GROW

L1 Wholesale Distribution

Public
 GROW with SAP – Offering

Solutions, services and community to help our customers adopt Cloud ERP with speed,
predictability and continuous innovation

Solutions components Adoption and acceleration services Community and learning

Leverage a collaborative,
SAP S/4HANA Integrated methodologies and
Scale your business with SAP Tools and SAP open community for
Cloud, public tools to guide and manage
S/4HANA Cloud, public edition Methodologies Community customers, SAP, and partners
edition your Cloud ERP journey
to engage and learn

Enable all developers Get you up and running with a

SAP Business Packaged Enjoy flexible learning
to build, integrate, and predictable scope and Accessible
Technology Activation resources tailored to roles and
collaborate with an agile duration supported by tools learning​
Platform (Build)​ Services​ learning goals
innovation platform and experts

Optimize processes Access skilled partners

Industry
and apply built-in best Trusted partner to help customers get quick
best practice
practices to grow ecosystem time to value based on
content​
your business fit-to-standard approach

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 Analysts attest SAP a competitive advantage
Gartner Magic Quadrant: Cloud ERP for Product- IDC MarketScape: Worldwide SaaS and Cloud- Forrester Wave: Digital Operations Platforms for
centric Businesses (Q3/2023) Enabled Operational ERP Applications Vendor Manufacturing and Distribution (Q2/2022)
Assessment (Q2/2022)

Gartner Homepage IDC Homepage Forrester Homepage

Public
 Wholesale Distribution GROW priority segments by SIC Code
Industrial Food and Beverage Other Durables
5031 Lumber, Plywood, Millwork, and Wood Panels 5141 Groceries, General Line 5021 Furniture
5032 Brick, Stone and Related Construction Materials 5142 Packaged Frozen Foods
5044 Office Equipment
5033 Roofing, Siding, and Insulation Materials 5143 Dairy Products, Except Dried or Canned
5039 Construction Materials, NEC 5144 Poultry and Poultry Products 5014 Tires and Tubes
5043 Photographic Equipment and Supplies 5145 Confectionery 5023 Home Furnishings
5046 Commercial Equipment, NEC 5146 Fish and Seafoods 5052 Coal and Other Minerals and Ores
5063 Electrical Apparatus, Equipment Wiring Supplies, Construction 5147 Meats and Meat Products
Materials 5091 Sporting and Recreational Goods and Supplies
5148 Fresh Fruits and Vegetables
5149 Groceries and Related Products, NEC 5092 Toys and Hobby Goods and Supplies
5064 Electrical Appliances, Television and Radio Sets
5072 Hardware 5153 Grain and Field Beans 5093 Scrap and Waste Materials
5074 Plumbing and Heating Equipment and Supplies (Hydronics) 5154 Livestock 5094 Jewelry, Watches, Precious Stones, Precious Metals
5159 Farm-Product Raw Materials, NEC
5075 Warm Air Heating and Air-Conditioning Equipment and Supplies 5099 Durable Goods, NEC
5181 Beer and Ale
5078 Refrigeration Equipment and Supplies
5182 Wine and Distilled Alcoholic Beverages
5082 Construction and Mining (Except Petroleum) Machinery and
Equipment 5191 Farm Supplies
5193 Flowers, Nursery Stock, and Florist’s Supplies
5083 Farm and Garden Machinery and Equipment
5194 Tobacco and Tobacco Products Other Non-Durables
5084 Industrial Machinery and Equipment
5085 Industrial Supplies 5113 Industrial and Personal Service Paper
5087 Service Establishment Equipment and Supplies 5131 Haberdashery, Knitwear
5088 Transportation Equipment and Supplies, Except Motor Vehicles High Tech 5136 Sportswear
5045 Computers and Computer Peripheral Equipment and Software 5137 Female/Child Clothing
5049 Professional Equipment and Supplies, NEC
5139 Footwear
Healthcare 5065 Electronic Parts and Equipment, NEC
5162 Plastics Materials and Basic Forms and Shapes
5111 Printing and Writing Paper
5047 Medical, Dental, and Hospital Equipment and Supplies 5112 Stationery and Office Supplies 5169 Chemicals and Allied Products, NEC
5048 Ophthalmic Goods 5192 Books, Periodicals, and Newspapers 5198 Paint, Varnishes, and Supplies
5122 Drugs, Drug Proprietaries, and Druggists' Sundries 5199 Nondurable Goods, NEC

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 Detailed Industry Guidance
Distributor Product Catalogue
Perspective
-
Look for distributors with products that require
limited to no transformation (e.g. office supplies,
janitorial products; medical supplies, hardware)
- recovery
Evaluate closely distributors dealing in products
that:
- Classic “Buy stock sell” in one or multiple locations
- require bundling between products and subscription
services (e.g. software licenses attached to laptops)
- For now avoid distributors:
- that trade products of any kind short or long (Global
Trade Management available in a future release)
- whose profitability heavily relies on dealing in products
affected by commodity pricing (e.g. copper)
(Commodity Management available in a future release)
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Distributor Business Process Perspective
- Consider providing enhancements, preconfiguration or
teaming up with solution partners when facing:
- High volume/speed order entry (e.g. order guides in Food Service)
- Complex price ingestion and frequent price changes
- Complex supplier rebate and chargeback requirements for cost
- Need to automate processing of email or xls-based inbound
orders
- Manage the lifecycle of construction projects from tendering
through phase-based execution
- Cutting and inventory management of materials on reels or coils
like hoses, chains, cables or metal sheets
- Clarify in discovery if coverage of complex value-
added services shall be executed in S/4 or stand alone
solutions (e.g. Design or project management related
services)
5
 The components of a successful GROW package
Executive
Team-signed off Successful
Growth Plan Reference

Solution Partnership

Partner

Deployment Methodology & Tools

enhancements

Procurement

Supply Chain
Finance

Service

Sales
Migration Value-driven
Accelerators business case

Database and Data Management

IT Management
Application Platform and Architecture

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SAP S/4HANA Cloud Approach: Standardized Processes relevant for WD
Human Sourcing &
Sales & Service Supply Chain Finance Cross
Resources Procurement

Recruit to Retire Source to Pay Lead to Cash Plan to Fulfill Finance Governance

Enterprise
Core HR & Time Sourcing And Order and Contract Accounting and
Inventory Information
Recording Contract Mgmt. Mgmt. Financial Close
Management

Service Master Process

Employee Master Operational Financial
Data and Warehousing Management and
Data Procurement Operations
Agreement Mgmt. Integration

Central Service Operations Cost Mgmt. and Administration and

Core HR & Payroll Order Promising
Procurement and Processes Profitability Analysis Usability

Procurement Commerce Delivery and Treasury Security and Data

Analytics Management Transportation Management Protection

Augmented
Quote, Order and Advanced Order Subscription Billing
Invoice Mgmt. Business
Contract Mgmt. Promising and Rev. Mgmt.
Intelligence

Supplier Billing & Revenue Logistics Material Enterprise Risk and

Management Innovation Mgmt. Identification Compliance

Operational Customer Advanced Real Estate

Procurement - SAP Attribution Warehousing Management
®
Ariba® Guided
Buying Available in SAP S/4HANA Cloud
Advanced Environment,
Field Service Available examples in SAP portfolio
Transportation Health and Safety
Contract
Management
Environmental
Footprint
Management

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Typical scenarios relevant for a Wholesale Distributor
1. Order processing, 2. Logistics, 3. Services

While you can use the clock as the

basis of your conversation,
feel free to also build some scenarios

1. Receive customer order, 1. Expedite shipment of 1. At customer request,

commit to it
2. Resolve customer
escalation around
defective materials
3. Return back to supplier
certain materials at perform certain value add
customer request services
2. Perform warehouse
functions to locate, prepare
for shipment (e.g., wave
picking)
3. Deliver goods

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Day in the life of a Wholesale Distributor

LUNCH
BREAK
RETURN TO MANAGING CUSTOMER REBATES
SUPPLIER 12:00
11:00 13:00
MESSAGING WITH CUSTOMER LOCATE AND EXPEDITE SHIPMENT
10:00 14:00

REPLENISH INVENTORY 9:00 15:00 SERVICE MANAGEMENT

8:00 16:00
CUSTOMER ORDER COLLECT ACCOUNTS RECEIVABLE
17:00
SALES ANALYTICS

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8:00: “Can you send us…?” Back to
scenarios
Committing to a customer order (and many other orders like this one…)
With additional license 8013723 SAP S/4HANA Cloud for advanced available-to-promise

How well can you satisfy this and many other

orders today?
Considerations: availability, other customer commitments, allocations

S/4HANA Cloud for advanced available-to-promise ( product 8013723 ) available-to-promise

Customer-requested order quantities

Availability check

Order commitment dates

Back Order Processing

Product Allocations

Alternative Based Confirmations

Release for Delivery

Credit check

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Product Allocation: A sweet spot S/4HANA aATP feature

Product Availability Back Order Product Allocation Alternative Based Release For
Check Processing Confirmation Delivery

Capabilities

Forward & Backward Consumption

 Sales (e.g., amount restrictions)
 Production (e.g., bottleneck Product A March April May June
resources)
 Transport (handle, store, move) 10,000 units Searched 3 Searched 2 Searched 1 Searched 4

Customer Group A Customer Group B Customer Group C

6,000 units 3,000 units 1,000 units

Impact on your sales order

from the 9am customer (vs.
other customers / orders)
Customer 1 Customer 2 Other customers
5,000 units 500 units 500 units

Collective allocations for limited supply products for low-priority customers:

also to enable higher priority customers to consume from this group

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 9:00: Time to replenish inventory Back to
scenarios
Real-time with SAP S/4HANA
SAP S/4HANA MRP/Demand Driven
Replenishment (DDMRP)
Max stock

S/4HANA pubic cloud

Max of
Green
 Yellow zone x lead time factor MRP
 Minimum order quantity
 Average daily usage x order cycle Calculate material replenishment and lot
size
Reorder
point Identify source: purchase

What, How, Average daily usage x

Supply stock-outs & safety stock (buffer
sizing and dynamic adjustments)
When to be decoupled lead time
Safety
replenished stock
Yellow
• This process enables you to ensure the availability of materials. It is
“Are we Min Red typically performed by the MRP who monitors the material shortage
Safety bas
overstocking e Yellow x lead time situation and solves any issues on time.
this item?” factor
• Another main task is to ensure that sufficient supplies have been
planned to cover requirements — whether from sales orders, stock
transfer orders,. The goal is to ensure that customer and other sites
Red base x
variability factor demand are fulfilled on time and to avoid any damageable “out of stock”
Red in the supply chain of the distributor
safety

Calculation of the necessary replenishment for the coming periods with the
right stock to cover unpredictability both in sales and supply
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10:00: Customer messages you that kits arrived defective Back to
scenarios
Communicating with business partners within SAP S/4HANA

How quickly can you respond to your customer

complaints / concerns?...
…while checking the facts and keeping track of all communications

SAP S/4HANA Output Management: Messaging

Can trigger any output

Print, fax, telex, external send, EDI

Central overview of outputs sent via various channels and their status.
Output Management
View and process multiple outputs at the same time.
Allows sending multiple messages to multiple recipients using multiple
Output Parameter Determination
channels at same time
Allow predefined email subject and email body, including variables for
Clean email templates
dynamic content.
Print attachments and send attachments via email
Attachments

Forms are using SAP Cloud Platform Forms by Adobe.

Forms

Allow flexible branding of print forms by separating static layout parts such
Master Form Template
as header, footer ,logos from the application content.
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11:00: Getting those returns out Back to
scenarios

Typical document flow and

Typical return scenarios Process steps various Fiori Apps for return
management in Appendix

Customer
returns

Return Vendor
Customer materials
still at (supplier)
customer Inspect at returns
site customer site
first The returns purchase order Record the results of a material Use internal refund Specify the next step in the
Distributor (transportation triggers a supplier return (return inspection that was carried out on determination to determine how logistical processing of a
to vendor), and the returns returned materials either by the much to refund the company returned material:
costs are stock transport order triggers a vendor or by the receiving plant in code that issued the returned • Transfer to Free Available
higher) store return. a store return. materials in a cross-company- Stock
code store return and to create • Ship to Vendor
Warehouse Warehouse These returns documents Warehouse employees can use the corresponding credit • Transfer to Scrap, and so on.
1 2 + special cases such contain information that is the the Material Inspection by Vendor memo. Warehouse employees can enter
as UNPLANNED basis for the subsequent transaction to enter inspection the information required for the
Return RETURN (customer logistical and financial results for outbound deliveries Internal refund determination is selected logistical follow-up
processing of the return. related to returns purchase orders, only necessary for specific activity directly in the returns
directly to returns directly to combinations of return reason purchase order (supplier returns),
or the Material Inspection in
supplier courier who delivered) Warehouse transaction for and inspection code that are or the returns stock transport
or UNKNOWN inbound deliveries related to configured in Customizing. order (store returns). For inbound
MATERIALS returns stock transport orders. deliveries related to returns stock
transport orders, warehouse
(distributor cannot find employees can enter the
which goods and required information using the
quantities to be Material Inspection in Warehouse
returned) transaction.

Sales Returns constitute a real process in Wholesale Distribution, when customer could return product they
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have not used 14
13:00 “Did you give us the rebates we earned?” Back to
scenarios
“ What cash back should we return to you”
Strategic importance of optimal pricing
SAP S/4HANA Condition Contract Management (price, rebates, partial
& final settlements, financial services, etc.)

SAP S/4HANA Public cloud

Managing contract conditions retroactively, real-time and proactively with multiple rebate bases

Create sales or purchase rebate agreement. This process works

both sides

Monitor the life cycle of sales/purchase rebate agreement and the

development of their business volume

Post and update accruals

Settle sales/purchase Rebates and the settlement to accounting

How well can you
manage rebates for
Review settlements and carry out corrections if necessary strategic purposes?
Considerations: customer
loyalty, market share,
competition, P&L impact
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How customer rebate management works in SAP S/4HANA PUBLIC CLOUD
Condition contract management

Account executive (sales) Billing clerk

Sales rebate
Create condition
contract for one
customer
Take customer order /
Check volume
create sales order Good rebate
(optional)

Sell from stock

(optional)
Post accruals

Sales rebate

Create condition
Create collective
contract for
settlement
multiple customers Partial settlement
document
Good rebate (optional)

Sell from stock Check business

volume

Final settlement Create collective

with reversal of settlement
accruals document

Sales Order
End
fulfillment
monitoring process

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14:00: “Can you expedite product delivery outside the regular schedule?” Back to
scenarios

SAP S/4HANA public cloud and related capabilities

SAP S/4HANA Public cloud
Managing logistic operations , real-time and some physical operations

A handling unit is a physical unit consisting of packaging materials and the

Handling units management
products contained in it.

You can manage the product quantities in different stock categories on the
Inventory Management following levels: • At storage bin level • On staging areas for receiving,
shipping,• In handling units

Delivery management is an important part of the logistics chain taking into

Delivery Management account general business agreements with your customer • Recording
special material requests • Defining shipping conditions in the sales order

You can define your own removal strategies to determine the most suitable
Picking source bin to pick from. You can configure the stock determination. You can
combine or split warehouse request items into waves

Transportation features supports transportation planning and execution in

SAP S/4HANA Cloud. Freight units are built considering transportation
Transportation constraints, such as freight unit building rules. They can be transferred also
to a decentral Transportation system.

You can configure CO2 emission parameters for your vehicle types. CO2
emissions for road freight orders are then calculated during manual
Calculating greenhouse gas
planning, and the results are reflected in the road freight order user
emissions interface and the transportation cockpit. For the calculation, a distance-
weight-based calculation method is used.

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“Can you expedite the shipment of my items?”
Back to
SAP S/4HANA reflected in this document scenarios

Check + document flow

availability

How far is Locate in # of items,

size,
acceptable? warehouse diversity
Substitute?

Wave
picking
RDC 1 RDC 2
Arrange for
shipment
Other services:
Other services: packaging etc.
optimized truck
loading, optimized
Warehouse Warehouse Warehouse Warehouse routes, returns
1 2 1 2

Transportation, delivery,
Where does the product reside now?
financial document flow
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15:00: Differentiating yourself in sales & service management
Back to
SAP S/4HANA Public cloud scenarios

SAP S/4HANA Public cloud

Managing operations ,

Screen editing You use this feature to visually transform classic

Wholesale Distributors need rapid screening to
respond to customer questions in particular in
Selling at the counter
applications that you want to run in SAP S/4HANA and create a
modern, intuitive user experience for your mission-critical software. Key
users can simplify screens by hiding unneeded controls rearrange
controls, as well as adjust the formatting and styles of UI elements to
meet their organization’s requirements.

Solution Order Management allows you to manage end-to-end

Encapsulating both product and services inside
a sales order
processes that span from creating a solution order to delivering
products of different categories, such as physical goods, one-time
services, and long running services. This includes the integration with
billing, invoicing, and controlling.

Predictive Analytics integrator (PAi) integrates predictive capabilities

Know the product or service you should sell to into business processes. PAi uses algorithms to predict an unknown
your customer (and also not sell) outcome, for example, using a predictive model you can forecast when
a buyer is likely to negotiate a new procurement contract

Service contracts are outline agreements with business partners that

Service Contract Management define the services offered for a particular period. A service contract
usually represents a long-term service agreement with customers.

Document Management (DMS) allows you to store, manage, and use

Document management System documents during creating and maintaining digital product information
company-wide and throughout the life cycle of a product.

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16:00: Collect account receivables from your customers Back to
SAP S/4HANA public cloud scenarios

SAP S/4HANA Public cloud

Managing operations ,

You can manage receivables, display customer

Monitor Accounts receivable
balances, and process individual customer items.

You can post incoming payments, manage down

Clearing of Open Items payment requests, clear open items manually, and
reprocess bank statement items.

Using Credit Check you can assign credit limits to

Credit Check credit accounts. The system can automatically check
incoming sales orders against these credit limits.

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17:00: Lets analyze how well we did!
SAP S/4HANA public cloud
SAP S/4HANA Public cloud
Managing operations
Analytics to know more about your customer and take
appropriate decisions such as detecting margin destroyers
Profitability on a sales segment attribute project
Reallocate Cost center to have precision profits
Predictive analysis of incoming sales orders
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Back to
scenarios
You can model data with Custom Core Data Services views
(Custom CDS view) which can then be consumed by a UI,
analytics or other systems.
S/4Hana Public Cloud provide event-based profitability
analysis for customer projects and sales order items. The
profitability data is taken from event-based revenue recognition
based on market segment attributes such as Customer,
Customer Group, Product, Product Group, or Sales
Organization.
Overhead allocation to profitability You can
allocate your overhead costs from cost centers to market
segments using a periodic run
With S/4 Hana Public cloud you can perform an analysis of the
predicted margins for incoming sales orders.
21
Recap: Operating profitably as a wholesale distributor
S/4HANA supports wholesale distributors 24/7/365
Distributor Discounts to Customer
(on-Invoice & Off-Invoice)

Supplier Credits to Distributor

(incl. Cost Recovery)
Volume/
Line/GPO Promotion
Discount Discount Pmt.
Terms Rebates
Indirect Costs

Charge Free of
Rebates Backs charge Commis,
Value Add Incentives
COGS Discounts
svc Agent Fees

S,G &A
costs Net
List Price On-Invoice Price Off-Invoice Price Pocket Margin
Margin

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Thank you.