Manage Contracts, Purchases with S/4HANA

By Darren McGregor, Illumiti

Buyers will realize much better results with a holistic view that breaks the job into daily, weekly, and monthly duties. SAP S/4HANA users should align the Materials Management module with the rest of ERP Central Component (ECC). Looking ahead, consider integrating your work into the business by collaborating with other departments. Making these changes will help the operation run more smoothly and could yield significant savings. Following is a quick rundown of how S/4HANA is used to monitor contracts and execute purchases.

A first step is to evaluate contracts to ensure they have not expired and that spend is in line with the contract amount. Use the overview tile to reveal contracts. This contract is valid until the end of May 2020 and has a consumption percentage of almost 45%.

Go to the Manage Contracts page, update the date, and press “Renew.” The contract will now reflect the new expiration date.

One of the materials in the contract has reached the reorder point. Use the Monitor Stock tile to reveal the Stock Requirements Situation window. As we can see, we do not have any of the material in stock and need to activate Material Requirements Planning (MRP) action. The reorder point is 25 and the maximum stock is 40. Run MRP by selecting this icon at the top of the page:

The system generates a requisition for a quantity of 40.

To create a PO for the material, press the Purchase Order button. A PO is created against the contract for a quantity of 40.

Darren McGregor is Logistics Solution Architect at Illumiti, Thornhill, Ontario (illumiti.com). If you have SAP questions, send them to editors@efficientplantmag.com and we’ll forward them to Darren.