TOOLS FOR ANALYTICAL SUPPORT OF INVENTORY MANAGEMENT IN SAP S4/HANA IN OPTIMIZATION CYCLE FRAMEWORK

Abstract

The main purpose of this article is to discover and analyze crucial instruments for analytical support of inventory management process in the environment of Enterprise Resource Planning system SAP S4/HANA in the workflow of optimization cycle. The optimization cycle provides a framework for process design that uses continuous feedback loops. The cycle consists of 3 stages – planning, execution and analysis that follow each other. The workflow starts with planning. This stage can be further divided into configuration of basic system parameters and master data settings, the planning strategy decision, and materials requirement planning. We analyze the differences among such available planning strategies as make to stock, make to order, assembly to order, engineer to order and demand driven materials requirement planning. One of the important elements of materials requirement planning is MRP type definition. SAP S4/HANA presents a number of options of build-in MRP types, such as PD – classical MRP planning process, P1, P2, P3 – versions of classical MRP with frozen planning timeframe, M0 – master production scheduling planning process, VB – manual reorder point-based planning and several others. We analyze the differences among them and their division into deterministic and stochastic types. Next, we analyze the execution stage of the optimization cycle, and show how the inventory flow is captured in the documents – purchase requisition, planned order, purchase order, and different types of material movement documents. Then we proceed to the analysis stage and investigate specific analytical tools that can be used for inventory management, including various SAP Fiori applications. These instruments include early warning system (exception management tool with custom notifications on the basis of user set rules), different purchasing reports, including purchase order history, standard analyses and Key Figures management, ABC analysis with different approaches, inventory turnover analysis, dead stock and slow-moving items analysis, range of coverage analysis and stock value analysis.