SAP S/4HANA Introduction

Introduction to SAP S/4HANA

• SAP SE is a German multinational company that pioneered ERP (Enterprise Resource Planning) software.
• It is one of the world's largest independent software manufacturers, with 400,000 customers in 190 countries.
• SAP lets companies streamline processes, use live data, predict customer trends, and connect entire businesses.

SAP History

• 1972: SAP was founded for the development of real-time data application software.
• 1981-1982: SAP R/2 was introduced.
• 1986-1989: SAP R/3 was developed and presented at the CeBIT Hanover.
• 1993-1994: The IBM Corporation started using SAP R/3.
• 1995-1996: SAP joined the Internet, and SAP R/3 could be used online.
• 2002: SAP became the 3rd largest independent software provider.
• 2005-2006: The release of SAP ERP was announced.
• 2009: SAP Business Suite 7 was launched to optimize business performance and reduce IT costs.
• 2011: The first SAP in-memory computing product was implemented, resulting in the SAP HANA platform.
• 2013: SAP Business Suite moved to SAP HANA, becoming the fastest-growing product in the history of enterprise software.
• 2015: SAP S/4HANA was introduced.

SAP ERP and SAP S/4HANA

• SAP ERP is the standard ERP solution for companies around the world, enabling companies to support and optimize business processes.
• SAP S/4HANA is the next-generation Business Suite, representing the biggest innovation since SAP R/3.
• SAP S/4HANA enables digital transformation and offers real-time simplification, compressing data storage and processing.

SAP Fiori

• SAP Fiori is a design system and a user experience (UX) layer that allows business app creation with a consumer-grade user experience.
• It provides a user interface for SAP S/4HANA and has three application types: transactional, analytical, and factsheet.

Data Types

• Organizational Data: part of the organizational unit, such as company code, plant, storage location, and distribution channel.
• Master Data: stored for a long time and rarely changed, such as customer, material, vendor, and general ledger accounts.
• Transaction Data: system record of the business event, referencing master data and organization data.

Cloud vs. On-Premise

• SAP S/4HANA can be accessed on the Cloud and On-Premise.
• Both options can be used hybridly without losing the company's integration.

Optimization Levers

• Efficiency: focuses on accelerated execution, automated process steps, and digital out-tasking.
• Effectiveness: speeds up action, de-layers processes, and raises process intelligence.
• Agility: focuses on process flexibility, organizational flexibility, and assimilating process innovation.

Transition to SAP S/4HANA

• New Implementation: new implementation of SAP S/4HANA for customers migrating a legacy system.
• System Conversion: customers want to convert their current system into an SAP S/4HANA system.
• Landscape Transformation: customers want to consolidate their landscape or selectively transform data into a SAP S/4HANA system.

SAP S/4HANA Case Study (Global Bike Inc.)

• Global Bike Inc. has a practical design philosophy, founded by John Davis and Peter Schwarz.
• The company has continued to deliver innovative high-performance bicycles to the world's most demanding competitors.
• Global Bike Strategies:
  • Product Strategy: focuses on innovation, quality, safety, and speed to market.
  • Manufacturing Strategy: operates two production facilities, Dallas and Heidelberg, with three assembly lines that can produce around a thousand bikes annually.### Global Bike's Distribution and Partner Network
• Global Bike sells its bicycles exclusively through reputable Independent Bicycle Dealers (IBDs) that have staff with expertise in off-road and tour racing.
• The IBDs help consumers pick the right bike and accessories for their individual needs.
• Global Bike uses the Internet to educate consumers and partners and market its products to a large audience.
• Due to complex tax issues, Global Bike has limited Internet sales and mainly sells through specialty resellers.

Distribution Network

• The distribution network includes countries, models, and bike prices.
• Global Bike has an extensive partner operation to ensure process continuity and provide best-in-class products.
• The company pays special attention to nurturing and protecting strong relationships with suppliers.

IT Strategy

• In 2009, Global Bike used a shared services model for all IT functions in the Dallas office.
• The company implemented SAP ERP (version 6.0) and centralized all ERP functions to reduce costs and deliver global best-in-class technology.
• In 2017, the company moved to SAP S/4HANA to accelerate digital transformation.

Sales and Distribution (SD)

• SD organizational structure consists of multiple units, including Client, Company Code, Credit Control Area, Sales Organization, Distribution Channel, and Division.
• The Sales and Distribution module manages customer- and product-related data, including sales support, sales, shipping, billing, credit management, and foreign trade.

SD Master Data

• SD Master Data consists of three types: Customer Master, Material Master, and Condition Master.
• Customer Master contains information necessary for processing orders, deliveries, invoices, and customer payments.
• Material Master contains information for managing materials, including general information, sales, and storage locations.
• Condition Master includes prices, surcharges, discounts, freights, and taxes.

SD Processes

• The SD process includes pre-sales activities, sales order entry, checking availability, picking materials, packing materials, posting goods issue, invoicing the customer, and receiving customer payment.
• Pre-sales activities include creating and tracking customer contacts and communications, implementing and tracking direct mailing, Internet, and trade fair campaigns.
• Sales order entry involves creating a sales document that contains customer information, material/service, and quantity, pricing, shipping information, and billing information.

Shipping and Transportation

• The shipping process begins with creating a delivery document that controls and monitors the shipping process, including picking, packing, loading, and posting goods issue.
• The delivery document checks orders and materials to determine if a delivery is possible and whether there is a delivery block.

Payment

• The billing process generates a customer invoice and updates the customer's credit status.
• The billing document is created by copying data from the sales order and/or delivery document.
• Payment involves posting payments against invoices and reconciling differences between payment and invoice.### MM Master Data
• Consists of Vendor Master Data, Material Master Data, Purchasing Info Record, Condition Master Data, and Output Master Data
• Vendor Master Data contains necessary information for business activities with an external supplier
• Divided into three views: Client Level, Company Code Data, and Purchase Org Data

Material Master

• Contains all the information a company needs to manage a material
• Stored in functional segments called Views
• Divided into three areas: General Information, Sales, and Storage Location

Purchasing Information Record

• Allows buyers to determine which vendors have offered or supplied specific materials quickly
• Serves as the default information for Purchase Orders
• Includes data on pricing and conditions, specific lead times, last purchase order, and availability periods

MM Processes

• Includes the Procure-to-Pay process
• Steps in the process: Purchase Requisition, Vendor Selection, Purchase Order, Notify Vendor, Goods Receipt, Invoice Receipt, and Payment to Vendor

Purchase Requisition

• Involves an internal document instructing the purchasing department to request a specific good or service
• Can be created directly or indirectly through Materials Request Planning (MRP), Production Order, Maintenance Order, and Sales Orders

Purchase Order

• A formal request to a vendor for a specific material or service under stated conditions
• Can be created manually or automatically
• Item category (procurement type) defines the use of the order and the process that the order will follow

Goods Receipt

• Deals with the goods movement wherein goods are accepted into the system
• Movement Types are three-digit keys used to represent a movement of goods
• Destinations for Receipts of Goods include a warehouse, quality, and goods receipt blocked stock

Invoice Processing

• Verifies the content, prices, and arithmetic of the invoice against the Purchase Order
• Discrepancies between the purchase order or goods receipt and the invoice will generate a warning or an error
• Upon verification, the purchase order and the material master are updated, and the account document is created

Payment to Vendor

• Can be done automatically or manually
• Elements of the Payment Transaction include Payment Method, Bank, Items to be paid, Calculate payment amount, and Print payment medium

Production Planning and Execution (PP)

• The process of aligning demand with manufacturing capacity in creating production and procurement schedules
• Divided into Production Planning, Manufacturing Execution, and Production – Process Industries

PP Organizational Structure

• Shares some organizational units with the previous modules
• Includes Client, Company Code, Plant, Storage Location, and Work Center Locations

PP Master Data

• Includes five types: Material, Bill of Materials (BOM), Routing, Work Center, and Product Group

Material Master

• Contains all the information a company needs to manage a material
• Includes General Data, Material Requirement Procedure (MRP), Lot Size Data, and MRP Areas

Bill of Materials (BOM)

• Lists the components that make up a product or assembly
• Three types: Single-level, Multi-level, and Variant Bill of Materials

Routing

• The series of sequential steps or operations that must be carried out to produce a given product
• Enables the planning of the production of materials (products)
• Contains each step's what, where, when, and how

Work Center

• The location within a plant where Value-added work (operations or activities) is performed
• Represents people or groups of people, machines or groups of machines, and assembly lines

Product Group

• Aggregate planning that groups materials or other product groups (Product Families)
• Can be a multi-level or single-level, wherein the lowest level must always consist of materials

PP Processes

• Includes Forecasting, Sales and Operations Planning (SOP), Master Production Scheduling (MPS), Material Requirement Planning (MRP), and Demand Management

Forecasting

• The foundation of a reliable Sales and Operations Planning (SOP)
• Accurate forecasts are essential in the manufacturing sector
• Forecasting models include Trend, Seasonal, Constant, and Trend and Seasonal