Parts Dispositionon Service Orders

- a custom solution

Pieter de Bruyn

Session: 4005

Topics to Cover

• Company Background• The Service Order Life Cycle @

Heidelberg• Completion Confirmation and Parts

Disposition• Special Cases when using Customer

Consignment Orders• Summary and Questions

Company Background

Our Mission: To be the world marketleader in solutions for theprinting and publishingbusiness.

The Heidelberg Group

The Heidelberg Group

Heidelberg is the world's leading solutions provider for the print media industry with nearly 25,000 employees in 170 countries. Heidelberg manufactures sheetfed, digital and web press systems as well as prepress and postpress components, software and consumables for all printing applications. Heidelberg has the largest manufacturing and support network in the industry with 18 manufacturing sites and 250 support centers worldwide providing 240,000 customers with service and knowledge.

•Heidelberg Market Center North America is made up of 2 companies, i.e. Heidelberg USA and Heidelberg Canada

• Main Business Process focus areas = Sales, Service, Marketing (Consumables, Service Parts, Equipment)

• Live with SAP since 1998 (started on 3.0F, now on 4.6C + BW)

– Approx. 800 SAP users

Market Center North America

• Corporate headquarters:Atlanta, GA

• Technical Centers/Sales & service offices: located across North America

• Over 1,000 employees

Market Center North America

The Service Order Life Cycle @ Heidelberg

The Service Order Life Cycle: Overview

Service LifecyleSystem(SAP)

Data Warehouse(SAP)

Service Activity Data

Machine Data

InvoicingCustomer Reports

Call Center

Customer interaction:Create Service Request,Provide Feedback and

Register Complaints

Create Service Order

Assign Technician

Service Technician

DataMining

Customer

Dispatcher

1 2 3 4 5

Call Entry

Call Dispatch/Escalation

Reporting

Service andCall

Completion

Billing/Receivables

Dispatching and CallCompletion through multiple

channels

The Service Order Life Cycle: Components

Customer/ Equipment Overview Screen

(Custom Solution)

Service Notification

2 types:

-Internal Requests

-External Requests

Service Order

3 types:

-External jobs

-Contract jobs

-Internal jobs

Advance Shipment Parts Order

-Customer Consignment

-Standard delivery and transfer order

Call Completion:

-Technical Reporting (Notification)

-Time and Expense (custom solution)

-Parts Disposition (custom solution)

Other Components:

-Service Contract

-Warranty Contract

-Maintenance Plan

Preliminary Service Invoice

(debit memo request)

Service Invoice

(debit memo)

The Service Order Life Cycle: Advance Shipment

ADVANCE SHIPMENT

CONSIGNMENT

The Service Order Life Cycle: Customer Consignment

Notes:

•Consignment Movement: Inventory remains in Plant – moves from storage location to customer location (MT 631W – no financial implication)

•The Advance Shipment order is not relevant for billing

Completion Confirmation and Parts Disposition

Completion Confirmation and Parts Disposition

A Custom Transaction is used as one point of entry for all confirmations

1. Technical Reporting

2. Time and Expense (Custom Solution)

3. Parts Disposition (Custom Solution)

Three Components of Completion Confirmation

Completion Confirmation: Technical Reporting

Note: Technical Reporting is carried out in the Notification

General Comments

Fault/Cause Codes

Measurement Documents

Completion Confirmation: Access to 3 components

Status of Technical Reporting

Status of Technical Reporting and Time & Expense Reporting per operation

Completion Confirmation: Time & Expense Reporting

Note:

Some features:

Configurable per work center (normal time, overtime etc.)

Travel Zones

Modify Account indicator on line item

Why a Custom solution?

original 3.0F limitations

expenses on Service Orders

Automatic determination of overtime and more

1. Activity type used for cost determination and determination of service material used for charges.

2. Maintenance Activity type in combination with Account indicator is used for billing decisions (through RRB)

Completion Confirmation: Parts Disposition – a custom solution

Why did we create a custom solution for Parts Disposition on Service Orders?

Business Process: Service Parts on Service Orders are only billed to the customer when used on the job. Therefore Parts are shipped to customer locations on consignment

Visibility of Consignment parts assigned to Service Order when performing completion confirmation

Automate portions of the Service Parts process

Consumption and Return of all Service Parts handled in one screen

Parts Disposition:Advance Ship Order Created

Information relating to the Service Order

Returnable Part?(warranty or repair-exchange)

Quantity on the Advance Shipment Consignment Order

Technician assigned to order operation

Movement Type to be used for consumption – linked to Maintenance Activity type

Delivery status of Parts

Notes:• When Parts have

been Delivered (Goods Issue posted), parts become available for Consumption in Parts Disposition

• MT 261W for consumption from consignment; MT 261 for consumption from carstock

Parts Disposition: Parts Delivered

Consumption Status

Quantity Delivered:Visibility of partial deliveries

Delivery Number

Delivery Status of Parts (visibility of parts on back-order, partial delivery etc.)

Parts Disposition: Parts Consumption

Notes:• Consumption is

posted on SAVE• Possible to perform

partial consumptions• Service Order TECO

only possible after full completion of Parts Disposition (ref. User Status)

Consumption:1. Consume 2 of

item 1; return 32. Consume 1 of

item 2; Repair exchange part to be returned; change Technician responsible

3. Consume 4 items from Carstock (Technician specific)

Possible to assign "Reason for Movement", e.g. Repair or PM

Consumption is linked to Operation Number for Reporting (Note: not supported by standard SAP

It is possible to modify the Movement type to be used when posting consumption; typically used when different GL account required – can be done per item

Delivery Status for Items:1. Parts to be returned2. Repair Exchange part to be returned3. Carstock consumed

Parts Disposition: Consignment Pick-up

Notes:• Warehouse

personnel create delivery when returned goods are received in the warehouse

• Return documentation include reference to original Consignment Order

Automatic Creation of "Consignment Pick-up" at time of first posting of consumption in Parts DispositionNote: Created with reference to "Advance Shipment Consignment Order"

Items not consumed being returned as "NEW"

Repair Exchange Item – returned to repair plant/storage location (non-valuated stock)Note: these parts are not returned from

consignment – treated as returns from customer

Parts Disposition: History

Consumption and Returns history shown for Service Order

Information relating to the Service Order

Special Cases when using Customer Consignment Orders

Drop-ship on Consignment Orders Cross-company shipping and consumption

Drop-Ship on Customer Consignments: Overview

• Issue: Items ordered on drop-ship need to be received in inventory before it can be moved into customer consignment

• Solution: Perform Goods Receipt into a Drop-Ship storage location at time of receipt of shipping notification after which items are available for "delivery" to customer consignment

Drop-Ship on Customer Consignment: DetailScenario:• Service Order in Plant A, Advance Shipment Consignment Order in

Sales Org A, parts not in stock or only available from Vendor• Trigger drop-ship purchase requisition through schedule line in

Consignment Order

• Note: Consignment order does not create consumption and is not relevant for billing – it only moves parts to a customer consignment location in inventory.

• Therefore, Consignment drop-ship parts need to be taken into inventory (note: normal drop-ship parts are not relevant for deliveries in the system and

therefore do not trigger any material movements).

• Issue: Consumption on the service order cannot be confirmed until the drop-ship parts are reflected in the system in the specific customer consignment location.

COMPANY A

Service

Order

Advance Ship

Consignment

Order

(Drop-ship)

Vendor PQR

Inventory

•Direct Delivery

to Customer

•Invoice to

Company A

Drop-Ship on Customer Consignments: Detail

COMPANY A

Service

Order

Advance Ship

Consignment

Order

(Drop-ship)

Vendor PQR

Inventory

•Direct Delivery

to Customer

•Invoice to

Company A

Possible solutions:

1. Do not use Drop-ship as a process when dealing with consignment orders

(pre-requisite: another process is required for handling out-of-stock items when dealing with consignment)(advantage: normal controls for goods movements)(disadvantage: logistical issues, customer satisfaction issues due to multiple processes)

2. Trigger a virtual goods receipt for consignment drop-ship parts at time of shipment from vendor.

(pre-requisite: need to be notified at time of shipment, process required for separation of virtual receipts from real receipts)

(advantage: process can be automated, drop-ship can be used effectively in a customer consignment environment)

(disadvantage: stricter control on goods movements because the concept of virtual receipts can be transferred into other areas)

Advance Ship ConsignmentOrder

(Sales Org A/Customer XYZ)Service Part (Plant A/Storage Loc DS)Note: Drop ship Item Category required

Delivery(Sales Org A/Shipping Point DRP)

Service Part (Plant A/Storage Loc DS)

COMPANY A

Goods MovementMovement 631 WInventory Origin: Plant A/Storage Location DS

Inventory Destination:

Plant A/Customer Location XYZFinancial: None

Service Order(Plant A/Customer XYZ)

(PartsDisposition)

Consumption?

Yes

Consignment Pick-up(Sales Org A/Customer XYZ)

Returns Delivery(Sales Org A/Shipping Point RET

Service Part (Plant A/Customer Loc XYZ)

No

Consumption:Movement 261 W

Drop-Ship Purchase Order

Special Delivery instructionsVENDOR

Purchase Requisition

Goods Movement(virtual receipt)

Movement 101Inventory Origin: Purchase Order/Vendor PQR

Inventory Destination:

Plant A/Storage Loc DSFinancial: Standard Goods Receipt

Goods MovementMovement 632 WInventory Origin: Plant A/Customer Location XYZ

Inventory Destination: Plant A/StorageLocation AFinancial: None

SHIPPING NOTIFICATION

Drop-Ship on Customer Consignments: Diagram

Virtual delivery

Note: The Shipping Notification can trigger an automatic goods movement and delivery if posted electronically

Cross-company Consumption on Consignment: Overview

• Issue: How to Consume and/or Return customer consignment parts when the parts are shipped from another company code

• Solution: Move items to customer consignment in ordering company at time of Consignment Delivery Goods issue

Cross-company Consumption on Consignment: DetailScenario:• Service Order in Plant A (company A), Advance Shipment

Consignment Order in Sales Org A (Company A), parts available in Plant B (company B).

• NOTE: When parts are shipped from Company B the delivery is created in Company B. With Customer consignment the result is that the parts are moved to a customer consignment location in Plant B!

• Consumption of parts is onto a service order (CO object). Cross-company consumption is possible if cross-company configuration (clearing accounts) is in place.

• Issue: Returning unused parts directly to Plant A is not possible (Consignment parts are in plant B in a customer consignment location)

COMPANY A

Service

Order

Advance Ship

Consignment

Order

COMPANY B

Inventory

Advance Ship

Delivery

Cross-company Consumption on Consignment: Detail

Possible solutions:

1. Return parts to plant B(pre-requisite: cross-company clearing account configuration needs to be in place)(advantage: no system changes required for processing returns)(disadvantage: logistical nightmare)

2. Perform cross-company goods movement before parts are returned to Plant A

(pre-requisite: cross-company clearing account configuration needs to be in place)(advantage: additional goods movements only for new parts being returned) (disadvantage: parts remain in shipping plant's inventory until consumption/returns are processed)

3. Set up Company B as a drop-ship vendor* (pre-requisite: drop-ship and intercompany processes need to be defined and configured)(advantage: standard vendor/purchasing drop-ship process used; consumption from company B is to an

intercompany customer and standard intercompany SD process can be used)(disadvantage: additional processing steps, inventory assignment can only be confirmed at time of receipt

of shipping notification)

4. Perform cross-company goods movement at time of initial shipment

(pre-requisite: cross-company clearing account configuration needs to be in place)(advantage: parts move into receiving company's inventory at time of shipment)(disadvantage: additional goods movements for all cross-company shipments)

COMPANY A

Service

Order

Advance Ship

Consignment

Order

COMPANY B

Inventory

Advance Ship

Delivery

*Note: Heidelberg also uses this option

Advance Ship ConsignmentOrder

(Sales Org A/Customer XYZ)Service Part (Plant B/Storage Loc B)

Delivery(Sales Org B/Shipping Point B)

Service Part (Plant B/Storage Loc B)

COMPANY A COMPANY B

Post Goods Movement

Movement 631 WInventory Origin: Plant B/Storage Location B

Inventory Destination:

Plant B/Customer Location XYZFinancial: None

Service Order(Plant A/Customer XYZ)

USER EXIT:MB_CF001

Step 1: 632 W movementInv. Origin: Plant B/Customer Loc XYZInv.Destination: Plant B/Storage Loc ICCTFinancial: None

Step 2: 301 cross-company movementInv. Origin: Plant B/Storage Loc ICCTInv.Destination: Plant A/Storage Loc ICCTFinancial: 3 accounting documents

Step 3: 631 W movementInv. Origin: Plant A/Storage Loc ICCTInventory Destination:

Plant A/Customer Loc XYZFinancial: None

(PartsDisposition)

Consumption?

Yes

Consignment Pick-up(Sales Org A/Customer XYZ)

Returns Delivery(Sales Org A/Shipping Point RET

Service Part (Plant A/Customer Loc XYZ)

No

Consumption:Movement 261 W

Post Goods MovementMovement 632 WInventory Origin: Plant A/Customer Location XYZ

Inventory Destination: Plant A/StorageLocation AFinancial: None

Cross-company Consumption on Consignment: Diagram

Reference: Transaction OBYA: Automatic Posting - Clearing Accounts

Note: You have to comply with IRS guidelines when managing these clearing accounts

Parts Disposition on Service Orders

Summary• Custom solution for Parts Disposition on Service Orders• Visibility of advance shipment of Customer consignment

items• Automated processing of consignment pick-up • Some limitations in SAP for handling customer

consignments, e.g. drop-ship

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Session Code: 4005