How to use SAP S4 HANA in the Oil & Gas Industry?

SAP S4 HANA: A vital part in the Oil & Gas Industry Today

The Oil and Gas Industry is one of the most versatile sectors around the world which undergoes continual development. With new players in this competitive industry, Oil and Gas Industry requires innovative software solutions to manage and integrate every business process efficiently. To do that, it’s best to adopt SAP S4 HANA for Oil & Gas Industries. By implementing SAP S4 HANA, the Oil & Gas Industry can handle every aspect of its business effortlessly from any part of the world. Also, migrating to a cloud platform like SAP S4 HANA is the best option for a fast-moving industry like Oil and Gas Industry.

Let us now see, how SAP S4 HANA benefits the Oil and Gas Industry:

Order to Cash:

The full flow from Order Management is such that, on basis of the Sales Order, the procurement is done. And then, following Credit Management and order fulfillment, the order is shipped and AR Customer Invoicing is accomplished along with Incoming Payment.

MIS Reports help to run business in a controlled way by SAP S4 HANA. Customer Item Code is stored as BP Catalog Number item-wise, which helps for faster processing and tracking. Sales BOM solution is used for scenarios where accessories are procured as separate item codes, whereas it is delivered to the customers as a single item.

Backorder reports give a detailed view to achieve faster order processing in Oil and Gas Industry.

Procure to pay 

Purchase is done based on the customer order, by using the procurement wizard function from which SO and PO are directly generated. Goods receipt is done against the Purchase Order, where each item is allocated in the store’s item batch-wise. As per that, Accounts creates the payable invoice, and outgoing payment is done. Vendor item code is maintained by BP Catalog number. Purchase analysis, pricelist, approval for any price change, and price change report provide desired control, which reduces the chances of errors.

Sales Order (SO):

SO is created once the PO is raised or once the quotation is confirmed by the customer. Using DMS, the softcopy of the PO is also attached. Payment terms and delivery dates are auto-fetched as per the customer master (committed / credit limit management restricts salesmen from further PO orders).

Sales quote

Sales quotation is created by SAP S4 HANA. The ‘Ship to’ and ‘Bill to’ fields are automatically populated with the data entered in the Business Partner Master Data, and for the client, along with Accounting and Pay term, contact persons are also auto-populated. The soft copy is directly mailed to the customers of Oil and Gas Industry, from SAP S4 HANA Software.

MRP

Material Requirements Planning (MRP) is used to create purchase requests or direct PO for preferred suppliers daily, weekly, or monthly from the Sales Order.

Purchase Request

PR is auto-created by Material Requirements Planning and even PR is created manually department-wise as per their requirement of office equipment, consumables, etc. against which the PO is generated.

Purchase Order

PO is created order-wise using the procurement wizard and the PDF is mailed to the vendor directly from SAP S4 HANA. Various engineering data is stored in the item master which is auto-fetched to the transaction by which the error has been reduced. Order-wise PO report expanded item wise help to have great record and control to find if any error has occurred.

GRPO

On basis of PO, when the vendor delivers the item, the Goods receipt against PO is posted by allocating a serial number to each quantity of item which debits the inventory (inventory management and inventory reports standard in SAP S4 HANA).

Supplier Payment

On basis of GRPO, an AP invoice is added against that outgoing payment, which is done.

Production

The sales BOM function is used.

Invoice

Account Payable / Receivable invoice is created and the payment entries are posted (open document system gives proper control).

Service

Complete management of after-sales for each serial item is done efficiently in SAP S4 HANA.

These are some of how SAP S4 HANA benefits Oil and Gas Industry and increases its operational efficiency. Also, the overall performance of Oil and Gas Industries can be drastically improved.

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