Dear SCN community,
the handling of supplier products without a material master in ERP SD and MM order processes is becoming increasingly popular, 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 on 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 master data and price changes. Store retailers have to manage their store space intelligently and, among other reasons, simply have no space or storage/shelf 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 describe 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 article master creation is performed by the ERP based Enhanced Material Search with Creation.
Quicklinks:
- Preparation of Supplier Product data
- Supplier Products / Long Tail product handling in SAP ERP orders (for professional sales reps and buyers)
- Supplier Products handling in SAP Retail InStore MIM (for occasional/remote users)
- 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 tool of some kind to manage the supplier product data, e.g. a catalog management system, a PIM solution, a huge excel spreatsheet, an ERP Partner addon solution or simply a Z-table in ECC. In my earlier blog I have described a variety of options to import, process and manage supplier product data.
With the acquisition of hybris in August 2013 there is now a great catalog management solution, hybris Product Content Management (PCM), in SAP's 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).
Fig.1: Long Tail scenario architecture using the Enhanced Material Search with Creation to orchestrate the creation of master data out of supplier product data (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:
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 an SAP Netweaver TREX "catalog" index. This would simplify the architecture but requires 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 non-TREX based supplier catalog search engine are to be implemented on project basis using the Business Add-In BADI_WSD_CATALOG of the Enhanced Material Search (EMS), unless you use the standard search engine options of the Enhanced Material Search.
Common for all these options is that the supplier catalog management solution itself takes the highest initial and continuous project effort, to continuously import, process, harmonize and manage the ongoing changes of supplier product data.
If you are lucky, there might be an existing external data provider or organization who manages the supplier product data of your industry/vertical segment/business space for you, e.g. a 3rd party "Master Distributor", a head of a cooperative, a central master data organization of some kind etc. This would be a tremedendous help to save the continous effort but might not be available for free.
Fig.3: Performing external catalog search in a central 3rd party Supplier Product Data Repository via Enhanced Material Search with Creation.
Please note: 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 the ERP transactions Sales Order, Sales Quotation, Purchase Order, Purchase Requisition, and some other transactions.
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), or some other transactions..
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:
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.
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:
- 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)
- 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.
- The Catalog Search results are displayed. The users selects a search result line and presses the button "Create Material"
- 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.
- 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)
- 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)
- Within the Enhanced Material Search screen the user directly presses the button "Create Material", without selectiong a search result.
- A Material Creation UI is shown based on the EMS material creation customizing.
- 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.
- 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.
- 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:
- 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)
- 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.
- The Material Search results are displayed. The users selects a search result line and presses the button "Create Material"
- A Material Creation UI is shown based on the EMS material creation customizing.
- The user changes the product data where it differs from the material used as template. At the end the user saves the new material.
- 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.
- 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:
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.
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:
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:
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) SAP Commerce Cloud triggers supplier product creation in SAP ERP / S/4 backend
The SAP Commerce Cloud product content management 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) External PIM integrated with SAP Commerce Cloud triggers supplier product creation
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
SAP Customer Experience
SAP SE
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