Justin Ashlock has spent over half of his more than 20-year career in technology with SAP America, joining SAP¿s Professional Services organization in 2005, serving eventually as a platinum consultant, and then as the practice engineer for hundreds of global SAP customer projects and engagements supporting over [...] billion in procurement and logistics activities and pursuits worldwide. In 2013, Justin began managing the SRM cloud practice for SAP North America, focusing on SAP Ariba, SAP S/4HANA Sourcing and Procurement, Materials Management, SAP Supplier Relationship Management (SRM), as well as SAP CLM and Sourcing. Since 2018, Justin also serves as the global practice lead for SAP¿s procurement solutions in parallel.

Justin is also a longtime SAP PRESS author, having published two books (SAP S/4HANA Sourcing and Procurement and SAP Ariba and SAP Fieldglass: Functionality and Implementation), as well as two procurement chapters as a contributing author in Discover SAP, 3rd edition and an e-Bite entitled Introducing Central Procurement for S/4HANA. Justin holds a Bachelor¿s Degree from the University of California, Berkeley, and a Master¿s Degree in Business Administration from the University of Notre Dame. He resides in Chicago with his wife and two young sons.

Third edition, updated and revised

... Foreword ... 21

... Preface ... 23

... Target Audience ... 24

... Objective ... 24

... Structure of This Book ... 24

... Acknowledgments ... 29

1 ... Introduction to Sourcing and Procurement ... 31

1.1 ... Sourcing and Procurement: From Basic to Strategic ... 31

1.2 ... Sourcing and Procurement from End to End ... 35

1.3 ... Procurement with SAP S/4HANA ... 40

1.4 ... Summary ... 49

2 ... Implementation Options ... 51

2.1 ... Implementation Overview ... 51

2.2 ... On-Premise SAP S/4HANA ... 60

2.3 ... SAP S/4HANA Cloud ... 69

2.4 ... SAP Ariba Central Procurement, Private Cloud Edition ... 71

2.5 ... Quick Start Approaches and Materials for SAP S/4HANA ... 74

2.6 ... Summary ... 82

3 ... Organizational Structure ... 83

3.1 ... SAP S/4HANA Enterprise Management Organization Objects ... 83

3.2 ... SAP S/4HANA Sourcing and Procurement¿Specific Organization Structure Objects ... 86

3.3 ... Company Code ... 87

3.4 ... Plants ... 90

3.5 ... Storage Locations and Warehouses ... 92

3.6 ... Purchasing Organizations ... 96

3.7 ... Purchasing Group Creation ... 100

3.8 ... Summary ... 100

4 ... Master Data ... 103

4.1 ... Material Masters and Material Groups ... 104

4.2 ... Batch Management and Serialization ... 115

4.3 ... SAP S/4HANA Business Partner Model ... 118

4.4 ... Summary ... 137

5 ... Operational Procurement ... 139

5.1 ... What Is Operational Procurement? ... 139

5.2 ... Self-Service Procurement ... 143

5.3 ... Requirements Processing in SAP S/4HANA Sourcing and Procurement ... 156

5.4 ... Purchase Order Processing ... 159

5.5 ... Service Purchasing and Service Confirmation ... 161

5.6 ... Purchase Order Collaboration ... 162

5.7 ... Configuring Operational Procurement ... 163

5.8 ... Summary ... 186

6 ... Automated and Direct Procurement ... 187

6.1 ... What Is Automated and Direct Procurement? ... 187

6.2 ... Materials Requirements Planning ... 190

6.3 ... Forecasting and Planning ... 200

6.4 ... Contract and Source Determination ... 207

6.5 ... Configuring Automated and Direct Procurement ... 225

6.6 ... Industry-Focused Solutions for Direct Procurement ... 231

6.7 ... Integration with SAP Ariba and SAP Business Network ... 234

6.8 ... Summary ... 235

7 ... Inventory Management ... 237

7.1 ... What Is Inventory Management? ... 238

7.2 ... Stock Management in SAP S/4HANA ... 241

7.3 ... Goods Movements ... 244

7.4 ... Physical Inventory ... 274

7.5 ... Reporting in Inventory Management ... 283

7.6 ... Configuring Inventory Management ... 307

7.7 ... Summary ... 326

8 ... Contract and Scheduling Agreement Management ... 327

8.1 ... What Is Contract and Scheduling Agreement Management? ... 328

8.2 ... Contract Consumption ... 335

8.3 ... Contract Reporting and Analytics ... 338

8.4 ... Configuration ... 343

8.5 ... Scheduling Agreement ... 349

8.6 ... Customizing Scheduling Agreements ... 355

8.7 ... Integrating with SAP Ariba Contracts ... 359

8.8 ... Summary ... 360

9 ... Enterprise Contract Management and Assembly ... 361

9.1 ... What Is Enterprise Contract Management and Assembly? ... 361

9.2 ... SAP Fiori Apps for Enterprise Contract Management Overview ... 363

9.3 ... Customizing Enterprise Contract Management ... 374

9.4 ... Summary ... 389

10 ... External Sourcing ... 391

10.1 ... Sourcing Strategies ... 391

10.2 ... Request for Quotation ... 393

10.3 ... SAP Fiori Apps for External Sourcing ... 395

10.4 ... Configuring Request for Quotation ... 404

10.5 ... Configuring Flexible Workflow ... 411

10.6 ... Integration with SAP Ariba ... 418

10.7 ... Summary ... 418

11 ... Product Sourcing ... 419

11.1 ... What Is Product Sourcing? ... 420

11.2 ... Product Sourcing ... 423

11.3 ... Procurement Planning ... 433

11.4 ... Product Sourcing with Enterprise Contract Management ... 437

11.5 ... Product Sourcing and Commodity Pricing Engine ... 439

11.6 ... Quotation Management and Supplier Quotations ... 440

11.7 ... Mass Price Update ... 441

11.8 ... External Collaboration with Suppliers ... 442

11.9 ... Configuration Product Sourcing ... 445

11.10 ... Summary ... 450

12 ... Invoice and Payables Management ... 451

12.1 ... What Are Invoice and Payables Management? ... 451

12.2 ... Invoice Processing ... 452

12.3 ... Accounts Payable ... 477

12.4 ... Invoice and Payables Management Analytics and Reporting ... 491

12.5 ... Configuring Invoice and Payables Management ... 504

12.6 ... Integrating SAP S/4HANA with SAP Invoice Management by OpenText ... 520

12.7 ... SAP Ariba Central Invoice Management for SAP S/4HANA Cloud ... 521

12.8 ... Taulia: Working Capital Management ... 522

12.9 ... Summary ... 524

13 ... Supplier Management ... 525

13.1 ... What Is Supplier Management? ... 525

13.2 ... Classification and Segmentation ... 530

13.3 ... Supplier Evaluation ... 534

13.4 ... Configuration ... 542

13.5 ... Summary ... 546

14 ... Centralized Procurement ... 547

14.1 ... What Is Centralized Procurement? ... 547

14.2 ... Central Requisitioning ... 552

14.3 ... Central Purchasing ... 554

14.4 ... Central Sourcing ... 558

14.5 ... Central Purchase Contracts ... 559

14.6 ... Central Analytics ... 561

14.7 ... Integration with SAP Ariba and SAP Business Network ... 566

14.8 ... Configuring SAP Ariba Central Procurement, Private Cloud Edition ... 568

14.9 ... Summary ... 592

15 ... Sourcing and Procurement Analytics ... 593

15.1 ... Spend Visibility ... 593

15.2 ... Contract Expiration ... 596

15.3 ... Sourcing ... 597

15.4 ... Supplier Performance ... 599

15.5 ... Reporting ... 602

15.6 ... Machine Learning and Artificial Intelligence ... 604

15.7 ... SAP Ariba Category Management ... 606

15.8 ... Configuration ... 607

15.9 ... Summary ... 614

16 ... Integrating SAP S/4HANA with SAP Signavio, SAP Ariba, SAP Business Network, and SAP Fieldglass ... 617

16.1 ... SAP Ariba and SAP Business Network Integration Projects and Connectivity Options ... 618

16.2 ... SAP Integration Suite, Managed Gateway for Spend Management and SAP Business Network ... 620

16.3 ... SAP Business Network Supply Chain Collaboration ... 640

16.4 ... SAP Business Network for Logistics ... 647

16.5 ... SAP Business Network for Asset Management ... 650

16.6 ... SAP Fieldglass ... 651

16.7 ... SAP SuccessFactors ... 656

16.8 ... SAP Signavio ... 658

16.9 ... Summary ... 660

17 ... Customizing the User Interface ... 661

17.1 ... User Interface Options in SAP S/4HANA ... 661

17.2 ... Configuring SAP Fiori ... 673

17.3 ... Customizing SAP Fiori ... 679

17.4 ... Summary ... 683

18 ... Conclusion ... 685

18.1 ... Future State of Procurement Solutions ... 688

18.2 ... Future State of the Procurement Supply Chain ... 689

... The Author ... 691

... Contributors ... 691

... Index ... 693