With SAP S/4HANA With SAP S/4HANA, SAP has created the successor to SAP ECC. The end of maintenance in 2027 (or 2030 with extended maintenance) makes the change necessary for all SAP users. Automotive suppliers that have to map special OEM requirements must be particularly careful during the transformation.
Enterprise resource planning systems are used for central resource planning in a company. These IT systems are used to manage, control and plan personnel, capital, equipment, materials and other resources. SAP has long been the market leader in the field of ERP systems.
SAP ERP Central Component, or ECC for short, was the successor solution to R/3 in 2004, but was regarded more as a continuation, particularly in terms of versioning. Most users therefore make no distinction between R/3 and ECC. The renewed successor S/4HANA was released in 2015. The official end of maintenance for ECC was initially stated as 2025, then 2027. With an extended maintenance license, companies can still use the old system until 2030. The result is that companies, some of which have been working with SAP ERP systems for decades and want to continue doing so, are forced to convert their central IT system.
A lot has changed in IT since the 90s. There are major differences between the two ERP systems from SAP. It is important for all companies, including those outside the automotive industry, to be aware of these differences, as they have a major influence on the setup of the new system and the design of internal company processes. The major technological differences are as follows:
What would be unthinkable in other industries is commonplace in the automotive industry: customers, i.e. automotive manufacturers (OEMs), place very precise and complicated demands on their suppliers in terms of how deliveries and all communication relating to deliveries should take place.
In this white paper, we explain the biggest problems and challenges that suppliers face in these processes.
Anyone already using an existing SAP system landscape can of course decide to migrate existing processes to the S/4HANA world as comprehensively as possible. However, this is not the only way:
There is no general recommendation for one of these methods. Depending on the requirements in the respective industry, but also for the individual company, different scenarios can make sense.
Many companies initially tend towards greenfield or bluefield. There is a simple reason for this: SAP systems that have been used in companies for many years are often heavily modified. With every new requirement or necessary adjustment, specially developed Z programs are added - also known as "tinkered systems". Such systems are very costly to maintain and operate. Based on this experience, companies want to return more to the standard.
Automotive suppliers must comply with their customers' special delivery requirements. On the one hand, this applies to series or sequential deliveries, but on the other hand it also applies to special processes for data exchange between suppliers and automotive manufacturers (including OEMs). Regardless of the ERP system used, as a supplier you must ensure that you process the EDI messages with delivery call-offs, save the data they contain and output them correctly as shipment documents, ASNs or labels when shipping.
The standard under SAP ECC was not able to do this: cumulative quantities, time zone conversion, schedule line-related additional data or adjustments in ASNs - suppliers already had to map the OEM processes under ECC with the help of Z programs or add-ons.
In terms of the migration scenario, this has consequences for the setup of the system: the SAP standard under S/4HANA still does not fully cover OEM special requirements. This means that if you have already used enhancements under SAP ECC to map OEM processes, there is a very high probability that you will also have to do this under S/4HANA.
The decision in favor of a migration scenario (i.e. green, brown or bluefield) in the automotive industry is therefore often more a decision as to whether you want to continue using existing add-ons or extensions, or whether you can use them at all, or whether you want to replace them with new ones.
In addition to the existing challenges posed by special processes, there are some additional technological changes that automotive suppliers need to consider when switching to S/4HANA. These have a direct impact on the implementation of OEM processes.
Increased diversity of variants
While it was still relatively common with SAP ECC to handle processes with the existing modules under ECC (LE-TRA, Stockroom Management, WM, etc.), the system landscape has changed considerably in recent years. Solutions such as EWM or TM can be set up decentrally (i.e. outside the ERP system). At the same time, the previous modules can continue to be used until the end of the maintenance period. There are therefore numerous different combinations of ERP system, transportation management (SAP Transportation Management Basic and Advanced, LE-TRA) and warehouse management (Stockroom Management, WM, EWM). In some cases, processes have to be completely rethought because they are handled completely differently.
This becomes even more complex if you use different combinations of systems in your company. If one branch is still working with the LE-TRA module for shipping processes and another with SAP TM, you are forced to harmonize different processes - and always in such a way that it still meets the OEM requirements.
An example: A special feature of OEM processes are the outgoing shipment notifications, called ASN (Advanced Shipping Notice). Under SAP ECC, or more precisely the LE-TRA transport module, these used to be the standard SAP IDoc (SHPMNT05 or DELVRY03). Anyone who now processes transports or shipments using SAP TM must be prepared to use the XML file format. IDocs no longer exist in this case. Additional information required by OEMs that is not provided for in the standard must be mapped completely anew after the transformation under S/4HANA.
As you can see from these points, it is difficult for automotive suppliers to use only standard SAP processes. Those who were already unable to implement this under ECC will also have to work with system extensions for S/4HANA. Accordingly, the greenfield approach is only possible in the sense that the system can be completely rebuilt, but the fact that additions are necessary for OEM processes must be taken into account.
Tip: Regardless of whether you are currently working with add-ons from WSW Software or another provider for your OEM processes under SAP: Contact your add-on partner as early as possible in your transformation project. In this way, you can ensure early on that you can also take all your customers' requirements into account under S/4HANA.
SAP consultants working for automotive suppliers are familiar with this conflict: On the one hand, they are confronted with complex requirements from automotive manufacturers that include very precise guidelines for data exchange with their suppliers. And on the other hand, there is often an SAP system that is not designed to meet these requirements. In this white paper, we examine how exactly to deal with this problem and what solutions are available.
