Tailored Journey to Operational Excellence in the Food Industry with SAP S/4HANA Cloud

SAP S/4HANA Value Blog Series 2022

 

 Tailored Journey to Operational Excellence in the Food Industry with SAP S/4HANA Cloud

As outlined in one of my previous blog posts, with SAP S/4HANA Cloud, we have a clear strategy to support our customers, both with their desire for standardization via pre-configuration, as well as an ability to differentiate and add their own “secret sauce” to a specific business process. (link). SAP S/4HANA Cloud as digital core has a wide range of scope that can cover our clients’ generic and customization requests very well.

The “secret sauce” can be a combination of standard business scope items tailored to their business models, together with advanced configuration capabilities available in SAP S/4HANA Cloud, or an extensibility approach adding to their digital capabilities.

To demonstrate how SAP S/4HANA Cloud helps many of our clients to maximize their business values in various industries, let’s zoom into two emerging food industry clients in China who chose SAP S/4HANA Cloud as their digital backbone to achieve their ambitious goals under fierce competition.

 

The Rising Trend Towards Healthier Lifestyles

With the rapidly increasing pace of today’s world, the development of health awareness and an improvement in disposable income, a surprisingly increasing need for both healthier and higher quality food can be observed in the China market. As a result, the major food industry players in China are intensively looking for an integrated business and finance system which can help them gain end-to-end visibility and control over the entire supply chain.

Here are two use cases demonstrating part of their tailored journey showcasing how these companies managed to integrate their business and finance requirements through a standard and customized solution.

Deeper insights into operational efficiency with the tailored adoption of actual cost reporting

The first use case comes from an integrated Food Industry customer who focuses on food product development, food production, storage, and relevant equipment that responds quickly to shifting market needs.

The customer has been deeply engaged in the agricultural industry chain for two decades. Adopting group operations management, it has formed three core businesses: international trade, deep processing of agricultural products, and modern supply chain services leveraging SAP S/4HANA Cloud as the digital core since December 2021. With the competition intensifying, the ability to closely monitor efficiency and transparency of the company’s own operations is particularly important to stay in a position of strength.

During one of our engagements with the client, they explicitly stated their concerns on cost control as a food provider. They are eager to understand the actual cost of their product, which can be influenced especially by the fluctuation of the raw material price, unnecessary scrap or the need for unexpected alternative materials.

With that requirement being heard, a proposal to enable the actual costing function is provided in order to address their most pressing pain point.

After the activation of the functionality with tailored configurations, the customer achieved their goal of refined cost management. In a nutshell, actual costing allows for completely new insights into the cost of externally procured materials versus materials produced in-house in the following ways:

  • They can determine the actual price of an item for a multi-level price variance assignment
  • They can use the actual costs to evaluate inventories of raw materials, semi-finished products, and finished products
  • They can determine what portion of the variance is to be assigned to internal material consumption and sales.

When the mystery of actual cost throughout the entire supply chain is unveiled, their supply chain manager can make fast decisions with confidence, for instance, which items should be made in-house and which items are more cost efficient to procure externally.

Tailored Tax Integration Solution Leveraging SAP S/4HANA Cloud and SAP Business Technology Platform

The second customer is a leading company that produces, distributes, and manages snacks, condiments, rice wine, and sugar products. In recent years, they have been focused on the development and branding of newly introduced products. As the number of stock-keeping units grows and their sales channels widen, the company has experienced challenges; lack of accuracy in data collection due to manual data entry and a non-integrated billing system.

With the increasing transaction volume, one of their critical business processes, namely, the billing process attached to the “Golden Tax”—which is mandatory per the guidelines in China—has come under tremendous pressure and has turned into a bottleneck on their path to operational excellence. To address this localized business challenge, a China-tailored solution and extended application were introduced to the customer. The business requirements are covered via the standard billing process available in SAP S/4HANA Cloud together with a partner solution leveraging the SAP Business Technology Platform (SAP BTP). This combined solution enabled a complete system integration and ensured business continuity starting with shipping to billing as well as the traceability of the entire end-to-end invoice-to-checkout process.

Either use case can be viewed as a great example of a tailored adoption of SAP S/4HANA Cloud and a pilot for enhancing the solution to showcase enterprise-wide operational excellence.

 

Inside SAP S/4HANA Podcast

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openSAP microlearnings for SAP S/4HANA

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For more information on SAP S/4HANA Cloud, check out the following links: 

 

  • Previous S/4HANA Value Blog Series posts here
  • SAP S/4HANA Cloud: New Product Releases here
  • Latest SAP S/4HANA Cloud Release blog posts here
  • SAP Intelligent Robotic Process Automation Content here
  • SAP S/4HANA PSCC Digital Enablement Wheel here
  • Inside SAP S/4HANA Podcast here
  • SAP S/4HANA Cloud Community here
  • SAP Activate Community here
  • Best practices for SAP S/4HANA Cloud here
  • Help Portal Product Page here
  • What’s New here

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