Illustrating the Product Compliance Integration in SAP S/4HANA for Product Compliance

In this lesson, you will explore the apps in SAP S/4HANA for product compliance. The apps are grouped according to the solution areas as related to the process context.

Compliance Data Foundation (CDF): This is all about managing basic compliance data, such as compositions for products and raw materials. Company Substances serve as the base layer, allowing you to relate to numerous substance-focused regulations. Regulations and other compliance obligations are managed as compliance requirements, which are grouped by compliance purposes according to regional/organizational aspects or criteria related to the product portfolio.

Safety Data Sheet Management (SDS): This allows you to allocate finished safety data sheets to your products and supports automated shipment based on sales business transactions. This frames the legal obligation to provide safety data sheets to customers upon the first delivery of the product or inform them of relevant changes by a subsequent shipment.

Product Marketability (PMA): Assessing marketability requirements is key to ensuring compliance regarding the business processes to produce and sell your products. Following a detailed assessment of the marketability requirements, you consolidate the results in the market assessment.

Dangerous Goods (DG): This is indispensable when selling and transporting your products to the customer. According to the regulations' approach, you first identify the dangerous good in the basic classification. Based on this, you process the final classification of the packaged product along with the texts required for documents, applicable labels, and marks.

The integration of Product Compliance with the Product Master is based on the indicator "Compliance Relevant." As soon as this indicator is set to "Yes" in the Product Master, a Request from Logistics is created for the product. This request shows up in the app's Process Requests from Logistics with the origin Material Master.

Based on this initial setting for the product, subsequent requests are initiated based on changes:

• Changes in the material/product master:
  • New distribution chain maintained;
  • New plant maintained;
  • Change of procurement type.
• Business transaction, for example, sales: in case the product is sold to a country, not assigned for the business process "Sell in", a request from logistics is created, in case of a missing product:
  • Dangerous goods assessment;
  • Marketability assessment;
  • Safety data sheet.

The Compliance Information - For Products app is needed for any user in the value chain who must retrieve the current Compliance Status for a specific product/material regarding the business processes:

• Production;
• Sales;
• Dangerous Goods.

Information is easily accessible via a map or a table view, and you can directly initiate a request to assess a country in case assessment for one of the business processes is missing.

The Process Requests from Logistics app is the main collaboration tool to initiate product compliance processing related to product master data. A compliance request can be initiated:

• Upon new or changed product or raw material master data.
• From Compliance Information - For Products, where a sales or production employee can request a product marketability assessment for selling or producing a product in a new country/region. In the same way, you can initiate requests for safety data sheet management or dangerous goods assessments.
• Out of sales documents- requests are created automatically when assessments for an affected country/region are missing.

In the request, the product stewardship specialist for product compliance gets an overview:

• Of the requests from the logistics department to verify the countries in which each product may be sold and produced, and which compliance purposes apply to the product.
• If a product is labeled a "new product" it also requires a new compliance view. The requests are sorted by due date so that work can be prioritized.

If a compliance view already exists, data changes in the request are propagated to the associated compliance view for further processing.

There are two apps to manage basic compliance data - one for unpackaged products and the other for the underlying raw materials.

Basic Compliance Data comprises:

• Assignment of materials/products, that is, a material-/product master is created. For example, a new packaging size can be assigned to an existing unpackaged product.
• Composition data (for unpackaged products, the material-based composition before and after production, legal deviations, and the analytical composition), as well as analytical compositions for raw material or supplier raw materials.
• Markets and countries/regions are automatically assigned based on views of the material/product master or requests launched from the Compliance Information - For Products app. Manual assignment is also possible.
• Assignment of compliance purposes - automatically assigned default compliance purpose for unpackaged products or raw materials, and manual assignment of specific purposes regarding the markets, product group, or application.
• Assignment of property groups to unpackaged products, raw materials, and substances. This allows editing properties like toxicological information, safety-related, or physical-chemical properties.

From the Manage Basic Compliance Data app, you can navigate directly to the Compliance Assessments of the unpackaged product or raw material.

This consolidated marketability status per country/region and business process is the level being checked by the logistic-integrated compliance checks.

Raw materials are the underlying level of your products. As marketability requirements assigned to the products are propagated to the raw materials going into production, any marketability assessment result for a raw material goes into the compliance calculation of the related products.

You assess requirements for raw materials using the Manage Suppliers Compliance - for Raw Materials app, providing access via the supplier of a raw material, or you use the Assess Marketability Requirements - for Raw Materials app. Here, you approach assessments per compliance requirement. In both apps, you can also use the generic search to find the raw material under consideration.

For raw materials, assessments go even deeper for suppliers of raw materials and suppliers, as well as the substances that are components of the raw material. While the system can only process substance-related calculations and compliance checks with known raw material substances, there is a complementary supplier compliance. These supplements are calculated when no 100% declaration from a supplier exists. It is also applicable for requirements related to the supplier granting compliance, for example, with a certificate or another kind of statement.

Assessments made on the level of a supplier's raw material are specific. These compliance results remain with the raw material, and the supplier is assigned.

Substances are the most detailed level for assessment of marketability requirements. A released assessment for a substance immediately goes into the compliance calculation of any other occurrence of this substance for raw materials or products. You must assess a substance only once per assigned compliance requirement.

You assess substance requirements using the Assess Marketability Requirements - For Substances app. Here, you approach assessments per compliance requirement, but you can also use the generic search to find the substance under consideration.

Following the dangerous goods regulations' methodology, classification is processed in two steps:

1. Basic classification of the unpackaged dangerous good means you identify the dangerous good by assigning the applicable line of the regulations' dangerous goods list, which means the UN-Number and packing group. You retrieve the data from the embedded regulatory content. Finalizing this initial step, you review the basic description of dangerous goods.
2. Classification of the packaged dangerous goods - to be transported, dangerous goods need to be packaged. In this context, we also consider a tank or a bulk container as a packaging means. Completing this second step, utilizing description templates provided with the system's integrated regulatory content, you derive the applicable description for dangerous goods documents as required by the dangerous goods regulations, along with required labeling and marking.

Integration with logistics processes is key to safeguarding compliance with Dangerous Goods Regulations in every business transaction where dangerous goods products are transported. Checks and the generation of required documentation directly retrieve data from the Dangerous Goods Assessment results.

Safety Data Sheet Management comprises the essential functionalities to comply with legal obligations to provide safety data sheets (SDS):

• Initially, this applies to a customer upon the first order for a product.
• Subsequently, in case of substantial changes to the SDS, the legally defined timelines are automatically applied for subsequent shipments.

The compliance requirements for Safety Data Sheet Management (SDS-CR) provided as embedded regulatory content include required languages per country/region, so you can specifically assign the translated SDS. Along with this come the country-specific, regulation-based timelines, which contain your responsibility for subsequent shipments. This legal information is the foundation for integrated SDS checks in Sales and to control automated SDS shipments, which you can monitor to solve shipment issues and safeguard compliance.

In case a country/region is missing, you can apply an existing SDS Compliance Requirement to this country. Alternatively, you can create your own SDS-CR.

Compliance Requirements (CRs) and Compliance Purposes (CPs) set the stage for assessing compliance obligations.

You must process three steps to make Compliance Requirements available for assignment to products or raw materials and thus for assessment.

1. With the Manage Compliance Requirements app, you manage the compliance requirement versions of a CR, beginning with creating the first version. You can set a version to Under Revision, create a new version, and release it to make it available for activation, or set a previous version to Historical if it is no longer applicable for assessments. For Compliance Requirements provided with system-inherent regulatory content, you can see details of the CR, and the maintenance status is set automatically.
2. In the Activate Compliance Requirements app, you activate a released compliance requirement version to make it available for assessments. If this is the first version of a compliance requirement, it is essential to make this CR available for assignment to Compliance Purposes. When a Compliance Purpose is assigned to a product or a raw material, you initiate the assessment of the requirements.
3. In the Manage Compliance Purposes app, you define Compliance Purposes to group Compliance Requirements according to organizational or product portfolio aspects that apply to your company.

The Analyze Assessment apps allow you to create an overview of compliance assessments by applying filter criteria like processing or compliance status. You can also filter by compliance purpose and compliance requirement. For the solution area Dangerous Goods, the analysis apps provide functionalities for mass data maintenance when it comes to creating new classification versions and setting classifications to historic, that is, after the end of the transition period.

The app, Substance List - Impact on Sales / Suppliers / Production, allows you to find out how substances assigned to monitoring or restriction lists impact your business.

• Impact on Sales / on Production: retrieve substances that are contained in your products.

  For Sales, per the substance list and affected substance, you get, for example, the related products along with the customer.

  For the Production per substance list and affected substance, you get the affected countries/regions and the compliance status for the business process production.

• Impact on Suppliers: retrieve, per substance, a list of the affected substances that are constituents of raw materials, along with the raw material and suppliers.