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What is Inventory Controlling and why is it so relevant?
Inventory controlling comprises the systematic planning, monitoring and management of material stocks with the objective of achieving an optimal balance between service level, costs and capital commitment. Excess inventory leads to unnecessary capital lock-up, storage costs and potential write-downs, while insufficient inventory increases the risk of supply shortages and production downtime. In times of volatile markets, unstable supply chains and rising costs, transparent and data-driven inventory controlling is becoming increasingly important. Companies require up-to-date visibility of stock quantities, values and movements at all times in order to identify deviations early and make well-informed decisions. Modern ERP systems provide integrated analytics capabilities for this purpose: In this context, SAP S/4HANA Embedded Analytics offers a powerful foundation for evaluating and managing inventory KPIs in real time directly within the operational system.
What is SAP S/4HANA Embedded Analytics?
SAP S/4HANA Embedded Analytics is SAP’s integrated analytics concept that combines operational processes and analytical evaluations directly within the S/4HANA system. The objective is to enable real-time decision-making based on current business data without replicating data into separate BW or data warehouse systems.
SAP S/4HANA Embedded Analytics is delivered and used via role-based SAP Fiori Apps that integrate analytical evaluations contextually into the respective business processes. Users benefit from intuitive dashboards, reports and KPI analyses within their familiar user interface.
The data foundation of SAP S/4HANA Embedded Analytics consists of CDS Views (Core Data Services). These provide business-oriented data models and define KPIs, dimensions and evaluation logic directly at the database level. CDS views specifically developed for analytical purposes enable high-performance and consistent reporting that can be used by SAP Fiori, SAP Analytics Cloud and other analytics tools.
A key advantage of SAP S/4HANA Embedded Analytics is the simplification of the system landscape. Many traditional reporting scenarios can be covered directly within the S/4HANA system, potentially eliminating the need for additional analytical systems in certain cases.
In summary, SAP S/4HANA Embedded Analytics enables:
- Real-time analytics on operational data
- A single source of truth without redundancies
- Business-defined evaluations based on CDS Views
- Analytics directly embedded in business process contexts
Inventory Controlling with SAP S/4HANA Embedded Analytics
With S/4HANA Embedded Analytics, SAP provides valuable functionality for structured inventory controlling. Integrated analytics tools allow evaluations such as stock levels by various criteria or inventory turnover directly within the operational system and without additional external tools. This enables responsible stakeholders to identify irregularities more quickly and make well-founded decisions. Dashboards, KPI monitoring and flexible analyses increase transparency and support proactive inventory management.
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What are the Core Tasks of Inventory Controlling in S/4HANA Embedded Analytics?
Monitoring Inventory Data
The continuous monitoring of inventory data forms the foundation of effective inventory controlling. In SAP S/4HANA, inventory information is available in real time, from total stock levels to storage locations, batches or serial numbers.
With Embedded Analytics, this data can be clearly visualised via Fiori Apps and dashboards. KPIs such as stock level, days of supply, safety stock or inventory value can be displayed based on user roles and filtered individually. Deviations, critical stock levels or unusual trends become immediately visible without relying on delayed reports or external BI systems.
The result is maximum transparency and a reliable data basis for both operational and strategic decisions.
Analysing Inventory Movements
In addition to current stock levels, understanding inventory movements is essential. Goods receipts, goods issues, stock transfers or write-downs affect not only inventory levels but also costs, liquidity and service capability.
SAP S/4HANA Embedded Analytics enables detailed analysis of these movements in real time. Analytical apps allow targeted evaluations by movement type, time period, material or plant. Fluctuations or unusual deviations can be identified quickly.
This makes it possible to determine the causes of high inventory levels, slow-moving materials or frequent urgent orders and to address them in a targeted manner.
Forecasting Future Demand
In combination with historical consumption data, current inventory information and sales data, SAP S/4HANA Embedded Analytics provides a solid basis for forecasting. By directly leveraging real-time data, forecasts can be updated more quickly and adapted to changing conditions more effectively.
Inventory controlling thus gains a forward-looking perspective and can respond early to changes in demand, for example by adjusting safety stock levels or planning parameters.
Seamless Navigation without without media discontinuities
Embedded Analytics allows users to perform inventory monitoring and movement analyses directly within the system without logging into additional tools. The goal is to align order quantities, timing and procedures optimally with actual demand.
KPIs such as inventory turnover, capital commitment or service level can be analysed in relation to one another and continuously monitored. Relevant purchase orders and documents can be accessed and adjusted immediately in S/4HANA according to the insight-to-action principle.
This enables companies to move from reactive to data-driven, proactive purchasing decisions directly within the system and without media discontinuity.
Different Analytical Applications within SAP S/4HANA Embedded Analytics
Overview Pages
Overview Pages are a core component of SAP S/4HANA Embedded Analytics. They provide role-based, contextual overviews and bundle operationally relevant information in a compact and clearly structured format on a single page.
The overview page shown in the screenshot below clearly displays various information on inventory management. In this case, for a specific plant, such as the stock value by inventory type or the warehouse throughput history.
Via individual “cards”, such as inventory value by stock type, users can navigate to detailed analytical apps to examine the inventory situation of individual materials more closely.
Multidimensional Reports
Multidimensional reports enable business departments and analytics teams to conduct structured, context-based analyses of operational data. Based on CDS views, KPIs can be flexibly evaluated along relevant dimensions such as plant, storage location or material – directly within the SAP system and in real time.
The following report shows an example of how stock quantities can be analyzed over a selected period, such as by year, quarter, or month, using various dimensions. This report is based on the standard analytical query C_MaterialStockTimeSeries.
SAP also provides a wide range of preconfigured analytical queries out of the box, from which corresponding reports can be created with just a few clicks.
Analytical List Pages
Analytical List Pages are an SAP Fiori app typ that combines analysis and action within a single interface. Large volumes of data can be visually analysed, specifically filtered and directly processed further without changing context, thereby implementing the insight-to-action principle.
In this example, inventory changes over a predefined period can be analysed. In this case for a specific plant. Additional filter criteria may include storage location, stock type or supplier.
In the lower section, relevant KPIs for individual materials, such as inventory value at the beginning of the period, inventory value at the end of the period and the difference between these values, are displayed clearly.
Specific Analytical Apps for Inventory
Within S/4HANA Embedded Analytics, there are analytical applications developed for specific use cases that do not fall into the categories of analytical apps mentioned above.
In the example shown, the Fiori app “Inventory Turnover Analysis” is used to gain transparency regarding inventory turnover KPIs and capital commitment within a plant. After selecting an analysis period and optional additional filters, the app delivers a detailed list of all relevant materials. For each material, key KPIs such as average inventory value and average stock level are displayed.
The displayed materials can then be analysed in even greater detail by reviewing additional KPIs and trends for each material.
This information enables end users to quickly assess warehouse performance. Materials with high average inventory values or stagnant consumption can be identified immediately.
Enhancement Options
As described in this post, SAP provides a range of analytical applications and reports for inventory controlling out of the box.
Within the S/4HANA Embedded Analytics environment, these contents can be flexibly extended and adapted to individual requirements via self-service options. In addition, SAP offers advanced tools that go beyond self-service capabilities and require deeper analytical and technical expertise.
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