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Introduction
The present blog
This blog will give you a first overview to the functionality of SAP Product and REACH Compliance. This solution is available on SAP ECC as AddOn or technically embedded in SAP S/4HANA. Here you get a first flavor of the scope of the solution.
The author
I have been working since years in the area of sustainability supporting customers in implementing product compliance solutions in several industries.
Overview to previously written blogs:
2022: Reference customers and/or customers success stories for SAP Product and REACH Compliance
2021: How to uninstall SAP Product and REACH Compliance 2.0 (to get ready for SAP S/4HANA)
SAP Product and REACH Compliance
Customers
In general, all companies that produce discrete items (articles) might benefit from this solution. Automotive customers can interface the <<International Material Data System>> (IMDS) for downloading material data sheets (MDS) from their suppliers and uploading MDS to their customers.
My customers, where I have implemented SAP Product and REACH Compliance, are active in the following areas:
- Automotive (both OEM and Tier-1)
- Manufacturing (flood control, pump, seal, valve, energy)
- Hot stamping and coating technology (scope is both process and discrete)
- Aerospace and Defense
- Medical Engineering
- Life Science
Scope overview to SAP Product and REACH Compliance
The figure below introduces the scope of SAP Product and REACH Compliance.
Regulatory List Management
Regulatory lists are mainly negative substance lists that might contain listed substances or listed substance groups. A listed substance group is for example "lead" that is being used for <<Restriction of Hazardous Substances>> (ROHS) and that contains more than 700 hundred single listed substances. Negative substance list means that the substances are either prohibited or declarable (or even both). Furthermore, the regulatory list defines for each listed substance the threshold and the algorithm for calculation.
Compliance Checks (in Compliance Requirements)
Most of the Compliance Requirements such as ROHS, IMDS, REACH-SVHC*, etc. are linked with exact one regulatory list and consume the data of them to check whether a basic material, component, product, contains these substances above threshold. This check is embedded in the compliance checks where several check criteria are in that ensure that the <<Compliance Data Object>> (CDO) is compliant or not. These compliance requirements might be linked with one default normalization that is applied for all calculations (even in automatic processing)
* REACH-SVHC: Registration, Evaluation, Authorisation, and restrictions of Chemicals - Substances of Very High Concern
Basic Material Management
For own produced components, often basic materials come into place. They can be added to own components and by this the chemical composition is known as the basic materials contain pure substances**. Using external systems like IMDS basic materials can be downloaded and used in SAP Product and REACH Compliance.
** Pure substances and listed substances are different objects in SAP Product Compliance. For seamless functionality these objects must be linked when existing on both sides.
Compliance Data
SAP Product and REACH Compliance uses its own objects, the compliance data objects. These CDOs are the counterparts of the products, components, supplier-material information, etc. in logistics. Using the Bill-of-Material-Transfer (BOM-Transfer) the system transfers the relevant objects for compliance to product compliance. Where required, high sophisticated logic to retrieve the best variant of a BOM (the best plant using the best usage and alternative) can be applied. These compliance data objects are used for compliance calculation and might have several versions (to still have access to historical data)
Compliance Declarations from suppliers
Several formats are supported out of the box as "manual data maintenance", IPC1752A (this is a standard from IPC <<Association Connecting Electronics Industries>>), and MDS from IMDS.
Compliance Declarations for customer
Out of the box the system can create MDS to IMDS, IPC1752A format C, and Adobe Interactive Forms documents such as <<Declaration of Substances>> (DoS) and <<Certificate of Compliance>> (CoC).
Compliance Reporting
Here the system offers <<Core Data Services>> (CDS) views to retrieve data using compliance analysis from the system. Besides that, Excel templates are available to retrieve data from selected products or components and transfer them to Excel.
Deeper insight to BOM Transfer
As we have already touched above, the BOM Transfer copies the relevant objects from logistics to product compliance. In case the objects do not yet exist, they are created, otherwise the system updates them.
Objects
- Materials (system will identify them and categorize them as "package", "bulk", or "product or product part"
- BOM Structure (system uses specification database to store this information)
- Supplier-material objects (these supplier parts are identified for most cases via source list or purchasing info record)
BOM Transfer triggers
As the figure below shows, there are certain triggers possible to initiate this transfer.
Manual transfer
Manually started by the user. That is what SAP has foreseen for trading goods. It might help during cutover, too. But for most use cases the customers want to have a higher automatization.
Bill of Material gets created or changed
That is also the SAP standard approach, however; the used workflows are not appreciated by customers and often a BOM gets changes to a relevant status before the material gets a relevant status. So, most customers rely on our own worklist that covers several use cases.
Supplier material links have changed
This is an appreciated SAP standard approach. Once the source list or purchasing info record gets created or deleted, the single material transfer is initiated by the system.
Material has changed
Not part of SAP standard functionality. But while applying the functionality of worklist from above we can handle this.
Applying filters for BOM Transfer
To emphasize the powerfulness of BOM Transfer we shed some light to the filter criteria. Using two existing structures, for the materials, the BOM header, and the BOM positions filters might be configurated. By doing this we only get relevant data into product compliance. Further configuration might be used for BOM alternative handling. Last but not least, there are user exits available that allow us to realize special customer requirements, e.g., to not overwrite weight data in case a manual flag is set (weight data is always a challenge...)
Degrees of freedom using BOM Transfer
There exist two poles.
Pole 1 is to transfer each and every alternative into product compliance. This ensures maximal compliance; however, leads to complexity. Some use cases do not permit this approach.
Pole 2 is to transfer only one structure to product compliance. This might be the latest changed BOM or the BOM with the smallest alternative.
Often a realistic scenario (using different plant nodes) gets implemented as the figure below shows.
Product Compliance structure
The product compliance structure is being displayed in the system and used by the system for the compliance calculation.
Objects in Product Compliance structure
The figure below provides an overview of (some of) the objects being used.
Normalizations
Normalizations provide a special view to the product compliance structure. So you might see all leaf elements, only basic materials, elements with issues only, etc. then normalizations come into the game.
Beyond that there exists plenty of uses cases where normalizations get applied to manipulate the product compliance structure. The figure below shows one use case: the system creates for a procured component supplier parts. For these three suppliers you have instructed them to use exact basic material for steel XYZ. The suppliers won't give any compliance information to you. You plug-in the basic material to the component. Now the system considers both the basic material and the supplier parts and states "missing data". With the "prefer basic material" normalization, the supplier parts get suppressed in case there exists a basic material.
Summary
SAP Product and REACH Compliance is a powerful tool. For my customers I have created process documentations with 200+ pages, for sure this cannot be added into a blog. However, the basic concept on a high level is given.
In case of questions or required help just contact the author.
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