Sunday, April 26, 2015

Report from the SAP Info Days by bigbyte in NYC

Last Wednesday and Thursday (April 22nd and 23rd 2015) bigbyte software systems inc ( organized a little conference in its offices at 88 Pine Street in downtown Manhattan. The idea was to bring together existing user with interested parties to discuss SAP's Add-On Tools for SAP-ERP software. An attendance of 35 people filled up our training room to the max and during the two days the group accomplished utmost information sharing combined with maximum interaction.

bigbyte kicked off the sessions on Wednesday morning with a presentation on how to implement a 'Model of Effective Materials Planning'. The Model includes the four pillars of
- Prioritized Portfolio Management
- Automated and Periodic Policy Setting
- Intelligent Exception Monitoring
- Sustainable Inventory Optimization
If  executed within clearly defined performance boundaries, using a policy playbook and a trained and competent Materials Planner, one should experience high service levels, low inventory holding cost and short cycle times. One particularly important statement was displayed on a single slide: "This is where the magic happens"

The slide stresses on the importance to bring together Tools to get the job done in an automated fashion, a framework of operations where performance boundaries and policies are defined with a strategy and a competent user.

Marc Hoppe from SAP Germany then focused on the 'Tool' part of this triangle and demonstrated the SAP Add-On Tools which he and his team at SAP developed over the years to further enhance, update and optimize SAP-ERP. He started out with a live-demo of the MRP Monitor for segmentation and policy update, continuing with a Safety Stock and Reorder Point Simulator, a Lot Sizing Simulator and the Inventory Controlling Cockpit, all Add-On Tool that provide a lot more automation, increase transparency and generally increase the efficiency of the SAP-ERP software.

The SAP Add-On Tool's main functions are to perform a 'Parameter Optimization', which serves as an excellent basis to make major strides towards Integrated Business Planning (or SAP's new IBP suit).

After lunch, Jim McCann from Greene Tweed presented how his company adopted some of the Add-On Tools and shared his experience with them. From his talk it became obvious that for a long time he was looking to perform segmentation and subsequent parameter optimization by class and just couldn't do it effectively in standard SAP. The MRP Monitor with its capability to do an XYZ analysis and also separate the short from the long lead time items and the ability to do a lifecycle analysis looked very promising. In combination with a Simulator that sets the Reorder Points and calculates service levels and safety stocks he made huge strides towards the effective system of continuous materials planning optimization. 

Marc Hoppe then went on to demo SCPI - the brand new Add-On Tool for benchmarking and performance measuring. SCPI stands for SAP Supply Chain Performance Index and measures performance in up to ten major KPIs. Individual KPIs are measured on a lower level and then aggregated with a weighting system. 

Day 2 started out with a bigbyte presentation on Effective Production Scheduling Methods. How can you introduce flow into your production lines? What is repetitive manufacturing with SAP and why do we sometimes forget to tel this SAP system whether the product is MTS or MTO... where some of the yopics discussed.

The Capacity Data Monitor, Capacity Requirements Monitor and the Production Controlling Cockpit wee some of the Add-On Tools demonstrated by Marc before Cheryl Jones from the Tennant Company in Minneapolis talked about her company's success using some of the Tools for over 2 years now. Her main message: "The Add-On Tools provide tremendous efficiency improvements and automation but you'll have to manage change... break down existing mental models... and instill a culture of using SAP as what it is: a tool and nothing but a tool (a great one too)"

After more demos Cristina Leahu from Cargill took center stage: "We acquired the Tools in 2011 and started to roll them out right away. But believe me, Cargill is a big company and to standardize such a 'monster' is no easy feat". She talked about the problems and issues she has been faced with the need for standardization and automation in a global company whee every plant had developed their own system and different levels of control persist. Developing Standard User Guidelines with Standard User Policies being used across the board is her answer.

Marc Hoppe explaining SCPI

The final 90 minutes of the Info Days were spent with discussions about building a users group for the SAP Add-On Tools where experiences are shared, problems are logged and solved and regular meetings are organized.

Thanks for two fun-filled and very interesting days in downtown Manhattan. I believe the SAP Add-On Tools are off for a great time in North America!

Tuesday, April 7, 2015

Seeing things differently...

For a long time now, I have been involved with materials planning with SAP in so many industries. We've all been trying so many functions and features available in SAP and in a long time... not much has changed with the basic view we have of how it's working.

In the beginning there was MRP, where diligent planners were exploding Bills of Material and handily figuring out ordering quantities and dates for purchased parts. This was pre-60's and nothing has basically changed since. yes, MRP II was coming to introduce capacity leveling as an additional step and doing it with computers. Then ERP integrated Materials Planning with HR, Sales, Finance and much more. eventually the new big thing of Advanced Planning Systems was trying to automate everything without human intervention. Supply Chain Management, Big Data, In Memory Computing, Cloud Computing, Mobility... (somebody stop me...) all promising a better world and none of it ever delivering any improvement on the problem at hand: optimizing the ordring process to hold perfect inventories for good availability and service levels.

Do we need another point of view? Aristotle, a long time ago, was talking about the use of simile and metaphor, and the underlying capacity to see similarity in dissimilars - as genius. David Katz M.D., Director at the Yale Prevention Center then picks up on an interesting idea in his article about 'The Obesity Fix'. What if we look at the problem in a different way and consider Health like Wealth and see obesity like drowning? All of a sudden mental models shift and break apart. If health is like wealth it becomes something we invest in and live for... Dr. Katz: "We care about it both for our own sake, and the sake of those we love. We recognize most get-rich-quick proposals as scams; we are sensible about money. We don't spend everything we have today; we think about the future, and save for it. We get financial guidance from genuine experts, not just anybody who had a piggy bank once."

And Dr. Katz continues about seeing obesity like drowning: "If instead, we treated obesity more like drowning, we would tell the truth about food. We would not market multicolored marshmallows to children as part of a complete breakfast. We would not willfully mislead about the perilous currents in the modern food supply. We would not look on passively as an entire population of non-swimmers started wading in over their heads." 

Seeing things differently is not a new concept, it's just an underwhelmingly utilized skill... Man Ray did it all the time... did William Wegman with his Weimaraners Man Ray and Fay Ray

I love metaphors and looking at things differently. It gives us a desperately needed new point of view. So what about materials planning? how can we get to a better place?  what is the metaphor or simile? 

Maybe we should use the perspective of System Thinking. Looking at things more holistically and considering feedback, interaction and behavior a bit more and not being so fixated on  individual process and transactions. With it causal loop diagram provide us with a new way to 'see' whereas stock and flow charts provide a useful metaphor to interpret the behavior of agents and describe the system's structure for better interpretation and decision making.

I have been looking into the world of Thinking in Systems for a while now and am still looking for good applications in the SAP supply chain. There are some very promising features and opportunities turning up. I'd appreciate any interactions with colleagues interested in the same subject...