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SAP ERP SD Sales

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This blog is in continuation to my previous blog Seller-Price, Buyer-Cost, Profitability. Where I implied we shouldn't have a notion that business not always think of "cost plus pricing". Pricing itself is big subject as like cost. In this blogs, I will dig more into understand & need of effective pricing and profitability management.

 

Lets look at an example, where a particular brand charges premium being cult in nature. Or.a new niche technology smart wearable "costs" $250, wherein market it is "priced" at $2500.

 

So, where cost plus pricing went? Why $2500? Does system or business consider cost plus pricing? As technology is new and manufacturer is looking for premier customer and accordingly priced that at premium. Once that premier customer segment is near to saturation, they will have the revise the price to preach into new customer segment. The same happened to desktops, laptops, smartphones, smart-watches, automobile, bikes to name a few.

 

Even though we have example around us as mentioned above. But still, every business is always under continual pressure to increase profits for shareholders and satisfying continuous demand from customers for effective price. But, out of all the parameters available to a business to produce those increases or control. Which is the most effective?  Which of these parameters hasn't already been tapped out?

 

According to the McKinsey & Co study, "a 1% increase in realized price delivers the greatest improvement – a healthy 10% increase in operating profits. Despite this power, few businesses have effectively taken advantage of pricing to improve profits."

 

In this competitive business era, achieving profits through sales growth is hard-fought and hard-won.  Equally the stress to deliver continues bottom-line growth remains.


Then question arises, "Why is business unable to leverage pricing effectively to drive profits?"

 

Generally, pricing is often treated/considered as a simple & a point problem. When, it is in fact a highly-complex enterprise-wide problem.


Processing of pricing spread across the organization, functional areas like marketing, sales & finance and different roles like executives, sales reps & managers.  In complex large businesses, pricing may be processes based on the product line.  All these issues make it hard to foresee effective pricing across all business function. If we run through lead-to-cash cycle, this is one of the critical factors and required at several stages of that process cycle.

 

Pricing_in_Lead_to_Cash_Cycle.JPG

Fig. - Pricing in Lead to Cash Cycle


 

Even in one the McKinsey & Co report on new economy has given pricing one of the top priorities for any business to deal with. Even most of the marketers  would agree that pricing is one the 4 P’s of marketing for seller, which produces revenue and is part of tactical marketing in value –delivery process.

 

Sellers_ 4Ps_of_Marketing.JPG

Fig. “Sellers 4 P’s of Marketing”(Source: Adopted from Marketing Management by Kotler)

 

Where, 3 of the 4 P’s of marketing Product, Place (distribution) & Promotion create value. In compare to those, pricing harvest values. Therefore, during strategy proposal, business works to achieve the lowest production and distribution costs so that it can price lower than competitors and win more market share. The problem is the competition may emerge with further lower costs, derail your strategy.

 

In fact,

Seller’s Price Customer’s Cost

Various business challenges like continuous innovation, global price pressure and product liability where businesses must overcome in order to grow, compete and perform in line with stakeholder’s expectations. So, if pricing is not handled professionally or effectively, this can became a nightmare for any business.

 

If we look at profit and loss statement of any business, pricing decision will effect on “revenue” and subsequently on other. Whereas cost will be derived out of cost of goods sold and operating expenses.

 

P&L_Statement.JPG

Fig. Profit & Loss Statement

 

But, very often there is confusion in the understanding of the difference between price and cost that I even mention in previous post.

 

Some say,

“If a business increases the cost, the profits will rise".

Other,

"If the business wants to increase its profits, it could increase its costs and hope to sell more"

 

Well, price refers to the amount of money that consumers have to give up to acquire a product or service. That amount reflects in Revenue section of the income statement.

 

Apart from misunderstanding between cost & pricing, there are some other challenges which business faces are in form of profit leakage.

 

Profit leakage can be referred as the amount of money that reduces your business profitability that is not genuine expenditure. It can be the result of one or many operating inefficiencies. Failure to control such leakages can divert profits away from your business. Example, for forms of profit leakages are direct sales commissions, installation costs and other expenses taken directly off the selling price factors that reduce your gross profit.

 

This implies without proper understanding on pricing & control profit leakage, a business can’t have vision for future.

 

In next blogs, I will dig more into how and what we have that can effectively manage pricing and profitability.

Let me start this blog with a question.

 

"How a seller view price or cost?"

"Can a seller practically derive at effective Profitability by only considering cost?"

 

If we are taking the opinion of the buyer, pricing would not be an issue. Buyers or consumers will typically use the terms price and cost synonymously. For instance, a purchase manager could tell to its counterpart, “The price of that Mountain Bike was only $250.” Or it could be just as easily say, “That Mountain Bike cost us only $250.”

 

However, from the opinion of the seller/vendor, the difference between prices and costs is quite important. A price is what a business charges, and a cost is what a business pays. Therefore, for a Store Manager may set a price of $250.00 for a Mountain Bike, may price a pair of Brake Calipers for $40.00, or may sell Disc Brake Caliper at the price of $25 per piece. But, in all situations the manager must also focus to his costs. These costs include, what he pays the manufacturer per set of disc brake, what he pays employees to stock spares on the shelves or to sell them, what he pays for rent, for display and lights, for advertising, and so on and so forth.

 

For effective profitability, pricing and profitability management is essential. Where, pricing and profitability management is a systematic, yet dynamic approach of recognizing the influence of pricing on revenue & margin and managed tactically over time to ensure reasonable prices for the value your businesses creates.

 

Accordingly based on better pricing and profitability management business can manage price negotiation effectively have better control in true profitability.

 

Hence, for seller/vendor, although a "price" may go by many names or unit of measure. One name it should not go by is "cost".

 

In subsequent blogs, I will dig more into need and way of effective pricing and profitability management.

 

First in the sequel we have Without a proper understanding on pricing, can business have vision for future?

Issue:

 

  • At the main item it's impossible to change the plant.
  • In the sub item of sales BOM it's possible to change plant.

 

7.gif


Check in the customizing:

 

 

  1. Call transaction: VOV7 - item category

 

 

3.gif

 

2. Check field: Structure scope (TVAP-STRUM) in case of BOM item

 

10.gif

 

How do I find out why the plant in case of BOM is set to not ready for input?

 

Way to find out which group the field was assigned to:

 

1.  Call up program MV45AFFE_FELDAUSWAHL_STATUS and find the DA_REGEL for the field to be checked. In this case for field VBAP-WERKS.

 

12.gif


2.  Which group (DA_REGEL) does the field VBAP-WERKS (item plant) belong to? -> DA_REGEL = 'WERKS' that is, the item category belongs to group WERKS.

 

3.  Check where the group/rule WERKS is processed.

 

4.  Program MV45AFFE_FELDAUSWAHL_STATUS also checks the processing of the group and decides whether a field is ready for input or not. The relevant  part of the source code starts with:

...
case da_regel.
  when
space.
...

 

 

 

5.  Now you have to find the WHEN loop in which the required group/rule is processed.

 

In our example with the DA_REGEL = WERKS, you  find the relevant source code in the following part:

...
when 'WERKS'.
  perform feldauswahl_vbap-werks changing sy-subrc.
  if sy-subrc > 0.
    screen-input = 0.
  endif.
...

 

11.gif

 

6.  Go to PERFORM feldauswahl_vbap-werks

 

14.gif

 

Check issue after putting the breakpoint directly in sales order:

 

 

 

1.  Call transaction VA02 (change sales order) ->  PERFORM feldauswahl_vbap-werks and check following fields:

 

  • screen-name
  • screen-input
  • ch_subrc

 

 

After program MV45AFFE_FELDAUSWAHL_STATUS is run, you receive an exact list of the checked fields in table SCREEN with the indicator (field name SCREEN-INPUT) whether the field is ready for input (1) or not ready for input (0).

 

 

15.gif

 

2. Go further with F5 to PERFORM feldauswahl_setzen

16.gif

 

Cause and explanation:

 

Using BOMs (in TVAP-STRUM = A or B for main item category) it is not allowed to change the plant of the main item afterwards, because the BOM is defined plant dependent. If the plant would be changed on main item level after BOM explosion, it could come to inconsistencies in the system. The already created items would not fit any more to the definition of the BOM and the materials could be different in another plant.

 

Due to this, changing the plant on the main item is not allowed. But you can still change the plant of the sub items, because the composition of the BOM  would not change due to this. Single sub items can be taken from different plants.

 

 

 

Reference notes:

 

 

208245 - Availability of fields in sales orders

 

 

393798 - Plant changeable in spite of order BOM

 

 

901048 - Change of plant for configuration and bills of material

I am sharing my experience in dealing with many inconsistent issues, number range issues,
express document/update fails.


Sometimes user may come across a temporary or inconsistent short dump while executing a process step or a particular transaction.

These inconsistent issues impact completion of activity (can be test /support/implementation activity)

Below method supports to analyze such issues at an earlier stage &resolve the issue wherever possible at users end itself.

 

~ Detailed analysis of short dumps or runtime errors using transaction ‘ST22’ helps
in understanding & resolving the root cause of the issue by highlighting
problem triggering code line, tables & fields.

~ Based on the information available on short dump trigger point, user can navigate to the
relevant tables & find the reason for inconsistency.

~ If available, perform necessary customizing settings to rectify the issue.

 

There are two kind of inconsistent issues I have seen:

  1. Issues which triggers dumps in ST22
  2. Issues without triggering dump in ST22


Example: where dump is triggered in ST22


Delivery number not being updated at table level

 

In given example, user is trying to create a delivery in transaction ‘VL01NO’.
After entering all necessary data when user saves the delivery document,   a delivery number is assigned based on
number range configuration & a success message appears with delivery
number.

 

vl01no.png

 

del.png

 

  However, in this particular example, on exiting the transaction a ‘Express information’ message appears with information “Update was terminated” which indicates that though a delivery number has been assigned to earlier transaction still the delivery doesn’t exist & the database is not updated with delivery information.

 

 

express.png

 

To analyze the issue, click on Inbox button, which navigates you to Business Workplace Inbox.  Look up the latest document with subject ‘Update was terminated’ & check the details relevant to update termination.

SWU3.png

 

For detail analysis of the issue, run transaction ST22, select today’s dump & search
appropriate dump based on user name. Go to the Source code Extract:

 

 

st22.png

 

 

 

As highlighted, choose the code line which triggered short dump. In this example,
the problem is occurring at the insert statement. You can discuss this with
your abaper too from here.

 

 

Based on the table information at problem triggering statement, check table VBPA, which stores the value with sales document number & partner function. In data browser, check the table entries for sales documents as highlighted.

 

VBPA.png

 

 

The delivery document number which was assigned in earlier transaction & following
numbers are already available in database. This indicates, there was a duplicate insert happening in this transaction at database leading to generate a short dump/update termination message.

 

 

This clearly directs to the root cause of issue to be a customization issue having a wrong
number range customizing set up for the delivery document. Based on delivery type customizing, choose appropriate number range & update the number range status to most latest available number.

 

 

SDDoc.png

 

After correcting number range customizing for delivery, repeat steps for delivery
creation with same data. User will be able to create delivery documents successfully;
the delivery number will be updated in table VBPA.

 

 

DWE.png

 

 

The new Delivery has been created & saved in the table.

 

 

Final vBPA.png

 

 

 

 

Example 2: when there is no dump in ST22

 

Change Pointer ID already Exist

 

In given example, user is trying to create a MPO (material Planning Object) in transaction ‘/ISDFPS/MPO’. After entering all necessary data when users save the document and exit the transaction. The termination pop up appears.

 

mpo.png

 

 

express.png

 

User does not find a log in ST22 as there is no short dump generated. In this case user
should check the SM21 (System logs).Double click on the system log and check the details for fail.

 

sm21.png

 

 

Navigate to transaction SM13 for more details

To find out the details of update termination, check SM13 (Update Requests)

 

 

sm13.png

 

upd.png

 

changept.png

 

 

 

Solution to correct this:  after searching with “Material_Write _Document” update fail, I
found a note: 1700295 which solved the issue.

 

Check the Number range for change pointers in transaction BDCP

The reason for update termination: Write Operation is failed. We can search with these search terms for Notes.

Similar sort of issue was occurring in transaction VK11 & it’s been solved in following discussion

 

 

 

http://scn.sap.com/thread/3278000          

 

  

In export sales order, system does not block delivery even if sales order value exceeds license value. For example licence value is 6000. My sales order value is 7000. System still allows to create a delivery. Where as it should block for delivery.

 

Loc1.png

 

You view the legal status in VA02 -> extras -> export license - > log

 

 

Loc2.png

 

and the System status in Item -> status shows:

 

 

Overall status       Open

Reason for rejection

Delivery status      Not delivered

System status        REL  EXLS NoMP       <<<<<  system status Export control is there!

 

When an order fails the item user status id set to EXLS or FTC5.

 

 

But if you go to tx. BS23 and check system status: I0275 - EXLS (Export control)

 

Loc3.png

 

Here you can see that to create Material purchase requisition, create delivery or a post goods issue is allowed and not forbidden.

 

It is the reason why you could create a delivery without any block.

 

Related function modules:   RV_EXPORT_CONTROL_DELIVERY

                                         RV_EXPORT_CONTROL

Dear SCN community,
 
the handling of supplier products without a material master in ERP SD and MM order processes is becoming increasingly, especially in the Retail and Wholesale Distribution space. In Retail and DIY home improvement the handling of supplier products is also called "Long Tail business".
 
Amazon, Thalia, Dansk Supermarked as well as the majority of wholesale distributors are key players in the Long Tail business and offer customers a wide variety of alternative products to choose from, while other retailers do the opposite and concentrate o selling fast moving goods to get better purchasing prices and simplify their warehousing.
 
Especially for wholesalers it doesn't make sense to create millions of master data for each and every product they can possibly procure from their suppliers and keep track of the changes. Store retailers have to manage their store space intelligently and, among other reasons, simply have no space and capacity to present too many variants of similar products.
 
 
For over a decade I worked in various supplier catalog/print media/e-commerce/multi channel/wholesale groups at SAP. In 2006 I was involved in the Enhanced Material Search with Creation, a feature introduced with SAP ERP 6.0 EhP2 to perform searches for supplier products and create material master out of them within the order process. 
 
The Enhanced Material Search is perfect to built various Supplier Products handling / Long Tail scenarios on project basis with reasonable effort.
 

In this blog I have described feasible realization concepts for Long Tail / Supplier Product handling scenarios in various business cases, mostly leveraging the hybris PCM as product catalog management tool, while the product search and article master creation is performed by the ERP based Enhanced Material Search with Creation.

 
Quicklinks:
   
  1. Preparation of Supplier Product data
  2. Supplier Products / Long Tail product handling in SAP ERP orders (for professional sales reps and buyers)
  3. Supplier Products handling in SAP Retail InStore MIM (for occasional/remote users)
  4. Long Tail business in a Web Shop using an SAP ERP Backend (for end customers and business partners)
 
 
 
   
Before we come to the actual scenarios let's talk about the (massive!) data preparation required.
   
   

Preparation: Supplier Products - Data Import and Management

buzzwords: Data import, master data management, catalog management, harmonization, consolidation, enrichment, staging, versioning, ...
   
For any scenario above it is mandatory to have the supplier product data consolidated, best in one single repository.
   
Many businesses use a catalog management system, PIM solution, a huge excel spreatsheet, an ERP Partner addon solution or simply a Z-table in ECC to manage the supplier product data. In my earlier blog I have described a variety of options to import and process supplier product data in my earlier blog about the Catalog Search in Enhanced Material Search and Creation. With the acquisition of hybris in August 2013 there is now an elegant catalog management solution in the SAP product portfolio to import and manage product data.
   
The figure below shows a long tail scenario with hybris Product Content Management (PCM) solution with SAP ERP to import and manage the product content by supplier, and providing an Apache Solr(TM) search engine, which allows the Enhanced Material Search to search for supplier products in Apache Solr(TM).
   
WEC-0023.jpg
 
Fig.1: Long Tail scenario architecture using the Enhanced Material Search with Creation to orchestrate the creation of master data out of supplier products (slide available as PDF)
   
Using the hybris PCM is particularly elegant, as it allows to "mix" different product sets from different origins (here: SAP materials as well as supplier products) into one common master catalog:
WEC-0033.jpg

Fig.2: Managing Supplier Product Information with hybris Product Content Management. Multiple catalogs of different origin can be imported and compiled into one single master catalog.

     
Such a mixed master catalog is the optimum basis for any long tail scenario, as it can provide a complete set of products (see option for site B in Fig.2) as well as separated catalogs (site A and C).
 
There can be various alternatives to the given constellation example, e.g. you could manage to export hybris product data into a TREX "catalog" index. This would simplify the architecture but require changes in hybris. In the same way the hybris PCM can be replaced with any 3rd party Catalog Management solution & search engine. Also, a SAP MDM can be used, and then the catalog search request sent out of EMS would by processed by the embedded MDM search engine.
   
All connections to a supplier catalog search engine are to be implemented on project basis using the EMS Business Add-In BADI_WSD_CATALOG, unless you use the standard search engine options of the Enhanced Material Search.
   
Common for all these options is that the supplier catalog management takes the highest initial and continuous project effort, to obtain and keep the data quality you need for a sales business. 
   
This effort can be bypassed if you can access an existing data provider who manages the supplier product data of your industry/segment/business space, e.g. a 3rd party "Master Distributor", a head of a cooperative, a central master data organization of some kind etc.:
   
WEC-0034.jpg
Fig.3: Performing external catalog search in a central 3rd party Supplier Product Data Repository via Enhanced Material Search with Creation.
 
 
       

But having all your supplier products accessible in a single repository may not be enough. In customer projects we have learned that the supplier product data should be best further enriched with SAP material master data, e.g. (future) material group, product hierarchy, SAP vendor number and vendor subrange ..., to streamline the processing of master data creation in the SAP backend, both on SD side (basic data, sales data) and MM side (purchasing info record). 

   
   
   
   
   

Realization Concepts

   

1) Supplier Products / Long Tail product handling in SAP ERP orders

in ERP transactions Sales Order, Sales Quotation, Purchase Order, Purchase Requisition, and some others
   
This scenario is for professional sales reps working with the ERP Sales order (transaction va01), or buyers working with the MM purchase order (transaction me21n).
   
It is based on the ERP based "Enhanced Material Search and Creation" function (see my detailed blogs), which was introduced in ERP 6.0 EhP2 (SD order ) and was extended in EhP5 (overall improvements, support of MM order and purchase requisition).
The Enhanced Material Search with Creation function is an extension to the ERP Sales Order and Purchase Order:
 
WEC-0013.jpg
Fig.4: Calling the Enhanced Material Search with Creation function from ERP Sales Order
 
In the Enhanced Material Search user interface new material master records can be easily created out of search results or from scratch, as decribed below.
 

WEC-0006.jpg

Fig.5: Catalog Search and Material Creation with the ERP based Enhanced Material Search mit Creation function.

   

       
a) Creation of a new material based on a supplier product search result:
   
  1. The user calls the Enhanced Material Search (EMS) function from within the SAPGui based order
    • SD: Sales Order va01, quotation, inquiry (from ERP 6.0 EhP2)
    • MM: Purchase Order me21n, purchase requisition me51n (from ERP 6.0 EhP5)
  2. Within the Enhanced Material Search screen the user performs a search for supplier products (called "Catalog Search"). The Search Engine that holds the supplier products index provides the results back to EMS. Before the results are shown the EMS triggers an existence check in order to identify supplier products which are already maintained as master data, by comparing the search results with the information of purchasing info records in ERP.
  3. The Catalog Search results are displayed. The users selects a search result line and presses the button "Create Material"
  4. Based on the material creation method the EMS creates a material master with Basic Data, Sales Data (MVKE), Plant Data (MARC), a purchasing info record and (optional) carries out a pricing to calculate the sales price out of the purchasing price which was given in the search result. This is done either in the background within seconds (Simplified Material Creation method), or with a user interface allowing the sales rep to control and change fields manually.
  5. A new material has now been created, has a material number and the user can order it like any other existing material.

       

b) Creation of a new material master from scratch (e.g. with information from print catalog or a supplier's product page)
  1. The user calls the Enhanced Material Search (EMS) function from within the SAPGui based order
    • SD: Sales Order va01, quotation, inquiry (from ERP 6.0 EhP2)
    • MM: Purchase Order me21n, purchase requisition me51n (from ERP 6.0 EhP5)
  2. Within the Enhanced Material Search screen the user directly presses the button "Create Material", without selectiong a search result.
  3. A Material Creation UI is shown based on the EMS material creation customizing.
  4. The user selects a vendor and some start parameters, enters the product data based on the EMS material creation customizing. At the end the user saves the new material.
  5. The EMS creates a material master with Basic Data, Sales Data (MVKE), Plant Data (MARC), a purchasing info record and (optional) carries out a pricing to calculate the sales price out of the purchasing price which was given in the search result.
  6. A new material has now been created, has a material number and the user can order it like any other existing material.
   
c) Creation of a new material master using an existing material as copy template:
  1. The user calls the Enhanced Material Search (EMS) function from within the SAPGui based order
    • SD: Sales Order va01, quotation, inquiry (from ERP 6.0 EhP2)
    • MM: Purchase Order me21n, purchase requisition me51n (from ERP 6.0 EhP5)
  2. Within the Enhanced Material Search screen the user performs a search for materials (with material numbers, called "Material Search"). The Search Engine that holds the material index provides the results back to EMS.
  3. The Material Search results are displayed. The users selects a search result line and presses the button "Create Material"
  4. A Material Creation UI is shown based on the EMS material creation customizing.
  5. The user changes the product data where it differs from the material used as template. At the end the user saves the new material.
  6. The EMS creates a material master with Basic Data, Sales Data (MVKE), Plant Data (MARC), a purchasing info record and (optional) carries out a pricing to calculate the sales price out of the purchasing price which was given in the search result.
  7. A new material has now been created, has a material number and the user can order it like any other existing material.
   
By using reference materials in ECC standard, "single" materials can be created with just one click ! within a second using the "Simplified Material Creation" method.
 
Fig.6 shows the user interface of the "Simplified Material Creation" method, which is highly configurable and uses reference materials:
 
WEC-0014.jpg
Fig.6: User interface of the Simplified Material Creation method embedded in the Enhanced Material Search.
 

Even IS Retail specific Generic Articles can be created with one click when the Retail functionality Price Catalog (PRICAT) is used to manage supplier products.

     
More details about the material creation options can be found in the Application Help of the Enhanced Material Search with Creation.
   
The Enhanced Material Search function is implemented in some SD, MM and Retail MM transactions. However, on project basis you can implement the EMS function module into any SD or MM related transaction.
   
   
     

Variant of scenario 1: Long Tail in a Cooperative / Franching Business

       
The concept of a Long Tail scenario in a cooperative / franchising business (Fig.7) is identical to the main scenario 1 shown in Fig.1, with the difference that the data repository containing the supplier products data is outside the company's system landscape.
   

WEC-0025.jpg

Fig.7: Performing catalog search via local Enhanced Material Search in a central hybris PCM based Supplier Product Data Repository

(slide available as PDF)

   

For a SAP user performing the catalog search in the Enhanced Material Search there is no difference at all in the behavior of the EMS. This makes this variant an elegant way to search for supplier products without the effort to import, harmonize, consolidate, manage and maintain the data coming from multiple suppliers in as many format.

 

As in the intra-company variant (see Fig.3), using the hybris PCM is particularly elegant as it allows to "mix" different catalogs into one common basis for a Long Tail / Supplier Product handling along with regular ERP materials. This is shown in Fig.7.

   

Scenario 1) shown in Fig.1 and Fig.7 is depending on the ERP based Enhanced Material Search with Creation, which is available in SD Order/quotation/inquiry since EhP2, and in MM order (me21n) and purchase requisition (me51n) since EhP5. This makes it possible to implement a long tail / supplier product creation in both SD and MM order processes using the same application for searching and creating supplier products.

           

In 2012 a German car parts dealer cooperative has implemented the scenario in Fig.8 using a central SAP Enterprise Search with a BWA server to run the central data repository:

WEC-0012.jpg
           
Fig.8: Performing catalog search via local Enhanced Material Search in an central external Supplier Product Data Repository using SAP Enterprise Search as the central search engine. This scenario is running in a German car parts dealer cooperative serving around 30 business members (each with an own SAP ERP client).   
   
     
   
   

2. Supplier Products handling in SAP Retail InStore MIM

for occasional/remote users
   
The same general procedure applies for a realization of a supplier product ordering in the order creation process of the Retail InStore MIM solution.
An option is the project based integration of a full text search option for articles (Article Search) and supplier products (Catalog Search) based on the Enhanced Material Search capabilities with a product catalog managing used the supplier products, leveraging scenario 1 above:
WEC-0032.jpg
Fig.9: Mockup for searching and creating Supplier Products in SAP Retail based InStore MIM solution.
 
 
     
 
 
 

3) Long Tail business in a Web Shop

For customers and business partners
   
This concept describes a possible Long Tail /Supplier Product handling scenario in a web shop and can be extended to other sales channels as well, applying the general principle of the scenarios above.
 
Typically a company would not allow their web customers to create new master data records. In this space workarounds like "text items" or "dummy products" are often used by customers to transfer the supplier product information to an order item.
 
These workarounds have the advantage for a company to keep control and limit the creation of master data records, but the disadvantage is that the process is not streamlined and requires a larger manual effort. In addition the sales reporting for such supplier products is more difficult, with effects on contracts up to price negotiations with suppliers.
     
In some wholesale areas like Heating/Ventilation/Air Conditioning (HVAC) where 10 million or more products can possibly be procured from suppliers, a company might not want to bother their web customers with request for quotations for supplier products and having all the manual effort to create the master data on the shoulders of their sales backoffice people. Here a webuser-triggered creation of master data could make sense.
 
I recommend to use an own material type for the creation of such master data out of supplier products catalog information. An own material type allows to easily identify materials which were created out of supplier product entries, and simplifies the whole order and procurement processes, including pricing, reporting, supplier negotiations, archiving, legal obligations, tracking, .... and not to forget the analysis whether such a material should be added to the assortment. In that case you can easily change the material type, e.g. to HAWA, and add additional master data like dispo data, storage locations, listing (in IS Retail), etc.
     
   
The general concept is simple and has to be realized on project basis:
  • The web shop used in the scenario is based on a product catalog, which has to hold not only products with an SAP master data record, but also supplier products without a material number.
  • The supplier product data entries need product content to allow a material master creation with the ERP based Material Creation module of the Enhanced Material Search, like SAP vendor, vendor material number, purchasing price, delivery time, minimum order quantity, ideally also sales list price, matching ERP material group, matching ERP product hierarchy, etc.
  • During the navigation of a customer within a webshop both supplier products and ERP materials are shown. For a web shop customer there must be no difference between the two kinds of products.
  • During the order creation or the creation of a request for quotation, the missing material masters are created:
    • I recommend the usage of the "Simplified Material Creation" method, which allows a creation of a new (single" material master within 1-2 seconds in ERP.
    • The Material Creation Module is part of the EMS and is contained in ABAP package WSD_CS_UI.
    • The Material Creation module sends the material number back to the calling web shop application
  • The web shop order has now all the material numbers and is created in the SAP ERP backend
  •  
  • a) hybris web shop variant using an SAP ERP backend

       

    The hybris product catalog has to contain the supplier product data in addition to the ERP material information. Alternatively, within hybris, a supplier products master catalog has to be mixed with an ERP material catalog (see Fig.2).

     

    The order process goes on as described in the general concept.

       

    b) SAP WCEM / SAP Internet Sales web shop variant using an SAP ERP backend

     

    When using WCEM or Internet Sales as web shop solution, the ERP Product Catalog has to be used to as the product basis of the webshop, together with TREX as search engine. However, in SAP Standard, the ERP Product Catalog does not support supplier products where no material master exists. Here the SAP ERP AddOn solution CatMan Suite is to be used to fill the gap. The web shop interfaces and UI's as well as the business object of the TREX index have to be extended on project basis to display and process supplier products as described in the general concept above.

     

     

     

     

     

     

     

    Feedback is welcome

     

    Again, I published these concepts as food for thought, not as the ONLY way of truth to realize long tail scenarios. But I believe all concepts are feasible without much complexity to be realized on project basis.

     

    My blogs are partly a bit technical, but I hope I can serve the needs of both business analysts as well as SAP experts to understand the concepts.

       

    As always comments, feedback and critique are welcome. Ideally we can start a serious discussion here to bust the myth of complexity for realizing a long tail scenario. In case it is business confidential please contact me in person for an individual concept discussion of your particular business case. 

     

    Please check my SD Enhancement Series Index blog for other valuable SD order enhancements.

     

     

  • Best regards,

    Ingo Woesner

     

     

     

    Dr. Ingo Woesner

    Product Manager - Multi Channel

    Suite Development Application Innovation

    SAP AG

    Requirement:

    The requirement from the business was to have different levels of allocation for the same material for different countries. For example, Korea needed to do the allocation for materials at sales office and plant level whereas Pakistan wanted the allocation for the same materials at customer group level.
    It might also happen that business may need different planning time fence for different countries for allocation consumption. For example, one country
    requires allocation consumption to be checked on weekly basis whereas other countries need them on a monthly basis.
    With the Standard SAP, the above requirements are not feasible as the Product allocation procedure assigned to the material is at Basic data1 level which is
    common to all different sales orgs.

    Solution:

    For the above requirement, the below can be implemented:

    Configuration:

    1. Info-structure definition MC21: Info-structure definition should be done by defining the characteristics and key figures. For our understanding and business case as mentioned above, 2 info structures have been defined – S860 and S861 for Korea and Pakistan respectively as below:
    1.jpg
    2.jpg
    2. Update group OMOG: The update group should be defined with the correct application (01 for Sales and distribution). This would be later on used
        for defining the update rules for the specific info-structure.
    3.jpg
    3. Create Update rules MC26: Update rules need to be defined for the data which needs to be updated automatically in the info-structure. In case needed, a formula or a requirement routine can be assigned for the spcific key figures.
    4.jpg
    5.jpg
    4. Define Planning Type MC8A: A planning type describes a customized planning table. You use planning types to create and store important data from any information structure. Planning type Z_S860 and Z_S861 are created for the respective info structures.
    6.jpg
    5. Product Allocation Configuration: All the required setup as per standard product allocation setup should be completed. The most important setup is to add the 2 info structures in the product allocation procedure as below:

    OV3Z - Assigning Procedure to Information structure
    7.jpg
    OV4Z - Control Product Allocation
    8.jpg
    Other configurations needed are:
    1. OV5Z – Consumption periods
    2. OVZ0 - Activate Allocation for Requirement Class
    3. OVZ8 - Activate Allocation for Schedule Line Category
    4. MC61 – Create Planning Hierarchy
    5. OV7Z - Generate Masking Character
    6. MM02 – Assign Product Allocation Procedure on Basic
      Data 1 Tab
      
    6. Development in SAP Enhancement: SAP has provided a specific enhancement point where based on specific conditions, specific step in the product allocation procedure can be ignored so that the system checks the allocation quantity in the required info-structure only.
    9.jpg
    10.jpg
    11.jpg
    12.jpg
    13.jpg
        
    With the above coding, for a specific sales org, we can delete a specific step from the product allocation procedure so that the system checks the allocation
    quantity from the relevant info-structure only.

    POC in SAP

    2 sales orders are created - 1 for sales order 4500 and another for sales org 4460 for the same material. For Sales Org 4500, the product allocation quantity should be checked in info-structure S860 whereas for the sales org 4460, the allocation quantity should be checked in info-structure S861.
    1. Order 1 – for sales org 4500:
    Picture1.jpg
        The product allocation quantity is taken from the info-structure S860.
    2. Order 2 – for sales org 4460:
    Picture3.jpg
        The product allocation quantity is taken from the info-structure S861.

    Handheld (legacy system ) to SAP  Sales Process overview

     

    In today scenario we have many company using SAP for tracking SD (sales & distribution ) . SAP interact with Different Legacy system (non SAP) for normal process to intregate SAP and SAP or SAP and Legacy systems .

     

    In a handheld scenario , we have Sales represenative ideally use a HH (handheld ) device to take on Sales order and Add basic master data like new customer for any route etc . The Handheld will provide mobility in terms of the sales representatives for different manufacturing / retails companies will goto any route and take up sales orders for the customers for any routes . In case they see and meet new customer who are willing to purchase or place and order . The sales represenatative will capture sales orders for these new customers also through HH . They would have shell customer or new customer template that they will map the new customers to . Once they are verified they will be authorized to bill and supplied their Order placed . Before authorization , to avoid duplicate Customers setup for any route , the customers are placed in a block and Sales order in SAP will have Hard incompletions .

     

    Once the Sales order is saved in HH . The Sales Rep add these HH to network ports and do a send . Once the SO from the HH are put on service network , they all are saved in a flat file which is sent to SAP via Middleware . Once the flat file reached SAP , A customized program will break up these File into Inbound IDOCS and each idoc will create a Sales orders corresponding to the Flat file created earlier ( HH related Sales order created . )  . Since interaction is with legacy system and SAP . we do send an update as an outbound idoc to HH system again for the sales rep to be aware that the Sales order has been created in SAP also . This is done through an output from SO which send the idocs to HH system . this will ensure that idocs / SO are not missed inbetween SAP and HH system and a 2 way communication is set up correctly , as required .

     

    HH devices can be configured to be more flexible to interact to SAP for more functions , as per business requirements .

    Scenario: Company ABC manufactures very high value equipments. these are sold across the country through their own dealer network. Dealers are free to place orders for any product and quantity. Company provides credit facility to dealers for buying equipment.

     

    ABC Company runs its business on SAP which is used for procurement, production, sales and logistics activities, for dealers they have DMS system (Non SAP) which is use for Purchasing, inventory management, service and sales to end customers.

     

    Sales Orders are created via. Interface in SAP from DMS. Delivery processing and shipping planning starts parallely, because of no credit shipping process should not stop. So update group 15 is used so that the deliveries are considered to calculate credit exposure. There is also a legal requirement to create one invoice per equipment.

     

    Considering the above business requirement the IT team proposed to create delivery with one material and one quantity.

     

    Now let’s see how to fulfill the business requirement in SAP.

    Mostly deliveries are created using due list transaction here lets take example of VL10E.

    Navigate to the below given path

    D1M1Q1.PNG

    Click on configure list profile copy 0201 and give a new name e.g. Z800

    D1M1Q2.PNG

    Make changes as above in red.

     

    Change Cumul. Rule to 9 use exit LV50R_VIEWH19.

    In user exit set the value of cf_kumng = 1

     

    In Field “SplitSchedLine” set value to “1 Deliver only one schedule line”

    (This will deliver only one schedule line for selected item e.g. for item 10 there are 3 schedule lines and when all three are selected for delivery, system will create delivery for the first schedule line out of all)

     

    Once the delivery is created the cumulative quantity is set to original cumulative qty. as per order confirmation, so the log settings are changed to show on the same screen. Upon pressing any button the refresh will get activated and the exit is called again to set qty. to 1.

     

    Now choose “Assignment of List Profile to Delivery Scenario” in IMG and assign as shown below

    D1M1Q3.PNG

    To have a split based on item number pass sales order item number (POSNR) to LIKP-ZUKRL in copy controls.

    Question

     

    Why Field WBS Element (COBL-PS_POSID) is not displayed at the Sales Order Line Item?

     

    1. Go tx. VA02
    2. Select item and go to tab: Account assignment

    WBS_1.png

     

    Reason and analysis

     

    Once  the KZVBR is determined on sales order line item with 'E' so after entering the plant the field WBS element is not displayed.

     

    WBS_2.png

     

    Please check your customising:

     

    1. In the sales order, check the requirements type (VBAP-BEDAE).

    • Sales order (VA02) check requirement type on tab "Procurement" :

     

    wbs_5.png

     

     

     

    2. In OVZH, check the requirement class assigned to the requirements type.

     

     

    WBS_4.png

     

     

    3. In OVZG, for the requirement class, check the "Account Assignment Category" (V_T459K-KNTTP).

     

     

      WBS_3.png

     

    4. In OME9, check the "Consumption posting indicator" (V_T163K-KZVBR).

     

     

     

    wbs_6.png

    If you want the WBS element (COBL-PS_POSID) to be displayed in the sales order item, this "Consumption posting indicator" should not be E or P.

     

      

    Summary of Transactions:

     

    OVZI:  Assign the requirement type to the item category

    OVZH: Assign the requirement class to the requirement type

    OVZG: Customize the requirement class (select the Acct.assig.cat)

    OME9: Customize the Account Assignment Category (select the  consumption posting indicator VBAP-KZVBR)

     

     

    More information about account assignment you can read in SAP note:

     

    459734How does the order account assignment work?

    • How to analyse the status during results analysis in tx. KKA3
    • Although the status of sales order is completed, it still catched status REL as status for valuation method in KKA3.

     

    KKA3_8.png

     

    Check it in sales order. Sales order is completed fully delivered, but system status shows: REL and not FNBL.

     

    KKA3_7.png

     

    How to analyze it, what is the reason?

     

    • In document flow status overview you can see already that the delivery status is not complete.
    • Delivery status is "Being processed"

     

    KKA3.png

     

    • Status delivery -> partially invoiced

     

    KKA3_3.png

     

    An invoice was already created to the customer, but an other is missing. Which invoice and why it is missing? Check it in debugging mode and

    set breakpoint to FM  SD_ORDER_GET_DATA :

     

     

    KKA3_5.png

    Here you can see again, everything is invoiced. And fields ch_all_issued and ch_all_posted are getting value "X".

     

     

    KKA3_4.png

     

    Where this value will be deleted and status FNBL is not set ?

     

    • Here will be deleted, because the sales order is an intercompany scenario and IV invoice is missing !
    • IV invoice status is not processed ("A")

     

    KKA3_2.png

     

    • Where does da_intercompany "X" come from ?
    • How can I analyze an intercompany process?
    • Check table LIKP with the following selection fields:

     

    KKA3_1.png

    Solution:

     

    • Create IV invoice in this example, with company code "5100".
    • Delivery will be full invoiced after that.
    • Run tx. KKA3 again.

    How Status Functionality in SAP helps professionals to control different activities:


    • SAP status profile functionality which is basically a workflow enabled functionality
    • Status profile is enabled by assignment to the sales order type (header level) or item category(item level)
    • Every activity will be defined by status number
    • With the help of the status number you determine the sequence in which the user statuses are activated.
    • You can assign lowest and highest number to status number so that particular activity can work within that number
    • you can track all activities performed for particular document based on updated statues
    • it can also be used for reporting purposes.

     

    How to configure status profile in SAP and enable for Sales documents:

    1. Define Status Profile:

    SPRO--------- Sales and Distribution---------- Sales >Sales documents ---------- Define and Assign Status Profile------------Define Status profile

     

    2.Assignment of Status profile at order type at below path:

     

    SPRO--------- Sales and Distribution---------- Sales >Sales documents ---------- Define and Assign Status Profile------------Assign order type/Status profiles


     

    3.Assignment of Status profile at item category at below path:

     

    SPRO--------- Sales and Distribution---------- Sales >Sales documents ---------- Define and Assign Status Profile----------- Allocate status profile to item categories

     


     

    4.Set Status controls based on business requirements.

     

    Go to Transaction control screen and enable below functionality

    :

     

    5.Enter Authorization code to change the status:

     

    t-code BS02 can be used also

     

    Details about User Status:

     


     

    Status Number:


    It is the number which is assigned per activity and it is unique to every status.

     

    Status:


    This is the text  which will flow to sales document once it is activated and update as per business activity mentioned in the configuration.

     

    Initial:

    whenever sales document is created by default this status will be activated to it.

     

    Lowest Status No:

    This will ensure that particular activity will be performed within this lowest number and once that activity is performed this will get deactivated.

     

    Highest Status Number:

    all activities will be performed till this number and it will block other activities or status updation having below status number than this.

     

    Position:

    it will give you at which place this status can be activated.

     

    Priority:

    if several status have same priority then status which has highest priority will have preference.

     

     

    Step by Step usage of Status in Sales Document  status tab and approval process:


    1.Based on initial Status ,order will have status A001 as per configuration

     

    2.Update User exit logic based on business requirement and call function to change the user status and it will change to A002 as pending for approval


     

    3.Use Authorization object to approve or reject, it will again call function to change the status as per maintained in the status profile and after approval it will change to A003


     

    4.Once it is rejected ,it will have status A004 as below:

     

     

     

    Conclusion:


    • Status profile functionality is useful to track activities in a sequence and create workflow based approval process.
    • Statuses can be used to control and communicate.  Statuses can be used in reporting.

    There are instances when user wants to alter sale terms for a material. We can enable the user to enter quantity conversions directly in sales order by configuring relevant condition types. In V/06, go to Changes which can be made section for the condition type and choose Qty relation indicator. User will now be able to directly enter quantity conversions in sales order without maintaining the same in material master.  If sale unit is EA and user wants to specify price per KG, the same can be entered directly in sales order pricing without maintaining conversion in material master. Condition type has to be set with ‘No limitations’ or ‘Manual entry has priority’ along with ‘Qty relation’ as allowed.


     

     

    I maintained EA as base unit of measure for material and Gross weight as 10 Kg. If I require to change my rate of conversion, I can do so directly in the sales order. I enter price per KG and System prompts user to enter conversions and user can specify, say 1 EA = 25 Kg.

     

    However, there is little control over user input and this can lead to user errors. This can be used where both product pricing & packing is as per demand or sale conducted.

     

    ***

    Hi All,

     

    when you have a dynamic Horizon in your credit management, the horizon period will be accounted if the line item's material availability date is within this specified Horizon Period. explained as below.

     

    horizon Period : 1 month ( 30 Days from 29th July 2013, hence 30th August 2013).

     

    Sales order with Requested delivery date : 25th September 2013.

     

    lets assume that the material availability date for this sales order line is 29th August, as it was around 25+ days of route.

     

    then on such cases this order will be relevant for credit management calculations as per the current date on 29th July.

     

    Hence material availability date is the key parameter to decide on horizon period & not the customer requested delivery date.

    This is a blog redux from 2008 during which time I was finalizing a large Order to Cash (O2C) and Finance transformation for a global manufacturer.  While some of the topics and names (e.g. "SafeGuarding") have changed, a Solution Design Review (SDR) remains a very valuable offering for SAP customers to consider and I continue to have these discussions as a way to ensure SAP deployments are maintainable post-go live. - WDN

     

    I’m fond of telling my clients that SAP is a vast, strategic technology platform whereby many business scenarios can be described in a variety of ways.  This is important for SAP as it allows a certain “creative freedom” of the software to address unlimited business needs in the global marketplace.

     

    There comes a time, however, where it is important for an organization to define the best way to articulate its business inside the SAP environment.  This allows for an increase in maintanability once the system is implemented, reduction in overal total cost of ownership (TCO), and simplification of the architectural design.

     

    One way to accomplish this is through a Solution Design Review (SDR) which SAP offers as a part of its Safeguarding® product offering.  Safeguarding® was introduced in 2004 as a way for SAP to understand more clearly how their customers were using the software platform and to provide feedback to the customer.  The net benefit to the customer, particularly in situations where the project is either internally realized or internally managed using contractor resources, is access to very senior and experienced SAP professionals (typically platinum consultants with multiple implementation experiences in a particular domain) on a time-bound, fixed-price exercise.

     

    Not Consulting, Not a Service

     

    Your SAP account executive will be the first to tell you that a SDR is not a substitute for consulting or integration services.  It is part of a product offering (Safeguarding®) which can be available to purchase similar to Value Engineering®, software, or maintenance. While there may be SAP professionals front-and-center during SDR activities, similar to maintenance it is a fee-based product offering.

     

    Generally an SDR provides three particular areas of benefit during review activities:

     

    1. A documented “snapshot” of the design of the system, regardless of its position in the ASAP methodology timeline.
    2. Business community and executive level involvement to confirm or re-confirm the business outcomes of using SAP in the execution of business operations.
    3. Alignment of technical and contractor resources in the design and realization of the system environment so everyone is “in the right seat, on the right bus.”

     

    I recommend using SDR as a way to validate the business blueprint of a new system implementation or for a significant new set of capabilities to be added to an existing SAP environment.  As one CIO commented to me, “given the amount of money we are about to spend on realization activities, the cost of completing an SDR is a rounding error.” 

     

    It also allows SAP as a software company to have a greater awareness of what business solutions and applications its customers are creating in the marketplace.  It creates a greater dialogue, in some cases where dialogue may have been missing or strained between new or long-standing customer project and SAP account teams.  SAP has a “vested interest” during this process, as it can provide documented comment on the risks and opportunities of a program moving forward after SDR activities are accomplished.

     

    An Intensive Process – Not for Everyone

     

    One of the characteristics of SDR that struck me was its similarity to quality assurance and risk audits.  For small and mid-size businesses the use of SDR is questionable.  Similar to quality audit processes, sometimes the commitment to the SDR process can be economically disadvantageous for a company to undertake as it has a noticeable impact to business resource availability.  However for large implementations where dedicated or partly-dedicatd staff are already committed to the SAP program, an SDR can be easily scheduled.  It is an intensive process divided into three activity sets:

     

    1. Pre-review.  During pre-review activities, there is a kick-off workshop typically a full day, scheduled roughly 30 days in advance of the actual SDR.  Prior to this workshop the SAP SDR lead will outline the specific areas, both in terms of SAP function and customer business scenario, that will be included in the review.  During the kick-off workshop, the SAP SDR lead will review the business scenarios and functional areas, propose a basic framework for the review, and meet the relevant business and technical staff that will participate in review activities.  The SAP SDR lead will also review pre-work the program team will need to complete prior to the actual review, and a list of documentation required prior to and during the review.  The lead may also conduct specific interviews with key business and technical (customer and contractor) stakeholders prior to actual review activities.

    2. Review.  The review can vary in length depending upon the nature of the solution considered, but generally allow for a full week (five business days) for the review. There can be multiple tracks of review activities, in one review recently the customer utilized a facilitative approach to have joint sessions of two operational solution reviews meet together in the morning and evening with breakout sessions specific to each operational solution review during the day.  Be prepared to review all business scenarios, including to-be processes, and specific functional expressions of those buisness scenarios.  Be prepared to “defend your position” when asked why the solution is to be expressed in a particular way in the SAP environment, and be prepared to hear of other ways based on the relevant expertise of the SAP SDR lead on how to accomplish program objectives.  At times this can become consultative between SAP and the customer, but the extent of that consultation will be limited to ideas and recommended areas to pursue that will be highlighted in post-review activities.

    3. Post-review.  At the conclusion of the review, the SAP SDR lead and any SAP team members will provide a findings presentation of the review.  This findings presentation will generally provide overall comment and feedback on areas of maintainability and proficiency in the customer solution under review, with a summary as shown in .  It will also provide an action set of areas where the SAP SDR lead may feel are critical to address moving forward, including specific risks that should be addressed moving forward in the SAP program.  The final report typically will include these areas as well as areas to consider the future use of other SAP software capabilities that were not explicitly a part of the review.

     

    From start to finish the SDR process can be completed within 30-60 days, so plan appropriately when to introduce and execute an SDR in the SAP program lifecycle.

     

    Limitations and Expectations

     

    Even for appropriately-sized programs, a SDR has its limitations and these limitations should be considered carefully before embarking on such a review.  First, SAP will only be able to comment with conviction on the use of SAP software.  If you are working in a heterogeneous environment with multiple applications running in multiple business operations or units, I recommend that you focus your expectations on how the SAP SDR team would best suggest you leverage the SAP software platform.  Second, an SDR is not a panacea for correcting a bad design or restructuring a poor SAP program.  While an SDR can, for example, call-out the non-standard use of standard SAP capabilities, the SAP SDR lead and team will not correct those deficiencies for you (remember, it’s not a substitution for consulting).  In fact the review could call into question the appropriate use of the SAP environment, so conducting the review earlier in the ASAP methodology program lifecycle is better than later.  Finally, an SDR is only as valuable as the information used during the activities.  If a customer witholds information, excludes key business stakeholders, or otherwise does not leverage the process accordingly, the review will demonstrate less value.  In these cases SAP SDR leads are pretty experienced and savvy, don’t be surprised if these shortcomings are actually noted in the final review presentation and report.

     

    To Review or Not to Review

     

    To restate my recommendation, an SDR is not for everyone.  It is time-consuming, intensive, and rigorous.  But it may be the insurance policy that an organization needs to commit to a significant undertaking, both from a stakeholder buy-in and from a technical quality assurance perspective.  In an age where most SAP program fail due to non-technical reasons, this may be a good insurance policy indeed.


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