SAP Leonardo use cases for SAP ERP/ECC users who memorized 100+ tcodes

Highlight:

• SAP Leonardo addresses ‘Innovation’ opportunity needs compare to S/4’s ‘System of record’ requirement
• SAP Leonardo includes different future facing technologies and service offerings
• One will need to select one or more tools/technologies to build an innovative solution
• In order to take advantage of SAP Leonardo strong SAP S/4 HANA core will be required

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SAP experts who rely on running their operations with trusted ERP/ECC are getting overwhelmed by new age SAP’s terminologies and acronyms. especially in innovation streams like Leonardo.

Old timers like me always believed that SAP is all about best practice and use it out-of-the box functionality to have a long term sustainable SAP footprint. However, in recent years SAP product lines have changed drastically. SAP launched many new products to change old ERP system into an intelligent enterprise software.

In recent years SAP, acquired many companies that provides additional functionality on top of traditional ERP (e.g. Ariba, Concur, Rare.io etc.) SAP seems to be in process of amalgamating all these products in SAP S/4 umbrella. These new applications overlap with the core business applications from the old regime. This shift in strategy creates lots of confusion for people who have used SAP ECC for more than a decade. For example: Do we use SAP MM in  S/4 HANA core to do our procurement or implement SAP Ariba that includes sourcing platform as well? I see SAP ECC as a full square meal i.e. Eat it and it’s good for you, while new SAP product offerings are like a buffet (I am sure it’s all good quality food), but one needs to do their research to pick a treat that fits their taste.

 

Here is my version of Leonardo

What is SAP Leonardo?

SAP product portfolio can be divided in the following three streams (Foundational, Differentiation and Innovation).

Leonardo is part of ‘Innovation’ stream on SAP roadmap.

Leonardo is not an age old ‘System of record’ powerhouse. Leonardo is an umbrella term to provide a platform to deliver various emerging technology and services.

Leonardo is not a module like my favourite ERP-Materials Management (MM) module where I can learn MM by understanding tcodes, screens, config, tables and enhancement points.

One needs to take Leonardo in the context of technology being implemented and related business use case.

Although you see six boxes in SAP Leonardo product line, I see three main streams:

Artificial intelligence related:

1. Machines learning (ML):

In this case, system learns from your behaviour and gets better over time. ML algorithms are for generic application like conversationsor for a specific use case.

Conversation UX (Generic service): This technology provides one more way to interact with system. It takes away friction of UI limitation. This technology relies on ‘Voice recognition’, ‘Text recognition’ and ‘Image recognition’.

Use case (UX): SAP products using this technology are SAP CoPilot or SAP developed Chabot. SAP CoPilot is directly integrated to SAP Fiori Launchpad. Users can chat with the system. Cool! I see this as a low risk implementation that can be implemented organization wide.

Predictions (Specialized services): In this use case one needs to feed model with tons of raw data and outcome. Once model is ready, system can predict outcomes. If business use case is specific/unique (Fraud detection, Predictive Maintenance) then you may need to plan time for ‘teaching model’ before you can use this feature.

Use case (SAP EAM): Predictive maintenance where ML algorithm digests all post historical data and predicts future failures. This is only viable where cost of repair is much higher than cost of failure. e.g. Critical components of chemical plants, power plants, airplane etc.

Use case (SAP MM/PP – MRP): Predictive models to predict material shortage based on sales orders, production order and historical trends.

2. Internet of things (IoT):

IoT is network of all sensors like voice, text, images, temperature etc. These sensors collect data and feed into an aggregator. Most of the time IoT will be implemented in conjunction with ML and Big Data technologies.

Use case (SAP EAM/SAP MM): Vehicle data tracking: Transportation company tracking vehicle GPS locations to optimize vehicle utilization is a typical business case. IoT framework can be implemented to collect and digest vital sensors data from engine, tires, transmission system and utilize to predict vehicle failure. In enterprise asset management (EAM) ‘Digital twin’ is based on this technology as IoT data can be shared between asset owner, operator and service provider.

Use case (SAP PP/SAP PM): Integrate machine sensor data to collect machine’s utilization. Link production work centers and maintenance work center using sensors. When machines is not working efficiently adjust production work center capacity and generate maintenance notification to report this issue. Collect and analyze data using analytics/ML.

Data utilization related:

The goal here is utilize data to generate new revenue streams or increase operational efficiency.

There are three marketed products in this category with a bit of overlap.

3. Analytics:

This is geared towards visualizations of data. SAP BI, Cloud analytics etc. can be used to implement analytics solution for the organization. More emphasis is on building self-serve models and dashboards that can be consumed by a wide range of users.

Use case: Digital Boardroom dashboard or various KPI dashboard that aggregates data from multiple sources. Display data in visually appealing and interactive fashion.

4. Data intelligence:

Data intelligence connects, aggregates, and anonymizes your data to prepare it for commercial consumption. This allows user to monetize on their data to generate new revenue stream, improve organisational efficiency or provide better customer experience.

5. Big Data:

Big data refers to large and complex data that traditional applications are unable to process. Big data technologies are application where data velocity and variability is high as well i.e. combination of structure data (database table) and unstructured data (text feeds). Big data technologies are used to collect different types of data and to provides tool (SAP Data hub) to generate insight in this data set. This data hub can integrate SAP and non-SAP data in one data set. This data can be used for aggregation (to feed to ML algorithm) or to the visual dashboards.

Trusted de-central network related – Block Chain:

6. Block Chain:

This is a gateway to explore distributed ledger or block chain technology.

This is SAP’s service for providing distributed ledger functionality to the customers. In my opinion, this technology is going through the hype cycle. It’s hard to come-up with a commercially viable business assess in an enterprise processes managed in today’s SAP footprint where blockchain technology can be easily integrated. Blockchain will be more applicable in ‘intra organization’ scenarios.

My simple mind can’t see application of distributed ledger in SAP finance world as Block chain is not a ‘double entry’ ledger.

Use case (SAP MM & SAP GTS): Pharmaceutical product tracing through global supply chain or Citizen’s data managed and shared by various level of the government.

Bottom line:

One needs to find the right business use case and find matching technology from Leonardo product line to implement this use case. Remember that your business case can be either a ‘Problem statement’ i.e. I have a problem I need to solve OR an ‘Opportunity statement’ i.e. I see an opportunity to increase revenue/efficiency.

In case of Leonardo, there is no one size fits all. All organizations will need to come-up with a specific business case and implement relevant technology. You can use SAP Cloud Platform and Innovation tool kits and that provides services and expertise you need to implement one or more combination of these technologies.

These technologies will define success of future enterprises. All of these technologies may evolve at different speed and will achieve varying levels of maturity in the next five years. Keep an eye on these technologies (and launch a pilot project to get hands on experience) and this will help all of us define road map for our organization/clients.

Innovative application implementation should be implemented on top of strong S/4 HANA core implementation. For example: In order to be a good tennis player or a marathoner one must be in good physical shape. Once you develop an active & healthy life-style and are in physically fit condition (e.g. SAP S/4 core), you can excel in any activity you focus on (e.g. Analytics, ML, IoT).

I look forward to reading your comments.

Thanks,

 

References:

1. SAP Leonardo
2. Open SAP – SAP Leonardo – Enabling the Intelligent Enterprise
3. Gartner – Pace-Layered Application Strategy and IT Organizational Design, by: Mary Mesaglio, Matthew Hotle

Also posted at: https://blogs.sap.com/2019/03/30/sap-leonardo-for-sap-ecc-users-who-memorized-100-plus-tcodes/

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SAP Leonardo – Enabling the Intelligent Enterprise

SAP experts who rely on running their operations with trusted ECC are getting overwhelmed by new age SAP’s terminologies and acronyms. especially in innovation streams like Leonardo.

Old timers like me always believed that SAP is all about best practice and use it out-of-the box functionality to have a long term sustainable SAP footprint. However, in recent years SAP product lines have changed drastically. SAP launched many new products to change old ERP system into an intelligent enterprise software.

In recent years SAP, acquired many companies that provides additional functionality on top of traditional ERP (e.g. Ariba, Concur, Rare.io etc.) SAP seems to be in process of amalgamating all these products in SAP S/4 umbrella. These new applications overlap with the core business applications from the old regime. This shift in strategy creates lots of confusion for people who have used SAP ECC for more than a decade. For example: Do we use SAP MM in  S/4 HANA core to do our procurement or implement SAP Ariba that includes sourcing platform as well? I see SAP ECC as a full square meal i.e. Eat it and it’s good for you, while new SAP product offerings are like a buffet (I am sure it’s all good quality food), but one needs to do their research to pick a treat that fits their taste.

 

Here is my version of Leonardo (and yes, I have memorized 100+ tcodes).

What is SAP Leonardo?

SAP product portfolio can be divided in the following three streams (Foundational, Differentiation and Innovation).

Leonardo is part of ‘Innovation’ stream of SAP roadmap.

Leonardo is not an age old ‘System of record’ powerhouse. Leonardo is an umbrella term to provide a platform to deliver various emerging technology and services.

Leonardo is not a module like my favourite ECC-Materials Management (MM) module where I can learn MM by understanding tcodes, screens, config, tables and enhancement points.

One needs to take Leonardo in the context of technology being implemented and related business use case.

Although you see six boxes in SAP Leonardo product line, I see three main streams:

Artificial intelligence related:

1. Machines learning (ML):

In this case, system learns from your behaviour and gets better over time. ML algorithms are for generic application like conversationsor for a specific use case.

Conversation UX (Generic service): This technology provides one more way to interact with system. It takes away friction of UI limitation. This technology relies on ‘Voice recognition’, ‘Text recognition’ and ‘Image recognition’.

Use case: SAP products using this technology are SAP CoPilot or SAP developed Chabot. SAP CoPilot is directly integrated to SAP Fiori Launchpad. Users can chat with the system. Cool! I see this as a low risk implementation that can be implemented organization wide.

Predictions (Specialized services): In this use case one needs to feedmodel with tons of raw data and outcome. Once model is ready, system can predict outcomes. If business use case is specific/unique (Fraud detection, Predictive maintenance) then you may need to plan time for ‘teaching model’ before you can use this feature.

Use case: Predictive maintenance where ML algorithm digests all post historical data and predicts future failures. This is only viable where cost of repair is much higher than cost of failure. e.g. Critical components of chemical plants, power plants, airplane etc.

 

2. Internet of things (IoT):

IoT is network of all sensors like voice, text, images, temperature etc. These sensors collect data and feed into an aggregator. Most of the time IoT will be implemented in conjunction with ML and Big Data technologies.

Use case: Vehicle data tracking: Transportation company tracking vehicle GPS locations to optimize vehicle utilization is a typical business case. IoT framework can be implemented to collect and digest vital sensors data from engine, tires, transmission system and utilize to predict vehicle failure and reduce downtime. In enterprise asset management (EAM) ‘Digital twin’ is based on this technology as IoT data can be shared between asset owner, operator and service provider.

Data utilization related:

The goal here is utilize data to generate new revenue streams or increase operational efficiency.

There are three marketed products in this category with a bit of overlap.

3. Analytics:

This is geared towards visualizations of data. SAP BI, Cloud analytics etc. can be used to implement analytics solution for the organization. More emphasis is on building self-serve models and dashboards that can be consumed by a wide range of users.

Use case: Boardroom dashboard or various KPI dashboard that aggregates data from multiple sources. Display data in visually appealing and interactive fashion.

4. Data intelligence:

Data intelligence connects, aggregates, and anonymizes your data to prepare it for commercial consumption. This allows user to monetize on their data to generate new revenue stream, improve organisational efficiency or provide better customer experience.

5. Big Data:

This product is related to technologies and platforms related to ‘Data aggregation’ from structures sources like different databases and unstructured sources like data lakes. You may hear Data hub that refines and enrich data in one place. This data can be used for aggregation (to feed to ML algorithm) or to the visual dashboards.

Trusted de-central network related – Block Chain:

6. Block Chain:

This is gateway to explore distributed ledger or block chain technology.

This is SAP’s service for providing distributed ledger functionality to the customers. In my opinion, this technology is going through the hype cycle. It’s hard to come-up with a commercially viable business assess in an enterprise processes managed in today’s SAP footprint where blockchain technology can be easily integrated. Blockchain will be more applicable in ‘intra organization’ scenarios.

My simple mind can’t see application of distributed ledger in SAP finance world as Block chain is not a ‘double entry’ ledger.

Use case: Pharmaceutical product tracing through global supply chain or Citizen’s data managed and shared by various level of the government.

Bottom line:

One needs to find the right business use case and find matching technology from Leonardo product line to implement this use case. Remember that your business case can be either a ‘Problem statement’ i.e. I have a problem I need to solve OR an ‘Opportunity statement’ i.e. I see an opportunity to increase revenue/efficiency.

In case of Leonardo, there is no one size fits all. All organizations will need to come-up with a specific business case and implement relevant technology. SAP provides services (innovation tool kits) that can help you get services and expertise you need to implement one or more combination of these technologies.

These technologies will define success of future enterprises. All of these technologies may evolve at different speed and will achieve varying levels of maturity in the next five years. Keep an eye on these technologies (and may be launch pilots to get hands on experience) and this will help all of us define road map for our organization/clients.

Innovative application implementation should be implemented on top of strong S/4 HANA core implementation. In order to be a good tennis player or runner one must be in good physical shape. Once you develop an active and healthy life-style and are in physically fit condition (e.g. SAP S/4 core), you can excel in any activity you focus on (e.g. Analytics, ML, IoT).

I look forward to reading your comments.

Thanks,

Source: https://www.sap.com/products/leonardo.html Open SAP – SAP Leonardo – Enabling the Intelligent Enterprise

8 Features to Know before Creating a Fiori UI5 Prototype with BUILD

SAP Build is a great tool for building high fidelity Fiori UI5 prototypes. Here are the main features I learned while developing with this prototype app.

1. Low cost of changes (no programming)
2. What you see is what you get
3. Interactive prototype with screens, process and data
4. Fiori compatible (get a jump start on Fiori development)

Not all prototypes are created equal

Mock-ups (low fidelity prototypes) can go only so far in the user experience improvement journey. In order to succeed, you will need to develop a high fidelity working prototype. This will reduce your risk of delivering yet another sub-optimal user interface (UI) to the end-users.

Low-fidelity prototype:

• Process map with sticky notes: You can visualize process, but not enough screen details
• Screen mock-ups: You can visualize screens, but not enough understanding of process
• Limited visibility on data

High-fidelity prototype:

• Visualize: screens, processes, and data

Elements of high fidelity prototype:

1. End-to-end process with all screens and fields
2. Interactive elements (where users can engage meaningfully with the UI)
3. Realistic data

You can use this prototype to explore all the features listed below.

Try Prototype: End-to-end business scenario and data:

https://www.build.me/gallery/api/private/v1/artifact/af0a25e40119762f0f17c988/0f4910cad428b5b50f191e9e/index.html

Clone prototype:

https://www.build.me/gallery/af0a25e40119762f0f17c988 (Google Chrome works better)

Slide deck:

Link to the prototype slide deck

8 Build features:

1. Page map and Pages: Build end-to-end business scenarios:

• Great tool to combine process and screen
• No need to rely on Visio or PowerPoint mock-ups
• You can add page and navigation options
• Great visualization with navigational arrows on “page map”

There are mainly five types of screen available with predefined controls. For example: “Worklist” page, and it will provide all building blocks for developing functioning work list e.g. Tabs, Table controls, Search bar, etc.

2. Fiori controls:

• Simple drag and drop interface.
• Easy to visualize and arrange different controls on a page

There are eight types of controls:

1. Action: Button, breadcrumb, menu, etc.
2. Tile: Tile, Tile content, etc.
3. Containers: Tab, tab bar, etc.
4. Display: Bar, Image, Item attribute, etc.
5. Layouts: Form, Grid, Box, etc.
6. List: Tables, feeds, etc.
7. User inputs: text, buttons, drop downs, etc.
8. Charts: Bar-chart, Line charts, Micro chart, etc.

You can manipulate the control parameters on the right section of this screen

3. Realistic data:

Bring your own data from a spreadsheet or create a model and populate the data on your own. You can bring many types of data and build relationships. You can find many sample data models from the Build library as well.

Edit sample data on the fly or update data with spreadsheet (download/upload) functions. This is a really easy to use interface. You can also create data relationships.

4. Images: Branding, icons and visualization

You can upload your own images. You can upload custom icons and use them for your app. Images can be used for branding (e.g. logo) or as a part of an app. e.g. product image. You can use file options in the Project Workspace to manage these images.

5. Collaborate

Share your project with you team/users. Your team members can edit the project, add comments, etc. It’s easy and intuitive.

The team can collaborate in the development cycle, testing cycle and getting feedback. This discussion allows everyone to be on the same page.

I wish there was a notification feature or indicator that someone added a comment. (Like Google docs)

6. Study/Feedback

Create your own study and invite users to explore the prototype and have a meaningful interaction. Users will provide you with realistic feedback and you can also measure users’ interaction with the prototype. Example features: Heat-map, statistics and user flow.

Create study: Perfect way to coordinate with the team. Let users play around and have a feel for the solution. If you have to explain a lot, then you didn’t do a good job in designing the user experience.

7. Personas

Personas is a great feature to understand users and it helps keep focused on them throughout the project. This can be integrated as a part of your change management and/or training efforts.

8. Export to SAP WebIDE

When you are ready to start development, simply download the prototype using the “Share” function. The downloaded file includes all screen elements.

Voila! You can design a functioning prototype without writing a single line of code.

A few bumps:

1. Understanding the data object and relations is not intuitive. Especially when users like me want to build very complex, life-size data structure. Suggestion: Think through your data model esp. hierarchical (e.g. header and item data) relationship between tables and fields before you start assigning data to fields.
2. No versioning. It’s hard to go back once everything is saved. Suggestion: Create a copy or use download functionality to create back-ups.
3. Only five projects per free account. If you want to work on more projects, contact your SAP representative.

There are many more features and functionalities available in Build, but the above highlighted features will help you take the first steps in your long and fun-filled user experience (UX) journey.

I look forward for your feedback and new tips and tricks through community.

Have fun!

Comparison – SAP Fiori UI5 and Screen Personas : The Good, The Bad, and The Ugly

SAP provides two paths to a delightful user experience (UX)

SAP Fiori UI5 apps and SAP Screen Personas are two ways to achieve SAP Fiori user experience.

• Fiori UI5 UX strategy aims to transform the transactional operational model to a role-oriented one
• SAP Screen Personas simplifies scenarios not yet covered by Fiori applications or for your custom transactions

UI v/s UX

There is a distinction between User Interface (UI) and User experience (UX).

User interface deals with intuitive screen design, screen flow, buttons and colors.

User experience deals with how users feel when they interact with the technology. It includes integration between processes, people and technology

Example:  Uber

• Intuitive screen design to call a ride from your mobile phone  > Great UI
• You can walk out of your ride without using your mobile phone >  Great UX

Perspective

SAP provided technologies (Fiori UI5, Personas) can be used to improve UI for screens as part of organization’s UX improvement initiative. Here is a perspective of each technology.

1. Fiori UI5 apps:

The Good:

• Role based development
• Develop once, use on any device i.e. Mobile phone, tablet and desktop
• Develop based on your need (independent of existing SAP transactions)
• Leverage SAP Fiori Launchpad to personalize landing screen
• Fiori design is the future UI for all SAP products
• Dynamic search functionality
• Smart tiles with analytical annotation

The Bad:

• High cost of development
• Different approach for development compared to traditional development (Design thinking)
• Need to provide complete “end to end functionality” for designated roles otherwise users end up in two different user interface (Fiori and SAP GUI)

The Ugly:

• High cost of change (develop once and develop right)
• Easy to deviate from SAP’s Fiori design guidelines

Bottom line:

Great for complex business processes, high development cost, great UX improvement, long term approach aligned with SAP’s UX strategy

2. Screen Personas

 The Good:

• Modify existing transactions (standard and custom) > Keep existing business logic
• Easy to simplify > remove fields
• Relatively easy to beautify screens by applying themes
• Great screen editing interface for screen editing and great libraries for JavaScript
• Great for simplifying display transactions
• Can be integrated with Fiori Launchpad

The Bad:

• Limited to SAP GUI transactions (Very difficult to combine different edit transactions on one screen > It gets ugly pretty fast)
• JavaScript can be used for front end development i.e. SAP GUI for HTML screen (One can also create flavors in SAP GUI for HTML and render in SAP GUI for Windows. Limitations are noted here: https://launchpad.support.sap.com/#/notes/0002080071)
• Limited to fixed screen-size per theme (You need to create flavors for every screen size. Development time multiplies with every flavor)
• Every transaction needs flavor (i.e. Three flavors for MM01, MM02 and MM03). Multiple flavors if you are creating different variants for different users groups

The Ugly:

• For edit transactions it gets ugly to merge fields from multiple tabs esp. grids
• It gets even uglier if you have mandatory fields on different tabs
• Must utilize an ABAP expert and a JavaScript developer for any meaningful automation or custom screen development
• Numbers of scripts and flavors can get out of hand very quickly
• Screen can look like Fiori screen but will not provide intuitive fluid UI functionality available in Fiori UI5 screens

Bottom line:

Great for simple transactions and linear business processes, limited development effort, limited UX improvement gain.

3. Hybrid approach:

Improve UX by implementing Fiori UI5 and SAP Screen Personas

• The man who chases two rabbits, catches neither. ~ Confucius
• If you “the organization” want to chase two rabbits, setup two different teams and send them to chase one rabbit each ~ Confucius 3.0

Also posted at : https://experience.sap.com/topic/perspective-two-paths-to-a-delightful-user-experience-ux/

Display number of entries (and counts) in PM list edit reports (IW28, IW38, IP15, IP18, IH08. IW47 etc.)

Goal: Display number of entries (and counts) in PM list edit reports

Example: IW28 – List notification

I am sure many PM experts knows about this features, but hopefully this document will help new and upcoming users.

Steps:

1. A selection of records is made using a PM list editing report. In this example IH08 is used.
2. The “Count.” column is added to the layout

 

3. Click green check mark
4. Number of Entries (without Filtering) will be displayed

5. If you add filter for any column(s), count will change by the number of entries in the header section of this report will not change.

Tip: To display totals line above the entries, check this box in the change layout ‘Display’ tab

Hopefully this will save time for users to export list to the spreadsheet in order to count number or rows.

 

You can use this to display ‘Number of Entries’ in many standard SAP reports

 

IW38 / IW39: List work orders with number of orders

IW28 / IW29 : List notifications with number of notifications

IP15 / IP16 : List maintenance plans with number of maintenance plans

IP18 / IP19 : List maintenance items with number of maintenance items

IK07 / IK08 : Measurement points with number of measurement points

IK17 / IK18 : Measurement documents with number of measurement documents

IW47 : Display time confirmation with number of confirmations

Enjoy!

 

Requirement: ECC6 EPH4 or higher

Reference SAP note with all applicable transactions: https://apps.support.sap.com/sap/support/knowledge/preview/en/2181264

Brief overview of Outline agreements

Outline agreements in SAP

Presentation – Contracts and Scheduling agreement

What is Outline Agreements? Where it fits in purchasing process?

The outline purchase agreement is often referred to as a blanket or umbrella purchase order. It is basically a long-term agreement between the purchasing department and vendor for material or services for a defined period of time. The purchasing department negotiates with the vendor a set of terms and conditions that are fixed for the period of agreement.

 

 

Which business requirements lead to use of outline agreement?

 

1. When purchasing department want to setup long term relationship with vendor for specific group of materials or services
2. To negotiate binding conditions for purchasing (i.e. price, quantity, discounts etc.) without actually releasing purchase order
3. Using pre-negotiated offer during day-to-day purchasing
4. Increase speed of actual purchasing to satisfy actual requirements
5. Provides better monitoring and control of actual release of purchase order against offer

 

Structure of an Outline Purchase Agreement

 

An outline purchase agreement consists of the following elements:

• Document header: contains information relating to the entire agreement. For example, the vendor information and header conditions are in the document header.
• Items: containing the information specific to the relevant material or service. For example:
• Statistics on ordering activities for the item
  • Quantity or price of the item
  • Conditions, such as quantity discounts and surcharges

 

 

Contracts v/s Scheduling agreement

 

 

In SAP MM Purchasing, such agreements are subdivided into “contracts” and ” Scheduling agreements.”

 

Contracts:

• Longer- term contract with subsequent issue of release orders
• Different POs can be released for same contract
• Mainly used for frequent non-predictable requirements e.g. Purchasing office supplies

 

Scheduling agreement

• Longer-term scheduling agreements and delivery schedules
• Same scheduling agreement number is used with different release calls
• Mainly used for repetitive/predictable requirements e.g. purchasing spare parts of a large fleet
• Can be tightly integrated with MRP

 

Contract

 

A contract is a longer-term agreement with a vendor (one of the two forms of “outline agreement” in the SAP system) to supply a material or provide a service for a certain period of time. A number of different terms may be used for this concept in purchasing literature, including “blanket order”, “blanket contract”, “systems contract” and “period contract”.

 

The contract does not contain specific delivery dates or the individual delivery quantities. These are specified subsequently in release orders issued against the contract when customer requires them.

 

Contract types

 

When creating a contract, you can choose between the following contract types:

1. Value contract (MK) : The contract is regarded as fulfilled when release orders totalling a given value have been issued. Use this contract type when the total value of all release orders should not exceed a certain amount.
2. Quantity contract (WK) : The contract is regarded as fulfilled when release orders totalling a given quantity have been issued. Use this contract type when the total quantity to order over the duration of the contract is known.

 

Ways of Creating Contracts

Contract can be created in one of the following ways:

1. Manually: Enter all the contract data manually.
2. Using the referencing technique: Create a contract by referencing

a.          Purchase requisitions

b.          RFQs/quotations

c.          Other contracts

 

Characteristics of contract:

 

• Contracts are outline agreements. They do not contain details of the delivery dates for each of the items.
• To inform vendors of which quantity you need for which date, you enter contract release orders for a contract. A release order is a purchase order that references a contract.
• If a purchasing information record with conditions exists for the material and the vendor, the system automatically suggests the net price according to these conditions when you create the contract item.
• Contract validity period is defined in the contract header as the validity period
• For each item in a quantity contract, you define the target quantity and purchase order conditions.

 

Item categories in contracts

 

Item Category

M – The material is unknown

W – Value and quantity are unknown

D – Procuring an external service

K – Consignment material is involved

L – Subcontracting material is involved

 

• Item category M is recommended for similar materials with same price but different material numbers. For example, contract for copier paper.
• Item category W is recommended for material belonging to the same material group but with different prices. For example, contract for office supplies.
• Item category W can be used only in value contracts.
• Item category M and W are not allowed in contract release orders.
• Item category D is used for services contracts.

 

• Account assignment category, ‘U’ unknown can be used in contracts. In this case, cost center will be determined at time of creating release order.
• The account assignment category, ‘U’ is denied in contract release orders. You have to replace the account assignment category with a valid account assignment category.

 

Processing contracts

 

• Contract release orders are purchase orders that are created with reference to contract.
• The release order documentation (i.e. the quantity released until now, and the open quantity) is automatically updated when you create a contract release order. This can be used for monitoring the contract.
• The release order document is contained in the statistics for contract item.
• You can enter source of supply in the purchase requisition. This ensures that the outline agreement is referenced when the purchase requisition is converted into a purchase order.
• Contract release order can be created with or without reference to a purchase requisition.
• The release order documentation comprises details of ordering activity relating to a contract. The system supplies the following data on each release order:

a.          Number of contract release order

b.          Order date

c.          Order quantity

d.          Order value

e.          Quantity released to date

f.          Target quantity

g.          Open target quantity

• You can list all contracts that are due to expire in the immediate future. The analysis is carried out using the Target value and Total value released fields in the contract header, based on suitable selection parameters

 

Centrally Agreed contract

 

The centrally agreed contract allows a central purchasing organization to create a contract with a vendor that is not specific for just one plant. In this way, the purchasing organization can negotiate with a vendor by leveraging the whole company’s requirements for certain materials or services.

• Contract items can relate all plants covered by a purchasing organization
• All plants of a purchasing organization can order against a centrally agreed contract
• Using the plant conditions function, the centrally agreed contract allows you to stipulate separate prices and conditions for each receiving plant. For example, different transport costs.

 

 

SAP Transactions

 

• Create value contract for material group (WK) – ME31K
• Change contract – ME32K
• List display contract – ME3L
• Monitor contracts – ME80RN

 

References:

 

1.          help.sap.com

2.          SAP MM:Functionality and Technical Configuration, SAP Press

Steps for opening and closing period – MM FI CO

As many of us struggle with changing periods in our DEV and QA environments, here is quick reference for opening and closing period. In doubt, please consult with your FI/CO expert.

There can be upto four transaction involved depending on your situation.

•          MMRV – Allow posting to previous period

•          MMPV – Close Periods

•          OB52 – Change view “Posting Periods: Specify Time Intervals”: Overview

•          OKP1 – Maintain Period Lock

1. MMRV – View current period / Allow posting to previous period

This transaction allows you to view current period and change setting for posting to previous period.

2. MMPV – Close Periods

In MMPV you can execute period closing up to the end of the current fiscal year. The period closing program updates the administration record, thus ensuring that the stock data of the material master are updated.

If, for example, you want to close your periods up to 03/2013, you are not allowed to post values in 01/2013. Therefore, if you still want to make postings in period t, you should execute period closing only for a maximum of t+1 periods.

3. OB52 – Change view “Posting Periods: Specify Time Intervals”: Overview

In this activity, you close the posting periods for FI-AA and open the new periods for FI-AA.

No more FI-AA postings can be made to the previous period. Postings for the future periods are allowed.

4. OKP1 – Maintain Period Lock

If needed, unlock period for CO transaction.

If I have missed anything here or misinterpreted, let me know and I will correct it or add additional clarification/tips.

Source: help.sap.com

Posted on: https://blogs.sap.com/2013/04/27/steps-for-closing-period-mm-fi-co/

PDF: Closing_Periods in SAP MM FI CO