Industry 4.0 solutions and the Internet of Things (IoT) are drivers of business for companies in manufacturing. However, ERP systems based around traditional technologies have long since fallen behind the requirements of innovative solutions like these. Enter SAP S/4HANA, which offers the key to overcoming digital obstacles.
With SAP S/4HANA, every user department can realize tangible advancements in development, resulting in increased competitiveness and efficiency.
Platforms and solutions for Industry 4.0 and IoT are hardly subjects for the distant future; indeed, they have been executive-level concerns for some time now. Many companies are already investing in corresponding systems in specific areas. Digital customer experiences, highly customized products, smart factories, digital supply chains, new service-oriented business models for the aftermarket – these new technologies open the door to a number of promising possibilities. To make efficient use of such innovative solutions, however, associated ERP systems need to fulfill standards that conventional technologies no longer support. In serving as a company’s digital core, SAP S/4HANA plays a prominent role in dealing with the hurdles involved in digital transformation.
When outlining their strategies, manufacturing companies focus on three goals in particular:
The prerequisites of achieving these strategic aims vary greatly depending on the individual user department at hand. There are a number of highly specific requirements involved, as the following examples illustrate:
While conventional ERP systems are running up against their technical limitations, IT landscapes have grown highly complex. As a result, the demands user departments are placing on these systems as they try to reach their strategic goals are very difficult to meet in a timely, budget-compliant fashion. Why is that?
Digitalization is causing the number and complexity of system postings to rise at a rapid pace. The tremendous increase in processes alone is putting considerable pressure on the traditional ERP systems designated to handle them.
When manufacturing products for the smallest customer segments (or even individual customers), every product variant continuously generates its own document chain, including on production orders and stock and delivery items. These documents then have to be processes by the cost centers, warehouses, and asset accounting departments involved, or for profit-and-loss statements.
Once the requirements concerning data capacity and flexibility are met, controlling and monitoring all of the steps in the value chain in real time becomes an important success factor. Learning of market developments or the responses of a particular customer group several days after they occur is simply no longer acceptable. Management decisions need to be made and implemented based on the latest events.
Said implementation, however, also necessitates immediate arrangements and simulations based on real-time data. On the other hand, all of the processes within an ERP system that require a decision to be made will slow down overall operations. Fine-tuning factors such as asset utilization, waste reduction, stock-outs, and warehouse inventory in the face of increasing complexity thus demands a system capable of recommending actions and addressing errors in a proactive way, even as the automation of routine business operations continues to progress. This transformation also places much higher requirements on the interfaces used by processors, planners, and managers.
As a next-generation ERP system, SAP S/4HANA is specifically designed to help companies take on the challenges described herein. That includes the user department requirements cited as examples above. SAP S/4HANA offers the answers manufacturing firms need to accomplish their three main strategic objectives.
By fully eliminating key technical obstacles and making technical processes available in all areas, the suite promotes both a focus on the customer and the development of innovative business models. SAP S/4HANA also provides for data capacity and flexibility by making all of the information it contains instantly usable, all while maintaining optimal response times. Meanwhile, the transparency and intelligence it offers are tailored to each user’s specific role. Thanks to SAP S/4HANA’s smart user interface, for example, users can call up predictive support straight from the software. This makes it possible to address the cause of a problem before it even crops up, which significantly increases productivity.
To achieve cost efficiency – the third main strategic goal of manufacturing companies – along with speed and flexibility, SAP S/4HANA is designed to reduce complexity. The suite includes an innovative data storage system that helps lower operating costs in IT, which frees up needed resources that can be used for business activities. SAP S/4HANA also makes it possible to forgo separate systems for ERP data analysis and consolidate a number of other ERP installations. In some cases, it even makes applications like SAP Advanced Planning and Optimization (SAP APO) and separate supply chain management systems obsolete.
In addition, SAP S/4HANA is available in a public cloud variant that enables users (at branch offices, for example) to take advantage of ERP functions in just a few weeks. This version also integrates with systems in place at your company’s headquarters.
By continuing SAP’s 40-year success story in this field without the technical limitations of the past, SAP S/4HANA takes ERP to the next evolutionary level. It provides benefits to all types of user departments, from financial and cost accounting to all manufacturing-related processes, logistics, and sales. Manufacturing companies that switch to SAP S/4HANA now stand to take a significant leap in their development.
Neil ran his first SAP transformation programme in his early twenties. He spent the next 18 years working both client side and for various consultancies running numerous SAP programmes. After successfully completing over 15 full lifecycles he took a senior leadership/board position and his work moved onto creating the same success for others.