Friday, May 16, 2014

Have we SAP consultants forgotten why we do what we do?

The people who read this maybe aren't the SAP using customer and therefore you might strongly disagree with me. But before you jump my throat, ask yourself: “Is what I do really helping the customer in their efforts to use SAP software for their core business?” (and don't get me wrong, there is plenty of very valuable work done to support the customer outside of their core business - but I am talking about why customer buy SAP software in the first place: to support their core business!)

To answer that question we should first identify what the core business is. The customer that I am talking about here, is a company that transforms raw materials into a finished product (or service) that they sell. So their core business is ‘transformation’ and they need to do that in the most effective way using stocks, resources and time.

According to that definition you might now say “we are selling extraordinary technology to do just that!” Great. You also installed that technology at the customer site and they have now mobile devices that foster a full inventory report, run MRP on HANA, can use scheduling heuristics and see graphics that show forecasts and sales activity.

But does the user know how to set a planning policy that drives great service levels and low inventories for that transformation? Does their SAP functionality support lean manufacturing? Yes it does, but no one knows how to use it.
I put out a statement here: “100% of all SAP using companies use the software’s capabilities to less than 80% and 98% of all SAP using companies use the software’s capabilities to less than 40%!”

Wow! If that is true, shouldn't we all shift our focus a bit?

And it is true in what I see when I visit customers: I NEVER come across a company that uses the availability checking rules correctly. I NEVER see a company that does automated policy setting. I have NEVER seen SAP production scheduling supporting ‘flow’… to just name a few.

I’d greatly appreciate any comments to get this conversation going

Tuesday, May 13, 2014

using a reorder procedure for inter plant stock transfers... whats the lead time?

Yes, you can use a reorder point procedure for inter-plant stock transports, but be careful what you put into the lead time.

When you source materials from one of your own plants, your lead time (in the field Planned Delivery Time  (in the delivering plant) should be the time it takes from the issue in the delivering plant until it arrives at the receiving plant. The only question is: Can the delivering plant issue right out of available stock?

If the delivering plant does not keep the product in stock but has to procure it also, then the total lead time until it arrives in the receiving plant will increase dramatically. But if you put that total time into the PDT, you will ask the delivering plant to issue way too early. Unfortunately the TLRT in MRP3 does not work with procurement indicator 'F', so what can you do?

I know people have played around with source lists and info records but if you want to use an automatic reorder point calculation (VM or V2) you need to put the total replenishment lead time into the PDT, because that is what the reorder point calculation uses. So you are stuck with a manual reorder procedure (VB or V1) and you will have to include the entire total replenishment lead time in your spread sheet calculation.

The SAP Add-On Tools (MRP Monitor and Reorder Point Simulation) give you added possibilities: Since the MRP Monitor also performs an EFG classification for lead time - and lets you pick the TRLT from the MRP3 screen - you can build a list of items which are feasible for an auto-reorder procedure (X - consistent consumption, C - low consumption value, E - short lead times). The Safety Stock and Reorder Point Simulator then lets you calculate and simulate various service levels for optimized reorder points and safety stock settings... and allows for a mass update of the policy.

for more info on the SAP Add-On Tools refer to the website or check out my YouTube channel.