How Does SAP S/4HANA Solve Supply Chain Pain Points?

In today’s world, a company must meet three key demands: speed, individuality, and innovation. With the rise of new technologies, customer expectations have increased significantly. Customers have more specific product requirements and want the delivery of their orders as quickly as possible.

In addition, with the heavy competition of today, customers have a lower pain threshold and can switch at any moment to another supplier or to someone who hasn’t entered the market before.

Following are some of today’s key challenges for supply chains:

• Increasing customer requirements cause companies to produce products adapted to individual requirements. Classic inventory planning can’t keep up with the flexible accommodations or custom configurations that customers are expecting today.
• Lack of real-time reports on stock levels often leads to delivery delays and dissatisfied customers.
• Lack of transparency and real-time insights causes companies to struggle with data analysis.

Inventory management in SAP S/4HANA enables organizations to harmonize warehouse inventories and demand and supply planning, as well as use all data and analysis on a company-wide basis. Real-time processing of inventory postings and inventory values rather than overnight jobs can lead to higher accuracy of inventory, increase in turnover, and reduced days of items in stock.

In addition, inventory management can take all production locations and external supply chains into account and can manage the changing demand for smaller lot sizes passing through entire logistics operations with all involved parties. Real-time information, including early error detection, creates precise where-used information per unit.

SAP S/4HANA's logistics lines of business allow real-time processing of inventory postings and visibility of warehouse inventory, resulting in the following business benefits:

• Improved on-time delivery
• Increased inventory turnover
• Reduced cost of inventory
• Single source of truth for inventory in one system
• Decreased stock levels due to increased transparency

The user experience (UX) offered by SAP Fiori enables users to access data anytime and anywhere. Within SAP Fiori, there are three types of SAP Fiori apps: transactional, analytical, and fact sheet.

Transactional SAP Fiori apps allow you to execute specific tasks and transactional activities. Those that are currently available for inventory management allow you to do the following:

• Post goods receipts for purchase orders.
• Transfer stock from one storage location to another storage location and make changes to stock type.
• Manage stock by posting an initial goods receipt or scrapping from stock.

Analytical SAP Fiori apps are used to provide real-time insights and key performance indicator (KPI) information on specific parts of a process. Related to inventory management, an analytical SAP Fiori app is available for material document overview and stock overview (for a single material). It provides the user with an overview of inventory level and material postings at any point in time and on any device.

Fact sheet SAP Fiori apps allow users to quickly navigate to other related documents and provide links to follow-on processes. Fact sheets for inventory management are provided for the following:

• Goods receipt
• Goods issue
• Materials

The table below describes the key challenges for the chief supply chain officer (CSCO) for the area of supply chain management and how SAP S/4HANA functionalities can address today’s challenges:

Editor’s note: This post has been adapted from a section of the book SAP S/4HANA: An Introduction by Devraj Bardhan, Axel Baumgartl, Madalina Dascalescu, Mark Dudgeon, Piotr Górecki, Asidhara Lahiri, Richard Maund, Bert Meijerink, and Andrew Worsley-Tonks.