To meet the specific needs of certain customers, SAP standard functionalities can be used together to create customised workflows that meet these specific requirements.
Certain functions, such as consignment management and catch weight management (CWM), are rarely used together on the same flow. This can lead to limitations in the SAP standard, which are only detected when a customer requests that particular flow and it is tested according to best practice.
This article discusses the combination of functionalities described below, the limitations that our consultants identified and the collaboration with SAP to adjust the standard with a view to continuous improvement, in order to eliminate these limitations and enable our customer to manage these operations correctly on SAP.
Consignment and catch weight : Key issues to be aware of
Consignment plays a crucial role in stock management, particularly for variable-weight products. This approach is particularly important for these products, as it enables fluctuations in quantity and value to be managed more effectively.
Consignment facilitates the precise adjustment of stocks in line with actual demand, while reducing the financial risks associated with the direct purchase of different products, including variable-weight products.
Catch Weight Management (CWM) meets the challenges of managing products whose weight can fluctuate. Managing these weight fluctuations is essential, as it has a direct impact on inventory accuracy, accounting and financial reporting. Greater accuracy in tracking the actual weight of products means that there are no discrepancies between the quantities recorded and those actually sold or used, guaranteeing better cost management and more reliable financial data.
This is particularly crucial for companies where even small variations in weight can lead to significant differences in value.
This use of consignment with catch weight has limits that are difficult to detect. The main limitation is that in the SAP standard, a minimal difference is generated at each operation between the deconsolidation operation and the supplier invoice. This does not pose a problem for most customers, for whom these deviations are acceptable within the tolerance set by SAP. For our customer, this is not the case. The customer uses an invoice verification process that requires 0 discrepancies. That’s how this problem was detected and that’s how we were able to report it to adjust the standard SAP solution.
After an in-depth analysis of this limit, it turns out that it is caused by rounding differences on the standard code. These discrepancies pose a major problem by creating discrepancies between the expected and actual financial amounts, thus complicating the correct validation of supplier invoices.
These discrepancies have a significant impact on financial transactions and require particular attention to ensure the accuracy of accounting and logistical processes in consignment. In zero-tolerance processes, time-consuming operations often have to be carried out to compensate for these discrepancies.
When the SAP standard evolves to better meet needs
To make the necessary adjustments to the problem explained above, our teams approached the subject in the following way :
1. Documentation of the initial problem by the consultants :
Our SAP consultants were called in to document and analyse the discrepancies observed in the transaction amounts during stock deconsolidation. To detect this discrepancy, they compared the SAP standard flow of a consignment process with a nominal procurement flow. Transactions 411K for consignment deregistration and 101 for nominal receipt were compared, revealing inconsistencies in stock valuation, with financial discrepancies.
A root cause analysis carried out by our consultants highlighted the following source of this discrepancy: The weight coefficient used to calculate the movement amount is rounded differently between the consignment flow and the nominal flow. For the consignment, this coefficient is rounded to 4 decimal places, and for the nominal flow, to 3 decimal places.
In order to report the anomaly to the SAP teams, our consultants were able to trigger an OSS ticket.
By identifying these problems and pinpointing the causes of the discrepancies, our consultants were able to pave the way for precise adjustments and optimisation of stock management processes in the SAP system.
2. Detailed analysis and ongoing exchanges :
Following our diagnosis of the origin of the problem by identifying the incorrect rounding of the weight coefficient as the main cause of the discrepancies observed, we were able to submit an execution protocol to SAP to resolve this inaccuracy, via note: SAP OSS 3435895.
At this stage, SAP carried out a detailed analysis of the problems associated with consignment and catch weight. Following clarifications requested by SAP, our consultants provided additional information, including screen shots of the accounting documents generated by the two flows.
In addition, we organised simulation meetings and live tests with SAP to provide concrete evidence of the discrepancies observed and enable the software publisher to analyse the problem more accurately, thereby facilitating the development of the solution.
3. Submission of our solution to the SAP teams
After all these analyses, we were able to submit the proposed fix to the SAP teams. The German publisher therefore created a note, dedicated solely to our pilot customer, in order to test the solution.
After testing and validating it, SAP has made the note public so that the patch can be applied to all its customers.
This note can be found here.
Here’s a look at the main advantages of the solution :
The solution, which corrects rounding errors, has delivered a number of significant benefits. It has improved the accuracy of financial transactions, eliminating discrepancies in amounts between the SAP system and supplier invoices. For customers who do not accept any discrepancies on supplier invoices, either for financial reasons or due to system constraints, this solution has enabled them to continue to use consignment, an aspect that had been questioned following the discrepancies encountered at the outset. This correction has also benefited users by reducing interruptions in the supply chain, simplifying the invoice verification process, and strengthening the company’s financial compliance.
Thanks to these improvements, internal processes have become smoother and more reliable, guaranteeing better overall performance.
Going further, the integration of the variable-weight consignment solution with SAP Extended Warehouse Management (EWM) has also presented challenges, particularly regarding the entry of full and empty packs into stock via SAP’s Empties Management solution.
Our consultants were able to provide solutions to these challenges, in particular by customising the existing solution to meet the challenges of this integration.
We’ll be taking a closer look at this subject in a future article, based on our expertise in SAP WM and EWM solutions.
