Eursap's SAP Tips: Ten Tips for Optimising Materials Management when moving to SAP S/4HANA

Eursap's SAP Tips: Ten Tips for Optimising Materials Management when moving to SAP S/4HANA.

Materials Management (MM) in SAP S/4HANA should be treated as a strategic simplification opportunity, not a technical lift-and-shift from ECC6. Organisations that migrate MM without reviewing their existing configuration often carry forward years of accumulated complexity including redundant document types, over-engineered approval workflows, and material master data that nobody has cleansed since go-live (and sometimes even before that in legacy systems!).

The most successful S/4HANA programmes use the migration as a chance to rethink MM from the ground up. This involves streamlining procurement processes, improving inventory accuracy, and aligning purchasing data with the demands of a real-time, single-source-of-truth architecture.

This article is not only about exploiting new S/4HANA features (although that matters). It is equally about avoiding the brownfield trap of bringing legacy complexity straight across from ECC6 without question. Both dimensions deserve attention.

Let’s examine ten tips which will help you when considering transforming your SAP ECC Materials Management approach into a more modern, SAP S/4HANA setting.

1. Rationalise your material master before migration, not after

Material master data is the foundation of every MM process. In ECC landscapes, it is common to find thousands of obsolete or duplicate materials that were never properly decommissioned.

Optimisation example:

Before migration, run a materials master analysis to identify flagged-for-deletion materials, materials with no stock and no movement in 24+ months, and duplicate descriptions across plant-level views. Cleansing these prior to migration significantly reduces data volumes and simplifies ongoing master data governance in S/4HANA.

2. Understand the impact of the Business Partner model on vendors

In SAP S/4HANA, suppliers are managed as Business Partners. The vendor master (transactions such as XK01/MK01) no longer exists as a standalone object. This has significant implications for MM, particularly in the Purchasing area.

Optimisation example:

Organisations that treat the vendor-to-Business-Partner migration as a pure technical conversion often discover missing data in the BP financial accounting view or incorrect BP roles. These gaps surface as purchase order failures or payment blocks. The correct approach is to treat BP migration as a data quality exercise, not just a data conversion task.

3. Simplify purchasing document types

Like sales order types in SD, purchasing document type proliferation is a common problem in ECC landscapes. Multiple custom purchase order types, request for quotation types, and scheduling agreement types that differ only slightly are routinely carried forward without challenge.

Optimisation example:

Audit your purchasing document types in customising (transaction OMH6) before migration. Challenge each custom type: does it represent a genuinely distinct business process, or has it grown to accommodate a configuration workaround? Consolidating document types reduces training burden and simplifies downstream reporting.

4. Leverage SAP S/4HANA's simplified inventory management

SAP S/4HANA has significantly simplified the inventory management data model. The separate stock tables of ECC (MARA, MARD, MARC, MCHB, etc.) have been consolidated. This improves performance but also requires a review of any custom reports or programmes that read these tables directly.

Optimisation example:

Identify all custom code that reads ECC stock tables directly using the SAP Readiness Check output. These programmes must be adapted to use the new S/4HANA table structures or CDS views. Carrying forward unreviewed custom code is one of the most common causes of post-go-live MM issues.

5. Review goods receipt and invoice verification settings

The three-way match (purchase order, goods receipt, invoice) is central to MM. In ECC landscapes, tolerance keys and posting settings are often poorly maintained. Either they are too tight, causing unnecessary blocks, or too loose, creating financial risk.

Optimisation example:

Use the S/4HANA migration as an opportunity to review tolerance keys in configuration (transaction OMR6) and align them with current business requirements. At the same time, review the Logistics Invoice Verification settings to ensure they support the more real-time Finance integration that S/4HANA's Universal Journal demands.

6. Adopt Fiori-based purchasing apps early

SAP S/4HANA delivers a strong set of standard Fiori apps for the procure-to-pay process. These include apps for managing purchase orders, tracking goods receipts, monitoring supplier performance, and overseeing invoice exceptions.

Optimisation example:

Rather than replicating ECC GUI transactions in S/4HANA, introduce the standard Fiori purchasing apps from the outset. Apps such as "Manage Purchase Orders" and "Approve Purchase Orders" provide real-time visibility that SAP GUI transactions never offered and significantly reduce the need for custom reports.

7. Revisit source list and quota arrangement configuration

Many organisations maintain source lists and quota arrangements in ECC that are out of date or overly complex. In S/4HANA, these directly influence the behaviour of MRP and automated purchase order creation.

Optimisation example:

Review source lists (transaction ME01) and quota arrangements (transaction MEQ1) as part of the migration preparation. Obsolete sources and incorrect quota splits will cause MRP to generate incorrect purchase requisitions in S/4HANA, often not discovered until after go-live when procurement teams start chasing unexpected orders.

8. Align MM closely with Finance from the outset

In SAP S/4HANA, every goods movement and invoice posting feeds directly into the Universal Journal. There is no separate FI reconciliation account for inventory as there was in ECC, because the data is unified.

Optimisation example:

Incorrect valuation class assignments or missing account determination entries (transaction OBYC) in the MM/FI configuration will produce Universal Journal posting errors that surface immediately at go-live. Ensure a Finance consultant is involved in MM configuration reviews throughout the programme, not just at the end.

9. Standardise the goods receipt and goods issue process

In many ECC landscapes, the goods receipt and goods issue process has been handled inconsistently across plants: different movement types used for the same business scenario, manual workarounds for returns, and non-standard reversal processes.

Optimisation example:

Document the intended movement type usage before migration and enforce consistency across all plants. S/4HANA's real-time stock visibility and embedded analytics will immediately expose inconsistencies that were previously hidden in batch reports. Cleaning this up before go-live is far easier than correcting it post-migration.

10. Optimise MM with the end-to-end process in mind

MM does not operate in isolation. Changes that simplify procurement can create downstream issues in production planning, warehouse management, or finance if the end-to-end impact is not considered.

Optimisation example:

A rationalisation of plant parameters or purchasing organisation assignments may simplify the MM landscape but inadvertently disrupt MRP runs or EWM integration if those dependencies are not mapped in advance. Always validate MM design changes against the full procure-to-pay and plan-to-produce process chains before finalising configuration.

Conclusion

Successful MM optimisation in SAP S/4HANA is built on disciplined data cleansing, configuration simplification, and a genuine willingness to challenge what has been carried forward from ECC unchecked. Organisations that follow these ten principles will consistently achieve faster procure-to-pay cycles, stronger inventory accuracy, and a more resilient foundation for the intelligent enterprise.