An Introduction to SAP S/4HANA Logistics

S/4HANA packages both On-Premise (Edition 1511 FPS02) & On Cloud (Edition 1603), there have been certain significant enhancements & expansions on the capabilities under logistics. In this article, I will focus on the business value & benefits of different offerings under Sourcing, Procurement, Supply Chain & Manufacturing together with key functionalities given in S/4Hana under each of them. I am not at all likely to touch on the technical distinctions between OP & Cloud versions but a broader level will highlight the useful aspects which are fairly comparable for both kinds of deployments.

SAP has tried to make it clear that SAP S/4HANA is a new line of product & not the follower of any type of pre-existing business suite but the type of functionalities covered under S/4HANA Enterprise Management edition directs one to believe that if they will be migrating to S/4HANA which is inevitable, they have to leave the existing business suite behind to fully harness the abilities S/4HANA needs to offer. I also totally understand that the offerings under the On-Premise & Cloud version may differ a little bit but not to such an extent that we have to have different reviews from the perspective of covering logistics features.

I will be discussing the Key Innovations under each area in S/4HANA based on the mapping into the product map & I will additionally try to go deeper anywhere required into exactly how these innovations will work for any business based on the best techniques adopted into S/4HANA.

Click here to Know More About SAP S/4HANA Logistics.

Procurement

• Simplicity – Procurement is an area well known for the complexity, manual work, time-consuming procedures with the high volume of purchasing documents, and line items. S/4HANA reduces the procurement operation cost by supplying a simple but reliable procure to pay process facilitated by Fiori Apps i.e. for Analytics, Spend KPIs. Customer experience is streamlined & enhanced by role-based applications. Organization value is included by real-time analytics.

• Visibility – S/4HANA offers utmost visibility at fingertips by utilizing Fiori apps, providing Ad-hoc supplier transparency & performance analysis based upon comprehensive data points & most significantly integrating with SAP Ariba network for transactional data.

• Adoption – The procurement procedure is supposed to be manual or semi-automatic causing slow cycle time & error-prone. S/4HANA has Self-Service Requisitioning leading to higher business user adoption with consumer-grade customer experience. It also supplies five times fewer interaction actions to get the procurement information to bring about faster & exact data.

Inventory Management  

Accuracy – Due to missing real-time analytics, process & data redundancies one can’t ensure the accuracy of valuation or Inventory numbers. S/4 HANA is capable of more timely & comprehensive real-time processing of Inventory postings leading to the higher precision of inventory. Parallel inventory publishing for basic price-driven materials is also feasible. This also aids in Improved On-time delivery. Valuation is more accurate because it’s based on one valuation technique (Material Ledger) instead of 2 (MM-IM and ML). All of this is streamlined by utilizing Fiori apps for Managers along with warehouse resources.

High Inventory Turn over – S/4HANA provides more visibility & accuracy of Inventory across the board & therefore lesser Safety and security stock can be an alternative that will help to have much better Inventory turnover ultimately leading to reduced Working Capital cost to the business.

The segment of One – S/4HANA supplies real-time processing instead of batch processing & support to manage dynamic demand fulfillment for even a lot size of one & facilitate this throughout the logistics operations.

Want to Boost Your Skills? Click here

Material Need Planning/Capability Planning

Flexibility- It is common to have revenue loss because of stock-outs & poor on-time delivery performance. The S/4HANA offers a focused view on material flow issues with a clear presence. It also gives system-generated solution proposals & automated development of procurement proposals. It’s flexible in customizing available abilities and receipts to fulfill needed quantities.

Quick- Accelerated MRP work on S/4HANA can be 10+ times faster together with faster demand proliferation along the supply chain providing more chances for simulation & better planning quality.

Real-Time- S/4HANA uses Real-time alerting based on the current stock requirements scenario in addition to the Real-time Inventory picture.

MRP Fiori apps use managing and monitoring external and internal demands, product coverage, monitoring production, or process orders. It’s planned to have one MRP system for planning including the APO PP/DS into S/4 Hana & Live cache-based, finite-capacity planning as an integral part of the SAP HANA Platform, requiring simply one database to manage along with simplified data integration, advanced analytics. It will offer Intuitive maintenance of master data and integration models. This will be a great innovation & edge for the planning aspect on S4/HANA this will cause the fulfillment of an order in a timely manner with accurate quantity utilizing various checks for different organization scenarios along with performing automatic back-order processing.

Available To Promise

On-Time- S/4HANA enabled mass product availability checks for sales, Plan & manufacturing orders i.e. ATP check for all items of an order at the same time which leads to meet an order in a timely manner and in the desired quantity utilizing a different kind of checks for different business scenarios. It assists to assure accurate as well as reliable order dates & to fulfill orders from the whole network or to replace products automatically.

Efficient- S/4HANA has substantial performance improvements for releasing large manufacturing orders. There are plans for data and process innovations in Backorder processing and Sales Product Allocation.

Go through our SAP S/4HANA Simple Logistics Interview Questions to crack the Interviews.

Conclusion

SAP S/4HANA is a new line of product & not the follower of any type of pre-existing business suite but the type of functionalities covered under S/4HANA Enterprise Management edition directs one to believe that if they will be migrating to S/4HANA which is inevitable, they have to leave the existing business suite behind to fully harness the abilities S/4HANA needs to offer.

ZaranTech is excited to help you take your career to new heights! SAP S4 HANA Logistics jobs are in demand and can be established anywhere in the world. As you’ll soon learn, the SAP industry continues to evolve, so check back periodically for news updates and ongoing training.

Watch SAP S4 HANA Logistics Demo: