It is a centerpiece of the process landscape: the SAP module MM (Materials Management). It maps the fundamental processes in materials management and serves as the foundation for all further logistics modules in SAP. Every company that uses an ERP system like S/4HANA will also use the processes in the area of Material Management (MM). “But: we no longer talk about modules, transactions or authorizations — today it’s about streams, business roles and apps. What role do you play in the company? What tasks do you have?” Marco Binz objects. He is a Senior Manager at cbs and an expert in procurement.
Connected with this role — in this case that of the purchaser who must procure raw materials — one speaks of “Source to pay”, subdivided into the process parts “Plan to strategy”, “Source to contract”, “Procure to receipt” and “Invoice to pay” — or, in other words: from finding sources to paying. These areas were only partially covered by SAP in the ERP beforehand with Purchasing, Inventory Management and Invoicing and are now being reconsidered completely with S/4HANA. By the way, the MM topic is also closely linked to the area of Sales & Distribution (SD). Both core modules are undergoing major change, from classic MM to “Source to Pay”, from SD to “Order to Cash”. After all, today it’s about thinking in much larger contexts than ten years ago. “Our task is to establish seamless, digital end-to-end processes, and even beyond company boundaries,” Binz emphasizes.
The strategic purchaser manages sourcing
In the future “Intelligent Enterprise”, MM offers best-practice processes for procurement in order to meet requirements optimally in terms of price, quality and delivery time. These three cornerstones are now being supplemented by the topic of sustainability. This is about procurement that conserves as much energy and the environment as possible. The rules derived from the company’s objectives are implemented into processes. These processes are practiced and realized by the strategic purchaser and the operational purchaser within their roles. The operational purchaser must keep an eye on current requirements as well as material stocks. They must optimize these with regard to future needs in order to align the company with the forecast market demand. The strategic purchaser, accordingly, searches the market for sources (sourcing). 
Ariba as the digital marketplace of the future
In this context something new is added: the topic of Ariba, SAP’s new purchasing platform, a cloud solution that more and more customers worldwide are using. On Ariba, companies can network directly with each other and conduct business more efficiently. They can manage the entire procurement process, find suppliers, realize savings potential, run tender procedures and build a stable supply chain. “We advise our customers toward Ariba, we have installed our own test platform and we build individual interfaces into the SAP system together with our PI experts,” reports Binz. Ariba is intended to become the digital marketplace of the future. Collaborative Commerce — that is the buzzword. Already today, nearly two billion euros in turnover are generated there daily.
Another innovation is the Central Procurement Hub (CPH). This is an add-on that cbs has already tested intensively and aligned with customer requirements. Marco Binz: “We are also in close exchange with SAP here. It is a good, robust and very exciting product. In this area we will also continue to develop and gain new experiences.” With the CPH, procurement processes run centrally through one system. The hub is connected to Ariba and communicates with the various systems beneath it, such as S/4HANA and SAP ECC. Because in many corporate groups multiple heterogeneous ERP systems often exist.
Order management, shipping, invoicing
In the area of Sales and Distribution (SD) it is similar to MM: the upcoming switch to S/4 is keeping customers busy. There are quite a few changes regarding Business Partner, data structure, etc. The consultants’ task is to make the innovations transparent and explain them in such a way that the customer gets an idea of the technical and personnel effort of the transformation. The processes largely continue as before. “Standardized procedures are very important for many industrial companies. SAP company templates are the basis of sustainable globalization and the proven means to establish standards across the entire corporate group, and that also applies to sales,” says Franziska Hempel. She has been working as a consultant in the SAP environment for twelve years, heads the Competence Center Sales Management and is thoroughly familiar with SD. The SD module is one of the core modules in the SAP system. SD primarily contains activities of the logistics process that are customer-oriented. These include, among other things, order management, shipping and transport, invoicing, credit management and the foreign trade/customs area.
Especially in SD, processes often have to be tailored individually to specific customers, i.e. “customized”! That makes it particularly time-consuming. “In all those years I have never encountered an industrial customer who designed a sales process exactly the same as another,” Hempel admits candidly.
Interfaces to all other modules are important. “Of course — the modules mesh together like gears,” says Hempel. Already during order entry the system checks the availability of the recorded material. Based on the customer’s requested delivery date it checks whether that date is feasible or not. Sales must constantly keep in touch with production planning and procurement and exchange data in real time. Do we still have enough stock of a material? How quickly can we produce it? Where are there delivery bottlenecks? How can we accelerate the procurement process so that we can deliver the order next week?
Do consultants actually talk more with the business side or directly with corporate IT? That varies by project. Sometimes IT has already captured the requirements, for example when something in pricing is to be changed.
Business users are the ideal sparring partners
“But especially with a view to S/4, and above all in process modeling, it makes a lot of sense to talk directly with end users,” reports Franziska Hempel. “That way I want to find out independent of the system which tasks they perform daily, how workflows look, and then map the optimal process in the system. The business primarily wants processes to work cleanly. Changed procedures must be well justified and provide added value. IT usually has a different perspective — it looks more at standardized processes to keep the operational effort low.”
Marco Binz sees it similarly; he likes to talk with the business. “Purchasers are usually a very challenging sparring partner. You learn a lot from that. And: they always have their costs in mind. But that is completely legitimate,” the consultant states. “Our maxim is: don’t accumulate unnecessary project days, but find the best solution for the respective company — and do so directly,” explains the SAP specialist. “We act in the customer’s interest and make the customer’s project goals our goals.”
