusting Inventory

Chapter 5

Executing Inbound InventoryProcesses

Chapter 6

Executing Core InventoryProcesses

Chapter 7

Executing Production PlanningProcesses

Chapter 8

Analyzing Inventory Processes

Chapter 9

System Deployment Options

Execute

Analyze

Plan/Adjust

17

Preface

Further Resources

For each SAP Fiori app that we discuss, you can use the related SAP Fiori ID (for exam-

ple, F0843 — Post Goods Receipt for Purchase Order) or SAP GUI transaction shown

in parentheses for deeper analysis in the SAP Fiori apps reference library at http://s-

prs.co/v489206.

Let’s review what is covered in each chapter of this book:

� Chapter 1: Introduction to SAP S/4HANA and SAP Fiori

This chapter introduces the SAP S/4HANA database and explains how its in-memory

architecture is leveraged in the refactoring of core logistics. Secondly, the chapter

explains the SAP Fiori UI paradigm, which is designed to simplify and streamline

system–user interaction.

� Chapter 2: Inventory Management Basics

This chapter focuses on core inventory management basics and positions inven-

tory management within supply chain planning from the technical and end-user

role perspectives. The chapter also introduces the idea of SAP S/4HANA as an intel-

ligent ERP system supporting inventory optimization.

� Chapter 3: Configuring Inventory Management

In this chapter, we walk through the configuration steps in an SAP S/4HANA sys-

tem, which consist of the SAP IMG, business process extensibility, and setting up

user roles regarding technical interfaces.

� Chapter 4: Planning and Adjusting Inventory

This chapter covers the inventory planning part of the inventory optimization

cycle. Different planning strategies are mentioned, and the key SAP Fiori apps in

SAP S/4HANA supporting these strategies are explained in depth.

� Chapter 5: Goods Receipt

This chapter belongs to the execution part of the inventory optimization cycle and

covers the SAP Fiori apps used in the inbound processes of inventory manage-

ment.

� Chapter 6: Core Inventory Management


covers the SAP Fiori apps used in the core processes of inventory management

(stock transfer posting, physical inventory, and more).

18

http://s-prs.co/v489206


Preface

� Chapter 7: Production Planning and Execution


covers the SAP Fiori apps used during production execution.

� Chapter 8: Inventory Analysis

This chapter belongs to the analysis part of the inventory optimization cycle and

presents all kinds of real-time analytical SAP Fiori apps, ranging from simple use

cases to professional use cases and from operational reporting to strategic analyt-

ics.

� Chapter 9: Inventory Management in the Cloud

This chapter gives an outlook beyond the on-premise deployment options of SAP

S/4HANA. There is a strong focus on SAP S/4HANA Cloud and SAP Cloud Platform

with some concrete examples of hybrid deployment scenarios.

Disclaimer

Throughout this book, the terms “material” and “product” are used as synonyms as

are “vendor” and “supplier”; however, SAP S/4HANA often replaces “material” with

“product” and replaces “vendor” with “supplier.”

Inventory management is a central part of the core logistic processes. In this book, we

look at inventory management from a production planning perspective. Therefore,

external procurement-related processes aren’t covered in detail. Furthermore, the

newly embedded SAP S/4HANA warehouse management capabilities are not part of

this book, as they are “downstream” of inventory management. Both topics deserve

their own book.

Acknowledgments

We have been supported while writing this book by many colleagues at SAP. We

would like explicitly to thank the following colleagues for actively reviewing this

book with us (in alphabetical order):

Thomas Friedrich, Bernhard Lokowandt, Michael Philipp, Benjamin Ringl, Manish

Saraswat, and Bernhard Trebels.

In the course of writing single chapters, we received additional support from the fol-

lowing colleagues (in alphabetical order):

19

Preface

Bince Mathew, Peter Gussmann, Thomas Hensel, Heike Hoffmann, Alexander Kra-

sinskiy, Katja Mueller, Carsten Riemer, Michael Schmidt, Jochen Strobel, Hardeep

Tulsi, Christine von Crailsheim, and Martin Wilmes.

We would also like to thank Emily Nicholls and Megan Fuerst at Rheinwerk Publi-

shing.

Last but not least, our respective families have co-invested considerable effort into

this book by freeing their husbands/fathers for writing. Both authors pay back now

with this acknowledgement to (in alphabetical order): Alexandra, Esther, Hannah,

Jan, Jonathan, and Rebecca.

In case we omit a colleague, we promise to correct this in the next edition.

Many screenshots are taken from test and demo systems. Without our colleagues

having created the demo data, this book wouldn’t look as it does right now. Thanks

very much indeed!

Conclusion

Reading this book will provide you with a comprehensive guide to inventory man-

agement in SAP S/4HANA. This book will serve as your foundational knowledge

source when planning your SAP S/4HANA implementation. It also serves as a starting

point to explore further the books from SAP PRESS. Let’s get on board now and pro-

ceed to Chapter 1 with a first glance at SAP S/4HANA in general.

20

Chapter 1

Introduction to SAP S/4HANA and SAP Fiori

Let’s begin with the basics—what is SAP S/4HANA, what is SAP Fiori,

and how does inventory management fit in? In this chapter, we’ll

build up the foundations of inventory management in SAP S/4HANA.

When talking about IT systems, solution architecture, or business processes, we often

face the situation that business analysts and end users use a different terminology

than IT people, which leads to misunderstandings and confusion during implemen-

tation projects. This chapter will shed some light on the latest IT terms introduced

with SAP S/4HANA in general and within inventory management in particular.

An IT system is supposed to collect, store, compute and present information to its

users. To separate these tasks a little bit, IT systems are constructed as layers, as

shown in Figure 1.1.

An enterprise resource planning (ERP) system is an IT system designed to collect,

store, compute, and present all kind of business information in support of end users

doing their business. SAP S/4HANA is the next generation ERP system that evolves

the technology of the database layer and the user interface (UI) layer.

This chapter will explain the evolution of the database layer by introducing in-

memory databases and the new data model in inventory management. We’ll then

explain the simplification of the application layer and conclude with a discussion

of the changes to the UI layer by introducing SAP Fiori.

21

1 Introduction to SAP S/4HANA and SAP Fiori

Figure 1.1 Software Architecture of an ERP System

1.1 SAP HANA Database

Databases are used to collect and store information. They represent the memory of

an ERP system. After reading this chapter, you’ll understand why the SAP HANA data-

base is a quantum leap in database technology.

Let’s break down SAP HANA into three parts: basics, limitations, and benefits.

1.1.1 Basics

To motivate this rather technical chapter, let’s assume you’re a financial accountant

transferring $1000 from account A holding $2000 to account B holding $1000. You

have the following expectation for your ERP system behavior:

� The ERP system will always display the correct figures of account A and B regard-

less of whether the system is in normal operation mode or there was a power fail-

ure, hardware defect, or technical upgrade. Either account A holds $2000 and

SAP HANADatabase

ABAP

SAP Fiori

SAP S/4HANA Architecture

Collect andStore

Compute

Present User Interface Layer

Application Layer

Database Layer

TaskSoftwareArchitecture Term

SAP S/4HANA System

Web Browser

HTTP(S)

Frontend

Backend

22


B holds $1000, or vice versa. Neither with both accounts have $2000 during the

transfer nor will both accounts have $1000.

� If $1000 is withdrawn from account A, then the same sum of $1000 will appear in

account B.

� Your transfer of $1000 won’t affect any other posting in the system done by you or

by any other users.

� You can always rely on the result of the transfer after it’s executed and confirmed

by the ERP system.

Your expectations are met by the implementation of the atomicity, consistency, iso-

lation, and durability (ACID) principle for transactions. ACID describes in technical

terms the requirements of an ERP system designed to support business process used

in this example. The cornerstone of such an ERP system is the database, which pro-

vides these ACID capabilities to the application (refer to Figure 1.1).

The challenge to today’s database vendors is to provide these capabilities not just for

one transaction at a time but for millions of concurrent transactions changing tera-

bytes of data simultaneously. For a long time, database implementations have relied

on file systems such as storage on hard disks, where the data itself is organized in

tables, and each table consists of an arbitrary number of rows stored sequentially on

the hard disk. In our example, each row of the account table may have a column rep-

resenting the account identifier (A or B) and another column representing the

amount in currency for each account. A row may also be denoted in database termi-

nology as a record. To execute the $1000 transfer, the database would need to read

both rows of the account table from the hard disk into main memory, subtract the

$1000 from the value of row A’s $2000 amount column, add it to the value of row B’s

$1000 amount column, and then write both changes simultaneously back to the

hard disk while making sure that no other transaction has changed the values of

account A or account B in-between.

With SAP HANA, a new type of database implementation has been introduced. Due to

the advances in hardware, notably main memory and processing power, the SAP

HANA database doesn’t use the file system as memory anymore. It keeps all data in

the main memory (a change log of every operation is written to the hard disk to

recover the main memory in case of unexpected hardware outages). In addition, the

SAP HANA database organizes the data in columns instead of rows; for our example,

this results in a column account identifier with values A and B and a column account

23


value with initial values $2000 and $1000. The row information (i.e., record) is pre-

served by the order of each column. In general, this organization of data is referred to

as column store in opposite to the row store outlined earlier.

The column store provides two advantages:

� As the database knows all the different values stored in one column all the time,

the database can use compression algorithms to reduce the main memory con-

sumption of a column. This is helpful if you have a limited number of discrete val-

ues per column. For example, a plant in SAP is identified by four alphanumeric

characters. Therefore, in a row store, you would normally reserve 4 bytes, or 8

bytes on Unicode systems, per plant. However, as long as you don’t have more

than 255 different plants per column, 1 byte is sufficient to represent all different

plants if it’s linked to a second table holding the true values of each plant. This is

referred to as Data Dictionary (DDIC) compression. Later, in Section 1.2.1, you’ll see

how DDIC compression significantly reduces the memory footprint in inventory

management.

� Many database operations comprise calculation within one column (sum, mini-

mum value, maximum value, etc.). This is straightforward within a column store,

as all values of one column are accessible in main memory. In a classical row store,

you need to read all rows from the hard disk, extract the value for each column,

and do the computation.

The main disadvantage of a column store is the use of delete and insert operations of

rows. Eventually, this requires a reordering of all columns linked to the database

table. To overcome this disadvantage, SAP HANA executes delete and insert opera-

tions per column in a transient area of the main memory and merges these changes

back to the column store from time to time.

Now that you’ve learned the basics of SAP HANA database with its in-memory col-

umn store of database tables, let’s take a closer look at its limitations and benefits.

1.1.2 In-Memory Database Limitations and Mitigation Strategies

Although Moore’s law about computer hardware evolution is still valid to some

degree, it’s obvious that there are physical boundaries that limit the size and process-

ing power of modern computer systems today. Of course, this limitation also applies

to in-memory database instances such as SAP S/4HANA.

24


As outlined in Section 1.1.1, using a column store instead of a row store has clear

advantages regarding mathematical operations per column; however, when applica-

tions need to fetch row by row from the database, a row store will perform better.

With SAP S/4HANA, the limitations are minimized so that the benefits mentioned in

Section 1.1.3 create a unique user experience superior to all available ERP systems so

far.

Scale Up or Scale Out

With SAP S/4HANA, you can either increase the main memory/processing power of

the ERP systems if your business grows (scale up), or you can distribute the tables

held in memory between several SAP HANA server instances (scale out). The latter

strategy clusters database tables on SAP HANA server instances in a way that avoids

cross SAP HANA instance queries. Thus, you distribute your database content

between the main memory of several SAP HANA server instances to achieve optimal

performance for your business processes.

Data Aging

In your daily life, you’ll organize your bank statements so that the current year’s

statements are at hand, and the previous years’ statements are stored in a file in your

desk. SAP S/4HANA offers a comparable feature for database tables, which may hold

large amounts of data. Like the bank statement example, records that may not need

to be accessible during your daily business can be moved to a different storage called

“cold store,” which is the opposite of the hot store, where the records needed for daily

business are kept, as shown in Figure 1.2.

Technically, the cold store is an SAP HANA partition that isn’t consuming main mem-

ory but is residing in a special storage attached to the system with superfast band-

width. The process of moving data to the cold store is called data aging. You can

schedule data aging based on certain conditions on a regular basis to minimize main

memory consumption of nonbusiness critical data. Accessing aged data is transpar-

ent for end users (unlike archiving, as we’ll see in the next section); for example, if an

end user tries to access an aged document, the application moves the document from

the cold store to the hot store to make it accessible for all sorts of computations.

25


Figure 1.2 Data Aging and Archiving

Archiving

At some point, the bank statements of the earlier example become obsolete. You may

keep a few of them to prove some critical transactions, but you’ll simply discard most

of them.

This process is called archiving in SAP S/4HANA, as shown previously in Figure 1.2.

Most of the database table, which held business-critical data, offers an archiving

object that can be linked to an archiving system. Like the preceding example,

archiving can also mean deletion. You can schedule archiving runs based on certain

conditions. Unlike data aging, archiving removes records from the SAP S/4HANA sys-

tem. If end users want to access the archived records, they need to use transactions

that are especially enabled to access archived data because normal business transac-

tions don’t access archived data. The entire process of information lifecycle manage-

ment is shown in Figure 1.3.

As mentioned, archiving can also be used to delete records from the SAP S/4HANA

system. Therefore, you can fulfill the legal obligation of data protection and privacy

with archiving.

SAP HANADatabase

Database Table

PermanentAging

Retrieval on Demand

Archive Object(1–n Database Tables) Archiving

Transparent AccessExplicit Access

Hot StoreCold Store

26


Figure 1.3 Information Lifecycle Management

1.1.3 Database Benefits and Features

As explained in Section 1.1.1, the column store offers many options for fast and effi-

cient mathematical operations on the values of one database column. This allows

you to move application coding into the database and improve performance. More-

over, the core data services (CDS) and built-in SAP HANA libraries (as you’ll see in this

section) offer a rich collection of mathematical functions significantly enhancing the

available ABAP open SQL syntax. This feature is wildly used in performance-critical

processes such as available-to-promise (ATP) and material requirements planning

(MRP) (see Chapter 4).

Core Data Services

New database features are leveraged only if they are “consumable” by the application

and integrate nondisruptively into the existing code base. Therefore, SAP S/4HANA

comes along with the new technology of CDS. In a nutshell, CDS views are enhance-

ments of existing database views. Their main features are as follows:

� CDS views support basic software architecture requirements because they can be

stacked and designed in layers.

Today

Current yearYear n -2 Year n -1Year n -3Year n -4Year n -5Year n -6

Archived data (archiving system)

Historic data

Data is notchangedanymore

Data is not used incritical processes

anymoreEnd of

purposeEnd of retention and

destruction of personal data

Archiving and informationlifecycle management

Data aging

Current data (always accessible)

27


� CDS views offer a tool-supported declarative design of database operations with-

out the need to learn Structured Query Language (SQL).

� CDS view syntax offers a rich set of data manipulation language (DML) commands.

� CDS views can be annotated to indicate reusability. They offer different kinds of

technically and semantically stable contracts.

� CDS views that are publicly available follow stable naming conventions for views

and attributes.

� CDS views are used to model access to SAP business objects. Each business object

represents one or many database tables, which form a strong business relation-

ship (i.e., header – item).

� CDS views offer an extension concept, so that you can easily extend business

objects with your own fields.

� CDS views may directly interact with native SAP HANA functions.

� CDS views allow the direct execution of authorization checks when retrieving data

from the database.

� CDS views support text-index based search (see Section 1.4.3).

� CDS views natively support OData.

� CDS views can be directly accessed by ABAP programs and are visible in the ABAP

DDIC.

Libraries

The SAP HANA database includes several build functionalities that are frequently

used in ERP systems:

� Enterprise search

Sometimes called fuzzy search or TREX, this functionality retrieves the best

matching text strings out of a set of text data based on a ranked similarity index.

� Predictive Analysis Library (PAL)

This functionality offers statistical and predictive analytical capabilities.

� Graph engine

This feature allows processing of mathematical graphs within the database.

� Geospatial engine

This features allows processing of geospatial data within the database.

28

1.2 A New Data Model


In this section, you’ll learn about the improvements that are part of inventory man-

agement in SAP S/4HANA and, to some extent, in financial accounting, because the

material ledger intersects with our main topic. The cornerstones of the improvement

include the redesign of two core database tables, the elimination of redundant fields

distributed among various database tables holding aggregated data, the clear separa-

tion of transactional data and master data, and the nondisruptive integration of the

revised data model into the existing code base.

1.2.1 Material Documents (Table MATDOC)

Inventory management is about tracking physical or logical movements of materials

as part of your business processes, and it’s in the center of all business processes deal-

ing with procurement, production, sales and distribution, physical inventory count-

ing, warehouse management, and so on. The tracking is achieved by recording any

material movement with a material document posting (table MATDOC).

We’ll walk through the material documents components, as well as how the material

document differs pre- and post-SAP S/4HANA, in the following sections.

Basics

A material document contains a material document header and one or many mate-

rial document items. The material document header contains the following:

� Material document number (key)

� Material document year (key)

� Posting date

� Document date

� Additional administrative fields

There are many possible material document items, as follows:

� Key fields

The Material Document Number is derived from number range objects. The used

interval depends on the type of material document. The Material Document Year

is the calendar year of the posting.

� Posting date/document date

The Posting Date determines when the posting becomes valid from a business

29


perspective. The Document Date normally contains the creation date of the mate-

rial document. Posting of material documents is only allowed in the two active

posting periods. After a posting period is closed, posting into this period is no lon-

ger possible. The active posting periods normally correspond to two successive

calendar months.

� Additional administrative fields

These fields contain information on the user, transaction, and so on of the mate-

rial document.

In most cases, each item is related to the posting of one material. The business pro-

cess of the movement is defined by the movement type of the Material Document

Item. In addition to the Material and the Movement Type each Material Document

Item contains the following:

– Document item number

– Quantities/quantity units

– Stock type

– Special stock type

– Special stock type identifier

– Organizational units

– Material supplementing data

– Links to direct predecessor or successor documents in the business process

– One link to the valuation of the material document item

– Fields used for specific industry processes

– Fields extended by customers (coding block)

� Quantities

Each material has a Base Unit of Measure and optional Alternative Units of Mea-

sure. The Quantities are always recorded in Base Unit of Measure and in the

inputted unit of measure.

� Stock types, special stock types, special stock type identifier

A stock type is a logical attribute identifying the purpose, state, or usage of a

defined quantity of material stock in SAP. There are 10 predefined stock types in

inventory management in SAP S/4HANA, such as Unrestricted-Use Stock, Quality

Inspection Stock, Blocked Stock, and so on (see Chapter 2, Section 2.1).

30


Moreover, stock types might be subdivided by the Special Stock Type indicator.

Depending on the special stock type, additional special stock type identifiers are

required. Here are a few examples:

– Special stock type K (Supplier Consignment) requires the supplier number.

– Special stock type Q (Project Stock) requires the work breakdown structure

(WBS) element to identify the assigned project.

– Special stock type E (Orders at Hand) requires the sales order item.

Stock types and special stock types help the system and end user determine

whether a defined quantity of material stock is usable in a dedicated business pro-

cess. Changes of stock types are recorded with material documents containing the

designated movement types. For transfer postings, both issuing and receiving

stock types are recorded.

Note

The stock types discussed here are the inventory stock types. There are stock types in

SAP S/4HANA that aren’t managed by inventory management and thus not recorded

by material documents (e.g., non-valuated goods receipt blocked stock).

� Organizational units

To structure your business processes, you need to structure your organization (see

Chapter 3). In core inventory management, typical organizational units are as fol-

lows:

– Plant

– Storage location

To valuate a material movement, the company code might be required (derived

from the plant). For material transfer posting, the issuing and receiving organiza-

tional units are also recorded.

� Material supplementing data

In some cases, the material number itself isn’t sufficient and needs to be enhanced

with supplementary data. For example, if your material is subjected to batch man-

agement, the batch number is also part of the material document item.

� Links to direct predecessor or successor documents in the business process

If your material document item is created as part of a business process, the link to

the direct predecessor or successor document items are stored.

31


For example, if you create a goods receipt for a purchase order item, then the

material document contains the appropriate movement type 101 and the pur-

chase order item.

� One link to the valuation of the material document item

Material documents only store the quantity-related information of material

movements. The financial impact of a material movement is stored in a different

table (see Section 1.2.2). The KALNR value in table MATDOC is the direct link between

the material document item and the accounting document item representing the

material valuation related to the quantity posting in table MATDOC.

� Fields used for specific industry processes

Some industry-specific processes fill additional fields during a material document

posting.

� Fields extended by customers (coding block)

Users can extend the material document item with custom specific fields to

extend the SAP S/4HANA predelivered business processes. For example, custom

specific fields in the goods receipt process control the account determination of

the involved financial document.

Note

In addition to the field group explained in the preceding list, table MATDOC contains

some technical attributes that don’t have any influence on business processes and

therefore aren’t mentioned here.

Material documents can’t be changed or updated. If a material document item is

incorrect, the material document item must be reversed by creating a reversal post-

ing (another material document with at least one item representing the reversal).

Normally, the movement type of the reversal posting is directly derived from the

movement type of the material document item to be reversed. As a rule of thumb,

movement types with odd numbers represent the normal business process flow, and

the movement type with the follow-up even number is the corresponding reversal

posting. In other words, reversal means the original material document is “neutral-

ized” by an inverted material document.

Thus, material documents can be considered as journals recording all material move-

ments within an SAP S/4HANA instance. As the number of material documents may

grow very quickly, an archiving strategy can be used to keep the size within reason-

able bounds (see Section 1.1.2).

32


As the material documents record all logical and physical stock changes, the inven-

tory stock situation can be calculated at any given point by evaluating the appropri-

ate material document items.

Pre-SAP S/4HANA Design

The SAP system on previous SAP releases (such as SAP ERP) recorded the material

documents in two normalized database tables. One table stored all material docu-

ment headers (table MKPF), and a second table stored the material document items

(table MSEG). In addition, each material document posting updated several tables that

stored aggregated information on the material stock in the system. Some of the

tables contained master data attributes and aggregated material stock data (e.g.,

tables MARD and MARC), whereas others contained exclusively aggregated material

stock data (see Figure 1.4).

Figure 1.4 Old Data Model versus the Simplified Data Model for Material Documents

The first tables are denoted as hybrid tables in Figure 1.4. During a material document

posting, these table were exclusively locked for a short time by the posting process to

ensure data consistency. After closing the current posting period, the aggregated

stock data was transferred to history tables, for example, MARDH and MARCH.

MATDOC

SAP S/4HANASAP ERP

MaterialMaster Tables

MARC

MARD

MCHB

MKOL

MSKA

MSKU

MSLB

MSPR

MKPF

MSEG

HybridHistory

AggregateTables

MSSA

MSSQ

MSTB

MSTE

MSTQ

MSSAH

MSSQH

MSTBH

MSTEH

MSTQH

MARCH

MARDH

MCHBH

MKOLH

MSKAH

MSKUH

MSLBH

MSPRH

MARC

MARD

MCHB

MKOL

MSKA

Material Document Tables Material Document Tables

Master Data + On-the-Fly Aggregation Denormalized Material Documents

MSLB

MSPR

MSKU

33


This design ensured the following:

� All stock changes were recorded as material documents.

� The actual stock quantity was stored per stock type in various tables.

� All stock quantities were modeled as key figures.

� Some preprocessed aggregates were available for analytical purposes.

� The stock history was preserved for each posting period end.

SAP S/4HANA Revised Data Model

As explained in the previous section, all stock changes are recorded as material docu-

ment items. Hence, the stock quantity at any given point could be calculated by sum-

ming up the relevant material document items. Based on this idea, a new

denormalized database table MATDOC was designed, containing all required fields to

calculate the quantity of any stock type at any given time. The table’s design was opti-

mized exactly for this purpose in the following ways:

� A globally unique identifier (GUID) was introduced as an artificial key split up

across several key fields to reduce memory.

� Quantity fields with sign and suitable size were introduced to support fast aggre-

gation.

� Header and item were merged into one denormalized table to avoid join opera-

tions on the database table level.

� A Record Type field was introduced to ensure the correct quantity calculation for

data migration, data aging, or data archiving.

� Attributes serving as logical keys for all known stock types were grouped as stock

identifying field (SIDs). More than 60 different inventory stock types are known in

SAP S/4HANA. This approach is called the account model.

� To support stock transfer posting, the appropriate logical issuing and receiving

attributes were included in the table definition.

� To support fast document flow analysis of reversals, the reversal document and

the reversed document were linked as a double-linked list.

� Fields holding posting information, such as week, month, day of week, and so on,

were introduced in addition to the posting date itself.

34


Technically, a database table definition in the ABAP DDIC serves two purposes in SAP:

� Defines a database table, which is created by the data definition language (DDL) on

the database instance and is accessed by open SQL in ABAP

� Defines a structure type, which can be referred to in any ABAP program

Therefore, the new data model outlined here must also ensure that the existing ABAP

code still works correctly despite all the changes in table design and the new

approach to calculating stock quantities solely out of table MATDOC records. In spite of

replacing the functional purpose of table MKPF and table MSEG, their technical defini-

tion (and therefore their structure type) is still visible in SAP S/4HANA. Their ABAP

DDIC information has been enhanced by a so-called replacement object (sometimes

also called proxy or compatibility view), which redirects any read access to table MAT-DOC and returns the data records in the correct format, as shown in Figure 1.5.

Figure 1.5 ABAP DDIC Replacement Object of Table MARC (Plant-Related Data of a Material

Master Record)

35


This technique is used to eliminate other redundant aggregate tables or aggregates in

master data tables, so that eventually all material document or stock quantity infor-

mation in SAP S/4HANA is calculated from table MATDOC on request.

Further Resources

SAP Note 2206980 helps you plan your upgrade to the revised data model in inven-

tory management in SAP S/4HANA. SAP Note 2569435 describes how to deal with the

content of the replaced tables after an upgrade to SAP S/4HANA.

Of course, adding up thousands of records will always take more time than just read-

ing a single preaggregated value. Therefore, all read access to the master data contain-

ing aggregates has been optimized in SAP S/4HANA, so that the aggregation isn’t

executed if the requesting coding merely needs the master data.

The new data model described so far has another advantage over the pre-SAP

S/4HANA design. Because there is no need to update several aggregate tables, there is

also no need to lock tables during material document posting. This “insert only”

design facilitates throughput and greatly increases the performance of material doc-

ument postings (see Figure 1.6). See Chapter 3, Section 3.1.3, for more details.

Figure 1.6 Comparison of Material Document Posting Performance

0

100

200

300

400

500

600

700

800

900

1 5 10 20 40 60 70 80

Simulated Backflush Posting with 100 Items per Material Document

SAP ERP SAP S/4HANA

Parallel Processes

Th

rou

gh

pu

t (I

tem

s/Se

c)

36

1.3 Functional Changes

1.2.2 Accounting Documents (Table ACDOCA)

We’ve seen that table MATDOC only stores the quantity-related information of material

movements. The value-related information is stored in another new table, table

ACDOCA. The link between both tables is the attribute KALNR, which links every material

document posting to an accounting document posting. Figure 1.7 shows the redesign

of the database tables involved in inventory valuation. Similar to table MATDOC, the

universal journal table ACDOCA replaces the denormalized tables BKPF and BSEG. In addi-

tion, several aggregate tables have become obsolete.

Figure 1.7 Old Data Model versus Simplified Data Model for Accounting Documents

1.3 Functional Changes

In this section, we’ll discuss the changes in the application layer of SAP S/4HANA,

which include both the removal of redundant application functionality and the ret-

rofitting of industry-specific coding into the normal code line to make it available to

all customers via simple configuration.

1.3.1 Simplification List

SAP S/4HANA was crafted with the idea to eliminate redundant or obsolete function-

ality. Historically, SAP has often tried to preserve functionality during release

upgrades for backward compatibility reasons. Consequently, this has often led to the

ACDOCA

SAP S/4HANASAP ERP

ValuationTables

MBEW

EBEW

OBEW

QBEW

CKMLCR

CKMLPP

BKPF

BSEG

ValuationTables

History

MBEW

EBEW

MaterialLedger Tables

CKMLPP

CKMLCR

MBEWH

EBEWH

OBEWH

QBEWH

OBEW

QBEW

Accounting Document Tables Accounting Document Tables

Master Data + On-the-Fly Aggregation Universal Journal Entry Line Items

37


situation in which functional equivalent applications coexisted within one system.

With SAP S/4HANA, SAP has decided to follow a different approach by publishing a

simplification list, which contains functions and technology that have become obso-

lete and are removed during an upgrade to SAP S/4HANA.

Note

This simplification list is published for each major on-premise release at http://

s-prs.co/v489200.

With the help of this list, you can upgrade your implemented processes during the

technical upgrade to SAP S/4HANA.

1.3.2 Industry Solution Retrofitting

SAP ERP basic architecture was built on the business function concept, which allowed

you to switch on industry-specific functionality or new developments shipped in

enhancement packages. This architecture has allowed SAP to enrich its ERP flagship

stepwise with additional features that only become active if the code is activated

when the assigned business function is turned on.

In SAP S/4HANA, the vast majority of the switchable code fragments are merged back

into the main code line and the business function is replaced by simple configura-

tion. Following are the most prominent retrofitted business functions:

� Long material number (40 digits), which is natively supported in SAP S/4HANA

� Catch weight management, which supports a parallel (second) unit of measure in

all logistic transactions

� Discrete industry and mill products

� Retail (partially)

1.4 SAP Fiori

Let’s now discuss the evolution of the UI layer in SAP S/4HANA. End users access an

ERP system via its UI. The easier and the faster an end user can perform his or her

tasks, the higher the business value of an ERP system. As part of SAP S/4HANA, SAP

38



1.4 SAP Fiori

Fiori is the new UI paradigm designed to increase end-user productivity. In this sec-

tion, we’ll walk through SAP Fiori’s design principles, applications (apps), and launch-

pad.

1.4.1 A New User Paradigm

SAP Fiori is the new user experience that brings together core design principles with

a focus on the user. SAP Fiori apps follow five design principles:

� Role-based

All SAP Fiori apps are designed for a specific use case. The essential part of the use

case is the end-user “definition.” The user’s tasks and responsibilities, pain points,

and daily achievements are the main input to app design. Each SAP Fiori app must

be assigned to at least one role before it’s implemented. Each role is a blueprint of

a business role based on the best practices gained in 30+ years of SAP ERP develop-

ment. It’s important to understand that each SAP Fiori app is tailored to its

assigned roles.

Consider a few examples: If the role is to perform logistics postings within one

warehouse, the assigned SAP Fiori app won’t offer any cross-company postings.

Instead, it will support bar code scanning on mobile devices and an easy-to-use UI.

If the role is managing inventory for plants, the SAP Fiori app will offer all kinds of

inventory postings, including a rich UI.

� Coherent

Usability means understanding a UI intuitively without training just by recogniz-

ing similar and recurring patterns. The highest degree of usability is reached when

a UI becomes self-explanatory. As a prerequisite, similar requirements must trans-

late into similar UI patterns, hence enhancing the usability. This is defined as

coherence. All SAP Fiori apps are based on the same design patterns to provide an

identical user experience. End users familiar with one list app will be able to work

with all list apps.

� Responsive

All SAP Fiori apps will run on any device and directly react to what users do at any

time. For example, if the screen size shrinks, the font size in the table doesn’t

shrink; instead, the columns are removed according to their priority.

� Simple

SAP Fiori apps focus on the essential information to complete a specific task. If the

task becomes more complex, a different SAP Fiori app is used. When managing a

39


business object, the SAP Fiori apps can be classified according to a pyramid-like

layering, as shown in Figure 1.8, with the simplest one on top displaying the busi-

ness essentials, and the complex ones with comprehensive editing capabilities

forming the bottom of the pyramid.

Figure 1.8 Pyramid Approach to Accessing the SAP S/4HANA System via SAP Fiori Apps

� Delightful

A good UI feels like talking to a good friend. It helps and supports end users so that

they enjoy their work.

SAP Fiori apps not only support different end-user roles but also different levels of

configuration and personalization.

When working with SAP Fiori apps, end users will see all the information needed to

do their daily work. If anything is missing, it will be just one click away. The system

supports users by automating as many steps as possible. Each end user may adjust

any SAP Fiori app to his or her personal preferences by different sorts of personaliza-

tion, such as app settings, selection and layout variants, personalized tiles, and per-

sonalized home pages.

Adaptation of SAP Fiori apps by administrators or key users ensures that all end users

have a productive working environment tailored to their needs. Adaptations always

affect all users of an SAP Fiori app (see Chapter 3, Section 3.2.4).

Former SAP GUI and Web Dynpro Apps

Launchpad and Search

Overview Page

Worklists and Approvals

Analytical Apps

Native SAP Fiori Transactional SAP Fiori Apps (<100% Scope)

Object Pages in Display Mode

Transformed SAP Fiori

Native SAP Fiori appwith full functionality

Native SAP Fiori appwith reduced functionality

Transformed SAP Fiori appwith full functionality

40

1.4 SAP Fiori

Theming and extension of SAP Fiori apps by developers creates a uniform working

environment within a company as well as customer-specific fields linked to business

objects and passed within processes.

1.4.2 SAP Fiori Applications

SAP Fiori apps may be classified according to the complexity, flexibility, and versatil-

ity they offer to users. In SAP S/4HANA, there are typically two basic types of techni-

cal SAP Fiori app implementations: native and former SAP GUI transactions. We’ll

explore both in the following sections.

Native SAP Fiori Applications

Native SAP Fiori apps are developed from scratch in SAP S/4HANA. They follow com-

mon floorplans:

� Overview page

An overview page (see Figure 1.9) displays mainly analytical information on the

highest aggregation level suitable for the end user.

Figure 1.9 Overview Page Warehouse Clerk

41


Interaction is limited to navigation from the highly aggregated data to the SAP

Fiori app showing less aggregated data, which is shown in an interactive chart card

1 and a list card 2 with your navigation target. Filtering the information is possi-

ble 3.

� Simple list

A simple list (see Figure 1.10) provides information in a list-based layout with filter

options 1 and structured columns in a responsive table 2 offering navigation

inside or outside the original SAP Fiori apps, create/edit/delete row functions (if

applicable), sorting, grouping, and filtering. If navigation options are linked to a

list item, an arrow is displayed to the right of the list item on which you can click

to start navigation. Sometimes, simple list implementations offer a split column

layout so that they resemble a worklist.

Figure 1.10 Simple List Material Documents Overview

� Analytical list/SAP Smart Business app/design studio grid

All these floorplans have in common that they provide information as list and

charts displaying dimensions and measures. Measures are aggregated/disaggre-

gated if dimensions are removed or added to the table/chart. Navigation inside or

outside the original SAP Fiori apps, sorting, grouping, and filtering are supported.

There are slight differences depending on the use case, as follows:

42

1.4 SAP Fiori

– The analytical lists (see Figure 1.11) combine charts and tables for simple drill-

down operations. The filter bar allows you to restrict the initial result set

depicted by the chart and is switchable to graphical mode 1. Here you can use

chart elements to drill down on subsets 2 to be displayed in the analytical table

at the bottom 3.

Figure 1.11 Analytical List Page: Dead Stock Analysis

– SAP Smart Business apps offer threshold definitions to indicate the critical sta-

tus of key performance indicators (KPIs) to be displayed on the user’s home

screen (see Figure 1.12). You can see the filter bar 1, the mini charts (which are

also displayed in the SAP Fiori launchpad) 2, and the analytical chart and table

showing the results 3.

43


Figure 1.12 Smart Business App Scrap Reason

– Design studio grids are spreadsheet-like apps that allow the arbitrary pivoting

of rows and columns. You can display the result set as chart 1 and/or table 2, as

shown in Figure 1.13. The left-hand section lists the dimensions and measures

that can populate the columns and rows 3.

44

1.4 SAP Fiori

Figure 1.13 Design Studio Grid: Goods Movement Analysis

� Object page

An object page (see Figure 1.14) is the simplest approach to display a business

object instance. It allows multilevel internal navigation to subobjects also dis-

played in an object page layout. Object pages can support create/edit/delete oper-

ations, if applicable. Object pages are structured with a header 1 and sections and

subsections; in this example, the sections include the form 2, table with item

details 3, and a graphic 4.

45


Figure 1.14 Material Document Object Page

� Worklist

A worklist (see Figure 1.15) displays a filtered list of object instances 1, so that each

instance‘s details are displayed when selected 2. Worklists allow create/edit/

delete operations on each instance.

46

1.4 SAP Fiori

Figure 1.15 Worklist Application Material Coverage

� Initial page

An initial page (see Figure 1.16) starts with an empty page that allows the selection

of one object instance. After selection, processing of the object instance, including

navigation to detail pages, is possible. If applicable, actions are offered. Here, you

can see the input field 1, the header containing the sections to display 2, and

three sections: form 3, table with item details 4, and attachment service 5.

47


Figure 1.16 Initial Page of Goods Receipt for Purchase Order

Each of these floorplans is composed of recurring design elements containing sec-

tions with filter bars, lists, tables, charts, and form elements. As a default, they offer

built-in personalization features to control layout and filter criteria.

Note

The variant management employed by filter bars is an especially useful tool to per-

sonalize, share, and standardize selection criteria in business processes. SAP ships

predefined variants, but you can also create your own private or public variants.

Native SAP Fiori apps use, in most cases, the OData protocol to exchange data

between frontend (browser) and backend systems, except in the case of analytical

apps. Because the OData protocol follows the Representational State Transfer (REST)

paradigm, native SAP Fiori apps need to ensure continuity between consecutive end-

user interaction steps. The SAP S/4HANA architecture allows the implementation of

48

1.4 SAP Fiori

native SAP Fiori apps in a stateless or stateful interaction mode. The interaction

mode ensures if and how users can preserve the input after disconnecting from the

backend system before saving the input. In addition, the interaction mode defines

what happens if concurrent accesses to the same business object instance occur.

A stateless SAP Fiori app doesn’t keep any internal state on the backend server. If the

stateless app executes a change operation on a business object, which may lead to a

conflict or inconsistency, different conflict resolution patterns may be applied

(rejected, last wins, first wins, merge of conflicting data). If a stateless implemented

SAP Fiori app is closed, or the communication to the backend is unexpectedly inter-

rupted, all end-user input is lost.

A stateful SAP Fiori app keeps the internal state on the backend server. In most cases,

the state is implemented as a transient draft of a business object. The draft instance

of a business object must be converted into an active instance of the business object;

for example, it must be activated or posted to become part of a business process.

Depending on the use case, the draft instance might be edited simultaneously by dif-

ferent end users or edited by one particular end user at the time. Closing the draft-

enabled SAP Fiori app and reopening the draft instance any time later is possible. In

case of a communication failure, only the very recent end-user input is lost. Because

all draft instances are kept on the backend, conflicts due to concurrent accesses to

one business object can be easily detected and displayed to the end user.

Transformed SAP GUI Transactions

If upgrading from SAP ERP to SAP S/4HANA, you’ll recognize many SAP GUI transac-

tions converted into SAP Fiori apps. These SAP GUI transactions were adjusted to the

SAP Fiori layout and are part of the business roles. They support the SAP Fiori naviga-

tion concept too (see Section 1.4.3). In many cases, the bottom of the pyramid (refer to

Figure 1.8) is formed by these kinds of SAP Fiori apps because their predecessors were

often used to solve complex business requirements. SAP Fiori apps based on former

SAP GUI transactions retained their interaction mode. In most cases, this is a session-

based interaction with a state, which is kept in the backend session and secured by

durable locks as part of the session; therefore, concurrent access to the same business

object is prevented by the locks. A typical example in inventory management is the

SAP Fiori app Post Goods Movement, which is based on the former SAP GUI Transac-

tion MIGO (see Figure 1.17).

49


Figure 1.17 SAP Fiori App: Post Goods Movement

1.4.3 SAP Fiori Launchpad

A prerequisite to fulfill the promises made by the SAP Fiori design principles in Sec-

tion 1.4.1 is uniform access to the SAP S/4HANA system. This section introduces the

SAP Fiori launchpad as the web-based single point of entry across technologies and

platforms.

Note

You can still access the SAP S/4HANA system with the SAP GUI client, but you can’t

use any of the features described in this book.

The Google Chrome browser was used to access the SAP Fiori launchpad in this book,

but other browsers work as well.

The screenshots provided in this book are based on an SAP Fiori 2.0 theme; however,

some contain elements of the upcoming SAP Fiori 3.0 theme.

50

1.4 SAP Fiori

The SAP Fiori launchpad is started from a URL prompting you to authenticate your-

self and choose the logon language, as shown in Figure 1.18.

Figure 1.18 SAP Fiori Launchpad Logon Screen

After logging on, you’ll be directed to your personal Home page, shown in Figure 1.19,

unless you started the SAP Fiori launchpad via direct link to an SAP Fiori app. The

Home page is rendered based on the business roles assigned to the user. It can be per-

sonalized in the Me Area 1. A business role contains all authorizations to start a col-

lection of SAP Fiori apps. A building block of the business role is the business catalog,

which is a reusable entity to group SAP Fiori apps belonging to the same business

context. Business roles are created by key users based on business role templates

shipped in SAP S/4HANA. Typically, you’ll design business roles according to your

requirements by copying an appropriate SAP template, editing the new business role

by adding or removing SAP Fiori apps, and adding or removing authorizations used

within the SAP Fiori apps (see Chapter 3).

Groups on your Home page 2 help you to structure the SAP Fiori apps you want to

use. The most prominent group is My Home, which can be used to store your favorite

SAP Fiori apps.

51


Figure 1.19 Typical Home Page with Groups

There are also icons to access search 3, help 4, and notifications 5.

Features

This section describes all the features embedded in the SAP Fiori launchpad using the

Home page as a starting point. Let’s walk through each in the following sections.

Me Area

The Me Area, shown in Figure 1.20, can be accessed by clicking on the corresponding

icon of the Home page.

52

1.4 SAP Fiori

Figure 1.20 Me Area

The Me Area allows access to following key features:

� Sign Out

Signing out by this function ensures that all credentials linked to your browser

instance are cleared.

� App Finder

In the app finder, you can find an app in all business catalogs assigned to your user

by your business role. Here, you can personalize your SAP Fiori Home page by

“pinning” relevant SAP Fiori apps and assigning them to groups.

� Settings

You can update your user account information, language and region, default val-

ues, and more. You can only configure default values if they are supported by at

least one SAP Fiori app of your assigned business roles.

53


� Edit Home Page

You can edit the layout of your Home page by creating, editing or deleting groups;

resetting SAP-delivered groups; and creating a link between SAP Fiori apps in dif-

ferent groups.

� Recent Activity/Frequently Used

If configured in your settings, the SAP Fiori launchpad tracks your recently and

most frequently used SAP Fiori apps. You can start the corresponding SAP Fiori

app out of this list.

Search

You can access enterprise search in SAP S/4HANA directly via the search icon in the

SAP Fiori launchpad.

Enterprise search is an unstructured (text) index-based search function used across

business objects and their relationships in SAP S/4HANA. You can narrow the search

by selecting a business object you want to search, as shown in Figure 1.21. You can also

search for SAP Fiori apps.

Figure 1.21 Search and Business Objects

Example

If you want to search for a materials document containing a material with material

description of “Product A”, “Product a”, or “product A”, for example, you select Mate-

rial Document as the entity and enter the search term as “Product A”. Enterprise

search will return material documents in a ranked list that match the search term—

the better the match, the higher the rank.

The result of the search query and the navigation targets, shown in Figure 1.22,

depend on the authorization of the end user after entering the search term 1. The

results are displayed as a list 2, and the selected result list item appears with more

details highlighting the search term (eBike). By using the filter criteria on the left-

hand side 3, you can filter on the primary result set, based on attributes in the pri-

mary result set based on a textual or graphical filter.

54

1.4 SAP Fiori

Figure 1.22 Enterprise Search Result on Material Documents

The enterprise search in SAP Fiori launchpad is a generic search capability embedded

in SAP S/4HANA to search for one or many business object instances and whether

any object attributes are related to the search term. The closer the relation is, the

higher the rank is in the result set.

Personalization

If you’ve started an SAP Fiori app that provides app-specific personalization capabili-

ties, you’ll find an additional Application Settings entry in the Me Area, as shown in

Figure 1.23. The settings that appear here depend on the application.

Figure 1.23 SAP Fiori App Personalization

55


Notifications

Notifications offer a publish-subscribe mechanism within an SAP S/4HANA instance.

If any change within a business process occurs, the app might publish a notification

of a specific notification type. You can subscribe to notifications of a specific notifica-

tion type in the Me Area. Newly arrived notifications will show up in the icon as a lit-

tle number, and all notifications can be displayed by clicking on the icon, which will

open the notification center (see Figure 1.24).

Figure 1.24 Notification Center

56

1.4 SAP Fiori

Depending on the notification type, you can navigate to an appropriate SAP Fiori app

to process the notification. Alternatively, you can directly dismiss the notification.

SAP CoPilot

The SAP Fiori launchpad includes a personal digital assistant called SAP CoPilot,

which comes with two basic capabilities:

� Natural language interaction (NLI)

� Chat

SAP CoPilot can be started as a non-modal window in the SAP Fiori launchpad via its

icon in the top-right corner (Figure 1.25, 1). You can switch SAP CoPilot between the

NLI and chat function with the two icons in its window header 2. NLI allows you to

enter text by typing or voice. Depending on the available skills, SAP CoPilot can

understand the text and give an answer.

SAP CoPilot chat 3 allows you to invite other SAP Fiori launchpad users 4, to add

business objects shown in the active SAP Fiori app 5, to type text messages 6, and to

add screenshots or upload images 7.

Figure 1.25 SAP CoPilot Basic Functions

57


You can create as many chats as you like and invite other users to them. Figure 1.26

shows how SAP CoPilot scans the active SAP Fiori app for business objects, lists them,

and then offers to add them by one click to a chat.

Figure 1.26 SAP CoPilot: Add Objects Screen

The details of an added business object in Figure 1.27 show all its attributes and pro-

vide navigation to object pages referenced in the attributes 1. In any case, you can

navigate to the SAP Fiori app 2, which was used to add the business object to SAP

CoPilot.

With SAP CoPilot, the SAP Fiori launchpad offers a lightweight and easy-to-use collab-

oration tool that allows you to share different kinds of information—most notably,

business objects embedded in a chat. Moreover, SAP CoPilot offers several quick

action features depending on the context in which SAP CoPilot is running.

58

1.4 SAP Fiori

Figure 1.27 Details of an SAP CoPilot Object (Purchase Order Item)

Embedded Documentation

The SAP Fiori launchpad includes an integrated help and support capability, which

can be switched on or off by clicking the ? icon 1, as shown in Figure 1.28.

If you start another SAP Fiori app, the help menu bar automatically adjusts its con-

tent. The help menu bar contains short explanatory texts of the SAP Fiori app’s dedi-

cated elements, which are marked by green bubbles 2 and linked to the text 3.

In addition, the What’s this app? entry points to the external documentation of the

SAP Fiori app.

59


Figure 1.28 Integrated Help Feature

Navigation

The SAP Fiori launchpad applies intent-based navigation. Any SAP Fiori app is started

by calling its “intent,” which is composed of a semantical object and an action sepa-

rated by a dash, for example, Material—DisplayStockOverview. In the SAP Fiori

launchpad, the intent is part of the URL in the browser window.

Semantic objects normally identify business objects within SAP S/4HANA systems.

Actions can be freely chosen when defining an SAP Fiori app in the SAP Fiori launch-

pad (see Chapter 3).

The intents can also be used to pass additional parameters when starting an SAP Fiori

app. As the URL to the SAP Fiori app is stable, it can be bookmarked or shared. As long

as the end user opening the URL has the authorizations to start the SAP Fiori apps, he

or she will be able to start the SAP Fiori app directly.

This technique is also used if the end user shares SAP Fiori apps by the generic SAP

Fiori launchpad capabilities Send E-mail, Save As Tile, or Share in Jam (not shown), as

60

1.4 SAP Fiori

shown in Figure 1.29. Many SAP Fiori apps not only support the generic information

sharing but are also capable of sharing internal parameters, such as current field val-

ues or the current navigation state. Save as Tile allows you to add an instance of the

currently used SAP Fiori app to any group in your SAP Fiori launchpad. Send E-mail

opens your local e-mail client to send a link to the current SAP Fiori app, and Share in

Jam allows you to post this link to an SAP Jam group, if SAP Jam is active.

Figure 1.29 Generic Information-Sharing Capabilities

In particular, the Save as Tile feature is a useful tool in personalizing the SAP Fiori

launchpad; for example, can add your own title, subtitle, and description to tiles.

When saving the tile, all filter and layout criteria are also persisted in case you have a

list app. The tile on the SAP Fiori launchpad will show the actual number of list items

matching the filter criteria (this is refreshed in regular intervals). You can create your

personalized tile group containing the most important key figures to look at (see

Figure 1.30).

Figure 1.30 Self-Created Tiles with Title, Subtitle, Description, and Current Number of Items

Matching the Filter Criteria

Another feature of intent-based navigation is the use of semantic objects to mark UI

elements in the SAP Fiori app as a carrier of a semantic object key. In this case, the SAP

Fiori launchpad automatically calculates which SAP Fiori apps are registered for the

same semantic objects that belong to the user’s business role and offers them as

potential navigation targets (see Figure 1.31). The most prominent navigation option

is automatically the object page of the business objects if navigation is possible 1.

61


Figure 1.31 Semantic Annotation

The navigation targets can be personalized, and the key of the semantic objects is

passed to the target SAP Fiori app when navigating 2.

Furthermore, some SAP Fiori apps may offer explicit navigation to other SAP Fiori

apps 3 if the targeted SAP Fiori app is part of the end user’s business role.

Note

It’s important to understand that navigating from SAP Fiori app A to SAP Fiori app B

usually means that SAP Fiori app A is terminated, and SAP Fiori app B is initiated (a

few SAP Fiori apps are kept alive in the background as an exception). When navigat-

ing back, the opposite process occurs; that is, the starting SAP Fiori app has to restore

its state (former user input, layout).

Theming and Extensibility

SAP S/4HANA includes a theme designer that allows administrators to modify the

themes shipped with SAP Fiori apps, for example, changing fonts, margins, and col-

ors to create individual branding for your SAP Fiori apps.

Further Resources

Details on theming can be found in SAP Fiori Implementation and Development by

Anil Bavaraju (www.sap-press.com/4401, SAP PRESS, 2017).

SAP Fiori apps have built-in extensibility capabilities as well. The development envi-

ronment SAP Web IDE supports helps you create custom SAP Fiori apps based on cus-

tom OData services. These custom SAP Fiori apps can be published in the SAP Fiori

launchpad (see Figure 1.32).

62


1.4 SAP Fiori

Figure 1.32 SAP Web IDE Cloud Development Environment of SAP Fiori Apps

Many SAP Fiori apps have built-in field extensibility on their own. Users can add new

fields to be displayed or changed by the SAP Fiori app. They can permanently change

the layout of existing SAP Fiori apps via the Key User Extensibility app tools (see

Figure 1.33), including custom field data 1, usage 2, and status 3.

Figure 1.33 Key User Extensibility App (Footer Actions Omitted)

63


1.5 Summary

This chapter introduced the technical background of SAP S/4HANA. All three layers of

the ERP software were discussed, including their key capabilities. The database layer

is built on the new in-memory database SAP HANA using key features such as col-

umn stores of database tables, code pushdown, and a new API based on CDS. The app

layer is optimized to work with SAP HANA. Redundant features collected in a simpli-

fication list were removed from SAP S/4HANA, and new developments such as

denormalized tables MATDOC and ACDOCA were realized. The UI layer is implemented

with the new concept of browser-based access to SAP S/4HANA, offering a role-based,

coherent, and responsive collection of SAP Fiori apps that can be started within the

SAP Fiori launchpad as a uniform UI environment.

Leaving the technology behind, the next chapter will start with the business topic of

this book: inventory management.

64

Chapter 2

Inventory Management Basics

Now that we’ve established the technical details, we’ll begin our

discussion of inventory management and how it has changed in

SAP S/4HANA. Let’s start with the basics.

This chapter introduces the basics of inventory management by defining the key inventory terms and outlining the key activities of the planning/adjusting, execu-

tion, and analysis phases of inventory management. Looking at the content map pro-

vided in the preface (see Figure 1 under “How This Book Is Organized”), this chapter is like a node that ties together the configuration, planning, analysis, and execution parts of inventory management.

Let’s begin by explaining how inventory fits into the supply chain.

2.1 Inventory as a Staple of the Supply Chain

Inventory defines the entire quantity of stock used in the business processes of an enterprise. Different product types result in different inventory types, such as raw materials, semifinished goods, work-in-process (WIP), finished goods, and spare parts. Inventory falls into different categories called stock types. In SAP S/4HANA, up to 60 different stock types can be defined in the system. Stock types define how inventory can be used in the business processes, on what organizational level they are maintained, and how the inventory is valuated. In addition to the inventory stock types, there are a few stock types not controlled by inventory management. In SAP S/4HANA, stock types are represented technically by the Stock Type field and (optional) the Special Stock Type field, plus additional keys. The key combinations defining the inventory stock types used in your SAP S/4HANA system help you understand your inventory management processes. Frequently used inventory stock types in SAP S/4HANA business processes are as follows:

65

2 Inventory Management Basics

� Unrestricted-used stock

Stock can be consumed in any business process.

� Blocked stock

Stock is blocked from any usage, except transfer postings.

� Quality inspection stock

Stock is subjected to quality inspection. This stock type might be managed by qual-

ity management in SAP S/4HANA.

� Transfer stock

Stock is moved from one organizational unit to another in a two-step process only

by means of inventory management.

� Stock in transit

Stock is moved from one location to another but isn’t available for consumption.

There are different subtypes of stock in transit depending on the kind of transfer

of goods and title. These processes stretch beyond inventory management and

involve internal procurement and logistics execution.

� Vendor consignment stock

Stock is owned by the vendor but is available for consumption in your business

process.

� Customer consignment stock

Stock is owned by you as a supplier but located at a customer site and ready for

consumption by the customer.

� Orders at hand stock

Stock is linked to a specific sales order item.

� Project stock

Stock is linked to a specific project.

Some stock types are closely linked to industries processes, such as tight empties

(retail) or stock provided to vendor (subcontracting). Thus, the stock type might exist

only at the plant level (customer consignment stock), whereas other stock exists on

the storage location level.

Noninventory stock types in SAP S/4HANA include the following:

� Reservations

� Nonvaluated goods receipt blocked stock

The flow of inventory within an enterprise is called the supply chain. Thus, inventory

is the key factor to be looked at in supply chain planning. Inventory may be created

by external procurement and/or internal production.

66

2.1 Inventory as a Staple of the Supply Chain

Figure 2.1 shows the principal components of a supply chain for an example company

called My Company. Inventory is either procured externally, produced internally, or

produced by subcontractors externally. Inventory is consumed within production

processes and eventually sold as a finished product. These principal components

might be combined differently depending on the involved products, product lifecy-

cle, location strategy, or market requirements.

Figure 2.1 Supply Chain of My Company

An optimal supply chain keeps the costs linked to inventory low (procurement, pro-

duction, warehousing, distribution) while providing the desired service level to all

customers. Depending on your business process, there are multiple strategies to

achieve this goal:

� Just in time (JIT)/just in sequence (JIS) production

Prominently used in the automotive industry to ensure that all components of a

car reach their final assembly step exactly at the moment they need to be con-

sumed.

� Kanban

Helps to simplify your inventory replenishment strategy by using predefined lot

sizes tied to moving containers (see Chapter 4, Section 4.4 and Section 4.9).

My Company

Procure

Sell

MySubcontractors

ProduceExternally

Inventory

ProduceInternally

MyCustomers

MySuppliers

67


� Demand-driven material requirements planning (DDMRP)

Material requirements planning (MRP) strategy trying to decouple bottleneck

steps in supply chain planning (see Chapter 4, Section 4.3.4 and Section 4.8).

� Vendor-managed inventory

Shifts the inventory management responsibility to the vendor of a component.

� Make-to-order (MTO)/make-to-stock (MTS)

Allows you to plan your inventory based on concrete demands or on demand fore-

casts (see Chapter 4, Section 4.6).

� Make or buy

Decision regarding whether or not you outsource the procurement of a compo-

nent/finished good to an external contractor.

2.2 End-User Role Templates

When talking about inventory management, it’s also important to consider the

involved business roles. Each company will have a different organizational structure

with different responsibilities, which is often considered a competitive advantage.

Nevertheless, the basic requirements of supply chain planning must be fulfilled.

Therefore, the roles and responsibilities might have different names in each com-

pany, but the semantic will most likely exist. SAP S/4HANA entails several role tem-

plates that facilitate the system configuration (see Chapter 3, Section 3.5).

The major parts in supply chain planning are shown in Figure 2.2 (sales isn’t shown

because it’s not covered in this book). The role templates for external procurement

process are shown in the upper part and the templates for the internal production

process are shown in the lower part of the figure. Production input is demand plan-

ning and product engineering. Every time logical or physical movement of inventory

is required, the warehouse clerk/receiving specialist is involved. Production planning

is supported by the inventory analyst, and all inventory processes are supervised by

the inventory manager (plant manager).

68

2.3 Key Considerations

Figure 2.2 Roles and Responsibilities in Supply Chain Planning


This section introduces some key aspects of inventory management. After all, our

motivation is to provide the best services/products to our customers at the best price

(approximate internal price + calculated margin). To keep the narrative focused, we

simplified the basic equations in hopes of not alienating product cost controllers.

2.3.1 Service Levels, Inventory Costs, and Operational Profit

Enterprises need to balance the service level with inventory cost and operating profit.

Normally a target is defined by the enterprise as part of its business model, contain-

ing an optimal zone surrounded by comfort zones in which the balance is still within

an acceptable range (see Figure 2.3).

PurchasingPlanning

• Planner of External Procurement

Purchasing

• Purchaser

GoodsReceipt

• Warehouse Clerk

• Receiving Specialist

ProductEngineering

• Production Engineer

Product/InventoryPlanning

• Production Planner

• Inventory Analyst

ProductionExecution

• Production Supervisor/ Operator

QualityInspection

• Quality Engineer

Goods Receipt

• Warehouse Clerk

• Receiving Specialist

DemandPlanning

• Demand Planner

Inventory

• Inventory Manager

Internal Production

External Procurement

69


Figure 2.3 Balancing Service Level with Inventory Value (Schematic Drawing)

Operating profit equals roughly the following equation, which is highly simplified:

Revenue – Inventory costs – Production costs = Operating profit

The service level defines the ability of a company to fulfill its customers’ requirement

so that revenue is generated. Customers’ requirement fulfillment refers to the

requirement that the company must deliver its goods/service to the customer on

time, in quality, and in budget. Inventory costs are all costs needed to obtain, process,

store, and distribute goods and have substantial impact on service level. Figure 2.4

illustrates roughly the formula to calculate inventory costs based on storage and

order costs. Although order costs tend to decrease with the ordered quantity, the

storage costs will consume this benefit at a certain quantity level.

Note

Not considered in the cost calculation of Figure 2.4 is the locked-in capital bound in

the inventory value.

0 10 20 30 40 50 60 70 80 90 100

Operating Profit

Legend:

Inventory Value

Service LevelO

pti

mu

mComfortZone

ComfortZone

Company Target

Business Failure Business Failure

Operating Profit versus Inventory Value

70


Figure 2.4 Inventory Costs in Relation to Order Quantity

All strategies mentioned in Section 2.1 are intended to find the optimal balance or at

least reach the comfort zone in Figure 2.3. If you consider all factors influencing ser-

vice level and inventory costs, it’s obvious that this is a multidimensional optimiza-

tion challenge. SAP S/4HANA supports you in finding a local optimum and holding

on to it in a dynamic environment.

2.3.2 Lot Sizes, Replenishment Times, and Safety Stocks

To reduce the complexity of the optimization challenge, inventory planners typical

work with some key factors that essentially influence service level and inventory

costs during the product lifecycle.

The lot size is the amount of inventory that is obtained in one atomic step. Given a

constant linear consumption, the larger the lot size, the higher the locked-in capital,

and the lower the replenishment frequency. Figure 2.5 depicts how three different lot

sizes influence the procurement process.

The replenishment lead time is the duration in days to execute this step. It’s com-

prised of several steps, such as ordering, transport, and goods receipt. Figure 2.5

shows the inventory value over time based on a constant replenishment lead time.

The shorter the replenishment lead time, the more flexible your planning options.

Inventory stock will never fall below the safety stock level. It represents the lowest

limit of stock quantity that is required to fulfill the service-level agreement (SLA). The

higher the defined safety stock, the higher the bottom line of locked-in capital and

the storage costs (refer to Figure 2.4). Figure 2.5 shows a constant safety stock defini-

tion. Normally, replenishment is triggered way before the inventory value reaches

Order Quantity

Storage Cost + Order Cost

Storage Cost

Order Cost per Unit

Co

st

71


the safety stock. There are multiple planning strategies to implement an optimal

replenishment process, which will be discussed in Chapter 4, Section 4.1.

Figure 2.5 Key Factors in the Supply Chain Planning

You can see that a small lot size and a high frequency of replenishments create a

smoother curve in Figure 2.5, whereas a large lot size and a low frequency of replen-

ishments create a rough curve.

In general, Figure 2.5 illustrates the interdependence of the key factors of lot size,

safety stock, and replenishment lead time. It’s based on an ideal supply chain plan-

ning world of nonchanging linear consumption and 100% reliable replenishment.

Real-world supply chain planning needs to deal with sudden consumption changes,

delays in replenishment, production resource constraints, missing components,

unplanned changes in product lifecycles, quality issues, legal regulations, and prod-

uct and production variants. All these factors impact the comfort zone shown earlier

in Figure 2.3. Section 2.4 will shed some light on how SAP S/4HANA supports you in

consistently monitoring your supply chain processes and adjusting them to the opti-

mum level.

0

50

100

150

200

250

Inventory Value

Inventory Value

Legend:

Lot

Size

1 Lot

Size

2

Lot

Size

3

SafetyStock

Date of OrderDate of Goods

Receipt

ReplenishmentLead Time

Consumption

Order 1 Order 2 Order 3

Order 4Order 5 Order 6

Locked-inCapital

Time

72


The product lifecycle impacts the planning strategy too. Figure 2.6 shows a simple

product lifecycle with the typical phases:

� Ramp-up

� Active demand

� Phase-out

� Ramp-down

� SLA

� Removal from stock

“Simple” means there are no demand fluctuations due to seasonal effects or market

changes, which require a more sophisticated planning. During ramp-up, the planning

strategy needs to be adjusted to the growing market requirements. Often, during

ramp-up, supply and demand aren’t balanced well. When market requirements cre-

ate a constant demand of the product, inventory can be planned on optimized non-

changing parameters. If the product lifecycle reaches its end, planning needs to be

adjusted. If SLAs influence the product lifecycle, inventory must be kept although the

product is no longer actively used. Eventually, the product becomes obsolete and is

removed from inventory. If the planned demand exceeds actual demand, excess

inventory will be created (arrows in Figure 2.6).

Figure 2.6 Typical Product Lifecycle

0

1000

2000

3000

4000

5000

6000

Ra

mp

up

Hig

h d

em

an

d

Hig

h d

em

an

d

Ph

ase

ou

t

Ph

ase

ou

t

En

d o

f active

lifecy

cle

Ra

mp

do

wn

Low

de

ma

nd

Low

de

ma

nd

+ S

LA

Low

de

ma

nd

+ S

LA

Low

de

ma

nd

,S

LA-trig

ge

red

rep

len

ishm

en

t

Low

de

ma

nd

+ S

LA

En

d o

flife

cycle

Re

mo

va

l from

stock

Stock value

Legend:

Stock consumption Active BOM usage

Gaps indicate unwanted excess of stock value

73


On the opposite side, if the planned demand is below the actual demand, your ability

to fulfill the market requirements is endangered (not shown in Figure 2.6). Therefore,

the more reliable your prognosis, the more accurate is your planning and the better

are your inventory key performance indicators (KPIs).

Every time the product lifecycle reaches a different phase, the planning strategy

needs to be adjusted again. The more proactively the phase changes are detected, the

better the inventory can be planned. SAP S/4HANA offers different capabilities, such

as prognosis tools and monitoring tools supported by machine learning to optimize

the product lifecycle. Section 2.4 will explain how SAP S/4HANA supports you in ana-

lyzing market trends and adjusting your prognosis and planning strategy proac-

tively.

2.3.3 Local versus Global Inventory Management

When considering inventory management, it’s also crucial to understand the organi-

zational scope of all your activities. Organizational units make up one dimension of

inventory management, and the second one is composed of functional aspects repre-

sented by stock types (which we discussed in Section 2.1). The typical organizational

planning unit is one plant in SAP S/4HANA. However, it’s also possible to subdivide a

plant into multiple MRP areas to execute planning on a smaller set of products. Sim-

ilar rules apply to analytics, which are performed on the plant level but can also be

executed across multiple plants or vice versa on organizational structures below the

plant level, for example, the MRP area. When it comes to execution, you can perform

activities within a plant or cross-plant. In SAP S/4HANA, the organization structure

above the plant is the company code.

All SAP Fiori apps in SAP S/4HANA support local as well as global inventory manage-

ment strategies by the following means:

� Organizational structures

� Filter criteria within all SAP Fiori apps along organizational structures

� Custom enhancements of filter criteria

� Authorization based on organizational structures

� Roles created for local or global inventory management tasks

74


2.3.4 New Technologies

Technology helps end users complete their daily work as efficiently as possible. SAP

has been introducing some new technologies in SAP S/4HANA to improve end-user

productivity in a rapidly changing environment. Figure 2.7 sketches the evolution of

the intelligent ERP.

Figure 2.7 Evolution of the Intelligent ERP with an Increasing Number of Automated Tasks

Today, end users are performing a lot of daily routine tasks that consume most of

their working time due to the following:

� Breaks in communication medium

� Lack of adequate information while decision-making

� Distributed data, which needs to be collected by hand

� Process monitoring by manually defined and calculated KPIs

� Decisions based on experience/guessing, not on facts

0 10 20 30 40

Intelligent Enterprise

Task automation

Legend:

Simple routine tasks High value generating tasks Data collected in system

TotalWorkingTime

Typ

e o

f Ta

sk D

istr

ibu

tio

n

Time

75


Typical indicators of manual tasks are the abundant use of spreadsheets in e-mails,

shares, and the number of post-it notes attached to computer monitors. With SAP

S/4HANA, SAP has created the first release supporting an intelligent enterprise. In

informal terms, you may call it the vision of a “low-touch ERP.” Basically, a low-touch

ERP frees end users from their daily routine task, so that they can spend more time

on high value generating tasks, as illustrated by the darkest area in Figure 2.7.

Technically, the ERP system can be configured to record all manual decisions made

by human interaction. After a while (if the data set is large enough), the key user may

train and activate machine learning models based on this data set. These machine

learning models support end users in decision-making. Furthermore, key users may

define conditions that will lead to end-user notification or even automatic issue res-

olution based on those machine learning models.

In Chapter 1, Section 1.4.3, we already explained many features that comprise a low-

touch ERP, such as embedded navigation, information sharing, personalization of

the working environment, role-based UIs, built-in collaboration tools, and mobile

options. SAP S/4HANA includes additional capabilities to reduce manual tasks in end

users’ daily business. Figure 2.8 outlines the principles of typical tasks during daily

work:

1. You define conditions that require manual intervention by a dedicated group of

end users.

2. You need a set of information to complete this intervention successfully.

3. Depending on the provided information, you select the most appropriate action.

As shown in Figure 2.8, SAP S/4HANA offers you a framework called situation han-

dling, which allows key users to define conditions, the related information, and the

responsible set of end users to take the actions depending on their business roles.

This is called a situation.

Once defined, the situation creates notifications if the condition of the situation

applies and automatically informs the responsible end user, who can navigate to an

SAP Fiori app, getting proposals on how to solve the situation. The configuration

steps connected to situation handling are described in Chapter 3, Section 3.2.3. Exam-

ples of how to leverage situation handling in inventory management are provided in

Chapter 4 and Chapter 8.

76


Figure 2.8 Situation Handling Framework

When interacting with the system, end users often are making decisions based on the

experience they have had in the past. In general, this is called learning. With the recent

progress in machine learning, an ERP system can support an end-user’s decision-making

by displaying his or her own (machine) learnings and offering an unbiased experience

based on mathematical principles.

Further Resources

Wondering if this is possible? Check out the story of Alpha Go, a computer Go pro-

gram that managed to win matches against professional Go players (http://s-prs.co/

v489201).

This is like a car navigation system recommending the best way home. If you know

the way yourself because it’s your daily route, the navigation system may just give a

second opinion enhanced with recent traffic information. If you don’t know the way

at all, the navigation system is normally the best choice you have.

Figure 2.9 displays the basics of machine learning. To set up a machine learning

model, you need to complete data analysis to shape the model. After the model is in

place, it must be trained to be consumable. Training isn’t a one-time task but may or

must be repeated once in a while if the underlying training data changes. If retraining

doesn’t take place, the machine learning model’s prediction will become more and

more inaccurate.

ConditionRelated

InformationAction

Situation

Key User:

Defines Condition Prepares RelatedInformation

Sets Responsibility/Functionsand Authorizes Actions

End User: Is Notified by the System Evaluates Informationand Takes Action

77




Technically, SAP S/4HANA offers two kinds of predictive models. You can have an

embedded model or a side-by-side installation in the SAP Cloud Platform. The first

type is simpler to set up because training and querying the model happens within

one system. The second type gives you more freedom, as you could also embed addi-

tional machine learning algorithms or use external data for training.

Figure 2.9 Machine Learning Principles/Types of Predictive Models

Figure 2.10 explains how the machine learning model training takes place. Prerequi-

site is a sufficient set of training data that is divided up into at least two buckets

during training. The larger bucket (normally 75% of the entire training data) is used to

train the model. After training, the model’s performance is validated with the second

bucket. If the performance of the model on both buckets is more or less equal, the

model is trained well. If not, training conditions need to be adjusted until a sufficient

predictive capability is accomplished.

In many cases, the performance of a predictive model is expressed as a confusion

matrix, which is an N × N matrix. N is the number of different states to be predicted

by the machine learning model. Figure 2.11 shows an example with N = 2. The light

segments represent the correct prediction, and the dark segments represent the false

prediction.

Machine Learning: Process Flow

Data AnalysisData Preparation

and TrainingModel Consumption

RetrainingCustomer Input

Types of Predictive Models: Embedded or Side by Side

Model

ModelBusiness Process

SAP S/4HANA Instance SAP Cloud Platform

Query andTraining

Query

Training onExternal Data

78

2.4 Inventory Optimization in SAP S/4HANA

Figure 2.10 Machine Learning Details Figure 2.11 Confusion Matrix with Two

Values A and B


As pointed out in Section 2.3, supply chain management requires constant refine-

ment and adjustment of the company’s business processes. If this isn’t done, the sup-

ply chain isn’t operated at an optimal level, and the operating profit is reduced.

In the following sections, we’ll introduce the optimization cycle, discuss each step in

detail, and refer to the chapter in which the tool support provided by SAP S/4HANA is

explained.

2.4.1 Optimization Schema

Figure 2.12 depicts the optimization schema used throughout this book. The three

steps are detailed in the following sections. In general, the schema’s steps can be

found in various project management or product management optimization strate-

gies such as lean production, continuous improvement process (CIP), or Scrum. It

entails a planning step, an execution step, and an analysis step. Each step is the input

of its successor. The optimization cycle time is dependent on various factors, such as

the following:

� Type of product

� Involved business process

� Stability of the environment

Training Data

Model

Validation Data

True Values

Pre

dic

ted

Va

lues

A B

A

B

79


Figure 2.12 Optimization Cycle

Usually, the higher the uncertainty, the faster the cycle time. It’s quite common to

categorize products according to criteria such as contribution to operating profit

and/or product value. This is often referred to as ABC analysis or ABC/XYZ analysis.

The categories are also used to plan the optimization cycle time (see Figure 2.13). A

matrix, as shown in Figure 2.13, helps you focus your optimization planning. Essen-

tially, it clusters your inventory to help you focus on changes that have a significant

impact on your company’s overall performance.

Figure 2.13 Classification Matrix According to Product Value and Product

Consumption Variability

Note

During optimization, you focus on high value/high profit generating products (A

products). B and C products are taken into account with the lower frequency.

Plan andAdjust

ExecuteAnalyze

X Y Z

C

B

A

Pro

du

ct V

alu

e

Variable Consumption

80


When looking at Figure 2.12 shown earlier, you may wonder what level of detail the

optimization cycle is about. Basically, this idea isn’t linked to any specific level of

detail. It can be used in strategic supply chain planning as well as in optimizing the

goods receipt process of a warehouse. If you look at the supply chain process of your

company, you’ll ideally find something like Figure 2.14.

Figure 2.14 Stacked Optimization Cycles at Various Levels

Figure 2.14 shows that there are various levels on which you execute the optimization

cycle:

� Strategic enterprise level (defining KPIs or shaping the planning strategy)

� Division or subdivision level (optimizing subprocesses, such as production plan-

ning, warehousing, or transportation planning)

� Single loading point, storage location, or material level (not shown in Figure 2.14)

Plan andAdjust

ExecuteAnalyze

Strategic SupplyChain Planning

Analytical KPIDefinition

StrategyEvaluation

Plan andAdjust

ExecuteAnalyze

Plan andAdjust

ExecuteAnalyze

ProductionPlanning

Plan andAdjust

ExecuteAnalyze

Warehousing

Plan andAdjust

ExecuteAnalyze

TransportationPlanning

Plan andAdjust

ExecuteAnalyze

81


2.4.2 Plan and Adjust

During the plan and adjust step, you typically share information and discuss the

impact on the business. The system provides automatic or semiautomatic solution

proposals. Your input is the analysis of the past and you target the future.

Figure 2.15 shows that the essential part of planning is sharing knowledge, looking at

historic figures, and considering the system proposals to adjust the system settings. In

Chapter 1, we already highlighted the generic collaboration tools embedded in the SAP

Fiori launchpad. Chapter 4 explains the SAP S/4HANA collaboration and knowledge-

sharing tools designed for production planning in depth. They can be used to asyn-

chronously exchange structured and unstructured information. They may also be

used to store historic discussions.

In upcoming chapters, we’ll discuss various examples where the SAP S/4HANA sys-

tem supports planning and adjusting by alerting about critical supply chain situa-

tions, by making automatic solution proposals, and by indicating process

disturbances. Synchronous interactions are supported natively in SAP Fiori apps

because most of them offer the capability of insight to action.

Figure 2.15 System and Human Collaboration during Planning

2.4.3 Execute

During the execute step, you typically run your daily tasks, such as monitoring busi-

ness processes, detecting and correcting plan deviations, and dealing with all

planned and unplanned tasks in your daily work schedule. As we’ll touch on in Chap-

ter 5, Chapter 6, and Chapter 7, SAP S/4HANA supports your daily work with a variety

Share and exchangeinformation

Adjust settings Alert/propose

SAP S/4HANA

Evaluatehistoric

data

82


of role-based monitoring tools. Additionally, you may personalize your own KPI-

based monitoring apps within your SAP Fiori launchpad. There are role-based SAP

Fiori app used to collect worklists based on the end user’s responsibility. Based on the

pyramid approach (see Chapter 1, Section 1.4.1), SAP Fiori apps offer quick actions for

the most frequently required tasks and highly powerful transactions to solve

extreme cases.

Figure 2.16 depicts the sequence of SAP Fiori apps called by an end user in an SAP

S/4HANA system. As explained in Chapter 1, Section 1.4, SAP Fiori apps guide end

users seamlessly until they can complete their daily tasks. The role concept supports

the end user by only offering the features and functions required for this specific

role. Therefore, SAP Fiori apps greatly enhance end-user productivity in an SAP

S/4HANA system. As explained in Section 2.3.4, in the end, you strive to focus on high

value generating tasks and let the system do the routine work.

Figure 2.16 Different Users Executing Tasks in SAP S/4HANA

Let’s break down the examples shown in Figure 2.16:

� For a production planner taking care of a material shortage, the Material Shortage

Monitoring app (F0247) provides alerts for upcoming shortages and automatically

creates a solution proposal.

SAP FioriLaunchpad

MaterialShortagesWorklist

SAP FioriLaunchpad

WarehouseClerk Overview

Page

Overdue GoodsReceipt Blocked

Stock

Purchase OrderObject Page

Material DocumentObject Page

Good Receiptfor Purchase

Order

SAP FioriLaunchpad

Create GoodsMovement

SAP FioriLaunchpad

Goods Receiptfor Inbound

Delivery

Production PlannerTaking Care of Material

Shortages

Warehouse ClerkMonitoring Goods Receipt

Blocked Stock Process

Receiving Specialist Creating aGoods Receipt of an InboundDelivery on a Mobile Device

Plant ManagerCreating a Material-to-Material Posting

83


� For a warehouse clerk monitoring goods receipt blocked stock processes, the Over-

view page (F2416) alerts her of any stock locked up in goods receipt blocked stock

and directs her to the monitoring application supporting a resolution.

� For a receiving specialist creating a goods receipt of an inbound delivery on a

mobile device, the Goods Receipt for Inbound Delivery app (F2502) leads him to a

mobilized SAP Fiori app supporting in-app bar code scanning.

� For a plant manager creating a material-to-material posting, the Create Goods

Movement app (Transaction MIGO) offers him an expert mode of all material doc-

ument posting configured in the system.

2.4.4 Analyze

During the analyze step, end users check and evaluate current and historic data to

draw conclusions for the next plan and adjust step. Figure 2.17 displays different

kinds of analytical SAP Fiori apps and their intended usage.

Figure 2.17 Map of Analytical Applications in SAP S/4HANA

Op

era

tio

na

lSt

rate

gic

ObjectPage

OverviewPage

List Monitoring

AnalyticalList Page

SAP SmartBusiness

Natural LanguageInteraction

Analysis PathFramework

Grid

Custom CDS

SAP AnalyticsCloud

Freestyle

Freestyle

Freestyle

Professional UserCasual User

84

2.5 Summary

It’s important to understand that the user category on the x-axis depends on the

business context of the end user. A sales operator is a professional user for any ana-

lytical sales application, but merely a casual user for an inventory application. The

types of SAP Fiori apps mentioned in Figure 2.17 are explained in Chapter 1, Section

1.4.

The y-axis of Figure 2.17 defines the analytic capabilities of the SAP Fiori app, which is

normally proportional to its ease of use. The natural language interaction (NLI) will

support the casual user for operational analysis. The SAP Analytics Cloud and custom

core data services (CDS) views will support the professional user for strategic report-

ing. Most of the analytic SAP Fiori apps follow certain patterns; however, there may

be freestyle apps in all kind of categories. All analytical SAP Fiori apps have in com-

mon that the analysis is done in real time, that most of them are extensible, and that

they are role based. Some analytical KPIs are even integrated into predominant trans-

actional SAP Fiori apps. Results of any analysis can be shared with the collaboration

tools mentioned previously. The analytical SAP Fiori apps crucial to inventory man-

agement are explained in depth in Chapter 8.

2.5 Summary

This chapter defined some key terms of supply chain planning in general and inven-

tory management in particular. After reading this chapter, you should be familiar

with the concept of safety stock, replenishment lead time, and lot size. Moreover, you

should understand a product lifecycle and know the principle of an optimization

cycle consisting of three steps: plan and adjust, execute, and analyze. Finally, the idea

of a low-touch ERP, also known as intelligent enterprise, should have triggered some

expectations for the following chapters.

Before we start to enter the optimization cycle, we need to walk through the configu-

ration tasks in the next chapter.

85

Chapter 3

Configuring Inventory Management

To run inventory management, you must first configure or customize

it in your system. Inventory management is made up of many config-

urable pieces, ranging from organizational units to business processes

to servers, roles, interfaces, and beyond, as you’ll see in this chapter.

Now that we’ve outlined the basics of SAP S/4HANA and inventory management,

let’s move on to the required system configuration of inventory management to

enable the related business processes. Not all configuration steps are unique to

inventory management due to SAP’s philosophy of providing an integrated system.

We’ll also cover some hints for process automation to make life easier for end users.

This chapter gives step-by-step instructions for configuring inventory management

in SAP S/4HANA through the IMG. Normally, you configure your organizational

units first and then the processes linked to those units. You’ll also learn how to set up

cross functions, servers, and inbound and outbound interfaces, as well as the neces-

sary steps to use prepackaged SAP Fiori roles.

Note

The implementation steps described in this chapter are applicable to SAP S/4HANA

only. The SAP S/4HANA Cloud implementation methodology is significantly different

and explained in Chapter 9.

3.1 Implementation Guide Configuration

Configuration of an SAP system is mostly related to Customizing. A vital part of the config-

uration is also the system landscape used in the project. Figure 3.1 shows a three-system

landscape that is used in many SAP projects. It’s also possible to work with a two-system

landscape in smaller implementation projects or to use a five-system or larger number of

systems landscape in large implementation projects. Most of the configuration is done on

87

3 Configuring Inventory Management

the Customizing system and then transferred to the quality assurance system. This trans-

fer is often referred to as a transport. After successful integration testing on the quality

assurance system, the entire project is then transferred to the productive system, and the

project is live. Technically, all configuration activities are collected in transport requests.

This approach ensures the following:

� Traceability of all configuration chances moved from one system to another

� Consistent implementation of configuration changes

� Collecting configuration changes according to business semantics

� Easy project and change management

� Use of configuration templates provided by SAP, by partners, or internally

Figure 3.1 Typical Three-System Landscape

Note

Not all configuration steps can be transferred. Some have to be repeated on each sys-

tem separately.

3.1.1 Implementation Guide Overview

The SAP S/4HANA IMG is a hierarchical structure comprised mainly of configuration

tables’ maintenance views. You can access it by going to Transaction SPRO and click-

ing SAP Reference IMG. The hierarchy can be quite confusing at first glance because

it’s not easy to understand the systematic approach it’s based on. Because many for-

mer industry functions have been integrated in SAP S/4HANA, as mentioned in

Chapter 1, the structure has become even larger in comparison to SAP ERP. Therefore,

Figure 3.2 sketches a heat map with the most important configuration activities

related to inventory management and to the technologies described in this book.

CustomizingSystem

QualityAssurance System

ProductionSystem

Transport ofConfiguration

Transport ofConfiguration

88


Figure 3.2 Inventory Heat Map of SAP S/4HANA IMG

Note

You can use the search capabilities of the SAP menu to find nodes or configuration

activities.

Let’s walk through a few of the key nodes:

� SAP NetWeaver

Every technology-related configuration activity can be found below the SAP Net-

Weaver node in Figure 3.2. Normally, this kind of configuration is owned by the

system administrators, with one exception (as you’ll see in this section). Here you

find SAP Gateway configuration to set up the OData services used in SAP Fiori and

IMGSAP

NetWeaver

EnterpriseStructure

Cross-Application

Components

MaterialsManagement

Production

Productionfor ProcessIndustries

LogisticsExecution

SAPUI5

SAP Fiori

SAP Jam Integration

Logistics – General

Materials Management


SAP HANA-Based Search …

Responsibility Management

Data Aging

Purchase Order

Set Up Stock Transport Order

Account Assignment

Decentralized WMS Integration

SAP Gateway

UI Technology

General Settings

Enterprise Search

Definition

Assignment

General Application Functions

General Settings for Materials …

Purchasing

Inventory Management and Ph..

Valuation and Account ….

Basic Data

Production Planning

Material Requirements Planning

Kanban

Master Data

Process Order


89


external interfaces. In particular, there are IMG activities to clear OData caches,

which is very helpful if you deploy new service versions.

� UI Technology

Below the UI Technology node, you find the configuration for SAP UI5, SAP Fiori

and SAP Jam Integration (see Chapter 1, Section 1.4, for more information on SAP

Fiori).

� General Settings

The General Settings node comprises the setup of units of measurements, curren-

cies, countries, and time zones.

Note

Inventory management may require adding additional units of measurements.

� Enterprise Search

The Enterprise Search node is important for setting up the search function in the

SAP Fiori Me Area (see Chapter 1, Section 1.4.3).

� Enterprise Structure

The Enterprise Structure node in contains all configuration activities to define the

organizational structure of your SAP S/4HANA instance. It’s important to under-

stand that the initial structure itself is configured with the activities below this

node. This is described in detail in Section 3.1.2. The business-specific attributes of

each organizational unit are maintained where the business process is main-

tained, for instance, in inventory management (see Section 3.1.3). To set up the ini-

tial organizational structure, you need to define the organizational units first

(Definition) and then assign them to each other (Assignment). The organizational

units are grouped into “modules,” and for inventory management, Logistics –

General and Materials Management are of interest.

� Cross-Application Components

The Cross-Application Components node contains SAP HANA-Based Search and

Responsibility Management (see Section 3.2.2) configuration.

� Inventory Management, Production, and Production for Process Industry

The Materials Management node (with the Purchasing and Material Management

and Physical Inventory subnodes), Production node, and Production for Process

Industry node embrace most of the business configuration referred to in this book

on inventory management in SAP S/4HANA. We’ll cover Purchasing in Section

90


3.1.4 when focusing on stock transport orders. Inventory Management and Physi-

cal Inventory is covered in Section 3.1.3, and Production and Production for Process

Industry will be covered in Section 3.1.5.

The IMG-based configuration of SAP S/4HANA systems isn’t an easy task, which is

why SAP and SAP partners offer preconfigured system configurations containing

various best practices. Depending on the SAP S/4HANA system setup, the best prac-

tice configuration is in client 000 or is created using the SAP Best Practice Explorer.

The latter is the cornerstone of the SAP S/4HANA Cloud configuration, which we’ll

explore in Chapter 9.

3.1.2 Organizational Units

Organizational units structure your enterprise organization in a logical way and sup-

port you in your business projects. Sometimes there is a direct mapping of physical

units to logical units, but this isn’t always the case. For example, a plant modeled in

SAP S/4HANA can’t always be related to a physical building. Sometimes it’s a logical

unit required to organize the material flow within a company. We’ll focus on inven-

tory management when discussing the organizational structure, in which the follow-

ing aspects need to be considered:

� A basic configuration step is to reflect the enterprise structure in the IMG configu-

ration as a basis to show the stock situation on different organizational levels.

� Valuation of the stock is an important aspect to consider when setting up the

enterprise structure.

� Processes have a strong impact when defining an organizational structure. For

example, if you plan to use the 3GL logistics provider, you’ll need to set up storage

locations that serve as proxy objects (see Section 3.1.5).

� Security and compliance may also play a role.

The main organizational units in inventory management are the storage location

(where inventory is stored as a rule) and the plant (where inventory is manufactured

as a rule). The company code serves as the scaffold for one or more plants and links

the plant with its logistic processes indirectly to financial processes. In material

requirements planning (MRP), the MRP area also plays an important role (as we’ll dis-

cuss in Section 3.1.6), but it isn’t part of the original enterprise structure.

Figure 3.3 outlines the aforementioned organizational units and presents an exam-

ple setup on the right-hand side. Note that you can do material valuation on the plant

91


level or the company code level, depending on your configuration. In general, inven-

tory stock quantities are defined on a more granular level in the logistics processes

than in the financial processes. This can sometimes lead to confusion between end

users with a logistics view and end users with a controlling view. Some analytical

applications in inventory management break down inventory value according to the

rule of three if there is no one-to-one mapping between the material quantity kept in

inventory management and the material value kept in the material ledger. This

closely resembles the controlling view of inventory values, but it may result in

rounding differences. Alternatively, the inventory value is always calculated based

on the actual price multiplied with the material quantity, which resembles the plan-

ner view of inventory values.

Figure 3.3 Organizational Units in Inventory Management

Note

A plant key is unique within one SAP S/4HANA client, whereas a storage location key

can be assigned to more than one plant but is considered a different entity (as with

storage location 1011 in Figure 3.3).

As mentioned in Chapter 2, Section 2.1, there are several stock types and special stock

types used in SAP S/4HANA to define inventory. Some are defined on the storage

location level, and some are only available on the plant level of the organizational

hierarchy.

CompanyCode

Plant

StorageLocation

1000

1010

1011

1020

1011 1021

• Material valuation

• Link to financial accounting

• Material valuation

• Inventory

• MRP

• Material master data

• Inventory

• MRP

• Material master data

OrganizationalStructure Schema

Organizational StructureImplementation

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An organizational structure is reflected in master data as well, most notably in the

material master data. A prerequisite to creating stock of a certain material in a stor-

age location is that the material must be created for this storage location (i.e., the

storage location view of the material must exist). The same rule applies to plants.

As shown previously in the IMG inventory heat map in Figure 3.2, you need to define

your organizational units first and then assign them (build the hierarchy in Figure

3.3). Figure 3.4 shows the relevant part of the IMG with the focus on the plant defini-

tion.

Figure 3.4 Plant Definition in the IMG

You can define the plant and storage location, as follows:

� Plant

A plant is the organizational and operational unit in which the company’s stock is

managed and reported. To define the plant, go to Enterprise Structure • Definition •

Logistics – General, and select Define, copy, delete, check plant, as shown in Figure

3.4. Each plant belongs to one company code and country. This company code

dependency becomes important for logistic processes and material movements

between different companies and countries because different currencies and valu-

ation capabilities come into account.

� Storage location

A storage location is on the lowest organizational level in inventory management

and is defined by going to Enterprise Structure • Definition • Materials Manage-

ment and selecting Maintain storage location, as shown in Figure 3.4. A standalone

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storage location can’t exist, so it’s always created in the context of a plant (see

Figure 3.5). Below the storage location level, there are bins, which are used in ware-

house management.

Figure 3.5 Organizational Units in Inventory Management

As shown earlier in the IMG inventory heat map in Figure 3.2, the next step is to

assign your plant to the company code using the Assign plant to company code activ-

ity found in the IMG menu path under Enterprise Structure • Assignment • Logistics –

General, as shown in Figure 3.6.

Figure 3.6 Assigning a Plant to a Company Code in the IMG

Plant (1000)

Storage Location(0001)


Storage Location (…)

Plant (…)



Storage Location (…)

Company Code(1000)

Company Code(…)

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Beside the basic organizational units in inventory management, there are some addi-

tional organizational units that might be touched in inventory management:

� Purchasing organization

The purchasing organization belongs to procurement and is crucial to structure

the procurement process. A purchasing organization is in charge of procurement

of related goods from vendors and is referred to in stock transport orders (order

type UB) or in standard purchase orders (order type NB) for instance.

To define the purchasing organization, go to Enterprise Structure • Definition •

Materials Management • Maintain Purchasing Organization.

� MRP area

The MRP area is an element used to structure production planning for materials.

By linking a material to MRP areas, you can control when and how a material is

planned (see Section 3.1.6).

3.1.3 Inventory Management

Configuring inventory management essentially means configuring the processes

linked to material document postings. The related settings for inventory manage-

ment are clustered below IMG node Materials Management – Inventory Manage-

ment and Physical Inventory. To open the IMG, run Transaction SPRO.

Figure 3.7 displays the IMG section covering inventory management. There are five

main configuration clusters:

� Set up number range intervals for documents.

� Configure processes per plant.

� Configure processes per movement type.

� Set up physical inventory process.

� Configure transactions, reporting, printing, output management, authorization,

and stock determination.

We’ll walk through each in the following sections, after first taking a look at a key

activity outside of inventory management.

95


Figure 3.7 Inventory Management and Physical Inventory in the IMG

Late Locking

Let’s start with an important setting for material document processing regarding the

database locking mechanism. With SAP S/4HANA, a new feature was implemented to

make use of an optimized database locking feature called late lock. Late locking can be

activated with IMG activity Set Material Lock for Goods Movements, as shown in

Figure 3.8, which can be accessed via the menu path Materials Management • General

Settings for Materials Management.

Figure 3.8 IMG Activity for Activating Late Locking

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By activating this setting, performance benefits are available, especially regarding

high volume-based transactions that perform a large amount of material document

postings.

Further Resources

More detailed information and possible side effects of this setting are described in

SAP Notes 2267835 and 2338387.

Number Range Intervals

Before taking a deeper look into the predelivered movement types and how to adjust

or copy them, let’s first discuss the number range object for material movements and

physical inventory documents. Each posting of a material movement or physical

inventory document creates a new document in the system. Without an assigned

number range object, the document can’t be created at all. The number of this docu-

ment is taken from a number range object that is defined in the IMG menu path,

Materials Management • Inventory Management and Physical Inventory • Number

Assignment (see Figure 3.9). For the different categories of documents, different

number range intervals are defined.

Figure 3.9 Number Range Object for Material and Physical Inventory Documents in the IMG

After you start the Define Number Assignment for Material and Phys. Inv. Docs IMG

activity (see Figure 3.9), you have to click the pencil icon (Intervals) (or just Display,

not shown) to enter the screen shown in Figure 3.10.

97


Figure 3.10 Different Categories of Number Ranges

The Number Assignment IMG activity also provides a feature to set the status of the

number range manually to a certain number. Be careful, though, because adapting

the number range status manually might lead to number collisions, which would

lead to a short dump during material document or physical inventory document

posting.

Plant Parameters

Many processes in inventory management are controlled on the organizational unit

level (plant) and on the transactional level (movement type). Figure 3.11 shows the

configuration of a plant with IMG activity Plant Parameters in the menu path Mate-

rials Management • Plant Parameters.

Figure 3.11 Configuration of a Selected Plant

98


You can control actions encompassing material document postings, set up the basic

parameters of the physical inventory counting process, and define which negative

stocks are allowed on the plant level.

There are four key sections to configure in Plant Parameters:

1 Goods Movements

These plant parameters control processes during goods movement. Often you

enable a process first on the organizational level and second on the transactional

level (see the next section).

2 Physical Inventory

This section controls parameters of the physical inventory process (see Chapter 6,

Section 6.6).

3 Reservations

This section controls parameters when using reservations (see Chapter 7, Section

7.1).

4 Negative Stocks

By default, SAP S/4HANA doesn’t allow you to create negative stock quantities.

Negative stock quantities typically hinder period-end closing activities. If a mate-

rial document posting would create a negative stock quantity, the posting is

rejected.

Note

Allowing negative stocks transiently eases sequencing issues during high-volume

material document postings of goods issue and goods receipts. You need to allow

the negative stocks also on the storage location level with Goods Issue/Transfer

Posting • Allow Negative Stocks IMG activity and in the material master for each

material.

Movement Types

The cornerstone of each material movement and related material document in

inventory management is the movement type concept. A rough glimpse into the

importance of movement types was given in Chapter 1.

A movement type is defined by a three-digit number plus related control indicators.

Figure 3.12 sketches the following four aspects that a movement type influences

during a material document posting:

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� The movement type controls which attributes of the material document posting

are populated. Most important, the movement type controls all stock-identifying

fields and hence the material stock quantity.

� Depending on the business process, the movement type requires a predecessor

document, such as a purchase order or delivery. The predecessor document gets

updated during the material document posting.

� Depending on the business process, the movement type initiates the automatic

creation of a successor document, such as an accounting document.

� Depending on the business process, the movement type creates some auxiliary

objects, for example, a material batch or the storage location view of a material.

Figure 3.12 Movement Type: Functional Perspective

The second point of the preceding list, regarding predecessor documents, may espe-

cially lead to the material document posting itself only being triggered due to the

successor document posting. One example is the posting of physical inventory dif-

ferences.

The material documents in SAP S/4HANA can’t be altered after posting, which means

a material document is reversed by creating a material document posting inverting

the original material document. This is called a material document reversal (posting).

Movement Type

CreateMaterial

DocumentEntry

UpdatePredecessorDocument

CreateSuccessorDocument

CreateAuxiliaryObjects

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For each movement type, there is an assigned reversal movement type and vice

versa. Based on this assignment, the system automatically determines the move-

ment type during a reversal. Consequently, this mechanism implies you can only

completely reverse a material document item; partial reversal of the item isn’t possi-

ble unless you use a workaround (which is beyond the scope of this book).

Note

As a rule of thumb, the “normal” movement type has an odd number, and the rever-

sal movement type has the following even number.

Movement type numbers are clustered according to the business process they are

used in. Table 3.1 shows the cluster based on the first digit.

Figure 3.13 shows the configuration of a movement type with the Copy, Change

Movement Types IMG activity, which you can access via menu path Materials

Management • Inventory Management and Physical Inventory • Movement Types.

This IMG activity allows you to change any attribute of a movement type. We’ll

explore process-specific changes of movement types with simpler IMG activities.

Let’s walk through configuring the main sections for this screen, as follows:

1 Dialog Structure

The left-hand dialog contains additional attributes, texts, field controls, and suc-

cessor documents. Click on the node in the hierarchy if you want to change any of

the listed movement type attributes.

Movement Type Business Process

1XX Goods receipt linked to predecessor document postings

2XX Goods issue linked to different accounting objects

3XX – 4XX Material transfer postings

5XX Goods receipt/initial stock entry without predecessor document

6XX Goods issue linked to shipping

7XX Physical inventory difference postings

Table 3.1 Movement Types in SAP S/4HANA

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2 Entry Control

This section contains the attributes before posting. Here you may set defaults or

checks to control processes on the transactional level.

3 Updating Control

This section contains the actions during posting. Here you may also control pro-

cesses on the transactional level.

Figure 3.13 Configuration of a Selected Movement Type

Creation of custom additional movement types to the customer namespace should

be done by copying an existing movement type to ensure consistency of all depen-

dent parameters. New movement types are typically created to determine different

accounts in financial accounting or authorization-related controlling, for instance.

As pointed out at the beginning of this section, process control in inventory manage-

ment is most often done on the plant (i.e., organizational) level and on the move-

ment type (i.e., transactional) level. That is why the SAP S/4HANA IMG offers special

102


activities for each dedicated process summarizing both configuration activities and

offering only a suitable set of movement types. Figure 3.14 shows as example the

Goods Receipt process containing the following plant/movement type settings:

� Create Storage Location Automatically

If activated, the storage location view of the material master record is created auto-

matically, if missing.

� Create Purchase Order Automatically

If activated, a purchase order is created automatically based on defaults, if missing

during the goods receipt.

� Set Manual Account Assignment

If activated, a manual account assignment is supported.

� Set “Delivery Completed” Indicator

Allows you to configure when and how the goods receipt process is completed in

inventory management.

� For GR-Based IV, Reversal of GR Despite Invoice

Allows you to configure how reversals of material documents are handled in the

goods receipt process.

� Set Expiration Date Check

Allows you to configure how the shelf life process is handled (we’ll discuss shelf life

later in this section).

The identical settings exist for goods issue/transfer postings and automatic move-

ments.

Figure 3.14 Goods Receipt Process Configuration with Movement Type and/or Plant Set-

tings Highlighted

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Note

If you want to configure a specific process, it might be easier to look for the special-

ized IMG activity, instead of using the general ones described previously.

Physical Inventory Process

In Figure 3.15, all relevant IMG activities with a focus on physical inventory are col-

lected (accessed via menu path Materials Management • Inventory Management and

Physical Inventory • Physical Inventory).

Figure 3.15 Physical Inventory IMG Activities Overview

The following list describes the most important activities in more detail:

� Field Selection for Physical Inventory

The Field Control screen can be maintained (i.e., add a mandatory field, such as rea-

son code) during physical inventory if the physical inventory document must con-

tain the reason code for differences.

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� Default Values for Physical Inventory

Plant-dependent values can be reset for physical inventory documents such as

stock type or reason code, as shown in Figure 3.16. Enter your required default val-

ues, that is, the Reason f. difference.

Figure 3.16 Defaults for Physical Inventory Documents

� Settings for Physical Inventory

The following settings are available at the plant level:

– Activate change documents for logging of changes made to physical inventory

documents.

– Activate the adjustment of the book inventory balance.

– Activate the serial number display and printing on the physical inventory doc-

ument.

� Default Values for Batch Input

The batch input technology (technology for automatic recording and replay of

user input on SAP GUI screens, which is used for dark background processing) for

processing physical inventory documents can be controlled related to the given

reports when accessing the IMG activity. Figure 3.17 outlines the possible settings

for the batch input creation of physical inventory documents during cycle count-

ing process:

– Batch Input Data

Define the batch input-related data. For instance, you can enter the maximum

number of items a physical inventory document should contain.

– Physical Inventory Data

Give the presettings for the physical inventory process itself. For instance, you

might block the stock that is part of the physical inventory by setting the Phys.

Inv. Block indicator.

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– Stock Types

Indicate the affected stock types.

– Control

Use this indicator to enable that in certain cases (e.g., errors), the processing is

switched back to direct processing rather than batch processing.

Figure 3.17 Defaults of Batch Input Processing

� Maintain Copy Rules for Reference Documents

When inventory differences are processed (see Chapter 6, Section 6.6), the system

can automatically set the provided physical inventory document items to prese-

lected for further processing and posting of differences if activated.

� Allow Freezing of Book Inventory Balance in Storage Location

One flag is provided per plant and storage location to allow the freezing of the

book inventory balance per storage location. As a result, the frozen inventory bal-

ance is recorded in the physical inventory document accordingly for further calcu-

lation of inventory differences after the count result is entered. Material

movements such as additional goods receipts, which might happen during count-

ing, won’t harm the calculation of the inventory differences afterwards because

106


the initial inventory balance is still present on the physical inventory document

level.

� Define Tolerances for Physical Inventory Differences

The value ranges of the amount of inventory differences that the user is allowed to

post are defined by first creating physical inventory tolerance groups (Phys.inv.

tolerance group) with related values ranges and assigning these groups to the

related users afterwards, as shown in Figure 3.18.

Figure 3.18 Physical Inventory Tolerance Group

In the example in Figure 3.18, the user group 0001 is allowed to post inventory dif-

ferences up to 100.000,00 euros for all items and up to 10.000,00 euros for a sin-

gle item.

� Cycle Counting

The cycle counting indicators are used to group the relevant materials that should

be taken into account for the cycle counting process. The definition is done per

plant and assignment of individual cycle counting indicators (e.g., A, B, C, D) in the

example shown in Figure 3.19, which is usually based on an ABC analysis (categori-

zation of materials according to their business relevancy). The key columns for

each plant are as follows:

– CC Phys. Inv. Ind.

In combination with the plant, a unique ID for the cycle counting indicator.

– No.of phys.inv.

Number of physical inventories per fiscal year.

– Interval

Definition of counting intervals.

– Float time

Number of working days that the current count date might differ from the

planned count date.

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– Percentage

Ratio of materials counted within this indicator. Sum of all cycle count indica-

tors per plant has to be 100%.

Figure 3.19 Definition of Cycle Counting Indicators

This indicator is assigned in the material master record of a material manually via

the related material master applications (see Figure 3.20) or automatically via

report RMCBIN00 (ABC Cycle Counting Analysis).

Figure 3.20 Material Master Record Cycle Counting Indicator

General Configuration Settings

This section introduces some rather generic, but important, settings for inventory

management in SAP S/4HANA:

� Allow Negative Stocks

In this IMG activity, underneath Goods Issue/Transfer Postings, negative stock for

unrestricted use stock can be enabled on different levels (e.g., plant; see Figure

3.21). In addition, the negative stock can be allowed for individual special stocks

(Sales order stock, in our example). The standard setting is that negative stocks

aren’t allowed.

108


Figure 3.21 Allowing Negative Stocks per Plant and Special Stock

This setting might be required if goods issues are posted before the related receipt

of the materials was posted. This helps keep the inventory balanced when the

goods receipts are entered in a later stage.

� Set Expiration Date Check

In Chapter 5, we’ll introduce native SAP Fiori apps for goods receipt processing.

These SAP Fiori apps can take into account the settings of the Set Expiration Date

Check IMG activity. Here, the expiration date check can be configured on the plant

and/or on the movement type level, as shown in Figure 3.22, and can be set to the

following:

– No check

– Enter and check

– Enter only

– No check at goods issue

Figure 3.22 Expiration Date Check for Movement Type

If the total shelf life is defined in the material master record, the shelf life expira-

tion date is calculated based on the entered production date.

109


� Authorization Check for Storage Locations

Located under Authorization Management, the authorization check level in inven-

tory management can be detailed to the storage location level for individual stor-

age locations. The standard authorization check is on the plant level, but business

needs might require an authorization check on the storage location level, for

example, if materials with high values are handled within a certain storage loca-

tion, and only specific users will be allowed to post material movements for this

kind of material.

� Define Consumption Groups

Many analytical processes in inventory management require the calculation of

inventory consumption. By default, inventory consumption is recorded in mate-

rial document postings strictly linked to certain movement types. However,

inventory analytics often require inventory consumption to be calculated in the

context of the business process to be analyzed. Thus you can use a consumption

group to flexibly define the material document postings to be considered as con-

sumption in a certain business context.

Further Resources

For the exact details regarding movement types, refer to SAP Note 1832196.

Consumption groups can be specifically designed with this IMG activity to enable

more detailed analysis of consumption postings according to end-users’ needs.

Default consumption group “000” is predelivered and contains no movement

types, which means that the Consumption posting indicator shown earlier in

Figure 3.13 for each movement type is still used (default setting).

After you’ve defined your own consumption group by adding the movement

types describing inventory consumption in your desired analytical query, the

material document quantities linked to these movement types are used to calcu-

late inventory consumption, if you select your new consumption group while run-

ning the analytical query.

Note

The settings made in this IMG activity are only used in the Slow or Nonmoving Items

SAP Fiori app (F2137).

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Data Aging

In SAP S/4HANA, a data aging mechanism is used to move data from the hot store to

the cold store to decrease the amount of data in the operational activities. You can

access the IMG activities outlined in Figure 3.23 by following the menu path Materials

Management • General Settings for Materials Management • Data Aging • Data

Aging for Material Documents, where the related setup can be performed.

Figure 3.23 Data Aging IMG Activities

For data aging, the most important aspect is the residence time to determine which

material documents will be moved to cold store. This is configured in the Define Data

Aging for Material Documents IMG activity. The setting can be done on the plant level

(also a wildcard * is possible to reflect all plants). The standard setting is two years (731

days). This setting can be adjusted. Only complete material documents are moved to

the cold store. Therefore, the residence time is reflected to all items of the material

document. If one item is still too young to be aged, the whole material document

isn’t taken into account for the data aging run.

In addition, if the residence time is adjusted after data aging runs have already taken

place, there is no automatic undo of already aged material documents. To move

material documents back from cold store to hot store, a separate undo data aging run

has to be performed.

By using the Analyze Data Aging for Material Documents IMG activity, also shown in

Figure 3.23, a precheck can be performed to determine how many material docu-

ments will be taken into account by a data aging run.

111


If you require more specific checks to determine which material document should be

data aged besides the residence time, you might implement a business add-in (BAdI)

by using the BAdI: Aging of Material Documents IMG activity.

3.1.4 Procurement

Now let’s continue with the setup of procurement processes that directly impact

inventory management processes. First, we’ll cover the account assignment category

controlling the goods receipt process, and then we’ll discuss how to set up the stock

transfer process.

The IMG activities linked to procurement are located mainly under the Materials

Management node. In this section, we’ll walk through key procurement processes

and their associated activities, focusing only on those that directly impact inventory

management.

Document Flow

Figure 3.24 shows the document flow at the start of a procurement process. The pur-

chase requisition document containing the header and items collects the internal

requirements. It’s addressed to the purchasing organization and then approved and

converted into a purchase order with header and items, which represents a formal

request to procure goods from an external or internal supplier.

Figure 3.24 Document Flow in Procurement

There are some variants to how the procurement process continues, but from an

inventory perspective, the purchase order or the purchase order-based inbound

PurchaseRequisition

PurchaseOrder

Collection of InternalRequirements

Formal Request fromPurchasing Organization to

Supplier or Plant to Provide aDefined Quantity of Goods at

a Given Point in Time

Purchasing Organization

Conversion

112


delivery are the anchor documents to create the goods receipt document when the

goods arrive at the receiving plant. The goods receipt updates the purchase order his-

tory, eventually closes the process by setting the Delivery Completed indicator per

purchase order item, and initiates invoice verification. The process may also vary

depending on the type of procurement process, for example, standard, subcontract-

ing, consignment, stock transfer (which we’ll discuss later in this section), or external

service.

Account Assignment Category

One prominent attribute to be controlled in procurement is the account assignment

category of the purchase order item. Figure 3.25 shows that the account assignment

category influences the procurement process, but it also affects the account determi-

nation (costs are apportioned among various controlling objects) and—most of all—

the goods receipt process. For instance, the special stock type created during a goods

receipt is derived from the account assignment category settings of the purchase

order item (with one exception: vendor consignment stock is directly derived from

the item category K).

Figure 3.25 Account Assignment Categories: Influencing Different Factors

Account AssignmentCategory

AccountDetermination

ProcurementProcess

SpecialStockType

InventoryStock

Goods ReceiptProcess

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The account assignment category of the purchase order item also determines

whether inventory stock is created by the goods receipt or whether it’s a consumption

posting, where a goods receipt is directly consumed and internally billed according to

the account assignment category.

Figure 3.26 displays the Account Assignment IMG node and its activities, which you

can access via the menu path, Materials Management • Purchasing • Account Assign-

ment, as follows:

� Maintain Account Assignment Categories

Create/edit account assignment categories.

� Define Combination of Item Categories/Account Assignment Categories

Create the valid combination of the mentioned field in the purchase order item.

Figure 3.26 Account Assignment Node

Figure 3.27 presents the Account Assignment Categories detail screen. The Detailed

information area is important for configuring the factors mentioned earlier in Figure

3.25:

� Goods receipt

The goods receipt-related indicators control how the goods receipt is to be exe-

cuted.

� Stock

The Consumption posting and Special Stock fields regulate how and what kind of

special stock is created during the goods receipt process.

� Account determination

The account determination related attributes ensure how and how many accounts

are used when creating a goods receipt. Account Modification controls the account

determination, and ID: AcctAssgt Scrn controls whether there is a single or multi-

ple account assignment.

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Figure 3.27 Account Assignment Details

Stock Transfer Posting

Stock transfer postings are a major part of your logistic processes if you have more

than one plant and need to move goods between these plants. Figure 3.28 displays the

involved entities: an issuing plant and a receiving plant. During the transfer, the

involved stock might be recorded in the SAP S/4HANA system as stock in transit. In

fact, the process can be quite complex depending on whether the issue plant and

receiving plant belong to the same company code (see Section 3.1.2), whether a pur-

chase order is used, or whether a deliver document is involved.

Figure 3.28 Stock Transfer Basics

Plant 0001 Plant 0002

Issuing Plant Stock in Transit Receiving Plant

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Table 3.2 and Table 3.3 list all possible variants of the stock transfer process. Basically,

you can distinguish between stock transfers without a stock transport order (Table

3.2) and stock transfers with a stock transport order (Table 3.3).

The first group is solely based on material document postings and the movement

types that are described in Section 3.1.3. Table 3.2 lists all aspects of the material docu-

ment postings. In addition, you can directly transfer inventory with some special

stock types with movement type 301, and the stock in transfer stock type at the plant

level, which is created by movement type 303, doesn’t hold any batch information.

Stock Transport Orders

Stock transport orders are purchase orders with a dedicated purchase order type. As

you can create your own purchase order type, and SAP S/4HANA delivers some pur-

chase order types linked to stock transport orders, the purchase order type UB and

the associated delivery types and movement types mentioned in Table 3.3 are just

the most common examples.

You may choose to create stock transport orders with or without a delivery docu-

ment. The second variant creates the goods issue while processing the outbound

delivery document. If involved plants don’t belong to the same company code, a

clearing between the company codes must exist in controlling, or the posting is

One-Step Plant-to-Plant Two-Step Plant-to-Plant

Movement type 301: Transfer plant-to-plant � 303: Removal from

storage

� 305: Placement in

storage

Price calculation Valuation in issuing plant

Able to be planned Reservation –

Stock type after goods issue – Stock in transfer at plant

level

Delivery costs No

Cross-company code Company code clearing

Table 3.2 Stock Transfer without Stock Transfer Order

116


rejected. Alternatively, you can use purchase order type NB to create an ordinary pur-

chase order, including pricing and billing/invoice verification, in the issuing/receiv-

ing plant.

Stock Transfer with-

out Delivery

Stock Transfer with

Delivery

Stock Transfer with

Delivery and Billing

Purchase order

type/item type

� Purchase order

type: UB

� Item type: U

� Purchase order

type: UB

� Item type: U

� Purchase order

type: NB

� Item type:

Empty/U

Sales and distribu-

tion delivery type

– NL NLCC

Sales and distribu-

tion scheduling line

category

– NN NC

Billing type, docu-

ment type material

management-

invoice verification

– – IV, RE

Price calculation Valuation in issuing plant Pricing in materials

management/sales

and distribution

Movement type � 351: Goods issue

� 101: Goods

receipt

� 641/647: Goods

issue

� 101: Goods

receipt

� 643/645: Goods

issue

� 101: Goods

receipt

Cross-company

code

Company code clearing Revenue/clearing

account

Able to be planned Stock transport order

Stock type after

goods issue

Stock in transit

Delivery costs Yes

Table 3.3 Stock Transfer with Stock Transport Order

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Note

It’s not possible to lose stock in transit inventory. If there is an inventory difference

between goods issue and goods receipt, you need to either reduce the goods issue

quantity or increase the goods receipt quantity with subsequent scrapping. Move-

ment types 557 and 558 are reserved to correct rounding errors.

Figure 3.29 shows the IMG activities directly related to configuring the stock trans-

port order process in SAP S/4HANA, which you can find via the menu path, Materials

Management • Purchasing • Purchase Order • Set Up Stock Transport Order. The ship-

ping data is relevant if you use delivery documents in your stock transfer process.

The checking rules allow you to use available-to-promise (ATP) checks when creating

stock transfers. Most important are the following activities for configuration:

� Configure Delivery Type & Availability Check Procedure by Plant

Allows you to set up the delivery-related parameters listed earlier in Table 3.2 and

Table 3.3. You can use the defaults provided by SAP as starting points to implement

the process.

� Assign Document Type, One-Step Procedure, Underdelivery Tolerance

Allows you to set defaults to streamline the process execution in the SAP S/4HANA

system.

Figure 3.29 Set Up Stock Transport Order Node

Note

If the stock transport order type of a stock transfer between two dedicated plants is

unambiguously defined—which means there is only one stock transport order type

configured for the combination of issuing and receiving plant, or a default stock

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transport order type is set—the Stock Transfer – Cross Plant app (F1957) in SAP Fiori

offers a one-click stock transport order creation function.

3.1.5 Logistics Execution

Figure 3.30 shows the IMG node that controls decentralized warehouse management

integration, which you can access via the menu path Logistics Execution • Decentral-

ized WMS Integration. Here, you define your warehouse under the Application sub-

node and assign it to a storage location when setting up the enterprise structure (see

Section 3.1.2). Decentralized warehouse management allows you to include third-

party logistics providers or external warehouse management software (see Chapter

9, Section 9.2.2).

Then you set up your technical interfaces and define your distribution model. After

synchronizing the inventory stock between the storage location and the decentral

warehouse, you activate the configuration per warehouse.

Figure 3.30 Decentralized WMS Integration Node

3.1.6 Production Planning

This section explains how to configure the essential entities used in production plan-

ning (see Chapter 4). Figure 3.31 shows the Production IMG node, which you can

access directly from the IMG root. It contains the configuration of most of the master

data objects used in production planning, as follows:

� Bill of material (BOM)

Describes what components a material is made of in a hierarchical structure (see

Chapter 4, Section 4.2.1).

� Work center

Describes where and how a production step is executed (see Chapter 4, Section

4.2.2).

� Routing

Describes how a material is made (see Chapter 4, Section 4.2.3).

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Further Resources

For the purposes of this book, we’ll walk through production planning configuration

only as is relevant to inventory management, and at a higher level. For a comprehen-

sive guide on production planning, we recommend Production Planning with SAP

S/4HANA by Jawad Akhtar (www.sap-press.com/4821, SAP PRESS, 2019).

Figure 3.31 Basic Data Node

The Production Planning IMG node in Figure 3.32 contains two subnodes. Demand

Management allows you to configure planned independent requirements (PIRs),

which are explained in Chapter 4, Section 4.6. Master Product Scheduling allows you

to configure the MRP strategy with the same name (see Chapter 4, Section 4.7).

Figure 3.32 Production Planning Node

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One key activity is to define the MRP controller, which must be assigned to material

master records in the MRP view (see Chapter 4). Plant and MRP controller pairs are

used as areas of responsibility in end-user SAP Fiori app personalization to define a

set of materials an end user is responsible for from a material planner’s perspective

(see Chapter 4, Section 4.7). Configuring MRP controllers is normally done on each

SAP S/4HANA system separately.

Figure 3.33 contains all the IMG activities necessary to configure the MRP process in

SAP S/4HANA.

Figure 3.33 MRP Node

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Let’s break down the key subnodes to configure:

� Plant Parameters

Configure all planning parameters per plant, such as number ranges, MRP control-

ler, special procurement, planned order conversion, BOM explosion, external pro-

curement, and performance and rescheduling.

Figure 3.34 shows the plant-dependent settings in production planning:

– Document settings: Configuration related to documents entails number range

intervals, default values, or document conversion rules.

– ATP checking rules: If a process step requires an availability check (e.g., depen-

dent requirements, back orders), an ATP checking rule needs to be provided.

– BOM exploration: BOM exploration defines how and when BOMs are evaluated

during the MRP run.

– MRP controller: As mentioned previously in this section, the MRP controller

role is in charge of material flow in the planning process.

– Available stocks: Available stocks and special procurement define how MRP

evaluates existing stocks and creates external requirements.

Figure 3.34 Plant-Dependent Settings

Plant 0001

ATPChecking

Rules

Rescheduling

BOMHeader

Subassembly1

Item 1 Item 2

Subassembly2

Item 3

BOM Exploration

DocumentSettings

MRP Controller

AvailableStocks

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You’ll find the same IMG activities separated across several nodes under the Pro-

duction node. However, the Plant Parameters node allows you to execute and keep

track of all the parameter settings per one selected plant.

� Master Data

Helps you define MRP areas. Basically, you can plan with MRP on the plant level

(old approach used in SAP ERP) or on the MRP area level. MRP areas can be of three

different types:

– Plant type: Equals the old approach and means a planning run is carried out on

plant level. In this case, the MRP area key must equal the plant key.

– Storage location type: Allows planning runs on the storage location level. One

storage location must be assigned to only one MRP area. The Define MRP Areas

for Plant/Storage Location IMG activity is used for this configuration.

– Subcontracting type: Allows you to carry out planning runs for subcontractors.

This configuration (found in the Define MRP Areas for Subcontractors IMG

activity) needs to be repeated on the productive system because the sub-

contractor business partner number isn’t necessarily identical on two SAP

S/4HANA systems.

After the MRP areas are created in these activities, they must be assigned to the

material master record in the MRP view (see Chapter 4, Section 4.3.2).

� MRP Calculation

Below the MRP Calculation node, you’ll find the IMG activity Define Rescheduling

Check. In this activity, you set up the rescheduling check used to detect MRP situa-

tions requiring rescheduling of MRP (see Chapter 4, Section 4.7.1 for more details).

� Demand-Driven Replenishment

Allows you to choose the lead time calculation method, as shown in Figure 3.35.

You can use the historic average or a machine learning model (Chapter 4, Section

4.8).

Figure 3.35 Demand-Driven Replenishment Node

� Shop Floor Control

Allows you to configure the production order with the Order subnode plus number

ranges for confirmations, reservations, and operations and capacity requirements

(see Figure 3.36). Confirmations can be configured below the Operations node.

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Figure 3.36 Shop Floor Control Node

� KANBAN

Contains all Kanban-specific configuration options (see Figure 3.37). Notably, you

execute Define Number Range for Control Cycle and Define Number Range for

Kanban ID Number.

Figure 3.37 KANBAN Node

� Production Planning for Process Industries

Reflects the configuration activities required in SAP S/4HANA (see Figure 3.38).

You’ll notice that there are just a few additional features compared to the discrete

industries described so far. The most prominent one is the Process Order as coun-

terpart of the production order.

124

3.2 Cross Functions

Figure 3.38 Production Planning for Process Industry Node

3.2 Cross Functions

With activities related to cross functions, you can configure SAP S/4HANA functions

that aren’t related to a specific business process but are of a more generic nature. Let’s

walk through some key functions that are new as of SAP S/4HANA 1909.

3.2.1 Date Functions

Date functions allow users to specify a time period relative to a start date. This config-

uration is linked to the administrator role in the SAP Fiori launchpad and can be

reached with the Manage Date Functions app, as shown in Figure 3.39.

Figure 3.39 Simple List of Predefined Date Functions

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Date functions are used in various SAP Fiori apps. Although there is a list of SAP-

defined date functions, customers can also create their own if required.

Click on one list item to navigate to the Object page of each date function, which dis-

plays the definition’s details, as shown in Figure 3.40. You can’t edit SAP predefined

date functions, but you can create your own here.

Figure 3.40 Object Page of the Selected Date Function

To create your own date functions, click on +, and you’ll arrive at the screen shown in

Figure 3.41. You need to provide the mandatory Date Function Name. The various

options allow you to define a single date or a date range, different kinds of reference

dates, and a time frame.

Note

You can use the predefined date functions as a starting point and then copy them to

the customer namespace for further adaptations.

126

3.2 Cross Functions

Figure 3.41 Creating a Date Function in the Customer Namespace

3.2.2 Responsibility Management

Responsibility management in SAP S/4HANA allows you to define teams consisting

of one or more team members who will be responsible for a certain business process.

One prominent consuming application framework is situation handling (see Chapter

2, Section 2.3.4, for business motivation, and refer to Section 3.2.3 in this chapter for

configuration). SAP S/4HANA contains member functions and team types in its refer-

ence configuration. Responsibility management in the IMG allows you to extend the

reference configuration.

Figure 3.42 presents the basic attributes of a team in responsibility management.

Each team has a team type, which is linked to a team category. The team category

defines the consuming application framework. The responsibility definition of a

127


team is a set of filter criteria that express when the team members will be involved in

a business process. Typical filter criteria in the responsibility definition are organiza-

tional units, master data attributes, or transactional attributes. Each team has at least

one team owner who is the administrator of the team. The team members are the end

users who will take over responsibility (and are involved via the consuming applica-

tion). When the team is invoked by the consuming application framework, the frame-

work may submit attributes mapping to the filter criteria in the responsibility

definition and member functions, which might be linked to each team member. The

end users only take over responsibility if the filter criteria and member function

match (see Chapter 4, Section 4.7.9).

Figure 3.42 Attributes of a Team

Figure 3.43 displays the Responsibility Management IMG node with all its subnodes

and configuration activities:

� Define Functions/Define Function Profiles

Allow you to create your own member functions if the SAP S/4HANA predelivered

member functions aren’t sufficient for your business case.

� Responsibility Definitions

Allows you to create your custom responsibility definition if the SAP S/4HANA

shipped definitions need to be extended.

� SAP Delivered Team Categories

Allows you to map your custom member function to the SAP S/4HANA Team Cat-

egories and, eventually, with Define Team Types, to create your own team types

with a predelivered team category.

Team Type Team Category

ResponsibilityDefinition

Team Owner

Team Member

Link to situationtemplate

Attribute to distinguish teams

Filter criteria to identify team

Administrator

End user optionally mappedto 1:n member functions

128

3.2 Cross Functions

Figure 3.43 Responsibility Management Node and Activities

After setting up your own member functions and team types, your administrator can

use them when defining the teams with the Manage Teams and Responsibilities app

(F2412) in SAP Fiori, as shown in Figure 3.44.

Figure 3.44 Manage Teams and Responsibilities App: Draft-Enabled List

After selecting one item, the detail screen in Figure 3.45 shows how the previously

described team attributes can be edited. When creating a new team, follow these

steps:

1. Select a team Category, which will define the Responsibility Definitions.

2. As an optional second step, enter values for one or many Responsibility Definitions.

129


3. Add the Team Members. Optionally, you can assign Functions to each team mem-

ber (refer to Figure 3.43).

Chapter 4 and Chapter 5 provide business cases as examples.

Figure 3.45 Detail Screen to Edit a Selected Team

3.2.3 Situation Handling

Situation handling in SAP S/4HANA allows you to define business conditions that

trigger all the different kinds of notifications to a dedicated end user (see Chapter 2,

Section 2.3.4, for business motivation). SAP S/4HANA contains several situation tem-

plates that need to be copied to create an active situation type in the SAP S/4HANA

instance. The Manage Situation Types app (F2947) is used by the administrator to cre-

ate and activate situation types.

130

3.2 Cross Functions

A situation type contains the following attributes:

� ID

This is the unique key in the system.

� Status

This controls whether the situation type is active or not.

� Conditions

This option defines the filter criteria that will trigger a situation type instance.

� Batch Job Scheduling

This option defines when the criteria are evaluated during the day if the situation

template is triggered by batch jobs.

� In-App message and Notification

These settings allow you to edit how the situation type instance is displayed to the

end user in the SAP Fiori app and in the SAP Fiori launchpad notification (see Chap-

ter 1, Section 1.4).

� Preview

This option allows you to preview the situation while you’re editing.

� Notification Recipients

This option allows you to link one or more teams (see Section 3.2.2) and to set the

conditions that identify the to-be-notified team members (i.e., end users).

� Monitoring

With this option active, you can monitor the created situation type instance cen-

trally.

Figure 3.46 shows the Manage Situation Types SAP Fiori app displaying the Situation

Templates shipped with SAP S/4HANA.

Figure 3.46 Manage Situation Types App: Standard Templates Filtered for One Anchor

Object

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You can create user-defined situations by copying one of the SAP S/4HANA standard

templates in Figure 3.46. After copying the situation template, the situation shows up

under the Ready-to-Use Situation Types tab. Note that a situation must be enabled on

the detail screen to become usable (see Figure 3.47).

Figure 3.47 Manage Situation Types App: Created Situations Filtered for One Anchor Object

Figure 3.48 shows the detail page in edit mode, which you can access by clicking a

result item in the table. The Admin Information and the Conditions areas are outlined

on the screen, showing the Admin Information fields like ID and Name and Conditions

like the status of the purchase order to be met. The filter values on the right-hand side

control when a situation instance is created during the batch job run. With the pro-

cessing order on the left-hand side, you can also define conditions when the situation

instance should be removed.

Note

The Translate button helps you in creating language-dependent text of the situation

type.

If the situation template is defined to be triggered by a job, you need to complete the

next step. To schedule a batch job, go to the Batch Job Scheduling tab, as shown in

Figure 3.49, and set a Time Zone and a time (Start Batch Job At). This evaluates the

Conditions in Figure 3.48 on a daily basis.

132

3.2 Cross Functions

Figure 3.48 Detail Page of a Situation with the Admin Information and Condition Tabs

Figure 3.49 Batch Job Scheduling Tab

Next, go to the Situation Display tab, as shown in Figure 3.50. This area is used for

editing the visual appearance of the created situation instance. It’s preset by the

template and can be edited. You can use symbols (displayed with {}) representing

133


attributes of the conditions/calculated fields to populate the texts. The URL and URL

Text to Display fields allow you to provide a link to an arbitrary website within a sit-

uation notification. A situation instance can appear in the SAP Fiori launchpad’s

notifications, appear in the SAP Fiori app itself, or be sent as e-mail. If you activate

the Aggregate Notifications checkbox, all situation instances created by one batch

job run will be aggregated into one SAP Fiori launchpad notification.

Figure 3.50 Situation Display Area with In-App Situation Message, Notification, and

Preview

Note

In our experience, the entered text fragments (Message Details, Secure Notification

Details) should take into account whether aggregation is active or not.

In the Notification Recipients tab shown in Figure 3.51, you can link the situation to

one or more teams. As mentioned in Section 3.2.2, only teams with a predefined team

category linked to the situation template can be assigned as the team of a situation.

134

3.2 Cross Functions

You can pass a Responsibility Definition and Member Function to all teams of a cate-

gory to select the team members to be notified. Responsibility Rules allow you to

fine-tune the selection of team members.

Figure 3.51 Notification Recipients Area with Assigned Team Categories, Responsibility

Definition, and Member Function

Figure 3.52 shows how you can use the member function to address notifications to

different team members depending on the created situation type instance.

Figure 3.52 Working with Identical Team Types

PlantAA

InventoryManager

WarehouseClerk

User A

User B

One team withone filter and userdetermination bymember function

SituationInstanceType 110


PlantAA

Two teams withdifferent filters anduser determinationby member function



PlantBB

WarehouseClerk

User A

InventoryManager

User B

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You can use one team with identical filter criteria (i.e., responsibility definitions) or

two teams with different filter criteria (see Section 3.2.2).

Figure 3.53 shows the setup with two different team types. Basically, which setup is

more convenient depends on the use case. If team members can be solely selected by

member functions, one team is sufficient. If your team definition requires different

responsibility definitions, you’ll need to create more than one team.

Figure 3.53 Working with Different Team Types

3.2.4 Extensibility

In SAP S/4HANA, data source extensibility supports customers in extending existing

user interfaces (UIs) (SAP Fiori, e-mail templates, Adobe forms) or technical interfaces

(OData services, Simple Object Access Protocol [SOAP] services, business application

programming interfaces [BAPIs], IDocs, etc.) with additional SAP-owned fields and

custom field extensibility is used with customer-created fields (see Figure 3.54). Fur-

thermore, SAP S/4HANA allows you to extend the existing business logic at strategic

hooks (custom logic). As administrator, you can perform extensibility via the Custom

Fields & Logic app (F1481) in SAP Fiori. We’ll start with custom field extensibility in the

next section.

PlantA

MRPGroup

01

WarehouseClerk

User A



PlantBB

InventoryManager

User B

InventoryManager

User A

Two teams withdifferent team types

136

3.2 Cross Functions

Figure 3.54 Field Extensibility Options in SAP S/4HANA

Custom Field Extensibility

Figure 3.55 shows the Custom Fields tab used to manage custom field extensibility.

You see all the created custom fields, their Business Context, and their Status. Fields

that aren’t Published cannot be used for extensibility. The Business Context deter-

mines for which interfaces the custom field can be enabled.

Figure 3.55 Custom Fields and Logic: List of All Implemented Custom Fields

As a first step, you need to create a custom field by clicking the + icon, as shown in

Figure 3.56. You need to fill in some mandatory fields. The mandatory Type field con-

trols the rendering on any UI. If you select Code List, you must provide the single key-

value pairs. There are many other types, such as quantity and value fields, check-

boxes, and various numerical and text field types.

SAP1 SAP2 SAP3 Custom

SAP1 SAP2 SAP3 Custom

Customer FieldsExtension

SAP Data SourceExtension

SAP StandardFields

User Interface

Database

137


Figure 3.56 Creating a New Custom Field

Click the Create and Edit button to create the field. After creating the field, you can

edit attributes or create a Translation of texts in the General Information tab, as


As a second step, you need to add the created custom field to an interface technology.

The other sections are populated based on the business context and offer the UI or

technical interface for which this field can be enabled (see Figure 3.58). Often, the SAP

Fiori app documentation gives hints to the desired business context and requested

interface to be extended. To activate the custom field, the changes must be published

by clicking the Publish button.

Note

Keep in mind that some changes can’t be reverted after publishing because publish-

ing entails changes to database objects. After the database objects are enhanced, the

enhancement can’t be deleted.

138

3.2 Cross Functions

Figure 3.57 Editing a New Custom Field

Figure 3.58 Enabling the Custom Field

139


Data Source Extensibility

Figure 3.59 displays the Data Source Extensions tab with the option to create a new

extension by clicking +. The Extended Data Source column hints to the interface,

which is extended. The extension isn’t visible unless the Status is Published.

Figure 3.59 Custom Fields and Logic: List of All Implemented Data Source Extensions

Click on the arrow of each item to access the details of an extension, as shown in

Figure 3.60. Here, you can see the Selected Fields on the right-hand side, which

become visible in the interface due to the data source extension. The Field Path indi-

cates the source of the field on the left-hand side, where all Available Fields are listed

in a hierarchy. By selecting fields out of all the Available Fields, they become part of

the extension.

Figure 3.60 Field Selection in Data Source Extensibility

140

3.2 Cross Functions

To publish the extension, click on Publish. The results, as shown in Figure 3.61, show

that within the filter option, four fields originate in the data source extensibility, and

one is an extended custom field (MyCustomField).

Figure 3.61 Results of Data Source (Upper Rectangle) and Custom Field (Lower Rectangle)

Extension

Note

In some SAP Fiori apps, you need to complete the extension process by laying out the

extended field via runtime adaptation (RTA), as we’ll discuss later in this section.

Custom Logic

Figure 3.62 displays the Custom Logic tab with the option to implement your own

business logic at predefined SAP S/4HANA hooks (see Chapter 7, Section 7.5).

141


Figure 3.62 Custom Fields and Logic: List of All Implemented Custom Logic

Runtime Adaptation

Until now, we’ve only described the means to extend the data flow from the database

to the user or technical interfaces and back. However, another category of extensibil-

ity is to adapt the UI to customer needs. As shown in Figure 3.63, an administrator

logged on to the SAP Fiori launchpad can switch the SAP Fiori app to RTA mode by

clicking on Adapt UI in the Me Area of the SAP Fiori launchpad. In RTA, you can

change labels, hide fields, and adapt layouts. You can also place custom fields on the

UI, so that they can be used as input fields in SAP Fiori apps. RTA is a powerful tool

that allows you to create sustainable adaptations of SAP Fiori apps. While in RTA

mode, you can always switch back to navigation mode. You can reset or save your

changes so that they become permanent for all end users.

Note

Be careful when hiding mandatory fields: an SAP Fiori app might become unusable.

142

3.3 Servers

Figure 3.63 Activating UI Adaptation and Switching an SAP Fiori App to Runtime

Adaptation Mode

3.3 Servers

In general, the SAP S/4HANA system architecture is based on two main entities. On

the one hand, all the UI-related technology is part of the frontend server, and on the

other hand, the more business logic- and database logic-dependent data is part of the

backend server. Technically, both servers can be installed on the same platform but

don’t have to be. In SAP S/4HANA Cloud, the frontend apps are usually also installed

on the same tenant as the backend stack (see Chapter 9). Figure 3.64 outlines the high-

level server stack architecture of SAP S/4HANA and its different layers.

Let’s walk through configuration for both the frontend and backend servers.

143


Figure 3.64 Server Architecture of SAP S/4HANA

3.3.1 Frontend

The SAP S/4HANA frontend server contains the SAPUI5 and SAP Fiori app objects

from a technical point of view and is connected to the backend server via the OData

protocol. Therefore, the system’s entry point for all connected backend systems is

given by the SAP Fiori launchpad hosted on the frontend server.

The available SAP Fiori apps are represented as tiles in the SAP Fiori launchpad. To be

enabled to use a certain tile, a business role/business catalog must be assigned to the

related user. More details regarding the available business roles and business cata-

logs are described in Section 3.5.

To enable the data connection and access to the backend system, the related OData

services have to be activated on the frontend server. Activation can be performed

manually or per mass job. The OData services required for the single SAP Fiori app are

listed in the SAP Fiori apps reference library (see Figure 3.65), which can be found via

the menu path, Implementation Information • Configuration • ODATA Service(s)).

To activate the relevant OData services, you can use the IMG activity Activate and

Maintain Services, which you can find by following menu path SAP NetWeaver • SAP

Gateway • OData Channel • Administration • General Settings • Activate and Main-

tain Services.

Frontend Server (ABAP)

Backend Server (ABAP)

SAP HANA

SAP FioriClient

DesktopBrowser

Mobile Device

R R R

R

R

R

Internet ofThings (IoT)

144

3.3 Servers

Figure 3.65 Example of SAP Fiori Apps Reference Library: OData Services

Once you click the IMG activity, you enter the overview screen containing all of the

already activated OData services. To add and activate a new service, click the Add Ser-

vice button, as shown in Figure 3.66.

Figure 3.66 Add OData Service

In the following screen (see Figure 3.67), enter the related system alias that reflects

the connection to the backend system and press [Enter]. You can also enter the tech-

nical name of the service you want to activate (MMIM*, in our example). Then, press

[Enter], and all services that aren’t currently active and that meet the selection crite-

ria will be displayed in the table beneath the selection fields.

Figure 3.67 List of OData Services to Activate

145


Now, select the OData service that you want to activate and press the Add Selected

Services to activate it.

Note

One more interesting aspect regarding the frontend server setup is the availability of

SAP Fiori Cloud (i.e., SAP Fiori as a service). Technically, this provides a cloud-based,

hosted frontend server environment where companies can just connect their exist-

ing SAP S/4HANA backend server environment without the need for taking care of

the IT infrastructure of the frontend server.

3.3.2 Backend

The SAP S/4HANA frontend server is connected to a backend server in the SAP

S/4HANA. In addition, for the backend server, the SAP Fiori apps reference library

provides information about the required prerequisites for a certain SAP Fiori app.

Figure 3.68 shows an example form the SAP Fiori apps reference library for important

Implementation Information.

Figure 3.68 Example of Backend Server Information in SAP Fiori Apps Reference Library

The backend server owns the OData service repository objects that represent the

interfaces for external communication. The communication isn’t limited to the con-

nection of the UI presentation layer (frontend server); warehouses of IoT devices also

can be connected to the SAP S/4HANA backend server via interfaces. In this sense, not

only is the OData protocol available but also additional communication protocols, as

described in Section 3.4.

146

3.4 Basic Interfaces

3.4 Basic Interfaces

Inventory management takes records about companies’ material movements and

stock figures. The business processes around the goods of a company are reflected by

any goods movement, which must be recorded in the system. From a business per-

spective, the material flow can be distinguished between inbound and outbound

material flows. For these kinds of movements, SAP S/4HANA provides interfaces so

that manufacturing execution systems (MES) or subsidiary systems also can be con-

nected, and their material flow can be recorded in a central SAP S/4HANA system.

From a technical point of view, several technologies are supported for connecting to

inventory management in S/4HANA:

� BAPIs

� OData

� SOAP

With these services, the inventory management business objects can be accessed

from outside, and external systems can get updated in case of relevant activities.

The following inventory management business objects provide interfaces for exter-

nal communication:

� Material document

� Physical inventory document

� Reservation

� Stock

To gain insight into these interfaces, the SAP API Business Hub (see Chapter 9, Section

9.3.3, or go http://s-prs.co/v489202) is a good starting point for research, as shown in

Figure 3.69.

Figure 3.69 SAP API Business Hub

147



By just entering the related business object, you get the available interfaces as search

results based on the used protocol (e.g., OData or SOAP). Details about the structure

and definition of a certain interface can be checked by just navigating into the details

of a search result, as shown in Figure 3.70.

Figure 3.70 Interface Details in SAP API Business Hub

3.5 SAP Fiori

The SAP Fiori concept is based on user roles differentiating between apps. This means

that the available apps for an end user are based on his or her business role assign-

ment. The concept is mainly based on different entities:

� Business role

� Business catalog group

� Business catalog

Further Resources

While setting up your catalogs according your needs, you can use the SAP Fiori

launchpad content manager, which significantly simplifies the setup procedures. For

a detailed description of the SAP Fiori launchpad content manager, refer to SAP Note

2772270.

148

3.5 SAP Fiori

In this section, we’ll unpack these entities, explore user roles, and walk through the

SAP Fiori apps reference library.

3.5.1 SAP Fiori Entities

The relationship of the SAP Fiori entities is outlined in Figure 3.71. A business role con-

tains one or more business catalog groups. A business catalog group exists out of one

or more business catalogs.

Figure 3.71 Business Role Concept

The business catalog group builds a cluster of apps that belong together semantically.

In the SAP Fiori launchpad, these apps are combined also from a layout perspective,

as shown in Figure 3.72.

Figure 3.72 Business Catalog Group: Stock Monitoring

In this Stock Monitoring business catalog group example, you can see that it contains

six apps in the semantical area of stock analytical functions for monitoring stock fig-

ures.

Below the level of business catalogs, the technical catalogs provide the required infor-

mation about the app itself (like target mapping).

Business Role

Business Catalog Group Business Catalog Group …

……

Business CatalogRole



…

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The business role is focused on the business use case and processes a user might face.

Via the Maintain Business Roles app (F1303, role administrator; see Figure 3.73), you

can create your own business roles and assign business catalogs if the predelivered

business roles don’t meet your business needs.

Figure 3.73 SAP Fiori App: Maintain Business Role

3.5.2 Roles and Users

We’ve seen that the SAP Fiori launchpad concept is role based. In the SAP S/4HANA

standard delivery, role templates are included that serve as entry points for com-

pany-specific role setup.

The following business roles are predelivered with the related business catalogs

assigned in inventory management:

� SAP_BR_INVENTORY_ANALYST

� SAP_BR_INVENTORY_MANAGER

� SAP_BR_WAREHOUSE_CLERK

In the course of the book, we’ll point back to these three classic roles in inventory

management. This serves as a basis when we refer to these roles by introduction of

the different SAP Fiori apps in inventory management in SAP S/4HANA. Let’s first

take a high-level look at them:

150

3.5 SAP Fiori

� Inventory manager

The inventory manager is responsible for ensuring an uninterrupted inventory

flow that creates an optimal stock situation. This means to aim for a high through-

put of materials after goods receipt and picking of orders to keep stock level and

inventory costs low. Additionally, these tasks are performed with a low error rate.

He is responsible for implementation and documentation of quality standards

and fulfillment of legal obligations (i.e., physical inventory). His goals are met by

steady observation of relevant inventory KPIs.

� Warehouse clerk

The warehouse clerk ensures a high throughput of goods receipts and picking

orders from an operational point of view. He also checks deliveries for damages

and completeness. These tasks are performed with a low error rate and are docu-

mented according to the given process framework (i.e., physical inventory count-

ing). For his daily warehouse tasks, he makes use of transactional apps to post and

document inventory processes in the system (i.e., Post Goods Receipt for Purchase

Order app, F0843). In addition, he makes use of open-tasks check apps, such as

Overdue Materials, to focus on the important issues.

� Inventory analyst

The inventory analyst focuses on strategic inventory management by forecasting

inventory KPIs and analytic accuracy. The aim of the inventory analyst is to mini-

mize overstocks, avoiding scrapping, anticipate turnover for specific product

groups, and ensure delivery capability from a strategic point of view. She requires

effective software that delivers real-time data to ensure that analytics are as accu-

rate as possible. Observation of market trends and examination of new inventory

trends are crucial to developing future inventory management in her company.

Some more special business roles are delivered that are mainly based on the generic

ones mentioned previously.

These roles can be copied via Transaction PFCG to custom roles for specific needs.

After the role setup is finalized, the roles have to be assigned to the users in charge,

for instance, via Transaction PFCG (see Figure 3.74) or for user maintenance in Trans-

action SU01. Here, you can navigate to the User tab and enter the related users

directly on the business role level.

151


Figure 3.74 Transaction PFCG View of Business Roles

In the course of this book, we’ll touch on several apps that you also might want to test

or make use of. The following lists a collection of related business roles and business

catalogs for your reference:

� Quality technician (SAP_BR_QUALITY_TECHNICIAN)

� Receiving specialist (SAP_BR_RECEIVING_SPECIALIST)

� Inventory accountant (SAP_BR_INVENTORY_ACCOUNTANT)

� Situation handling (SAP_BR_BUSINESS_PROCESS_SPEC)

� Predictive analytics (SAP_BR_ANALYTICS_SPECIALIST)

� Design engineer (SAP_BR_DESIGN_ENGINEER)

� Production engineer (SAP_BR_PRODN_ENG_DISC)

� Production planner (SAP_BR_PRODN_PLNR)

� Production supervisor (SAP_BR_PRODN_SUPERVISOR_DISC)

152

3.5 SAP Fiori

� Production operator (SAP_BR_PRODN_OPTR_DISC)

� Production process specialist/compliance engineer (SAP_BR_PRODN_SUPRVSR_

DISC_EPO/SAP_BR_PRODN_SUPRVSR_DISC_CAM)

Note

Because myriad business catalogs are assigned to the predelivered SAP business

roles, we’ve just mentioned the relevant business roles for simplicity reasons in this

book. If you just want to assign certain aspects of an SAP business role to your own

user and business role, you can check out the assigned business catalogs of the SAP

business roles and assign the business catalog accordingly.

3.5.3 SAP Fiori Apps Reference Library

The SAP Fiori apps reference library is a web-based tool that provides an overview

about the available app in the different product versions. The library can be used in

different stages of a project. To get an overview, prepare decisions regarding which

apps will be used, and during implementation, a lot of needful information is given,

for example, the required OData services that must be activated to be used in a cer-

tain SAP Fiori app.

You can select the app of interest by using the navigation bar (or just filtering), as


Figure 3.75 Selection of SAP Fiori Apps in SAP Fiori Apps Reference Library

153


Select an app, and the related app information is displayed. In this example, Material

Documents Overview (F1077) is selected, which opens the screen shown in Figure

3.76.

Figure 3.76 Header of SAP Fiori App in SAP Fiori Apps Reference Library

By selecting the delivery version in the dropdown box (SAP S/4HANA, in this exam-

ple), the different deployment versions can be selected:

� SAP S/4HANA

� SAP S/4HANA Cloud

According to the selection of the delivery version, the SAP Fiori apps reference library

displays deployment-specific information.

The description of the PRODUCT FEATURES includes a screenshot and also a link to

the related app documentation. You can also access the IMPLEMENTATION INFORMA-

TION, which, as mentioned previously, contains important SAP notes to be imple-

mented, for example. In the SAP S/4HANA Cloud delivery version, the related Scope

Items are also listed here (see Chapter 9, Section 9.1.1).

Another piece of interesting information is outlined at the end of the product fea-

tures: a list of other apps in the same area that might give insight into related apps.

154

3.6 Summary

3.6 Summary

SAP S/4HANA provides a lot of configuration and setup capabilities to steer the

inventory management processes based on your requirements. The IMG allows you

to configure the organizational units and processes around inventory management.

Cross functions are services consumed by different apps, mainly supporting stream-

lining processes. Extensibility enables you to add additional custom fields to busi-

ness apps and business processes.

With several technical deployment options of the UI layer (frontend), more flexibility

is given with SAP S/4HANA. In addition, staring with the SAP Fiori launchpad is made

easy by the provision of predefined business roles and business catalogs that may be

the right entry point for you. On top of the configuration and enhanced user business

role handling, SAP S/4HANA provides many communication interfaces for connect-

ing your SAP S/4HANA core system to your related business environment.

After laying this foundation of information, we can now start to take a deeper look

into the inventory management business areas and how they are reflected in SAP

S/4HANA. We’ll start with planning and adjusting inventory in the next chapter.

155

Chapter 4

Planning and Adjusting Inventory

In this chapter, you’ll start to plan your inventory. We’ll discuss plan-

ning strategies, cover the master data of production planning, and

then dive deep into the SAP S/4HANA planning tool.

Before inventory processes can be executed, an organization needs to plan what

inventory to carry and where. When it comes to production planning, there are three

major steps, and each step is associated with the recommended SAP Fiori apps, which

will be discussed in detail in this chapter:

1. Managing production master data

Step 1 deals with activities related to production master data. Some production

master data originates in production engineering and therefore isn’t covered in

detail here. The relevant apps and transactions are as follows:

– Manage Work Center Capacity (F3289)

– Display BOM (Transaction CS03)

– Display Routing (Transaction CA03)

– Display Master Recipe (Transaction C203)

2. Make-to-order (MTO) and make-to-stock (MTS)

Step 2 is about creating planned independent requirements (PIRs), whereas

requirements based on sales orders are created in sales and distribution. The rele-

vant app is as follows:

– Manage Planned Independent Requirements (F3445)

3. Material requirements planning (MRP)

Step 3 lists all the direct planning activities, such monitoring material coverage/

shortages, monitoring internal and external requirements, scheduling and evalu-

ating MRP runs, converting planned orders/purchase requisitions, and handling

exceptions. The relevant apps are as follows:

157

4 Planning and Adjusting Inventory

– Monitor Requirements and Material Coverage (F0247)

– Manage/Convert Planned Orders (F4171)

– Schedule MRP Runs/Display MRP Key Figures/Display MRP Master Data Issues

(F1339, F1426, F1425A)

– Monitor External/Internal Requirements (F0246, F0263)

– Detect Unnecessary Supply Elements (F3853, see also SAP Note 2733550)

As explained in Chapter 2, Section 2.2, SAP S/4HANA includes role templates to help

customers quickly enable the end user in effectively using the SAP Fiori apps. This

chapter deals with the production planner (SAP_BR_PRODN_PLNR). Production

planners track materials and inventory, ensuring that materials are available when

they are needed and that a sufficient value of inventory is maintained. They also are

in charge of the production schedule, purchase requisitions, and production orders.

If the inventory falls below a necessary value and can’t meet material demand, typi-

cally an MRP run will create planned orders as needed. However, in special cases that

can’t be solved automatically, the production planner must step in.

Note

As explained in Chapter 2, the production planner can be supported by the inventory

analyst to analyze and monitor strategic challenges in inventory management. This is

the connection between the analysis phase and the plan and adjust phase in Chapter

2. Although the SAP Fiori apps described so far offer analytical capabilities, the strate-

gic analysis is carried out by different tools, which are all described in Chapter 8.

This chapter introduces different planning strategies and provides step-by-step

instructions for how to use SAP Fiori apps in SAP S/4HANA for capacity planning,

MTO and MTS, MRP, demand-driven material requirements planning (DDMRP), and

Kanban to match demand with supply and adjust each. We’ll close with a look at new

and upcoming functionalities.

4.1 Planning Strategies

Usually, organizations do their planning with a time horizon in mind. Long-term

planning takes into account business development strategy, marketing, and long-

term product strategies. Midterm planning is about executing these strategies based

on the long-term planning forecast.

158


SAP Integrated Business Planning (SAP IBP) is used for long-term and midterm

planning if your supply chain planning strategy is implemented outside the SAP

S/4HANA instance.

Further Resources

More information about SAP IBP can be found in SAP Integrated Business Planning:

Functionality and Implementation by Sandy Markin and Amit Sinha (www.sap-

press.com/4615, SAP PRESS, 2018).

Short-term planning is started by MRP in SAP S/4HANA. If required, capacity require-

ment planning (CRP) and production planning/detailed scheduling (PP-DS) is used to

further break down the MRP output into more detailed operations in SAP S/4HANA.

Eventually a manufacturing execution system (MES) is used to execute, monitor, and

confirm the production. This book focuses on the MRP part of the planning, as it has

the strongest impact on inventory management.

Figure 4.1 summarizes the interplay between the different planning horizons:

� Long-term planning

Falling under sales and operation planning (S&OP), long-term planning can be

done using SAP IBP or legacy software. The output of long-term planning feeds the

midterm planning.

� Midterm planning

Also falling under S&OP, midterm planning can be fulfilled by S&OP, SAP IBP, pre-

dictive MRP, or legacy software.

� Short-term planning

Short-term planning is executed by MRP, CRP, PP-DS, and production execution.

Note

You can feed PIRs as results of a legacy-based planning process into SAP S/4HANA

with the appropriate interface (see Chapter 3).

We’ll walk through the key planning strategies in the following sections.

159




Figure 4.1 Planning Horizons

4.1.1 Production Planning

When it comes to inventory management, there are several production planning

strategies to choose from. The main strategies are as follows:

� Make-to-stock (MTS)

The output of the production process is stocked because it’s not linked to a con-

crete customer requirement. Therefore, planning is often done based on forecasts.

� Assemble-to-order (ATO)

The output of the production process with a low vertical integration is linked to a

customer requirement based on a limited subset of product variants.

� Make-to-order (MTO)

The output of the production process with a high vertical integration is linked to a

customer requirement based on various product variants.

� Engineer-to-order (ETO)

The output of the production process with a high vertical integration is engi-

neered according to an individual single customer requirement.

Figure 4.2 shows the key factors influencing your production planning strategy and

hence also your inventory situation. The listed planning strategies are closely linked

to the following factors:

Long-TermPlanning

MidtermPlanning

Short-TermPlanning

160


� Production variants

How many different variants of one product do you plan to offer to your custom-

ers?

� Production volume

How many finished products do you plan to sell in the market?

� Value per product

How much value do you generate with each product?

� Production trigger

What business model are you using to sell your product to the market?

Figure 4.2 Planning Strategies

In addition to your go-to-market strategy, another factor that influences your pro-

duction planning strategy is the service-level agreement (SLA) you offer to your cus-

tomers or, in other words, the market lead time of your finished goods.

Figure 4.3 explains how the total production lead time is calculated by the maximum

replenishment lead time within all components, plus the production time of the fin-

ished good. If total production lead time is greater than the SLA (i.e., market lead

time), you’ll opt for an MTS planning strategy or risk your SLA. If the total production

lead time is shorter than your SLA, you have the choice to plan with MTS or MTO/ATO

strategies.

Key Factor Make-to-Stock Assemble-to-Order

Make-to-Order Engineer-to-Order

ProductVariants

ProductionVolume

Value perProduct

ProductionTrigger

Forecast orService-LevelAgreement

Sales Order Sales Order Sales Order

161


Figure 4.3 also outlines that the planning strategies within the supply chain of one

finished good might vary. As shown, one option to shorten the total production lead

time and increase the SLA is to stock semifinished goods within the supply chain (SA3

in Figure 4.3), which are on the critical path. Hence, you decouple the production of

finished goods from the availability of M3.

Figure 4.3 SLA and Lead Time Influencing the Planning Strategy

The production planning strategies outlined so far exist in theory. In real life, how-

ever, you’ll often plan with a combination of different planning strategies:

� For example, if you like to boost your market share with a special promotional

variant of your original product, you’ll plan this with an MTS strategy.

� If you have a complex supply chain network, you may plan the finished product

with MTO, but some components used in several product variants are planned

with MTS.

� Consumer behavior may influence planning strategies. For example, some cus-

tomers want to configure their desired car individually with the help of configura-

tions tools, resulting in an MTO planning strategy. Others simply buy the car

model displayed in the car shop “off the shelf,” which is planned according to an

MTS strategy.

t

FG

SA1

SA2

M1

M2

SA3

M3

Total lead time

Market lead time

Legend:

FG: Finished good

SA1, 2, 3: Subassembly

M1, 2, 3: Material

Inventory required

MTO, if product hascustomer-specific

configuration

Production ondemand, if supportedby market lead time

Reorder pointplanning, MTS, and

stable demand apply

Dependent requirement

MTS with planningagainst forecast

162


In fact, SAP S/4HANA supports these hybrid scenarios as you can plan each material

with a different planning strategy. As we’ll see in Section 4.8, SAP S/4HANA explicitly

supports the idea of demand-driven replenishment as a special kind of hybrid plan-

ning strategy with an intelligent automation-based decoupling strategy.

4.1.2 Discrete versus Process Manufacturing

SAP S/4HANA distinguishes between discrete and process industries in production

planning. Discrete manufacturing is the production of distinct items (automobiles,

smartphones), whereas process manufacturing yields rather undifferentiated prod-

ucts (chemicals, food, oil). Some of the differences are mainly in terminology (see Sec-

tion 4.2.2 and Section 4.2.3). Naturally some differences reside in the configuration

(see Chapter 3), and some differences are in the created documents; for example, each

planned order can be converted into a production order or a process order.

4.1.3 Demand-Driven versus Plan-Driven Planning

Demand-driven planning implies there is a concrete product demand out of the sales

process that triggers the manufacturing process. In SAP S/4HANA, this is, for exam-

ple, a sales order item on the finished good level (i.e., primary demand). Planning of a

sales order item may result in dependent requirements (i.e., secondary demand),

which are needed to assemble the finished product (see Figure 4.4).

Figure 4.4 Sales Order Item of Finished Good Creates Dependent Requirements

Desktop PC with Monitor Desktop PC Components

1X Monitor + Cable

1X Desktop Case1X Mainboard1X Power Supply + Cable1X CPU (Microprocessor X)4X 5 GB DRAM2X Hard Disc Drive 1 TB1X Optical Disc1X Keyboard + Cable1X Mouse + Cable1X High-End Graphics Card

Dependent RequirementsSales Order Item

163


Sales orders can be created in SAP S/4HANA automatically by the sales process, or the

demand can be entered manually (see Section 4.6).

Plan-driven planning, on the other hand, implies that the manufacturing process is

triggered based on a previously created plan. This plan is created based on calculated

forecasts, and its creation normally follows three general steps, as shown in Figure 4.5:

1. Forecast is collected for a defined time frame on an abstract level based on a previ-

ously agreed algorithm.

2. Forecast is distributed based on an applicable formula between products and pro-

duction intervals.

3. Planned primary demands are converted into PIRs per production interval.

Figure 4.5 Converting a Forecast into PIRs (Schema on Left; Example on Right)

If desired, the SAP S/4HANA system can be configured so that the forecast in a given

time period is matched against incoming sales orders. Thus, the forecast consump-

tion can be monitored. If there is a surplus at the end of the time period, the forecast

was too high (example in Figure 4.6); if there is a negative difference, the forecast was

too low.

SAP S/4HANA offers several functionalities, such as S&OP, to generate input for plan-

driven manufacturing and to monitor and adjust the execution of such plans.

AnnualForecast

Create PIRs• Convert forecast into PIRs

• Distribute total annual forecast per product and production interval

• Calculate total annual forecast per product group

Product andSeasonal

Breakdown

164

4.2 Production Master Data Overview

Figure 4.6 Forecast Consumption by Matching Sales Orders against the Forecast

4.2 Production Master Data Overview

Before we start with production planning, let’s begin with the master data. In this sec-

tion, we’ll define the master data elements and provide an overview of their relation-

ship.

4.2.1 Bill of Material

A bill of material (BOM) is a component hierarchy comprising all components needed

to assemble the finished product (see Figure 4.7). BOMs can have a different usage

and can have more than one alternative describing product variants. Each node of

the hierarchy—also called the subassembly—has its own BOM number and can be

referenced by different BOMs. In some cases, these references become recursive

(most likely in process industries).

The example in Figure 4.7 sketches the BOM of the desktop PC ordered in Figure 4.4.

The subassembly (mainboard) could also be part of another BOM belonging to differ-

ent finished products. Each BOM has a validity, and its lifecycle is normally maintained

600

Forecast

Sales Order 1

Sales Order 2

Sales Order 3

Sales Order 4

Sales Order 5

Non-Consumed Forecast

500500

-20

-40

-60

-70 225

-50400

300

200

100

0

165


in a product lifecycle management (PLM) function. Section 4.2.4 describes how BOMs

are used in production planning, and Section 4.5.2 explains the SAP Fiori apps to dis-

play and explore BOMs. Naturally, BOMs are used in DDMRP to identify the best decou-

pling points, as described in Section 4.8.

Figure 4.7 Desktop PC Shown as a BOM

4.2.2 Work Center/Resource

Work centers (in process industries, the term resource is used instead) represent

machines, employees, or production lines as master data objects in production plan-

ning. Work centers are used in routings (see the next section) and carry information

to calculate scheduling and capacity (see Section 4.5).

4.2.3 Routing/Master Recipe

Routing (in process industries, the term master recipe is used instead) defines how

you process work on the floor. Routing is composed of a series of operations, also

called routing steps. Each step is linked to a work center (refer to previous section).

Routing management is explained in Section 4.5.

4.2.4 Production Version

The production version is the link between the BOM alternative (see Section 4.2.1) and

routing/master recipe (see Section 4.2.3). Production versions may be time depen-

dent and lot size range dependent. You can also assign a storage location where the

produced material is stored. Production versions are used in MRP and S&OP.

Desktop PC

Mainboard

CPU DRAMHigh-EndGraphics

Card

Case Hard Disk Optical Disk

1 1 1

1 1

2

5

Finished Product Component Quantity

Subassembly

Component

166

4.3 MRP Overview

4.2.5 Production Supply Area

The Production Supply Area (Fast Entry) app (Transaction PK05S) and the Manage

Production Supply Area app in SAP Fiori allow the creation and edition of production

supply areas required for planning with Kanban (see Section 4.4). The production sup-

ply area is linked to a storage location.

4.3 MRP Overview

MRP describes a process that explores independent requirements and creates depen-

dent requirements based on different algorithms using the production master data

explained in Section 4.2.

Input to MRP can be PIRs or sales orders of goods, which you plan to sell to your cus-

tomers. To plan your finished good, you need to maintain a set of information in the

system:

� Material master entry of the finished good, including planning strategy

� BOM of the finished good describing all its components and subassemblies (see

Section 4.2.1) or an external source of supply

� Routing describing the tasks to assemble the finished good (see Section 4.2.3)

� Material master entry of all components and subassemblies describing their sub-

assemblies, components, and routing

Overall, you need a nested description of where to get all the components of your fin-

ished goods and how to assemble them. Nesting terminates in the moment a compo-

nent is procured externally.

MRP calculates which components are needed when in which sequence for each fin-

ished good based on the preceding description and which resources are required to

assemble them when to fulfill the PIR/sales order. As intermediate output, planned

orders or purchase requisitions are created, which are converted into production

orders and purchase orders, respectively, or they can create dependent requirements

that are fed into the MRP process again. Eventually, the result of this multistep plan-

ning process is a set of purchase orders for external procurement and a set of produc-

tion orders for in-house production.

167


4.3.1 Generic MRP Capabilities in SAP S/4HANA

All SAP Fiori apps in production planning offer generic capabilities, although a few

are only available for specific SAP Fiori apps. You’ll see the following capabilities pop

up throughout the chapter:

� Area of responsibility

With the area of responsibility, all SAP Fiori apps offer a common tool to end users

so they can personalize their working environment. Each end user must define the

pairs of plant and MRP controllers he or she wants to use in data selection.

� Quick views

With quick views, users can start a quick inspection of objects such as MRP ele-

ments or master data by clicking on the visible link. Quick views also include addi-

tional navigation targets connected to the inspected object.

� Variant management

All simple lists offer variant management to end users so they can create person-

alized selection/layout variants for specific tasks. Variants can be private or public

(shared).

� Notes

Many objects support end users in taking notes and displaying note history to doc-

ument business decisions.

� Change management

An end user can activate change management so that changes to purchase orders

must be requested and approved by the vendor.

� Open related SAP Fiori apps

Based on the end-user authorizations, additional context-sensitive navigation tar-

gets (SAP Fiori apps) are offered for problem-solving.

4.3.2 Planning Process

Figure 4.8 outlines the entire planning process via MRP. In the upper-right corner, the

input to MRP is shown (PIRs, sales orders, dependent requirements). In the lower

part, the output of MRP (production orders, purchase orders) is shown.

During a planning run, MRP matches the required stock against the existing stock to

calculate the net requirements (upper part of Figure 4.9).

168

4.3 MRP Overview

Figure 4.8 Short-Term Planning Schema with Plan-Driven and Demand-Driven Strategies

Figure 4.9 MRP Strategies

PIRPlanningStrategy

InventorySituation

BOMExplosion

DependentRequirements

PlannedOrder

ProductionOrder

PurchaseRequisition

PurchaseOrder

DemandPlanning

MRP

In-HouseProduction

ExternalProcurement

Sales OrderSales and

Distribution

Plan-Driven

Demand-DrivenProcess Flow: MRP

Input: Demand

Output: Net Requirements

Supplier

MRPProcedure

None Deterministic

MasterProductionScheduling

MRP

Stochastic(Consumption-

Based)

Reorder Point Forcast-Based Time-Phased

Demand-Driven

Demand

Supply

Planned Independent RequirementsDependent Requirements

StockFixed Receipts

Net Requirements Calculation

• External Procurement (Purchase Requisition)• In-House Production (Production Order)

MRP Strategies: Overview

MRP Strategies: Algorithms

169


If the required component is procured externally, the output of MRP is eventually a

purchase requisition, which will be later converted into a purchase order. If the

required component is produced internally, the output of MRP is a planned order,

which will be eventually converted into a production order. The actual planning is

done with different algorithms (lower part of Figure 4.9), which can be subdivided

into three groups:

� Deterministic

� Stochastic

� Demand driven (see Section 4.8)

A deterministic algorithm is based on the assumption that the quantity of the

required material can be calculated according to the rules defined in the production

master data (see Section 4.2.1 – Section 4.2.5). The difference in the deterministic algo-

rithm lies in the way the dependent requirements are calculated and considered

during the planning run.

A stochastic algorithm is based on the assumption that the quantity of the required

material can be derived from consumption of the required material in the past.

Unlike a deterministic algorithm, a stochastic algorithm is consumption based by

reordering according to a set of rules, by taking forecast into account, or by using a

time-phased approach.

In SAP S/4HANA, the MRP strategy is determined by the MRP type assigned to the

material master record in the MRP view, as shown in Figure 4.10.

The MRP types starting with P or M represent the deterministic planning strategies.

Depending on the MRP type, additional fields, such as Planning Time Fence, must be

maintained in Figure 4.10. MRP types starting with M define master production

scheduling, whose algorithm creates dependent requirements only to the first BOM

level, allowing planners to adjust the intermediate result before all dependent

requirements are planned.

MRP types starting with V or R represent the stochastic planning strategies. Reorder

point (starting with V) is a simple algorithm, which creates planned orders if inven-

tory stock falls below a certain threshold, which is maintained as a Reorder Point in

Figure 4.10.

Depending on the MRP type, the reorder point is maintained manually or calculated

automatically. A time-phased planning strategy starting with R requires the Planning

Cycle field in the material master and ensures that the material is planned only in a

designated time frame.

170

4.3 MRP Overview

Figure 4.10 Material Master MRP View

MRP types starting with D represent demand-driven replenishment strategies, which

are explained in detail in Section 4.3.4.

4.3.3 MRP Live

MRP Live is a reimplementation of the classic MRP optimized for SAP S/4HANA with

performance improvements and allows live planning of dedicated materials. MRP

Live has stricter requirements for master data during planning. Hence, if planning

with MRP Live fails, the system automatically tries to plan with classic MRP. If plan-

ning fails, an error code is generated. Section 4.7.6 gives some hints on how to deal

with master data issues during MRP Live runs.

Further Resources

SAP Note 1914010 explains for each release the restriction for planning in MRP Live on

SAP HANA.

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4.3.4 DDMRP

The Demand Driven Institute (http://s-prs.co/v489203) defines DDMRP as the follow-

ing:

“... a formal multi-echelon planning and execution method to protect and promote

the flow of relevant information.”

Essentially, DDMRP decouples the flow of semifinished goods at strategic steps of the

supply chain by establishing dynamic material buffers. These buffers smooth any

fluctuations in the material demand and reduce, for example, the bullwhip effect

known in supply chain planning. DDMRP can be used in a broad range of business

scenarios, such as MTO, MTS, component manufacturing, or subcontracting. One

advantage of DDMRP is the ability to ensure high SLAs while keeping the inventory

low. The key feature of DDMRP is the dynamic buffer management based on historic

figures, such as lead time or demand.

Figure 4.11 shows the execution cycle of DDMRP and how SAP S/4HANA supports the

different steps.

Figure 4.11 Implementation of the DDMRP Methodology in SAP S/4HANA

Another advantage of DDMRP is that it can gradually be implemented as a replenish-

ment strategy without disturbing existing replenishment strategies. Only the mate-

rials identified to be buffered need to be switched to the DDMRP replenishment

ReplenishmentPlanning

Buffer Sizing(Operational)

Buffer Positioning(Strategic)

ReplenishmentExecution

Individualized

Demand-Drivenwith Buffer

Ad Hoc Prod.

MaterialStock/

Stock Level

Stock+

Ordered

Proposed

Order Qty

FIO-NAV-0815 3 13 30

FIO-PST-1501 6 16 15

FIO-MST-3006 55 135 0

FIO-PRD-0807 22 56 0

FIO-NAV-0101 23 23 127

FIO-NAV-0404 44 44 26

FIO-MST-0821 25 25 0

FIO-PRD-0822 88 88 0

Lead Time

Average Daily Usage

Classification

Analytics(Including Basis for Feedback)

Lead Time

Average Daily Usage

…

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4.4 Kanban Overview

strategy. Section 4.8 describes in detail the SAP Fiori apps supporting the implemen-

tation of the DDMRP replenishment strategy in SAP S/4HANA.

4.4 Kanban Overview

Kanban was developed by Toyota and represents a material flow control system

based on the pull principle (see Figure 4.12). All materials are transported in containers

(bins) to the work center. If a container is emptied, its refill is triggered (pull).

Figure 4.12 Kanban Control Cycle

In simple terms, Kanban is planning with a fixed lot size and a fixed reorder point.

SAP S/4HANA defines two main categories of the Kanban control cycle. The first is the

event-driven Kanban control cycle, which means that Kanban containers are created

on demand (e.g., triggered by an event). The second is the classical Kanban control

cycle with a predefined set of Kanban containers. There are three principal processes

of Kanban container replenishment in SAP S/4HANA:

� External procurement

External procurement can be fulfilled by a purchase order, scheduling agreement,

stock transport order, or summarized just in time (JIT) call (see Section 4.9.2).

� Transfer postings

Transfer postings are created by stock transfer reservation or direct material trans-

fer postings, SAP Extended Warehouse Management (SAP EWM) deliveries, ware-

house management transfer requirements, or warehouse tasks.

KanbanDemand

KanbanSupply

Filled Kanban container moves to the work center demanding the Kanban.

Empty Kanban container moves to thework center supplying the Kanban.

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� Internal production

Internal production is fulfilled by planned orders eventually to be converted into

production orders.

A Kanban control cycle is always linked to a material, plant, and production supply

area (discussed in Section 4.2.5). From the inventory perspective, one Kanban control

cycle is also tied to a storage location (or destination bin if using SAP EWM) by its pro-

duction supply area in which its stock quantities are listed. From the production per-

spective, one Kanban control cycle is linked to a work center, where its content is

consumed (see Section 4.2.2). For a summarized JIT call as the replenishment process,

a summarized JIT call profile is assigned to the control cycle.

Section 4.9 explains in detail how SAP S/4HANA supports production planning with

Kanban.

4.5 Capacity Planning and Production Master Data

Before starting any planning activities, we need to take care of the production master

data evaluated during planning. To begin, we’ll briefly discuss how the work center

capacity is managed and production master data is maintained, before moving on to

key SAP Fiori apps for BOMs and routing.

Note

For material master planning data, the material object page displays the details of

one material master record. The sections related to external procurement are espe-

cially of interest for production planning.

You can quickly find the object page of a desired material by using enterprise search

in SAP Fiori launchpad (see Chapter 1, Section 1.4.3).

4.5.1 Manage Work Center Capacity

The Manage Work Center Capacity app (F3289), shown in Figure 4.13, allows you to

plan and adjust the capacity of work centers if the work center capacity is set to finite

scheduling. You can detect overload situations and balance several factors to achieve

optimal usage of the work center.

This is a draft-enabled simple list SAP Fiori app (see Chapter 1, Section 1.4.2), hence the

filter criteria allow you to select for a certain Editing Status. You can select a simple

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list of work centers based on the work center itself, master data attributes, transac-

tion data attributes, and administrative data. The Evaluation Horizon limits the time

frame to look at in the future by offering several time buckets, and the Load Type

allows you to filter for certain load conditions. The initial list displays the main attri-

butes per work center and summarizes the Utilization as a micro chart.

Figure 4.13 Capacity Center List

Click the arrow at the end of the line item to access the Work Center Capacity details

page, as shown in Figure 4.14. The details page shows the Utilization as a chart/table.

Selecting a chart column updates the Operation section below, displaying all opera-

tions within the selected time frame. If needed, you can focus exclusively on all over-

due operations by selecting Overdue in the Operations section in Figure 4.15.

Figure 4.14 Capacity Planning Details Page of a Work Center with Chart Overview

The Shifts section (see Figure 4.15) shows all shifts starting with the first day of the dis-

played time frame. If you switch to edit mode by clicking Edit, you can edit the shifts

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of the work center. You can add (click the + button), Delete, or edit existing shift inter-

vals. When editing, you can change the Shift Utilization (i.e., net working time) or the

Number of Capacities (i.e., number of parallel tasks per work center).

Figure 4.15 Capacity Planning Details Page of a Work Center with Operations and Shifts in

Edit Mode

4.5.2 Display BOM, Display Multilevel BOM Explosion, and Find BOM

for Components

The following SAP Fiori apps are used for detailed analysis and display of BOM infor-

mation during production planning. There are more advanced SAP Fiori apps for

managing BOMs available to product engineers (not covered in this book).

The Display BOM app (Transaction C503) helps you display simple BOMs. On the

entry screen shown in Figure 4.16, you must enter the Material, Plant, BOM Usage,

and Alternative BOM (see Section 4.2.1). The BOM structure is always time dependent.

After clicking Item, the results screen shown in Figure 4.17 displays all components of

the BOM plus the BOM header information in detail. If you double-click a BOM Com-

ponent showing an assembly (i.e., the Asm column box is checked), you navigate to

the assembly.

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Figure 4.16 Entry Screen to Display a BOM

Figure 4.17 Material BOM Components List

The next SAP Fiori app, Display Multilevel BOM Explosion (Transaction CS12), helps

you explore all levels of a BOM from the top down. On the entry screen shown in

Figure 4.18, you must enter Material, Plant, and BOM Application (normally, “PP01”

for production-general BOM).

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Figure 4.18 Entry Screen to Explode a Material BOM

After clicking Execute, the results screen shown in Figure 4.19 displays a hierarchical

list of all BOM levels.

Figure 4.19 Material BOM Explosion to All Levels

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The final SAP Fiori app for BOM information, Find BOM for Components (Transaction

CS15), allows you to find all components of any BOM containing a dedicated material.

You can explore a BOM one level up in the BOM hierarchy.

On the entry screen shown in Figure 4.20, you enter the Material, Type of where-used

list, and kind of BOM to look at in the Used in options (Material BOM, in our example).

You can access the view screen by clicking Next Screen in the upper-left corner, where

you can control the output (see Figure 4.21).

Figure 4.20 First Entry Screen Defining Search Criteria

Figure 4.21 Second Entry Screen Defining Output Criteria

After clicking Execute, the results screen shown in Figure 4.22 displays a simple list of

all components in which the material is used.

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Figure 4.22 Material BOM Where-Used List

4.5.3 Display Routing/Display Master Recipe

The next two SAP Fiori apps we’ll discuss are used for detailed analysis and display of

routing/master recipe information, respectively.

The Display Routing app (Transaction CA03) helps you display routing of a material.

On the entry screen shown in Figure 4.23, you must enter Material and Plant.

Figure 4.23 Entry Screen to Display Routing (Buttons in the Footer Not Shown)

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After clicking Continue, the results screen shown in Figure 4.24 displays the opera-

tions per work center of this particular material.

Figure 4.24 Material Routing with Operations, Sequence, and Allocation

You can directly navigate to the Sequences, Operation, Allocation, and Work Center

by selecting an item and choosing the appropriate menu entry.

An additional SAP Fiori app, Display Master Recipe (Transaction C203), helps you dis-

play the master recipe of a material. On the entry screen shown in Figure 4.25, you

must enter the Recipe Group (all recipes belonging to one production process) or a

Material and Plant.

Figure 4.25 Entry Screen to Display the Master Recipe (Footer Buttons Not Shown)

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After clicking Recipe Header, the results screen shown in Figure 4.26 displays the

operations per resource of this particular recipe group/material.

Figure 4.26 Master Recipe with Operations and Materials

If you switch to the Materials tab, you can see the finished good and the BOM this rec-

ipe group is using.

4.6 Make-to-Order and Make-to-Stock

In this section, we’ll create some PIRs in case we have a plan-driven scenario (either

MTO or MTS).

The Manage Planned Independent Requirements app (F3445) can be used to create

and edit PIRs per material having a forecast indicator in the material master record.

The initial screen shown in Figure 4.27 allows you to select the materials you want to

edit according to several filter criteria, most notably the following:

� Reach

Define the time horizon you want to look at.

� Accuracy

Match the PIRs to the actual demands in the system.

� Upload

Mass upload PIRs created externally in a column-separated values (CSV) format.

� Create

Create different versions of one material’s PIR to reflect different sources of the

PIR.

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Figure 4.27 Simple List to Maintain PIRs

You can navigate to a details page for each entry by clicking the arrow to arrive at the

screen shown in Figure 4.28. Here, you can see the PIRs of materials and compare PIRs

to sales quantity.

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Figure 4.28 Details Screen after Navigation

If you select Edit in Figure 4.27, you’ll arrive at the screen shown in Figure 4.29 where

you can change the entered PIR quantities.

Figure 4.29 Editing Screen

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Alternatively, in Figure 4.27, you can select the checkbox for one or many entries and

start mass editing directly on the entry screen (via the Edit button). This will lead you

to the Mass Maintenance screen of Figure 4.30.

Figure 4.30 Mass Maintenance Screen

You have the following three options for your Proposed Quantity after selecting the

period you want to change:

� Copy from Reference Material

Enter a reference material, and the PIRs of this reference material are transferred

during mass maintenance.

� Enter Quantity Directly

Enter a quantity, which is transferred during mass maintenance.

� Forecast Quantity

The quantity calculated by a forecast is transferred.

Note

In addition to the Manage Planned Independent Requirements app, there are two

additional SAP Fiori apps called Create Planned Independent Requirements and

Change Planned Independent Requirements for detailed operations on PIRs that

aren’t covered by the Maintain PIRs app, such as schedule lines.

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4.7 MRP Live

We’ll now start to plan according to the planning strategies outlined in Section 4.1.

Initially, we’ll discuss how MRP Live interactively supports planning and propose

solutions for material coverage issues. Then, we’ll cover how to set up regular plan-

ning runs in batch mode and how to evaluate the results. Finally, we’ll discuss how to

monitor requirements and how to be automatically notified of requirement changes.

4.7.1 Monitor Requirements and Material Coverage

The SAP Fiori apps Monitor Material Coverage (F0251) and Monitor Material Coverage

– Net Segments (F0247A) form the cornerstone of all planning-related activities in

SAP S/4HANA. As shown in Figure 4.31, you get a supply/demand overview per mate-

rial. You can inspect the material master, execute immediately an MRP Live planning

run, or use the system proposals/context-sensitive action to solve a critical situation.

You can document all actions by note-taking.

Figure 4.31 Monitor Material Coverage in the Center of All Planning Activities

MonitorMaterialCoverage

MaterialMaster

MRP LivePlanning

Supply/DemandOverview

Notes,Context-SensitiveActions

186

4.7 MRP Live

Note

In contrast to SAP ERP-based planning transactions like Transaction MD06, the SAP

Fiori app Monitor Material Coverage isn’t based on the results of the last MRP run

but displays real-time data.

There is then a further divide between two SAP Fiori apps (shown in Figure 4.32):

Monitor Material Coverage – Net Segments 1 and Monitor Material Coverage – Net/

Individual Segments 2. Material Coverage – Net Segments doesn’t show the demand

element (e.g., a sales order), and Material Coverage – Net/Individual Segments dis-

plays the demand element in the Individual Segment column (see Figure 4.32). The

second app is therefore ideally used in an MTO production planning scenario.

Figure 4.32 Comparing both Material Coverage Apps

Let’s take a closer look at the key aspects of these apps.

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Area of Responsibility

Both applications offer the end user a personalized view of the core planning-related

activities by defining an Area Of Responsibility (combination of plant and MRP con-

troller).

You can access the app’s personalization in the Me Area of the SAP Fiori launchpad

(see Chapter 1, Section 1.4.3). Here you can set your Area Of Responsibility, as shown in

Figure 4.33, by clicking on Application Settings.

Figure 4.33 Area of Responsibility Setup

Note

If the selected materials displayed in the Material Coverage app don’t meet your

expectations, check your Area of Responsibility settings.

Both the Monitor Material Coverage – Net Segments and Monitor Material Coverage

– Net/Individual Segments apps allow you to filter for all materials with net require-

ment segments having a shortage issue according to the selected shortage definition

by your Area of Responsibility. They are designed according to the simple list pattern.

You can click Go to see the result list (see Figure 4.34).

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4.7 MRP Live

Figure 4.34 Monitor Material Coverage App: List of Materials with Shortages

Stock Availability Views

The following Shortage Definitions (see Figure 4.32) are available:

� MRP Standard

Compares all receipts with all requirements. Shortage means available stock is

below safety stock level or below zero.

� Stock Days’ Supply

Compares stock with planned requirements. Shortage means available stock is

below zero. If available stock is below safety stock, the period is critical.

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� Ordered Requirements

Compares planned receipts with ordered requirements. Shortage means available

stock is below zero. If available stock is below safety stock, the period is critical.

� Ordered Receipts

Compares planned requirements with ordered receipts. Shortage means available

stock is below zero. If available stock is below safety stock, the period is critical.

With the Time till Shortage filter criteria dropdown, you define the time period to

look at. There are some predefined time periods, such as Material Replenishment

Lead Time, Total Replenishment Lead Time, 7 Days, 14 Days, and so on.

The chart settings can be configured by Horizon and Number, as shown in Figure 4.35,

by clicking Configure Chart.

Figure 4.35 Configure Chart of Stock Availability

MRP elements or master data are displayed as links that offer a quick inspection of

each object, including additional navigation targets. Here, the Material No. can be

clicked to access a quick view. Quick views of materials and vendors allow you to

assess stock availability, material master data, and vendor master data with one click

(see Figure 4.36).

After selecting rows, you can click Start MRP Run to schedule an MRP run with the

selected materials (see Section 4.7.4) or click Revoke Acceptance to remove any previ-

ously accepted shortage to find a new solution. Clicking the Manage Materials button

takes you to the worklist of the Material Coverage app containing the selected mate-

rials of Figure 4.34 on the left-hand side, as shown in Figure 4.37.

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4.7 MRP Live

Figure 4.36 Quick View of Stock Situation and Material Master Data

Figure 4.37 Worklist Material Coverage with Details on the Right

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For each selected material of the worklist, you see details in three tabs:

� Stock Requirements List

This tab can be displayed in detail (see Figure 4.37), in aggregated format (not

shown), and as a time series chart (look ahead to Figure 4.40) by clicking on one of

the three toggle buttons on the left side.

The Stock Requirements List details in Figure 4.37 offers you quick views on the dis-

played MRP elements, as shown in Figure 4.38, or quick actions, as shown in Figure

4.39, depending on the context and your authorizations. You can see actions taken

on a purchase requisition in the top screen 1, and actions taken on production

orders or planned orders in the bottom screen 2. Later in this section, we’ll discuss

how to convert planned orders into production orders, which is mandatory to

complete the planning process as described in Section 4.3.

The time series displays the MRP elements in a waterfall chart with an aggregated

overview of the full period on the bottom and the selected window on the top, as


Figure 4.38 Quick View on MRP Element (Planned Order at Right and Production Order

at Left)

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4.7 MRP Live

Figure 4.39 Available Actions on Single MRP Elements

Figure 4.40 Stock Requirements as Time Series (Overview with Selection Window at the

Bottom)

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� Material Information

This tab summarizes all planning-relevant data of the selected material, such as

Stock Availability, MRP Data, and Material Data, as shown in Figure 4.41.

Figure 4.41 Material Information

� Notes

This tab allows you to take notes to document any decisions, as shown in Figure

4.42. Many objects support the end users in taking notes and displaying the note

history to document business decisions.

Figure 4.42 Note-Taking Option

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4.7 MRP Live

If you need more detailed information on a selected material, clicking the Open but-

ton shown earlier in Figure 4.37 allows you to navigate to the stock requirements list

(see Section 4.7.7) or the material object page (which we mentioned at the beginning

of Section 4.5).

Managing Shortages

Several options are available to solve a shortage situation. Returning to the original

screen in Figure 4.34, you can do the following:

� You can use the Start MRP Run button to resolve the shortage.

� You can use the Accept button to accept the shortage.

� You can follow the proposals of the system, navigating through the views shown

from Figure 4.43 through Figure 4.46.

� You can use the rescheduling options offered by the system.

Figure 4.43 Material Shortage with Solution Proposal (Rectangle)

195


Let’s walk through the automatic proposal process. Figure 4.43 displays a material

shortage with solution proposal by the system, which you can access by clicking the

arrow.

When you click the solution proposal in the Available column (highlighted in Figure

4.43), you’ll be directed to the Material Shortage screen shown in Figure 4.44. You can

see the MRP Element that causes the shortage and the MRP Element proposed to solve

the shortage, including a Rating in brackets below.

Figure 4.44 Solution Proposal: Tabular View

With the Simulate button, you can mimic the proposed solution within the Shortage

list. Figure 4.45 outlines the simulated solution (graphical view switched on).

If you choose Accept on the tabular view (not shown), the proposed solution can be

created with prepopulated attributes in the Create Purchase Requisition screen, as

shown in Figure 4.46. Here, you can create the document by clicking OK.

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4.7 MRP Live

Figure 4.45 Solution Proposal after Simulation: Graphical View

Figure 4.46 Realizing the Solution Proposal

197


Let’s look at another solution pattern, the rescheduling check. Rescheduling means

the system proposes changing the scheduling of an existing MRP element instead of

creating a new one. The rescheduling check proposes actions for the MRP element

based on the following exception messages:

� Reschedule in

Reschedule the MRP element to an earlier delivery date, indicated by the left-

pointing arrow buttons in Figure 4.47. Once clicked, you’ll arrive at the lower

screen shown in Figure 4.47.

Figure 4.47 Changing the Purchase Order Item with Change Management Offered as a

Rescheduling In Option

Further Resources

See SAP Note 25388 for detailed documentation regarding exception messages.

� Reschedule out

Postpone the delivery date of the MRP element, indicated by the arrow buttons in

Figure 4.48. Once clicked, you’ll arrive at the lower screens shown in Figure 4.48.

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4.7 MRP Live

Figure 4.48 Changing the Planned Order Offered as Rescheduling In (Upper Part) and

Rescheduling Out (Lower Part) Option

� Plan process according to schedule

MRP can’t plan to meet the schedule, and manual intervention is required.

� Cancel process

Cancel the MRP element by clicking the Cancel button (highlighted Figure 4.49).

Figure 4.49 Cancellation Offered as a Rescheduling Option with the Refresh Toolbar Button

Highlighted

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� Excess stock

Planned stock is higher than the maximum stock setting (not shown).

� Excess individual segment

Individual receipt segment exceeds actual demand (not shown).

Convert Planned Orders into Production or Process Orders

The Monitor Material Coverage app can also be used to convert planned orders into

production or process orders so that the planning process is completed.

The worklist shows all selected materials (refer to Figure 4.37). The details per material

on the right-hand side allow the conversion of the material’s planned orders by

choosing Edit • Convert.

The subsequently displayed modal window shown in Figure 4.50 allows you to choose

either Convert to Production Order or Convert to Process Order as the conversion tar-

get. Click OK to apply the change.

Figure 4.50 Conversion of Planned Order into Production Order or Process Order

We’ll discuss converting planned orders in more detail using alternative apps in Sec-

tion 4.7.3.

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4.7 MRP Live

4.7.2 Manage Planned Orders

Planned orders are in most cases created automatically as an output of the MRP pro-

cess (see Section 4.3). The Manage Planned Orders app (F4171) helps you manage the

planned orders by selecting planned orders in the end user’s Area of Responsibility

and offering navigation to the Create New Order, Create Order with Reference,

Change Order, and Display Order (see Figure 4.51). You simply select the planned

orders in the list and click the appropriate button in the toolbar to execute the action.

Figure 4.51 Simple List: Manage Planned Orders

4.7.3 Convert Planned Orders

To complete the MRP process, the created planned order must be converted into a

production order to initiate production execution (refer to Section 4.3). The Convert

Planned Orders app (F4171) selects planned orders in the end user’s Area of Responsi-

bility and displays them in a list, as shown in Figure 4.52. Here, you can navigate in

each item to the relevant conversion application in the Action column. After select-

ing one or more items, you can trigger the following:

� Collective Conversion to Production Orders

You can select several items and convert them to a production order.

� Collective Conversion to Process Orders

You can select several items and convert them to a process order.

� Collective Conversion to Purchase Requisitions

You can select several items and convert them to purchase requisitions.

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Figure 4.52 Simple List: Convert Planned Orders

In addition to the SAP Fiori app just described, there are additional SAP Fiori apps that

you can use if you need to perform the following changes not supported by the Mon-

itor Material Coverage app (see Chapter 1, Section 1.4.1):

� The Convert Planned Order to Production Order and Convert Planned Order to

Process Order apps are for detail operations on planned orders not covered by

Monitor Material Coverage, such as changing fields other than Quantity and Deliv-

ery Date.

� The Convert Planned Orders to Production Orders, Convert Planned Orders to Pro-

cess Orders, and Convert Planned Orders to Purchase Requisitions apps support

collective conversions of planned orders.

� The Create Planned Order, Change Planned Order, and Display Planned Order apps

support manual creation, change, and display of planned orders.

4.7.4 Schedule MRP Runs

The Schedule MRP Runs app (F1339) allows you to schedule MRP runs as background

jobs. With this SAP Fiori app, you finally automate the execution of your planning

strategy implemented in the previous sections.

Figure 4.53 shows the entry screen for the Schedule MRP Runs app, where you see a

simple list of all MRP jobs. You can use the filter bar to select for specific attributes

and time frames. The list indicates whether the job is Scheduled or Finished.

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4.7 MRP Live

Figure 4.53 Entry Screen of Schedule MRP Runs

Access the details screen for each list entry by clicking on the arrow of the list item.

You’ll arrive at the screen shown in Figure 4.54, where you can see all details of the

defined job. The Scheduling Options and Run Details sections display administrative

job data.

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Figure 4.54 Job Details: Scheduling Options and Run Details

The Parameter Section, shown in Figure 4.55, contains the control attributes of the

MRP job:

� Planning Scope

The Planning Scope section helps you to define the set of materials to be planned.

Notably the Material Scope helps you plan all material (A), only with MRP types of

master product scheduling type (M), or not having an MRP type of master product

scheduling type (S).

� Regenerative Planning

If Regenerative Planning isn’t set, only net changes are planned during an MRP

run.

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4.7 MRP Live

� Scheduling

Scheduling affects the created/changed planned orders during an MRP run and

allows you to switch between determination of basic dates for planned orders (1)

or lead time scheduling and capacity planning (2).

� Planning Mode

Planning Mode affects unconfirmed procurement proposals of former MRP runs.

You can either delete and recreate procurement proposals or adapt existing ones.

� Changed BOM Components

If the Changed BOM Components indicator is set, the MRP run also plans the

dependent requirements of the planning scope irrespective of the plant.

� All Order BOM Components

If the All Order BOM Components indicator is set, the MRP run also plans the

dependent requirements of all order BOMs regardless of whether they are in the

Planning Scope.

� Stock Transfer Materials

If the Stock Transfer Materials indicator is set, the MRP run also plans the depen-

dent requirements in supplying plants in which a stock transfer is created regard-

less of whether they are in the Planning Scope. You can adapt the existing planning

data (1) or delete the old and recreate new planning data (3).

� Output Material List

The Output Material List indicator creates a list of all planned material within the

job log if set.

Figure 4.55 Job Details: Parameter Section

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To create a new job, click the + button in the screen shown in Figure 4.53, opening the

following screen shown in Figure 4.56. Enter the job parameters (Job Template and

Job Name).

Figure 4.56 Job Creation Screen

The Scheduling Options allow you to define the job execution parameters. With the

Define Recurrence Pattern option, you can modify the timing of the job execution

repetition.

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4.7 MRP Live

The Parameters Section allows you to select the Planning Scope and to pass some

Control Parameters to the job. It’s mandatory to enter at least one selection criteria

within the Planning Scope.

You can validate your input with the Check button, Schedule the execution, or save

your input as a Template for further usage.

Each scheduled job can be monitored using the Display MRP Key Figures app (see the

next section).

4.7.5 Display MRP Key Figures

After scheduling your planning runs, you may want to track their execution and

check their result. The Display MRP Key Figures app (F1426) allows you to monitor the

jobs created with the Schedule MRP Runs app (discussed in Section 4.7.4). You’ll able

to track the execution of your planning strategy by the MRP.

After entering the SAP Fiori app, you see a simple list of all scheduled MRP jobs in

Figure 4.57. You can use the filter bar to select specific attributes. The Run Status indi-

cates whether the job has finished successfully or not.

Figure 4.57 List of MRP Jobs and Status

You can access the details screen by clicking on the arrow of a selected item. You can

see the following sections for each job:

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� Information

This section, shown in Figure 4.58, gives general runtime information, the settings

used to schedule the job, the number of planned materials, and the job data.

Figure 4.58 Job Details: Technical Details

� Run History

This section, shown in Figure 4.59, displays a line chart of the planned materials

and of those whose planning failed during the runtime.

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4.7 MRP Live

Figure 4.59 Job Details: Run History and Low-Level Code Steps

� Low-Level Code Steps

This section, shown at the bottom of Figure 4.59, shows a table of all low-level code

steps. Click on a table item to access the details screen (not shown).

� All MRP Live Steps

This section in Figure 4.60 shows a table of all MRP Live steps. Click on the arrow of

a selected item to access a details screen (shown in Figure 4.61), which shows the

planning statistics of the MRP Live step.

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Figure 4.60 Job Details: MRP Live Steps

Figure 4.61 Details of MRP Live Step

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4.7 MRP Live

4.7.6 Display MRP Master Data Issues

If your MRP runs encountered master data issues, you may want to inspect them. The

Display MRP Master Data Issues app (F1425A) allows you to view the results of MRP

Live planning runs and analyze any master data issues that occurred during MRP

Live. Navigation options help you drill down on the root cause of an issue to find a

solution.

Figure 4.62 shows a list of MRP master data issues in the upper part 1. If you click on

the arrow of a selected line, you navigate to the details screen of the issue (Figure 4.62,

2). You can mark single entries as Accepted or as Revoke Acceptance while progress-

ing on the list entries. All input is refreshed with each MRP Live run.

Figure 4.62 Simple List: Display MRP Master Data Issues (Top) and Details of Selected Entry

(Bottom)

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4.7.7 Monitor External Requirements

As a production planner, you need to ensure that all external requirements needed

during production execution are available on time. The Monitor External Require-

ments app (F0246) enables you to monitor uncovered requirements of materials

based on sales orders or stock transport orders.

Using the Time till Requirement Date filter criteria shown in Figure 4.63, you can

define the time frame to look at. The shortage is calculated by matching ordered

demand against planned supply. The item status is visualized as an overview chart

(showing Open Quantity and Missing Quantity). You can quickly track and react to

critical situations by selecting the desired item in the list shown in Figure 4.63 and

clicking the Manage Items button to navigate to the work list shown in Figure 4.64.

The worklist displays four sections for each selected object. Figure 4.64 shows the tab-

ular display of the Stock/Requirements List, including any shortages.

Alternatively, you can choose a graphical display icon to open the screen shown in

Figure 4.65. The waterfall diagrams list the stock quantity changes of all MRP ele-

ments in Figure 4.64 on a time axis with the option to select the displayed time frame

with the slider at the bottom.

Figure 4.63 Simple List: Monitor External Requirements

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4.7 MRP Live

Figure 4.64 Worklist: External Requirements

Figure 4.65 Section Stock/Requirements List: Graphical Display

213


You have several options to resolve uncovered demands:

� Click the Start MRP Run button to initiate MRP for the particular material. MRP will try to find a solution based on the defined planning strategy.

� Open a related SAP Fiori app to pursue a solution depending on your business role (Stock/Requirements List app, see Chapter 4, Section 4.7.8).

� Choose one Action directly, if applicable (see Section 4.7.1).

� Navigate to the Material Shortage View, if applicable, and evaluate the automatic proposals (see Section 4.7.1) or Accept the shortage.

Other tabs in the Monitor External Requirements app include Material Information,

which contains all material-related information such as MRP Data, Master Data, and

Stock Availability; the Item Information, which created the requirement; and Notes,

where you take notes to document any action taken.

4.7.8 Monitor Internal Requirements

As a production planner, you need to ensure that all internal requirements needed

during production execution are available on time. The Monitor Internal Require-

ments app helps you to ensure that all internal requirements in your area of respon-

sibility originating from production orders, process orders, maintenance orders, and

network orders can be covered. The shortage definition is based on comparing

planned receipts with ordered requirements.

Many objects offer quick views for rapid inspections. After starting the app, you see a

simple requirement list in Figure 4.66 showing the most important data, such as

Component, Quantity Overview (Open versus Missing), and Affected Order. You can

navigate to a worklist for selected items with the Manage Components button.

The Manage Internal Requirements worklist, shown in Figure 4.67, offers for each

selected object similar sections as discussed for the Monitor External Requirements

app.

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4.7 MRP Live

Figure 4.66 Simple List: Monitor Internal Requirements

Figure 4.67 Worklist: Selected Component in the Stock/Requirements List Section

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The Stock/Requirements List section allows you to solve open issues. You have the

following options:

� If the system has a solution proposal for an issue, it will direct you to the Material

Coverage app, described in Section 4.7.1, when you click on an item (see Figure 4.67,

first two items).

� If you have the appropriate authorization, you can directly edit an MRP element

(Actions column in Figure 4.67).

� Additionally, you can choose Start MRP Run per material.

As with the Monitor External Requirements app, there is also a graphical display of

the Stock/Requirements List available. The waterfall chart shown in Figure 4.68 dis-

plays all MRP elements creating quantity changes in a selected time frame. You can

change the time frame selection with the slider on the bottom.

Figure 4.68 The Stock/Requirements List: Graphical Display

Other tabs in the Monitor Internal Requirements app include Material Information,

which contains all material-related information such as material master and material

stock-relevant data; the Order Information tab, which shows your type of order and

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4.7 MRP Live

internal contact; and the Notes tab, where you take notes to document any action

taken.

4.7.9 Detect Unnecessary Supply Elements

As mentioned in Chapter 2, situation handling enables you to automatically notify a

defined set of users of a condition detected in SAP S/4HANA business processes. This

situation template supports you in detecting supply elements that are no longer

required, for example: If a sales order is canceled, this situation detects all MRP ele-

ments, which have been created to fulfill this sales order. In this case, the situation

automatically notifies the MRP controller.

The following exceptions are detected by the situation:

� CAN (cancel process)

No requirements for a receipt element exist. To avoid unnecessary warehouse

stock, the element should be reversed.

� EXC (excess stock)

The planned available stock exceeds the maximum stock as specified, and/or the

actual stock and the receipt elements exceed the requirements in the individual

segment such as MTO planning, individual project planning, direct production, or

direct procurement.

As a prerequisite, you must define the MRP element to be taken into account in IMG

activity Define Rescheduling Check for Plan:

� Firmed Planned Orders

� Production Order

� Fixed Purchase Requisitions

� PO/SA Schedule Line

� QM inspection lot

� Shipping Notification

To create a situation, you need first to define the team (see Chapter 3, Section 3.2.2).

The following setup attributes must be considered:

� Team type: SMRPT

� Team category: PPMRP

� Member function (shipped):

SMRPLAN

� Function profile: SMRP

Figure 4.69 shows the definition of the team, and Figure 4.70 shows the assignment

of team members. The Responsibility Definitions section helps to determine the cor-

rect team, and the Team Members identifies the end user within the team. Setting up

teams is explained in Chapter 3, Section 3.2.2 in detail.

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The situation is created as a copy of the situation template SAP_PP_MRP_MATERIAL_

EXCEPTION as a batch-triggered situation (see Chapter 3 for details).

Figure 4.69 Setting Up a Team of Team Category PPRMP

The definition of the situation display is shown in Figure 4.71 with situation type CAN

as the filter value. Figure 4.72 shows the lower part of the situation with the assign-

ment of the team in Figure 4.69.

Figure 4.70 Assigning User to the Team

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4.7 MRP Live

Figure 4.71 Copy of the Situation Template SAP_PP_MRP_MATERIAL_EXCEPTION with

Material Situation Type CAN

Figure 4.72 Assigning Teams with Member Function

The situation needs input of the job “PPH_MRP_SITUATIONS_CREATE”, which can be

scheduled using the Detect MRP Situations app, shown in Figure 4.73. You don’t need

to provide any additional mandatory parameter, except the Scheduling Options,

when you schedule a new job with the + button.

219


Figure 4.73 Detect MRP Situations: Simple List with Jobs

Figure 4.74 shows a selected job details page after clicking on the arrow of the selected

item. You can provide optional parameters to restrict the created situations to a ded-

icated Material, MRP Area, MRP Controller, or Plant.

Figure 4.74 Detect MRP Situations: Selected Job Details

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4.8 DDMRP

Figure 4.75 shows the result for the end user defined in the team. The user will get a

notification in the SAP Fiori launchpad. Upon clicking on the notification, the user

will be directed to the Manage Material Coverage app (discussed in Section 4.7.1)

where he or she can solve the issue now and dismiss the situation.

Figure 4.75 Notification in SAP Fiori Launchpad with Subsequent Navigation to the Manage

Material Coverage App

4.8 DDMRP

In Section 4.3, we covered the rationale behind the DDMRP strategy. This section will

help you set up and work with DDMRP. We’ll start with the multistep configuration

process to identify the position and the size of the buffers. To finish, we’ll cover the

tools to monitor buffer performance.

4.8.1 Configuration Process

DDMRP requires some different configuration steps than you saw in Chapter 3, which

we’ll cover in this section. For DDMRP, setting up is a cycle that is closely linked with

execution. Setup isn’t a onetime effort but needs to be repeated on a regular basis to

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keep the DDMRP process in an optimal state. Therefore, most of the setup steps are

highly automated. To find the optimal buffer position and buffer size, you classify

your products of the supply chain first according to four dimensions (see Section

4.8.3).

Four steps are required to complete this task:

1. All materials are classified according to value, BOM usage, and demand variability

(see Section 4.8.3 and Section 4.8.5).

2. All materials are classified according to their decoupled lead time (DLT) (see Sec-

tion 4.8.7).

3. Buffer positioning is executed, which means the components of the supply chain

to be buffered are selected (see Section 4.8.6).

4. The buffer size is calculated (see Section 4.8.8).

Each of these steps might be repeated once in a while to adapt the setup to changes in

the demand/supply conditions.

Let’s move on to execution. As a planner, you can use the overview page as a starting

point to detect deviations between actual and planned. The planning and execution

steps are supported by their own SAP Fiori app, nevertheless the DDMRP process is

embedded into the normal MRP of SAP S/4HANA, as pointed out in Section 4.3.

4.8.2 Buffer Profile Maintenance

A buffer profile defines how buffering is handled by DDMRP, for example, how buffer

size and lead time are calculated. Figure 4.76 shows how mandatory configuration

data needed for DDMRP product classification in the subsequent steps is maintained.

A set of buffer profiles are available in the system that can be modified by the produc-

tion planner with the Buffer Profile Maintenance app (Transaction PPH_DD_BUF_

PROF).

You can define buffer profiles (Figure 4.76, 1) and assign them to your plants in the

plant settings (Figure 4.76, 2). The Procurement Type used in Figure 4.76 is the default

source of supply calculated by MRP. You can see the assigned Variability Factor and

Lead Time Factor for each attribute of Procurement Type, Variability Indicator, and

Lead Time Indicator, which are used in product classification in Section 4.8.3.

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4.8 DDMRP

Figure 4.76 Buffer Profile Maintenance Overview and Details

4.8.3 Product Classification: Mass Maintenance of Products

To start with DDMRP, you have to classify your materials so that the correct buffering

strategy can be applied for each material. The Mass Maintenance of Products (DD)

app (F2825) allows you to perform mass maintenance of attributes related to DDMRP.

Thus, you can manually carry out step 1 of the DDMRP setup discussed in Section

4.8.1. With this SAP Fiori app, you can classify your material master data in different

categories, as shown in Table 4.1.

After starting the SAP Fiori app, you can use the filter criteria to create a list of mate-

rials. First, you mark the products within a simple list, as shown in Figure 4.77.

Category Description

ABC classification Classification according to goods issue value

PQR classification Classification according to usage in BOMs

XYZ classification Classification according to demand variability

EFG classification Classification according to DLT

Table 4.1 Classification Categories

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Figure 4.77 Mass Maintenance of Products Entry Screen

As a next step, click the Change button in Figure 4.77, and in the subsequent modal

window shown on the left in Figure 4.78, you choose the attributes to be changed and

enter their new value. On the right side of Figure 4.78, you can see the supported Lead

Time calculation methods and their descriptions. This is accessed by using the value

help of Lead Time Calc. Meth., which controls how the lead time is calculated in

DDMRP.

Figure 4.78 Mass Maintenance of Products: Change View (Left) and Lead Time Calculation

Methods (Right)

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4.8 DDMRP

Note

Some changes are only accepted if the MRP Type is set to D1 (DDMRP).

4.8.4 Buffer Adjustment

We’ve seen that different algorithms can be used to calculate the lead time in Figure

4.78, and we discussed the configuration in Chapter 3. One of the algorithms (PRED) is

based on SAP S/4HANA predictive analytics integrator mentioned in Chapter 1 (SAP

HANA Predictive Analysis Library [PAL]).

As explained in Chapter 2, each machine learning model needs to be trained on an

appropriate data set before being activated. Figure 4.79 shows the details of the pre-

dictive model, including the model version history created by several trainings after

entering the Predictive Models app. Only one model version can be active. With the

Activate, Deactivate, Retrain, and Delete buttons, you can manage your model ver-

sion. When training the model, you can add filter criteria to optimize the training

data set.

Figure 4.79 Predictive Models: Predicted Individual Lead Time for Stock Transfer

Figure 4.80 shows the training results after clicking on the arrow of a selected item in

Figure 4.79. There is an overall indicator of the Quality and two KPIs indicating the

performance (Predictive Power) and the robustness (Predictive Confidence) of the

trained model. The closer the values are to 1, the better. The Performance section con-

tains the Key Influencers, that is, fields of the training view that contributed most to

the model version’s performance.

225


If the predictive model is active, it can also be used to calculate the lead time in

DDMRP (refer to Figure 4.78).

Figure 4.80 Training Results

4.8.5 Product Classification: Schedule Product Classification

The Schedule Product Classification SAP Fiori app supports you in classifying attri-

butes of your material master data with a background job according to the categories

described in Section 4.8.2. Thus, you can automatically carry out step 1 of the DDMRP

setup (refer to Section 4.8.1). When entering the app, you’ll see a simple list of classifi-

cation job runs, with their Status and their Log as in Figure 4.81, 1. When you click on

an arrow of a selected item, you navigate to the job’s details page (Figure 4.81, 2).

When you click on the + button shown in Figure 4.81, you can create a new job (see

Figure 4.82). The Product Selection Criteria allows you to define the set of products

processed by the job run.

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4.8 DDMRP

Figure 4.81 Material Classification Job Maintenance

Figure 4.82 Entry Screen: Creating a New Material Classification Job (Part 1)

227


Figure 4.83 displays the fields (Thresholds for …) of the ABC, PQR, and XYZ classifica-

tions (refer to Table 4.1) to be used by the job run.

Figure 4.83 Entry Screen: Creating a New Material Classification Job (Part 2)

4.8.6 Buffer Positioning

After classifying your master data, you need to define the components whose mate-

rial stock quantities are to be buffered during DDMRP (refer to Section 4.3). The Buffer

Positioning app (F3282) helps you identify your components to be buffered so you

can carry out step 3 of the DDMRP setup discussed earlier in Section 4.8.1. The app

leverages the BOM information stored in SAP S/4HANA (refer to Section 4.2.1). Down-

stream of the supply chain, you can identify all parents of one particular component

up to the finished product. Upstream of the supply chain, you can identify all materi-

als used to assemble your component. This information helps you to decide whether

and how to buffer the component to protect its flow on the demand and supply side.

You enter the SAP Fiori app as a simple list showing DDMRP-relevant data such as the

following:

� Lead Time

Lead time of the item (refer to Chapter 2).

� Decoupled Lead Time

Lead time after buffer positioning (assuming that buffered materials are stocked).

� Classifications

Material classification, according to Section 4.8.2.

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4.8 DDMRP

You can directly execute actions, such as Calculate DLT, Buffer, or Unbuffer, on the list

after selecting one or more items (see Figure 4.84).

Figure 4.84 Simple List: Buffer Positioning

You can access the details page for each entry by clicking on the arrow of the selected

item. Here, you see the upstream and downstream information (see Figure 4.85). You

can switch between different display modes in the Upstream or Downstream drop-

downs:

� BOM Usage

Counted usage in BOMs.

� Longest Path

Longest path upstream in the supply chain.

� Immediate Parent

Direct parents of the component.

You can also change the MRP Area of certain materials and thus change planning

(refer to Chapter 3).

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Figure 4.85 Details Tabular Display: Buffer Positioning

If you select the toggle button for graphical display on the right-hand side, you switch

to an alternative view, that is, the network graph with the Graph Overview on the top-

right corner and the selected area in details below, as shown in Figure 4.86.

Figure 4.86 Details Network Graph: Buffer Positioning with Selected Material

230

4.8 DDMRP

You can select one component shown in the network graph and perform a quick

action on it, as shown in Figure 4.87. Quick actions include Buffer Analysis or Manage

Buffer Levels (see Section 4.8.9).

Figure 4.87 Quick View with Action: Buffer Positioning

4.8.7 Schedule Lead Time Classification of Products

The Schedule Lead Time Classification of Products DD SAP Fiori app (F2871) supports

you in classifying the DLT of your material master data with a background job accord-

ing to the EFG categories described in Section 4.8.3. Hence, you can carry out step 2 of

the DDMRP setup discussed in Section 4.8.1.

If you open the Schedule Lead Time Classification of Products (DD) app, you’ll reach

the Application Jobs scheduling screen displaying a simple list of related jobs (see

Figure 4.88, 1). When you click on the arrow of the selected item, you’ll reach the

details screen of the job (see Figure 4.88, 2).

When you click on the + button as shown in Figure 4.88, you can create a new job (see

Figure 4.89). The Product Selection Criteria section allows you to specify the set of

materials to be classified by the job run.

231


Figure 4.88 Lead Time Classification Job Maintenance

Figure 4.89 Entry Screen: Creating a New Lead Time Classification Job (Part 1)

232

4.8 DDMRP

The fields in Figure 4.90 allow you to specify the DLT attributes in days to be used by

the job run.

Figure 4.90 Entry Screen: Creating a New Lead Time Classification Job (Part 2)

4.8.8 Schedule Buffer Proposal Calculation

After finishing buffer positioning, it’s necessary to create a buffer proposal. The

Schedule Buffer Proposal Calculation app (F2837) supports you in generating buffer

proposals based on the average daily usage (ADU), DLT, and buffer profiles of your

materials. Hence, you can carry out step 4 of the DDMRP setup discussed earlier in

Section 4.8.1. The proposals are the input of the Manage Buffer Levels app (see Section

4.8.9).

233


If you open the Schedule Buffer Proposal Calculation app, you’ll reach the Application

Jobs scheduling screen displaying a simple list of related jobs (see Figure 4.91, 1).

When you click on the arrow of the selected item, you’ll reach the details screen of the

job (see Figure 4.91, 2).

Figure 4.91 Buffer Proposal Calculation Job Maintenance

When you click on the + button in Figure 4.91, you can create a new job as shown in

Figure 4.92. The Product Selection Criteria section allows you to specify the set of

materials of which a buffer proposal will be calculated by the job run.

234

4.8 DDMRP

Figure 4.92 Entry Screen: Creating a New Buffer Proposal Calculation Job (Part 1)

The fields in Figure 4.93 allow you to specify the attributes to be used by the job run

for the buffer proposal calculation.

235


Figure 4.93 Entry Screen: Creating a New Buffer Proposal Calculation Job (Part 2)

4.8.9 Manage Buffer Levels

The Manage Buffer Levels draft-enabled app (F2706) helps you to manually control

the buffer level of your buffered components in DDMRP in changing demand/supply

situations. Buffer proposals for safety stock level, reorder point level, and maximum

stock level are calculated by the Schedule Buffer Proposal Calculation app (refer to

Section 4.8.8). The optimal buffer level balances excessive inventory costs with

changing demand to ensure adequate stock availability.

When entering the Manage Buffer Levels app, you can filter for the desired materials

in a simple list, as shown in Figure 4.94. You can see that micro charts visualize his-

toric buffer levels, ADU, and future proposals.

236

4.8 DDMRP

Figure 4.94 Simple List: Manage Buffer Level

After marking one or more entries, you can directly perform actions on the buffer

proposal such as Adopt, Discard, or Adjust. Adjusting allows you to change the buffer

zone or the demand by an absolute or relative factor or by copying the values from a

different material (see Figure 4.95).

In Figure 4.95, we’ve copied adjustments from the buffer of MZ-FG-B1 to MZ-FG-B2 by

entering “MZ-FG-B1” in the Product field under Copy Adjustments from Buffer.

237


Figure 4.95 Example Actions

For each list entry, you can navigate to a details screen by clicking on the arrow of the

selected items for closer investigation (see Figure 4.96). The details screen contains

four sections:

� Buffer Levels

Offers a graphical or tabular view of the history of buffer level changes. You can

switch between the following views:

– Planning View: Shows you the buffer levels on a daily basis, as shown in Figure

4.96.

– Performance View: Shows you the buffer level in comparison to the stock level

on a daily basis, as shown in Figure 4.97.

– Comparison View: Allows you to compare actual settings with proposed buffer

settings, as shown in Figure 4.98.

238

4.8 DDMRP

Figure 4.96 Simple List and Details Screen in Split Screen Mode: Manage Buffer Level All

Sections

Figure 4.97 Buffer Levels: Performance View Visualizing Replenishment Operations

239


Figure 4.98 Buffer Levels: Comparison View Showing Current and Proposed Values

You can perform adjustments and simulate the changes of buffer levels when

you’re in edit mode and click on Show Adjustments (see the table toolbar in Figure

4.96).

� Average Daily Usage

Displays goods issue and PIRs plus the historic and the future ADU (see Figure

4.99). You can perform adjustments and simulate the changes when you’re in edit

mode by clicking on Show Adjustments (see the table toolbar in Figure 4.96).

Figure 4.99 Details Screen: Manage Buffer Level ADU

240

4.8 DDMRP

In addition to the ADU, you can see the network graph of the replenishment net-

work (Figure 4.100, top). For more details on the network graph, refer to Section

4.8.6.

� Classifications

Contains the DDMRP-relevant material information (see Figure 4.100, bottom).

Figure 4.100 Details Screen: Manage Buffer Level Classifications

Figure 4.101 shows the simulation features when adjusting buffer levels, and Figure

4.102 shows the simulation features when adjusting ADU. You just enter new time

frames and values and then click on Simulate Changes.

241


Figure 4.101 Manage Buffer Level Details Screen: Changing the Buffer Level

Figure 4.102 Manage Buffer Level Details Screen: Changing the ADU

242

4.8 DDMRP

4.8.10 Planners Overview

After finishing all configuration activities, we can now focus on monitoring our

DDMRP. The Planners Overview app is an overview page (see Chapter 1, Section 1.4)

supporting the daily work of DDMRP planners, as shown in Figure 4.103.

Figure 4.103 Overview Page Supporting DDMRP

It contains the following cards:

� Buffer Level Management

Shows you the total number of buffers with deviations (actual versus planned) on

the top and the same data in a column chart according to the selected category.

You can navigate to the Manage Buffer Level app (see Section 4.8.9).

� Replenishment Planning

Shows you the total number of buffers below the reorder point on the top and the

same data in a column chart according to the selected category. You can navigate

to the Demand-Driven Replenishment Planning app (see Section 4.8.11).

243


� Replenishment Execution

Shows you the total number of buffers below the safety stock on the top and the

number of buffers with low on-hand stock in a column chart according to the

selected category. You can navigate to the Demand-Driven Replenishment Execu-

tion app (see Section 4.8.12).

4.8.11 Replenishment Planning

The Demand-Driven Replenishment Planning app supports you in monitoring buf-

fer information sorted by planning priority. Based on this information, you can trig-

ger appropriate actions to avoid out-of-stock situations.

Figure 4.104 shows the Demand-Driven Replenishment Planning app after selecting

the desired data set and one immediate action to solve a shortage by creating a

planned order.

Figure 4.104 Simple List: DDMRP (Top), Direct Action Expedite Supply (Bottom)

On the details page of the selected entry (click on an arrow), you can see the Supply/

Demand List, Product Information, and Notes, as shown in Figure 4.105. You can switch

the Supply/Demand List to display All MRP Elements or only the DDMRP-relevant

ones.

244

4.8 DDMRP

Figure 4.105 Worklist: DDMRP with Selected Details Page

Quick views on single MRP elements support you in decision-making, and you can

trigger quick actions directly. For example, you can access the Create Order action

shown in Figure 4.105 to directly create a production order with the desired Receipt

Quantity, Availability Date, and Source of Supply (see Figure 4.106).

Figure 4.106 Action: Creating an Order

245


To document your action, you can add notes. Figure 4.107 shows the lower part of the

details page with Product Information and the Notes section.

Figure 4.107 Details Page: DDMRP Product Information and Notes

4.8.12 Replenishment Execution

The Demand-Driven Replenishment Execution app supports you in monitoring

today’s stock situation for each product. Based on this information, you can trigger

immediate actions to avoid out-of-stock situations and directly trigger the replenish-

ment by contacting the supplier of a purchase order or the production supervisor of

a component production order.

Figure 4.108 shows the SAP Fiori app after selecting the desired data set with On-Hand

Stock Status at risk, triggering one immediate action (Expedite Supply button) to

solve a shortage by creating a planned order (Figure 4.108, bottom). Moreover,

246

4.8 DDMRP

another planned action has already been scheduled (not shown) and is indicated as

Queued in Figure 4.108.

Figure 4.108 Simple List: DDMRP Execution

After you click the arrow of a selected item, you can see the Supply/Demand List,

Product Information, and Notes on the details page (see Figure 4.109). You can switch

the Supply/Demand List to display All MRP Elements or only the DDMRP-relevant

ones. Quick views on single MRP elements support you in decision-making. For

example, as shown on the right side of Figure 4.109, you can access the Stock action

by clicking on the MRP element Stock. Here, you can navigate to Display Stock Over-

view or configure additional navigation targets depending on your role (More Links).

To document your action, you can also add notes.

247


Figure 4.109 Worklist: DDMRP Execution

4.9 Kanban

If you plan with Kanban, this section will help you set up your planning strategy. Ini-

tially, we’ll get to know the Kanban control cycle and then we’ll discuss specific fea-

ture of Kanbans.

4.9.1 Manage Control Cycle

The Manage Control Cycle app (Transaction PKMC) enables creating, changing, and

displaying Kanban control cycles. You enter the application after filling in the man-

datory Plant field (“1710”, in this example) and clicking the Search button shown in

Figure 4.110. The upper part of Figure 4.110 lists the selected Kanban control cycles. In

our example, we have one event-driven and three classical Kanban control cycles.

248

4.9 Kanban

Figure 4.110 Manage Control Cycle (Search Button Not Shown)

If you select one control cycle in Figure 4.110, the details are shown. Figure 4.111 dis-

plays the details of the classical Kanban control cycle with replenishment by in-house

production.

Figure 4.111 Manage Control Cycle: Kanban with Replenishment by Production Order

249


It contains the following sections:

� Control Cycle 7

Lists all related master data.

� Lifecycle

Displays the life cycle attributes.

� Kanbans

Lists number, size, and distribution of Kanban containers.

If you scroll down, you’ll see the most important details of Kanban with replenish-

ment by production orders in our example (see Figure 4.112). The In-House Production

tab lists the production-relevant data, whereas the Flow Control tab defines when and

how the replenishment is executed, including the summarized JIT call profile.

Figure 4.112 Kanban with Replenishment by Production Order Details Page

When you click Display Kanban, shown earlier in Figure 4.111, all Kanban bins of the

Kanban control cycle and their statuses are listed, as shown in Figure 4.113.

Figure 4.114 shows the details of a Kanban control cycle with external replenishment

by a scheduling agreement after selecting the first Kanban control cycle in Figure

4.110. The most relevant attributes, such as replenishment strategy (External Procure-

ment), Supplier, and Agreement are shown, which define how the Kanbans of this

control cycle are replenished.

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4.9 Kanban

Figure 4.113 Display Kanban

Figure 4.114 Kanban with External Replenishment by Scheduling Agreement

251


4.9.2 Summarized JIT Call Scheduler

The Summarized JIT Call Scheduler app (Transactions PJ02, PJ03) allows you to define

and schedule background jobs, which convert Kanban JIT calls on a regular basis into

messages to suppliers, triggering the JIT replenishment.

Figure 4.115 shows the entry screen, which displays a simple job list. From here, you

can navigate to the details screen in Figure 4.116 by clicking on the arrow of a selected

item or creating a new job using the + button.

Figure 4.115 Scheduling Summarized JIT Calls: Simple List of Scheduled Jobs with Statuses

Figure 4.116 Details Page of Selected Job Entry

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4.9 Kanban

The details page shown in Figure 4.116 displays the job’s details; most importantly,

the Scheduling Options and the Run Details with the job log are provided.

When creating a new job, the job template defines the parameters you have to submit

with the job. In the Scheduling Options section of Figure 4.117, you define when the

job with which recurrence pattern will be scheduled by filling out the Start field or

selecting the Start Immediately checkbox.

Figure 4.117 Creating a New Job: Scheduling Options

In Parameter Section of Figure 4.118, you define parameters used to start the job:

� Output Data

Defines the output generated by the job.

253


� Processing Mode

Controls whether the job initiates, repeats, or corrects JIT calls.

� Summarized JIT Call

Allows you to provide additional attributes, of which Plant is mandatory.

Figure 4.118 Creating a New Job: Parameter Section

4.9.3 Kanban Calculation

Setting up planning with Kanban entails an exact calculation of Kanban size and Kan-

ban numbers, which is beyond the scope of this book. Basically, the Kanban Calcula-

tion and Check Calculation Results apps (Transactions PK07, PK08N) allow you to

calculate the number of Kanbans or the Kanban size per Kanban control cycle based

on various methods and to view the calculated results and adjust them.

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4.10 What’s Ahead for Inventory Planning and Adjustment?


Figure 4.119 outlines the idea of predictive MRP, which is a new tool currently devel-

oped as part of SAP S/4HANA. Predictive MRP enables end users to optimize midterm

and long-term planning by simulating planning alternatives based on the operative

data of the SAP S/4HANA production planning functionality. The operative data is

converted and transferred to a new data structure optimized for planning simulation

within predictive MRP. The converted data allows real-time simulation and analysis

of what-if scenarios. Once optimized, the adjusted planning parameters can be

released to the SAP S/4HANA production planning functionality.

Figure 4.119 Predictive MRP Supporting Supply Chain Planning Optimization

Let’s take a closer look at new functionality for scheduling and processing predictive

MRP simulations, starting with the prerequisites.

4.10.1 Prerequisites

Figure 4.120 delineates how the reference scenarios are created. Basically, you choose

one anchor object (work center or material in Figure 4.120) and then extract the data

to a simulation ID. The prerequisites to a successful extraction are as follows:

SAP S/4HANAOperative Data

Simplifyand Transfer

Simulate PlanningParameter

Adaptations

ReleaseAdaptations

SAP S/4HANAPredictive MRP

SAP S/4HANAProduction Planning

Analyze Resultsin Real Time

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� Materials created with applicable plant view

� Materials part of a BOM (BOM usage 1) with appropriate validity

� Work centers with capacity information

� Routings linking work centers and operations

� Production version linking BOM and routings

� PIRs

Figure 4.120 Two Possible Anchor Objects Used When Creating the Reference Scenarios

Materials are only taken into account as anchor objects if they create the primary

demand, which means they must be the root node of a BOM.

Let’s take a closer look at new functionality for scheduling and processing predictive

MRP simulations.

4.10.2 Schedule Predictive MRP Simulation Creation

As explained previously, we need to extract the data for simulation first. The Sched-

ule Predictive MRP Simulation Creation app allows you to define a reference plan,

which is a prerequisite to creating predictive MRP simulations via job scheduling. A

reference plan is basically a simplified extraction of operative data for material

resource planning that is used downstream in the Process Predictive MRP Simula-

tions app (which we’ll discuss in the next section). You can choose to create data

WorkCenter

Operation

Routing

ProductionVersion

Bill ofMaterial

Material

Capacity

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based on work center data or top-level material data. In the Job Template field, select

one of the corresponding templates:

� Creation of pMRP Data via Top-Level Materials

Anchor object will be the material.

� Creation of pMRP Data via Work Center

Anchor object will be the work center.

Figure 4.121 shows the general part of the job template when scheduling a new job to

create a predictive MRP simulation with the + button. In this section of the job tem-

plate, you define the Scheduling Options of the job, such as when and how often the

job is executed.

Figure 4.121 Scheduling a New Predictive MRP Simulation Creation: Scheduling Options

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Figure 4.122 shows the predictive MRP job-specific Parameter Section:

� ID for Reference Plan

This mandatory field is the key of the reference scenario, whose simulation is cre-

ated by this job.

� Bucket Category

This field defines a monthly or weekly period pattern of the reference scenario’s

data. All relevant demands are distributed over the specified bucket data and dis-

played in the simulation plan as defined in this app.

� Start Date of Reference and End Date of Reference

These fields define the reference scenario’s time frame.

� Simulation ID

This mandatory field will be used in the Process Predictive MRP Simulations app to

identify the created simulation (see the next section).

� Limits

This section allows you to specify material-related master data that limits the data

processed in the simulation. The criteria enable you to identify materials that are

relevant for simulation.

Figure 4.122 Scheduling a New Predictive MRP Simulation Creation: Parameter Section

� Object Selection

This section in Figure 4.123 allows you to specify additional selection criteria to

restrict the data processed in the simulation in case the anchor object is material.

Figure 4.124 shows the layout if the work center is used as the anchor object.

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� Stock Transfer Behavior

This section allows you to specify how stock transfers should be included in the

simulation.

� Document Data

This section allows you to specify how stock quantities will be calculated in the

simulation. Opening Stock allows you to define whether to start your simulation

without opening stock, with safety stock, with current plant stock, or with plant

stock at the start of the reference scenario. In addition, you can select how PIRs and

material discontinuation will be treated.

Figure 4.123 Scheduling a New Predictive MRP Simulation Creation: Parameter Section with

Object Selection via Materials

Figure 4.124 Scheduling a New Predictive MRP Simulation Creation: Parameter Section

with Object Selection via Work Centers

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4.10.3 Process Predictive MRP Simulations

The current implementation of predictive MRP supports capacity planning with the

Process Predictive MRP Simulations app (F3934). Figure 4.125 shows a list of all active

simulations within predictive MRP after starting the SAP Fiori app. They are created

by the jobs scheduled in the previous section or by copying existing simulations.

After selecting one or more entries, you can Override Errors, Copy, Rename, or Delete

simulations. If you feel a simulation’s settings are improving the production plan-

ning situation, you can Release the simulation to production planning so it becomes

real. A released simulation can’t be altered further.

Figure 4.125 Simple List: Predictive MRP Active Simulations

Each simulation can be worked on in the details screen by clicking on the arrow of a

selected item. Figure 4.126 shows a Demand Plan Simulation of dedicated materials

per time bucket. You can edit the demands and immediately see the impact on

Capacity Issues and Delivery Performance. You can switch between comparing Refer-

ence/Simulation (shown) or Simulation Only, Delta of Reference, and Simulation.

Figure 4.127 shows the impact of some changes after clicking Capacity Plan Simula-

tion of a work center per time bucket. The simulations consider only in-house pro-

duction. You can shift demands by clicking the Shift Top-Level Demands button, or

you can change the source of supply. In addition, the system will suggest preproduc-

tion to solve capacity overloads.

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Figure 4.126 Details Page: Demand Plan Simulation

Figure 4.127 Details Page: Capacity Plan Simulation

If you click the Simulation Summary button, you get to the screen shown in Figure

4.128, which shows the Simulation Summary of all changes done within the selected

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simulation plan compared to the reference plan. When working with several simula-

tion plans, you can compare the impact of capacity changes on meeting your

planned deliveries.

Figure 4.128 Details Page: Simulation Summary

4.11 Summary

This chapter provided background about planning and adjusting inventory with the

help of the production planning capabilities of SAP S/4HANA. It covered basic factors

such as planning horizon, planning strategies (MTO, MTS, DDMRP, etc.), and planning

tools. The second part of the chapter introduced the master data elements used

during planning (BOMs, routing, master recipes, work centers, resources) and the SAP

Fiori apps to access them. The third part described the SAP Fiori apps to run, monitor,

and adjust the planning process itself. The last section gave some outlook on recent

developments regarding predictive MRP.

In the next chapter, we’ll look at inbound delivery processes and how to handle them

in SAP S/4HANA.

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Chapter 5

Goods Receipt

After an inventory plan has been made and adjusted, inventory

execution begins. This chapter gives step-by-step instructions for

performing the first of several execution processes (goods receipt) in

SAP S/4HANA.

This chapter focuses on the material inward flow in different process facets of a goods

receipt. We’ll spotlight the different flavors of a goods receipt and focus on SAP

S/4HANA and SAP Fiori specialties.

The following SAP Fiori apps are discussed in this chapter:

� Goods Receipt for Purchase Order (F0843)

� Goods Receipt for Inbound Delivery (F2502)

� Goods Receipt for Production Order (F3110)

� Goods Receipt without Reference (F3244)

As of now, not all process variants that were supported by SAP ERP are also supported

via an SAP Fiori-based app (we’ll cover this in Section 5.6). In the meantime, the web-

based SAP GUI Post Goods Movement app (formerly known as Transaction MIGO)

provides all process variants for goods receipts.

We’ll begin with a walk-through of SAP Fiori apps for key goods receipt processes: the

purchase order, inbound delivery, and production order. We’ll then discuss the goods

receipt without reference scenario, before moving on to process variants and a look

at what’s ahead.

5.1 Purchase Order

One important step in a company’s procurement process is the receipt of procured or

produced goods. At receipt, these new goods are physically taken over in the com-

pany’s owned stock and can be treated accordingly, depending on follow-up activities

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5 Goods Receipt

such as quality inspection. These goods receipt processes can have different flavors,

which are outlined in the following sections in more detail.

5.1.1 Purchase Orders for Inventory

The goods receipt process that is based on a given purchase can be performed in SAP

Fiori via the Post Goods Receipt for Purchase Order app. To enable users to use this

app via the SAP Fiori launchpad, special business roles must be assigned. SAP delivers

certain standard business roles as templates (see Chapter 3, Section 3.5.2, for assign-

ing roles). In this case, the business roles SAP_BR_INVENTORY_MANAGER and SAP_

BR_WAREHOUSE_CLERK include the target mapping of the Post Goods Receipt for

Purchase Order app.

After the user is assigned to the related target mapping, the SAP Fiori launchpad pro-

vides the related tile as shown in Figure 5.1.

Figure 5.1 SAP Fiori Launchpad Tile: Post Goods Receipt for Purchase Order

The Post Goods Receipt for Purchase Order app can post goods receipts for stock-

related procurement and for materials procured for direct consumption.

Click the Post Goods Receipt for Purchase Order tile, and then select the required pur-

chase order on the next screen. There are three different ways of selecting the right

purchase order:

� Entering the related purchase order manually

� Copying and pasting a given purchase order from the clipboard

� Selecting the purchase order via search help ((F4) help)

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5.1 Purchase Order

Figure 5.2 illustrates the type-ahead search if you enter a purchase order number. In

this case, the app tries to identify the purchase order after four digits are entered and

provides the search result based on a “contains search” in a dropdown list while

you’re still entering the purchase order.

Figure 5.2 Entering the Purchase Order Number

Along with the purchase order number, the supplier name can also be used as search

term. In this case, three letters (case insensitive) are enough for the app to start using

the type-ahead search.

The functionality of the search help can be adjusted to your needs via the Application

Settings in your Me Area. Figure 5.3 and Figure 5.4 depict how to access the settings

and which settings can be performed.

First, you click on the user icon in the upper-right corner to open the screen shown in

Figure 5.3. In the screen that appears, you click on Application Settings to open the

screen shown in Figure 5.4 for adjusting the application-related settings.

The selection of standard purchase orders and/or stock transport orders can be con-

trolled here. In addition, the functionality of bar code scanning for mobile devices,

such as mobile phones or tablets, can be enabled. The bar code scanning unveils one

of the innovative features SAP Fiori provides. Each user can set his or her application

settings independently.

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5 Goods Receipt

Figure 5.3 Application Settings

Figure 5.4 Details of Application Settings

After the application settings are done and a certain purchase order has been

selected, the application loads and displays the related purchase order data in the

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5.1 Purchase Order

header at the top of the screen. In Figure 5.5, the purchase order number in the header

is blue because the SAP Fiori launchpad provides an intent-based navigation to the

purchase order object page if the user owns the related target mapping authoriza-

tions.

Figure 5.5 Main Screen with Purchase Order Data

The only mandatory fields in the header data are the Document Date and Posting

Date, which are already prefilled by the app but can be changed by the user.

Below the header data, the purchase order items are listed in a table view. Note that

the Post Goods Receipt for Purchase Order app only outlines purchase order items

that can successfully be processed within this application.

If a purchase order item meets one of the following criteria, it won’t be outlined by

the application:

� The related material is serialized.

� An unsupported account assignment is chosen.

� The Delivery Completed indicator is set.

Table 5.1 shows which account assignment categories are supported.

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5 Goods Receipt

Via the notification icon (refer to Figure 5.5, lower left-hand corner), you’re informed

via an information message if a purchase order item is filtered out.

For purchase order items that can’t be processed with this SAP Fiori app, the web-

based SAP GUI Post Goods Movement app might be used instead.

5.1.2 Stock-Related Procurement

In the examples in this section, we’ll focus on procurement for stock.

For stock-related procurement, each purchase order item is assigned to a stock type

during goods receipt. A stock type can be selected that might reflect a different move-

ment type when the material document is created, according to Table 5.2.

Account Assignment Category Description

A Asset

C Sales order

F Order

K Cost center

P Project

S Third party

X All auxiliary account assignments

Table 5.1 Supported Account Assignment Categories

Stock Type Movement Type

Unrestricted use 101

Quality inspection 101

Blocked 101

Nonvaluated goods receipt blocked stock 103

Release of nonvaluated goods receipt blocked stock 105

Posting of return items 161

Table 5.2 Supported Stock Types

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5.1 Purchase Order

Depending on the purchase order, it’s possible to post three material documents. For

movement types 103 and 105, separate material documents are posted for each; for

movement types 101 and 161, only one material document is posted covering both

types (see Chapter 3, Section 3.1.3). Figure 5.6 shows the dropdown list of possible

stock types you could select per purchase order item. The previously mentioned

movement types reflect certain stock types (refer to Table 5.2).

Figure 5.6 Different Stock Types

A split of purchase order items, that is, to post one purchase order item to different

stock types or storage locations, is possible by clicking the + button in the Distribu-

tion column (see Figure 5.7).

Figure 5.7 Purchase Order Item List in Table View

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5 Goods Receipt

The table view of the purchase order items provides a Personalization functionality

that can be accessed by clicking on the gear icon on the upper-left side of the pur-

chase order item table (see Figure 5.8). To enable the open quantity to be presented to

the user for preassignment, you choose the Use open quantity option. To do the same

for the purchase order item short text if the related purchase order item is without a

reference to a material with a material master record, you choose the Use from Pur-

chase Order option.

Figure 5.8 Personalization Options

The Storage Location search help offers an implicit view of the current stock situation

based on a micro chart, as shown in Figure 5.9. The micro chart depicts the stock level

of the three support stock types (refer to Table 5.2). The goods receipt blocked stock

isn’t part of the company’s owned stock and therefore isn’t outlined here.

All storage locations that are already assigned in the related material master data

view (database table MARD) are listed in the Standard area of the search help. Plant stor-

age locations that aren’t yet assigned in the material master are listed in the Derived

area if the related setting is activated for the related movement type in the Customi-

zing activity Create Storage Location Automatically (see Chapter 3, Section 3.1.3). If

this setting is given, and the goods receipt is posted, the system automatically creates

the assignment between material master record and storage location.

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5.1 Purchase Order

Figure 5.9 Storage Location Search Help with Stock Data

By clicking on a purchase order item (as shown earlier in Figure 5.7), an information

page is displayed outlining the details for each item, such as the Ordered quantity or

the Delivery Completed indicator (see Figure 5.10).

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5 Goods Receipt

Figure 5.10 Detail Screen of a Purchase Order Item

5.2 Inbound Delivery

In this section, we’ll focus on goods receipts based on inbound deliveries. An inbound

delivery combines and maintains all relevant data about the delivery process, which

starts with the goods receipt, to serve the logistic process integration (i.e., in combi-

nation with warehouses).

The Post Goods Receipt for Inbound Delivery app in SAP Fiori is part of the business

role template SAP_BR_RECEIVING_SPECIALIST. To get started, click the Post Goods

Receipt for Inbound Delivery tile shown in Figure 5.11.

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5.2 Inbound Delivery

Figure 5.11 SAP Fiori Launchpad Tile: Post Goods Receipt for Inbound Delivery

Now, you have to enter or search for an Inbound Delivery, as depicted in Figure 5.12.

Figure 5.12 Selection of Inbound Delivery in Type-Ahead Search

After you’ve entered the related inbound delivery, the SAP Fiori app displays all items

of the inbound delivery. You can enter goods receipt information such as delivered

quantity just as for a standard purchase order, which was described in the previous

section.

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5 Goods Receipt

5.3 Production Order

Along with goods being procured externally, companies might also produce their

own goods. After production is finished, the produced goods have to enter the inven-

tory by performing a related goods receipt, which we’ll describe in this section.

The Post Goods Receipt for Production Order app in SAP Fiori is also part of the busi-

ness role template SAP_BR_WAREHOUSE_CLERK.

After starting the SAP Fiori app by clicking the SAP Fiori launchpad tile Post Goods

Receipt for Production Order, you have to enter a Production Order for which the

goods receipt shall be performed, as shown in Figure 5.13.

Figure 5.13 Input of Production Order

Once the production order is selected, the SAP Fiori app displays the related header

and item information, as shown in Figure 5.14.

Figure 5.14 Production Order Header and Items

In the header section of the screen, the production order details are displayed, includ-

ing a semantic object-based navigation capability to navigate to the production order

object page (the Production Order link 1000211 in the header section of Figure 5.14).

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5.4 Goods Receipt without Reference

Generally, the goods receipt process steps look very similar to a standard purchase

order. After selecting the related production order, you have to enter the quantity,

storage location, and stock type information as shown in Figure 5.14. Data that is

already maintained in the production order is prefilled automatically by the app. In

our example, the storage location information is missing. Therefore, the Storage

Location field gets a red (highlighted) status.

Once the storage location is entered, you can click the Post button (located in the

bottom-right corner of the screen, not shown in Figure 5.14) to perform the goods

receipt accordingly. When the goods receipt is performed successfully, a material

document is created and the app shows a Success pop-up that provides a link to the

material document that was created, as shown in Figure 5.15.

Figure 5.15 Successful Goods Receipt for Production Order

5.4 Goods Receipt without Reference

Sometimes, there is no reference document or document number available (e.g., no

purchase order number can be found), but the related goods have arrived and have to

be put into the inventory to go ahead with dependent inventory management pro-

cesses. In this case, a goods receipt without a reference might be posted, as described

in this section.

The Post Goods Receipt without Reference app in SAP Fiori is part of the business role

template SAP_BR_WAREHOUSE_CLERK. After you start the related SAP Fiori app by

clicking on the Post Goods Receipt without Reference tile, the main screen of the app

opens and provides the required input fields (see Figure 5.16).

No item information can be provided because no reference document is given, so

you have to enter the required data manually (at least the material, quantity, plant,

storage location, and stock type).

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5 Goods Receipt

Figure 5.16 Type-Ahead Search for Material

Figure 5.17 depicts a purchase order item without reference to a purchase order with

a manual user input.

Figure 5.17 Goods Receipt Item without Reference

Depending on the selected Stock Type per item, the movement types used for posting

the goods receipt are shown in Table 5.3.

By clicking on the item, the detailed screen can be accessed as mentioned previously

for different goods receipt apps (see Figure 5.18).

Stock Type Movement Type

Unrestricted use 501

Quality inspection 503

Blocked stock 505

Table 5.3 Movement Types Used in Goods Receipt without Reference

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5.5 Process Variants

Figure 5.18 Item’s Detail Screen


Now that we’ve discussed the different sources of goods receipt (purchase order, pro-

duction order, etc.), we’ll outline some variants of goods receipts that hold true for all

goods receipt sources. Variants refers to the different possible shapes of materials in

a goods receipt item. Let’s start with batch-managed materials.

5.5.1 Batch-Managed Materials

All the previously mentioned SAP Fiori apps can process batch-managed materials. If

the Customizing of the related movement type is set accordingly in the Set Expira-

tion Date Check IMG activity (see Chapter 3, Section 3.1.3), a shelf life and/or produc-

tion date can also be entered per purchase order item, which is based on a batch-

managed material.

Figure 5.19 shows a purchase order item that is batch managed (last entry shown). In

this case, the apps dynamically display an additional Batch column to show the batch

input field. In this field, you can select the required batch to which the material will

be posted.

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5 Goods Receipt

Figure 5.19 Batch-Managed Purchase Order Item

For enabled items, click the search icon in the Batch column field to open the screen

shown in Figure 5.20. This search help for selecting the batch contains stock informa-

tion for the three main stock types as shown in Figure 5.20. Here you can selected the

required batch by clicking on a list entry. The selected batch is taken over, and the

search help window is closed automatically.

Figure 5.20 Stock Information of a Batch

In addition, you can click the purchase order item to access the detail screen that con-

tains the batch information, as shown in Figure 5.21.

Figure 5.21 Purchase Order Item Detail Screen with Batch Information

If the Customizing setting Set Expiration Date Check (see Chapter 3, Section 3.1.3) is

activated for the chosen movement type (chosen via the Stock Type dropdown list), a

278


shelf life expiration date or a production date of the material has to be entered during

goods receipt processing that is dependent on the material master record. Figure 5.22

shows the two additional fields: Production Date and Shelf Life Expiration Date.

If a minimum remaining shelf life is entered in the material master record but no

total shelf life, then you have to enter the Shelf Life Expiration Date during goods

receipt processing.

If a total shelf life is entered in the material master record, then you enter a Produc-

tion Date during goods receipt. In this case, the app automatically calculates the shelf

life expiration date by adding the shelf life to the entered production date.

If the date entered isn’t sufficient in the sense of the shelf life, an appropriate mes-

sage is displayed during goods receipt processing.

Figure 5.22 Production Date and Shelf Life Date in the Details Screen

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5 Goods Receipt

5.5.2 Goods Receipt Blocked Stock

If a goods receipt is posted into the goods receipt blocked stock, the app uses move-

ment type 103.

Generally, the goods receipt blocked stock isn’t owned by the receiving company at

the point of the goods receipt, so the goods receipt blocked stock is nonvaluated.

If the goods receipt is posted into the goods receipt blocked stock by selecting Goods

Receipt Blocked Stock, there are different possibilities to release the stock out of the

goods receipt blocked stock. These new posting possibilities are displayed after the

same purchase order is loaded again after the initial goods receipt was posted into

the goods receipt blocked stock.

The dropdown list in the Stock Type column is enhanced with the related stock types,

as shown in Figure 5.23, so that the goods receipt blocked stock can be released

accordingly by a related goods receipt posting.

Figure 5.23 Goods Receipt Blocked Stock Postings after the Initial Goods Receipt

5.5.3 Mandatory Quality Inspection

Goods receipts of materials can be posted directly into the quality inspection stock.

This is a stock where materials are kept that need to be checked by a quality inspec-

tion before they can be released for further usage (i.e., by posting into the unre-

stricted-use stock). In this case, in the quality management view of the material

master record, the Post to Inspection Stock setting has to be enabled. This setting is

then copied as the default to purchase order items and goods receipt items for this

material. The material posting will occur in this case without creation of an inspec-

tion lot.

280


This setting can be overruled by entering the more detailed inspection setup data in

the material master record (i.e., more detailed inspection types) that might create

inspection lots. If inspection types are assigned, the Post to Inspection Stock setting is

deactivated because a more detailed setting via inspection types was chosen.

If the mentioned preconditions are met, the stock type gets preassigned with Quality

Inspection accordingly, as shown in Figure 5.24, and can’t be changed by the user

during goods receipt processing.

Figure 5.24 Preassigned Stock Type Quality Inspection

5.5.4 Decentralized Warehouse Management

If a goods receipt is posted into a storage location that is managed by a decentralized

warehouse, the application automatically generates an inbound delivery to be pro-

cessed by the warehouse management system. More information about inventory

management and the linkage of decentralized warehouse management is provided

in Chapter 9, Section 9.2.2.

5.5.5 Return Delivery

Customer returns can be posted directly in inventory management without the use

of special sales and distribution (SD) functionality and without reference to a return

delivery document by the usage of movement type 451. In this case, a material move-

ment is posted into the returned blocked stock with reference to a certain customer.

Afterwards, it can be transferred to unrestricted use by releasing it with movement

type 453 (455 for releasing it to quality inspection stock). If a return from customer is

based on a delivery, movement types 651 (returns blocked stock) and 653/655 are used

for releasing it to unrestricted use or quality inspection stock, respectively. These

kinds of posting can be performed with the Post Goods Movement app (see Chapter

6, Section 6.3.3).

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5 Goods Receipt

5.5.6 Single- or Multi-Account Assignment

Procurement for consumption requires an account assignment for each purchase

order item. The previously mentioned goods receipt apps in SAP Fiori dynamically

detect that an item is based on consumption and provide the related account assign-

ment information to the user. Per the purchase order item, the account assignment

information is displayed in the purchase order Items table view shown in Figure 5.25.

Figure 5.25 Account Assignment Information

Clicking on the Account Assignment micro chart opens a popup with more detailed

information, as shown in Figure 5.26.

Figure 5.26 Popup with Detailed Account Assignment Information

Click a purchase order item to access the detail screen shown in Figure 5.27. Here,

a table view with the related account assignment information is displayed for

consumption-based procurement.

If there is a multiple account assignment for a purchase order item, the share

between the different accounts can be seen on the detail screen of the purchase order

item. In this case, the purchase order item can be assigned to more than one account.

The related micro chart in the purchase order item table now displays the share

between the different accounts per purchase order item (see Figure 5.28).

282


Figure 5.27 Account Assignment in the Detailed View

Figure 5.28 Multiple Account Assignment

The same holds true if you click the micro chart to open the popup with the informa-

tion about the different account assignments, as shown in Figure 5.29.

In addition, in the detailed view of the purchase order item, the account assignment

table outlines the detailed information of the different accounts assigned to the pur-

chase order item, as shown in Figure 5.30.

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5 Goods Receipt

Figure 5.29 Popup with Multiple Account Assignments

Figure 5.30 Multiple Account Assignments in Detail View

Note

The account assignment information can be displayed in the Post Goods Receipt for

Purchase Order app in SAP Fiori. Adding or changing accounts isn’t supported as of

the time of writing (summer 2019). In such cases, the SAP GUI-based Post Goods

Movement app might be used instead.

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5.7 Summary

5.6 What’s Ahead for Goods Receipt?

The goods receipt processing variants discussed in Section 5.5 are supported via

native SAP Fiori apps in SAP S/4HANA as of today. Besides these variants, there are

some more specific matters that aren’t yet supported in these native SAP Fiori apps:

� Serial number processing: Enablement of assigning serial numbers during goods

receipt processing

� Split valuation support: Reflection of valuation type during goods receipt process-

ing so that the related valuation of the different stock data for a certain material

can take place

� Quality certificates: If you request your vendor to deliver a quality certificate, then

the delivery of the quality certificate can be confirmed during goods receipt pro-

cessing

In addition, some movement types aren’t currently supported by native SAP Fiori

apps, such as movement type 107 and 109 for processing of valuated goods receipt

blocked stock and release of the same, respectively. In such cases, the Post Goods

Movement app based on Transaction MIGO must be used.

5.7 Summary

In this chapter, the role-based SAP Fiori apps for goods receipt processing were dis-

cussed for purchase orders, inbound deliveries, production orders, goods receipt

without reference, and process variants.

As of the time of writing (summer 2019), goods receipts might also have to be pro-

cessed with the Post Goods Movement app due to some lacking features in the cur-

rent version of the native SAP Fiori apps.

Beside these feature gaps, the native SAP Fiori apps offer modern and state-of-the-art

capabilities such as integrated navigation (semantic object based, i.e., to the supplier

object page) or increased usability of attachment services. Through the usage of

sophisticated user application presettings, such as preassignment of delivery quan-

tity or presetting of required print output forms, these native SAP Fiori apps make

end users’ daily work easier.

We’ve now looked at SAP S/4HANA applications supporting the flow of goods into

your company. In the next chapter, we’ll take a deeper look at the core inventory

management capabilities.

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Chapter 6

Core Inventory Management

This chapter gives step-by-step instructions for performing “core”

inventory processes in SAP S/4HANA: inventory monitoring, exception

handling, physical inventory, transfers, scrapping, and so on.

In the previous chapter, we discussed the required steps and available SAP Fiori app

to control the inward flow of goods. After the required goods are received, they have

to be managed accordingly. To do so, we’ll now focus on the core inventory manage-

ment capabilities to manage the available goods.

All material movements take place based on a material document. In this chapter,

we’ll begin with a look at the available SAP Fiori apps to monitor these documents.

We’ll move on to the quantity and value of available materials, and how they are

shared between different stock types, with a discussion of stock identification capa-

bilities. In addition, we’ll see how stock can be moved between different stock types

or organizational entities, such as plants.

Sometimes, new storage locations or plants are set up, which makes an initial entry

necessary, or goods have to scrapped because they reach their shelf-life date or are

damaged. We’ll describe the handling of these special cases in this chapter as well. In

addition, if an incorrect material document posting is made—for instance, you

entered a wrong quantity—you might want to reverse the related material docu-

ment, which is also described in this chapter.

After discussing the physical inventory process and available apps required to keep

the stock and financial information up to date, we’ll conclude by covering what’s

ahead for core inventory.

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6 Core Inventory Management

6.1 Monitoring Core Inventory Documents

The central entity in inventory management in SAP S/4HANA is the material docu-

ment. For each material movement, a material document is created and stored in the

database to ensure seamless documentation of a company’s stock situation.

The following sections describe in more detail how to monitor the material docu-

ment and the document flow in the different inventory management applications.

6.1.1 Material Document Components

A material document consists of a material document header and related material

document items.

The material document header contains the following information:

� Document Date

� Posting Date

� Created by

� Document Type

� Inventory Transaction Type

� Delivery Note

� Bill of Lading

� Note

On the material document item level, a lot of information is stored that is dependent

on the transaction type (movement type):

� Material Document Number

� Material Document Item Number

� Material Document Year

� Material

� Goods Movement Type

� Quantity

� Plant

� Storage Location

� Stock Type

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� Batch

� Customer

� Purchase Order

� Sales Order

Basically, the movement type controls which fields are mandatory to be filled.

6.1.2 Use Enterprise Search to Identify Inventory Documents

The enterprise search functionality is embedded in the SAP Fiori launchpad and pro-

vides a “Google-like” search pattern to easily search for business object instances,

such as a material document. This search also allows a fuzzy search, meaning that the

search term doesn’t necessarily have to be a material document. Plant or material

names can also be search terms for identifying material documents via enterprise

search. You can access enterprise search by clicking on the magnifier icon (see Figure

6.1).

Figure 6.1 Enterprise Search: Magnifier Icon

After the search term is entered (“Plant 1010”, in our example), the related result is

displayed, as shown in Figure 6.2, in a list format, including the total number for

search results. In addition, the value that was found is highlighted by the enterprise

search functionality. Depending on the given user authorizations (part of business

catalogs, see Chapter 3, Section 3.5), navigation targets are provided to the end user. In

general, the search result for the material document provides a navigation to the

Material Document Overview app in SAP Fiori (discussed in the next section) for

accessing more detailed information about the material document, such as account-

ing assignment information that isn’t given in the search result list directly. The

search result for the material document is based on the material document header

data. The fields used for searching the material document also include important

fields related to the material document item (see previous list), such as material,

plant, or storage location.

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Figure 6.2 Material Document Search Result

Usually, productive systems contain a lot of material documents up to a high triple-

digit million number of material documents. Therefore, sometimes the search pro-

vides a broad amount of material documents as a search result. To find the relevant

data, the search framework provides additional drilldown and filter capabilities

based on the given search result, as shown in Figure 6.3.

By just clicking on the relevant filter criteria (left-hand side of the screen), such as

Company Code or Plant, the search result can be narrowed down to a reasonable

result set.

After the relevant search result is found, you can get a more detailed view of the

material document by navigating to the material document object page, which is

part of the Material Documents Overview app described in the next section.

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Figure 6.3 Filters for the Search Result

6.1.3 Material Documents Overview

The Material Documents Overview app (F1077) in SAP Fiori is the central method for

accessing material document information. The app can be started standalone from

the related tile on the SAP Fiori launchpad home screen. In this case, the app is started

with a filter bar so that you can select the required material documents according to

your needs. The filter fields shown in Figure 6.4 can be adapted according to your

needs via the Adapt Filters functionality. Click the Adapt Filters button to open the

related popup in which you can choose additional filter fields. The adjusted filter bar

settings can also be saved as variants so that every time you start the application, the

relevant filter fields are displayed directly.

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Figure 6.4 Filter Bar

As described in the preceding chapters, the movement type is one central attribute

controlling the relevant information and fields of a material document. The move-

ment type is a three-digit number, for example, 101 for goods receipt. A lot of move-

ment types exist in the system, so it might be hard at times to remember the right

movement type that you’re searching for. Therefore, the Stock Change filter was

introduced in SAP S/4HANA that combines categories of movement types with

regards to their stock impact, as shown in Figure 6.5:

� No Stock Change

Material document postings that don’t change the stock level (e.g., goods move-

ment type 340, batch revaluation).

� Stock Decrease

Material document postings that lower the stock level (e.g., goods movement type

201, goods issue to cost center).

� Stock Increase

Material document postings that increase the stock level (e.g., goods movement

type 101, goods receipt).

� Transfer Posting

Material document postings within an issuing and receiving organizational unit

(e.g., goods movement type 311, one-step storage location to storage location).

Figure 6.5 Stock Change Filter

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After the right filter values are set and you click the Go button, the system outlines

the related material documents, as shown in Figure 6.6. The columns displayed in the

result list can be adjusted to your needs via the table settings feature by clicking the

gear icon at the top of the results table.

Note

The result list shows one line per material document item. This means if the material

document contains two items, both are outlined in the result if the search criteria

meet both material documents’ items.

The example in Figure 6.6 shows the breakdown of material documents items for

Material Document 4900008750.

Figure 6.6 Material Document Result List

You can navigate to the material document object page by selecting one of the mate-

rial document items.

In the header of the material document object page, the related material document

number and the material document year are shown. In addition, information about

reversed items is displayed here (see Figure 6.7). More information about how a mate-

rial document can be reversed is provided in Section 6.5.

Figure 6.7 Object Page Header

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The material document object page consists of four different tabs:

� General Information

This tab was already described at the beginning of the chapter and provides the

material document header data.

� Items

This tab offers the related material document item information. For the given

example of material document 4900008750, this means that four material docu-

ment items are displayed in a table format, as shown in Figure 6.8. In addition, this

table’s columns can be adjusted via the gear icon at the top of the table.

Figure 6.8 Object Page Item List

A detail page for each material document can be accessed by clicking on a material

document item.

Beside the header information of the material document number and material

document number item, the detail page contains two tabs. The Output Manage-

ment tab, shown in Figure 6.9, offers information if the material document items

included an output-related activity such as a print form or an email. The related

output can be displayed accordingly.

Figure 6.9 Output Management Tab in the Material Document Item Detail Page

In addition, a tab with more detailed Accounting information is given, as shown in

Figure 6.10. Here, you can find the related financial accounting information for the

general ledger account and cost center, for instance.

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Figure 6.10 Accounting Tab in the Material Document Item Detail Page

� Process Flow

In this tab, you gain a graphical illustration of the predecessor and successor busi-

ness documents of the current material document. We’ll walk through it in detail

in the next section.

� Attachment

This tab shows the attached items of the material document (see Figure 6.11). It’s

possible to display the attached items in detail, attach additional items, or remove

existing ones.

Figure 6.11 Attachment Tab

Material Documents Overview is the central application of inventory management

in SAP S/4HANA due to the importance of the material document entity. Therefore,

the material document object page can also be reached via direct navigation from

several apps on the SAP Fiori launchpad. To give a simple example, look at Chapter 5,

where we considered the different SAP Fiori-based goods receipt processes. If a goods

receipt is successfully posted in the system, and the related material document is cre-

ated accordingly, the system shows a popup outlining the newly created material

document, as shown in Figure 6.12.

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Figure 6.12 Success Popup with Material Document Number

Included in this popup is an implicit navigation that leads you directly to the mate-

rial document object page without displaying the initial filter bar so that the material

document information is directly displayed.

This navigation is based on the MaterialMovement sematic object so that it’s centrally

embedded in the SAP Fiori launchpad. This also enables apps that aren’t part of the

inventory management area to provide a navigation to the material document

object page. You must have sufficient authorization to display material documents,

however.

6.1.4 Analyze the Document Flow via the Material Document Object Page

While the material document is a rather central entity in the system, from a business

process perspective, there are several possible predecessors and successors (also

called follow-up documents) of a material document.

A predecessor document of a material document could be a purchase order or a deliv-

ery for instance. After a goods receipt is posted, and the related material document is

created, the material document contains the information about the predecessor doc-

ument.

Inventory management in SAP S/4HANA automatically triggers the creation of the

required successor documents, such as relevant accounting documents.

The Material Documents Overview app, which we discussed in the previous section,

offers a graphic illustration of the business process document flow in the Process

Flow tab.

The process flow contains separate steps for each relevant predecessor and successor

document, such as accounting documents that include the document number to

give the user a context of the given material document, as shown in Figure 6.13.

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Figure 6.13 Process Flow

In addition, the functionality of the process flow and the related business documents

isn’t restricted to just displaying the related documents. It also provides an embed-

ded navigation in the SAP Fiori launchpad that you can access by simply clicking on

the business document, as you can see in Figure 6.14.

Note

A display authorization is required for the business document in the process flow to

be enabled for using the related navigation target.

In general, the business process flow provides a comprehensive process and process

steps view, including the environment of the chosen material document, in a graph-

ical way.

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Figure 6.14 Navigation Out of the Process Flow

6.2 Stock Identification

One of the most critical and important functionalities of inventory management is

to provide up-to-date and accurate information regarding a company’s stock situa-

tion as the basis for daily work.

The current stock and the stock level over time for different reporting dates and time

frames might be of interest. Supplementary stock values may also help in making the

right decisions. Finally, all these figures have to be provided in a timely and perfor-

mant manner.

Note

It’s important to distinguish the daily stock information requirements faced by the

warehouse clerk and inventory manager, which are described in this chapter, from

the requirements faced by an inventory analyst. These analytical requirements are

described in Chapter 8.

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In this section, we’ll walk through how to identify stock using key SAP Fiori apps for

both a single material and multiple materials, before discussing the stock overview.

6.2.1 Stock – Single Material

The Stock – Single Material app (F1076) provides a view of the stock situation for a sin-

gle material. The stock types that can be accessed by this app are configured in data-

base table T200A, as shown in Figure 6.15. If an entry for a stock type is given in the

table, the SAP Fiori app provides the related column to be displayed in the results

table. So, if you want to hide a certain stock type permanently because it’s never used

in your company, you can simplify the SAP Fiori app output by removing (or not add-

ing) the related stock type in table T200A. The mechanism of table T200A and its entries

are used in several SAP Fiori apps for inventory management. For each app, we’ll

mention whether it makes use of the table T200A mechanism. You can access the data

maintenance of table T200A by running Transaction SM30 in your SAP S/4HANA

backend and entering “T200A” as the maintenance object.

Figure 6.15 Table T200A Entries for Stock Types

After opening the app from the SAP Fiori launchpad, enter the material you want to

check the stock situation for, as shown in Figure 6.16.

The app offers type-ahead search and standard value help for getting the required

material out of the system. Of course, the app can also be started via SAP Fiori launch-

pad navigation. In this case, a material is passed as a parameter, and the application

directly loads the stock figures for the material.

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Figure 6.16 Material Input Field

When the material is entered, the application provides some general header data of

the material, such as material number, material name, material type, and base unit of

measure, as shown in Figure 6.17.

Figure 6.17 Material Header Data

Below the header data, the stock figures are provided in a hierarchical view (see

Figure 6.18). The organizational levels plant and storage location are provided in the

table.

Figure 6.18 Stock Figures on the Plant Level

The storage location level can be expanded or collapsed via the arrows at the top of

the results table, providing the view shown in Figure 6.19. A search functionality is

also provided if the material has a wide variety of organizational assignments to

plants and or storage locations so that you can easily find your best fitting result.

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Figure 6.19 Stock Result Expanded to the Storage Location Level

If a batch will be assigned to the material, its batch name is provided in a separate col-

umn after the Storage Location column. The columns of the different stock types can

be adjusted according to your needs via the gear icon at the top-right of the table. This

setting allows you to decide, per stock type, if the related stock type should be shown

in the results table and if it should be shown in the micro chart of the Stock History.

In addition, the app provides three general settings via the application settings in the

Me Area that you can adjust to get a more focused view on the stock figures:

1. Expand list by default

If this setting is active, the organizational entities are expanded in the results table

once the data is loaded.

2. Hide all empty columns

If this setting is active, stock types with an empty result for all organizational enti-

ties are hidden.

3. Hide all empty rows

If this setting is active, rows with an empty result are hidden.

The given stock figures are determined with the current date as the reporting date

when the material is selected. If you need to get the stock figures from the past to a

certain date, you just change the Reporting Date to the required date in the past. The

system then determines the historical stock figures. If the Reporting Date is left

empty, the final stock of the current posting period is determined.

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In addition, you might need to convert the stock figures to a different unit measure

by changing the Unit Of Measure. Only the unit of measure in the same dimension

and the parallel units of measures that are maintained in the material master record

are provided as alternatives to the base unit of measure. Both capabilities are

included in the header of the results table as illustrated in Figure 6.18.

The app not only provides the stock figures as numbers but also contains a Stock His-

tory chart outlining the stock level for the different stock types for the last year. This

chart includes 12 different data points, one each for every month in the past year,

starting from the given reporting date.

If you don’t rely on the stock figures and require a more graphical view, the results

table can be toggled into a stock chart by selecting the upper right-hand icon, depict-

ing the different stock types in chart, as shown in Figure 6.20.

Figure 6.20 Chart View of Stock Figures

By clicking on the Stock History chart in the last column of the results table, you

access more detailed stock information of the selected item, as shown in Figure 6.21.

A popup window provides the stock figures as a chart with the different stock types

and allows you to select data points in the graphic for a deeper drill down.

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Figure 6.21 Stock History Chart

The Stock History chart not only contains the drilldown feature but also offers an SAP

CoPilot integration by clicking the Add to Co-Pilot button shown in Figure 6.22 so that

you can share the given information within your inventory management team. In

this case, the team members can access the same chart and drilldown level by just

selecting the shared information in the SAP CoPilot team chat. For more about SAP

CoPilot, see Chapter 1, Section 1.4.3.

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Figure 6.22 Drilling Down to Material Documents in the History Chart

With this drilldown functionality, you can step down into the selected data point and

break down the stock information into the different days in the past and the under-

lying material documents that cause certain stock situations you want to analyze.

The navigation to the Material Documents Overview app is also embedded in the

stock history chart (the Show Material Document button) so that you can directly

navigate further to the material document object page to gain more insight into the

material document in question or just add the material document to SAP CoPilot for

sharing it with your inventory management team.

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6.2.2 Stock – Multiple Materials

In comparison to the Stock – Single Material app just discussed, the Stock – Multiple

Materials app (F1595) provides a filter bar with a wide variety of possible filter values

beyond the Material Number and Plant filters. Figure 6.23 depicts the filter fields of

the standard variant. Of course, you can add additional filter fields by using the Adapt

Filters functionality, as we discussed in Section 6.1.3. Same as before, fill in the filter

for Reporting Date to determine the key date for which the application displays the

stock information.

Figure 6.23 Filter Bar of the Stock – Multiple Materials App

Click the OK button to see the standard results table, which is based on the standard

SAP Fiori table control and provides a more detailed granular result set regarding attri-

butes, as shown in Figure 6.24. In addition, standard table features, such as grouping,

sorting, and exporting to Excel, are supported. In comparison to the Stock – Single

Material app, no graphical information is provided in this application.

Figure 6.24 Result List with Stock Figures

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Besides the stock information in Stock – Multiple Materials, you can also provide

stock value information for the different stock types. Figure 6.25 shows the supported

stock values that can appear as columns in the results table. The screen can be

accessed by clicking on the gear icon in the upper-right corner of the table. Select the

stock value you want to display, and click OK to see the screen shown in Figure 6.26.

Figure 6.25 Configuration of Different Stock Values

Figure 6.26 Result List That Includes Stock Values

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Stock values can be provided in different currencies because the result set shows

cross-plant stock information and values. If these plants are assigned to different

company codes, which might have different currencies, the result set can provide

more than one currency.

In this case, the SAP Fiori app automatically provides a detailed view breaking down

the different stock values for the given currency of the stock values, as shown in

Figure 6.27. You can access this by clicking the Show Details option at the lower-left

corner of the screen.

Figure 6.27 Stock Values Listed by Currency

Note

Initially, in the standard display, the stock value filters and columns in the results

table are hidden and have to be added manually to be displayed. This setting can be

saved as an individual variant afterward.

More details about how stock values are calculated are provided in Chapter 8, Section

8.1.1 for value-based analytics and the related organizational units in Chapter 3, Sec-

tion 3.1.2.

6.2.3 Display Stock Overview

The Display Stock Overview web-based SAP GUI app is based on Transaction MMBE.

This app’s stock information overview provides some more information, like the

native SAP Fiori apps do, for special cases (e.g., reservations).

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After you’ve opened the Display Stock Overview app in the SAP Fiori launchpad

(based on Transaction MMBE), fill out your Database Selections, as shown in Figure

6.28. This includes your Material, Plant, Storage Location, and Batch, if applicable.

Figure 6.28 Stock Overview Selection Criteria

The remaining criteria to fill out are shown in Figure 6.29. With this more detailed

selection criteria, the list output can be adjusted to your needs. In this example,

entries with zero stock quantity are hidden to optimize the list output by checking

the No Zero Stock Lines box.

Figure 6.29 Stock Overview Detailed Selection Criteria

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6.3 Stock Transfer

To access the results, click Execute. The application result header contains the stan-

dard material information and allows you to change the Unit of Measure in which the

stock information is displayed, as shown in Figure 6.30.

Figure 6.30 Stock Overview Result Header

Like the SAP Fiori stock information apps, the Stock Overview app shows the differ-

ent stock figures for the different stock types. In addition, reservations available for

the given material are shown in this application. More information about material

reservations is provided in Chapter 7, Section 7.1.

In addition, the result set contains information about stock that isn’t managed by

inventory management directly, such as On-Order Stock, as shown in Figure 6.31.

Figure 6.31 Different Stock Types in the Display Stock Overview App

Let’s move on to the material movements and related postings available in SAP

S/4HANA with a focus on native SAP Fiori apps.

6.3 Stock Transfer

We’ll begin with stock transfers. The essence of each stock transfer posting is that two

organizational units are affected by the material posting so that an issuing and a

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receiving organizational unit are involved. The issuing organizational unit is the

place where the goods are taken from, and the receiving organizational unit is where

the goods are received.

Generally, transfer postings might occur between two storage locations in the same

plant (discussed in Section 6.3.1). Materials stock transfer between plants is covered in

Section 6.3.2. Stock transfers with materials that have certain attributes to take care of

(e.g., serial numbers) which aren’t yet supported in the native SAP Fiori apps have to

be performed with the Post Goods Movement web-based SAP GUI app, which is

described in Section 6.3.3. Finally, transfer postings might need a stock transfer order

as a reference document, which is discussed in Section 6.3.4.

6.3.1 Stock Transfer – In-Plant

The Stock Transfer – In-Plant app (F1061) opens after you click the Stock Transfer – In-

Plant tile. Select your Material and Plant, as shown in Figure 6.32.

Figure 6.32 Transfer Stock – In-Plant App: Material and Plant Information

After you select the material, a micro chart showing the material master information

for three major stock types appears, as shown in Figure 6.33:

� Unrestricted-Use Stock

� Blocked Stock

� Stock in Quality Inspection

A calculation of an important inventory key performance indicator (KPI) is included

in the header by calculating the range of coverage on the fly when the material is

selected. In the given example, the range of coverage is calculated with 870 days. This

feature is an example of embedded analytics, which are part of transactional applica-

tions, and outlines one major benefit of SAP S/4HANA and SAP Fiori apps.

The transfer posting within the same plant is based on a touch-enabled usability con-

cept by providing buttons for selecting the source and target storage location. This

enables the app to be easily used on mobile devices.

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6.3 Stock Transfer

Figure 6.33 Header with Range of Coverage KPI

After you enter the Material and Plant, the results table is shown (see Figure 6.34) and

contains all storage locations and their stock information for the selected plant and

material combination. In addition, an overall sum of each stock type is shown at the

end of each column.

Figure 6.34 Results Table Including Touch-Based Transfer Posting

The columns for the stock types are based on the configuration in table T200A. If a

stock type is maintained in table T200A, the related column is displayed accordingly.

A result line for a storage location is shown when the material master record for the

material is already maintained for the storage location. If the material master record

isn’t maintained accordingly yet, the application offers a Add Storage Location fea-

ture to select storage locations that aren’t assigned to the material in the material

master record as of now. Click Add Storage Location (top of table) to access the Select

Storage Location screen shown in Figure 6.35, and select the appropriate checkbox.

With the first material movement into this storage location, the material master

record is updated automatically. As a prerequisite, you must set the Create Storage

Location Automatically option in Customizing. In this setting, you can define

whether this feature should be enabled on the plant and/or storage location level.

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Figure 6.35 Creating the Storage Location Assignment Automatically

Note

This setting is available in SAP S/4HANA as an IMG activity and in SAP S/4HANA

Cloud as Self-Service Configuration UI (SSCUI). Refer to Chapter 3, Section 3.1.3, for

more details about the Create Storage Location Automatically setting.

Now let’s discuss how a transfer posting is performed. As described, the results table

contains buttons for selecting the sending storage location. You just have to click the

related button as outlined in Figure 6.36. After the selection is made, the button is

marked as active and the allow transfer posting target buttons are kept active so that

you can select the target location by just selecting the second button.

The selection of the button implicitly includes the selection of a certain movement

type because the button is located in a specific column for a certain stock type (in the

Unrestricted-Use Stock column, in our example).

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6.3 Stock Transfer

Figure 6.36 Transfer Posting by Button Selection

After the target storage location is selected (second button clicked), a popup appears

containing the input fields for required information for the material movement, as

shown in Figure 6.37. Enter your Quantity and date information (Document Date and

Posting Date) in the mandatory fields.

Figure 6.37 Input for Transfer Posting

If you choose the wrong direction for the storage locations, you can just exchange the

target and source storage location by using the exchange button (the two arrows) in

the middle of the popup screen.

This app supports special stock types such as E (orders on hand), K (vendor consign-

ment), and Q (project stock). The selection of the special stock happens implicitly

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when a source storage location is chosen via the popup, which only appears when the

stock contains special stock, as shown in Figure 6.38.

Figure 6.38 Special Stock Popup

Special transfer postings in the same storage location but between the same special

stock indicators are also possible: from E to E or from Q to Q. The related information

for the special stock type, such as a sales order item for special stock type E, can be

entered in the posting popup. The related fields are displayed based on the chosen

special stock.

6.3.2 Transfer Stock – Cross-Plant

The Transfer Stock – Cross-Plant app (F1957) is structured in a similar way as the

Transfer Stock – In-Plant app. However, in this app, the Plant filter isn’t available. You

only need to choose a Material, as shown in Figure 6.39.

Figure 6.39 Material Selection

Once you select the material, the app loads the related data and provides stock fig-

ures for the most important stock types in the app header via a micro chart, as shown

in Figure 6.40.

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6.3 Stock Transfer

Figure 6.40 Header Information

After selection of a certain material, the results table shown in Figure 6.41 breaks

down the stock information for all relevant plants, including a Batch column on the

left-hand side for separation of batch-related stock information.

Figure 6.41 Results Table with Plant and Batch Breakdown

Again, the selection of source and target location is based on button navigation as in

the Transfer Stock – In-Plant app. Select the issuing button according to your chosen

movement type (e.g., Unrestricted-Use Stock in Figure 6.42).

Figure 6.42 Transfer Posting via Button Selection

If a material movement isn’t allowed, the target button gets deactivated so that you

can’t select it. Deactivation might occur due to insufficient authorizations for move-

ment types or missing Customizing for the transfer posting between different plants.

After you select a receiving button, the popup shown in Figure 6.43 appears. Enter

your quantity and date information to post your material document.

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Figure 6.43 Transfer Posting Popup

The stock transport order settings for this app are described in Section 6.3.4.

6.3.3 Post Goods Movement

In SAP S/4HANA, the Post Goods Movement web-based SAP GUI app, based on Trans-

action MIGO (or in this case, Transaction MIGO_TR), is available for processing stock

transfer postings.

Some features, such as support for serial numbers, aren’t available in the preceding

SAP Fiori app. In this case, the Post Goods Movement web-based SAP GUI app can be

used instead.

The web-based SAP GUI app renders the SAP GUI transaction in a browser HTML envi-

ronment. Execute the Post Goods Movement app from the SAP Fiori launchpad

(Transaction MIGO) to access the app entry screen shown in Figure 6.44.

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6.3 Stock Transfer

Figure 6.44 Transaction MIGO Rendered in the Web-Based SAP GUI Environment

Here, the movement type for transfer posting can be entered or selected via search

help in the TF trfr plnt to pnt box in the upper-right corner. Other fields to fill out

include the issuing and receiving plant and the related quantity.

After the entered data is checked or posted (Post button at the bottom of the screen),

an error log might appear outlining whether erroneous data was entered. An exam-

ple is given in Figure 6.45.

Figure 6.45 Error Log in the Post Goods Movement App

Compared to the new SAP Fiori apps, this is a different behavior. The inventory man-

agement SAP Fiori apps try only to offer available and valid data for further process-

ing. In the web-based SAP GUI apps, you can enter data that isn’t consistent in an

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attempt to process the data; you’re only warned or stopped after entering all data and

trying to check/post your input.

6.3.4 Working with Stock Transport Orders

In the Transfer Stock – Cross Plant app, you can post transfer postings between differ-

ent plants. From a business perspective, there are several ways to do this. The direct

posting is possible without a stock transport order, as described in Section 6.3.2.

Transfer posting can also be based on a stock transport order, which is a business doc-

ument containing all relevant information about the stock transfer that acts as a

hook for dependent business objects, such as delivery or accounting. The Transfer

Stock – Cross Plant app also allows the creation of a stock transport order via the Cre-

ate Stock Transport Order button shown in the posting popup in Figure 6.46.

Figure 6.46 Stock Transport Order Creation

The button becomes active if the Customizing for the involved plants is present. For

the related Customizing settings, refer to Chapter 3, Section 3.1.4.

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6.3 Stock Transfer

In addition, in the Application Settings shown in Figure 6.47, a machine learning

functionality can be activated that enables the delivery date to be forecasted and pre-

filled with a proposal provided by the predictive model. Check both boxes to activate

this feature.

Figure 6.47 Predictive Forecast Delivery Date

Figure 6.48 shows the stock transport order process in SAP S/4HANA, which supports

the internal movement of one material from one plant to another. Several variants of

the process exist. They all have in common that the process is initiated by a stock

transport order as the special type of purchase order and is completed by a goods

receipt. During the process, the inventory stock has the stock in transit stock type

(see Chapter 2, Section 2.1). Stock transport orders can be created automatically by

material requirements planning (MRP) runs or manually by end users (see Chapter 7,

Section 7.1).

Figure 6.48 Stock Transport Order Process and Timeline

For creation and monitoring, it’s crucial to know whether the stock transport order

process timeline is on track or delayed. SAP S/4HANA contains a predictive model,

which can be trained based on completed stock transport orders to predict the dura-

tion of future stock transport orders.

Creation of StockTransport Order

Creation ofDelivery

Goods Issue Goods Receipt

Delivery Date

Plant 0001 Plant 0002

Track Various Steps with Documents Posted in SAP S/4HANA

Move Material A from One Plant to Another

Days in Transit

Picking/Packingin Warehouse

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Figure 6.49 shows the Predictive Models app to manage training of the predictive

models. Training, retraining, and activation are carried out centrally within this

application. You can create multiple versions of one model by training, but only one

can be the active version.

Figure 6.49 Predictive Model Overdue Stock in Transit: Training Overview

To train a model, click the Train button on the left side of the screen shown in Figure

6.49. Afterwards, your trained model appears on the right side with the Trained status

(not shown).

Figure 6.50 shows a training run’s results.

Figure 6.50 Predictive Model Overdue Stock in Transit: Training Results

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6.4 Initial Entry and Scrapping

You enter the training result screen by clicking on a model version shown in Figure

6.49. Besides administrative data, the quality of the training run is indicated, and the

Key Influencers (model attributes that contributed most to the training results) are

shown.

After posting by clicking Create Stock Transport Order, a stock transport order is cre-

ated accordingly by the Transfer Stock – Cross Plant app.

These stock transport order can be monitored with a special Overdue Materials –

Stock in Transit app (F2139), which we’ll introduce in Chapter 8, Section 8.4.3.


Initial entry and scrapping are two special cases in inventory management. Initial

entries are often used to set up the stock information for new plants or storage loca-

tions. During normal business, initial entries should be avoided because they are

nontransparent from a goods movement perspective.

Scrapping is used if a material is damaged or has reached its shelf life date to take it

out of stock with a material document as reference. In SAP S/4HANA, there are two

different applications available to post a scrapping for a certain material.

Both the SAP Fiori Manage Stock app (F1062) and the Post Goods Movement web-

based SAP GUI app (Transaction MIGO) provide scrapping functionality, depending

on your requirements. As of the time of writing (summer 2019), the Manage Stock

app allows a single posting per material only. If you want to post scrapping or initial

entries for more than one material at once, you must use the Post Goods Movement

app to post material documents with more than one material document item.

We’ll take a look at both apps in this section.

6.4.1 Manage Stock

The Manage Stock app in SAP Fiori has a similar layout to the Transfer Stock – In-Plant

app, which we discussed in Section 6.3.1. First a Material/Plant combination has to be

selected, as shown in Figure 6.51.

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Figure 6.51 Input of Material and Plant

After material selection, the material header data is displayed as shown in Figure 6.52.

Graphical stock information is shown as a micro chart for three important stock

types. Additionally, the Range of Coverage in Days KPI is calculated on the fly based

on the material consumptions of unrestricted-use stock in the past 30 days.

Figure 6.52 Material Header Data, Including the Range of Coverage KPI

After the material is selected, the results table shown in Figure 6.53 breaks down the

stock information on the storage location level for the given plant and provides a

button per stock type to take action. Again, the displayed stock type columns are con-

trolled via the settings in table T200A.

Figure 6.53 Selection of Material via Button

Clicking the button for a certain stock type in a storage location opens a popup, as

shown in Figure 6.54, which offers different stock change capabilities.

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Figure 6.54 Posting Popup with the Stock Change Field

Depending on your authorizations, the Stock Change dropdown list contains the

allowed stock change activities for certain movement types, as shown in Figure 6.55:

� 551: Scrapping from unrestricted-use stock

� 553: Scrapping from quality inspection stock

� 555: Scrapping from blocked stock

� 561: Initial entry of stock – unrestricted-use stock

� 563: Initial entry of stock – quality inspection stock

� 565: Initial entry of stock – blocked stock

Figure 6.55 Selection of Stock Change Type

In addition, a Reason Code for the material movement posting can be selected, as

shown in Figure 6.56, and is stored in the related material document.

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Figure 6.56 Selection of Reason Code

Note

Reason codes can be defined in the following IMG activity: Materials Management •

Inventory Management and Physical Inventory • Movement Types • Record Reasons

for Goods Movements. They are also available as SSCUIs in SAP S/4HANA Cloud.

After clicking Post, the related material document is created, and the material docu-

ment number is shown in a Success popup, providing a link navigation to the mate-

rial document object page and an Add to Co-Pilot icon next to the creation message,

as shown in Figure 6.57. If the storage location is managed via warehouse manage-

ment, an outbound delivery is created instead of a material document, as in our

example.

Figure 6.57 Successful Posting of Initial Entry

6.4.2 Post Goods Movement

To post a scrapping with the Post Goods Movement app, you must be aware of the

required movement type. In the entry screen of the Post Goods Movement app,

shown in Figure 6.58, enter the movement type in the GI scrapping field (“551”, in our

example).

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6.5 Reversals

Figure 6.58 Entering the Movement Type

Press (Enter) to arrive at the screen shown in Figure 6.59. Here, you can enter the

Material and plant information.

Figure 6.59 Material Information

Next, click the Where tab to arrive at the screen displaying the plant information

shown in Figure 6.60. Enter the Plant, Storage Location, and quantity in the Quantity

tab, and post your scrapping by clicking Post.

Figure 6.60 Plant Information

6.5 Reversals

If a material document must be reversed, you can choose between the native Mate-

rial Documents Overview app in SAP Fiori and the Post Goods Movement web-based

SAP GUI app. We’ll discuss both applications in this section.

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6.5.1 Reversals within the Material Document Object Page

In the Material Documents Overview app in SAP Fiori, you can reverse the whole

material document or even just single material document items.

To do so, select a material document, and navigate to the material document object

page (refer to Section 6.1.3 for details). In the header information, the material docu-

ment item status is shown as described in Section 6.1.3 (refer to Figure 6.7).

In the header of the material document object page, the Reverse action (upper-right

corner) is provided. Click the Reverse button, and a popup is shown asking you to

select the reversed material document items. Enter the Posting Date and an Addi-

tional Note, if necessary (see Figure 6.61).

Figure 6.61 Material Document Reverse Popup

6.5.2 Partial Material Document Reversal

In the Post Goods Movement web-based SAP GUI app, a material document or its

items can be reversed by selecting the material document items in the table view

after the material document is selected. To access the table view shown in Figure 6.62,

choose Cancellation in the dropdown, and enter the related material document.

Select the line with the material you’d like to reverse, and then click Post.

Figure 6.62 Reversal of a Material Document

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6.6 Physical Inventory


Inventory management is one of the essential building blocks of a company’s busi-

ness, especially regarding the current stock situation. Goods kept in stock reflect an

essential part of a company’s possessions. Therefore, it’s crucial that the overview of

the current stock figures is always up to date so that business decisions are based on

current and accurate stock figures. Along with stock figures, the financial impact of

the stock (meaning the stock value) must also be accurate. In the daily business of

warehouse tasks in inventory management, the stock information might deviate

from the real stock figures for many reasons. For instance, a material might have

exceeded its total shelf life or might be damaged due to breakage. If the real stock fig-

ures deviate from the figures present in the system, all dependent business processes

are using inaccurate stock figures (MRP, available-to-promise [ATP], etc.). Therefore,

maintaining the most accurate stock figures in the system is crucial, and, of course,

legal reasons might also drive different physical inventory processes.

In SAP S/4HANA, the following different physical inventory process flavors are sup-

ported:

� Periodic inventory

Generally, periodic inventory is done once a year (i.e., end of the year or business

year). This variant is chosen by most companies.

� Continuous inventory

Continuous inventory is commonly used in relationship with warehouse manage-

ment systems, and the counting is carried out at different times in the course of

the business year.

� Cycle counting

During cycle counting, inventory materials are counted in periodic cycles based

on the classification of the cycle counting indicator, which we introduced in Chap-

ter 3, Section 3.1.3.

� Sampling

The sampling inventory is a subset of the cycle counting inventory process and

takes a considerable amount and a number of kinds of companies’ materials into

account. The rest of the materials aren’t counted, but the result of the counted

ones is extrapolated to those materials.

In this section, we’ll discuss the physical inventory process steps for these

approaches and walk through each in detail with their corresponding apps.

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6.6.1 Physical Inventory Phases

For all these different physical inventory approaches, similar main phases have to be

performed to get the stock figures checked and updated, as shown in Figure 6.63.

Figure 6.63 Physical Inventory Process Steps

This rough overview is given because often these different phases are also reflected in

the user setup of the SAP system to distinguish the users who are allowed to count

and post the differences, for instance, due to legal reasons.

In the preparation phase, a decision must be made regarding which materials will be

counted for which plant and storage location. Overall, physical inventory can be per-

formed for the following stock types (see Chapter 2, Section 2.1):

� 01 – Unrestricted use stock

� 02 – Quality inspection stock

� 03 – Return stock (without special stock types)

� 04 – Stock in transfer at storage location level (without special stock types)

� 05 – Stock transfer stock at plant level

� 06 – Stock in transit

� 07 – Blocked stock

� 08 – Restricted stock

� 09 – Tied empties stock (without special stock types)

� 10 – Valuated goods receipt blocked stock

For the different physical inventory process steps, certain apps are available. In Sec-

tion 6.6.1 and Section 6.6.2, we’ll focus in more detail on the native SAP Fiori apps

available for physical inventory in inventory management. Let’s start with a high-

level look at all available physical inventory applications, including the web-based

SAP GUI applications:

Prepare

• Create physical inventory document

• Lock material posting

• Print physical inventory document

Evaluate

• Record count results in the system

• Initiate recount

• Post differences

Count

• Count

• Note results

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� Prepare phase

– Create physical inventory documents

� Web-based SAP GUI application Transaction MI01 (and Transaction MI02 for

changes)

� SAP Fiori app: Create Physical Inventory Documents (F3197)

� Count phase

– Enter physical counts

� Web-based SAP GUI application: Enter Count Results (Transaction MI04)

� Transaction MI24 (Physical Inventory List)

� SAP Fiori app: Create Physical Inventory Documents

� Evaluate phase

– Report differences

� Transaction MI20 (List of Inventory Differences)

– Post inventory documents

� Transactions MI07 (Post Inventory Differences) and MI24 (Physical Inven-

tory List)

� SAP Fiori app: Create Physical Inventory Documents

If a recount is required, the related recount sheets can be printed with Transaction

MI11 (also possible with Transactions MI04 and MI24).

In addition, some shortcuts are available to combine different process steps:

� Posting the count result without reference to the physical inventory document

The physical inventory document is implicitly created when the count result is

posted.

� Posting stock differences without reference to the physical inventory document

The physical inventory document and count result are implicitly created when the

stock difference is posted.

� Posting counting and stock differences in one step

The stock differences are directly posted when the count result is entered in one

step.

The first two steps can be performed with the Enter and Post PI Count without Docu-

ment web-based SAP GUI application (Transaction MI10, business role SAP_BR_

INVENTORY_MANAGER).

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In Chapter 3, Section 3.1.3, we already introduced the related settings for physical

inventory that are used for entering count results and posting differences.

6.6.2 Create Physical Inventory Documents

The Create Physical Inventory Documents app (F3197) provides a filter bar to select

the related materials for which a physical inventory document will be created, as

shown in Figure 6.64. In addition, a filter for a date-dependent selection when the last

count of a material happened is provided. Further filter criteria, such as adjustment

values of counts or quantities, can be added to the filter bar via the gear icon.

Figure 6.64 Filter Bar for Physical Inventory

Select your filters, and then click Go to access the results list, as shown in Figure 6.65.

The results list outlines the material-related information, and again the table col-

umns can be adjusted to your needs by using the gear icon at the top-right corner of

the table.

Figure 6.65 Results Table

Clicking on one result line takes you to a details page for the selected material, as


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Figure 6.66 Details Page: Header Data

The details page contains two different tabs. General Information outlines inventory

and material master data, as shown in Figure 6.67.

Figure 6.67 Details Page: General Information Tab

The Key Figures tab outlines the physical inventory information, such as adjustments

to count results or quantities in the past 12 months, as shown in Figure 6.68.

Figure 6.68 Details Page: Key Figures Tab

After the decision is made to perform a count for a certain material, you can create a

physical inventory document. To do so, click the related Create Physical Inventory

Documents button (bottom-right corner of results screen, not shown), and the Create

Physical Inventory Documents screen will appear, as shown in Figure 6.69.

All physical inventory documents are split by plant and storage location as a default.

In addition, the given situation might require a more detailed split of the physical

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inventory documents. The SAP Fiori app supports more detailed splitting on three

different layers from which you can choose in the Split Documents by dropdown:

� Storage Bin

� Material

� Material Group

� None

Enter your maximum number of items and the related date information as shown in

Figure 6.69.

Figure 6.69 Creating a New Physical Inventory Document

In addition, additional header data for the physical inventory documents can be set

up, as shown in Figure 6.70.

Figure 6.70 Header Data of the Physical Inventory Document

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The Additional Header Data area contains two important flags. The Set Posting Block

indicator prevents (once set) further material movements for the given material

until the physical inventory count is completed. Something similar holds true for the

Freeze Book Inventory indicator, which prevents an incorrect book inventory balance

during the counting process if, for instance, goods receipts are still entered into the

system. If this indicator is set, the book inventory balance is stored for this physical

inventory document so that after entering the count results, any changes during the

count can be compared. This might be relevant if the count result isn’t entered into

the system in a timely manner.

6.6.3 Enter Inventory Count

After the inventory is counted based on the physical inventory document, the count

result must be entered into the system. This can be done with the Enter Inventory

Count web-based SAP GUI app (Transaction MI04, business role SAP_BR_WARE-

HOUSE_CLERK).

Starting with the selection of the relevant physical inventory document, the related

material must be selected, as shown in Figure 6.71. Afterward, the count result can be

entered and saved.

Figure 6.71 Selection of the Physical Inventory Document

After you’ve selected the Physical Inventory Document, click (Enter) to access the

screen shown in Figure 6.72. Select the related physical inventory document item,

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and enter the count result (Quantity 5 in this example). Or, you can mark a Zero Count

before saving by clicking the Post button (not shown).

Figure 6.72 Entering the Count Result

Note

If a count result has to be changed afterward (before posting differences), the

Change Inventory Count web-based SAP GUI application can be used to adjust the

counting information.

6.6.4 Process Physical Inventory Count Results

With the Process Physical Inventory Count Results web-based SAP GUI app (business

role SAP_BR_INVENTORY_MANAGER), the entered count result can be processed fur-

ther.

Execute the Process Physical Inventory Count Results app from the SAP Fiori launch-

pad (Transaction MI20), as shown in Figure 6.73. Here, you can post the differences for

the count results.

Figure 6.73 Processing Physical Inventory Documents

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By selecting the related physical inventory document item and clicking the Post Dif-

ference button, the changes to the stock figures are posted into the system.

6.6.5 Physical Inventory Document Overview

After the physical inventory documents are created, the Physical Inventory Docu-

ment Overview app (F0379A) in SAP Fiori provides an overview of the given physical

inventory documents.

Figure 6.74 shows the entry screen with filter bar. The documents can be filtered via

the provided filter options.

Figure 6.74 Filter Bar of the Physical Inventory Document Overview App

When you click Go, the results table of the physical inventory documents, shown in

Figure 6.75, appears to provide status information about the count progress.

Figure 6.75 Count Progress in the Results Table

You can access the details screen of the physical inventory documents by clicking on

one line item in the results table, shown in Figure 6.76. The screen consists of header

data (count progress information) and three tabs.

The Items tab, shown in Figure 6.77, shows the different physical inventory document

items with related count information. Important information on the item level is

provided (i.e., whether the count result is different from the current book quantity).

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Many more details can be displayed in the item table when you add columns via the

gear icon.

Figure 6.76 Details Page: Header Data

Figure 6.77 Item Information with Comparison of Count Results

By clicking on one item in the item overview table, you can access a details page for

each item that provides more information in graphical way via micro charts in the

header, as shown in Figure 6.78.

Figure 6.78 Item Details Screen: Header Data

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6.7 What’s Ahead for Core Inventory?

The detailed Count Results on this screen include quantity and value information, as


Figure 6.79 Count Results for a Physical Inventory Document Item

6.7 What’s Ahead for Core Inventory?

Recently, some enhancements to the SAP Fiori-based core inventory management

processes were released. For instance, more fine-grained support of batches in the

Manage Stock, Transfer Stock – In-Plant, and Transfer Stock – Cross Plant apps in SAP

Fiori was introduced for better usability. As of the time of writing (summer 2019),

there are some features that are lacking and worthwhile enhancements that could

enrich the native SAP Fiori apps for the core inventory processes:

� Goods issue: Availability of a native SAP Fiori app for posting of goods issues

� Field control: Availability of a configuration capability to steer the fields which are

available on the UI (that is, to set fields to optional or mandatory)

� Transfer Stock – Cross Plant: Enablement of transfer postings with multiple items;

currently only one item is supported

� Initial load: Enablement of initial loading for special stock types and for multiple

items at once in the Manage Stock app

� Scrapping: Enablement of scrapping with account assignments in addition to cost

centers for special stocks and for multiple items at once

In addition, more native SAP Fiori apps for supporting the physical inventory process

might be worthwhile in the future.

Looking at current IT trends, Internet of Things (IoT) will have a major impact on

physical inventory. Sensor-related data will make the physical inventory process

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faster and smarter. You might also check out Chapter 9, Section 9.3.4 with regards to

the SAP Leonardo IoT platform.

6.8 Summary

This chapter outlined the core inventory management processes and their represen-

tation as native SAP Fiori apps or web-based SAP GUI apps, such as Transaction MIGO

or the physical inventory processes. Web-based SAP GUI apps are still necessary due

to some missing features of native SAP Fiori apps as of now. Increased end user

usability and modern UIs will cause the usage of native SAP Fiori apps to increase

quickly, depending on further feature enhancements.

We walked through stock identification at the beginning to outline how stock figures

can be observed and analyzed. After this, we touched on a basic activity of inventory

with regards to stock transfer processes. In addition, some special areas reflecting ini-

tial stock entries and scrapping were described in a separate section. We also covered

reversal and the physical inventory process that guarantees the financial accuracy of

the available stock situation.

Now that we’ve laid the foundation for the core inventory processes, we’ll outline

production execution in the next chapter based on these fundamentals.

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Chapter 7

Production Execution

In this chapter, we’ll execute our planning process using the recom-

mended SAP Fiori apps. We’ll start with reservations and continue

with the entire production process, from scheduling to confirmation,

step by step, and then take a look at monitoring and Kanban options.

This chapter describes all processes during production planning execution. In a nut-

shell, this is one follow-up step from Chapter 4, in which we discussed planning and

adjusting inventory, covering the processing of internal requirements, namely pro-

duction orders.

As explained in Chapter 2, SAP S/4HANA entails role templates that help customers

quickly enable the end user in effectively using the SAP Fiori apps. This chapter deals

with the production supervisor/operator. As this book covers inventory manage-

ment, it doesn’t distinguish between production supervisor and operator. The pro-

duction supervisor is in charge of the work centers where production occurs,

ensuring that orders are completed on time and are of good quality. Key tasks include

working with the production operator, ensuring production processes are followed

correctly, and machine maintenance. When a maintenance problem occurs or even a

machine breakdown, it’s the supervisor’s responsibility to escalate the problem, if

needed. Production operators, on the other hand, are on the shop floor. They operate

machines and perform the manual labor, which may necessitate a high level of skill

or may be somewhat simple, depending on the production process.

This chapter describes how to monitor the lifecycle of a production order beginning

with its execution, tracking and documenting deviations, until its final confirmation.

The process goes as follows, paired with the associated SAP Fiori apps:

1. Schedule production execution

– Schedule Production (F3770)

– Monitor Work Center Schedules (F3951)

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7 Production Execution

2. Monitor production execution

– Monitor Production Order/Process Order (F0266)

– Manage Production Order (F0273)

– Manage Production Operations (F2335)

3. Confirm production execution

– Confirm Production Operation (F0245)

– Create Goods Receipt for the Production Order (F3110)

Naturally, the chapter will also cover some supplementary processes, such as Kan-

ban, reservation handling, and KPIs useful in production planning execution.

7.1 Working with Reservations

Reservations can be used to prepare a goods issue of a particular material at a defined

point in time for a certain purpose. Reservations can be created manually or auto-

matically, as shown in Figure 7.1. Automatically created reservations can’t be edited

manually, and they are based on orders, work breakdown structure (WBS) elements,

networks, and stock transfers. Reservations don’t decrease the unrestricted stock dis-

played in the various SAP Fiori apps (see Chapter 6), but they are considered during

materials requirement planning (MRP) (see Chapter 4).

Although it’s also possible to use reservations to plan the goods receipt process, this

normally isn’t required because purchase orders and production orders contain all

the required information anyway.

Figure 7.1 Business Processes Embedding Reservations

Which material?Which quantity?

When (requirement date)?Where (plant/storage location)?

Which recipient?Why (movement type)?

Which priority?

ManualReservation

Automatically CreatedReservation

• Based on orders, WBS elements, and networks

• Based on stock transfers

Reservation Document

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In this section, we’ll walk through automatic and manual creation of reservations

and show how to display your reservation list.

7.1.1 Automatic Creation of Reservations

MRP runs can create stock transfer reservations at the issuing plant as part of a stock

transfer process to cover open demands in a different location.

Reservations are also created/changed automatically if the leading document (order,

network, WBS element) is created/changed.

7.1.2 Manual Reservation Management

The Create Reservation app (Transaction MB21) in SAP Fiori allows you to manually

create a reservation. On the initial screen in Figure 7.2, you enter Base Date, Move-

ment Type, and Plant, and then you proceed to the details screen by clicking Create

New Items.

Figure 7.2 Creating a Reservation: Initial Screen

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In the details page shown in Figure 7.3, you enter the reservation details, such as var-

ious account assignment fields G/L Account, Goods Recipient, Cost Center, Material,

Quantity, and Storage Loc. You save your input by clicking Post.

Figure 7.3 Creating a Reservation: Details

After you’ve created your reservation, you can view it in the Manage Reservation app

shown in Figure 7.4. This is a mass maintenance tool for execution changes on reser-

vations, such as deleting, closing, or setting goods movement to Allowed.

Figure 7.4 Viewing a Reservation

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7.1.3 Display Reservation List

The Display Reservation List app (Transaction MB24) allows you to monitor the reser-

vations created in the system. You start with a selection screen, split into Figure 7.5

and Figure 7.6. In Figure 7.5, you can use various attributes describing either the res-

ervation document itself or its account assignment information as selection criteria.

In Figure 7.6, you can limit the result set to certain aspects of a reservation. Layout

allows you to add a layout variant of the results list shown in Figure 7.7.

Figure 7.5 Reservation List: Selection Screen (Part 1)

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Figure 7.6 Reservation List: Selection Screen (Part 2)

After clicking Execute in the screen shown in Figure 7.5, you’ll see the results list

shown in Figure 7.7 displaying all reservations matching the selection criteria.

Figure 7.7 Reservation List: Result Set

After selecting one item and clicking the Item button, you’ll be directed to the details

page of the selected entry (see Figure 7.8). Here you see the attributes defining the

process linked to the reservation item (Movement Type, Plant, Material, Storage

Location), Quantity information, and additional data, in particular the cost assign-

ment of the reservation item.

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7.2 Scheduling and Manufacturing Execution

Figure 7.8 Reservation List: Selected Item Details


In this section, we’ll cover the entire manufacturing execution process, beginning

with production scheduling. We’ll then discuss how to monitor various execution

steps, briefly introduce change management, and finally cover the confirmation

step.

7.2.1 Schedule Production

The Schedule Production app (F3770) allows you to schedule orders on bottleneck or

pacemaker work centers (work centers that are critical for the production scheduling)

based on the production line settings in the material master record selected within

one Horizon (mandatory).

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Within the app settings, you’ll need to define your Area of Responsibility and your

Industry Type (Discrete or Process).

Note

You need to maintain the correct production line in the MRP4 view of the material

master record to be able to schedule a production version.

You also need to maintain finite capacity planning at the work center to see each

order’s capacity requirements.

You can access the list of production operations by clicking Go, as shown in Figure 7.9.

Figure 7.9 Simple List with Production Operations

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The Set Strategy button at the top of the screen brings you to the screen shown in

Figure 7.10, which enables you to personalize the planning parameters with the fol-

lowing options:

� Planning Mode: You can select the Bucket planning mode to display the capacity

view in Figure 7.11 as a table format with one column per day. You can use the

Sequence planning mode to display the capacity in time continuous format (not

shown).

� Scheduling Control: You can use a Finite or Infinite scheduling strategy.

� Direction: Forward scheduling considers the start date of the order, and Backward

considers the end date of the order.

Figure 7.10 Set Strategy

The Dispatch and Deallocate buttons allows you to change all selected production

operations shown in Figure 7.9.

To access the details screen shown in Figure 7.11, you click on the arrow of a selected

item. Here, you can do the following:

� Switch the production version, if applicable, by choosing from the Assign column.

� Dispatch an operation using the Dispatch button.

� Deallocate an operation using the Deallocate button in the top right-hand corner.

� Edit operation details in the Available Sources of Supply table, which takes you to

the screen shown in Figure 7.12.

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Figure 7.11 Details of Selected Production Operations in a Flexible Column Layout

Figure 7.12 Editing Operation’s Details

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7.2.2 Monitor Work Center Schedules

The Monitor Work Center Schedules app (F3951) allows you to monitor the progress

on operations of selected work centers in your area of responsibility. Thus, you’ll be

able to track the production execution. You need to fill in the mandatory Horizon fil-

ter to define the time frame to look at in Figure 7.13. On the left side, you see either the

Pacemaker Work Centers (in our example) or All Work Centers. The operations per

work center are delineated on a time axis (unit hours) on the right side. The legend

button in the toolbar explains the different color codes of the chart.

Figure 7.13 Entry Screen with Work Centers and Operations

You can select on operation in the chart and navigate via the Schedule Production

button to the respective SAP Fiori app, as shown in Figure 7.14 (see previous section).

Figure 7.14 Navigation to Schedule Production

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You can select a Work Center from the column on the left side of Figure 7.13 to access

a quick view. Figure 7.15 shows how quick views help you retrieve additional informa-

tion on the work center to navigate to context-sensitive work center-related SAP Fiori

apps.

Figure 7.15 Work Center Quick View

If you have more than one operation per work center, you can expand the hierarchy

on the left side as shown in Figure 7.16. If you select an operation, you see the Opera-

tion Details in a side panel on the right side.

Figure 7.16 Work Center with Expanded Production Orders

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If you select a production order in Figure 7.16 and click the Order Details button, you

can see all the Operations of the selected production order and their assignment and

schedule in the corresponding work center, as shown in Figure 7.17.

Figure 7.17 Operations per Production Order

7.2.3 Stock Requirements List

The Stock Requirements List app shows the supply and demand situation for each

material on a very detailed level. After entering Material, MRP Area, and Plant, the data

is loaded. As shown in Figure 7.18, you can see a list of key information, such as Date,

MRP element, Receipt/Reqmt, and Available Qty, normally sorted after date.

Figure 7.18 Stock Requirements List

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7.2.4 Display Planned Orders, Production Orders, and Process Orders

This section will guide you through finding and displaying the transactional docu-

ments linked to manufacturing execution. We’ll take a look at both the enterprise

search option and the available SAP Fiori apps.

Enterprise Search

As explained in Chapter 1, Section 1.4.3, the main SAP S/4HANA business objects can

be searched for and displayed with the built-in SAP Fiori launchpad enterprise search

capability. This is particularly helpful if the primary intention is to do some basic

information retrieval with little information to start with. Figure 7.19 shows search-

ing with a production order number and the related action the systems offers based

on the end user’s role, which you can see by clicking the ellipsis button.

Figure 7.19 Searching for Production Order 2000140

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Other typical information to start searching with includes the material number,

material short text, or plant. By selecting a business object to search in, you restrict

the result set to production orders, process orders, or planned orders.

If the information displayed by the enterprise search expanded view in the screen

shown in Figure 7.19 isn’t sufficient, you can go directly to the object page of the pro-

duction order by clicking the Production Order Object Page option to see a rich set of

additional data, as shown in Figure 7.20.

Figure 7.20 Object Page Header: Production Order

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The object page header allows direct navigation to the section of interest via multiple

tabs. For example, you can view the Operations and Components details, as shown in

Figure 7.21.

Figure 7.21 Object Page Details: Production Order

SAP Fiori Applications

If enterprise search and object pages don’t contain the information, the Display Pro-

duction Order app (shown in Figure 7.22) or the Display Process Order app (shown

Figure 7.23) can be used to retrieve all data related to the business object in depth.

354


Figure 7.22 SAP Fiori App: Display Production Order

Figure 7.23 SAP Fiori App: Display Process Order

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7.2.5 Manage Change Requests

If you’ve selected to use Change Requests (shown in Figure 7.24) in your personal set-

tings, changes to external requirements are managed by a change order process

involving the vendor. A change request can have the statuses New, Requested, and

Answered. The Manage Change Requests app (F0670) is used to handle this process.

Figure 7.24 Personalization: Activating Change Requests

Four SAP Fiori apps are available to manage change requests. Three are used exclu-

sively for each of the aforementioned states, and a fourth one is used to handle all

states.

Figure 7.25 shows a change with a change request. If you select Requested, waiting for

answer, the change request is created with status Requested.

Figure 7.25 Initiating a Change Request for a Purchase Order

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If you select Request later, the status is New. You can enter a note and change the

desired attribute. Click OK to enact the change. To manage this change, you could use

either the Manage Change Requests – New app or the Manage Change Requests – All

app (F0670 and F3406, respectively).

Figure 7.26 shows the Manage Change Request – All app. The worklist contains the

vendors on the right side and all change requests of the selected vendor on the left

side. You can navigate to the details of all open change requests.

Figure 7.26 Worklist of All Change Requests

Figure 7.27 shows a change request with status New. To create automatic emails to the

selected vendor of change request with the status New, select the change request and

click on Compose E-Mail (not shown). The changed attributes (in this example, a new

Delivery Date of 03/26/2018) are shown and can be edited by clicking the Edit button.

You can also click the Set to Requested option, which changes the status to

Requested. The lower section shows all MRP elements of the Material as a table or

graphic. All actions can be documented in the Notes section.

Figure 7.28 shows a change request of status Requested. You can record the vendor’s

response with one of the Pending, Accepted, Rejected, or New Proposal buttons.

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Figure 7.27 Change Request with Status New

Figure 7.28 Change Request with Status Requested

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Click Apply Changes to automatically update the order if the vendor doesn’t reject

the changes. With the Discard button, you can close the change request if the vendor

rejects any changes. Both actions will close the change request.

7.2.6 Check Material Coverage

The Check Material Coverage app (F0251) allows you to directly check the material

coverage of a certain material. When starting the SAP Fiori app, a popup window

requires you to enter Material and Plant supported by value help, as shown in Figure

7.29.

Figure 7.29 Starting the SAP Fiori App

Subsequently, the Material Coverage app described in Chapter 4, Section 4.7.1 is

started.

7.2.7 Monitor Production Orders and Process Orders

The Monitor Production Orders app (F0266) helps you to track all the production

orders in your area of responsibility, detect critical situations, and react to them.

Many objects offer quick views for rapid inspections. Starting with a simple require-

ments list, you can navigate to a worklist for selected items.

Figure 7.30 shows the list with status information per material, such as start and end

time, delays in operations or missing components, and open quantities. The Status

column contains an aggregated overview. The calculations are based on the selected

Shortage Definition:

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� MRP Standard

Represents standard MRP logic to compare supplies and demands.

� Stock Days’ Supply

Calculates stock days’ supply to compare available stock with planned demands.

� Ordered Requirements

Calculates whether the planned receipts will cover the ordered demands.

� Ordered Receipts

Calculates whether the ordered receipts will cover the planned demands.

Figure 7.30 Simple List: Monitor Production Orders

After selecting one or more item, click Manage Orders to navigate to the Manage Pro-

duction Orders worklist, as shown in Figure 7.31.

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Figure 7.31 Worklist: Selected Production Orders with Five Sections per Object Details

Within this worklist, you work on the production orders. The following five sections

provide additional information to identify and solve any issue:

� Stock/Requirements List

You can solve the issue quickly by starting an MRP run from this section (see

Figure 7.31). Another option to solve an issue is to delete the MRP Element. If the

MRP run can’t solve the issue, and the material is externally procured, click on a

row with an arrow to navigate to the Material Shortage screen (see Chapter 4, Sec-

tion 4.7.1). This section offers a graphical display too (not shown).

� Components

You can identify any missing quantity you want to solve, as shown in Figure 7.32.

Click the Manage Components button to navigate to the Monitor Internal Require-

ments app described in Chapter 4, Section 4.7.8.

� Milestones

You get an overview of all operations, including their timeline and status, as


361


Figure 7.32 Components Section with the Manage Components Capability

Figure 7.33 Milestones Section

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� Material

You can view material-related information, such as Stock Availability, Material

Data, and MRP Data, as shown in Figure 7.34.

Figure 7.34 Material Section with Master Data

� Production Order

You can see the details of the production order, such Order Type, Order Status, var-

ious date fields, and Order Quantity (see Figure 7.35).

The Monitor Process Orders app offers the same capabilities as the Monitor Produc-

tion Orders app.

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Figure 7.35 Production Order Section

7.2.8 Manage Production Orders

The Manage Production Orders app (F0273) helps you supervise the progress of pro-

duction by monitoring production order operations. If you detect any issues, you can

drill down to identify the root cause and take immediate actions to resolve the issue

and keep your production process running as smoothly as possible. The usage is sup-

ported by personalization via Area of Responsibility, as shown in Figure 7.36.

Figure 7.36 Personalization by Area of Responsibility

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The initial list in Figure 7.37 visualizes the progress of each production order opera-

tion, including any issues if applicable. Quick views on material, production order,

operation, work center, and previous statuses offer additional information. After

marking one entry, you can directly Change Dates and Quantities, Edit, or Release a

production operation, if applicable.

Figure 7.37 Simple List: Manage Production Orders

Based on the Progress of Operation and the symbols indicating Issues, you can navi-

gate to the details of each production order operation by clicking the arrow next to a

selected item, as shown in Figure 7.38, which provides sections for Issues, Order Infor-

mation, Components, Order Schedule, Confirmation, and Inspection. Any issues are

directly listed as the first section for closer investigation.

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Figure 7.38 Object Page of Production Order Displaying Issues

The Components section shows the status of the assigned components (see Figure

7.39), indicating, for example, coverage, scrap, and storage location.

Operations shows the progress on the operations with the selected operation marked

and indicating key figures, such as Work Center and Actual Start/Actual End versus

Planned Start/Planned End, as shown in Figure 7.40.

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Figure 7.39 Details Page with Section Components

Figure 7.40 Details Page with the Operation, Confirmation, and Inspection Sections

You can access additional data by clicking an item of interest to open quick views

(shown in Figure 7.41), or you can navigate to the details of the production operations

by clicking the arrow of the selected item (shown in Figure 7.42).

The production operation details in Figure 7.42 list the Operation Issues, Components

(assigned), Order Schedule, Work Center Schedule, Confirmation, and Inspection

(quality).

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Figure 7.41 Quick View on Work Center

Figure 7.42 Details Page of One Selected Operation Displaying Operation Issues

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The Order Schedule section displays the selected operation as marked. The Work Cen-

ter Schedule section shown in Figure 7.43 lists the Operations in Progress as well as

Operations not Started.

Figure 7.43 Details Page of One Selected Operation with the Work Center Schedule Section

Figure 7.44 shows the last two sections of the production operation details: Confirma-

tion and Inspection. Confirmation lists the production order Confirmations, includ-

ing the confirmed Quantity. Inspection lists the quality Inspection Lots linked to the

production order.

If required, you can directly navigate to the Change Production Order app via the

related actions button in the header (not shown) to access the app Header screen


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Figure 7.44 Details Page of One Selected Operation with the Confirmation and Inspection

Sections

Figure 7.45 Change Production Order App

7.2.9 Confirm Production Operations

The Confirm Production Operations app (F0245) supports the confirmation process

of production operations. In Figure 7.46, you start the SAP Fiori app by entering the

production Order and Operation.

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Figure 7.46 Confirmation Entry Screen

On the following screen shown in Figure 7.47, enter the following confirmation

details:

� Yield

Produced quantity to be confirmed.

� Scrap

Scrapped quantity.

� Rework

Quantity needs rework.

� Reason for Variance

Reason code for deviations.

You can completely or partially confirm the production operation.

After you’ve entered the confirmation details, you can click the Post or Post and Com-

plete buttons to post the production operation.

371


Figure 7.47 Confirmation Details

7.2.10 Create Goods Receipt for Production Order

You can directly create a goods receipt for a production order by using the Post Goods

Receipt for Production Order app presented in Chapter 5, Section 5.3.

7.3 Production Performance Monitoring

This chapter provides step-by-step instructions for inventory management as part of

the production planning and monitoring in SAP S/4HANA using the recommended

SAP Fiori apps. You can create your own visual alerts on key performance indicator

(KPI) tiles for a specific time period and other related features.

7.3.1 Material Scrap

The Material Scrap app (F2035) allows you to monitor expected scrapping defined in

the material master versus actual scrapping after confirmation. You can choose

372


between several layout options in the Material Scrap entry screen, as shown in Figure

7.48, by choosing from the dropdown. We’ve selected a bubble chart in our example.

You can drill down by clicking on a bubble and clicking the down arrow button to

identify the root cause of an issue.

Figure 7.48 Material Scrap Displayed as a Bubble Chart

The following KPIs can be calculated, which you select from the dropdown:

� Material’s Expected Scrap Percentage

� Material’s Actual Scrap Percentage

� Material’s Actual Yield Percentage

� Material’s Actual Rework Percentage

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7.3.2 Operation Scrap

The Operation Scrap app (F2034) allows you to monitor expected scrapping defined

in the routing operation versus actual scrapping after confirmation. You can choose

between several layout options in the dropdown on the Operation Scrap entry screen

shown in Figure 7.49. If required, you can drill down here as well by selecting a dot

and clicking the down arrow button to zoom in to the root cause of an issue.

Figure 7.49 Operation Scrap: Line Chart Diagram


� Operation’s Expected Scrap Percentage

� Operation’s Actual Scrap Percentage

� Operation’s Actual Yield Percentage

� Operation’s Actual Rework Percentage

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7.3.3 Scrap Reason

The Scrap Reason app (F2216) provides you with a step-by-step analysis to identify the

root cause for scrap in your production process. You can choose between several lay-

out options and drill down from different perspectives. Hence, you can analyze the

distribution of actual scrap recorded in production confirmations in the dimensions

of time, work center, material, plant, and reason for variance. Drilling down to the

reasons or root causes of the greatest loss of production will help prevent problems

in the future.

Begin on the Scrap Reason entry screen, shown in Figure 7.50. In our example, we’ve

started with a stacked column chart per work center (x-axis), but you can change your

layout using the dropdown.

Figure 7.50 Scrap and Rework per Work Center

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Select a column to open the popup shown in Figure 7.51. You can choose between sev-

eral drilldown options. In our example, we’ve selected a Donut Chart.

Figure 7.51 Drilldown Options after Selecting Values

The preselected filters are automatically passed, and the drilldown to the reason code

is executed, as shown in Figure 7.52.

Figure 7.52 Drilldown to Scrap Reasons for the Selected Work Center

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The following KPIs can be calculated (time frame: last 24 hours), which you select

from the dropdown:

� Actual Scrap Percentage

� Actual Yield Percentage

� Actual Rework Percentage

7.3.4 Excess Component Consumption

The Excess Component Consumption app (F2171) allows you to monitor expected

scrapping defined in the BOM component versus actual scrapping after confirma-

tion. You can choose between several layout options in the dropdown shown in

Figure 7.53.

Figure 7.53 Component Scrap Deviation in Percentage

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If required, the drilldown capabilities allow you to zoom in to the root cause of an

issue by clicking on a column. Hence, you can trace the problems that create the larg-

est excess component consumption in the past and search for a means to prevent

these problems in the future. Starting from the top three materials with maximum

component scrap deviation, you can perform a step-by-step analysis for a specific

time frame.

You can drill down to the cost of a specific material by selecting one column and click-

ing the down arrow. The results are displayed in a bubble chart (see Figure 7.54).

Figure 7.54 Drill Down to One Material


� Original Component Demand Quantity

� Excess Component Consumption Quantity

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� Excess Component Consumption Quantity in Percent

� BOM Item Scrap in Percent

� BOM Item Scrap in Percent Deviation

7.3.5 Monitor Production Execution Duration

The Monitor Production Execution Duration app (F2172) allows you to compare

actual versus planned operation execution duration. The actual operation duration is

calculated based on the production order confirmation. The planned operation dura-

tion is defined in the production order and calculated based on the routing/master

recipe.

You can choose between several layout options via the dropdown, as shown in Figure

7.55.

Figure 7.55 Processing Execution: Line Chart Comparing Actual versus Planned

379


If required, the drilldown capabilities allow you to zoom in to perform a root cause

analysis of deviations by clicking on a column and clicking the down arrow. The

Reporting Period filter allows you to select a predefined time frame. You can enter dif-

ferent units of measure for time calculation.


� Planned Operation Duration

� Actual Operation Duration

� Operation Duration Deviation

� Operation Duration Deviation Percent

7.4 Working with Kanban

Kanban as a means of production planning was introduced in Chapter 4. Here we’ll

cover the production execution part and explain how to monitor the demand and

the supply view of a Kanban control cycle.

7.4.1 Display Kanban (Demand View)

The Display Kanban (Demand View) app (Transaction PK13N)—sometimes also

known as the Kanban board by the production operator—allows you to track Kanban

containers from a demand perspective.

When entering the application, you need to enter the mandatory Plant field, as

shown in Figure 7.56. The other attributes are optional selection criteria to select the

Kanban container of interest. Because we don’t have additional criteria, we’ve

selected No Area Selection in our example and left the Material field blank.

Click the Continue button to view the selected Kanban container displayed as a list, as

shown in Figure 7.57. This view offers generic list capabilities such as sorting, filtering,

exporting to Excel, and printing, as well as Kanban container-specific functions. You

can change the Kanban status of the selected row by clicking Set to Empty or Set to

Full.

380


Figure 7.56 Entering the Kanban Demand View with the Plant Mandatory Field

Figure 7.57 Demand View of Selected Kanbans with Time Stamp

To access a legend for the list, click the Display Legend icon 1 in Figure 7.57. To see a

status summary of all selected Kanban containers, click the overview icon 2 in Figure

7.57. Both screens are shown in Figure 7.58.

381


Figure 7.58 Legend of Kanban Status (Left) and Kanban Board Overview (Right)

If you display the details of one Kanban container by clicking the details icon 3 in

Figure 7.57, you can navigate in Display mode (checkmark icon) or in Change mode

(pencil icon) to the Replenishment element (e.g., a planned order 393), as shown in

Figure 7.59.

Figure 7.59 Kanban Details with Replenishment Element (Planned Order)

382


7.4.2 Display Kanban (Supply View)

The Display Kanban (Supply View) app (Transaction PK12N) allows you to track Kan-

ban containers from a supply perspective. When entering the app, you need to fill in

the mandatory fields depending on the context of the supply. Usually, you provide

one of the Plant fields and a Person Responsible, Supplier, Issuing Plant, or Storage

Location. In our example of in-house production in Figure 7.60, we’ve entered the

Plant and Person Responsible.

Figure 7.60 Entering the Kanban Supply View

Click the Continue button to view the selected Kanban container displayed as a list, as

shown in Figure 7.61. This view offers generic list capabilities such as sorting, filtering,

exporting to Excel, and printing, as well as Kanban container-specific functions. You

can change the Kanban status of the selected row by clicking Replenishment, Status

in Process, or Status in Transit.

The legend and the Kanban overview shown earlier in Figure 7.58 are also available

(not shown).

383


Figure 7.61 Supply View of Selected Kanbans with Time Stamp

7.4.3 Due Replenishment Elements

The Due Replenishment Elements app (Transaction PKAL) helps you select existing

and overdue Kanban replenishment elements in the system. Figure 7.62 and Figure

7.63 show the selection screen when entering the application.

Figure 7.62 Kanban Replenishment Elements

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Figure 7.63 Kanban Replenishment Elements: Selection Screen

You start your selection with the mandatory Plant field. The optional selection

parameters allow you to restrict the result set further.

Click Execute to get to the result set. The results list in Figure 7.64 contains the list of

replenishment elements with their most important information:

� Material

Material number.

� Supply Area

Supply areas required for Kanban (See Chapter 4, Section 4.2.5).

� Kanban ID

Key to identify the Kanban container within the control cycle.

� MRP element

MRP element to fill the Kanban container.

� Replen. element

Key of the MRP element.

385


Figure 7.64 Selected Kanban Replenishment Elements

7.4.4 Correct Kanban

The Correct Kanban app (Transaction PK31) supports you in changing existing con-

tainers in a Kanban control cycle. Figure 7.65 shows the screen to enter a Kanban con-

tainer correction. Mandatory input fields are Material, Plant, and Supply area to

identify a dedicated Kanban control cycle.

Figure 7.65 Entry Screen of Kanban Corrections: Keys of the Kanban Control Cycle

Click the Continue button to access the selected Kanban control cycle, as shown in

Figure 7.66. The Status/Quantity, Replenishment, Quantity/Batch, Reverse, and Can-

cel buttons allow you to execute the desired actions on the Kanban control cycle.

386


Figure 7.66 Selected Kanban Control Cycle

7.4.5 Unlock Kanban Container

The Unlock Kanban Container app (Transaction PK09) supports you in locking and

unlocking selected Kanban containers. You can use this application to onboard and

offboard an entire Kanban control cycle.

7.4.6 Collective Kanban Print

The Collective Kanban Print app (Transaction PK17) allows you to print Kanban cards,

which can be attached to the Kanban container.

387


7.4.7 Set Kanban Container Status

The Set Kanban Container Status app (Transaction PKBC) allows you to set the Kan-

ban container status of selected containers from Full to Empty if the container’s con-

tent was consumed at the production supply side, so that a refill is initiated.

Figure 7.67 shows a worklist of Kanban containers on the left side, either manually

entered or automatically entered by bar code scanning, in the Entered tab. Accidently

entered containers can be removed from the worklist again (Remove button). In the

detail area, on the right side, you can set the container status and the batch if applica-

ble. After clicking the Save button, the container shows up in the Saved tab.

Figure 7.67 Worklist: Setting Selected Kanban Container Status

When using a bar code reader in “keyboard wedge” mode (i.e., the bar code reader’s

output is translated into the keyboard input), you can input the Kanban container

388

7.5 What’s Ahead for Production Execution?

and the container status via a single scanning operation. You can repeat this opera-

tion multiple times as the cursor focus is automatically positioned in the next empty

input field. Make sure that the bar code contains the following data: <container

ID><next status code><enter>.

Allowed values of <next status code> are listed in Table 7.1.

Note

You can also set the status manually by appending a status code to the container ID

in the input field.


Now that we’ve walked through the flow of production execution tasks and the SAP

Fiori apps that support them, let’s move on to new and upcoming features. Process

extensibility is a main focus for the future of production planning execution, and we

can already see how this is being done with Kanban. In this section, we’ll explore the

process extensibility features of SAP S/4HANA with the example of the Kanban con-

tainer.

The main Kanban apps offer extensibility capabilities to extend the Kanban process.

Status Code Description

0 Next status will be determined automatically from the status sequence

1 Waiting

2 Empty

3 In process

4 In transit

5 Full

6 In use

Table 7.1 Possible Status Codes as Part of the Bar Code

389


Example

You may add a project ID to all Kanban operations to link the Kanban-based produc-

tion operations to a specific project.

Table 7.2 lists the SAP Fiori apps and the business context that can be extended (see

Chapter 3, Section 3.5).

SAP Fiori App Business

Context

Data Source BAdI Name BAdI Capabilities

Manage Con-

trol Cycle

Manufactur-

ing: Kanban

control cycle

PP_KANBAN_CONTROL_CYCLE_GUI

Kanban Control

Cycle Change/

Kanban Control

Cycle Check

� Change values

of custom fields

� Check standard

or custom fields

Display Kan-

ban (Demand

View)

Manufactur-

ing: Kanban

container

PP_KANBAN_CONTAINER_GUI

Kanban Contai-

ner Status

Change/Kan-

ban Container

Status Check/

Change Before

Creation of

Replenishment

Element

� Change value

of custom fields

during status

change

� Check value of

custom or stan-

dard fields

during status

change

� Change value

of custom fields

whenever

replenishment

element is cre-

ated on status

change to

Empty

Display Kan-

ban (Supply

View)

Manufactur-

ing: Kanban

container

PP_KANBAN_CONTAINER_GUI

Kanban Card PP_KANBAN_CARD

FDP_KAN-BAN_CARD_SRV_0001

— —

Table 7.2 Process Extensibility of Kanban Cards Ordered by SAP Fiori App

390


If you want to enable a data flow to the purchase order item, you simply need to cre-

ate the same custom fields in the target business context, that is, Procurement: Pur-

chase Document Item. Any data is automatically passed from the business context

Manufacturing: Kanban Control Cycle or Manufacturing: Kanban Container to the

purchase order item.

Figure 7.68 shows as example the Project text field, which has been created in the

Manufacturing: Kanban Control Cycle business context. The Data Source PP_KAN-

BAN_CONTROL_CYCLE_GUI is enabled on the UI and Reports tab. This results in an

additional tab Custom Fields tab with the Project text field in the Manage Control

Cycle app, as explained in detail in Chapter 4, Section 4.9.1 (see Figure 7.69).

Figure 7.68 Custom Field Extensibility: Context PP_KANBAN_CONTROL_CYCLE_GUI

391


Figure 7.69 Custom Field Extended SAP Fiori App

7.6 Summary

The chapter explained how SAP S/4HANA supports the end user in production execu-

tion. It highlighted the SAP Fiori apps that can be used to schedule, monitor, and con-

firm production operations. The embedded change management capabilities, such

as change request handling and note-taking, support exception handling during exe-

cution. Furthermore, working with reservations and Kanbans as a means to control

392

7.6 Summary

inventory and material flow within your business processes was described. Analyti-

cal SAP Fiori apps support the end user in monitoring production execution KPIs.

Finally, the SAP S/4HANA process extensibility features were outlined with a Kanban

example in a look at what’s new.

The next chapter covers the analytical SAP Fiori apps in inventory management in

detail to complete our inventory optimization cycle.

393

Chapter 8

Inventory Analysis

Inventory analysis with SAP S/4HANA allows you to control and opti-

mize your inventory management processes based on SAP Fiori apps. It

provides an idea of which scenario you might make use of with the dif-

ferent tools to steer your inventory business in the right way.

So far, we’ve looked at basic information about SAP S/4HANA and how inventory pro-

cesses are reflected in SAP S/4HANA. To gain more insight into your inventory man-

agement processes, this chapter outlines the analytical capabilities of inventory

management in SAP S/4HANA.

Inventory analytics in SAP S/4HANA are mainly based on the data created during

inventory processing, which is stored in the new data model for material documents.

Due to this new performance-optimized data model, new analytical functionalities

are available with inventory management. The predelivered business role SAP_BR_

INVENTORY_ANALYST can be used with these analytical features. Some basic analyt-

ical capabilities are also include in the predelivered SAP_BR_INVENTORY_MANAGER

and SAP_BR_WAREHOUSE_CLERK business roles. These two business roles include

at least the related overview pages. For more details, check Chapter 3, Section 3.5.2,

where the business roles are described.

Referring to the control cycle of inventory management, which we introduced in

Chapter 2, Section 2.4, this chapter is about the controlling and analytical tools avail-

able within inventory management. The following sections touch on different

aspects of analytical views. We’ll start with analysis of the current and past stock

information. Afterwards, we’ll discuss monitoring of relevant key performance indi-

cators (KPIs) with inventory management in SAP S/4HANA. Based on this, we’ll intro-

duce analytical SAP Fiori apps that can be used for analysis and optimization of

process flows. Then, you’ll see how you might adopt analytical queries according to

your needs. We’ll finish the chapter by discussing the future of analytics.

395

8 Inventory Analysis

8.1 Inventory Analytics in SAP S/4HANA

Analytical capabilities are often used to gain business benefits by analyzing the avail-

able business data in the SAP system. This also holds true for inventory-based pro-

cesses. Knowledge about slow-moving materials or dead stock situations can be

worthwhile information to optimize the stock level and in the end the bounded cap-

ital of your company.

In this section, we’ll start out with a look at what advances SAP S/4HANA has brought

to analytics for your inventory management processes, before discussing the avail-

able tools.

8.1.1 Advances in Analytics

SAP S/4HANA provides several advances to analytics:

� Real-time data

Based on the new data model to store the main business-relevant data in inven-

tory management in SAP S/4HANA, the material document is kept in a column

store-oriented database (SAP HANA). This column store provides the basis for real-

time analytics on up-to-date transactional business data.

� Integrated data

In addition, a state-of-the-art and browser-based user interface (UI) (SAP Fiori)

gives the right presentation capability for process and stock monitoring and opti-

mization. The SAP Fiori pattern was also used to combine analytical with transac-

tional features (in-app analytics). For instance, the transactional SAP Fiori app

Manage Stock (see Chapter 6, Section 6.4.1) contains the inventory KPI range of

coverage.

� Insight to action

Beside the in-app analytics, the SAP Fiori pattern of insight to action brings a pow-

erful capability into the analytics world. Based on the semantic object and the

related navigation targets, the analytical results can be drilled down, for example,

to the material level, and transactional actions (e.g., transfer postings or scrapping)

can be performed directly, or a team of warehouse staff can be contacted by adding

the relevant business object into an SAP CoPilot chat.

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8.1 Inventory Analytics in SAP S/4HANA

� Value-based analytics

Most of the analytical SAP Fiori apps offer the result set in regard to the stock

value. This offers the chance to compare different materials even if they have

different units of measure; however, financial aspects also can be judged directly.

It’s important to note that the stock value calculation in inventory management is

performed based on the current material price multiplied by the stock figures.

This holds true for all stock value determinations in the SAP Fiori apps of inven-

tory management, even if a different reporting date than today is selected. In this

case, historical stock values are multiplied with the current price of the material.

Only in the Stock – Multiple Materials app is the reporting date also used to deter-

mine the price information from that date as a basis for multiplication with the

historical stock figures.

8.1.2 Choosing the Right Analytics Tool

The inventory management optimization cycle was introduced in Chapter 2, Section 2.4. Now we’ll outline which tools and applications are available in SAP S/4HANA that support the analyze part of the inventory management optimization cycle. Related to Figure 2.17 in Chapter 2, Section 2.4.4, these applications are built upon different application templates or patterns.

The available tools and applications for analytics, which we’ll see in action through-

out the chapter, are as follows (many of which you’ll remember from our in-depth discussion of SAP Fiori apps in Chapter 1, Section 1.4.2):

� Object pages

SAP Fiori app pattern outlining important details for business objects such as

material document.

� Overview pages

SAP Fiori app pattern combining different KPIs and relevant data at one glance.

� Analytical list pages

SAP Fiori app pattern providing a standardized look and feel with graphical and

tabular result representations.

� SAP Smart Business

Application pattern that makes use of core data services (CDS)-based queries (SAP

Lumira, designer edition).

� Custom queries and CDS views

SAP Fiori app to adapt CDS queries to your needs (extensibility).

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8.2 Posted Stock Change Analysis

During warehouse business, many material movements take place that change the

stock situation frequently. To make the right decisions in daily business and meet the

demand and service level of the related goods, a comprehensive and most current

view on the stock level has to be provided by the system.

In the following sections, we’ll describe related SAP Fiori apps that support checking

the stock situation of your warehouse. A more detailed and fine-grained analysis

(similar to SAP Business Warehouse [SAP BW] reporting but based on the most cur-

rent system data) will then be discussed for the material document and the physical

inventory document.

8.2.1 Stock Single Material and Stock Multiple Materials

The basic analytical functions of inventory management were introduced in Chapter

6 regarding stock analysis.

Simple stock checks can be performed with the SAP Fiori app Stock – Single Material

by just entering the material and plant combination. Refer to Chapter 6, Section 6.2.1,

for more details.

More complex filter criteria are available in SAP Fiori app Stock – Multiple Materials

(i.e., special stock) and the selection of more than one material is possible. Refer to

Chapter 6, Section 6.2.2, for more details.

8.2.2 Goods Movement Analysis

From an analytical perspective, inventory management offers more detailed and

complex features for better process analysis in SAP S/4HANA.

Regarding goods movements, the SAP Fiori app Goods Movement Analysis (F2912) is

a comprehensive tool for detailed analysis of goods movement.

The SAP Fiori app is based on two CDS views:

� C_GoodsMovementQuery

� I_GoodsMovementCube

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Note

The application design might be comparable to SAP BW applications out of the past.

The difference is that SAP BW reports required an extraction, transformation, and

loading (ETL) cycle that sometimes was time-consuming, so that the final report

wasn’t based on current business data. The new reporting makes use of the current

data in the same system as the transactions (i.e., material movements) take place.

To begin, open the Goods Movement Analysis tile out of the SAP Fiori launchpad, and

navigate to the Dimensions selection screen shown in Figure 8.1. The selection and

output concept is based on dimensions and measures to be selected. Click any mea-

sures that you’d like to include in your analysis, and checkmarks will appear next to

them.

Figure 8.1 Dimensions of Goods Movements

After the selection is done, click Go (upper-right corner, not shown), and the result set

is displayed in a table view, as shown in Figure 8.2, or in graphical view, as shown in

Figure 8.3. The different views can be toggled via a set of buttons in the upper-right

corner. In addition, a combined view with a chart and table control can be used.

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Figure 8.2 Goods Movement Analysis Result in Table View

Figure 8.3 Goods Movement Analysis Result in Chart View

Based on the given result, a data point in the result set can be selected, and, via the

Jump To feature (upper-left corner, Figure 8.4), further navigation into all SAP Fiori

apps that share the same semantical object can be used for more detailed analysis.

The list of available navigation targets depends on your authorizations.

As in SAP BW applications, a drilldown of the results is available to dig down into

finer granular details regarding a dimension of interest. For example, you can drill

down into the dimension of material document after initially selecting the Plant

dimension as the entry point (see Figure 8.5).

Right-click on the dimension you want to drill down to, and select Filter • Drill Down

in the popup window.

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Figure 8.4 Many Navigation Targets

Figure 8.5 Filter Drilldown in the Plant Dimension

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Next, select the new dimension you want to see in the result set from the Select

Dimension dropdown. In this example, Material Document Item is selected, as shown

in Figure 8.6.

Figure 8.6 Selection of New Material Document Item Dimension

Click OK to access the result set. Now the result set gets drilled down in the next level

of the selected dimension, as shown in Figure 8.7.

Figure 8.7 Drilled Down Result Set by the New Material Document Item Dimension

Further Resources

A wide set of measures and dimensions can be taken into account in SAP Fiori app

Goods Movement Analysis, which could not all be listed in this book. For more

details, check the SAP online help (http://help.sap.com) to get familiar with all the

available measures and dimensions.

Note

The Goods Movement Analysis app is only available on desktop devices.

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8.2.3 Physical Inventory Document Analysis

Similar to the Goods Movement Analysis (F2912), the analysis of physical inventory

can be performed via the Physical Inventory Analysis app (F2913).

After starting the SAP Fiori app, two required parameters must be filled (can be pre-

filled)—Fiscal Year and Is Difference Posted—as shown in Figure 8.8. The Is Difference

Posted parameter breaks down the result set already by only considering physical

inventory documents that led to stock corrections after counting.

Figure 8.8 Entry Filter Values of Physical Inventory Analysis

The result set shown in Figure 8.9 can be displayed in the same variants as described

in the previous section for the Goods Movement Analysis app. After you click the Go

button (upper-right corner, not shown), the result set is displayed.

Figure 8.9 Result Table of Physical Inventory Analysis

In the Physical Inventory Analysis app, the Physical Inventory Document dimension

is drilled down into in the result set by following the steps described in the previous

section, creating the result set shown in Figure 8.10. A rather detailed analysis is pos-

sible, and analytical questions such as “Which items had the most book value impact

in the last year?” can be answered.

Figure 8.10 Drill Down into the Physical Inventory Analysis Dimension

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Further Resources

The whole list of dimensions and measure that can be taken into account can be

accessed via the SAP online help (http://help.sap.com).

8.3 Key Performance Indicator Monitoring and Analysis

Besides gaining knowledge of the stock level, which we described in Chapter 7, it’s

also important to monitor your most important KPIs to steer your business the best

way. In this section, we’ll introduce the tools available for this purpose in inventory

management SAP S/4HANA.

Note

There’s one related SAP Fiori app that we won’t dive into in this section. The Stock

Champion app (F2133) is available as part of business role SAP_BR_INVENTORY_ANA-

LYST, which provides monitoring of expiration dates and shortage information about

batches by using graphical illustrations. This SAP Fiori app was delivered in SAP

S/4HANA Cloud only and isn’t available in on-premise SAP S/4HANA.

8.3.1 Overview Pages

To reflect the role-centric approach of the SAP Fiori launchpad, the SAP Fiori app pat-

tern of overview pages was used to combine analytical applications in a kind of a

dashboard to provide a single point of entry for end users.

In general, inventory management provides three overview pages:

� Overview Inventory Management (F2769)

� Overview Inventory Processing (F2416)

� Inventory Analysis Overview (F3366)

We’ll discuss these pages in the following sections.

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http://help.sap.com


Overview Inventory Management

The Overview Inventory Management (F2769) overview page contains the following

cards:

� Stock Value by Stock Type

� Warehouse Throughput History

� Monitor Purchase Order Items

� Overdue Materials – GR Blocked Stock

� Recent Material Documents

� Stock Value by Special Stock Type

� Overdue Materials – Stock in Transit

The Stock Value by Special Stock Type card is shown in Figure 8.11 as an example. The

card includes navigation capabilities by clicking on the header or pie chart. The navi-

gation target is the Stock – Multiple Materials app. The navigation includes the

selected parameters of the card. In this example, by clicking on the 17k part of the pie

chart, the Stock – Multiple Materials app makes it so that only the special stock Orders

on Hand is taken into account for selection.

Figure 8.11 Card Example for the Overview Inventory Management Overview Page

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It’s also important to mention that the underlying SAP Fiori apps often provide

implicitly displayed application variants. For instance, if the Stock – Multiple Materi-

als app is navigated to from the Stock Value by Special Stock Type card, the filter and

columns that you select are automatically loaded with the Stock – Multiple Materials

app so that the relevant information is displayed directly.

You can check the available standard variants directly in the related Stock – Multiple

Materials app by clicking on the down arrow to open the list of available variants, as


Figure 8.12 Predefined Variants Also Used as Navigation Parameters

The cards that should be shown after the overview page is started can be influenced

via the Manage Cards settings, which you access by opening the user settings in the

SAP Fiori launchpad, as shown in Figure 8.13.

The Overview Inventory Management overview page has a mandatory Plant filter

that needs to be filled out before a data selection can take place due to the value-

based evaluation provided in the Stock Value by Stock Type and Stock Value by Spe-

cial Stock Type cards. These cards summarize the stock values accordingly, but this

can only be performed for stock values in the same currency. Based on the relation-

ship that each plant belongs to one company code (see Chapter 3), and each company

code has one company code currency, the selection by one plant leads to one cur-

rency of the stock values in the same plant.

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Figure 8.13 Manage Cards

Overview Inventory Processing

The Overview Inventory Processing (F2416) overview page is part of the warehouse

clerk business role and offers the following cards:

� Recent Inventory Counts

� Monitor Purchase Order Items

� Warehouse Throughput History

� Recent Material Documents

� Overdue Materials – Stock in Transit

� Overdue Materials – GR Blocked Stock

� Outbound Delivery List

� Inbound Delivery List

In comparison to the Overview Inventory Management overview page, this overview

page doesn’t include stock values and is more focused on the daily warehouse busi-

ness and logistical aspects that are relevant for a warehouse clerk.

Inventory Analysis Overview

A more analytical focus is given in the third overview page: Inventory Analysis Over-

view (F3366).

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This overview page is especially designed for analytical purposes and provides ana-

lytical cards in a KPI-based manner. As of release SAP S/4HANA 1909, the overview

page contains four cards:

� Stock Value Increase despite Consumption

� More than 100 Days without Consumption

� Monitor Batches by Longest Time in Storage

� Monitor Batches by Shortest Expiration Date

Figure 8.14 shows an example of the Stock Value Increase despite Consumption ana-

lytical card, and Figure 8.15 displays an example of the More than 100 Days without

Consumption analytical card.

Figure 8.14 Stock Value Increase despite Consumption

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Figure 8.15 Chart with More Than 100 Days without Consumption

8.3.2 Inventory Turnover Analysis

The Inventory Turnover Analysis app (F1956) allows you to analyze the inventory

turnover in relationship to average inventory value. In general, the inventory turn-

over is determined by taking into account the goods issues in relationship to the

average stock in a given time frame. If a material movement is a goods issue, the clas-

sification is taken from the related setting of the movement type (table T156, field

KZVBU → consumption posting; see also Chapter 3, Section 3.1.3). The average inven-

tory value is calculated based on the current price.

Like most of the SAP Fiori apps based on smart templates, the Inventory Turnover

Analysis app begins with a filter bar that allows you to specify the result set regarding

the given filter criteria, as shown in Figure 8.16.

Figure 8.16 Filter Bar of the Inventory Turnover Analysis App

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The following parameters can be used for filtering:

� Mandatory filter values:

– Start Date

– End Date

– Plant

� Optional filter values:

– Material

– ABC Indicator

– Material Type

– Material Group

The only field that requires a bit of explanation is the ABC Indicator field, which is

taken from the material master record of the material.

Note

The SAP Fiori app doesn’t consider special stocks like Transaction MC44 and intra-

company-related goods issues do.

The result is displayed in a scatter chart or bubble chart after you click the Go button.

The scatter chart is shown in Figure 8.17, and the legend is shown in Figure 8.18.

Figure 8.17 Scatter Chart of the Result Set

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Figure 8.18 Legend for the Scatter Chart

The same result set can also be displayed as a bubble chart (shown in Figure 8.19 and

followed by the legend in Figure 8.20) by using the toggle button (upper-right corner

of the chart, not shown).

Figure 8.19 Result Set as a Bubble Chart

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Figure 8.20 Legend of a Bubble Chart

You can select one data point in the bubble chart in the SAP Fiori app to drill down

and gain more insight into selected data, as shown in Figure 8.21.

Figure 8.21 Selection in a Bubble Chart

The outline graphical result can be analyzed so that if the inventory turnover is high,

the material isn’t kept very long in storage, meaning the time between goods receipt

and goods issue is rather short.

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On the one hand, the bubble chart makes use of a coefficient of variance for goods

issues (see the y-axis of the bubble chart). The coefficient is calculated based on stan-

dard deviation of goods issues quantity per day divided by the average goods issue

quantity in the selected time frame multiplied by 100. A low coefficient reflects a

steady goods issue.

On the other hand, the scatter charts make use of an average inventory value (see the

y-axis of the scatter chart). The average inventory value is calculated by multiplying

the average stock quantity of the selected time frame with the current price of the

material. In addition, the app automatically groups the result set into “top catego-

ries” such as Top 10% (see Figure 8.18).

By selecting a data point in the chart, the app offers a detail page for the selected

materials that outlines more detailed inventory turnover data.

8.3.3 Inventory (Multiple) Key Performance Indicator Analysis

The Inventory KPI Analysis app (F3749) offers a multiple KPI analysis tool that

enables you to compare different KPIs for different time series. The following KPIs

are supported:

� Stock Changes

� Consumption Changes

� Inventory Aging Changes

� Inventory Turnover Changes

� Range of Coverage Changes

When you open the app, you’re met with three mandatory filter values that must be

entered up front during data selection because they are essential for the result set

determination and processing, as shown in Figure 8.22:

� Display Currency

� Comparison of

� Reference Date

Display Currency is mandatory due to normalization of the inventory values to one

currency. Different plants in different company codes could have different curren-

cies, which would make summing up the stock values impossible. Therefore, the

inventory values are all converted to the same display currency.

Besides the mandatory filters, many additional filters related to stock identifiers (e.g.,

material or stock type) and some others (e.g., material type or material group) are

available for filtering.

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Figure 8.22 Filter Bar of the Inventory KPI Analysis App

After the data set is received, a table view outlines the result either in a stacked bar

chart or as a table. The view can be toggled between the chart and table by clicking the

toggle button (upper-right corner of chart, not shown). We’ll go with the bar chart, as


Figure 8.23 Column Bar Chart of the Inventory KPI Analysis App

To configure the axis and groups of the chart, click the gear icon in the upper-right

corner of the chart (not shown). You’ll arrive at the View Settings screen shown in

Figure 8.24.

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Figure 8.24 Chart Configuration

The configuration contains a powerful way to adapt the outlined KPIs and groups

(refer to Figure 8.23) and provides the option to outline up to four measures as differ-

ent axes. In addition, you can select two groups and one series just by activating the

related checkbox and selecting the required occurrence in the dropdown list. The

additional axes show up as additional bars in the chart.

To narrow down the filtered result set in respect to the five different KPIs supported

by this app, a KPI filter is available, as shown in Figure 8.25. You can optimize and

influence the selection using the blue bars on the left and right-hand side of the KPI

graph show in Figure 8.25, which uses the example of the Stock Changes and Inven-

tory Turnover Changes KPIs.

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Figure 8.25 KPI Filter

The KPI filter offers an easy graphical way of showing figures of the given KPIs statis-

tically by representing outliers in a frequency distribution chart. The selection can be

changed by dragging and dropping the related blue frame (see Figure 8.25). After-

wards, this adjustment narrows down the result set of the stacked bar chart automat-

ically.

You can further analyze the given result by drilling down on a bar in the chart. First,

select the relevant bar, and then drill down into a dimension by clicking the leftmost

icon, as shown in Figure 8.26.

For example, select your chosen dimension (here, Company Code), which results in

the chart shown in Figure 8.27.

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Figure 8.26 Drilling Down into a Dimension

Figure 8.27 Drilling Down by Company Code

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Now you can see that one company code owns the majority of the stock value in the

reference period.

The second step is to drill down by material to gain insight to determine which mate-

rials own this stock value, as shown in Figure 8.28. To do so, perform the same steps

as for Company Code, but this time, choose Material from the dropdown list.

Figure 8.28 Second Drilldown by Material

Based on the second drilldown, you hit the ground and can figure out that only a few

materials are responsible for the high stock values in the given company code, allow-

ing inventory managers to now act accordingly.

Note

If the result set after the drilldown contains too many entries that flood the chart

with different materials, for instance, use the magnifying glasses icons (refer to

Figure 8.26) to zoom in or out to get a more convenient graphical display.

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8.4 Process Analysis Tools

8.3.4 Material Valuation

We’ve talked a lot about inventory management analytics in SAP S/4HANA with a

strong focus on stock figures. We also mentioned that the stock figures are just half

the truth and that the stock itself might not be enough to steer a company’s business

processes. In the end, the financial impact is the important factor for steering busi-

ness processes (even logistic ones). Therefore, inventory management analytical fea-

tures also contain price and inventory value information. The price considered is

always the current price. The inventory values are calculated by multiplying the stock

figures (current or historical) with the current price, which means the inventory val-

ues are derived from the current price.

The price itself isn’t directly related to inventory management. Its home ground is in

the area of material valuation in the material ledger.

Material valuation also provides some applications for analytical features related to

price and inventory value. These apps are part of the SAP_BR_INVENTORY_ACCOUN-

TANT business role; following are two examples of such apps:

� Material Inventory Values-Balance Summary (F1422)

Provides the capability of analyzing stock quantity information together with

inventory values for a certain reporting date.

� Material Inventory Values-Line Items (F1423A)

Provides the capability of drilling down stock and inventory value information to

a single line item.

Further Resources

For more detailed information, go to the SAP Fiori apps reference library and search

for one of the preceding apps. In addition, look at the rest of the apps that are part of

the SAP_BR_INVENTORY_ACCOUNTANT business role. To do so, open the SAP Fiori

apps reference library, and select All Apps. Enter your SAP Fiori ID (e.g., “F1422A”), and

check the Other Apps in Cost Accountant – Inventory section.


In Chapter 6, we introduced the core inventory management features that cover the

standard inventory management processes. In addition to these standard features,

some more process-specific SAP Fiori apps are available in SAP S/4HANA. With the

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tools that we’ll discuss in this section, you can analyze and optimize your process

performance. Therefore, these tools are an essential part of the inventory manage-

ment control cycle and support the check and cycle of plan and adjust, execute, and

analyze (see Chapter 2, Section 2.4).

8.4.1 Dead Stock Analysis

During usual warehouse and stock keeping processes, sometimes goods are no lon-

ger moved or consumed. In addition, an increase of stock values despite consump-

tion might occur for many reasons (e.g., less demand, decreasing usage in bill of

materials [BOM], etc.). However, the heaviest impact comes from no stock usage in a

certain time frame, which would mean that these goods are “dead stock,” which is

tied up capital.

In combination with the inventory value, dead stock becomes a relevant business

insight if there are high values or increasing values in a certain time frame.

The smart template pattern analytical list page was used for the Dead Stock Analysis

app (F2899) to gain insight into such a trend of dead stock. Because a sum of stock val-

ues is required, and a certain time frame for analysis has to be selected, the app con-

tains a standard filter bar with three mandatory filter values to fill out, as shown in

Figure 8.29:

� Analysis Start Date

� Analysis End Date


Figure 8.29 Filter of Dead Stock Analysis

The result set becomes available after you click the Go button, and a graphical filter is

displayed that you can use to narrow down the results, as shown in Figure 8.30.

To configure the graphical filter, click the gear icon. Up to four different axes and two

categories/series can be selected to adapt the graphical filter according to your needs.

Below the graphical result filter, you find the results table with one line in the result

set per stock identifier (not shown, but similar to Figure 8.32 ahead).

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Figure 8.30 Graphical Filter

8.4.2 Slow or Non-Moving Materials

Besides dead stock, slow or nonmoving materials might be of interest for the inven-

tory manager or analyst. With the Slow or Non-Moving Materials app (F2137), you can

search for these kinds of stock issues and get an overview of the affected materials. As

in the Dead Stock Analysis app, this app is based on the smart template pattern ana-

lytical list page and includes the elements filter, graphical filter, and result table.

You’ll start with the filter bar, as shown in Figure 8.31.

Figure 8.31 Filter Bar of the Slow or Non-Moving Materials App

This SAP Fiori app is special because it contains more powerful filter options related

to Customizing, as follows:

� Days with Low Consumption

Starting with the mandatory filter Days with Low Consumption, you can specify

the time frame in which you would expect and analyze low consumption of this

inventory.

� Reference Date

The endpoint of the time frame to be analyzed is the second mandatory filter,

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Reference Date. This means, if the user enters the reference date with 5/31/2019

and 90 days for Days with Low Consumption, the system will analyze the past 90

days beginning with the May 31, 2019.


The Display Currency acts the same as in the rest of the SAP Fiori apps and serves

as a common factor for calculating the stock value across different plants.

� Inventory Consumption Group

Consumption postings can be threaded in a very differentiating way in this SAP

Fiori app via this filter value. Inventory consumption groups are defined in a sep-

arate IMG activity as described in Chapter 3, Section 3.1.3, and not only by the set-

ting per movement type. You can also define different groups of consumption

postings so that analysis can be performed for a certain group of consumption-

related movements.

� Slow-Moving Indicator

The last mandatory filter is the Slow-Moving Indicator supplementary option.

This new indicator introduced with SAP S/4HANA 1909 is based on the formula

consumption of the time frame divided by stock quantity in relation to the refer-

ence date multiplied by the days of the reporting time frame. The result reflects

the consumption-to-stock ratio. Different reporting periods can be compared

using this filter.

The list of materials shown in Figure 8.32 is displayed after you click the Go button.

Figure 8.32 Table Data in the Slow or Non-Moving Materials App

The Slow or Non-Moving Materials app also offers a detail screen for each result

entry, which you can access by clicking on the right-facing arrow on the right-hand

side.

The details screen contains a header and chart. Basic data around the slow or non-

moving item is given in the header section as outlined in Figure 8.33 by displaying

the most important information, such as Slow Moving Indicator and Stock Value.

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Figure 8.33 Detail Screen Header Information

Slow-moving indicator data is displayed as a bar chart in the chart section of the

detail page, as shown in Figure 8.34. To access the detail page you have to click on one

result item. This chart is enhanced with a Predicted Slow-Moving Indicator (orange

line) based on two predictive models that must be activated and trained before the

predictive information is displayed in the chart. If the predictive models aren’t acti-

vated and/or trained successfully, the chart would only contain the blue bar chart.

The given historical data of the Slow-Moving Indicator (bar) is outlined for 12 months

into the past, starting with the selected reference date. Predictive data is added for the

next 3 months (line chart).

Figure 8.34 Chart with Predictive Information on the Detail Screen

The predictive models must be activated to benefit from the predicted data. The Pre-

dictive Models app is part of the SAP_BR_ANALYTICS_SPECIALIST business role and

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is required for activation and training of the following two relevant predictive mod-

els:

� MMSLO_CONSUMPTION_01

Contains consumption information.

� MMSLO_STOCK_LEVEL_01

Contains stock level information.

Both models are part of the ODATA_MM_IM_SLONOMOMAT catalog.

After the Predictive Models app is started from the SAP Fiori launchpad, the list of

predictive models is shown (see Figure 8.35).

Figure 8.35 Predictive Models: Slow or Non-Moving Materials

Both models need to be activated by selecting the checkbox and clicking the Train

button, as shown in Figure 8.36.

Figure 8.36 Activated Predictive Models

After this is done, different versions of the model can be trained. Training can be per-

formed on the detail screen of the model (click the arrow) again. Each training can be

performed by adding different training filter criteria. A broad amount of filter criteria

is part of the training views, but Figure 8.37 only outlines a handful of them to illus-

trate how to use training filters.

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Figure 8.37 Model Training by Using Filters

Finally, the training can be started by clicking the Train button (not shown). It might

take some time until the version of the model is trained successfully because such a

huge amount of data must be processed.

Figure 8.38 illustrates the different possible statuses for a predictive model:

� Training Failed

This model version could not be trained successfully, possibly due to an insuffi-

cient amount of training data. Details can be analyzed by navigating into the

details screen of the model version.

� Active

This model version is currently in use by the Slow or Non-Moving Materials app.

� Training

This model version is trained in the background, and training is still ongoing.

Figure 8.38 Training Statuses of Predictive Models

8.4.3 Overdue Stock in Transit

Along with the KPI-based analytical SAP Fiori apps we introduced in Section 8.3,

inventory management in SAP S/4HANA also provides apps that are more focused

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on certain inventory processes and allow for inventory process optimization to meet

inventory process service KPIs.

For example, the Overdue Materials – Stock in Transit app (F2139) provides insight

into the processing of stock transport orders as related to the creation of the stock

transport order and the goods receipt.

The result chart of Overdue Materials – Stock in Transit outlines the shipping dura-

tion (see Figure 8.39, micro chart) and is shown after you click the Go button (not

shown). The micro chart starts with the Posting Date (PO) of the stock transport order

(i.e., 5/10/2019) and determines the delivery date based on the date given in the stock

transport order. On May 31, 2019, for example, there is an overdue stock transport

order because the Forecast Delivery Date was 5/12/2019 (line 1 in Figure 8.39). There-

fore, the stock has been in transit for 21 days already, as show in column Days in Tran-

sit. The Days in Transit column can be added to the result table by clicking the gear

icon, which brings you to the configuration options.

Figure 8.39 Overdue Stock Transport Orders

A predicted forecast of the delivery data can also be added to the result table as a Pre-

dicted Deviation separate column. To make use of this delivery date prediction, the

Predictive Scenario MATERIAL_OVERDUE_SIT in Catalog MM_IM_VDM_STOCK must

be activated and trained via the Predictive Models app (part of the SAP_BR_ANALYT-

ICS_SPECIALIST business role). Figure 8.40 shows the predictive model description in

the Predictive Models app.

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Figure 8.40 Predictive Model for Delivery Date Prediction

The steps required to activate and train a predictive model are described in the previ-

ous section.

One final feature of the result tables is the toggle filter, which allows easy switching

and break down of the result set via buttons that reflect the different statuses of stock

transport orders. In the example shown in Figure 8.41, the Delivery Completed button

is selected. In this case, already-completed stock transport orders could be analyzed.

Figure 8.41 Status Filter for Stock Transport Orders

8.4.4 Overdue Goods Receipt Blocked Stock

Regarding overdue stock, the Overdue Materials – Goods Receipt Blocked Stock app is

available (F2347).

Background for this process monitoring app is the daily inventory management

business when goods receipts are posted into the nonvaluated goods receipt blocked

stock (movement type 103). Goods are received conditionally, aren’t valuated, and

aren’t free for use. For this kind of stock, companies often have internal service levels.

For instance, goods should not be kept longer than three days in good receipt blocked

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stock. They must be reverted to the supplier or posted into the unrestricted use stock

(movement type 105).

The SAP Fiori app offers a smart template-based pattern (filter + result table) for

analysis of overdue stock. By using the Days since Posting Date filter, you can select

only goods receipt postings that exceed the company’s service level, for instance,

greater than five days as a filter value. After you click the Go button, the result is

shown (see Figure 8.42).

Figure 8.42 Overdue Goods Receipt Blocked Stock

8.5 Custom Queries

In SAP S/4HANA, analytical functions are built on CDS views to ensure a consistent

view on the new data model in the SAP HANA database. CDS views in inventory man-

agement are especially implemented in a way that ensures the most consistent and

performant access to the required analytical data. These predefined and predelivered

CDS views might not be enough to serve your analytical reporting requirements

comprehensively. For example, the required data might be shared across database

tables that aren’t part of inventory management, such as material master data.

To meet this need for custom queries, the Custom CDS Views app (F1866) is available,

which allows you to create custom CDS views and queries to implement analytical

queries for special requirements that aren’t part of the SAP S/4HANA standard deliv-

ery.

Further Resources

Check out the SAP S/4HANA online help (http://help.sap.com) concerning Applica-

tions for General Functions for Key Users to gain more insight about available key

user tools.

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8.5 Custom Queries

Custom CDS view queries have to be built on CDS views that are predelivered by SAP

and must be released in a way that they can be consumed in the Custom CDS Views

app. To find available CDS views that can be reused in custom CDS views, you have to

open the Custom CDS Views app and search for the required data source in the search

bar at the top of the screen, as shown in Figure 8.43. By navigating into the detail page

per data source entry, you can check out the parameters and fields of the selected

data source to determine whether it fits your needs.

Figure 8.43 Custom CDS Views Data Sources

Click the Add button (right-hand side, not shown) to create a new custom CDS view.

The New Custom CDS View screen will open, as shown in Figure 8.44.

Figure 8.44 New Custom CDS View

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Enter a Name and Label, and add a primary and associate data source by clicking the

Add button (lower-right corner, not shown) (see Figure 8.45).

Figure 8.45 Primary Data Source for a Custom CDS View

After you select the primary data source, you can choose the associate data source by

clicking on the Add button again, as shown in Figure 8.46.

Figure 8.46 Associate Data Source for a Custom CDS View

To connect these two data sources, you must maintain the association properties by click-

ing on the paper clip icon in the Actions column to access the screen shown in Figure 8.47.

In this example, both data sources are connected via their Product and Material

fields.

Now you must maintain the field list that the custom CDS view should return. In this

example, the product group has been added from the I_PRODUCT data source to the

result (see Figure 8.48). The editor provides a table with two sections. On the left-hand

side, the data sources and their result fields are outlined and can be taken over into

the result set of the new custom CDS view.

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8.5 Custom Queries

Figure 8.47 Association Properties

Figure 8.48 Available Fields of the Chosen Data Sources

On the right-hand side, the already-selected fields, which are part of the result of the

new custom CDS view, are displayed, and attributes such as Field Type or Label can be

adjusted to your needs (see Figure 8.49).

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Figure 8.49 Selected Fields and Associations

You can save a draft (click Save Draft) or publish (click Publish) your new custom CDS

view so that it can be used in analytical queries afterwards. Before the custom CDS

view is published, you can also use the Preview function to see the result of the newly

created custom CDS view directly in the Custom CDS Views app, as shown in Figure

8.50.

Figure 8.50 Preview of the New Custom CDS View

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8.6 What’s Ahead for Analytics?

You can see a graphical dependency overview by clicking the icon to the left of the

Save Draft button, shown previously in Figure 8.49. The screen shown in Figure 8.51

appears, and you can see the data sources that are mapped to the custom CDS view

now.

Figure 8.51 Graphical Outline of Data Source Dependencies

After the custom CDS view is published successfully, it can be used in SAP Lumira,

designer edition or business add-in (BAdI) implementations, for instance.

Further Resources

To learn more about SAP Lumira, designer edition, go to http://s-prs.co/v489204.


All inventory value calculations mentioned previously are based on the current

material price. In the future, the analytical SAP Fiori apps may offer the capability use

historical prices that are determined based on the reporting or reference dates in the

SAP Fiori apps.

We can dream of quantum leaps in the IT world if predictive analytics/machine learn-

ing can be combined with process automation. A first step into this new area is part

of the Overdue Materials – Stock in Transit app via automated information about

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stock transport orders that might be of interest for setting the Delivery Completed

indicator (see Figure 8.52). Based on the new situations framework in SAP S/4HANA,

you get notified if there are stock transport orders that you’re responsible for which

aren’t already completely delivered but already have a goods receipt.

In this regard, the My Situations app (F4154) has to be mentioned. This SAP Fiori app

provides access to all open situations and easy navigation into the single situations

for the end user to gain insight and act accordingly.

Figure 8.52 Warning Triangle for Possible Delivery Completed Purchase Orders

In the detail page of the Overdue Materials – Stock in Transit app (click on one item of

the result to enter the detail screen, as shown in Figure 8.53), an action button is

added to the header so you can choose Complete Delivery. This button is only visible

if the following are true:

� The currently displayed purchase order item isn’t already completely delivered.

� Sufficient authorizations are assigned to the user.

� A goods receipt was posted already, and the total goods receipt quantity equals the

total goods issue quantity.

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Figure 8.53 Situation in Detail Page

You can decide to set the Delivery Completed indicator by just using the action pro-

vided by the situation framework.

Before the situation functionality can be used in the Overdue Materials – Stock in

Transit app, two administrative steps have to be performed:

� Set up a team

� Set up a situation

A setup of a new situations team can be done with the Manage Teams and Responsi-

bilities app (F2412), which is part of the SAP_BR_BUSINESS_PROCESS_SPEC business

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role. In Chapter 3, Section 3.2.3, the setup of situation handling was described in gen-

eral.

Follow these steps to set up a team:

1. Create a new team.

2. Enter the team name (e.g., “Overdue SiT Monitoring”).

3. Enter the type.

4. Add your user as a team member with the function “SMMIM_IM”.

5. If you have multiple users for the same team, assign another function for the next

user.

6. Save your team.

Next is to set up the situation itself, which is done by using the Manage Situation

Types app (F2947), as shown in Figure 8.54.

Figure 8.54 Search for Situation Template

Follow these steps to set up the situation (see Figure 8.55):

1. Select the standard template MAN_MATLOVERDUESITSITN, and click the Copy but-

ton.

2. Enter an ID (e.g., “Overdue_SiT”).

3. Maintain the batch job scheduling time.

4. Remove all responsibility definitions under Responsibility by Teams, and add the

Member Function you defined in the team setup. Only the team functions

assigned here will retrieve the related notifications (see Figure 8.56).

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8.7 Summary

5. Click the Save button to enable your new situation type.

Figure 8.55 Admin Information of the Situation

Figure 8.56 Assignment of Responsibilities

Finally, how would inventory management in SAP S/4HANA look if the system not

only could predict trends of inventory KPIs or warn if a process is overdue but also

know how to resolve this in the best way and act accordingly? The user would get an

overview of automated system decisions and could steer the system in the right

manner. The first cornerstones are already available with SAP S/4HANA 1909 when

we consider the stock figures and KPI prediction and situation handling use cases,

enabling the first step into a new level of ERP software.

8.7 Summary

The analytical tool kits available within SAP S/4HANA cover a wide range of analytical

capabilities. With new SAP Fiori patterns and a modernized data model of the mate-

rial document in inventory management, real-time analytics are feasible. As outlined

in this chapter, analytical features were introduced in transactional applications, and

more process-oriented analytical tools are available, such as detection of overdue

stock or monitoring of process KPIs.

In the next and final chapter of this book, we’ll highlight some aspects of inventory

management in cloud deployments.

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Chapter 9

Inventory Management in the Cloud

In this chapter, we’ll turn to inventory management deployment and

inventory management processes in the cloud. We’ll also discuss

hybrid deployments and take a look at key cloud products.

So far, we’ve focused on inventory management with an SAP S/4HANA system. Now,

we’ll switch gears to discuss your cloud deployment options. A cloud deployment has

the following features:

� Code is owned by the vendor:

– Upgrades or patches applied centrally at defined points in time by the software

vendor

– No access to code by the customer

� System isn’t operated by the customer.

� System is preconfigured, and configuration is highly standardized.

The transition of on-premise to cloud computing is sometimes fluent, and there isn’t a

clear distinction. Consider the following metaphor: You move to another city and need

somewhere to live. You have two options: buy your own house or rent an apartment.

In the moment you buy a property, you own it and can adapt it (within the technical

and legal boundaries) to your personal needs. You’ll need to pay some auxiliary costs

to keep the property in good shape from time to time. If you rent a property, your

contract clearly defines your obligations and restrictions. Buying normally means a

long-time engagement, capital investment, and stability, whereas renting gives you

the flexibility to switch to a better-suited location if the boundary conditions change.

You may want to enhance your house with new features such as a parking lot, solar

heating, and so on. You can’t do this with your rented apartment.

A self-owned house strongly resembles an on-premise solution, whereas a rented

apartment is like a cloud solution.

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9 Inventory Management in the Cloud

Figure 9.1 explains the SAP S/4HANA deployment options. The dimensions used in

the diagram are technology and business processes. Of course, you can exclusively

opt for one deployment option only (see Figure 9.1, right-hand side). You can also

choose to split your deployment along the technology or the business processes as a

symmetric hybrid model (upper row, left and middle column). Finally, you can

choose an asymmetric hybrid model (lower row, left and middle).

Figure 9.1 Deployment Options for Cloud and On-Premise

In this section, we’ll dive into your deployment options beyond SAP S/4HANA in

more detail as we cover SAP S/4HANA Cloud or a hybrid deployment. We’ll then take

a look at new innovations for SAP cloud systems.

9.1 SAP S/4HANA Cloud

This section introduces the SAP S/4HANA Cloud solution. All cloud criteria men-

tioned previously also apply for SAP S/4HANA Cloud. When you watch SAP S/

4HANA Cloud demos for the first time, you’ll notice a strong similarity to the

SAP S/4HANA solution. Indeed, SAP S/4HANA Cloud is a prepackaged, scoping-

enabled, SAP-managed cloud solution based on SAP S/4HANA with a quarterly

Business Processes

Tech

no

log

y

On-Premise Deployment

Cloud Deployment

Business Processes

Tech

no

log

y

On-PremiseDeployment

Cloud Deployment

Business Processes

Tech

no

log

y

On-PremiseDeployment

CloudDeployment

Business Processes

Tech

no

log

y

Cloud Deployment

Business Processes

Tech

no

log

yOn-Premise Deployment

Business Processes

Tech

no

log

y

On-Premise Deployment

CloudDeployment

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upgrade cycle. In the same way, each SAP S/4HANA edition contains most of the

features of the preceding SAP S/4HANA Cloud editions.

We’ll begin with a look at the SAP S/4HANA Cloud scope, before moving on to the

implementation methodology, configuration, and update cycle.

9.1.1 Solution Scope

The SAP S/4HANA Cloud solution scope is enhanced with each quarterly release. It

comprises several Scope Item Groups, as shown in Figure 9.2.

Figure 9.2 Solution Scope: SAP Best Practices for SAP S/4HANA Cloud

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The key Scope Item Groups are as follows:

� Finance

� Human Resources

� Sourcing and Procurement

� Manufacturing

� R&D Engineering

� Supply Chain

� Sales

� Services

� Professional Services

� Application and Platform Infrastruc-

ture

� Database and Data Management

Note

These screenshots were taken from SAP S/4HANA Cloud 1905. Due to the nature of

quarterly upgrades, they may differ later.

You can find a two-level hierarchy below each Scope Item Group with the scope items

on the lowest level. Figure 9.3 shows this part of the hierarchy containing inventory

management. Each scope item has a three-digit alphanumerical key and a descrip-

tion.

Figure 9.3 Scope Items below Inventory

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When you click on a scope item, you’ll be directed to the scope item’s object page (see

Figure 9.4) containing version information; Overview, Country/Region Relevance,

and Details tabs; and references to other solutions. In the Overview tab, you’ll find

the key business benefits of the scope items and covered main processes.

Figure 9.4 Scope Item Core Inventory Management (BMC): Header and Overview

Figure 9.5 shows the country/regional information linked to the scope item. This

may, for instance, become interesting if you require localized tax rules, chart of

accounts, or other business-relevant, country-specific configuration.

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Figure 9.5 Scope Item Country Relevance

The details shown in Figure 9.6 always contain a process flow and a test script. They

support you in understanding the business processes covered by the scope item and

to test and execute the main flow.

Figure 9.6 Details of the Scope Item

In Figure 9.7, you can see the process flow linked to the scope item Core Inventory

Management (BMC). The process flow outlines the involved business roles, the links

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to other scope items, and the single process steps, which are shown in detail as part of

the tutorials.

Figure 9.7 Fragment of the Core Inventory Management Process Flow

All tutorials are listed in Figure 9.8. You can start a tutorial by double-clicking on it,

and you’ll be directed via step-by-step instructions on how to complete the process

step.

For example, Figure 9.9 shows the Goods Receipt without Reference tutorial’s first

step, which starts with SAP Fiori launchpad as a starting point to launch the SAP Fiori

app (see Chapter 5, Section 5.4).

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Figure 9.8 Tutorials Overview

Figure 9.9 Goods Receipt without Reference Tutorial

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In addition to the documentation and tutorials published in the SAP Best Practices

Explorer, SAP S/4HANA Cloud customers can sign up to the SAP Learning Hub and

join the SAP S/4HANA Cloud implementation learning room, which contains a rich

set of featured online tutorials, documents, blogs, and opportunities to connect with

other SAP S/4HANA Cloud customers.

Further Resources

If you want to try out the SAP S/4HANA Cloud offering, check out the SAP S/4HANA

Cloud Trial offering at http://s-prs.co/v489205.

9.1.2 Implementation Methodology

When customers begin an SAP S/4HANA Cloud implementation, they follow dedi-

cated phases. Within each phase, steps, checkpoints, and deliverables are defined.

Let’s walk through the key phases, as shown in Figure 9.10:

1. Explore

During the explore phase, they have the opportunity to test SAP S/4HANA Cloud

on a starter system instance (see Figure 9.10). A starter system contains SAP Best

Practice content and demo data, which allows you to test and fine-tune the

deployed process according to the provided test scripts mentioned in Section 9.1.1.

All configuration changes are local, which means they can’t be used in any imple-

mentation phases later.

At the end of the explore phase, customers receive a quality system (Q-system).

During the setup of the Q-system, initial scoping and the creation of the organiza-

tional structures are performed.

2. Realize

After setup, fine-tuning (see Section 9.1.3) of the configuration is used to adapt the

predefined scope to the customer requirements in the realize phase. The result is

transferred to the production system (P-system) approximately every two weeks,

so that both system configurations are kept in sync.

3. Deploy

At the end of the deploy phase, the p-system configuration is finished and the P-

system is ready for go-live. The last cycle (realize, deploy, run) may be repeated

several times to apply a stepwise implementation of processes or countries.

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Figure 9.10 SAP S/4HANA Cloud Implementation Phases

9.1.3 Configuration and Fine-Tuning

Most of the configuration is carried out on the Q-system and transferred to the P-system

in a consistent state. There are some rare exceptions when configurations can’t be trans-

ferred but have to be repeated on the P-system as well. One example is the configuration

of external system access.

The clear majority of all business process fine-tuning is performed within the Man-

age Your Solution app in SAP Fiori, which is unique to SAP S/4HANA Cloud. Figure 9.11

shows the entry screen of the Manage Your Solution app. The current phase is prom-

inently displayed in the header, and you can navigate to apps supporting migration,

testing, education, and configuration. The Set Country Version button allows you to

set Configure My Solution to the desired country, so that all country-dependent fine-

tuning is executed for this country.

To begin, click the Configure Your Solution button. Configuration as fine-tuning

starts with a simple list of implementation items, which is structured according to a

two-level hierarchy of Application Area and Sub Application Area, as shown in Figure

9.12. Additional attributes indicate whether an implementation items is mandatory,

country dependent, or needs to be repeated in the P-system (Redo in P System). More-

over, a Status helps you monitor the completeness of the implementation steps.

Discover Prepare Explore Realize Deploy Run

Phases

Starter SystemSAP Best

Practices Content

Q-SystemSAP Best

Practices Content

P-System

Configuration

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Figure 9.11 Manage Your Solution App: Displaying the Current Phases

Figure 9.12 Configure Your Solution Displaying Implementation Items

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When selecting an implementation item, the flexible column layout shows all

assigned Self-Service Configuration UIs (SSCUIs) on the right-hand side as Configura-

tion Steps (see Figure 9.13). Only these SSCUIs are visible, which are linked to the acti-

vated scope (see Section 9.1.2). In addition to the Status, Mandatory, and Redo in P

System columns, the SSCUI ID is unique to each SSCUI.

Note

You can search for the ID directly in Figure 9.12 to reach the desired SSCUI.

The Description explains the implementation item, and the Comments section

allows you to comment on all configuration activities.

Figure 9.13 Selected Implementation Item Organization with Assigned SSCUIs

In addition to the actual configuration screen, each SSCUI offers an option to add

comments and an extended help text in the Actions dropdown, as shown in Figure

9.14.

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Figure 9.14 Additional Help and Comment Capabilities from Each SSCUI

Figure 9.15 shows the Organizational Structure SSCUI, which is used in SAP S/4HANA

Cloud to create and edit the organizational structure of the cloud implementation.

Figure 9.15 SSCUI Organizational Structure

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The structure itself resembles strongly the organizational structure of SAP S/4HANA

installations as described in Chapter 3. The actual structure is displayed as a hierarchy

on the left-hand side. A detail page for each selected hierarchy node appears on the

left-hand side supporting editing of the node itself and its relationship to other orga-

nizational entities. You can navigate to the details of each organizational entity by

clicking on them. The country on top of the hierarchy is set in the Manage Your Solu-

tion app (refer to Figure 9.11).

If you click on the arrow of a selected plant, you’ll reach the editing screen of a

selected plant (see Figure 9.16).

Figure 9.16 Editing General Plant Attributes

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9.2 Hybrid Deployment

The organizational structure SSCUI allows you to change general attributes of a plant,

such as address attributes, tax codes, time zones, and so on. Business process-specific

attributes can be changed in the SSCUIs linked to the appropriate Application Area

and Sub Application Area.

9.1.4 Update Cycle

As explained in Section 9.1.1, SAP S/4HANA Cloud deployments will be upgraded four

times a year at a predefined date to the next edition. Two weeks after the Q-system

upgrade, the P-system is upgraded, as shown in Figure 9.17.

Figure 9.17 SAP S/4HANA Upgrade Cycle

After the Q-system upgrade, SAP S/4HANA Cloud customers have two weeks to

explore the features of the next edition, and then the P-system is upgraded. The

whole cycle starts again in the next quarter. A new scope must be activated explicitly

by the customer after each upgrade. Any enhancements to the activated scope won’t

interfere with any business processes of the customer.


Now that we’ve introduced the cloud deployment model, let’s look at whether you

can combine cloud and on-premise and distribute the business processes between

them. We’ll look at key hybrid scenarios in the following sections.

11Weeks

2Weeks

SAP S/4HANAQuarterly Upgrade

Cycle

Q-SystemUpgrade

P-SystemUpgrade

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9.2.1 SAP S/4HANA and SAP S/4HANA Cloud

Today’s economy creates extraordinary challenges for IT. Business processes are rap-

idly changing. Companies invent new business models while discarding old ones.

The process is often accelerated by mergers and acquisitions. Moreover, the internal

supply chain plus all digital processes extended to suppliers and customers are con-

stantly optimized, often creating collaborative planning, forecasting, and replenish-

ment scenarios relying on emerging technologies such as Internet of Things (IoT),

machine learning, or block chain. This phenomenon is often referred to as the digital

transformation. IT’s challenge is to support this transformation while not disturbing

the enterprise core processes. One approach to supporting new scenarios is by defin-

ing IT environments whose components evolve at different speeds:

� The core component implements all business processes that are stable or evolving

at a lower speed.

� The agile component implements the rapidly evolving business processes de-

pending on the latest technology or recent process innovations.

This approach is sometimes referred to as bimodal IT or two-speed IT. Both compo-

nents must be linked to ensure consistency, which can become a nightmare if there

is no semantic compatibility of business objects between both environments. SAP

S/4HANA offers an easy-to-use solution to that challenge called “two-tier ERP.” Figure

9.18 displays four typical solution patterns consisting of an SAP S/4HANA solution

and SAP S/4HANA cloud instances:

� Pattern 1 delineates a headquarter on-premise and its subsidiaries on cloud.

� Pattern 2 depicts a similar setup for corporate and affiliate.

� Pattern 3 depicts how central services can be implemented in a cloud serving other

on-premise and cloud instances.

� Pattern 4 illustrates an ecosystem with the on-premise instance in the center and

subcontractors, dealers, and so on as connected cloud instances.

As SAP S/4HANA and SAP S/4HANA Cloud have the same technology base, a seman-

tic compatibility is built in by default. Of course, other solution patterns are also fea-

sible, such as central finance or central procurement instance.

This section focuses on hybrid scenarios impacting inventory management. One

possible example is a subsidiary producing a niche product that is nevertheless

crucial for the entire company. In Figure 9.19, the subsidiary is represented as an SAP

S/4HANA Cloud instance in the enterprise IT system landscape.

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Figure 9.18 Possible Hybrid Deployment Scenarios of SAP S/4HANA and SAP S/4HANA

Cloud

Figure 9.19 Manufacturing Example 1 with Tier 2 Acting as Supplier (Scope Item 21T in Cloud

Solution Scope)

SAPS/4HANA

SAPS/4HANA

Cloud

Subcontractors

Headquarters

SAPS/4HANA

SAPS/4HANA

Cloud

Affiliates

Corporate

SAPS/4HANA

SAPS/4HANA

Cloud

Central Services

SAPS/4HANA

Cloud

SAPS/4HANA

Cloud

SAPS/4HANA

Ecosystem

SAPS/4HANA

Cloud

Subsidiaries Dealers

Subsidiary (Tier 2)

Headquarters (Tier 1)

Create purchase order

Create sales order

PO

SO

Create goods receipt

Create goods issue

GR

GI

AC

BL

Create billing document

Clear accountrecord

PrdO

SAP S/4HANA Cloud

SAP S/4HANAOn-Premise

455


Thin arrows indicate the data flow between process steps, and large arrows indicate

the document flow within one tier. The advantage of this setup is that the internal

business processes of the headquarters and subsidiaries remain independent from

each other, so they can evolve at a different pace. The interface between them is

clearly defined by the processes and the involved business objects.

When ordering a product in the subsidiary, headquarters creates a purchase order,

which automatically triggers the creation of a sales order in the SAP S/4HANA Cloud

instance. This is available as scope items 2EL and 2EJ (see Section 9.1.1). As a demand

element, this sales order triggers the production order at the subsidiary, and then the

subsidiary will produce and issue the finished goods back to headquarters against the

sales order. When the ordered product arrives at headquarters, the goods receipt

against the purchase order triggers the financial postings, eventually clearing the

account receivables at the subsidiary. Additional interfaces are available in SAP

S/4HANA Cloud so that progress of the internal steps in tier 2 can be monitored from

tier 1 (see Section 9.3.3).

In the second example outlined in Figure 9.20, the subsidiary is also represented as

an SAP S/4HANA Cloud instance in the enterprise IT system landscape. Here as well,

thin arrows indicate the data flow between process steps, and large arrows indicate

the document flow within one tier. In this case, however, tier 2 acts as a subcontractor

of tier 1.

When ordering a product in the subsidiary, headquarters creates a subcontracting

purchase order, which automatically triggers the creation of a sales order in the SAP

S/4HANA Cloud instance. Furthermore, headquarters provides the free-issue stock

required to complete the production process at the subcontractor. This stock is kept

as the stock provided to supplier special stock type in the headquarters inventory

management. As the demand element, the sales order triggers the production order

at the subsidiary, and the subsidiary produces the finished goods using the free

goods from headquarters, and then issues the finished goods back to headquarters

against the sales order. When the finished good arrives at headquarters, the goods

receipt against the subcontracting purchase order triggers the financial postings,

eventually clearing the account receivables at the subsidiary and clearing the stock

provided to the supplier in inventory management.

The advantage of the subcontracting scenario is that the free-issue stock provided by

headquarters does have to be kept in the books of account at the subsidiary. Like

example 1, additional interfaces are available in SAP S/4HANA Cloud so that progress

of the internal steps in tier 2 can be monitored from tier 1 (see Section 9.3.3).

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Figure 9.20 Manufacturing Example 2 with Tier 2 Acting as Subcontractor (Scope Item 2WL

in Cloud Solution Scope)

Both examples illustrate the advantages of semantic compatibility between SAP

S/4HANA and SAP S/4HANA Cloud. The SAP S/4HANA Cloud will incorporate the lat-

est technology with every quarterly upgrade, but the technical and the business

interfaces will remain stable. The SAP S/4HANA instance, on the other hand, will

most certainly evolve at a much slower pace from a technical perspective, as on-

premise upgrades are very time consuming. However, by using a two-tier scenario,

even on-premise instances can indirectly benefit from the latest technologies.

9.2.2 Decentralized Warehouse Management

SAP S/4HANA offers the capability to link inventory management to an external

warehouse management system (WMS). After setting up the basic communication,

pairs of plants and storage locations of the SAP S/4HANA organizational structure are

connected to the external WMS. All stock quantities must be synchronized between

Subsidiary (Tier 2)

Headquarters (Tier 1)

Create subcontractor purchase order

Create sales order

PO

SO

Create goods receipt

Create goods issue

GR

GI

AC

BL

Create billing document

Clear accounts receivable

PrdO

SAP S/4HANA Cloud

SAP S/4HANAOn-Premise

ST

ST

Provide

free-issuestock at

supplier

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both systems before this link is established. After the link is established, inventory

postings involving these pairs are automatically converted into outbound and

inbound delivery documents (see Figure 9.21). As this is an asynchronous process,

stock quantities in the involved plant/storage location aren’t updated until the pro-

cess is completed.

Figure 9.21 Integration between SAP S/4HANA and an External WMS (Scope Item 1ZQ in

Cloud Solution Scope)

Figure 9.22 shows the result of a posting involving a storage location linked to a

decentralized WMS.

Figure 9.22 Material Transfer Posting into a Storage Location Linked to a Decentralized

Warehouse

SAP S/4HANA

Outbound Delivery Document

External WarehouseManagement

Inbound Delivery Document

Plant A/ StorLoc01

Plant A/ StorLoc02

Plant A/ StorLoc01

Plant A/ StorLoc02

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The general setup of the decentralized WMS can be found in Chapter 3, Section 3.1.5.

The plant/storage location pairs linked to the external warehouse serve as proxy

objects representing the stock within the external warehouse. The organizational

setup within the external warehouse may be totally different.

9.2.3 Digital Procurement, Sourcing, and Supply Chain Process with SAP Ariba

Figure 9.23 shows the integration of the Ariba Network into the procure-to-pay pro-

cess of SAP S/4HANA. SAP Ariba offers configuration of procurement catalogs

(guided buying capability), sourcing, and the execution of the entire procure-to-pay

process. On the right-hand side, you see a set of different suppliers registered at the

Ariba Network, which serves as a consolidation hub during the procurement process.

Once you start your procurement process through the Ariba Network, SAP Ariba

takes care of the communication steps during the procurement operation, such as

purchase order creation, purchase order confirmation, advanced shipping notifica-

tion, goods receipt propagation, invoice processing, and exception handling. The

Ariba Network consolidates the documents and forwards them to your SAP S/4HANA

instance.

Figure 9.23 Managing Procure to Pay with SAP S/4HANA and Ariba Network

SAPS/4HANA

Supplier A

Supplier B

Supplier C

Supplier D

Supplier E

Consolidated

DocumentsPurchase Order Confirmation

Advanced Shipping NotificationAriba

NetworkGoods Receipt

Invoice

Exception

Purchase Order

Consolidated

Documents

459


9.3 SAP Cloud Solutions

Cloud solutions are one of the fastest evolving IT business areas. The same is true for

SAP’s cloud solutions. The following sections try to summarize the most prominent

trends and upcoming cloud products.

9.3.1 SAP Cloud Platform

SAP Cloud Platform is an open business platform offering a design and runtime envi-

ronment to create business applications. There is an entire set of available capabili-

ties, such as an integrated development environment for rich internet applications

(RIA); machine learning application programming interfaces (APIs); mobile services;

IoT services; and integration, collaboration, and analytic services.

SAP Cloud Platform is ideally suited to extend existing or create new SAP Fiori apps

in a side-by-side scenario to collect and process IoT data, to integrate data from vari-

ous sources, and to leverage machine learning capabilities. A side-by-side scenario

means you extend the core business processes in the SAP S/4HANA Cloud solution

with the means of the interfaces described in Section 9.3.3 on the SAP Cloud Platform.

9.3.2 SAP Analytics Cloud

SAP Analytics Cloud is a cloud-based, real-time analytical visualization tool that can

be connected to different data sources, as shown in Figure 9.24. You can evaluate que-

ries, create dashboards, and use built-in predictive capabilities across data sources.

Figure 9.24 SAP Analytics Cloud

SAP AnalyticsCloud

SAP S/4HANA

Dashboard Predictive

SAP S/4HANACloud

Third Party

Data Sources

460


You can find all prepackaged scenarios with the SAP Best Practices for analytics for

SAP S/4HANA. The preconfigured content supporting a manufacturing scenario for

accessing SAP S/4HANA Cloud is defined in scope item 28S (see Section 9.1.1).

The following scenarios are supported out of the box:

� Cost variance analysis

Analyze production cost actuals versus planned costs linked to production orders.


Perform work center cost analysis by plant.


Predict cost variance (fixed versus actual).

� Production scrap analysis

Analysis of production scrap distribution between organizational units/work cen-

ters.

� Current stock value and quantity analysis

Analysis of current stock quantities and values distributed among all stock types

and special stock types.

Figure 9.25 shows an example of the Production Cost Analysis dashboard.

Figure 9.25 Production Cost Dashboard: Overview

461


The key figures on a reporting date are visible on the left-hand side. Aggregated fig-

ures per plant and company code are shown as charts on the right-hand side.

Figure 9.26 shows a detailed version of the Production Cost Analysis dashboard with

filters on the left-hand side and charts aggregating cost-related figures per profit cen-

ter, company code, or order type.

Figure 9.26 Production Cost Dashboard: Details

Figure 9.27 presents the manufacturing boardroom as an SAP Analytics Cloud exam-

ple linked to inventory management. Different production key performance indica-

tors (KPIs) are visualized as part of the boardroom. The key figures are shown on the

right-hand side. The production quantity is shown as a geolocated cluster with drill-

down capability. The same data is presented per dimension (plant) and as a time

series below the map.

Figure 9.28 is the geolocated production quantity per product as a table and pie chart.

You can drill down by using the filter options or just by zooming into the map.

462


Figure 9.27 SAP Analytics Cloud Boardroom: Manufacturing Overview

Figure 9.28 SAP Analytics Cloud Boardroom: Production Quantity per Plant, Drilldown on

Plants in Germany

463


Figure 9.29 shows as an example the generic drilldown capabilities of the chart—

Incorrect Ratio and Production Quantity per Time—reachable by right-clicking the

chart bars. Many chart components support navigation or display disaggregated fig-

ures by right-clicking.

Figure 9.29 Generic Drilldown Capabilities

9.3.3 SAP API Business Hub

The SAP API Business Hub is the central API repository of all SAP solutions, such as

SAP S/4HANA, SAP S/4HANA Cloud, SAP C/4HANA, SAP Cloud Platform, SAP Success-

Factors, SAP Fieldglass, SAP Concur, and SAP Ariba.

APIs available in the SAP S/4HANA solution can be found at http://api.sap.com, as


Note

As a rule of thumb, SAP S/4HANA Cloud 1808 equals the SAP S/4HANA release in

2018. Consequently, SAP S/4HANA Cloud 1908 equals the SAP S/4HANA release in

2019. This rule can be derived from the cloud update cycle mentioned in Section 9.1.4.

464

http://api.sap.com


Figure 9.30 Entry Page of SAP API Business Hub

Business Application Programming Interfaces

Figure 9.31 shows the entry screen to SAP S/4HANA Cloud APIs. The Details section

here provides news, secondary documentation, and links. The most important fea-

ture is the search capability, which helps you quickly find your desired API. Each API

is linked to an SAP S/4HANA business object type.

You can see the search results for Material Document in Figure 9.31, which are three

SOAP service-based APIs and one OData-based API. You can expect to find at least one

OData-based API per SAP S/4HANA business object type, which can be used to read

the SAP S/4HANA business object and perform create, update, or delete OData opera-

tions, if applicable.

465


Using the OData protocol to access SAP S/4HANA business objects and using SOAP

for process integration are recommended.

Figure 9.31 Search and Display of Results of SAP S/4HANA Cloud Business APIs

The Details section contains some package information (change log) and most nota-

bly a Documents section containing links to supplementary information, such as

blogs, links, and hints (see Figure 9.32).

466


Figure 9.32 Details in the Documents Section

Note

In general, the APIs published with SAP S/4HANA Cloud are also available in SAP

S/4HANA; however, the API version and the API availability might differ. A detailed

document on how to verify which API version is available is listed in Figure 9.32.

When opening an API description (Process Material Documents in Figure 9.31), you’ll

be directed to a dedicated API overview page (see Figure 9.33). This example shows an

OData-based API with entity types to the left and supported operations of the

467


selected entity type to the right, including Try out and Code Snippet features. The API

References section contains the technical API documentation, whereas the Details

section contains the secondary documentation. Download SDK and Code Snippet

help you to quickly start an implementation project using the chosen API.

Figure 9.33 API Overview

The Details section in Figure 9.34 contains a textual description of the API, so you can

verify whether it meets the requirements of the expected functions. Download Spec-

ification allows you to download the API metadata. As we’re looking into an OData-

based API, we get an OData metadata file, as shown in Figure 9.35.

If you’re using the API on an SAP S/4HANA Cloud instance, you need to know the

Scope Items to activate the visibility of SAP S/4HANA Cloud instance on the API (refer

to Section 9.1.1) and the Communication Scenario to configure the API in your SAP

S/4HANA Cloud instance.

468


Figure 9.34 Secondary Documentation of the OData API

Figure 9.35 Specification Example: OData Metadata File in XML Format

469


The Business Documentation link shown in Figure 9.34 links you to the SAP Help Por-

tal entry of the API. The SAP Help Portal documentation of the API in Figure 9.36 doc-

uments the business function of the APIs and can also contain requests exemplifying

dedicated business scenarios, such as a goods receipt for purchase order or a goods

issue for cost center. It’s important to keep in mind that each API contains a contract

based on the technical interface definition, as shown in Figure 9.36, and a business

contract based on the configuration of the system.

Figure 9.36 SAP Help Portal Documenting the Business Context of the API

As shown in Figure 9.33, you can try out all supported operations on an OData entity

type. Figure 9.37 shows the section that allows you to enter OData request parameters

such as query options, filters, or sort criteria.

Figure 9.38 displays the response part. Execute triggers the request to the configured

system shown in Figure 9.37.

470


Figure 9.37 Trying Out an OData Request: Request Part

Figure 9.38 Trying Out an OData Request: Response Part

471


As shown in Figure 9.33, the Download SDK button provides an automatic download

functionality providing an archive (software development kit [SDK]) with a Java-

coded project accessing the selected OData API. Figure 9.39 displays a code snippet of

the downloaded project. This feature helps you immediately start an implementa-

tion project, connecting an external system to your desired API in SAP S/4HANA.

Figure 9.39 Snippet of the Downloaded SDK

If you want to integrate access to the chosen API in your existing implementation

project, you can also use the Code Snippet feature in Figure 9.33 to get a coding block

accessing the selected OData operation (see Figure 9.40). Code snippets are available

in various programming languages.

Business Events

In addition to the OData and SOAP APIs, the SAP API Business Hub also offers SAP

S/4HANA Cloud business events (see Figure 9.41), which can be used for a loose cou-

pling between heterogenous systems.

472


Figure 9.40 Automatically Generated Code Snippets: Selected Programming Language on

the Left, Code on the Right

Figure 9.41 Package Info of SAP S/4HANA Business Events

473


Business events follow a publish-subscribe pattern outlined in Figure 9.42. A con-

sumer interested in changes of business objects in a different system instance sub-

scribes to the corresponding event. When the event is triggered, the consumer gets

notified.

Figure 9.42 Publish-Subscribe Example between SAP S/4HANA Cloud and SAP Cloud Plat-

form

Similar to APIs, you can search for events by business objects. Figure 9.43 shows

searching for business events covering the business object Production Order.

After clicking on the Production Order Events card, you’ll reach the Production Order

Events detail page, shown in Figure 9.44, which lists the available events to subscribe

to and their HTTP implementation.

SAP Cloud Platform SAP S/4HANA Cloud

Event

SubscriptionConsumer

Event


Event


474


Figure 9.43 SAP S/4HANA Cloud Business Event for Production Order

Figure 9.44 Details of the Business Event Production Order

9.3.4 SAP Leonardo Internet of Things

In Chapter 1, we started with the definition of an IT system and soon met the term

ERP system as an IT system designed to support enterprise business processes. Look-

ing at an ERP system from a meta perspective, we can see that it contains an abstrac-

tion of the real world. Factories are mapped to plants, moving goods are mapped to

inventory, an explanation of how to create a good becomes a production version, and

475


a place where steps of the creation are executed is a work center. In general, the real

world requires an abstracted counterpart in the IT world. If not, the IT system would

not be able to support the business.

However, there is a gap between the real world and the IT world, which is usually

bridged by the end user of the IT system. The end user collects the data in the real

world, translates the data, and maps it to the abstracted entities of the IT world. Then

he or she transfers it to the IT world, so the SAP S/4HANA system can process it. The

result is interpreted by the end user and transformed into actions in the real world.

The closer the IT world resembles the real world, the easier the bridging. If the end

user can close the gap without much training, simply by interacting with the IT world,

we call the ERP system user friendly.

From Chapter 2 to Chapter 8, we’ve explained how SAP S/4HANA with the SAP Fiori UI

narrows the gap physically by mobilizing the IT world and conceptually with the

intelligent enterprise and the intuitive user experience. A different type of bridge is

the IoT, as shown in Figure 9.45. IoT enables the real world to directly talk to the IT

world on many occasions without any human involvement. To do so, the real world’s

data needs to be collected, transformed, stored, and mapped to the IT world’s entity

and vice versa. This is exactly what the cloud-based SAP Leonardo platform does.

Figure 9.45 Bridging the Gap between the Real World and the IT World

SAP S/4HANA System

IT WorldReal World

IoT

Collecting

TranslatingMapping

Transfer

ProcessC

ProcessB

ProcessA

InterpretActing

Gap

End User

476


Figure 9.46 shows the services provided by the SAP Leonardo platform:

� Device management

Device management enables the secure onboarding/offboarding of IoT devices at

scale. Different IoT protocols are supported out of the box, plus there is an SDK to

implement additional protocols. The sensor data can be enriched with geospatial

information.

� Data management

Data management comprises two aspects: (1) the collection of sensor data, includ-

ing harmonizing, abstracting, and transforming the physical sensor data into

meaningful business data, and (2) integration of master data, including geo loca-

tion.

� Geo

Geo services allow you to define points or areas of interest and floorplans.

Figure 9.46 Services Provided by the SAP Leonardo Platform

The data is stored automatically in hot storage usable for analytical queries and in

warm and cold storage with different retention periods.

You can define aggregates with dimensions and measures with calculation views on

top that are consumable by SAP Analytics Cloud (refer to Section 9.3.2).

There is a rule engine available on streams and persisted data. Based on the rules

engine, there is an event service to implement a publish-subscribe architecture with

possible consumers if rules match certain criteria. Eventually, events trigger actions

and provide an IoT context to business processes running on SAP S/4HANA.

Big Data Storage

Event Service ActionActions andIntegration

Services

Streaming Data

Persisted Data

RulesAnalytics and Queries

Device Management

Data Management Geo Services

Rules

477


9.4 Summary

This chapter set out to provide insight into your deployment options and how inven-

tory management functions in the cloud. In doing so, it has also provided an outlook

to the future of SAP S/4HANA.

Initially, different deployment options were discussed. In addition to an on-premise

deployment, the general aspects of cloud deployment were introduced, and hybrid

deployment models where either part of the technology or part of the business pro-

cesses are deployed in cloud were delineated schematically. The next section pre-

sented SAP S/4HANA Cloud as deployment model business in cloud. Then several

other hybrid deployment models (two-tier ERP, decentralized warehouse manage-

ment, digital procurement) with focus on inventory management were shown. The

final section focused on SAP Cloud Platform, in particular with SAP Analytics Cloud

and SAP Leonardo IoT with the SAP API Business Hub as the interface repository.

We hope you’ve enjoyed reading the book and that we were able to meet the expecta-

tions raised in the preface. One last closing remark: There is no need to travel to Wall-

dorf to get the latest SAP S/4 HANA package; details can be found at www.sap.com.

478

http://www.sap.com

The Authors

Bernd Roedel is chief development architect within a central

architecture team in the area of core logistics, where he has

supported SAP S/4HANA development for the last two years.

He joined SAP in 2000 and worked as a developer and an

architect for sustainability management, human resources,

supply chain management, and inventory management proj-

ects. He has a bachelor’s degree in biology, a master’s degree in

computer science, and a PhD in natural science.

Johannes Esser joined SAP in 2002 and is an experienced proj-

ect management expert in SAP development and a certified

Scrum master. He has completed a broad range of projects

across sustainability management, supply chain management,

and inventory management, with a focus on cloud mindset

and agile software engineering.

479

Index

A

ABC analysis ............................................................... 80

Account assignment ............................................ 282

multiple ...................................................... 282, 284

Account assignment category ......................... 113

details ................................................................... 114

factors ................................................................... 113

purchase order .................................................. 267

Account determination ........................... 113, 114

Account model ......................................................... 34

Accounting document ........................................... 37

ACID principle ........................................................... 23

Adjusting inventory ............................................ 157

Analytical list ...................................................... 42, 43

Analytical list page ............................................... 397

App finder ................................................................... 53

Application programming interface

(API) ....................................................................... 464

business documentation ............................... 470

description .......................................................... 467

details ................................................................... 468

integrate .............................................................. 472

OData-based ...................................................... 468

overview page ................................................... 467

SAP S/4HANA Cloud ............................. 465, 467

Archiving ..................................................................... 26

Area of responsibility ................................ 168, 188

Ariba Network ........................................................ 459

Assemble-to-order (ATO) ................................... 160

Authorization check ............................................ 110

Authorization management ............................ 110

Automatic proposal ............................................. 196

graphical view ................................................... 196

realize ................................................................... 197

Auxiliary object ..................................................... 100

Available stock ....................................................... 122

Available-to-promise (ATP) checks ................ 118

Average daily usage (ADU) ................................ 240

B

Backend server ............................................. 143, 146

Batch input .............................................................. 105

defaults ................................................................ 106

Batch job scheduling

situations ............................................................ 132

Batch-managed material ................................... 277

details ................................................................... 278

search help .......................................................... 278

single ..................................................................... 301

Bill of material (BOM) ................................ 119, 165

display .................................................................. 176

explode ................................................................. 177

exploration ......................................................... 122

information ........................................................ 179

where-used list .................................................. 180

Bimodal IT ............................................................... 454

Bin .................................................................................. 94

Blocked stock ................................................... 66, 427

Bubble chart ............................................................ 413

Buffer ......................................................................... 221

adjust .................................................................... 225

control level ....................................................... 236

levels ..................................................................... 238

positioning ......................................................... 228

proposal ............................................................... 233

simulate ............................................................... 241

views ..................................................................... 238

Buffer Positioning app ....................................... 228

Buffer profile .......................................................... 222

define .................................................................... 222

Buffer Profile Maintenance app ..................... 222

Business Application Programming

Interface (BAPI) ........................................ 147, 465

Business catalog .................................... 51, 148, 152

Business catalog group ............................. 148, 149

Business events ..................................................... 472

publish-subscribe ............................................. 474

Business role .......................... 51, 68, 148, 149, 152

copy ....................................................................... 151

inventory analysis ........................................... 395

481

Index

Business role (Cont.)

predelivered ....................................................... 150

templates ............................................................... 68

C

Capacity center ...................................................... 175

Capacity planning ................................................ 174

details ................................................................... 175

shifts ...................................................................... 175

Capacity requirement planning (CRP) ......... 159

Catch weight management ................................. 38

CDS view ........................................... 27, 85, 397, 428

custom queries .................................................. 429

Change Inventory Count app .......................... 334

Change management ......................................... 168

Change PIRs app .................................................... 185

Change Planned Order app ............................... 202

Change Production Order app ........................ 369

Change request ...................................................... 356

activate ................................................................ 356

automatic emails ............................................. 357

initiate .................................................................. 356

new ........................................................................ 358

requested ............................................................. 358

Check Material Coverage app .......................... 359

Checking rule ................................................ 118, 122

Classification job .................................................. 226

Cloud deployment ............................................... 439

Cloud solutions ..................................................... 460

Cold store .......................................................... 25, 111

Collective Kanban Print app ............................ 387

Column store ............................................................ 24

Company code .......................................................... 91

plants ....................................................................... 93

Component scrap ................................................. 377

Configuration ........................................................... 87

cross functions .................................................. 125

DDMRP ................................................................ 221

general settings ................................................ 108

inventory management ................................... 95

logistics execution ........................................... 119

procurement ...................................................... 112

production planning ...................................... 119

Confirm Production Operations

app ................................................................ 340, 370

Confusion matrix .................................................... 78

Consumption group ............................................ 422

default ................................................................... 110

define ..................................................................... 110

Consumption posting ............................... 114, 422

Continuous inventory ........................................ 327

Control cycle ........................................................... 395

Controlling view ...................................................... 92

Convert Planned Order to Process Order

app .......................................................................... 202

Convert Planned Order to Production

Order app ............................................................. 202

Convert Planned Orders app .................. 158, 201

Convert Planned Orders to Purchase

Requisitions app ............................................... 202

Core data services (CDS) ....................................... 27

Core inventory management ........................... 287

Correct Kanban app .............................................. 386

Cost variance analysis ......................................... 461

Create Goods Movement app ............................ 84

Create Goods Receipt for the Production

Order app ............................................................. 340

Create Physical Inventory Documents

app ................................................................ 329, 330

Create PIRs app ....................................................... 185

Create Planned Order app .................................. 202

Create Reservation app ....................................... 341

Cross function ........................................................ 125

Current stock value and quantity

analysis ................................................................. 461

Custom CDS view .................................................. 428

associate data source ..................................... 430

data sources ....................................................... 429

field list ................................................................. 430

graphical outline .............................................. 433

primary data source ........................................ 430

publish .................................................................. 432

Custom CDS Views app ....................................... 428

Custom field ............................................................ 137

add to interface ................................................. 138

create ..................................................................... 137

edit .......................................................................... 139

publish .................................................................. 138

Custom Fields & Logic app ................................ 136

Custom logic ................................................. 136, 141

Custom query ......................................................... 428

482

Index

Customer consignment stock ............................ 66

Customer return ................................................... 281

Customizing ............................................................... 87

Cycle counting ............................................. 107, 327

indicators ............................................................ 108

D

Data aging ......................................................... 25, 111

undo ...................................................................... 111

Data Dictionary (DDIC) ................................... 24, 35

Data management ................................................ 477

Data source .............................................................. 140

extensions ........................................................... 140

Date function ......................................................... 125

create .................................................................... 126

details ................................................................... 126

Dead stock ............................................................... 420

Dead Stock Analysis app .................................... 420

Delivery completed indicator .......................... 434

Delivery document .............................................. 116

Demand element ........................................ 187, 456

Demand-driven material requirements

planning (DDMRP) ......................... 68, 172, 221

buffer adjustment ............................................ 225

buffer positioning ............................................ 228

classify materials ............................................. 223

configure ............................................................. 221

execution cycle .................................................. 172

lead time .............................................................. 224

maintain buffer profiles ................................ 222

manage buffer levels ...................................... 236

monitor ................................................................ 243

product classification ........................... 223, 226

replenishment ......................................... 244, 246

schedule buffer proposal ............................... 233

Demand-driven planning .................................. 163

Demand-driven replenishment ...................... 123

Deploy phase .......................................................... 447

Deployment ............................................................ 439

hybrid .......................................................... 440, 453

Design studio grid ............................................ 42, 44

Detect MRP Situations app ............................... 219

Detect Unnecessary Supply Elements

app ......................................................................... 158

Deterministic algorithm .................................... 170

Device management ........................................... 477

Discrete manufacturing ..................................... 163

Display BOM app ......................................... 157, 176

Display Kanban (Demand View) app ............ 380

extend ................................................................... 390

Display Kanban (Supply View) app ............... 383

extend ................................................................... 390

Display Master Recipe app ................................ 181

Display MRP Key Figures app ................. 158, 207

Display MRP Master Data Issues

app ................................................................ 158, 211

Display Multilevel BOM Explosion app ....... 177

Display Planned Order app ............................... 202

Display Process Order app ................................ 354

Display Production Order app ........................ 354

Display Reservation List app ............................ 343

Display Routing app ............................................ 180

Display Stock Overview app ............................. 307

Document date ......................................................... 30

Due Replenishment Elements app ................ 384

E

Embedded analytics ............................................ 310

Engineer-to-order (ETO) ..................................... 160

Enter Inventory Count app ............................... 333

Enterprise resource planning (ERP) ................. 21

Enterprise search .............................................. 28, 54

filter criteria ....................................................... 290

identify documents ......................................... 289

manufacturing execution ............................ 352

navigation targets ........................................... 289

node .......................................................................... 90

result ..................................................................... 290

Enterprise structure ............................................... 90

Excess component consumption .................. 377

KPIs ........................................................................ 378

Excess Component Consumption app ........ 377

Excess individual segment ............................... 200

Excess stock ................................................... 200, 217

Expiration date ...................................................... 279

Expiration date check ......................................... 109

Explore phase ......................................................... 447

Extensibility ........................................................... 136

custom fields ...................................................... 137

custom logic ....................................................... 141

483

Index

Extensibility (Cont.)

data source ................................................ 136, 140

runtime adaptation ........................................ 142

External procurement ........................................ 173

External warehouse management

system (WMS) ................................................... 457

F

Field control ............................................................ 337

Filter bar ...................................................................... 48

Find BOM for Components app ...................... 179

Follow-up document ........................................... 296

Forecast .................................................................... 164

converting to PIRs ........................................... 164

monitor ................................................................ 164

Freezing ........................................................... 106, 333

Frontend server ............................................ 143, 144

Fuzzy search ........................................................... 289

G

Geo services ............................................................ 477

Geospatial engine .................................................... 28

Globally unique identifier (GUID) .................... 34

Goods issue .................................................... 337, 409

Goods movement ................................................... 99

analysis result ................................................... 400

dimensions ......................................................... 399

drill down ............................................................ 400

navigation targets .......................................... 401

Goods Movement Analysis app ............. 398, 402

Goods receipt ................................................ 113, 263

account assignment ....................................... 282

batch ..................................................................... 277

blocked stock ..................................................... 280

decentralized warehouse .............................. 281

expiration date check .................................... 109

inbound deliveries ........................................... 272

post ........................................................................ 264

process variants ............................................... 277

production order .............................................. 274

purchase order .................................................. 264

quality inspection ............................................ 280

reservations ....................................................... 340

return delivery .................................................. 281

Goods receipt (Cont.)

settings ................................................................. 103

without reference ............................................. 275

Goods Receipt for Inbound Delivery app ...... 84

Goods Receipt for Purchase Order app ........ 267

Graph engine ............................................................ 28

H

Hot store ............................................................ 25, 111

Hybrid deployment .............................................. 453

decentralized warehouse

management ................................................. 457

SAP Ariba ............................................................. 459

scenarios .............................................................. 454

I

Implementation Guide (IMG) ............................ 87


overview ................................................................. 88

production planning ....................................... 120

Inbound delivery ................................................... 272

items ...................................................................... 273

Information lifecycle management ................ 26

Initial entry .............................................................. 321

Initial load ................................................................ 337

Initial page ................................................................. 47

Insight to action .................................................... 396

Inspection lot .......................................................... 281

Inspection type ...................................................... 281

Integrated data ....................................................... 396

Interface .................................................................... 147

business objects ................................................. 147

technologies ....................................................... 147

Internal production ............................................. 174

Internet of Things (IoT) ............................. 337, 476

Inventory .................................................................... 66

Inventory analysis ................................................ 395

advances .............................................................. 396

custom queries .................................................. 428

KPIs ........................................................................ 404

posted stock change ........................................ 398

process analysis tools ..................................... 419

tools ....................................................................... 397

Inventory Analysis Overview page ...... 404, 407

484

Index

Inventory analyst .......................................... 68, 151

Inventory cost .................................................... 69, 70

Inventory KPI Analysis app .............................. 413

drill down ............................................................ 417

Inventory manager ....................................... 68, 151

Inventory optimization ........................................ 79

Inventory turnover .............................................. 409

analysis result ................................................... 410

parameters ......................................................... 410

Inventory Turnover Analysis app .................. 409

bubble chart ....................................................... 411

scatter chart ....................................................... 410

Inventory valuation tables .................................. 37

Inventory value ........................................................ 92

J

Just-in-sequence (JIS) production ..................... 67

Just-in-time (JIT)

calls ........................................................................ 252

production ............................................................. 67

K

Kanban ..................................................... 67, 173, 248

calculate .............................................................. 254

configure ............................................................. 124

container replenishment ............................... 173

demand view ...................................................... 381

display .................................................................. 250

JIT replenishment ............................................. 252

legend ................................................................... 381

production execution ..................................... 380

replenishment elements ................................ 384

status .......................................................... 380, 383

supply view ......................................................... 383

Kanban Calculation and Check

Calculation Results apps ............................... 254

Kanban Card app ................................................... 390

Kanban container ....................................... 380, 383

correct ................................................................... 386

details ................................................................... 382

process extensibility ....................................... 389

scanning operation ......................................... 388

status .................................................................... 388

Kanban control cycle ................................. 174, 386

classic ................................................................... 173

details ................................................................... 249

event-driven ....................................................... 173

external replenishment ................................. 250

manage ................................................................ 248

Key performance indicator (KPI) ... 43, 310, 404

boardroom ......................................................... 462

excess component consumption ............... 378

filter .............................................................. 415, 416

material scrap ................................................... 373

operation scrap ................................................ 374

production execution duration ................. 380

range of coverage ............................................ 322

scrap reason ....................................................... 377

time series ........................................................... 413

Key User Extensibility app ................................... 63

KPI Analysis app

bar chart .............................................................. 414

configure ............................................................. 415

L

Late locking ................................................................ 96

Long-term planning ................................... 158, 159

Lot size ......................................................................... 71

Low-touch ERP .......................................................... 76

M

Machine learning ................................... 76, 77, 225

Maintain Business Roles app ........................... 150

Maintain PIRs app ................................................ 182

Make or buy ............................................................... 68

Make-to-order (MTO) ................ 68, 160, 182, 187

Make-to-stock (MTS) ........................... 68, 160, 182

Manage Buffer Levels app ........................ 233, 236

Manage Change Requests – All app ............... 357

Manage Change Requests – New app ........... 357

Manage Change Requests app ......................... 356

Manage Control Cycle app ................................ 248

extend ................................................................... 390

Manage Date Functions app ............................ 125

Manage Material Coverage app ...................... 221

Manage Planned Independent

Requirements app ........................................... 157

485

Index

Manage Planned Orders app ................... 158, 201

Manage Production Operations app ............ 340

Manage Production Orders app .................... 340,

360, 364

Manage Production Supply Area app ........... 167

Manage Reservation app ................................... 342

Manage Situation Types app .................. 130, 436

Manage Stock app ............................. 321, 337, 396

Manage Teams and Responsibilities

app ................................................................ 129, 435

Manage Work Center Capacity app ...... 157, 174

Manage Your Solution app ...................... 448, 452

Manufacturing execution ................................. 345

transactional documents ............................. 352

Manufacturing execution system

(MES) ............................................................ 147, 159

Mass Maintenance of Products (DD) app ... 223

Master data ................................................................ 93

classification categories ............................... 223

issues ..................................................................... 211

material .................................................................. 93

MRP areas ........................................................... 123

production ................................................. 157, 165

Master recipe .......................................................... 166

display .................................................................. 181

Material coverage ................................................. 359

Material Coverage app ............................... 188, 190

Material document .......................................... 29, 32

accounting ......................................................... 294

APIs ........................................................................ 465

attachment ........................................................ 295

create .................................................................... 324

data aging .......................................................... 111

details ................................................................... 294

header ........................................................... 29, 288

items ....................................................... 29, 32, 288

monitor ................................................................ 287

output management ...................................... 294

process flow ....................................................... 295

result list .............................................................. 293

reversal ................................................................ 100

reverse .................................................................. 326

Material document object page ...................... 293

analyze document flow ................................. 296

cross-app navigation ..................................... 295

header .................................................................. 293

Material document object page (Cont.)

reversals ............................................................... 326

Material document posting

configure ................................................................ 95

movement types ................................................. 99

Material Documents Overview app .... 289, 291,

295, 304

process flow ........................................................ 296

reversals ............................................................... 325

Material information ........................................... 194

Material Inventory Values-Balance

Summary app .................................................... 419

Material Inventory Values-Line Items

app .......................................................................... 419

Material object page ............................................. 174

Material requirements planning

(MRP) .................................................... 91, 157, 159

activities ............................................................... 121

algorithms ........................................................... 170

calculation .......................................................... 123

configure .............................................................. 122

predictive ............................................................. 255

process .................................................................. 168

run .......................................................................... 168

types ...................................................................... 170

Material scrap ......................................................... 372

KPIs ........................................................................ 373

Material Scrap app ................................................ 372

Material Shortage Monitoring app .................. 83

Material valuation ......................................... 91, 419

Materials management (MM) node ............... 112

Me Area ....................................................................... 52

application settings ......................................... 265

features ................................................................... 53

Member function .................................................. 135

Midterm planning ...................................... 158, 159

Monitor External Requirements app ........... 158,

212, 214

Monitor Internal Requirements app ... 158, 214

Monitor Material Coverage – Net

Segments app ..................................................... 186

Monitor Material Coverage – Net/

Individual Segments app .............................. 187

Monitor Material Coverage app ............ 186, 200

Monitor Process Orders app ............................. 363

486

Index

Monitor Production Execution

Duration app ...................................................... 379

Monitor Production Order/Process

Order app ............................................................ 340

Monitor Production Orders app ..................... 359

Monitor Requirements and Material

Coverage app ..................................................... 158

Monitor Work Center Schedules

app ............................................................... 339, 349

Monitoring .................................................... 288, 339

Kanban ................................................................. 380

production performance ............................... 372

Movement type ....................................... 32, 99, 292

103 ....................................................... 269, 280, 427

105 ................................................................ 269, 428

107 .......................................................................... 285

109 .......................................................................... 285

453 .......................................................................... 281

455 .......................................................................... 281

557 ........................................................................... 118

558 .......................................................................... 118

651 ........................................................................... 281

653 .......................................................................... 281

655 .......................................................................... 281

business process ............................................... 101

configure ............................................................. 101

custom .................................................................. 102

normal .................................................................. 101

post goods movement ................................... 324

reversal ................................................................. 101

stock change ...................................................... 292

MRP area ...................................................................... 95

define .................................................................... 123

types ...................................................................... 123

MRP controller ....................................................... 122

define .................................................................... 121

MRP element

actions .................................................................. 193

quick view ........................................................... 192

MRP Live ......................................................... 171, 186

issues ..................................................................... 211

steps ....................................................................... 209

MRP run

create new job ................................................... 206

details ................................................................... 203

jobs ......................................................................... 202

MRP run (Cont.)

parameters ................................................ 204, 205

schedule ...................................................... 190, 202

status .................................................................... 207

MRP standard view ..................................... 189, 360

Multiple materials ................................................ 305

currencies ............................................................ 307

stock figures ....................................................... 305

stock values ........................................................ 306

My Situations app ................................................ 434

N

Natural language interaction (NLI) ................... 85

Negative stock ........................................................... 99

allow ..................................................................... 108

Nesting ...................................................................... 167

No zero stock lines ............................................... 308

Notes ................................................................. 168, 194

Notifications .............................................................. 56

Number range interval .......................................... 97

Number range object ............................................. 97

O

Object page ....................................................... 45, 397

Object page header .............................................. 354

OData ........................................................... 48, 89, 147

activate ................................................................ 144

add service .......................................................... 145

API .......................................................................... 467

entity type ........................................................... 470

protocol ...................................................... 144, 466

repository objects ............................................ 146

request .................................................................. 471

services ........................................................ 144, 145

Operating profit ....................................................... 69

equation ................................................................. 70

Operation scrap ..................................................... 374

KPIs ........................................................................ 374

Operation Scrap app ............................................ 374

Optimization cycle ........................................ 79, 397

analyze .................................................................... 84

execute .................................................................... 82

levels ........................................................................ 81

plan and adjust .................................................... 82

487

Index

Ordered receipts view ................................ 190, 360

Ordered requirements view .................... 190, 360

Orders at hand stock .............................................. 66

Organizational structure ...................................... 90

Organizational unit ........................... 31, 74, 90, 91


issuing .................................................................. 310

receiving .............................................................. 310

Output material list ............................................. 205

Overdue Materials – Goods Receipt

Blocked Stock app ............................................ 427

Overdue Materials – Stock in Transit

app ...................................................... 426, 433, 434

Overdue Materials app ....................................... 151

Overview Inventory Management

page .............................................................. 404, 405

manage cards .................................................... 406

Overview Inventory Processing

page .............................................................. 404, 407

Overview page ......................................... 41, 84, 397

analytics .............................................................. 404

P

Periodic inventory ............................................... 327

Physical inventory ............................... 99, 104, 327

activities .............................................................. 104

analytics .............................................................. 403

batch input ......................................................... 105

count ..................................................................... 329

count results ...................................................... 334

cycle counting ................................................... 107

details ................................................................... 330

evaluate ............................................................... 329

filter bar ............................................................... 330

freezing ................................................................ 106

inventory count ................................................ 333

inventory differences ..................................... 106

phases ................................................................... 328

prepare ................................................................. 328

results ................................................................... 330

shortcuts ............................................................. 329

stock types .......................................................... 328

tolerance ............................................................. 107

types ...................................................................... 327

Physical Inventory Analysis app .................... 403

Physical inventory document ......................... 105

count results ....................................................... 337

create ........................................................... 330, 331

details .................................................................... 336

dimension ............................................................ 403

header ................................................................... 332

inventory count ................................................. 333

items ...................................................................... 335

overview ............................................................... 335

process .................................................................. 334

results table ........................................................ 335

select ...................................................................... 333

split ......................................................................... 332

Physical Inventory Document

Overview app ..................................................... 335

Plan-driven planning ........................................... 164

Planned independent requirement (PIR) .... 157

configure .............................................................. 120

details .................................................................... 184

edit .......................................................................... 184

list ........................................................................... 183

maintain .............................................................. 182

mass maintenance ........................................... 185

quantity ................................................................ 185

Planned order

convert ........................................................ 200, 201

manage ................................................................ 201

MRP ........................................................................ 170

Planner view .............................................................. 92

Planners Overview app ....................................... 243

Planning inventory .............................................. 157

Planning mode ....................................................... 347

Planning scope ....................................................... 204

Planning strategy .................................................. 158

hybrid .................................................................... 162

influences ............................................................. 162

production planning ....................................... 160

Plant ...................................................................... 74, 93

assign to company code .................................. 94

MRP area .............................................................. 123

parameters ................................................... 98, 122

Plant key ..................................................................... 92

Post Goods Movement app ... 49, 268, 281, 284,

285, 310, 316, 321, 324

error log ................................................................ 317

reversals ..................................................... 325, 326

488

Index

Post Goods Receipt for Inbound

Delivery app ....................................................... 272

Post Goods Receipt for Production

Order app ............................................................ 274

Post Goods Receipt for Purchase

Order app ......................................... 151, 264, 284

Post Goods Receipt without Reference

app ......................................................................... 275

Posted stock change analysis

goods movement ............................................. 398

physical inventory document ..................... 403

single/multiple materials ............................. 398

Posting date ............................................................... 29

Predecessor document ............................. 100, 296

Predictive Analysis Library (PAL) ............ 28, 225

Predictive model ............................................ 78, 225

performance .......................................................... 78

slow-moving indicator ................................... 423

statuses ................................................................ 425

stock transport orders .................................... 319

training ...................................................... 225, 320

Predictive Models app ........... 225, 320, 423, 426

Predictive MRP ...................................................... 255

prerequisites ....................................................... 255

process simulations ........................................ 260

schedule simulation ........................................ 256

simulation summary ...................................... 261

Primary demand ................................................... 163

Process extensibility ........................................... 389

Process flow ............................................................ 296

BMC ....................................................................... 445

navigate ............................................................... 297

Process manufacturing ...................................... 163

Process order .......................................................... 201

Process Physical Inventory Count Results

app ......................................................................... 334

Process Predictive MRP Simulations app ... 260

Procurement ........................................................... 112

account assignment ....................................... 282

digital .................................................................... 459

document flow .................................................. 112

stock-related ...................................................... 268

Product life cycle management (PLM) ......... 166

Product lifecycle ....................................................... 73

ramp-up .................................................................. 73

Production date ..................................................... 279

Production execution ......................................... 339

duration ............................................................... 379

Kanban ................................................................ 380

performance monitoring .............................. 372

reservations ....................................................... 340

Production input ..................................................... 68

Production lead time .......................................... 161

Production master data ..................................... 174

Production operation ................................ 346, 366

confirm ................................................................. 371

details .......................................................... 367, 369

Production operator ................................... 339, 380

Production order .................................................. 274

convert ................................................................. 201

details ................................................................... 365

enterprise search .............................................. 352

goods receipt ..................................................... 372

header ................................................................... 274

issues ..................................................................... 366

manage ................................................................ 364

monitor ................................................................ 359

object page ......................................................... 353

operations ........................................................... 351

visualize ............................................................... 365

worklist ................................................................ 360

Production planner ............................................. 158

Production planning .................................... 68, 157

configure ............................................................. 119

process industries ............................................ 124

strategies ............................................................. 160

Production planning/detailed scheduling

(PP-DS) .................................................................. 159

Production scrap analysis ................................. 461

Production supervisor ....................................... 339

Production supply area ...................................... 167

Production Supply Area (Fast Entry) app .... 167

Production trigger ................................................ 161

Production variant ............................................... 161

Production version ..................................... 166, 475

Production volume .............................................. 161

Project stock .............................................................. 66

Pull principle .......................................................... 173

Purchase order .............................................. 112, 263

account assignment categories ........ 113, 267

batch managed ................................................ 277

change request .................................................. 356

489

Index

Purchase order (Cont.)

data ....................................................................... 266

details ................................................................... 271

distribute ............................................................. 269

MRP ....................................................................... 170

multi-account assignment .......................... 282

NB ........................................................................... 117

personalize ......................................................... 270

select ..................................................................... 264

storage location ............................................... 270

type ........................................................................ 116

UB ........................................................................... 116

without reference ............................................. 276

Purchase requisition ........................................... 201

Purchasing organization ...................................... 95

Q

Quality assurance system .................................... 88

Quality certificate ................................................. 285

Quality inspection stock ............................. 66, 280

Quick view ............................................................... 168

R

Realize phase .......................................................... 447

Real-time data ........................................................ 396

Reason code ............................................................ 323

select ..................................................................... 324

Record .......................................................................... 23

Reference date ....................................................... 421

Reference document ........................................... 275

Reference scenario ............................................... 255

Regenerative planning ....................................... 204

Reorder point ......................................................... 170

Replenishment ............................................... 71, 244

execute ................................................................. 246

Replenishment element .................................... 384

details ................................................................... 385

Replenishment Execution app ....................... 246

Replenishment lead time ..................................... 71

Replenishment Planning app .......................... 244

Report RMCBIN00 ................................................ 108

Reporting date ....................................................... 301

Representational State Transfer (REST) .......... 48

Reschedule in ......................................................... 198

Reschedule out ....................................................... 198

Rescheduling check .............................................. 198

Reservation ....................................................... 99, 340

automatic .................................................. 340, 341

create ..................................................................... 341

details .................................................................... 342

item ........................................................................ 344

layout variant .................................................... 343

list ........................................................................... 343

manual ................................................................. 341

results .................................................................... 344

view ........................................................................ 342

Resource .................................................................... 166

Responsibility management ............................ 127

activities ............................................................... 128

Responsibility rule ................................................ 135

Return delivery document ................................ 281

Reversal ..................................................................... 325

Reversal posting ...................................................... 32

Routing ............................................................ 119, 166

display ................................................................... 180

steps ....................................................................... 166

Runtime adaptation (RTA) ....................... 141, 142

S

Safety stock level ..................................................... 71

Sales and distribution (SD) ................................ 281

Sales and operation planning (S&OP) ........... 159

Sales order ................................................................ 164

Sampling ................................................................... 327

SAP Analytics Cloud ...................................... 85, 460

manufacturing boardroom .......................... 462

production cost dashboard .......................... 461

scenarios .............................................................. 461

SAP API Business Hub ............................... 464, 472

interfaces ............................................................. 147

SAP Ariba .................................................................. 459

SAP Best Practices ................................................. 461

SAP Best Practices Explorer ....................... 91, 447

SAP Business Warehouse (SAP BW) ............... 399

SAP Cloud Platform ....................................... 78, 460

SAP CoPilot ............................................. 57, 303, 396

SAP ERP ....................................................................... 33

architecture .......................................................... 38

490

Index

SAP Fiori ..................................................... 21, 38, 148

design principles .................................................. 39

entities .................................................................. 149

SAP Fiori applications ........................... 40, 41, 144

analytical ............................................................... 85

converted SAP GUI .............................................. 49

extensibility ........................................................... 62

interaction mode ................................................ 49

native ................................................................ 41, 48

stateful .................................................................... 49

stateless .................................................................. 49

SAP Fiori apps reference library ........... 144, 146,

153, 419

information ........................................................ 154

select ...................................................................... 153

SAP Fiori Cloud ...................................................... 146

SAP Fiori launchpad ............................ 50, 144, 264

embedded documentation .............................. 59

features ................................................................... 52

groups ...................................................................... 51

layout .................................................................... 149

Me Area ................................................................... 51

navigation ............................................................. 60

notifications .......................................................... 56

personalization .................................................... 55

role-based ............................................................ 150

SAP CoPilot ............................................................ 57

search ....................................................................... 54

semantic objects .................................................. 61

tiles ............................................................................ 61

SAP Gateway .............................................................. 89

SAP GUI ........................................................................ 50

transactions .......................................................... 49

SAP HANA ................................................................... 22

basics ....................................................................... 22

benefits .................................................................... 27

database ................................................................. 23

limitations ............................................................. 24

SAP Integrated Business Planning

(SAP IBP) .............................................................. 159

SAP Jam ........................................................................ 61

SAP Learning Hub ................................................. 447

SAP Leonardo ......................................................... 476

services ................................................................. 477

SAP Leonardo Internet of Things ................... 475

SAP NetWeaver ......................................................... 89

SAP S/4HANA ............................................................ 21

architecture ........................................................... 38

data model ..................................................... 29, 34

deployment options ........................................ 440

extensibility ....................................................... 136

hybrid deployment .......................................... 454

hybrid planning ................................................ 163

IMG ........................................................................... 88

inventory analytics ......................................... 396

inventory optimization .................................... 79

new technologies ................................................ 75

servers .................................................................. 143

simplifications ..................................................... 37

stock types ............................................................. 65

SAP S/4HANA Cloud ............................................ 440

APIs ............................................................... 465, 467

best practices ..................................................... 441

configure ............................................................. 448

hybrid deployment .......................................... 454

implementation ............................................... 447

implementation items ................................... 448

servers .................................................................. 143

solution scope ................................................... 441

update cycle ....................................................... 453

versions ................................................................ 464

SAP Smart Business ............................................. 397

SAP Smart Business app ................................ 42, 43

SAPUI5 ...................................................................... 144

Scaling .......................................................................... 25

Scatter chart ............................................................ 413

Schedule Buffer Proposal Calculation

app ......................................................................... 233

Schedule Lead Time Classification of

Products DD app .............................................. 231

Schedule MRP Runs app ........................... 158, 202

Schedule Predictive MRP Simulation

Creation app ...................................................... 256

Schedule Product Classification app ............ 226

Schedule Production app ............... 339, 345, 349

Scheduling execution ......................................... 345

Scheduling production ...................................... 345

strategy ................................................................ 347

Scope item ...................................................... 443, 456

core inventory ................................................... 443

country relevance ............................................ 444

details ................................................................... 444

491

Index

Scope item (Cont.)

process flow ....................................................... 444

Scope item group ................................................. 441

inventory management ................................ 442

Scrap reason ........................................................... 375

donut chart ........................................................ 376

KPIs ........................................................................ 377

Scrap Reason app .................................................. 375

Scrapping ........................................................ 321, 337

post goods movement ................................... 324

Secondary demand .............................................. 163

Self-Service Configuration UIs (SSCUIs) ...... 450

organizational structure ..................... 451, 453

Serial number processing ................................. 285

Serial numbers ...................................................... 316

Service level ........................................................ 69, 70

Service-level agreement (SLA) ........... 71, 73, 161

Set Kanban Container Status app .................. 388

Shelf life .................................................................... 109

expiration ........................................................... 279

Shop floor control ................................................ 123

Shortage

calculate .............................................................. 212

definition .................................................... 189, 359

manage ................................................................ 195

Short-term planning ........................................... 159

Simple list ................................................................... 42

Simple Object Access Protocol

(SOAP) ......................................................... 147, 466

Simplification list .................................................... 38

Single material ....................................................... 299

batch ..................................................................... 301

header .................................................................. 300

input ...................................................................... 300

organizational levels ...................................... 300

Situation ...................................................................... 76

batch jobs ............................................................ 132

conditions ........................................................... 132

create .................................................................... 217

display .................................................................. 133

exceptions ........................................................... 217

link ......................................................................... 134

restrict .................................................................. 220

set up .................................................................... 436

template ........................................... 130, 131, 217

translate .............................................................. 132

Situation (Cont.)

type ........................................................................ 131

user-defined ........................................................ 132

Situation handling ............ 76, 127, 130, 217, 436

Slow or Non-Moving Materials app ..... 421, 422

Slow/nonmoving material ................................ 421

Slow-moving indicator ....................................... 422

bar chart ............................................................... 423

Special stock type ........................................... 31, 313

Split valuation support ....................................... 285

Stochastic algorithm ............................................ 170

Stock – Multiple Materials app .............. 305, 405

analytics ............................................................... 398

Stock – Single Material app ..................... 299, 305

analytics ............................................................... 398

Stock availability ................................................... 189

chart ....................................................................... 190

quick view ............................................................ 190

Stock Champion app ............................................ 404

Stock change ........................................................... 323

Stock days' supply view ............................ 189, 360

Stock history ........................................................... 302

chart ............................................................. 302, 304

Stock identification .............................................. 298

multiple materials ........................................... 305

overview ............................................................... 307

single material ................................................... 299

Stock identifying field (SID) ................................ 34

Stock in transit ................................................ 66, 115

overdue ................................................................. 425

Stock overview ....................................................... 307

criteria ................................................................... 308

header ................................................................... 309

Stock Requirements List app ............................ 351

Stock transfer ................................................ 116, 309

cross-plant ........................................................... 314

in plant ................................................................. 310

post goods movement .................................... 316

stock transport orders .................................... 318

with stock transport order ............................ 117

without stock transport order ..................... 116

Stock Transfer – Cross Plant app ..................... 119

Stock Transfer – In-Plant app ........................... 310

Stock transfer posting ............................... 115, 316

Stock transport order ................................ 116, 318

activities ............................................................... 118

492

Index

Stock transport order (Cont.)

create .................................................................... 318

forecast ................................................................ 319

overdue ................................................................ 426

process .................................................................. 319

status filter .......................................................... 427

train ....................................................................... 320

Stock type ......................................... 30, 65, 268, 269

batch ..................................................................... 278

blocked stock ..................................................... 280

chart ...................................................................... 302

goods receipt without reference ................ 276

in-plant transfer ............................................... 311

inventory ......................................................... 31, 65

manage stock .................................................... 322

noninventory ........................................................ 66

physical inventory ........................................... 328

quality inspection ............................................ 281

single material .................................................. 299

table ....................................................................... 299

Stock value .................................................... 306, 327

currencies ............................................................ 307

Stock/requirements list ..................................... 192

external requirements ................................... 212

graphical display .................................... 212, 216

internal requirements .................................... 216

production orders ............................................ 361

Storage location ................................................ 91, 93

authorization check ........................................ 110

decentralized WMS .......................................... 458

in-plant transfer ............................................... 311

manage stock .................................................... 322

MRP area ............................................................. 123

plant ...................................................................... 270

production order .............................................. 275

purchase order .................................................. 270

single material .................................................. 300

Storage location key ............................................... 92

Subcontracting ...................................................... 456

MRP area ............................................................. 123

Successor document ........................................... 296

Summarized JIT Call Scheduler app .............. 252

Supply chain .............................................................. 66

Supply/demand list ............................................. 247

System alias ............................................................ 145

T

Table

ACDOCA .................................................................. 37

BKPF ......................................................................... 37

BSEG ......................................................................... 37

MARC ....................................................................... 33

MARCH .................................................................... 33

MARD ...................................................................... 33

MARDH ................................................................... 33

MATDOC ............................................ 29, 32, 34, 35

MKPF ........................................................................ 33

MSEG ........................................................................ 33

T156 ........................................................................ 409

T200A ................................................ 299, 311, 322

Table locking ............................................................. 36

Team .......................................................................... 127

attributes ............................................................ 128

create .................................................................... 129

define .................................................................... 217

edit ......................................................................... 130

filter criteria ....................................................... 136

members .............................................................. 128

owner .................................................................... 128

set up .................................................................... 436

types ...................................................................... 136

Theme designer ........................................................ 62

Time series .............................................................. 192

Tolerance ................................................................. 107

Touch-enabled usability concept ................... 310

Training ........................................................... 320, 424

results ................................................................... 320

Transaction

C203 .............................................................. 157, 181

CA03 ............................................................. 157, 180

CS12 ........................................................................ 177

CS15 ........................................................................ 179

MB21 ...................................................................... 341

MB24 ..................................................................... 343

MC44 ..................................................................... 410

MD06 .................................................................... 187

MI01 ...................................................................... 329

MI02 ...................................................................... 329

MI04 ............................................................. 329, 333

MI07 ...................................................................... 329

MI10 ...................................................................... 329

493

Index

Transaction (Cont.)

MI11 ........................................................................ 329

MI20 ............................................................. 329, 334

MI24 ...................................................................... 329

MIGO ................................. 49, 263, 285, 316, 321

MIGO_TR ............................................................. 316

MMBE ................................................................... 307

PFCG ...................................................................... 151

PJ02 ....................................................................... 252

PJ03 ....................................................................... 252

PK05S .................................................................... 167

PK07 ...................................................................... 254

PK08N .................................................................. 254

PK09 ..................................................................... 387

PK12N .................................................................... 383

PK13N .................................................................... 380

PK17 ....................................................................... 387

PK31 ....................................................................... 386

PKAL ...................................................................... 384

PKBC ...................................................................... 388

PKMC .................................................................... 248

PPH_DD_BUF_PROF ...................................... 222

SM30 ..................................................................... 299

SPRO .................................................................. 88, 95

SU01 ...................................................................... 151

Transfer posting ........................................... 173, 310

cross-plant ................................................. 315, 316

in-plant ................................................................ 312

input ...................................................................... 313

special ................................................................... 314

stock transport order ..................................... 318

touch-based ....................................................... 311

Transfer stock ........................................................... 66

Transfer Stock – Cross Plant app ................... 314,

318, 337

Transport .................................................................... 88

Transport request ................................................... 88

Tutorial ...................................................................... 445

goods receipt without reference ................. 445

U

Unit of measure ..................................................... 302

Unlock Kanban Container app ........................ 387

Unrestricted use stock ................................. 66, 428

V

Value per product ................................................. 161

Value-based analytics .......................................... 397

Variant ............................................................. 277, 285

standard ............................................................... 406

Variant management ................................... 48, 168

Vendor consignment stock ................................. 66

Vendor-managed inventory ............................... 68

W

Warehouse clerk .................................................... 151

Warehouse management ........................... 94, 324

decentralized .................................. 119, 281, 457

Work breakdown structure (WBS) .................. 340

Work center ......................................... 119, 166, 476

capacity ...................................................... 174, 175

monitor ................................................................ 349

production orders ............................................ 350

quick view .................................................. 350, 368

schedule orders .................................................. 345

Worklist ....................................................................... 46

494

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