2016 sap se or an sap affiliate company. all rights reserved

SAP S/4HANA 1610Innovations – Key Use-Cases

October 2016 Customer

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2CustomerThis is the current state of planning and may be changed by SAP at any time without notice

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Industry to core – discrete

industries and mill products

(DIMP)

SAP S/4HANA 1610Key innovations* to faster adoption

Color legend: Existing and enhanced innovations - New innovations

advanced available to

promise (aATP)

Embedded extended

warehouse management

Effective order

management and billing

Efficient

procurement

Real-time inventory management

and material valuation

Integrated quality

management

Entire SAP S/4HANA Finance

scope included

Embedded software in

product development

Consistent SAP Fiori

user experience (UX) for

SAP S/4HANA

Plan to produce in ONE

system (production planning

and detailed scheduling)

Optimized portfolio and

project management

Accelerated material

requirements planning

Industry to core –

retail

Industry to core –

oil and gas

* Key innovations do not reflect licensing


Accelerated MRPProduction and Procurement Planning

Automation

System of Intelligence

Agility (Integration / HCP)

Business Network

SAP S/4HANA 1610Key Innovations mapped to the SAP S/4HANA value levers

advanced available to promiseProduct Strategy Allocation

Automation



Business Network

Real Time Inventory ManagementPhysical Inventory Count

Automation



Business Network

Integrated Quality ManagementEfficient Supply Chain

Automation



Business Network

Integrated Extended Warehouse Mgmt.Warehouse Logistics Processes

Automation



Business Network

Embedded Software in R&DLifecycle of Embedded Control System

Automation



Business Network

Consistent SAP Fiori UXHarmonized User Experience

Automation



Business Network

Effective Order Management & BillingStreamline Order Processing

Automation



Business Network

Optimized Portfolio & Project Mgmt. Management of Strategic Initiatives

Automation



Business Network

SAP S/4HANA Finance in CoreIntegrate Financial Operations for Compliance

Automation



Business Network

Industry to Core (DIMP, Oil, Retail)Extend Core Functionalities

Automation



Business Network

Efficient Procurement

Automation



Business Network

Shopping Experience

LegendAutomation: Robotic process automation of existing business processes

System of Intelligence: Self-learning system of intelligence based on data

Agility (Integration / HCP): Service consumption

Business Network: End-to-end collaboration (supplier and purchasing communities, IoT devices and business processes)


SAP S/4HANA 1610Key Innovations mapped to the SAP S/4HANA value levers

Consistent SAP Fiori UXHarmonized User Experience

End 2 End “Insight to action”

based on

Harmonized UX across the

1610 Release

Central Landing Pages,

Overview Pages, Co-Pilot

and Embedded Analytics

Industry to Core (DIMP, Oil, Retail)Extend Core Functionalities

Long Material Number

Harmonization of “article”

and “material”

Retail in the core

IS Oil enabled

Real Time Inventory ManagementPhysical Inventory Count

New simplified Data Model -

MATDOC

Real-time processing of

inventory postings

Posting of finest granularity

like handling unit, lot size 1

Accelerated MRPProduction and Procurement Planning

Real time data from all areas

of material management

Tasks focused on exceptions

Real Time Simulation

Decision support

Efficient ProcurementShopping Experience

Procurement Overview Page

Data integrity with SAP Ariba

solutions

Activity and task

management functions

Integrated Extended Warehouse Mgmt.Warehouse Logistics Processes

Eliminate the need to

replicate data

New deployment option

Process and technical

simplifications compared to

SAP EWM 9.4

advanced available to promiseProduct Strategy Allocation

Back-Order Processing: New

winner, gainer loser concept

Product Allocation: Reduction

number of customizing and

data maintenance steps

Release for Delivery: New SAP

Fiori app

Optimized Portfolio & Project Mgmt. Management of Strategic Initiatives

Overview dashboard for

project manager

Simplified and SAP HANA–

optimized data model

Simplified authorization

concept

Integrated Quality ManagementEfficient Supply Chain

Intuitive UIs for recording the

results of different types of

inspection characteristics

New roles with SAP Fiori UX

CDS views for quality

inspections and master data

Embedded Software in R&DLifecycle of Embedded Control System

Maintain compatibility

information between

software and other

components of a product

Check product structure for

compatibility of embedded

software

Effective Order Management & BillingStreamline Order Processing

Sales order fulfillment

monitor

Simplified billing processes

Insight to action

SAP S/4HANA Finance in CoreIntegrate Financial Operations for Compliance

Universal Journal

Central Finance

New cash management

Parallel valuation: transfer

pricing


SAP S/4HANABusiness Innovations Enabler Framework

Reimagine business models – Simplicity to connect to people, devices, and business networks in real time to deliver new experiences and value. Internet of Things and Big Data become accessible to any business – no more complex business collaboration and interactions.

Reimagine business decisions – Simplicity to get any insight on any data from anywhere in real time with planning, execution, prediction, and simulation now all done on the fly to drive faster business impact –no more complex data consolidation through additional sources or software.

Reimagine business processes – Simplicity to focus on essential tasks in real time and change business processes as needed to gain new efficiencies – no more long-running batches, no longer confined by predefined structures.

Reimagine user experience – Simplicity to get the job done across lines of business with a personalized, responsive, and simple user experience available on any device – no more complex and different user interfaces.

Reimagine IT landscape – Simplicity to reduce data footprint and work with larger data sets in one system to save costs (hardware and operational) and time – the planned option to reintegrate the SAP ERP, SAP Customer Relationship Management, SAP Supplier Relationship Management, SAP Supply Chain Management, and SAP Product Lifecycle Management applications with no more discrepancies between systems.

https://support.sap.com/release-upgrade-maintenance/release-

strategy/portfolio/product-strategy/applications.html

Functional Capabilities

» Role-based, new user design

» Simulation & decision support

» Built-in analytics

» Save draft & smart templates

» One UI design for any device

» Enterprise Search

» CDS (Core Data Services) views

» Unified reuse components & frameworks

» Semantically compatible Data Model

» Seamless integration & connectivity

Application Services

» In-memory, Columnar store Database

» OLAP & OLTP together

» Insert-Only, no DB locking

» Code pushdown

» Remove aggregates & indices

Database

User Experiences

Technical Capabilities

» Business Process Innovations

» High Throughput & Performance

» System consolidation & optimization

» Reporting & Analytics

» Minimal memory footprint

» Responsive consumer grade User Interface

advancedAvailability toPromise

Automation



Business Network


SAP S/4HANA 1610advanced Availability to Promise *

» Fulfilling an order on time and in the desired quantity using different kindS of checks for different business scenarios

» Performing automatic back-order processing

» Reducing inventory carrying cost

» Difficult to fulfill customer orders on time with the proper quantity

» Inability to promise accurate and reliable order dates

» Inefficient strategies to fulfill orders from the entire network or to substitute products automatically

» Inefficient strategies to sell scarce products in a fair manner

» Inefficient ways to manage order backlogs

» SAP HANA–enabled mass product availability check for sales, planned, and production orders.

» ATP check for all items of an order at once

» Significant performance improvements for releasing large production orders

» Data and process innovations in back-order processing and sales product allocation

» New concept of confirmation strategy

» Product allocation in SAP S/4HANA has a completely new design and implementation based on neither SAP ECC nor SAP Advanced Planning and Optimization application

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Efficient

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

advanced

Availability to

Promise

Throughout SAP S/4HANA, you can provide customers with instant confirmation or clear alternatives and make the best use of the inventory and production capacity available at each point in time across your supply network.

* does not reflect licensing


New business prioritization strategy:

Simple classification of concurrent sales orders according their business impact

High-volume back order processing

ATP confirmation based on business priority instead of order creation time

Reduction of the number of missed business opportunities and the enhancement of revenue and profitability

Traditional

Strategy

New

Strategy

Planning performance

Business process viewBack-Order Processing (BOP): Confirmation Strategy

First come – First served process:

No prioritization of requirements during sales document creation:First come – First serve

High priority orders might not get confirmed due to reservations for less important sales order requirements

Backorder Processing necessary to adjust confirmations according to the priority of the sales orders

Online order entry – Order creation Reinvented confirmation strategy with SAP S/4HANA

Sales Orders

WIN GAIN REDISTRIBUTE FILL

Inward movement

Outward movement

Requeste

d

Deliv

ery

Date

Estim

ate

d T

ime

of

Arr

ival

Rush Order

Time

Reservation

Delivery Delay

Reservation

Sales Orders

LOSE

Rush Order

Sales Orders

Stock Transfer

Requisitions

All Sales orders from “A”

Customers

which are due today and

tomorrow

All Standard Sales

Orders of this Week

“Customer X” Orders

of Today

Rush

Orders

Orders on

Credit Block

List of Material / Plants

Requested

Delivery Date Confirmed


Business InnovationProduct Allocation

» Product allocation with a completely new design and implementation based on neither ECC nor APO

» Time dependent assignment of product allocation data to product and product location combination. No need to change product master data, if product allocation data is to be assigned or unassigned to product or product location combination

» Hierarchical selection of product allocation -attributes according to business object hierarchy (much less technical)

» Value help for product allocation attributes Up and download via Excel natively supported for maintaining product allocation quantities


User Experiences


Simplified Set-Up: 3 easy to use Apps

» Reduced number of customizing and datamaintenance steps needed to setup product allocationfunctionality

» Configuration massively simplified for the benefit of the end-user and LOB. Compile 36 Transactions in 3 easy to use Apps

» No generation of coding or database-tables during product allocation setup (draft concept fully supported)


Business InnovationRelease for Delivery (SAP Fiori app)

Allows any user to easily gate keep which sales order requirements should be delivered. Especially designed for handling material shortage situations this highly interactive SAP Fiori aooenables any user to efficiently distribute the available stock to the most important sales order requirements.

» Visualization of the business impact of a material shortage

situation allows the user to prioritize his work and

concentrate on the real issues.

» Mass change capabilities enable efficient processing of

multiple sales order requirements.

» Automated selection of worklist according to a user specific

area of responsibility avoids dependencies and double

work.

» Delivery creation can be triggered directly out of the app.

Minimizes the impact of material shortages by supporting the user to efficiently work and keep his deadlines !

Overview

Screen

Identifying the

materials for which

the shortage is

causing the highest

business impact

Detailed Screen

Easily distribute the

available stocks to

the most important

sales orders

Real time InventoryManagement andMaterial Valuation

Automation



Business Network


SAP S/4HANA 1610Real time Inventory Management & Material Valuation *

» Low throughput, which prevents real-time inventory

» Missing embedded and real-time analytics

» Process and data redundancies, which increases effort

» Multiple aggregates and locking bottlenecks

» Limited insights into actual costs

» Multiple material valuation tables

» Real-time processing of inventory postings and visibility of inventory values

» Posting of finest granularity like handling unit, lot size 1, sensor data

» Decreased stock levels (e.g. reduce buffers) due to increased transparency

» Easy to consume data model supporting flexible analytics

» Manage the changing demand for smaller lot sizes passing through the logistic operations

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Efficient

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

Real time

Inventory

Management &

Material

Valuation

Throughout SAP S/4HANA, the inventory manager and warehouse clerk can analyze issues quickly, realize the potential threats in real time, and resolve complications rapidly in order to archive efficient management of inventory in today’s digital economy. Turnover analysis and material on stock analysis builds the basis of crucial actions such as posting goods movements, analyzing plant inventory, performing materials reposts, and analysis of these postings.


» Improved on-time delivery

» Increased inventory turnover

» Increased inventory accuracy

» Decreased safety net (for example, reduce buffers) due to increased transparency

» Attracting end user by real-time accuracy

» Managing the changing demand for smaller lot sizes passing through the logistic operations


Business process viewHigh-volume Inventory Backflush

With SAP S/4HANA:

Real-time inventory information, including early error detection.

Capturing the lowest level of granularity in inventory stock keeping ,

including where-used information per unit (lot size 1).

Drastic decrease of stock levels (safety stock).

With traditional system:

Throughput limitations cause queuing of data entry.

Limited inventory visibility increases error rate and

supply shortages (e.g., sub-daily deviations).

Best practice: Increase safety stock.

Order 1

Order 2

Order 3

BOM 1

BOM 2

BOM 3

Run

inventory

updates at

night

Real-time

data entry

Business process

Production orders are based on BOMs (Bill of

Material).

Production confirmations capture progress w.r.t.

components issued and activities provided.

Backflush automates confirmation postings

in high-volume scenarios.

Safety stock

Time

Quantity

Reorder

point

We

ekly

Reple

nis

hm

ent

Buffers

Daily collective

goods issues

Just-in-time

Safety stock

Time

Quantity Reorder

point

Sub-daily

replenishment Continuous

goods issue postings

Traditional With SAP S/4HANA

Process excellence

Reinvented confirmation strategy with SAP S/4HANATraditional system


SAP S/4HANAThe Need for a new Inventory Data Model

» Build in SAP HANA Database and the new data model uses the advantage of in-memory columnar storage

» Separation of MKPF and MSEG information in different tables becomes obsolete.

» Single table (MATDOC) with almost all required attributes and views represents the data for all business perspective

» Elimination and reorganization of the IMG table structure

» Existing fields MBLNR (Document No) and MJAHR(Fiscal Year) of table MKPF are not key fields any more

Content of the aggregate tables calculated from

» the inventory data in MKPF (material document

header table) and MSEG (material document

segment table)

» the IMG (Implementation Guide) tables e.g. Stock type

Two aggregate tables are used as logical locking arguments to block a parallel creation of material document creation

» One lock for quantity posting (for goods issue)

» Second lock for value posting (materials with moving average price)

SAP ECC6 SAP S/4HANA


Business InnovationInventory Management & Material Valuation

Technical Innovation

Simplified Data Model: MATDOC (material

document) = MKPF (material document header

table) + MSEG (material document segment

table) + add; columns for fast calculations

No aggregates: On-the-fly aggregation of

inventories

Insert only on database level: No more

database locks

Insert only on application level: Elimination of

standard price (SPREIS) locking (taking

rounding differences into account)

One valuation method: Material ledger instead

of two (material management – inventory

management and material ledger)

Use Cases enabled

Parallel

processing

of inventory

postings

High volume Backflush

(Parallel Production combined

postings)

Ice Truck Scenario

(Combined postings from

offline devices)

Internet of Things

Scenarios (real-time goods

movements posting)

Segment of one (Smaller lot

sizes passing through logistic

operations)

Business Processes

improved

Valid Inventory Management(inventory turnover, inventory costs)

Accurate Material

Requirement Planning

Profitable Procurement

processes

Exact Sales Order

Fulfillment and Delivery

Valuable Production

Execution

Easier implementation of new

processes (like Just-In-Time,

Kanban)

…addressing the digital business as digital core

Accurate

inventory

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 20CustomerThis is the current state of planning and may be changed by SAP at any time without notice© 2015 SAP SE or an SAP affiliate company. All rights reserved.

Business InnovationSimplification Example

SIMPLIFIED DATA MODEL

» Only main tables remaining, no redundancies

» Clear separation of master data from transactional data

» Reduction of memory footprint

THROUGHPUT INCREASE

» INSERT only on database level (MM-IM),

no locks for standard price valuation

Busin

ess S

uite

MATDOC ACDOCAMaterial

PricesMaterial

MBEW

OBEW

QBEW

OBEW

MBEWH

OBEWH

QBEWH

OBEWH MLHD

MLPP

MLIT

MLCR

Document

MLPPF MLCRF

CKMLPP CKMLCR

Totals

CKMI1

Index

FAGLFLEXA

GLFUNCA

BKPF

BSEG

COBK

COEPANEK

ANEP

FAGLFLEXT

GLFUNCT

COSP

COSS

BSIMBSIDBSIK

BSAK

BSET

BSAD

BSIS

BSAS

MARD

MARC

MSTQH

MSTEH

MSTBH

MSSQH

MSSAH

MSPRH

MSLBH

MSKUH

MSKAH

MKOLH

MCHBH

MARDH

MARCH

MSTQ

MSTE

MSTB

MSSQ

MSSA

MSPR

MSLB

MSKU

MSKA

MKOL

MCHB

MKPF

MSEG

Totals tables

Document

Totals

Totals

Indices

Documents

BKPF

PRINCIPLE OF ONE

» Only one valuation method (Material Ledger)

instead of 2 (IM + ML)

» Flexible rebate management instead of

cumbersome and expensive redundancies

Inventory Mgmt.(Quantities)

Inventory Mgmt.(Valuation via „MBEW)

Material Ledger(multi GAAP, multi currency)

Finance *

Master Data Inventory Mgmt(Quantities)

Material Ledger(multi GAAP, multi currency)

Finance *

VBAK LIKP VBRK

LIPSVBAP VBRP VBFA

VBUK

VBUP

VAPMAVAKPA

VLPMA

VLKPAVRPMA

VBOX

S066

S067EIKP

EIPO

NAST

Sales and Distribution

VRKPA

Primary

Document tables

Index

tables

Sales and Distribution

Status tablesLIS

tables

Rebate index Output mgmt

Export/import

tables

VBAK LIKB VBRK

LIPSVBAP VBRP VBFA

History tables

BSEG BSET

* Actual Data only

Not displayed in lower part: Profit Center Accounting,

Cost based CO-PA, Reconciliation Ledger

GLPCT

GLPCA

CE4*

COBK

COFIS

COFIT


Business InnovationMaterial Document: Data Model / Columns

MATDOC comprises 289 columns

» 32 columns from MKPF (Material Document header table)

» 204 columns from MSEG (Material Document item table)

» 53 additional columns for fast Calculations / Analytics

– Warehouse stock grouping fields

e.g. stock categories (special stock, unrestricted, …)

– Additional units and key figures

e.g. stock quantities stored with sign for fast on-the-fly aggregation

– Two sets of stock identifying fields (source and target)

Transfer postings

– Periods and time information

e.g. year-month combination for comparison of stock time series

– Data footprint: 25% .. 38% of total table size

IntegratedQuality Management

Automation



Business Network


SAP S/4HANA 1610Integrated Quality Management *

» End-to-end supply chain visibility regarding product quality and identification of non-conforming products

» Changing a local or departmental QM focus to a company-wide (and later to a supply chain) focus

» Preventing non-conformances within the entire stages of design to production to delivery

» Promptly informing customers of non-conforming products

» Integrated, simplified quality management

» On-premise (large enterprises) and cloud-based options (small businesses and midsize companies, small plants)

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Efficient

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

Integrated

Quality

Management

Throughout SAP S/4HANA, quality management data and processes have been streamlined and integrated to enable end-to-end, closed loop quality visibility and improvements across the entire enterprise and built-in quality and continuous improvement from product design through after market service.


» Real-time monitoring and exception management for quality deviations

» Backward and forward traceability

» Reduced inspection costs (sampling, skit lot)


Traditional system Reinvented Business Processes with SAP S/4HANA

Business process viewIntegrated Quality Management – End to End Quality Management

Quality master

data

Quality inspections

Quality planning

SAP QM

Quality audits

Complaint

management

With SAP S/4HANA:

Simplified QM processes and SAP Fiori apps

Role-based dashboards for all quality users

Visual QM with Visual Enterprise and 3D model

Standardized complaint and corrective-and-preventive-action processes and integrated R&D and engineering


Lack of end-to-end insight and visibility with disparate quality systems and processes

Analysis based on past performance instead of proactively based on asset and production performance

No real-time simulation or predictive capabilityProcess excellence

Traditional

Strategy

New

Strategy

IoT connectivity

Manufacturing Cloud

Streamlined test equipment

management

Standardization of issue

resolution procedures

Predictive quality

management

Simplified inspection

planning process

Machine- Learning

capabilities

Advanced closed loop

inspection planning

Comprehensive analysis

of quality management

Preconfigured QM

scenarios

Integrated QM

capabilities

Digital Core

Third-party

collaboration


Business InnovationIntegrated Quality Management


User Experiences


» Support for core QM processes with new roles with SAP Fiori user experience (UX) for quality technicians, quality engineers, quality planners, quality managers, quality auditors, calibration technicians

» Integrated search functionality in SAP Fiori with further navigation targets

» Intuitive UIs for recording the results of different types of inspection characteristics

» Initial scope covers the simplified inspection process

in SAP EWM as part of SAP S/4HANA

» CDS (Core Data Services) views for quality inspections and master data

EfficientProcurement

Automation



Business Network


SAP S/4HANA 1610Efficient Procurement

» Business process acceleration through seamless buyer and suppliercollaboration scenarios

» Reduced procurement cycle time

» Increased efficiency and effectively of buyers and accounts payables clerks

» Identify opportunities for the effective use of free cash

» Difficulty to gain transparency and hold track of supply information from various suppliers and their historical performance

» Complex, manual, time-consuming processes with high volume of purchasing documents and line items

» Poor end-user adoption with error-prone and inefficient processes

» Complexity of collaboration (internally and with vendors) to run diverse purchasing scenarios

» End-to-End integrated business process Procure to Pay across SAP Ariba solutions and SAP S/4HANA

» New opportunities of collaboration for matured buyer–supplier relations technically supported

» Buyers and suppliers running digital collaboration by exchanging business information through single data records

» Data integrity of SAP S/4HANA and SAP Ariba solutions increases overall process transparency for all involved parties

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Simplified

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANAEfficient

Procurement

Throughout SAP S/4HANA, the purchaser receives support in his daily work with the Procurement Overview App, is able to see all relevant information (analytical and transactional) on one screen, and can show all data in real-time as well as can drill-down for further details or perform direct actions.


Traditional System – Buyer & Supplier Collaboration Reinvented Business Processes with SAP S/4HANA

Business process viewEfficient Procurement

With SAP S/4HANA:

Full transparency of process status per PO & INV line item

Real-time updates of business process information

Increased process efficiency for Buyers and Suppliers

Short cycle times

Opening up business opportunities for the company’s debit / credit accounting

Data integrity of business information across systems

Direct exchange of business information


Loose collaboration between suppliers and buyers

Many manual interfaces

Error-prone processes

Inefficient collaboration due to limited transparency

Long cycle times

Difficult to identify new business opportunities

Remittance Advice

Goods Receipt

Purchase Order Purchase Order

confirmation

Ship Notice

Invoice

Clearing of

open items

CC-Invoice

Invoice status

update

(Payment date)

Payment proposalAgree on Early

payment

Cycle Time Cycle Time

Process excellence

x Waiting Time

End DateStart Date

1Purchase

Order

Purchase Order

confirmation

Goods Receipt

InvoiceCC-Invoice

Remittance AdviceClearing of

open items

2

3

4

BUYER SUPPLIER

Traditional

Strategy

New

Strategy


Business InnovationSourcing & Procurement – Operational Procurement

» Leverage catalog buying in self-service requisitioning processes

» Monitor critical business events, purchasing spend and supplier performance in “Procurement Overview Page”

» Increase supplier relationship and performance by using activity and task management functions

» Leverage purchasing category in real-time analytics to monitor the key performance indicators (KPIs) along business responsibilities

» Visualize planned spend versus actual spend per purchasing category

» Use new SAP Fiori apps for sourcing and contract management – manage requests for quotation and supplier quotation

» Create sourcing request in Ariba Sourcing out ofSAP S/4HANA

» Structure and merge material groups into the new business entity “purchasing category”


User Experiences



Purchase Orders

Buyer & Supplier CollaborationProcure to Pay Process

Goods Receipts

Ship Notice

Invoices

Invoice Status Update

Purchase Order

Invoice

Payment

PO confirmation

Request for Quotation / Supplier

Quotation Quote / Award

Digital Handshakes

Request for Quote

CC-Invoice; MM invoices

Payment Proposal

Early Payment

Sourcing

Collaboration

Order

Collaboration

BUYER SUPPLIER

Remittance Advise

Invoice

Collaboration

DiscountManagement

Invoice

Collaboration

IntegratedExtended WarehouseManagement

Automation



Business Network


SAP S/4HANA 1610Integrated Extended Warehouse Management *

» Plans to bring the full-scope SAP EWM into SAP S/4HANA software, which will provide customers with flexible deployment options to run all kinds of warehouses within a single SAP solution

» Full access without replication to a decentralized EWM system for:

• Business partners

• Material and product data

• Batch master

» Facing pressure from an increased number of smaller orders via a growing number of sales channels

» Need to improve customer order synchronization to seamlessly support customer order requests

» Focus around achieving omnichannel order fulfillment excellence

» Smaller e-commerce orders forcing organizations to create more “mini-warehouse zones” within their existing physical structures

» One System(Master Data, Customizing, UX)

» Reduce Data-RedundancyLean Processes with Less Business DocumentsSimplification

• Process simplifications compared to the SAP Extended Warehouse Management (SAP EWM) application, version 9.4, and its related products

• Technical simplification compared to SAP EWM 9.4 and its related products

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Efficient

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

Integrated

Extended

Warehouse

Management

Throughout SAP S/4HANA, you can manage your Warehouse to appropriately support evolving omni-channel order fulfillment requirements. Operate the Warehouse Management with processes like stock blocking (QM inspection documents, simple tracking who has blocked the stock, for how long was it blocked and who unblocked the stock).

.




Business process viewIntegrated Extended Warehouse Management

With SAP S/4HANA:

One System: Direct usage of master data and support of 40-digit material number

Avoid data redundancy: Avoid redundant objects and direct access to central objects

Simplification and reduction of data redundancy


Complex processes to align multifaceted supply chain realities and difficult economic conditions

Lack of end-to-end insight and visibility with disparate systems and processes

Analysis based on past performance and no real-time simulation capability

Scan VAS Picking

Consolidation

Goods Receiving Shipping

Cross Docking

VAS

Warehouse Management

3D Printing & in-house

production

Telematics Data

RFID Item Level

3D Scan, balance

Smart robots

Autonomous fork lifter /

Indoor positioning

Value-Added Services (VAS): assembling products,

packing products, labeling, or kitting

Storage

Stock posting

change

Inspection Lot

Check Pending

Inspection lots and record

inspection results

Capture usage

decision

Stock posting

change

EWMECC

Select stocks based

on criteria

Create QIE

document per HU

Create Quality Notification for

Material and batch

Update QIE

Document

Read QIE Document by External

Number

Decide Quality Inspection

Document

Stock Posting

QRFC

QRFC

QRFC

RFC

RFC

Backgro

und J

ob

QIE: Quality Inspection Engine

HU: Handling Unit

Traditional

Strategy

New

Strategy

Process excellence


On the fly aggregation

MATDOCMaterial Document

Master data without Stock aggregates

MARC MARD

Aggregates

MSTQ

MSTE

MSTB

MSSQ

MSSA

MSPR

MSLB

MSKU

MSKA

MKOL

MCHB

MSTQH

MSTEH

MSTBH

MSSQH

MSSAH

MSPRH

MSLBH

MSKUH

MSKAH

MKOLH

MCHBH

History Document

MARDH

MARCH

MKPF

MSEG

Inventory movements

Material Master

Master data with

Stock aggregates

MARC MARD

MARCH MARDH

Master

data

Transactional

data

26 aggregate

tables

Simpler

Data Model

Traditional disk-based ERP In-memory ERP

Business InnovationSimpler Data Model – Example Inventory Management


Simpler

Data ModelBusiness InnovationReduction of Data Redundancy – Direct Read of SAP S/4HANA Master Data

Purchase Order

Replicate Orders

Expected Goods

Receipts

Create EWM

Inbound Delivery

Purchase

Order

Inbound

Delivery

ERP EWM

Create EWM

Inbound Delivery

Inbound

Delivery

Sales Order Sales Order

ERP EWM

Outbound Delivery

Outbound Delivery

Request

EWM Outbound

Delivery Order

Pick

Pack

…

Outbound Delivery

EWM Outbound

Delivery Order

Pick

Pack

Purchase Order

Production Order

ERP EWM

Inbound Delivery

Inbound Delivery

Notification

EWM Inbound Delivery

Order

Unload

Put away

…

Inbound Delivery

EWM Inbound

Delivery Order

Unload

Put away

Purchase Order

Production Order

Material Posting Material

Posting

ERP EWM

Outbound Delivery

Posting Change

Request

Posting

Change

Outbound

Delivery

Posting Change


Business InnovationSAP EWM & SAP S/4HANA – Outlook

SAP EWM embedded in

SAP S/4HANA*

New deployment option for

our customers

Small & midsize warehouses;

production warehouses

» Decentralized SAP EWM (integrated to SAP ERP or SAP S/4HANA) is planned to be a long-term valid deployment option for SAP EWM

for good reasons (e.g. regional EWM systems, risk mitigation, specific planned down-times, scale-out for large DCs , multi-ERP connected; different release cycles; proximity to warehouse

(MFS); ..)

» Decentralized SAP EWM and central S/4HANA EWM are planned to share a common core of warehouse management functionsThis common Core is planned to evolve over time with new functions in both EWM options.

» Decentralized SAP EWM and central SAP S/4HANA EWM are planned to have different technical integration features with SAP ERP, but

identical integration with other SAP systems (e.g. GTS, TM, ..)

» Decentralized SAP EWM and central SAP S/4HANA EWM are planned to cover the same business scenarios & processes with only

minor exceptions e.g. central SAP EWM can only integrate with local ERP client, no multi ERP client integration will be possible as required in some LSP (Logistics Service

Provider) scenarios

* See Simplification List

Warehouse

Management*

Integrated

SAP EWM

LES (WM)

SAP EWM (Decentralized )

On Premise

Industry to Core- Retail -

Automation



Business Network


SAP S/4HANA 1610Industry to Core – Retail *

» On-click self-service

» Intelligent and authentic customers interactions

» Self-learning autonomic decision processes into retail forecasting, planning and execution processes

» Leverage customer experience with easy shopping pathway

» Point of sales with optimized inventory turnaround, shelves space, and consumer insights

» Consumers connected and the challenge for retailers is maintaining the key role in consumer ecosystem of product and service providers

» Consumers wanting everything now –information by buttons, fulfilment information, discount, sales assistants, support

» First release of SAP S/4HANA Retail solution for merchandise management**

» Integration to SAP S/4HANA Marketing Cloud solution

» Full usage of SAP S/4HANA features like:

• Streamlined procure-to-pay

• Accelerated plan-to-product

• Optimized order-to-cash

• HR connectivity

• Core finance

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Efficient

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

Industry to

Core

Retail

Solve upcoming market needs immediately and professionally with an intelligent and user-friendly retail solution combined with Real-Time Inventory, decrease costs for overstocking or being out of stock and increase sales due to better understanding of customerbehavior.

Source: IDC Research ** Internal working title as official name not yet defined* does not reflect licensing


Marketing and

Merchandising


Business process viewGain deeper understanding of customer needs and manage complex buying process

Industry Solution - Retail

Procure to Pay

Plan to Product

SAP ERP

Procurement and

Private Label

Supply ChainOmnicommerce

Customer Experience

IoT connectivity

With SAP S/4HANA:

Simplified processes and SAP Fiori apps

Role-based dashboards for all users

Increased competitiveness with integrated, fast and flexible business processes


Lack of end-to-end insight and visibility with disparate systems and processes

Analysis based on past performance instead of pro-actively based on customer Insights and Merchandise and Assortment Planning

No real-time simulation or predictive capability

Marketing Cloud

SAP BW

Order to Cash

Request to

Service

Core Finance

Core Human

Resources

Predictive

Analytics

Analytics

Filling / Subscribe

Personalized

coupon

Route planning

Personalized

communication

Simple order from

the App

Sharing experiences

Navigating in

the Store

Customer Experience

Omni-Channels

Customer Interaction

Digital Core

Point of Sales

Customer Experience

Traditional

Strategy

New

Strategy


Business InnovationSynergies & collaboration in 3 dimensions

Innovation in business processes

■ Throughput in inventorymanagement and valuation

■ MRP on HANA

■ ATP

■ Rebate processing

Innovation in Architecture

■ Throughput

■ Scalability

■ Principle of one

■ SAP Fiori

■ TCO reduction

Innovative Cross Industry Business Processes for:

■ Consumer Products, Wholesale Distribution, Life Sciences, Postal, Oil & Gas, High Tech, and more

■ Processes:

POS Integration (in- and outbound)

Sales Price Calculation

Promotions

Allocation

Product master data management (incl. mass maintenance and reference concept)

Merchandise distribution

Assortment management

Vendor Managed Inventory

Store processes via simplified user interfaces

Allocation Run (order ….)

And any more


Retail provides leading processes for cross-industry customers

Retail industry customers

26%

Outside Retail industry customers274%

Retail is one of the most widely used industry solution within SAP.

This solution is heavily used by cross industry customers.

Therefore SAP´s strategy has to support these End-to-End Processes via SAP S/4HANA.

1 Early Watch Analysis (EWA) data 2014, customer industry

assignment based on Master Code2 Ratio based article maintenance from previous slide

Total distribution of Retail usage inside and outside of Retail:Consumer Goods Products, Consumer Products Wholesale,

Automotive, High Tech, Oil & Gas, etc.

68%

Allocation Table

32%from Retail1

39%Store Connectivity

61%from Retail1

80%

Retail Stock Overview

20%from Retail1

49%

Sales Price Calculation

51%from Retail1

of customers using

IS-Retail are non Retail

of customers using

IS-Retail have no store connectivity

of customers using

IS-Retail have no allocation tables

of customers using

IS-Retail have no Sales price

Calculation


SAP S/4HANA – Transforms Retail business processesReimagine business processes for fundamentally higher performance

Finance

Allow for visibility into the state of the business at any time:

• Enable real-time financial close for faster, more accurate, and more collaborative decision making and execution enterprise-wide

• Perform soft-close to understand store and category level profitability in real time

HR

Manage, develop, reward, and retain an effective workforce:

• Integrate end-to-end HR and financial processes for budget and head count

• Develop the right talent and skill set in a changing environment with demanding customers

Digital CoreWorkforceengagement

Omni-customer experience

Supplier collaboration business networks

Assets & Internet of Things

Customer centric Marketing & Merchandizing

Sourcing Procurement & Private Label

Supply chainOmnicommerce Customer

Experience

Deliver compelling, seamless, and reliable shopping experiences

• Use real-time customer analytics for personalized offers at the moment of decision

• Create effective, targeted customer engagement across channels

• Empower your store and sales personnel with a single view at the customer

Enable flexible and reliable omni-channel deliveries

• Create one unified view at demand everywhere

• Optimize inventories with real time visibility

• Drive real time response to granular changes across the supply network

Connect to global Business networks and increase procurement efficiency:

• Collaborate instantly with global suppliers via the Ariba Network

• Enable endless aisles with large complementary assortments

• Automate procurement proposals based on real-time inventory and sales forecasts

Maximize revenue generation with real-time customer insights and predictive analysis

• Understand your customers in detail for targeted promotions to granular segments

• Create relevant assortments based on direct customer insights

• Respond to changes in demand and adjust pricing and promotions in real time


Marketing and Merchandising

» Harmonization of “article” and “material” combined with new user experience

» Unified concept of site, customer, vendor and business partner record

Procurement and Private Label

» Increased efficiency in the procure-to-pay processes, new analytical apps and spend key performance indicators, integration in the Ariba Network for purchase order and invoice

Supply Chain

» Simplified data model, resulting in increased through-put and flexible analytics at the most granular level

» Elimination of locking and increased throughput for standard price utilizing material ledger, so customers can use multiple currencies and valuation methods for different accounting laws such as GAAP

Omni commerce Customer Experience

» Enablement of monitoring of end-to-end order-to-cash process and taking actions for any exceptions, with information on the exceptions to resolve the issues

Business InnovationInnovation highlights for retail


User Experiences


Innovations from SAP S/4HANA that will be benefit merchandise management functionality in the upcoming release of the first version

of SAP S/4HANA Retail.

Embedded Softwarein Product Development

Automation



Business Network


SAP S/4HANA 1610Embedded Software in Product Development *

» Support software management in entire product life cycle

» Accelerate new product development by responding quickly to issues collected from market

» Leverage requirements- based product design and impact analysis

» Monitor the product development status, including design, quality, and development progress

» High Research & Development expenses associated with Software: 18% Auto, 51% A&D, 41% in IM&C, 71% Telco Equipment, 53% Consumer Electronics

» Hardware manufacturers deliver differentiator with the software

» Increasing customers' expectation to include intelligence in products simplifying its usage and maintenance resulting in more complex products

» Embedded Software maintained in the development product structure

» Integration of software development tools

» Handover to manufacturing and to service

» Compatibility management between software, hardware and mechanics for the product lifecycle

Throughout SAP S/4HANA, the product engineer can manage embedded software versions in the SAP Product Lifecycle Management (SAP PLM) application and can check product structure for compatibility of embedded software.

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Simplified

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

Embedded

Software in

Product

Development




Business process viewSupport software management in entire product life cycle

Requirements

SAP PLM

IoT connectivity to Asset

Intelligence Network

With SAP S/4HANA:

Support of PLM processes for cyber-physical products

Ensure the compatibility of embedded software

Accelerate new product development by responding quickly to issues collected from market

Ensure the data quality for all follow up processes so that they can do the right things like maintenance, after sales service.


Disconnected development process regarding mechanical and software components

Complex processes to align software and product development

Information of Software Component are often not up to date and also not consumable by mechanical engineers

Legacy System for

Software Engineering

Product

Development

Development

Software

Requirements

Requirements Management

Digital Core

SAP ERP

Test

Deploy

Online and Offline Documentation for After Sales Service

Produce

Sell and Deliver

Derive

Deliver

Manual

Interface

Product

Lifecycle

Engineering Data and Model

(Mechanical, E/E, Software)

Produce

Test and Validation /

Compatibility / FMEA

Sell and Deliver

Development

Test

Deploy

Software Engineering

Product

Lifecycle

Cha

ng

e

Ma

na

ge

me

nt

Process excellence

Traditional

Strategy

New

Strategy

Software

Lifecycle

Software

Lifecycle


Business InnovationProduct LiveCycle Management

Main features» Manage embedded software versions in the SAP Product Lifecycle

Management (SAP PLM) application

» Manage embedded software in the engineering product structure

» Maintain compatibility information between software and other components of a product

» Check product structure for compatibility of embedded software

Business value» Support of PLM processes for cyber-physical products

» Ensure the compatibility of embedded software

Innovation description

Embedded software is computer software that is embedded in one or multiple products. It provides functions together with varioushardware and systems. For example, embedded software can be used to control or optimize the functions of the mechanical part or electrical part of a product.

The embedded software typically has specific requirements on the hardware and other software that allows it to function accurately. Embedded software management allows to define such software as component of the product structure and to ensure that the embedded software is compatible with other components of the product as defined by relevant constraints.

OptimizedPortfolio and ProjectManagement

Automation



Business Network


SAP S/4HANA 1610Optimized Portfolio and Project Management *

» Streamlined and efficient portfolio and project management with role-based user interface

» High throughput due to simplification of the application object model

» External tools that can access portfolio and project data via core data services

» Lower TCO by eliminating duplicate functions

» Overwhelming number of simultaneous projects within a company

» Projects in larger business organizations are complex and often don’t support larger, company-wide business goals

» To cover all aspects of planning and execution of product portfolios and projects integration to all LOB solution needed

» Comprehensive new role-based user interface with SAP Fiori

» Integration to new SAP cloud solutions like SAP SuccessFactors solutions

» New database model for easier consumption by analytical tools like Excel, SAP BusinessObjectsLumira software, and so on

» Simplified application object model

» Reduced complexity by eliminating duplicate functions

advanced

Availability to

Promise

Accelerated

Material

Requirements

Planning

Real time

Inventory

Management &

Material

Valuation

Integrated

Quality

Management

Effective Order

Management &

Billing

Efficient

Procurement

Integrated

Extended

Warehouse

Management

Industry to

Core (DIMP, Oil,

Retail)

Entire S/4HANA

Finance

scope included

in the core

Embedded

Software in

Product

Development

Optimized

Portfolio and

Project

Management

Consistent

Fiori UX for

SAP S/4HANA

Optimized

Portfolio and

Project

Management

Effective portfolio and project management strategies require enterprises to align products and services with the organizational vision and strategy. Enterprises initiate new projects to fill gaps and delivery business outcomes, while underpinning decisions with reliable analytics and integrated processes and supporting quality work on time and within budget. To make the right decision, the project manager needs to have insights into the overall financial and capacity demand to match this against the available resources.



ERP Analytics

Business Process ViewAutomated Processes with the new SAP Fiori User Interface

Future Direction with SAP S/4HANA:

Portfolio and project reporting enhanced with real time data from ERP

No batch load process required to extract data from ERP Accurate analysis of project costs and resource availability Cross project analysis embedded in portfolio and project

management Drill down into projects cost records due to direct access to ERP

information Simplified interface reduces implementation efforts for ERP

integration Portfolio analysis capable to support a large number of projects

and items


ERP information in portfolio and project management system may be inaccurate due to batch load process

Visibility into reporting of actual project costs requires multiple applications

Original ERP details get lost due to aggregation in upload process Higher TCO due to integration scenarios Reporting of large project portfolio requires OLAP (Online Analytical

Processing) system


User

interaction

Ad hoc Financial

Accounting

User

interaction

Ad hoc Human Capital

Management

User

interaction

Ad hocProcurement

User

interaction

Ad hoc

Portfolio and Project

Management

Batch Processes

Cross Project

Analytics

Batch Data Load

OLAP

Reporting

Business

Financial

Accounting

Human Capital

Management

Procurement

User interaction

(Professional)

Enterprise Portfolio and Project Management

Cross Project

Analytics

(Real Time)

Direct Access

Product Life Cycle

Management

User interaction

(Casual User)

Process excellence

Traditional

Strategy

New

Strategy


Business InnovationHighlights for Portfolio and Project Management

Increased end-user productivity with SAP Fiori UX and improved performance

Overview Monitor – Project Progress

» Overview dashboard for project manager

» Quick overview of what requires project manager’s attention

» Monitoring project progress in Gantt charter in SAP Fiori

» System-guided navigation to critical project tasks

Upcoming Activities for Project Team Members

» Task dashboard for triggering task confirmation

» Checklist-item dashboards

Availability of SAP Portfolio and Project Management Application for SAP S/4HANA 1610

» Simplification of code base and feature set

» Simplified and SAP HANA optimized data model

» Simplified authorization concept

» Initial set of core data services (CDS) views for external consumption


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