Materials Planning and Procurement are crucial processes in supply chain management, ensuring that the right materials are available at the right time and cost to meet production and customer demands. SAP S/4HANA offers a modernized and integrated approach to managing these processes, leveraging the power of the SAP HANA in-memory database and embedded analytics for real-time insights and streamlined operations.
This article provides an overview of how Materials Planning and Procurement are managed in SAP S/4HANA, highlighting key features, process improvements, and benefits.
Materials Planning involves forecasting and scheduling the materials needed to support production and sales. In SAP S/4HANA, planning processes are integrated across modules like Production Planning (PP), Materials Management (MM), and Sales and Operations Planning (S&OP), ensuring alignment between supply and demand.
Advanced ATP (Available-to-Promise)
SAP S/4HANA’s Advanced ATP checks product availability in real-time, considering current inventory, planned receipts, and allocations to confirm delivery dates accurately.
Material Requirements Planning (MRP) Live
The new MRP Live runs on the SAP HANA database and performs material planning in real time, drastically reducing processing times compared to classical MRP.
Demand-Driven Replenishment
Supports demand-driven MRP concepts enabling better response to actual consumption and reducing excess inventory.
Embedded Analytics
Integrated analytics provide visibility into stock levels, planning results, and supply chain KPIs directly within the system.
Procurement manages the sourcing, purchasing, and supplier management processes to acquire materials and services needed by the organization. SAP S/4HANA enhances procurement through process simplification, automation, and integration with supplier networks.
Simplified Procurement Processes
The procurement cycle—from requisition to purchase order to goods receipt and invoice verification—is streamlined within S/4HANA.
SAP Ariba Integration
S/4HANA can integrate with SAP Ariba Network for supplier collaboration, electronic sourcing, and contract management.
Supplier Management and Evaluation
Centralized supplier master data and evaluation support informed decision-making and risk mitigation.
Invoice Management and Automation
Integration with SAP Invoice Management solutions automates invoice capture and verification.
SAP Fiori Procurement Apps
Intuitive Fiori apps simplify purchasing tasks such as creating purchase requisitions, managing purchase orders, and tracking deliveries.
Demand Forecasting and Sales Planning
Forecast demand based on historical data and sales plans.
Material Requirements Planning
Run MRP Live to calculate net material requirements.
Purchase Requisition Generation
Automatic or manual creation of purchase requisitions for required materials.
Supplier Selection and Purchase Order Creation
Select suppliers and create purchase orders, optionally leveraging SAP Ariba.
Goods Receipt and Inventory Update
Receive materials and update inventory in real time.
Invoice Verification and Payment Processing
Verify supplier invoices and process payments in coordination with Accounts Payable.
Real-Time Data and Planning
Faster planning cycles and accurate supply commitments due to real-time system capabilities.
Process Simplification
Streamlined procurement and planning processes reduce manual effort and errors.
Improved Supplier Collaboration
Enhanced communication and transaction automation with suppliers.
Greater Visibility and Control
Embedded analytics enable proactive decision-making and continuous process improvement.
Enhanced User Experience
SAP Fiori apps provide a modern, intuitive interface for all procurement and planning activities.
SAP S/4HANA’s approach to Materials Planning and Procurement offers significant improvements in speed, accuracy, and user experience. By harnessing real-time data processing, advanced planning algorithms, and seamless supplier integration, organizations can optimize their supply chain operations, reduce costs, and enhance customer satisfaction.
For SAP professionals, understanding these capabilities is essential for effectively implementing and managing SAP S/4HANA in dynamic and complex supply chain environments.