SAP S/4 HANA Supply Chain

The new ERP generation from SAP has been officially available since 2015:

SAP S/4HANA Enterprise Management

The SAP S/4 HANA Enterprise software is based on SAP’s own SAP HANA database and is therefore capable of showing transactions and analyses in real-time in a system, thereby speeding up and significantly reducing the storage requirements. Furthermore, the software architecture already fully complies with the thinking behind INDUSTRIE 4.0, as well as the Internet of Things (IoT) and Big Data.

Within this new SAP Business Suite, the new SAP S/4 HANA Supply Chain Module is the logistical S/4 HANA core. In addition to a completely revised and simplified materials management SLOG (formerly the MM module), the warehouse management module SAP, Extended Warehouse Management (SAP EWM) is now available in an “Embedded EWM” version in SAP S/4 HANA. Almost as a successor to the “old” R/3 SAP Warehouse Management (WM module), as well as the Logistics Execution Module LE and LE-TRA, which will only be supported by SAP until 2025. The main advantage of Embedded SAP EWM is the central data consistency; there are no redundancies and no duplications of data or data planes. This enables clients with small storage sites to simplify their system landscape further.

The option to operate SAP Extended Warehouse Management in a decentralised manner, i.e. separately as a separate system within the SAP Supply Chain Execution platform, is of course available to clients for medium and large storage locations with the highest level of performance and availability.
As a result, the SAP Supply Chain Execution Platform (SAP EWM / SAP TM) now also has ERP-integrated EWM functions available for operational logistics:

SAP S4/Hana-Migration for Warehouse Logistics

In addition to the embedded EWM, the new functions in the S/4 HANA Supply Chain include production planning, inventory management, production planning, and detailed planning (PP/DS), and the newly-programmed availability check (Advanced Available to Promise).

As is generally known, the data model of SAP S/4HANA is new, as a result of which, in this supply chain module, the memory requirement in the database is reduced many times over. This is technically feasible, because it is possible to dispense with aggregates and indices and to generate them quickly, if necessary, in real time.

Parallel bookings are also possible with SAP S/4HANA.  Previously, you had to wait for the completion of the previous transaction because SAP and other IT systems were locked for this short period of the transaction. With S/4HANA, the intention is to achieve a higher throughput in the financial and logistics processes as a result to shorter processing times and with lower memory requirements.

Practical examples in which S/4 HANA shows its particular strengths:

  • Mass postings: Capacity bottlenecks in logistics distribution centres should be a thing of the past. Even if many trucks are leaving or arriving at the same time, or many shipping items or returns need to be processed, the SAP system is not the bottleneck. Bookings are possible in parallel without system locking.
  • In the case of delivery or service vehicles, mobile devices synchronise directly with the ERP system. The booking of goods outward, invoicing of clients, and refiling and route planning for the next trips can be automated.
  • Material Requirements Planning (MRP) can help dispatchers achieve a balance between the availability of parts and capital commitment within the warehouse. Tools include the signalling of critical inventories, simulations, graphical SAP Fiori representations, and system-wide proposals.
  • Optimise inventories: Inventories can be classified using ABC/XYZ analyses and evaluated based on turn-around time. The inventory can be kept constant because the outgoings and receipts can be displayed in real time.
  • Making the information simple for dispatchers to read by means of cockpit presentations, user interfaces that can be individually tailored, graphical representations, and charts. Improved accessibility in case of customer inquiries regarding delivery dates using the production data.
  • Alarm messages in case of bottlenecks in material flow and material requirements planning, and shortened reaction times. Decision support through proposals by the system to eliminate bottlenecks and simulations for better inventory forecasts.
  • Analysis possibilities in real-time on material requirement levels, sales figures, or results: The basis for analyses is always current S/4HANA data and non-obsolete information from the previous day from interim tables or aggregates. Modifications can also be displayed in real time.

Migration from SAP WM to SAP (S/4 HANA Supply Chain)

SAP has built several bridges for the SAP R/3 component Warehouse Management (SAP WM) to enable the migration to SAP S/4 HANA Supply Chain as gently as possible.

  1. First of all, there is the interim option of using the “old” SAP WM within the S/4 HANA ERP core, i.e. SAP keeps SAP WM capable of running for the time being and supports this transition scenario in accordance with current statements up to 2025.

  2. With this transition scenario, SAP clients who have already decided to implement S/4 HANA ERP in the short term will be able to perform the full ERP migration from ECC to S/4 and in a single process initially take over their SAP WM functionality including all individual SAP extensions. For this “technical relocation”, SAP provides various wizards and services. However, this transition scenario does not mean that the migration to SAP S/4 HANA Supply Chain (embedded or decentralised EWM) will not have to be performed by 2025.

  3. A real alternative, on the other hand, can be the early migration of the SAP WM module to a decentralised SAP EWM System because this migration can take place independently with regard to time and technology from the ERP migration project to S4/HANA.

IGZ will be happy to work out which migration path is the right one for you individually as part of a “S4/HANA Warehouse Logistics Check”.

SAP Modules Warehousing