Country of Origin Management in S/4 - Disappointment, Intention or ..?
Unfortunately I have to comment on "new" or "no" Country of Origin management concept in S/4.
Please consider this as my internal and subjective observation. I would be more than happy to discuss with other clients or consultants what has happened and why I can not find a single complaint on web? I had a chance to speak with SAP already..
But lets start from beginning, first things first..What is country of origin?
Lets explain which Country of Origin (COO) I mean. In this article what I am mainly interested in is the "Commercial country of origin". What it is? This is exactly the "Made in Country" where the goods where produced. (Preferential country is different topic).
Where does it appear?
Country of origin is important information in almost all customs processes. Either for Inbound Intrastat (Eg. DE, AT..) or Outbound Intrastat (RO..) but as well for Export and Import declarations. It is necessary to print this information on the Export Invoice possibly Shipping papers if required. From the process perspective it is one of the crucial Foreign Trade Information!!
Why the country of origin is crutial?
Simple example - What if country of origin is incorrect? Hahaaa, yes this can easily happen, just imagine you maintain in the system country of origin DE as your vendor is German, but it is a traded good and your supplier purchased it in GB! When you export such good to China under DE origin but customs officer looks at the box which says GB - no import for sure.
Addionally goods supplier needs to be taken into account. More can be found here: Goods supplier vs. SAP GTS processes
So why am I actually writing this..
World of ECC
Every customer has his own COO management and concept in the system. Here I agree, in former ECC days when Foreign Trade (FT) tabs where present in transactional data starting from Purchase order ending with Billing document, everything made sense and was easy - user could do his COO magic and Foreign Trade data in-completion check could be executed. Country of origin was supported by Purchasing Info record, COO field on PO and Inbound delivery followed by Batch COO. (I missed Material master, but how many materials that you purchase, have correct COO maintained in Material master? It is impossible to maintain it here properly..)
World of S/4
What COO sources S/4 Offers?
Remaining ECC functions where you can maintain country of origin in S/4:
1. Purchasing info record (PIR)
3. Material Master (I would not even mention it here as I wrote before, so we are down to 1 & 2)
- FT Tabs from Transactional data are gone.
- FT data in-completion check is gone
- Inbound delivery COO field is hidden and not meant to be used.
THAT'S IT !?!
I assume SAP did not think this through. They count with Material master, Batch or Purchase Info records.
What is not considerred?
What to do?
- What is the best practice to use such limited functions?
- What in case customer has no active batch management?
- What about ASNs?
- What about materials purchased and sold using Equipment masters?
- What about Free text POs? Where to maintain country of origin? They are Intrastat and Customs relevant.
- Does SAP expect production people to maintain every time the COO in the Batch?
- What in case of different goods suppliers, how to maintain this in PIR?
- Is SAP expecting FT users to maintain COO in Incoming Batches?
Of course everything is possible, solution always can be proposed and final process defined. But the holes in the process needs to be filled with development and it is hard to explain this to clients.
I assume intention is to use SAP GTS for country of origin management in case this information is not filled in S/4 but it is a lot of manual effort and not always sufficient. (Simple example, when commercial invoice is printed in S/4).
My feeling remains the same. Who has disabled FT tabs from transactional data in S/4 did not consider all scenarios and no best practice is provided. To automate this process - only development is recommended. Who will come to S/4 migration point think about this first - do a proper analysis.
I am happy to hear any opinions. Lets stay optimistic. :)