Advanced Intercompany Sales & Stock Transfer in SAP S/4HANA Cloud

 Last updated: 07th December 2022

Today, I would like to introduce you to an amazing solution that you as our customer have desired for a long time, the Advanced Intercompany Processes. If you cannot wait, then check out the magic in this system demo here already.

Table of content (for quick access, just click on one of the business area links):

Overview

Business Reasons for Intercompany Processes

New Best Practice Processes

Process Activation and Restrictions

Outlook

Intercompany Sales

Classic Intercompany Sales – Single Level / Single System

Advanced Intercompany Sales – Single Level / Single System

System Demo – Advanced Intercompany Sales

Intercompany Stock Transfer

Classic Intercompany Stock Transfer – Single Level / Single System

Advanced Intercompany Stock Transfer – Single Level / Single System

Value Chain Monitoring Framework (VCM)

 

 

Overview

 

Business Reasons for Intercompany Processes

A split between the entities handling sales and production is often needed for various reasons. This leads to the need to support Intercompany Sales:

• Separate risks between domestic and international sales and production
• Easier local and regional sales
• Tax advantages
• Safeguarding of brand
• …

Intercompany supply chains are spread across various localizations and lead to the need of Intercompany Stock Transfer between group legal entities to run company value chains

• Production plants close to raw materials
• Leverage local advantages on company group level (labor costs, free trade, and industry zones, …)
• Tax advantages
• …

Most SAP customer companies with two or more company codes need Intercompany Processes.
Intercompany processes are a must for:

• All manufacturing industries
• All companies running on a dedicated internal supply chain

The Advanced Intercompany (ICO) processes

• Supports first E2E SAP standard processes for ICO
• Supports process automation
• Reduces TCO for customers as this standard process relieves them of custom developments, maintenance and upgrades

 

New Best Practice Processes

With the continuous delivery 2202.3 for SAP S/4HANA Cloud we are launching two new scope items for the Advanced Intercompany processes:

• Advanced Intercompany Sales (‏5D2‏)
• Advanced Intercompany Stock Transfer (‏5HP‏)

 

Process Activation and Restrictions

The Advanced Intercompany Sales process is per default disabled for the standard document types and item categories.

To activate the Advanced Intercompany Sales process, specific configurations must be enabled through an expert configuration request. Some configurations have to be done by the customer.
For further details read the Set-Up Instructions document that you will find in the details section of the scope item Advanced Intercompany Sales (‏5D2‏).

Currently the process can be activated for item categories TAN and CBXN.

The release restrictions for Advanced Intercompany Sales are described in SAP note 3192584.

Also the scope item Advanced Intercompany Stock Transfer (‏5HP‏) provide a Set-Up Instructions document.

 

Outlook

It is planned to deliver the Advanced Intercompany processes also in SAP S/4HANA on premise with upcoming releases. So this blog post is relevant for both deployment types, SAP S/4HANA Cloud, and SAP S/4HANA on premise.

The first launch of the Advanced Intercompany processes covers the scenario for Single Level / Single System that is explained below. In addition, it is planned to extend the Advanced Intercompany processes also to cover the scenario for Multi Level / Single System with one or more additional Intermediate Companies between the Selling Company and the Delivering Company. This is a subject to be changed.

 

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Intercompany Sales

Classic Intercompany Sales – Single Level / Single System

First let us have a look on the classic intercompany sales process. For example, a local sales office sells to a customer and the goods are delivered from a plant, which is assigned to another company code, directly to the customer as shown in the next figure.
Starting point of the process is the purchase order of an US customer (step 1) that triggers the creation of a sales order in the US selling company (step 2). The US selling company triggers directly the outbound delivery in the German delivery company (step 3). The US customer receives the goods directly from the physical warehouse in Germany, but the invoice is issued by the US selling company. During the process no valuated stock is created in the US selling company and business documents like the purchase and sales order between the affiliated companies are missing.

Fig. 1: Classic Intercompany Sales – Single Level / Single System

 

Advanced Intercompany Sales – Single Level / Single System

The process for advanced intercompany sales provides functions that allow two affiliated companies to participate in a single intercompany process, such as the following:

• A local sales office sells to a customer. The producing company delivers the goods directly to the customer.
• A local sales organization sells to a customer. A central warehouse delivers the goods.

A standard sales order can initiate the entire process, which is integrated into the value chain monitoring framework. To orchestrate and monitor each process step, this business processes makes use of the Monitor Value Chains app.

Fig. 2: Advanced Intercompany Sales – Single Level / Single System

 

What are the key features of the Advanced Intercompany Sales process?

It is a seamless E2E process that is highly automated and embedded into the following areas:

• Product Compliance
• Trade Compliance
• Profitability Reporting across legal entities
• Support of IFRS 15 compliant revenue recognition and COGS postings
• Product Costing
• Group Reporting / Consolidation

Changes in customer-facing sales order are possible and automatically managed by the system.

Valuated Stock in Transit in the Selling Company allows seamless change of control between affiliates and customer.

Purchase Order in the Selling Company enables landed cost in product costing.

E2E value chain and process monitor allows issue detection and posting services.

 

 

System Demo – Advanced Intercompany Sales

My colleague Markus Oertelt has recorded the Advanced Intercompany Sales process for you. Watch the next video! The system demo is structured into the following sections:

Video time / min	Topic
00:10	How to create a sales order?
02:09	How to create a sales order with SAP Fiori?
03:43	How to monitor your value chains after the sales order is created?
04:47	How to check automatic creation of intercompany purchase and sales order?
05:56	How to create delivery documents?
07:46	How to check transfer control of goods?
08:16	How to pick the delivery goods?
09:37	How to post goods issue?
10:39	How to create billing document?
12:08	How to monitor your value chains?

 

Video: Advanced Intercompany Sales  (system demo without voice demo)

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Intercompany Stock Transfer

In analogy to the chapter above, let me also briefly compare the process of Classic Intercompany Stock Transfer and Advanced Intercompany Stock Transfer with the help of process flow diagrams:

Classic Intercompany Stock Transfer – Single Level / Single System

Fig. 4: Classic Intercompany Stock Transfer Process – Single Level / Single System

 

Advanced Intercompany Stock Transfer – Single Level / Single System

Fig. 5: Advanced Intercompany Stock Transfer Process – Single Level / Single System

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Value Chain Monitoring Framework (VCM)

The Value Chain Monitoring Framework (VCM) is a generic framework for designing, running and monitoring business processes within SAP S/4HANA that supports pre-configured SAP standard E2E processes. The benefits are:

• Increased end-to-end process visibility, efficiency, and collaboration
• Issue detection providing posting services
• Tightly integrated into relevant business applications

Fig. 6: Value Chain Monitoring Framework

 

The Monitor Value Chains app enables you to track all steps of the Advanced Intercompany Sales, Advanced Intercompany Stock Transfer, and Sell from Stock with Valuated Stock in Transit (VSiT) business processes. This app provides you with a detailed overview of all relevant steps and documents in these processes. In addition, it directly integrates these processes with other business applications. The business benefits are increased transparency, efficiency, and cross-team collaboration.

Fig. 7: Monitor Value Chains app

 

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Thanks for reading this blog. Stay tuned!

[Update 20221207]: Also check out the recording of the SAP Community call with my colleague Bernd Strecker (SAP Product Manager for Advanced Intercompany Sales). First, Bernd explains Advanced Intercompany Sales in SAP S/4HANA via his slide deck that is available here. I would especially like to draw your attention to the topic “Planned Features” at 28:46 min with an interesting outlook. The “Q&A” that answers a lot of interesting questions starts at 30:30 min. At 40:57 min Bernd shows a live system demo and finally at 49:13 min he answers some more questions.

For more information on Advanced Intercompany Sales, check out the detailed description here.

For more information on SAP S/4HANA, check out the following links:

• SAP S/4HANA release info: sap.com/s4hana
• SAP S/4HANA Community here
• SAP S/4HANA Cloud for Manufacturing & Supply Chain – The Link Collection here
• Help Portal Product Page here
• What’s New here
• Best practices for SAP S/4HANA here

Source: Advanced Intercompany Sales & Stock Transfer in SAP S/4HANA Cloud | SAP Blogs

Automate Intercompany transactions using IDocs

 Introduction:

For a lot of organizations, Intercompany transactions constitute a major chunk of the overall transactions. Hence, bringing in process improvements and automation in this area can help save a lot of cost and effort.

In this blog post, i would like to highlight the automations we can bring in to have a seamless flow between MM and SD processes for intercompany transactions with minimum user interference.

I would be covering the high level process and the detailed steps required to set up each process can be found on various forums.

This is what a general intercompany cycle looks like.

IMG Source: https://blogs.sap.com/wp-content/uploads/2016/02/purchase_order_884189.jpg

 

Steps to be automated:

 

1. Sales Order creation in the selling company.

Once the necessary STO settings have been made, and an intercompany purchase order has            been created. The following settings need to be made to automatically create a sales order in            the selling company code.

Pre-requisites:

• Create a custom output type and set up partner profiles for each vendor with idoc type ORDERS for sales order creation using transaction code WE20.
• Use process code ORDE for inbound processing.
• We need to map the idoc fields to the Sales order creation fields for successful creation. Take ABAP help for mapping.
• Set up condition records for automatic output processing.

 

 

2. Order acknowledgement from the selling company.

Once the Sales order is created, we need to send an order acknowledgement from the selling            company to confirm the demand. Once triggered, it should show up in the PO confirmations                tab.

Pre-requisites:

• Create a custom output type and set up partner profiles for each customer with idoc type ORDERSP for sales order creation using transaction code WE20.
• Use process code ORDR for inbound processing.
• Set up condition records for automatic output processing.

PO confirmations tab:

 

3. Automatic creation of Outbound delivery w.r.t Sales order.

Once the material is available, the system should be able to automatically create a outbound             delivery with reference to the sales order.

Pre-requisites:

• Setup batch job with program RV50SBT1.

4. Automatic inbound delivery and ASN creation.

• Create a custom output type and set up partner profiles for each customer with idoc type DELVRY01/02/03 for inbound delivery creation using transaction code WE20.
• Use process code DELS for inbound processing.
• Set up condition records for automatic output processing.
• Once triggered, it should show up in the PO confirmations tab.
• Goods receipt can be posted based on this inbound delivery.

PO confirmations tab:

 

5. Automatic invoice in the receiving company based on the billing document created in selling                company code.

Pre-requisites:

• Once the requested materials have been delivered, the selling company creates a billing document.
• Create a custom output type based on standard output type RD04 and set up partner profiles for each customer with idoc type INVOIC for invoice creation using transaction code WE20.
• Use process code SD08 for inbound processing.
• Set up condition records for automatic output processing.
• Once triggered, the invoice will be automatically created and can be seen in the PO history.

 

Conclusion:

Organizations can choose to use all or some of these automations independently based on the business requirements.

This can help to reduce the number of FTEs required to post intercompany transactions, improve accuracy and reduce errors, and help reduce intercompany overdues drastically.

Please feel free to reach out to me via the comments section if you need any further information or clarification on the topic. Also, you can post your queries in the Q&A tag area here.

Source: Automate Intercompany transactions using IDocs | SAP Blogs

Start with SAP BTP Document Management Service (DMS)

 Recently as a customer success engagement role, I had to dive into SAP BTP Document Management Service (I will use SAP BTP DMS in short) topic, since more and more customers are showing interest. It is not an easy thing, if you know nothing about SAP BTP DMS before. So here I want to take advantage of SAP blog posts, to summarize some resources and links, together with some my own experience, so that perhaps you can gain some “getting started” knowledge.

First of all, what is SAP BTP DMS?

Let’s forget SAP BTP DMS for a while and take a look at SAP S/4 HANA side. Here is another thing called Document Management System (also called DMS). It is not SAP’s invention, but SAP has its own DMS solution in E.g. SAP S/4 HANA system. It is a cross application component of SAP that provides robust document and e-asset management capabilities. SAP DMS is a major component of SAP PLM solution. It is mainly used to manage business Documents, which are very important for day to day business. Companies needs to access these documents and make it available for every authorized person. SAP DMS provides us to store all important documents need to accessible by every one in the organization. So it’s possible to upload some e.g. Office documents and attach it to a sales order or procument order.

SAP DMS enables the capture and management of :

• Electronic documents,
• CAD models and drawings,
• Microsoft Office files,
• Scanned images,
• Multi-media files,
• Any other electronic files that should be stored and controlled in a secure environment.

SAP DMS provides:

• Version and revision control,
• Integrated workflow capabilities,
• Full text retrieval and search functionality,
• Linkage with SAP business objects such as Bill of Materials, material masters (parts), process plans, engineering change masters, and production orders.

There is also an easier SAP solution called SAP Generic Object Service (SAP GOS) besides DMS. I won’t go deep here as I want to focus on BTP side. You can refer to this blog post for more details.

OK, now let’s go back to SAP BTP DMS. This is a cloud service provided on SAP BTP. You can connect SAP BTP DMS to SAP S/4 HANA, either serving as a fronend UI layer, or serving as the content server as the backend layer.

Then, why BTP Document Managment Service (DMS)?

The short answer is: to get a cheaper place to store documents.

While SAP DMS or SAP GOS provided benefits and nice functionalities described in the previous paragraph, you have to consider one thing, where to store so many attachments? You can of course put these to SAP S/4 HANA database directly as default solution but when the volume of your documents gets higher and higher, it will definitely influence the performance of your SAP system. You can refer to this article and get clear mindset in such “expensive” cost.

Then you can refer to some other places as the content server and SAP BTP DMS is a cloud option for this. You can check this page for the price of storages and API calls. Thus, when you upload the documents from SAP system you can now select SAP BTP DMS as content server and decouple the storage from your SAP system, once you have set up it in your BTP account and conected to your SAP system e.g. SAP S/4 HANA.

The Document Management Service helps you in the management of your business’s documents. It’s based on the OASIS (Organization for the Advancement of Structured Information Standards) industry standard CMIS (Content Management Interoperability Services) and includes features like versioning, hierarchies, access control, and document management.

For your business apps, SAP Document Management Service provides API and UI-based document management capabilities. SAP Document Management Service is available in 2 different options, including Document Management Service, Application Option, which is the SaaS offering (easier to use with a frontend UI application provided), and Document Management Service, Integration Option, which is the PaaS offering (you can utilize all kinds of SAP BTP DMS API provided). All these two options require Document Management Service, Repository Option to stand as the storage provider.

Architecture view

How to start with SAP BTP DMS?

This will probably include two main use cases from requirement perspetive.

1. Connect SAP S/4 HANA repository and leverage SAP BTP DMS as a frontend layer
2. Connect SAP S/4 HANA and leverage SAP BTP DMS as a content server

But the first step is to set up your SAP BTP account and subscribe SAP BTP DMS there.

I have premumed you have a SAP BTP account and SAP BTP DMS in your entitlements e.g. in your free tier account. I will give some screenshots and it should not be hard for this step.

Log on to your SAP BTP account and create SAP BTP DMS instance

Click the instance created in the last step. Create a service key.

Navigate to “Role Collections”. Click “+” on the top right corner and give a name e.g.”DMS_ADMIN” to new role collection.

Click the role collection created in the last step.

Click “Edit” and add corresponding roles.

Navigate to “Users” and select yourself or the user you want to grant access to DMS. Assign Role Collection “DMS_ADMIN” created in previous step.

Navigate to “Instances and Subscriptions”. Click SAP BTP DMS instance you created. Click “View Credentials”. Important: write down the ecmservice url, client id, client secret, uaa.url. You will need them when accessing SAP BTP DMS API as authorization.

Now you can access SAP BTP Document Management Service API, e.g. create repository, onboard repostory, etc..

You can test from Postman using the credentials: client id, client secret and access token url

You can test from Postman e.g. creating a repository

Now since the SAP BTP DMS instance is already established let’s move forward. How to have a SAP Fiori UI connecting to the repository just created?

There is already a nice blog post talking about this. I will not repeat the steps. From within this blog post, you can also notice the same steps utilized for the set up of SAP BTP DMS instance.

If everything goes well (I hope so as it usually has lots of disruptions and struggling points due to my experience), you will get a SAP Fiori application showing the content of your repository. You can manage the documents there directly e.g. checkin, checout, upload etc.

Update: here maybe you want to quickly check the status of your repository in a friendly UI application without Fiori. Then I recommend you can leverage open source application DMS Workbench. You can check more details from my blog post here.

Then what comes next should be, how can I onboard a repostiory within SAP S/4 HANA to SAP BTP DMS so that I can manage documents in my SAP Fiori side just created?

From SAP BTP Document Management Service, it’s possible to onboard SAP S/4HANA DMS as an external repository and browse its contents. The following capabilities are enabled from SAP document management service with SAP S/4HANA DMS repositories:

Document management features including the ability to create, edit, and delete documents or folders.

• Creating Links
• Basic search and metadata search
• Rendition viewer
• Status management
• Classification

Also there is a nice blog post talking about the process. Just follow the steps.

I want to add some more notice here and maybe during the process you will need them.

• If your system doesn’t have SCMIS_HTTP package and /sap/bc/mcm/json SICF service. Please refer to  SAP Note 2856741 and implement it (including the manual activities).
• You can also check the root folder URL https://<api end point>/browser/<repositoryID>/root. If you receive a “runtime” error response please refer to https://launchpad.support.sap.com/#/notes/3053488  and https://launchpad.support.sap.com/#/notes/3083315 for more details.
• In the blog post the SAP Document Management service, application option is used. However, it is totally OK to use SAP Document Management service, integration option because the difference is only UI VS API and Application Option contains capabilites of Integration Option.

Provide the same destination within the request body. Here “destinationName” is the same one you used for the specified respository within SAP ABAP system. “repositoryId” is the same repostoriy id you created in the previous section. “repositoryType” is “external”. Give “displayName” and “description” as you wish. But please remember, you need to set different destinations for each repository you want to onboard.

• Remember to check “use all logon procedures”

The last but not least, how can I leverage SAP BTP DMS as the external content server?

This actually is perhaps the most valuable outcome from SAP BTP DMS from a real world use case perspective, as SAP Document Management service, integration option can be used as a content server from SAP S/4HANA attachment service.

Again, fortunately expert has already created a very nice blog post talking about the steps .

Via the steps I can successfully upload the attachment to the SAP BTP DMS repository. You can check the result via the SAP Fiori application created in the privious section. Here I want to add some notes in case you need them.

• Please read this note https://launchpad.support.sap.com/#/notes/2853519 if you never did this before. And please be sure you are visiting the right cockpit address. For example, if you your api is like https://…cfapps.eu10.hana.ondemand.com then you need to access the cockpit https://cockpit.eu10.hana.ondemand.com/cockpit instead of https://cockpit.ap11.hana.ondemand.com/cockpit or other data location.
• If you use SAP GOS, you need to switch SAP BTP DMS storage category within “skpr08” tcode.

• Issue: Sm59 returns error message “failed: NIECONN_REFUSED(-10)” when test connection. Solution: check and fill proxy setting in your SAP S/4 HANA side and activite it under “Global Settings”

• Issue: “Content repository ABC doesn’t exist” error when test connection under “OAC0”. Solution: Check SMICM logs if there is certificate issue (put it in right folder under STrust T-Code) and activiate “sec” service under SICF.

• Issue: when executing se38 report, you found out the following error. Solution: make sure the destination name in sm59 is upper case e.g. BTP_DMS_DEST instead of btp_dms_dest.

Summary

SAP BTP DMS is relatively a new service within SAP BTP and the product team is also marching forward. You can check more details in the roadmap. E.g. network performance improvement is definitely a nice feature in future and archiving feature is still missing. Usually people talk about some high level concepts and want to bring lots of benefits to customers. But what customers really want to know in my understanding are, 1. whether the product can satisfy my need 2. how to implement it? Is it easy or not? So specially thanks to the blog post authors mentioned within this blog post and the help of BTP DMS product team. Without all these help it is definitely not an easy thing to use it in real world.

I was also asked by customer: how much effort and how long will take to implement BTP DMS solution? Well that depends, especially on how complex you want to utilize BTP DMS or how specialized of your developer. I was a developer before but I am not an expert into S/4 HANA (I may know some T codes at least :D) . Going through all the process mentioned in this blog post took me 3 weeks (not full time as I had other responsiblities…). So if you have a full time team implementing this, it is surely less than 3 weeks.

You can find more information using respective community tag e.g. if you want to find more details regarding SAP BTP please refer to https://answers.sap.com/tags/8077228b-f0b1-4176-ad1b-61a78d61a847 and also SAP BTP DMS https://answers.sap.com/tags/73555000100800002121. BTW, to learn more about SAP BTP, see the learning journey Discover SAP Business Technology Platform, a great introduction to BTP and the Intelligent Enterprise strategy to see what it’s all about for free. Discover BTP, LCNC plus much more free learning at SAP Learning site.  I like this new fashionable web site as I will now and then check something new and integrated content.

I will contribute to this topic continuously. It is just a start for the massive usage from our customers.

Source: https://blogs.sap.com/2022/04/07/start-with-sap-btp-document-management-service-dms/