openSAP

SAP S4/HANA - Use Cases

Week 1 Unit 1
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Hello, and welcome to the introduction unit of the openSAP course SAP S/4HANA Use
Cases. My name is Sven Denecken, part of the S/4HANA team at SAP,
and together with my colleague Bert Schulze and others, I'm proud to guide you through
this course. Let me share some key thoughts at the beginning and the approach we will
be following during this course,
so we are on the same page on what to expect. The course is structured along the use
cases, and will showcase values across the key S/4 innovation areas,
taking into consideration both the business and the technical, so to say the IT perspective
for each selected example. After the course, you will have examples at hand
that you can relate to your specific situation. You will gain insights into the SAP S/4
capabilities that you can adopt for your company's processes.
You also should understand and be able to reuse the value levers framework and the
innovation adoption cycle to showcase the value of SAP S/4HANA using the scenarios
that were introduced.
So how will it work? We will start with a framework of value levers helping to understand
the full impact of a digitized core in the digital transformation.
SAP S/4HANA use cases in the following units, there we want to introduce concrete
examples based on the design of S/4HANA, our plans in the labs, and co-innovation with
strategic clients and partners.

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So, not everything is codified yet, but we are confident with sharing the areas of
innovation and the potential impact. This will help you to entertain your discussions at your
enterprises

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with the value we have found, as the basis of concrete use cases which actually turn into
business cases. The selected use cases are designed to emphasize and visualize the
value behind the digital transformation shift.

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So let's manage also the expectations upfront - if you are only looking for the technical
details, which I think is a miss because the why and the how to measure is important as
well -

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fast forward to the use cases and check the SAP S/4HANA cookbook on the SCN
community. If you want to learn the broader context, we trust you will enjoy.
With this, happy to guide you through this introductory unit and then looking forward to
see you in some of the next units.
So let us start with the Why? We think it is important to agree, or at least to understand
the Why. Customers today are looking for ways to transform their business and cater to
our digitized, networked, and complex world.

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They need to deliver services rather than only products, and everything needs to happen
fast, so innovation with speed is key. But it is not speed only.
Customers are looking to improve their decisions, processes, and products next. So
ultimately, they need to cater towards new business models
while preserving what they have, and this is where we come in by simplifying the core of
their business with SAP S/4HANA. So we happen to believe this Why is here today, and
we will keep prioritizing along those lines.
So what is the digitized core? Let us take it a step further. Our environment, for all of us,
for everyone, is changing.

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Customers are used to seamless design, customized user experience, and improvements
on a regular basis. If you cannot deliver this as an organization, or as a company,

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you will soon be overrun by your more agile and smarter competition. So this push from
the customers forces many new channels like phone applications,
apps, whatever have you, which are supposed to make buying more intuitive and userfriendly, are very good examples. But too often, the infrastructure behind, the
mushrooming of different solutions in the cloud and on-premise,

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the surface cannot deliver to the speed that, for example, a digital store enables and also
requires. Because we are now in a segment of one, and the number of incoming orders
rises,

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and the size of each lot becomes smaller and smaller by the promised customization. This
dramatically increases the complexity and puts the whole organizational infrastructure on
the test.

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This is the point where many fail. The problem lies not in the employees or the company's
philosophy, no; it is the complexity of the technology and IT and the workflow processes
and all that is related to that,

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which unnecessarily complicate things. The digitized core meets and will enable that
transformation. The big question is, how?
The entire value chain is actually digitized, including the digital core, which serves as the
foundation for business innovation and optimization.
It doesn't help just to innovate at the edges. The digital enterprise interconnects all
aspects of the value chain to drive and anticipate business outcomes in real time. And I
mean real time.

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Enterprises across industries can lead the digital transformation by completely

reimagining business models, business processes, and their work.
And of course the impact of the changing workforce, the business networks, the changing
customer experience, and the challenges with Big Data and the Internet of Things are
impacting every business.
And with this, they require a digitized core to be able to react. So of course we also need
to understand those new value levers in more detail.
And we will start the deeper course content with a unit to understand the value levers for
digital transformation. Clearly, the new environment - the digital economy with all the
disruptive technologies and trends
like segment of one or subscription economy - pushes forward and forces organizations to
transform. Otherwise, they will be history.
The existing complexity though often prevents a successful transformation, unfortunately.
The solution for this is to tackle that complexity, unburden employees and processes,
and stem the digital transformation for your enterprise. The core therefore needs to be
redesigned and brought up to date.
This new digital core will be able to handle the complexity. It helps to leverage actually
those disruptive technologies and deliver the customers what they expect.
Just to name some examples, you can now leverage the Internet of Things and make full
use of the connected manufacturing in order to deal with the customization and lot size of
one,
which in turn will give your customers a personalized and much more speedy experience.
But how exactly can the digital core contribute?
In the following weeks, we will dive deeper into some possible use cases of SAP
S/4HANA. But as every change, as every transformation, I think we need a framework,
and we call them the value levers. And first of all we want to explain the very basic value
levers of the digitized core, which all lead to the use cases of this course.

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An important question that we often get in co- innovation engagements: How can we
actually measure the impact of the digitized core on the organization and justify its positive
impact afterwards?

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A framework has to be in place, which can reflect the success, and where the use cases
and applications are compared to.
Generally spoken, there are three dimensions that drive and make organizational
transformation measurable. These dimensions are: efficiency, effectiveness, and agility.
So we think it is important that each value coming from a digitized core (we call them
value levers) serves one of these dimensions.
For each dimension, therefore, we have three main value levers which we can
recommend for you to measure the impact, and should help an organization to reach its
goals and make them transparent.

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So we will take a closer look at them throughout the respective units. And then we're
going to dive into the use cases,
because the use cases themselves of course are important. This course is all about the
details, the hands-on experience and the use cases, which we would like to illustrate and
discuss together with you.
For this purpose we will be using the following structure, which is actually shown here with
an example of real-time Inventory Management use case.
To show the value for each of the choosen use cases, we will take into consideration both
business and technical (so to say, IT) perspectives.
Both perspectives include explanations of capabilities, innovations, and quantifiable
values delivered with the respective use case as we have seen it, and we plan, or we
envision it.

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Last but not least, we will use the introduced value levers (efficiency, effectiveness, and
agility) to suggest how to measure the impact of the respective SAP S/4HANA use cases

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to your company's digital transformation from both the business and the IT perspectives.
The use cases of course also need to have a process view,
because the best way to explain the value and innovations is to compare the capabilities
of the traditional approach and systems to the newly developed SAP S/4HANA and its use
cases.

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In this case you see a comparison from a business perspective between the traditional
systems, still valid - there's still innovation there - with the SAP S/4HANA for the real-time
Inventory Management use cases.

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To fulfill the capabilities and objectives of today's Logistics processes, inventory

management systems need characteristics that allow companies to keep material secure,
identified,

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and functions that facilitate the satisfaction of demand in real time. This is the business
issue.
Similar to this example actually, we will be using the comparison for both business and IT
perspectives for each of the use cases throughout the course.
And to make your learning experience as hands-on as possible, we will show interactive
demos for the selected use cases, including real business scenarios as implemented at
clients.

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Of course it is important to understand where you can find more information beyond this
course. Make sure you don't miss the valuable content complementary to this course on
openSAP.

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There are 3 openSAP courses to mention: S/4HANA in a nutshell, where we did an

update, the deep dive, which hopefully you attended,
and an earlier course on digital transformation, which is still very valid. You can access
them anytime now.

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And beyond that, if you want to go further also during that course, in addition we would
like to mention and motivate you to become a member
of the very active community on SAP's Community Network and profit from the latest
content and developments of SAP S/4HANA.
The specific use case content of course will be made available for you after the respective
units, and we're looking forward to your detailed feedback.
With this, I conclude the Introduction for SAP S/4HANA Use Cases course. Join us next
time; we will be talking about understanding the new value levers in detail.
Thank you, and have a lot of fun.

Week 1 Unit 2
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Hello and welcome to week 1, unit 2: Understanding the New Value Levers. Before we
demonstrate the SAP S/4HANA use cases in the following units
we want to lay a foundation by introducing the new value levers to you. These are driven
by the ever-changing environment we are in these days.
My name is Bert Schulze and I am part of the Co-Innovation team for SAP S/4HANA at
SAP.
And I am really looking forward to guiding you through this unit. The modern drivers of
change in our environment
are running at an unprecedented pace of change. Where change took place in years in
the past, we see it in month today
The change is coming constantly but in waves. We can pick any of the drivers which you
can see on the slide and analyze the momentum that is induced.
Take the example of digital transformation. After the last wave, titled as "Products Become
Services",
we have seen that a mobile device, for example, is really replacing complete markets. I
invite you to discuss the camera capabilities of this smartphone
with a classical camera producer and you will learn that not everybody is amazed by the
digital transformation.
And it's even doing a better job than the classical camera in the past because today, using
that device, people do not only want to take pictures.
They want to instantly upload them to Instagram or Facebook. And this is all about real
time.
And the classical camera market is not disrupted by somebody producing it cheaper. It's
disrupted by a digital transformed expectation.
We're now facing the next wave, titled as "No Ownership". Car sharing over owning a car.
Streaming music via subscription model over owning the music. To survive, we all must
adapt to the new drivers of change
and take them into consideration Innovation: Drive business with a startup mentality on
mind
and continuously rethink your business models and processes. Or the new customer
mindset:
How do the customer expectations impact your services and your market share? Change
inducing technology: The driving force of technology,
changing markets faster than ever before, as the technology is changing constantly.
Collaboration: Global virtual teams are the new norm,
and we think and need to adopt to the new way of working in that environment. And finally
also social: People-to-people, business-to-business,
and of course a new middle class changing the consumption and turning target market
limitations into sourcing limitations to serve the new markets of the growing middle class.
The only constant in life is change, but the speed we experience today is incredible. And if
we look into the digital transformation,
the consequence of the new drivers, the ultimate goal for most companies, is the Unit of
One.
And this is not only appealing for B2C companies, so business-to-consumer companies,
but also B2B2C companies
because the new expectations are changing entire markets and supply chains and not
only single companies.
A seamless and customer-focused and fully individualized service is the goal So custommade is the magic word.

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Unfortunately, the path to it is not a direct one. A lot of it is already in place today

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and it's induced by changed technologies like RFID, mobility, bar codes and others.

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As the customer segments are moving, companies do see the direct customer
engagement as the first logical step.
In a changing market, I want to be where my customers are. And this is best, of course,
hip to hip with my customers.
Many new apps have been built, new Internet presence, online stores, new services,
gamification to win customer attention.
We summarized this, as you can see on the slide, as the digital storefront . All are
supposed to make buying more intuitive and user-friendly
and allow companies to gain better insights into their customers. But too often, the
infrastructure under the surface
cannot deliver on the new promise created at the digital storefront, and this is what you
can see here.
Because this is exactly what happens: There is a new promise out as a consequence of
that segment of one.
And we can observe that in all our markets. For many years now, we do get the same
message from all our analysts,
as well as from our customers. The number of incoming orders rises

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and at the same time does the size of each lot become smaller-- a direct consequence
also here of the unit of one.
And the same with invoices. The average value per invoice is decreasing
while the number of invoices is exploding at the same time. And you still need all the
follow-up activities in logistics and in finance:
dunning runs and all the other topics. The dramatic increase of workload
puts the whole organizational infrastructure on the test. And many fail because a
company's infrastructure is not prepared
for infinite scale any longer. The boundary conditions of the past are now locking systems
down
According to McKinsey, one issue is scattered information and data duplication that create
different versions of the truth,
complicating decisions and making it difficult for enterprises to bring good ideas to market
quickly and profitably. It then moves on to business processes that have been built around
long-running batch processes.
In fact, according to BCG, organizations can spend between 40% and 80% of their time
on non-value-added activities,
sucking up time and energy from solving real business problems. Ask yourself. We all
know about Big Data for many years now.
How much have the concrete workplaces for your business people changed? How much
do they really participate from the availability of zetabites of information?
I personally don't think enough. In fact, I think not many workplaces have changed at all.
And this is what we have to look into if we talk about the digitized core. So from changing
processes to changing business models
is the key in moving into the digital transformation. Today's complexity prevents a
successful transformation, unfortunately. .
To solve this we need to tackle that complexity, unburden employees and processes,
and stem the digital transformation for your enterprise. The core, therefore, needs to be
redesigned and brought up to date.
It is the way to deliver on the new promise to the market. But how exactly can the digital
core contribute?

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In the following units, we will dive deeper into some selected use cases of S/4HANA. But
first of all, I want to explain the very basic value drivers of a digitized core,
which all lead to the use cases By implementing a digitized core and leveraging the new
environment,
companies of course have to decide how much impact they want to create. And this is
what you can see here also on the picture.
There are many opportunities to change, from influencing single processes, on the left
side, up to transforming the whole organization and inventing new business models.
Unfortunately, there is homework to do. Redesigning processes does not come for free.
But the more effort I put into, the more I am able to capitalize on it. On the very left, we are
operating on a tactical level,
punctual adoption of new technologies, for instance, only eases some single processes,
often only for IT.
If we move further to the right, whole process chains are being replaced with a digital
equivalent
and start influencing across all levels of an organization. Moving even more to the right,
we start having actual strategy impact.
We start influencing our business value with the transformation and maybe innovate new
business models
which will finally disrupt the market to our favor and leave competition behind by acquiring
new market shares and segments for us instead of for them.
Spendings become investments if you move to the right, and not costs any more. And I
measure the success different.
New revenue streams are enabled versus, on the left side, the way how we run existing
revenue streams has been optimized.
We improve the competitiveness of our company. And this is the final goal. In the end,
however, it is up to leverage the opportunities with a digitized core,
thus the transformational journey of your Enterprise. So if we look at the new optimization
levers,
how can we actually measure the impact of a digitized core on the organization and justify
its positive impact afterward?
A framework has to be in place, which can reflect the success, and where use cases and
applications are compared to.
Generally spoken, there are three dimensions overall that drive and make organizational
transformation measurable.
These dimensions are, as you can see here, efficiency, effectiveness, and agility. So I
think it is important that each value coming from a digitized core-we call them value levers-- serves one of these three dimensions.
For each dimension, therefore, we have three main value levers which we can measure
the impact on and should help an organization to reach its goals.
Let's take a closer look at the dimensions themselves before we analyze each value lever
at the end of the use case section in more detail.
The first one I would like to look at is the increased efficiency. Efficiency can easily be
described as "doing things right".
Simply said, as the fundamental definition of business, you achieve more output with the
same input, or the other way around:
the same output with less input. If you have more efficient processes, you produce less
scrap.
By the way, a typical KPI looked at as an IT characteristic. As a first simple example,
giving people the right information,
better and faster analytics provided by a digitized core, thus making decisions more
precise and efficient.

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Keep in mind, we are not talking about a profound status and comfort zone companies are
in. We are talking about fast-changing markets and new competitors,
perfectly settled to disrupt your existing market. This makes efficiency, wherever you
come from, not a nice-to-have option these days.
If we look into effectiveness, we should move on to that one. In contrast to efficiency,
effectiveness can be described as "doing the right things".
This can be expressed in different ways, such as reaching the goals you set to yourself or
by collecting all the recourses you need to do so.
This is a typical KPI to be looked at to measure success for a line of business, typically
not that much from an IT point of view.
Put into practice, we could see more time for actual value adding tasks-- do the right
things--because many processes can be higher automated.
Think of low to zero-touch orders as a consequence of the new promise from a digital
storefront. It is not an option to improve the existing order processes by another 10%.
It is about fundamentally redesigning an order process to manage the new expectation
created at the digital storefront.
So right things can also be the new service model your customers have been waiting for
or a transition into a subscription model with your products.
The No Ownership paradigm from earlier today, as an example. And then we have the
dimension of agility.
This is somehow a mix of flexibility and speed. In an organizational context, this is the
ability to respond fast
to a change within the constantly changing environment. In other words, your processes
are flexible enough to adapt to changes fast
and improve service levels or other aspects of your business. In practice, we can see
faster deployment of new organizations or processes.
Your entire company is a living organism. In inventory management, your stock is as well.
The better you are able to run your IT in synch with the physical reality, the physical world
out there, the better you are.
Products can then be adapted and changed more flexible according to customer needs
and demand,
which, ultimately, can increase things like your net promoter score. More flexible and
easier-to-use processes finally lead to higher inventory throughput,
lower security stocks, or a higher employee engagement. So here we can see the three
dimensions in a nutshell.
This picture here will be seen a few times during the course, and we will also refer to that
in every single use case. So keep them in mind.
Efficiency: doing things right. Effectiveness: doing the right things.
Agility: organization flexibility and the capability to adopt change fast. So if we summarize
the new environment,
the digital economy with all the disruptive technologies and trends like segment of one or
subscription economy as a driver,
pushes forward and forces organizations to transform. But complexity prevents a fast
transformation.
The solution here is to tackle that complexity, unburden employees and also processes,
and stem the digital transformation for your enterprise.
Because with process designs from the last century, it is not a surprise that you cannot
handle technologies of the new millennium.
The core, therefore, needs to be redesigned. This new digital core is designed to tackle
this complexity
and improve the value levers and dimensions we've seen. Improving only single
processes is only half of the bet.

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The new promises need to be reflected in the new digitized core. You now have an
overview on where and how the digital core can improve a company.
With this we conclude the first introduction of the new value levers and will give you use
cases of a digitized core
and reflect that back to the three dimensions we have just introduced. And later on we'll
come back to the value lever framework in week 3.
Join us next time. We will start looking into the first really exciting SAP S/4HANA use
case. Thanks and good-bye.

Week 1 Unit 3
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Hello and welcome to week 1 of the SAP S/4HANA Use Cases course, Unit 3, Market to
the Segment of One. My name is Sven Denecken, part of the S/4HANA Co-Innovation
Team.

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Before we start, let me recap how we're going to run these use cases. Again we will focus
on the Why; this gives you the needed insight
to relate to the use case and also our motivation to address this topic with S/4HANA. We
will share light on two aspects - the business rationale and the technical / IT related view.

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And that's why we are both here. Both are essential and always should be looked at
together.
Then we will drill deeper into the process and the technical view and also add a demo
where feasible.
Let me also be clear: This can be existing functionality, planned scope, or future coinnovation work, so please do not treat those demos and what we are showing here as a
product training.
But we are sure it helps you to understand the transformational aspects and the
opportunities of S/4. With that, over to you Bert.Thanks a lot. My name is Bert Schulze,
also within the SAP S/4HANA Co-Innovation Team. After the first introduction of the new
value levers we are now drilling into the first use case.
We will explain how to market to a segment of one, and look at the value drivers that we're
getting from the new way of looking at customers and prospects
from first the business point of view, and second, the IT perspective. So markets are
shifting towards digital, society accordingly.
Nowadays, customers are well informed, mobile equipped, and they search for ways to
ease up their daily life. Their smartphones play a core role in life.
The devices are able to bundle many products (digital and physical services) in one single
device. Seen as an evolution, it offers a chance to rethink and re-design services to
customers.
Most businesses today still follow the standard approach when it comes to digital
customer engagement experience.
Classical marketing campaigns focus on the unique selling proposition (so-called USP) of
a product. A USP is the benefit of a good or a service that differentiates it from its
competitor products.
A USP is meant to give customers a reason to go for it. But does it really address the
individual needs of a customer? We dont think so,
because companies simply dont know the individual prospect today. A market research
might define the need of the collective crowd,
but the individual customer information is not available. Sometimes, pieces of that
information are available in a fragmented way,
all over the place, in different departments, but not in a single place. It is stored and
managed in silos today, thus the need
of every individual cannot be put together and addressed. ISP (the individual selling
proposition) is becoming the new black.
But to get there, mass volumes of customer engagement information from social
networks, from location services, check-ins, buying history etc. have to be leveraged
for deeper insights to deliver a "one-on-one personalized customer experience which - by
the way - get more important than the product itself in some areas.
The digital economy as we have seen it came up in waves. After the "product became
service" wave we are now hitting the "no ownership wave.
This creates a market differentiation into 2 parts of products: Strong brands that are able
to create a "must have mentality for their customers,

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and replaceable, commoditized products. And for them a good service experience, exactly
to the point, is going to replace a strong product brand.
From a business perspective today, top capabilities, which we see, need to get a closer
look towards the market to the "segment of one".
The real-time insights help to run campaigns with speed and agility. Adjustments are
possible while the campaign is running, and this leads to very hot topics.
And we need to engage with our leads today, at exactly the moment the campaign is
running, not the next day. Even when you are not in the digital business, it is important to
create and run a marketing segmentation
not as a batch process but a real-time event. If it takes many hours or an overnight
process to segment your customers,
you will never correct an obvious mistake 60 minutes before the next decision meeting,
because you simply don't have time to do so and to run the campaign again.
So it simply is something which you need to do in real time to achieve the required
outcome. As another example, car manufacturers follow up with a personalized
engagement

00:05:59

using data from the web user profiles, even when prospects just configure but do not
purchase a car in the end. Any special treatment pays off with those who are actually in
the position to buy a car.

00:06:13

The use of predictive analytics identifies purchasing patterns to narrow down the
prospects and also the customers that have the highest purchase likelihood.
It allows to run respective campaigns very dynamically. This ensures best possible
marketing budget allocation
and increases the conversion rate for every dollar spent. With S/4, you are able to collect
and process data from various sources in real time,
analyze patterns and drive relevant engagements and collaborations to develop the full
context of individuals for an efficient engagement at every stage.
Blending of structured and unstructured data together from internal and external sources
like sensors, payment information, purchase history, and social media
enables you to gain deeper and more comprehensive understanding of true customer
need, and an effective, insight-driven marketing.
The described capabilities and innovations lead to a true and quantifiable value for your
enterprise. Marketing organizations today that already practice it and excel at crosschannel integration

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and data-driven marketing, achieve 61% higher revenue from new customers and 32%
lower marketing spend.
Understanding marketing activity performance can help to plan resources better, and
result in up to 24% higher revenue growth from net new customers
and, last but not least, 30% higher growth in market share. Real-time operational insights
and collaboration can result in 22% less effort
to market and sell products. What is the impact on your enterprise by the new capabilities
and innovations
from a business point of view, based on the new value levers we discussed in the former
unit? It's efficiency, effectiveness, and agility, just to recap on the three.
There is no doubt that efficiency is increased rapidly. The efficiency of your enterprise
marketing activities increases,
and it becomes possible to improve also campaigns and marketing activities with your
same customer base and make better use of all the resources which you have at hand
today.
And allow your teams also to focus on exceptions and where activity is really required,
while you let the system do all standard tasks which do not need to be touched.
And how about effectiveness? With the constantly rising importance of a company's digital
store front

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and the battle for happy customers, it is a must to be able to execute campaigns and datadriven marketing in real time to effectively transform your business.
If you will not leverage the new opportunities, your competitors are happy to do so first,
and gain new market shares.
The digital economy has significantly changed the goals and reaction times. A digitized,
real-time operating core gives you the chance to deliver
on your new promise of the digital storefront, which you might have created already, when
you're meeting with your customers in the new world.
And last but not least, agility. Agility means to adopt fast, and S/4HANA enables that for
today's marketers, by using a real-time blend of data,
dynamic business simulations and also recommendations. Seamless drilldowns do not
stop your analytics at any static aggregate any more.
Helps you to be also more agile in this new world. And you have to go for it. Now. Well,
ten minutes into the video, I think finally I understand what the business context is,
and I think it is important that you really always put the business context together. But let's
jump maybe also into the technical perspective now.
And for the listeners, I think it's time to fasten seat belts, because now we're going into the
weeds. It is really how the IT perspective and its capabilities of innovations
drive those values, and it is important you understand which values we forsee. So let me
start. In the B2C business, the companies receive an end customer order
through a web shop mostly, a call center, or cell phone even. So that is actually the most
valuable product or front end for many.
The major difference to the classical approach is that usually the order quantity is 1 piece,
and the delivery time tends to be very short.
But many companies are challenged by this customer expectation, the segment of one also in the B2B scenario. Obviously an order quantity of 1 piece has a major effect to the
business process itself,

00:11:33

be it material requirements planning, production, packaging, or shipping. So the

processes in the companies are optimized for production and delivery for a superior
quantity than just 1 piece.

00:11:46

So they need to re-think. Those changes are also increasing the related documents
significantly, so production orders, delivery notes, goods issues, goods receipts.
So we need to handle those tremendously increased triggers or events, and you need an
IT infrastructure from application, database, and potentially also the network
that can manage the document throughput. So what are the top capabilities that we see?

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In order to ensure profitability, the B2C orders have to run in real time within a company;
the so-called "no touch order".
Meaning the majority of those orders have to run through the business without any human
interaction. So in order to fulfill those requirements companies need a real-time business
platform,
and a solution, which means accurate, up-to- date inventory information based actually in
real time, high-frequency, fast material requirements planning runs,
and efficiency to handle the backorder. So a manual process is only required when
unforeseen problems
like a credit limit check, availability-to-promise check, are occurring. For this kind of
business requirement the SAP S/4HANA Sales Cockpit, for example, is a huge win.
So internal sales representatives who are accessing the business processes through the
related Fiori cockpit have to handle only the exceptions
which occur during the business process flow of the order through the value chain. So the
Sales and Distribution document flow manages relationships between sales and
distribution documents

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to describe how these documents (or document items) are interconnected in business
process instances. From a persistency point of view it is represented by a database table
storing the relationships together

00:13:45

with additional (partially redundant) data for faster access to the relationships or for faster
evaluation of the data connected to those documents.
In a first step, this implementation we have done will be renewed to get rid of some of the
design boundaries of the past and ensure openness for future developments.
Further changes actually could be step-by- step removal of redundant data in the VBFA,
as the Sales and Distribution documents are linked by a so-called document flow table
(the VBFA),

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which allows for example to find the deliveries created to fulfill the demand on a certain
sales order or vice versa. And here we also provide a step-by-step migration flow,
so please check frequently the S/4HANA Cookbook in our Community for details. More
than that, the user interface of the document flow will undergo a re-design too.
The new process overview will combine the document flow and the status information,
and will be first used in the Sales Order Fulfillment Monitor App
and then included into other applications. The business data for a sales order is stored in
the table VBKD.
and I'm not telling that to show off, because it's important for our clients to understand that
we're going down there. Of course we now could go into all those details, but we have
those details
and they are in the use-case series which you will find on the SAP network under the
S/4HANA Community. And we will provide those links at the end.
So the innovations S/4HANA brings are targeted to improve performance in highly
complex designs and settings, and of course improving the reporting and the analytics.
That's why if I would like to summarize the IT innovations, because actually the increased
document throughput, material master, and the related documents
very often can be locked and therefore posting of those documents doesn't take place
until the former documents are all posted. So this inter-lock we need to resolve.
With SAP S/4HANA there is no locking issue for material documents anymore, because
the database doesn't have to update a number of different tables,
instead there is until an insert into the new table MATDOC required. No locking. That
means in the end that material documents for the same material can be posted in parallel.
It's a huge win.
A further technical innovation is the simplified Sales and Distribution data model, which is
achieved by optimized document workflow,
optimized access to business data, elimination of the status tables, and elimination of the
indices.
Materialized, application-owned indices are widely used in order to combine attributes
from multiple tables in a single data table,
allowing a combined search on selection criteria originally referring to more than just one
database table. A typical example is the material index table.
In order to reduce the redundancies and hence reduce the database memory as well, and
the footprint by that, the SD index tables will be eliminated as far as possible.
So this replacement is being done by using ABAP managed CDS views, basically
following the idea of joining all contributing tables
and providing an equivalent data representation to the ABAP layer. The following index
tables actually will be replaced: Sales Index: Order Items by Material;
Sales Index: Orders by Partner Function; SD Index: Delivery Items by Material; SD Index:
Deliveries by Partner Functions; SD Index: Billing Items per Material
and Sales Index: Bills by Partner Functions. You see there is a mouthfull that we are really
simplifying here. And as a result, there are quantifiable values and of course IT
conclusions that we need to draw from that.

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With the transformative capabilities and innovations delivered by S/4HANA, modern

enterprises are equipped to adopt to "market to the segment of one,
which Bert has nicely explained why we need to do it, and we need to do it in real time.
Enabling companies to handle the significantly higher numbers of business documents
and objects by their system, by their IT, is leading to the efficiency and effectiveness and
agility you have been talking about. And I think it is important to tie that to that framework
and have that included in your IT landscape. With all the new data sources and
information provided from various systems,
reduction of information distraction and well- designed exception handling mechanisms
are required. Seamlessly embedded into and using the advantages of a strong backend,
"no touch orders
and exception handling build upon real-time calculations and simulations and lead exactly
to those business outcomes and recommendations we have talked about before.
Everyday transactions can run without specific attention as low to zero touch activities.
What users really get is seamless technical, and also system and execution support
during the decision making process by the innovative IT solution. So intelligent, I would
say machine learning- based value coming from the system.
But next to the technical details, I think it is also important to look at the business process
view as well. What do you think, Bert? Absolutely. Because I think this is the most
important piece, right?
We want to do better business. So if we look into the business view, and this is where I
can see here a perfect comparison between how we did it in the traditional way,
how it has been done also in the last couple of years in the traditional way, and where we
are going, on the right side, with the new S/4 environment.
When looking at the business process view in detail multiple differences become obvious
between the traditional and the new one. Scattered and inaccurate customer data,
which you find on the left hand side, and also a collection of manual processes from
multiple non-integrated channels and information sources
are coming together on the left hand side. This makes a cross channel execution of
marketing processes and collection of personalized customer information a huge if not
impossible effort,
for most companies today, which is far away from real time. Because to consolidate all
that information and then create something out of it
by bringing it all together is absolutely not possible in the speed which we need in today's
digital economy. The lack of visibility into real marketing performance and lack of
opportunities
to make changes and adjustments within the processes lead to a low agility level for
companies.
It simply prevents them from creating an individual customer value proposition. S/4HANA
now enables these real-time and low-touch business process challenges.
With a one stop shop for personalized customer information, generated in real time and
also fully across all integrated processes and channels,
companies are equipped for seamless execution and orchestration of the marketing
processes throughout the entire customer journey from the beginning, so from the
prospect point of view,
towards the end, when you hopefully have a happy customer camping with your company.
At the core is an S/4 system that allows analyzing all information in real time.
By delivering this personalized experience to the customer, making real-time
recommendations and also detailed tracking of the performance
brings the value directly to where you need to have it, to stand out amongst your
competitors, and give you a competitive advantage compared to your competitors.What
do you think?

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00:22:36

I think that's on the mark. But if we go back to the IT view of market to a segment of one, I
think it is again important to highlight, to conclude with a detailed IT view,
because this use case lets us compare the capabilities and innovations between actually
a traditional system and also a traditional landscape, and the next generation which we
see with SAP S/4HANA.

00:22:50

So the IT process differences and the major difference to the traditional system is that the
IT processes that you see here in the backend are very sub-sequential and manually
handled.

00:23:03

With today's requirements for modern IT landscapes, the order quantity needs to be 1
piece, and the delivery time tends to be very very short.
So an order of the quantity of 1 piece has a major impact, as we stated before, on
business processes. And of course, thanks to S/4HANA, "no touch orders" are technically
supported already today.

00:23:12

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00:26:36

So many of the manual processes are only required when unforeseen problems happen
and occur. So the number of documents handled compared to a traditional landscape,
where we have many of them and we have them locked, actually, the posting of those
documents doesn't take place until the former documents are all posted.
This locking mechanism has been completely eliminated with SAP S/4HANA. This
actually technically enables the increased document throughput
material master and the related documents. This leads at the end to much more
customer-centricity, because blending of structured and unstructured data
from internal and external sources like sensors, payment information, purchase history,
social media, I can go on and on; that enables the companies to gain deeper
and more comprehensive insight and understanding of true customer value. So when I
look at the data model that we have created, it actually consists of a single table
with almost all required attributes and views to represent the data in the required business
perspective. And all of that in-memory. This leads to faster access to the relationships
between the documents
and to faster data evaluation of connected documents. The structure is given by a
combination of the existing material document header
and item table structure, a signed field for the changing quantity and value as well as a lot
of other attributes.
And the ability to adopt the landscape with S/4HANA, the market of segment of one, the
real-time contexts can be leveraged to collect data from various sources, as explained,
analyze those patterns and drive relevant engagements with known and unknown
contacts actually, which will develop a full context of individual customers for
individualized engagements at every stage.
So the technical adjustments and extensions of the landscape are possible while for
example a marketing campaign is running - not only the next day, as you stated it,
where you see how your campaign works out now. So let's have a look at the demo.
Hello everybody. Many name is Stefan Feickert. Today I want to show you a short demo
about the value case market to the segment of one.
Here I want to show you the last mile of this process to show how the marketing in a B2C
environment can look like:
That you can do the marketing not for a broad audience, it's really a marketing for the
single interaction, or the interaction to the single human,
and here to really get their requirements and what they want on your products, and then
you can react automatically.
I want to show this with two solutions of the S/4HANA family, the one this is hybris
Commerce, the web shop from hybris Commerce
and on the other side also hybris Marketing, which shows from the backend where you
can add all these campaigns, the segmentation, and so on.

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00:31:36
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00:31:59

In my demo I will show you a so-called re- targetting campaign. And this campaign, we will
have in the web shop a user, that's me, who is interested in cameras,
and he will use the shopping cart to compare products and then he will go out of the
system.
And with this re-targetting campaign, the user automatically gets the information and gets
the e-mail from the system that something happens
because he hasn't checked out the shopping cart completely. And then you can also think
about offering some rebates, like
like lower delivery costs or no delivery costs, for example. Then I would like to start the
demo. Here you can see I'm in the web shop we created,
and the first thing I will do is sign in to this web shop. And this means now my customer is
like also registered for the hybris Marketing solution,
and now my search and everything will be tracked and can be used for campaigns and
further actions. What I will do right now, I will go into the digital cameras, and I'm
interested in SLR cameras.
Go into it, and then I take here the first one, and check the details of the camera and I will
add this camera to my cart.
This is the first camera. And what I also want to do, I have the shopping cart open, but I
will now just go out.
And this event will now be triggered in the Marketing solution, that there is an action, that
there is an event happening which we can react on.
The next thing I would do is, I would go also to the compact cameras because, for
example, someone from my family also wants to do some pictures,
and I would also add this to my cart. And I would check out this. But now something, you
might also know this, something is happening
and I have no time now to spend. I also have to think a little bit about the 700 dollars to
spend, and then I would say just here, go out, and say OK, let's use the shopping cart
tomorrow.
What's now happening here in hybris Marketing is that this re-targetting campaign will now
take action and will send me an e-mail. This I will show you.
And here is this e-mail. One item from the shopping cart is displayed. Dear Stefan
Feickert, also a personalization, and with all the information that you can call us,
and that there is also something you can additionally offer here. And this comes out of my
needs, and I really looked at these cameras,
and we can really target to this segment of one. I will now go into the backend system to
show you how this was set up
and also the insights of me as a customer. What I can do now with the system, I will first
start to go into this campaign.
And here you have a 360 degree view of this campaign. And the most important one here
is the automation that we set up,
that you have here this Shopping Cart Abandonned. This is this event. And then we have
the re-targetting e-mail. This is a template you can create
with all the information, and you see here the cameras and the names, and all the
information is now rendered in this e-mail address to have this personalization.
Besides this campaign I also want to show you now the insights of the customer Stefan
Feickert from this web shop. And here you see, this is also very interesting to see first my
personal data,
and then you can also see here the flags; what I committed or I accepted that you can use
this for marketing. For example, my phone number:
I said in the web shop that I don't want you to use this for marketing, but my Commerce
Consumer e-mail and e-mail address, it's okay.
But also don't use my address data. And what we also have here, however, this is not
maintained for my user, is that you have the integration to ERP,

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where also business data like the customer number are displayed. And besides this, also
in the system you can see here the interactions,
and also what I have searched for. I searched, I had a Canon, a Samsung, and a Sony,
and these are like the cameras I have.
And then we have here all the information of the interaction I have. And then also here on
this side there are some e-mails. This is the event.
The shopping cart was abandonned. And all the interaction for this customer on one
screen. And what is also very interesting, that the items I had in the shopping cart are
displayed,
which I can use if the automatic e-mail was not really targetting, you can also have here
the history of what I have in my shopping cart.
Okay. This was the demo I wanted to show you. And I hope it shows very well how we
can use the big data, which you can imagine,
for such a shop floor, and also with the power of HANA how to interact with this customer
and can use the speed of this big data,
the big data handling here to really target to the segment of one. Thank you.

00:33:50

Welcome back. Last but not least, make sure you don't miss the key takeaways for this
important use case. You'll find additional exciting content to this specific use case
attached.

00:34:04

We are looking forward to your feedback. So you're absolutely welcome to read the
related use case blogs, where available, on our SCN network.
Also, check out the SAP S/4HANA SCN Community in general, where many experts are
contributing and adding information for this area.
Find a link to the S/4HANA Trials and Cookbook. This is also very important. Any further
details are found with the SAP S/4HANA trainings.
There is also a link to the S/4HANA Trials, so if relevant for this use case, you can also
find more information and experience it yourself there.
Check if related demos are available in general on the SAP openSAP repository, and also
check as a recommendation the Business Scenario Recommendation engine,
where you find further insights into these themes. Explore also the SAP S/4HANA Journey
Map online.
So let's take action, because I think it is now up to you, because also we want you to
provide us with ratings on the relevance of exactly this use case for your business.
Give us feedback. Share your use cases based on comparable SAP S/4HANA design
principles, because this is also an exemplar. Which other use cases would make a
difference to you and your business?

00:34:15
00:34:27
00:34:39
00:34:49
00:35:00
00:35:09
00:35:20

00:35:33
00:35:44

Let us know if you are interested in co-innovating with us on an innovative use case. Well,
with this, I think we conclude the market to a segment of one use case.
Join us next time for unit 4 of the first week. Thank you, and goodbye.Thanks. Bye bye.

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Week 1 Unit 4
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00:00:55
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00:01:25

Hello again, and welcome to the first week of the SAP S/4HANA Use Cases course, Unit
4 - Real-Time Inventory Management.
Today, we would like to show our use case - real-time inventory management to you,
again both from a business and an IT perspective.
Sven. Yes, happy to co-host this session again with Bert. So let me start this time actually
with the business perspective.
You're welcome.So what is real-time inventory management delivering as value and why
do we need it? The challenge of inventory management was ever since to have precisely
the amount available
for providing customers with the right products in the right time, thus reducing storage
costs to an absolute minimum.
These targets were, even with classical processes that we're going to see a little bit later
and IT landscapes, possible to achieve. But with the rise of new technology triggers,
expectations of the customer and consumer will rise accordingly. With the "segment of
one that we have heard earlier, with that approach,
that where every customer is seen as an individual, classical inventory planning cannot
keep up with flexible accommodations, or custom configurations which customers expect
these days.

00:01:37

So we already discussed some of those aspects in the previous section, actually. So the
slow update cycles lead to outdated information as new orders fly in constantly at high
speed.

00:01:50

So the limited inventory visibility increases error rate and supply shortages, which will
affect available-to-promise, and of course to the customers at the end,
that can lead to customer churn. So let's discuss those business perspectives in a little bit
more detail.
Real-time inventory management powered by SAP S/4HANA enables organizations to
harmonize warehouse inventories, demand and supply, as well as using all data and
analyses from a companywide fundament.

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With real-time processing of inventory postings and inventory values rather than
overnight, warehouse space can be reduced significantly, so we use less space,
and what it will lead to is a higher accuracy of that inventory. It will increase the turnover
and it will reduce the days of items in stock.
So additionally, inventory management is in a position to take all production locations and
external supply chains into account and can manage the changing demand
for smaller lot sizes passing through the entire logistics operations with all involved
parties. It's indisputable that the safety buffer in the warehouse is unavoidable.
However, simulations and evaluations help managing capacities and quantities in a much
more needs-based way than before. Real-time inventory information, including early error
detection creates precise where- used information, per unit, by the way.
And what are some of the business innovations delivered? So with an ultimate "unit of
one, customers not only get the products of their choice,
but can change their order last minute before items reach the packing station. And this is
not only in B2C - same expectations we see now rising in B2B scenarios.
So rethinking the way supply chain is controlled from an inventory perspective is a
necessity. The innovations delivered within real-time inventory management enable a
single item to be posted
in the system the same second it is removed from the warehouse and used for an order.
Seamless handling of the reduced batch sizes gives customers more flexibility
and ensures their satisfaction while shopping, because their competitor, or your
competitor, is just a mouse-click away. Only with such transparency can companies cater
to customer wishes at very short notice.

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This increases inventory turnover, satisfies customers, and finally ensures their loyalty.
But there is of course quantifiable value as well. The ability to change the lot size to "one

00:04:46

by real-time inventory management, thus capturing the lowest level of granularity in

inventory stock keeping, is the result. This is very important. For example, a supplier in the
healthcare industry

00:05:00

achieved more than 1400% faster operational reporting in inventory management. And we
think this says it all.
In manufacturing it's very often the case that there is an offset between what's happening
physically on the shop floor and what is depicted in the IT system,
meaning that for some production lines we have at least half day offset in terms of
inventory accuracy. With S/4HANA we can do this as a lot size of 1 production
for every end product and at every point in time, and we have always strived for this exact
inventory information.
And it's not enough to wait until night to synchronize stocks. Quantifiable values for the
warehouse are that inventory data is always up-to-date,
so safety-stock levels due to increased transparency can be reduced. And this is cash. So
what is then the business conclusion that we see?
What is the impact on your enterprise by real- time inventory management from a
business point of view based on the value levers that we introduced earlier,
like efficiency, effectiveness, and ability? The efficiency in your inventory management
activities increases rapidly
and turns to your company's advantage. Now it is possible to improve and increase
inventory management activities with the same customer base
due to the seamless handling of smaller size batches, and of course reduce the safety
stock levels. With the constantly rising importance of the "segment of one" or "unit of one,

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00:08:28

customers not only can get the products of their choice, but they can change their order
last minute before the items reach the packing station.
Therefore it is a must to have real-time inventory data connected to the high-volume
processing to effectively transform your business and cater to those digital worlds.
Being agile across the overall inventory management process cycle due to a higher
granular analysis and planning, early error detection,
and of course, that we see this improved order fulfillment will give your company the ability
to transform at the pace of the market.
So with that said looking at the business, why don't I take a cup of coffee while you go into
the technical weeds. Is this part of the inventory management? Of course it is.Okay,
excellent.
I think this was very comprehensive and has already taken a couple of IT perspectives up
front. But it's important to look at the top capabilities of the IT perspective,
the innovations, and also the values which we want to drive further from an IT perspective.
With the "segment of one approach we have just seen that market places are turning
upside down
and require that all data should be stored at the highest possible level of granularity, (the
level of greatest detail). And this is in contrast, from an IT perspective,
to the prevailing philosophy in most enterprise concepts, that data should be stored in the
application to ensure maximum performance.
Unfortunately, multiple applications often leverage the same information, as we also see
here in inventory management,
and require different levels of detail. This results in high redundancy and software
complexity around managing the consistency between multiple aggregate tables and
source data,

19

00:08:43
00:08:55
00:09:07

00:09:23
00:09:33
00:09:45
00:09:56
00:10:07
00:10:16
00:10:25
00:10:36
00:10:48

00:11:04
00:11:13
00:11:27
00:11:37
00:11:51
00:12:03
00:12:13
00:12:23
00:12:37
00:12:46
00:12:59
00:13:13

00:13:28

especially for this use case. With real-time inventory management the existing application
and master data can be flexibly extended by additional stock types
without a definition of new and redundant stock aggregate tables, because we keep
everything in one place and store it on the highest granular level.
With S/4, a new data model will be introduced to address exactly these capabilities. The
data model does not take into account the concepts for relational database designs from
the past,
which refer to the separation of entities in different tables. Instead, what we've done here
in that model is to leverage the advantage
of the in-memory columnar-based data tables to reduce the data footprint dramatically, at
the same time when we increase the level of granularity.
The new data model is a single new table containing the highest consistency data from
the business transactions as well as for all the reports.
You've heard about that term I think a couple of times, merging OLAP and OLTP, the
online analytical processing and the online transactional processing
into one system together. The new data model will allow high performance evaluations of
inventory key figures
directly based on the material document data. High resolution time series and also
complex stock evaluations
will be supported by this new concept. And this is also quantifiable. There is no more
check on duplicates from the database,
therefore all updates on inventory data can be done in real time. Given the incredible
speed of this new procedure provided by S/4
and the ability to process the increasing number of smaller batch sizes, all aggregates
required by the application can now be computed from one single source of data on-thefly.
This provides not only better performance and much faster than before, and also
dramatically decreased code complexity.
It also reduces the number of aggregate tables from former 26 tables to 1 new, central
table in which we can store all information and make system processing,
and also maintenance, from an IT perspective, a lot easier for all customers leveraging
those simplification tables.
The document data as of today can be stored in and retrieved from a simple projection
view. The evaluation can be done in the database by incorporating few attributes
and calculating usually across just one column. So for an IT conclusion, if we look at the
IT impact on your enterprise
from the value levers perspective: Efficiency, effectiveness, and agility, as you already
mentioned, Sven, for the business side of the house,
we come to the following estimation for the real-time inventory management. Effective
inventory management is founded on the principle that the warehouse operator
must be able to satisfy all demands for material out of inventory while keeping inventory
as up-to-date as possible and as low as possible.
Today, this is what we have achieved with S/4. Due to the reduced memory footprint and
elimination of aggregate tables,
it is also possible to improve and increase the data and transactional throughput for the
same customer and run inventory management activities super effectively,
and also increase the agility at the same time. And we can now adapt and react quickly to
the increasing inventory changes and to any update to come.
Which means eliminating the risk of losing sales, while having too much inventory, to save
costs at the same time. This is our IT perspective, and I would then see how we're going
forward into that flow, Sven.
Yes, especially as I'm getting close to the safety stock of my coffee cup here. Let me add
the business process view, though.

20

00:13:36
00:13:47
00:13:58
00:14:08

00:14:21
00:14:32
00:14:40
00:14:53
00:15:07
00:15:19

00:15:30
00:15:38

So to fulfill the capabilities and objectives described, inventory management systems

need characteristics that allow companies to keep material secure and identified,
and functions that facilitate the satisfaction of demand actually in real time. With today's
traditional systems, which you see here on the left, it is quite a difficult objective to fulfil
with the limitations that we had in place and still have, which is slow and manual update
processes based on the decentralized and outdated data.
It is difficult to accommodate additional or custom configuration to enable flexible
inventory handling. And last but not least, a very low visibility and early error detection rate
lead to manual inventory update processes and very lengthy inventory runs. So with the
S/4HANA real-time inventory management
we are tackling these challenges very successfully. In fact, real-time inventory
management can deliver massive simplifications
in areas like precise where-used information per unit, the ability to change the lot size to
one, and the ad-hoc data correction and actualization.
Along with innovative solutions for real-time inventory information handling, early error
detection, or capturing the lowest level of granularity in the exact inventory stock.
So this powerful combination can empower companies to reduce business process
complexity and rapidly transform their inventory management from planning to execution.
So from a business value perspective, if we look at that, this means that real-time
inventory management creates unique opportunities to reinvent inventory-related business
processes
throughout the companies and throughout the enterprise, and differentiates you and the
people using it to drive those new revenues
and actually profits. But why don't we go a little bit deeper on the IT side? What do you
think? Absolutely, because I think you need a foundation for all these nice business
benefits.

00:15:50

So to enable these exciting features in the demo, we have done multiple technical
improvements and innovations. What exactly has been achieved compared to traditional
system landscapes?

00:16:06

For this, let us take a look at the criteria considering the technical areas with the most
improvements and impacts. With complex, sequential and very manual processes it is
very difficult

00:16:20

to drive effective inventory planning and execution. Using the powerful S/4HANA technical
layer, new processes, simulations and business recommendations
have been designed, developed and also transformed into the system to enrich the
existing processes to the new simplicity level.
The new data model consists of a single table with almost all required attributes and views
to represent the data in the required business perspective.
The structure is given by a combination of the existing material document header and item
table structure, a signed field for the changing quantity
and value as well as a lot of other further attributes. With changed database architecture,
the locking logic has been improved,
and now, in the new world, allows parallel data handling and updates across the
application. Elimination of redundant data storage leads to the reduced memory footprint,

00:16:31
00:16:41
00:16:54
00:17:06
00:17:18

00:17:33
00:17:43
00:17:56

which supports high-performing OLTP business transactions to support performance

improvements during the posting procedure,
and at the same time, high-performing OLAP reporting. Thanks to the mixture of new data
model, reduced memory footprint,
and simplified processes, the inventory runs can now be processed from a technical
perspective much more quicker, which is always a win from the IT point of view,

21

00:18:09

because you simply reduce risks and the chance to make mistakes somewhere. All
aggregates required by any application can now be computed from the source data onthe-fly,

00:18:24

providing the same or better performance as before and dramatically decreasing code
complexity, which also makes it again easier to maintain the system.
And this together is something where we see that the IT perspective is perfectly served by
the new real-time inventory management. What do you think?
Great. It would just be great to look at the demo now, I think. That's a good point.

00:18:35
00:18:45
00:18:54

Hello everyone. My name is Katrin Oswald, and I'm part of the Core Innovation Team of
SAP S/4HANA. In the next few minutes I would like to show you how a real-time inventory
management looks like.

00:19:05

So the scenario is the following: I am Martin Hoff, and I work in an automotive company in
the U.S. I'm a plant manager for the plant in Detroit, and therefore responsible that 1,500
cars

00:19:17

leave my plant every day. I just got a call from my CFO, who told me that the capital tie-up
in my plant is significantly higher than those in the other plants,
and that I should please check out what's going on there and improve the situation. So I
launch my Fiori launchpad and I open my Inventory Turnover Analysis.
I selected only the A Materials for my plant. I selected of course my plant, P012, which is
the one in Detroit, and the period Q2-2015.
On the Y-axis you can see the inventory turnover, which is the ratio that shows how often
the material is sold and replaced in a certain period. On the X- axis you can see the
average inventory value.

00:19:26
00:19:38
00:19:49

00:20:01

And directly via color coding, I can see which is the critical material, which is the 4 red
dots here. It is a material that has a very low inventory turnover, but a very high inventory
value,

00:20:13

which basically means that these are shelf- warmers, and also very good candidates to
improve my overall inventory situation. So let's find out more details about these materials
by just marking them and clicking on Open.

00:20:29

For my exhaust systems, for example, I can see that the inventory turnover value is only
which is pretty low, and that the average inventory value is 1.3 million.
I also get a bar chart here, which shows me my inventories. With the blue bar, I can see
my supply, which is weekly,
and my demand, in green, which is evenly distributed over the week. As it is a real-time
inventory management, the digital inventory displayed equals the physical inventory on
site.

00:20:41
00:20:50

00:21:03
00:21:11
00:21:21
00:21:32

00:21:44
00:21:57

00:22:16

In the yellow line I can see my average inventory, and I can also realize that my safety
stock is pretty high.
So what's the next thing I want to see? It's the supplier for this material, because it's a
very good candidate for introducing demand-driven supply.
So just by scrolling down, I directly get the supplier data for this material. It's called Sedna
Automotive, it's only 56 miles away from my plant,
and it has a very high supplier evaluation score. This is data I get from my purchasers, for
example, or from my MRP planners, and I know that the accuracy by quantity and time is
very high.
So this material, because of this supplier, is very good to introduce maybe just-in-time or
just-in-sequence supply. So I'll check out with my colleagues via SAP Jam
if we can introduce just-in-time or just-in- sequence delivery for this material. I select the
group of my colleagues and ask them "Check on just-in-time or just-in- sequence
delivery".
So I send this message to my colleagues, and we should maybe now check if the situation
improved in Q3. So we take a short leap in time and check in Q3 the situation with this
material.

22

00:22:29
00:22:43
00:22:56

00:23:07
00:23:22
00:23:33
00:23:46
00:23:55
00:24:04
00:24:14

So I saved this material as a tile on my launchpad and can directly drill into it. I now can
directly see that the inventory turnover has improved significantly up to 75,
and that the average inventory value reduced to 550,000 USD, which is nearly an 800,000
dollar saving.
And I can see here on the very first glimpse that my inventory value decreased
significantly in this chart. So I have two steps in there, and let's see in detail what's going
on there.
So when I scroll forward, I can see that in July, we introduced a daily supply. But there is a
second step in this diagram, so let's scroll even further.
And as the daily supply worked out pretty well, we also introduced just-in-sequence
delivery, so sub-daily delivery, starting from August.
So actually you could now see that via real- time inventory management we have
integrated data from logistics and finance, we have a very intuitive UI,
and good collaboration tools. Thank you very much. So I hope you liked the demo, and
not because we showed it,
but because of the content that was actually in there. But last but not least, let's make sure
you don't miss the key takeaways for this use case.
You'll find additional exciting content to the specific use cases overall, and we're looking
forward to your feedback. So really, read those blogs that we have,
go into the SCN Community, discuss with us, and take the openSAP platform to give us
your feedback. And of course, don't forget: Go to the S/4HANA Cookbook. There you'll
find all the technical details on how to get there.

00:24:29

Attend some of those S/4HANA trainings that will really get you deep, depending on your
role, and last but not least, try out the S/4HANA trials, because they can be relevant
exactly for this use case.

00:24:42

Check more demos that are available on the openSAP repository, and of course, check
also the Business Scenario Recommendations, because here you get more insights.
There is also an online S/4HANA Journey Map, which we would like to motivate you to
look into. So let's take action. Provide us with a rating, as before.
What is the relevance of this use case for your business? And share your use cases
based on comparable design principles, because this is one of the keys when we look at
materials management and operations- related topics.

00:24:53
00:25:07

00:25:20
00:25:27
00:25:38

So let us know if you're interested in co- innovating with us, going further on such
innovative use cases.
So with this, given the fact that I'm out of stock with my coffee cup, I need a refill, we
conclude the detailed view on the retail inventory management use case.
Join us next time, when we'll be talking about the accelerated material requirements
planning use case. Thank you very much.Thanks and bye bye.

23

Week 1 Unit 5
00:00:16
00:00:25
00:00:36
00:00:49
00:00:58
00:01:07

00:01:25
00:01:39
00:01:49
00:02:00
00:02:12
00:02:22
00:02:33
00:02:43
00:02:54
00:03:06
00:03:17
00:03:30
00:03:46

00:04:02
00:04:15
00:04:27
00:04:41
00:04:52

Hello and welcome to Week 1 Unit 5. After discussing Real-Time Inventory Management
in the last unit, we will now go on
and talk about Accelerated Material Requirements Planning in SAP S/4HANA. Bert.Oh,
long time no see! Alright. Oh, hang on Sven,
I think we need to change.Oh, wrong side. Let's do that. Alright. Also welcome from my
side. Nowadays we experience the impact of the digital transformation
and you heard about that now a couple of times. But today we really experience it almost
on every single aspect of our daily life and work.
And this is dramatically changing the expectations and behavior of consumers who rather
search for solutions than products.
The result is that businesses regardless of industry find themselves in a B2B2C market
already today; even those businesses which have been acting in a classical B2B market
for decades.
To start with what we call the "minimal viable scope, most companies are entering the
digital economy via an investment into the customer- facing side.
We call that the digital store front. Most businesses underestimate the impact of the digital
transformation on the entire value chain
back end of a company down to the suppliers. The promise made at the digital store front
needs to be kept.
This is why we would like to drive attention to the logistic-related areas of the companies
and connect the dots between front and back end.
So thanks to the capabilities of an accelerated material requirements planning it is now
possible to work on real-time data also here,
for example on the actual data from inventory or production requirements. Selection
criteria for an MRP run are much more granular
so that you can specify your search on the fly and in depth. As a result you will drive much
better decisions for your company.
The system will help the user to identify and focus on the most critical tasks, which have
the highest business impact rather than on the routine business.
This is realized by redesigning screens, which drives users to the exceptions, and zero
attention for the rest of the business.
With routing the most critical and important business cases to the MRP Planner, the
business supports decision finding and taking actions
thanks to the system-based simulations and also to the business recommendations. Last
but not least, the new Sales & Operations Planning processes are much quicker
due to the real-time MRP runs underneath that planning procedure. So the new
accelerated MRP can run and execute as frequently as required.
Today's MRP run duration is only a fraction, so a tiny little part compared to the one of the
MRP run from the past. It is absolutely clear that the system-based business
recommendations
enable innovative solution finding and also do seamless decision making. A new rolebased cockpit, which you find for the MRP Planner, enables the user
also for a much, much higher productivity. Real-time insights into inventory and production
requirements decrease the safety stock
and will result in cost savings directly from that new way of executing a material
requirements planning process. Furthermore the risk of revenue losses due to stock-outs
or increased stocks that eat the profitability of your company will be reduced significantly.
The MRP controller has a real-time access to the production requirements,
the stocks, and is also able to identify and solve a shortage faster than ever before. And
this transforms and also improves the delivery capabilities dramatically for the new digital
economy.

24

00:05:09
00:05:19
00:05:29
00:05:39
00:05:51
00:06:02
00:06:11
00:06:22
00:06:34
00:06:47
00:06:58
00:07:10

00:07:24
00:07:35
00:07:42

00:07:53
00:08:04
00:08:14
00:08:24
00:08:33

So if we look into the quantifiable values here, we see that the capabilities and innovation
lead to a true value for the entire company.
The new capabilities and innovations will result in an improved on-time delivery and lower
inventory write offs. Furthermore the inventory turnover,
which is a very important KPI for all industries with low margins like the retail industry, for
example, can be increased significantly.
And the ability to redesign the overall Sales and Operations planning process and allow
much shorter cycles than we do today is a huge win for most organizations
and help companies also to move towards real time. So for a business conclusion, before
I then hand over to Sven to look into the IT perspective,
we conclude that the business perspective on the topic lets us analyze the impact of the
new capabilities and innovations from a business point of view
on the meanwhile well-known three levers: efficiency, effectiveness, and agility. There is
no doubt that efficiency is increased rapidly.
For example, now it is possible to improve on-time delivery at a reduced safety stock. Also
effectiveness is increased by the capabilities of the new MRP system in SAP S/4HANA.
The digital economy requires an MRP run to be executed more often than in the past.
Traditional systems opposed to SAP S/4HANA can't fulfill these high demands today.
We also see a need to better align central purchasing structures by having shortages
bundled in a better way than we can do today.
A redesign of MRP now allows to rethink that for the entire company, and also holdings,
which have run on local MRP runs in the past.
And the third value lever is agility, which is also clearly improved through the SAP S/4 new
and advanced MRP. And agility means to adapt fast to changes and SAP S/4HANA
absolutely enables that
for the MRP Controller and the entire organization. If you dont have to rely on old
analyses and aggregates in between, you are exactly hitting that target.
So what do you think, Sven? How can we achieve that from an IT perspective? So again, I
could not stress it more; if we don't know why and what we get out of it,
it's meaningless to talk about technology. But in that context, so when from a business
view the capabilities and innovations for an MRP controller result in that quantifiable value
and impact,
we of course need those three value levers. Now we want to have a deeper look what
changes with the new MRP system in SAP S/4HANA for the IT.
And of course, then let's talk about those top capabilities that we see. There are again, in
time from an IT perspective, looking at it,
important things that are changing, and important things that we can now leverage. So let
me mention the first. Process and data redundancies are eliminated
because with our new data model they are just not necessary any more. Full stop. We
talked about that before, but now, the number of transactions are reduced
because now you can streamline the processes. And multiple transactional screens are
replaced by one central cockpit, which actually provides you with that intelligence and
real-timeness of the system.

00:08:46

The tables as well are extremely simplified and the overall number of tables is reduced much less complexity. Transactions and analytics can be executed in the same single
system. Always important.

00:09:01

The technical innovations enable single source of truth, so redundant-free data down to
the document level and less coding actually to maintain.
The next generation innovation is merging analytical and transactional data into one
system. And thanks to SAP HANA as the foundation,
the analytical and transactional data can be processed now in that real-time manner, and
actually in one single system. And I mean, all data. As the consequence of the first
innovation

00:09:12
00:09:20

25

00:09:32

we see the system size can be reduced. A smaller system, a smaller footprint is easier to
handle. Just efforts for system back-ups, validation, testing, upgrade, whatever have you,

00:09:43

in a smaller system opposed to the bigger one, and no big machines needed.
Furthermore, less roundtrips and actually also bandwidth are required.
So from a technical point of view it already starts there, because the view is now also
possible for multinational companies to execute their MRP run centrally.
And we have nice showcases for that. But the quantifiable value is important because all
those capabilities and innovation leads to a real quantifiable value for modern enterprises.

00:09:52
00:10:04
00:10:16

The data footprint, as mentioned, could be reduced up to the factor of seventy. Seven
zero. Furthermore, the overall system performance will be increased up to the factor of 10
to 20.

00:10:29

And to summarize actually now the IT view on this topic we're discussing with a use case
today, let us analyze the impact of the new capabilities and innovations on the three value
levers that we have introduced:

00:10:43

efficiency, effectiveness, and agility. Efficiency is increased considerably. As an example it

is now possible to run
and execute higher amount of processes with a smaller system. Look at the effectiveness
of the system, with merged OLAP and OLTP into one system
makes multiple innovative use cases possible. The third layer of value lever actually is
agility.
So S/4HANA also impacts the agility of an MRP system from a technical point of view in a
significant way. Through the smaller system size it is now possible to adopt and integrate
changes and updates much, much quicker.

00:10:52
00:11:01
00:11:08

00:11:23
00:11:32
00:11:39

00:11:51
00:12:02
00:12:13
00:12:25

00:12:38
00:12:49

00:13:05
00:13:18
00:13:32

And factor ten to twenty is a lot, isn't it? It is. This is really huge. So if we look at the
processes,
and here's the business process overview with the traditional system on the left side and
the SAP S/4HANA on the right side.
You can see immediately that the process excellence is significantly improving. Typical
material requirements planning processes are quite long and complex in traditional
systems.
It took some time in the past, so on average between four and eight hours for an MRP
run. As a result, planers often worked on old versions and printed documents.
So typically what you have, you do your MRP run, and then you print out on your MMO4
the result list of the MRP run to make sure you have a hard copy on which you work,
placing it next to your desk at your workplace. And all these documents have some
problems, because you do not see the result
or you do not see the need immediately, or the demand which might change from the last
copy which you did. So to do so, you need to release required documents within the SAP
ERP Demand Management
and update them also frequently. And then it gets complicated. The data from different
sources for data preparation and batch processing is required.
Afterwards, when you look at the processes and how we composed that all together, the
system runs a long term MRP simulation. Often, only parts of the MRP run are executed
to increase the speed of an isolated simulation in the past world.
These steps take simply too long to run real time planning. As a result, decisions are
based on outdated data or, as I mentioned before, even on old printed versions.
The forecast accuracy and the promise date attainment decrease, while risks for out of
stock situations significantly increase while we're doing that.
Overall, the classical MRP runs lead to a very batch-orientated execution with negative
impact on process excellence. If we look now on the MRP processes as you can see it
here on the right side,

26

00:13:47
00:13:59
00:14:12

we notice instantly the processes are extremely simplified and require less steps from
planning to execution. Sven mentioned a factor ten to twenty.
Redundant batch processes, indices, and also aggregates are fully eliminated. Also, the
whole data is stored and processed in one single database,
in our S/4HANA in-memory database. And this is all composing together to make sure
that the process is significantly increasing from left to right to that factor as mentioned
already.

00:14:25

I think that that picture actually is telling, because so far, we had the same processes and
we made them faster, a value already. But I think it's really about the change of the
business processes at the end.

00:14:38

Maybe nevertheless, let's look into a little bit more also of the IT perspective what we get
with S/4HANA. So we explained how the work of an MRP controller gets reinvented
and the impact of simplicity to solve complex problems gets obvious with S/4HANA. The
IT innovations enable use cases like this that we presented today
and are supporting the system change with a lot compared to traditional systems. The first
category is the effort for the IT departments actually,
to get the analytical reports to the end users, which are needed at the end. In traditional
systems, transactional and analytical data were separated in different instances.
To generate a report, an MRP controller had to run multiple sub-sequential and batchoriented steps. We saw that in the process before. With SAP S/4HANA all data is merged
into one system.

00:14:50
00:15:01
00:15:10
00:15:21

00:15:33

As a consequence, it is a lot easier to create and adopt the reports for any user demand
very flexibly. The next classification we selected to compare is actually the required
storage space.

00:15:47

System aggregations, indices, and data duplication used to create a huge data footprint,
up to the gigabytes people talk about.
With S/4HANA all aggregations, indices, and data duplication are eliminated. Every data
request happens on the document level. I repeat: on the document level.
So let us now compare the simplicity of the processes. We are all familiar with the
sequential and complex processes, which require multiple roundtrips and enormous
bandwidth.

00:15:56
00:16:06

00:16:16

In S/4HANA, those actually very interesting processes are extremely simplified and
require less roundtrips and bandwidth. Flexible and parallel process execution is the
reality today.

00:16:30

While in traditional systems MRP runs are executed on a weekly or daily base, in best
case maybe overnight, with S/4HANA an MRP run can be done as often as required.
Not everyone needs sub-second, but here you can decide what makes business sense.
Now complex and redundant data, aggregate tables, and custom build lines of code
demand a huge effort to maintain.

00:16:41

00:16:52
00:17:02

We all know that. We live in the world of that set code. Due to the eliminated data
duplication in S/4HANA, code maintaining efforts decrease a lot.
So typically, the IT departments focus on data preparation, maintenance, and other nonvalue added tasks. So most of the time and energy are invested to just keep the lights on
and the complex city of the systems under control.

00:17:17

So with S/4HANA, data preparation and the effort to maintain it is reduced dramatically.
The IT department, the experts, has more bandwidth to serve the internal and external
customers when changes occur. And they will.

00:17:30

So fully equipped with S/4HANA, execution of an MRP run in real time, we firmly believe,
will become the standard. So now, let's look at the demo.
Hello everybody. My name is Stefan Feickert. I'm here today to show you one of the key
innovations for S/4HANA, and it's the material requirements planning,
the accelerated material requirements planning. And here I want to show you a real demo
we also reviewed with our customer, which is a real case,

00:17:43
00:17:55

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00:18:19

00:18:31
00:18:41
00:18:57
00:19:11

00:19:29
00:19:43

and shows also very good the key elements of material requirements planning. This is one
thing that you really have. A sub- daily MRP run.
You can do it sub-daily, the MRP run. You work on accurate inventory data, where you
have all the accurate data: what is your inventory, what are your material postings, and so
on.
And the next thing is that you really concentrate on issues and not on data entry with
S/4HANA, because the data entry the system will do automatically,
and the guys who are sitting before the screen have to work on issues and have to have
prioritized work tasks. I will start the demo within production, and here is a scenario
that the production clerk has a problem, and he has to post 100 parts that got damanged.
After this posting, the MRP guy gets directly notified that he has to do something
because a released production order where the production starts tomorrow has now
missing parts. And I would like to show you how the system now guides the MRP planner
to solve this issue.
OK, let's start with the demo. I start here with a Manage Stock app. Here you have all the
information about the material, the plant, and the storage location.
And what happens now is that I have to put that 200 of these parts will get damaged,
because something happened on the production line, and I have to put this into the
system.

00:20:10

In the normal way now, an MRP planner would not notice it at all. And now, in the
S/4HANA system, what will happen now - the MRP planner here directly has an alert that
he has to do something

00:20:29

in the production order. Now I will go into the production order. And the production order,
you see here now for the production of this DVD player.
You have three main tabs here. The one thing is about the output, if all the parts are in the
production, then the components and the product schedule.
The first thing I would do now as the MRP planner, I would check the production plan.
Today we have Friday, 3 o'clock. I have two hours to work,
but the production will start next Monday. And if I don't want to spend my time in the office
at the weekend, I have to do something now. It's really important.
Because here you see, it starts really early in the morning. OK, let's see which
components are missing. Oh, I see here that 100 parts will be too late for this USB
adapter.

00:20:42
00:20:56
00:21:08
00:21:21

00:21:34
00:21:46
00:22:00
00:22:10
00:22:26

00:22:43
00:22:56

00:23:12
00:23:26

And, what I also could see here is that there is a customer order which has the same date
for the finishing of the production order.
There I also cannot wait and just postpone this production order. OK, let's see how the
system could help me here. I will go to the USB adapter
and now start the apps that should help me here now to get an insight. You see here, 100
parts are missing
and there is this order. Let's go into this order. And now the system here provides me the
help, the decision help on what I could do here.
And the best thing is to show this in this graphic. What you see here, on Monday 100
parts will come, but then I will reach my safety stock. I cannot start with the production
order.
Now I have something that I could do. The one thing is, I could reschedule this
transportation order. Let's see it in the system. OK, this could solve my problem.
But rescheduling the transportation order from the other plant might also be a lot of stress.
Perhaps I could also just increase this order, which will come on Monday morning.
OK, I would do this. I choose this decision. What I now also know, because it is 3 o'clock
on Friday evening,
if the truck is already loaded at this plant. For that, I have to call my colleague here, Hans
Mueller, via phone, and because I want to save the data and the proposal here,

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00:23:55

00:24:13
00:24:28
00:24:41
00:24:51
00:25:04
00:25:17

I would create a change request. Because Hans said that he has to check this with the
truck driver
and check the transportation order, to see if he can really increase this transportation
order by 100 parts. And I said OK. What will happen now, you see here that this issue is
processed,
and you can also see this information in the production order. What's now happening is
that Hans calls me back and he said that it's all OK, you can do it.
And now I go into my change request, and you see here that Hans Mueller, the change
request of this USB adapter,
and let's go into the change request details, and Hans told me on the telephone OK, you
can do it. That's not a problem. And what I do right now, I accept this change request,
and here you see also the simulation, and all the data from the proposal before. And this
is also an innovation for S/4HANA; we are not directly changing information,
but we keep the information, what we want to change, and collaborate with different
colleagues on this data and find the right solution. And now I could apply these changes.
And what you also see here for S/4HANA with a business task, we maintain different
orders in the system. Normally, you have to go into a transaction, do something, then
change a small field,

00:25:32

and you get 400 fields displayed, but now, with this business action, you can say OK, the
purchase order will be changed, and the system also directly changed the transportation
order.

00:25:44

And at the end, we will go back to our launchpad. You see we have the issue solved, and
all the guys are happy.
Only the truck driver has to spend five minutes to load these 100 parts. OK, this was the
end of my demo I wanted to show.
And I hope you enjoyed the demo and you can also realize that S/4HANA is really a new
business suite and really could help you to solve day-to-day problems in your business.
Thanks.

00:25:54
00:26:05

00:26:23
00:26:36

00:26:52
00:27:01
00:27:11

Well I think this was really a good way of seeing what happens in MRP. Now going to the
last part, before you run out of coffee and have a shortage on that.
Last but not least, it's really important again to look into the key takeaways which we've
compiled for you together. So also here, you're absolutely welcome to read the use caserelated blogs, also on SCN, which we made available.
General information, which we also put on the SCN Community together with our
colleagues in the organization, to have really a set of experts together.
Again, the link to the SAP Cookbook. The Cookbook is the most relevant piece if you
intend to move from wherever you are today into the new S/4 world.
Or maybe you come as a net new customer. The Cookbook is also helpful for you to
understand what are the next steps you have to take to really move into this new world of
SAP S/4.

00:27:22

Further information with the trials, where you can also find parts of the MRP process and
can experience it yourself, are available online, and you're absolutely welcome to go there
and experience it yourself,

00:27:33

as well as the business scenario recommendations and also our SAP Journey Map. But
what's the action? Sven, what's the action?
I think the action again is give us your feedback, tell us what is relevant to your business,
share and bring your ideas to those use cases.
I before this session did my coffee requirements planning so I didn't need one. Now it's
time, I think.
So you will give us feedback, and we're looking forward to understanding what other use
cases would make a difference to you.

00:27:42
00:27:51
00:27:57

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00:28:06

Or even for the use case we're talking about today, MRP: What is your experience with
the MRP processes today? And you can co-innovate on that one. So let us know what you
think.

00:28:18

Great! With this, let's conclude the detailed view of the Accelerated Material Requirements
Planning use case. You will join us next time, I'm pretty sure, when we will be talking to
you about the Advanced Sales Order Fulfillment use case.

00:28:31

Bye. Thanks a lot. Bye bye.

30

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