Tuesday, April 17, 2012

SAP supply chain strategies and decision systems

Every company defines their strategies and policies on how to conduct business. Not very often are these translated correctly into SAP and almost no implementation effort includes thorough education on available strategies in standard SAP.

Most of the time, the consultant collects requirements, makes the decision what SAP strategy fits the bill and then teaches the SAP novice how to use that specific strategy. Blueprinting further eliminates standard strategies since the project team is required to make decisions and to document those. Therefore what's not explicitly required today, whatever requirement was not submitted, what the consultant does not know and what the team does not consider or understands at that time, will most likely never make its way into your SAP tool box.
In my mind there are Replenishment Strategies - mostly defined by the MRP type in MRP1, Planning Strategies - mainly defined by the strategy group in MRP3, and Production Planning Strategies which are defined by the tools of repetitive manufacturing or discrete production orders.


Every company using SAP should engage in the uncovering of unknown strategies. Expand your SAP supply chain horizon! Enable the user to work analytically, so they find the perfect match for any given situation and continuously optimize inventory levels and service. Nothing is worse than buying a Porsche and never going beyond first gear.
I often hear "I can't expect my people to understand all this", "let's take baby steps" or "production scheduling is on the agenda in two years from now. Until then we have spreadsheets".
So you bought a Mercedes 300S. The driver you hired to run this thing is not required to understand how to handle the Autobahn, you want to start out taking little trips in the beginning, before you take the car on a real drive to the countryside and for now, we will only make left turns. Going straight or right turns will be done by our old Volkswagen Beatle until we feel a little more comfortable.
SAP is not a toy, nor is it a status symbol (it is for many). You spent the money. Use it! And don't let anybody tell you to take baby steps with a multi-million dollar investment.
In some following blogs we will discuss three main categories of strategy and policy setting. Replenishment strategies - how do we control the inflow of components and raw materials from external suppliers. Planning strategies - how do we translate the plan and actual demand into the supply schedule. And production scheduling strategies which allow for various methods on how to run internal production of goods. First we will explore all the strategies provided and ready to use in standard SAP ERP. In a second step we discuss how to select the right strategy for the given situation using segmentation and decision trees.