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New S/4HANA release focuses on supply chain capabilities

SAP S/4HANA 1610 upgrade has new supply chain capabilities, focuses on ease of use with SAP Fiori 2.0, and includes industry-specific functions for retail and oil and gas.

SAP S/4HANA 1610, the latest version of the on-premises business suite on SAP HANA, includes a series of supply...

chain capabilities. It also attempts to address ease-of-use issues with updates to the Fiori 2.0 user experience and includes specific functions for the retail and oil and gas industries.

"S/4HANA 1610 is the third on-premises release for S/4HANA and it's a major one because it covers the entire suite," said Sven Denecken, SAP's senior vice president of product management, co-innovation and packaging. "The first one we had a key focus on finance; with 1610, we are accelerating the innovation in key manufacturing areas like inventory, like MRP [material requirements planning], and ATP [available to promise] that are important in the changing industry. We're adding a significant amount of automation, intelligence based on machine learning concepts and with the openness of our platform as a service to each of those buckets."

Denecken said that S/4HANA 1610 allows customers to do everything they could with SAP Business Suite and much more because of S/4's in-memory computing and real-time abilities. The new release includes a series of new supply chain capabilities that take advantage of that and allow companies to manage complex multichannel supply chains.

"Supply chain functionality was also there in the last release 1511, but we are significantly enhancing them in every aspect of the supply chain starting from procurement going to classical SCM [supply chain management] functionality," Denecken said.

These S/4HANA 1610 supply chain capabilities include:

  • Advanced Available to Promise (aATP), which offers new enhanced capabilities to manage multiple-level supply allocations with real-time ATP order confirmation. Additionally, new back-order processing and interactive rescheduling methodology helps to ensure constrained supply is matched to demands based on customer priority.
  • Inventory Management, which provides simplified and highly scalable transaction management, with enhanced user productivity in a range of SAP Fiori apps to help provide inventory visibility and to track slow moving items, monitor shelf life and provide real-time status updates of items in transit.
  • Material Requirements Planning (MRP), which includes embedded Production Planning and Detailed Scheduling (PP/DS) natively deployed without the need for complex integration and data maintenance to accelerate MRP processing times from hours to minutes and enable intelligent constraint-based planning and scheduling.
  • Extended Warehouse Management (EWM), embedded to simplify adoption of advanced warehousing capabilities such as automation with mechanical handling equipment, task and labor optimization and the use of mobile devices, without the need to integrate a separate system. SAP EWM can be implemented in both embedded and standalone deployments.
  • Environment, Health and Safety (EHS), a new comprehensive, integrated EHS Management platform reimagined to take advantage of the digital transformation occurring across the enterprise. It uses real-time data to support EHS practitioners in managing operational risk, worker safety, and compliance, with integrated solutions for Incident Management, Chemical Management, Operational Risk assessments, IH/Exposure Monitoring, Regulatory Compliance, and Emissions Management.

S/4HANA 1610 addresses ease-of-use issues by making more applications available to be accessed through the Fiori 2.0 user experience.

"It's very powerful for increasing the productivity of the end users and we've invested a lot in domain-specific launch pads; for example, if I'm the procurement manager, I want to see all the KPIs across all the business functions and have my dashboard to do so. There's more functionality, more flexibility and more collaboration," Denecken said.

There are also industry-specific functions designed to help these industries address their goals for digital transformation, according to Denecken.

"We keep on reinvesting in the reintegration of formerly external functionality in the industry edition into the core. We're doing it this time with retail and with oil and gas," he said. "The retail function is not only important for retail companies, it's important for many other industries because they have a retail approach in their business. So it's about 20 industries that we're supporting."

Varian Medical Systems participated in the guided beta for S/4HANA 1610 and upgraded from SAP Business Suite on HANA ECC EHP 8 to S/4HANA 1610 in 10 working days, according to a press release.

"We are looking forward to fully deploying SAP S/4HANA 1610 in 2017 as the solution now includes key components such as Extended Warehouse Management and Product Portfolio Management," Arnab Mukherjee, Varian Medical Systems manager of enterprise applications, said in the press release. "The simplified data model and corresponding IT landscape is an exciting continuation of the innovation, such as universal journal, which helps eliminate reconciliation between FI and CO that first attracted us to SAP S/4HANA."

S/4HANA 1610 is very underwhelming, however, according to Lora Cecere, founder and CEO of Supply Chain Insights.

"SAP HANA offers greater promise for transactional solution reporting for solutions like ERP; however, SAP continues to lag the industry to offer next-generation solutions for business leaders," Cecere said. "HANA is more effective for transactional architectures than time-phased, streaming data or hierarchical data structures. As a result, SAP HANA IBP [integrated business planning] is more appropriate as a visualization technology -- albeit a very expensive option -- than supply chain modeling."

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How can your company take advantage of S/4HANA's supply chain capabilities?
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Opinion aside, for the sake of accuracy on the last comment: SAP Integrated Business Planning is not a part of SAP S/4HANA 1610, the subject of this article. Not sure how that commentary is relevant. Also, for the sake of accuracy, SAP Integrated Business Planning does in fact provide time-phased supply chain planning at any level of hierarchical product-location aggregation to complement S/4HANA’s ERP transaction processing. -- Jim Dever, SAP
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