Rapid Planning with MRP on HANA SAP Manufacturingfm.sap.com/data/UPLOAD/files/Rapid Planning with MRP on HANA... · Rapid Planning with MRP on HANA SAP Manufacturing ... and functionalities

Frank Platt | Senior Director | SAP LoB ManufacturingApril 2014

Rapid Planning with MRP on HANASAP Manufacturing

© 2014 SAP AG. All rights reserved. 2

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Fiori LaunchpadOne entry point for the user

Stable URLs forbookmarkingand sharing

Role based& persona

centric

MultipleDevices

Theming andbrandingPersonalization

MultiplePlatforms

Search,collaboration

and feeds in firstwave

SAP Fiori ActiveTiles,Provides themost impactfulreal-timeinformation andKPIs at a glance


SAP Fiori app types

Transactional

Task-based access

Access tasks to create,change, approveprocesses with guidednavigation

Analytical

Insights

Get a visual overview ofa complex topic formonitoring or trackingpurposes

SAP SmartBusinessInsight to actioncockpitAnalyze and evaluatestrategic or operationalKPIs in real time andtrigger the right action

Factsheets

Search and exploreView essentialinformation about anobject with contextualnavigation betweenrelated objects

Runs on: Runson:

Runson:

Material Requirements PlanningCustomer Requirements


As a manufacturing professional, you are struggling with..

“Time-consuming, planning andevaluation processes wherecritical situations often can not bedetected easily

I cannot optimally planproduction schedules andsequences over longer timehorizons”

“Inability to gather accurate,complete manufacturing-related dataI cannot effectivelyminimize productionrisks across our network”

“Decisions based on incomplete,inaccurate and often outdatedinformationI cannot optimally reduce thecost of manufacturing operationsand increase profitability


What Is Material Requirements Planning (MRP)?Matching supply with demand to address material shortages

Supply Situation

• Inventory

• Stock Transfers

• Purchase Orders

• Goods Receipts

Demand Requirements

• Sales Orders

• Forecast Demand

• Stock Transfers

MRP• Match

Supply andDemand

• IdentifyShortages

Solution Recommendations

• Planned Orders

• Stock Transfers

• Purchase Orders


Supplier- 1

ProducerERP

…

…

DC

Supplier- 2

Customer

Material Planner

Area of Responsibility

How do I resolve the most critical material shortages?

Material Planner‘s questions:Do I fulfill all my material demands?If not, which materials are short and when?Do I have enough supply to meet the demand?Which important orders and customers are mostaffected and when?How do I resolve the most critical material shortages?What changes to plan are the most effective solutions?

Demand Supply

Demand Supply

Supply and Demand Evaluation TodayDecision making based on out dated information

KPIOn Time Delivery


A Material Planner is responsiblefor hundreds of materials and challengedby dozens of exceptions a day.

Time is limited, need to focus on the mostimportant and urgent issues

To identify the issues that require immediate attention, the Material Planner needs toknow:• What kind of demand is affected - forecast or actual sales order? For which customer?• What is the effect on the demand - delayed shipment by a day, by a week or more?• How much time do I have to solve the issue before it is realized?

Manually intensive analysis of the Stock Requirements List for a material

Multiple sources of additional information required in order to answer these questions

Detecting the most critical issuesSearching for needles in the haystack

?


MRP TodayBatch driven process and multiple ERP transactions

MRPPlanning

Run

MD01 – MRP Planning Run• Batch process - resource and data intensive• Long execution time – runs once a week, every couple

days or nightly

MD06 – Evaluate MRP Requirements• “Snapshot” of material requirements based on MRP run• Snapshot immediately out dated after new supply and

demand activity occurs

MD04 – Evaluate Stock Requirements• 2nd most widely used transaction across all of ERP• Very slow to execute

CO02/03 – Change Production OrderMD12/13 – Change Planned OrderME22/23 –Change Purchase OrderME52/53 – Change Purchase Requisition


MRP TomorrowMore frequent runs, more accurate data, better decisions

MRP Live: Utilize HANA capabilities for:Faster MRP run in ERP More frequent planning Up-to-date planning situationDetect and evaluate material shortages by flexible rulesFind critical demands, e.g. uncovered sales order items ormissing parts in productionFind critical supplies, e.g. late or overdue purchase orders orproduction ordersEvaluation of consequences, e.g. calculate which sales ordersare endangered by a late supply

Supplier- 1

ProducerERP

…

…

DC

Supplier- 2

Customer

Demand Supply

Demand Supply

Area of Responsibility

Material Planner


SoH on HANA for ManufacturingUtilizing HANA to improve the existing ERP manufacturing processes

MRP“Live”

MRP Live• Migration of MRP Planning Run to HANA• Optimized process reducing run-time by up to 10X

Smart Business for MRP• Improved, streamlined UI for Material Planner• Based on near-real time MRP information• Improved identification and prioritization of material

shortages issues• Improved solution recommendations and solution

“preview” capability for improved decision making

Fiori Apps for Manufacturing• Improved UI for traditional Production

Planning (PP), Quality Management(QM) and Enterprise Asset Management(PM) capabilities


With MRP on HANA, the system is able toanalyze the real-time situation of all materialsto predict and identify:• Disruptions in the material flow• Impact of issues on sales orders• Time-to-action until the issue is realized and

has a negative impact

Visibility to real-time information changes the way a Material Planner structures hisdaily work:• Predict, identify and address the most important material shortage issues first across all

materials• View material shortages from a sales order, inventory and procurement point of view, instead

of just a material view• Simulate recommended solution viability and effectiveness in real-time across sites and

thousands of material situations

Detecting the most critical issuesInformation served on a silver plate

!


The Plan to Produce Process: MRP Run

Roles

Sales OrderEntry MRP Run Release to

ProductionConfirm

OperationsInteractivePlanning

ProductionPlanner

ProductionSupervisor

ProductionWorker

Monitor &Control

ProductionPlanner


MRP Planning for ManufacturingStep by step process in ERP

Process today

MD01 /RMMRP000

EvaluateMRP Lists(snapshot)

MRP PlanningRun

MD06

Challenges:Long and resource intensive MRP runsmeans a periodic, batch processNew demand and supply changes makeMRP plan immediately out-datedNo real-time, single view of materialinformation and shortages across sitesSingle material, single site, manuallyintensive shortage identificationNavigation to multiple ERP transactionsrequired to evaluate solution alternativesResults in poor decision making

User interaction

Batch Job

EvaluateStockRequirementsList

MD04

Display / ChangeProduction OrderCO02/03

MD12/13Display / ChangePlanned Order

ME22/23NDisplay / ChangePurchase Order

ME52/53NDisplay / ChangePurchase Requisition

…


MRP Planning for ManufacturingStep by step process in SoH

Benefits:• More frequent MRP runs

• More timely and accurate material info

• Single, real-time view of materialshortage information across sites

• Sales order, inventory and procurementviews

• Simulate solution viability andeffectiveness in real-time

User interaction

Batch Job

MD01N

Real-timeSupply &Demandevaluation

New MRPPlanning Runon HANA

MRPFIORIApps

Smart Business for MRP:• Improved, streamlined UI for

Material Planner

• Based on near-real time MRPinformation

• Improved identification andprioritization of materialshortages issues

• Solution recommendation andpreview capability for improveddecision making

• External procurement – RTC Q12014

• In-House Production – 2014roadmap

~10Xfaster

… and now with Suite on HANA


How is MRP Performance Optimized?

Classic MRPApp-Server DB-ServerDispatcher

Read planning file entries

For every planning file entryRead planned orders

EbanRead purchase requisitions

Read purchase orders

Read production orders

Read sales orders

Read stock transfer demand

MRP LiveApp-Server HANADispatcher

Read planning file entries

For all planning file entries with the same low-level code

Plaf

Mdbs

Caufv

Vbbe

Mdup

ReadEban

ReadPlaf

ReadEkpo

Afpo Vbbe EkkoMerge + Split

MRP planning logic

Plauf

Eban

Update planned orders

Update purchase requisitions

Planset 1

Planset 2

Planset 3

Merge + SplitInsertPlaf

InsertEban

InsertResb

ABAP post-processing (e.g.determine release strategy)


The Plan to Produce Process: Interactive Planning

Roles


ProductionConfirm


ProductionPlanner


ProductionWorker

Monitor &Control

ProductionPlanner


From Planning to Better Issue ResolutionIdentify issues, simulate solution and apply the best resolution

With Smart Business for MRP, material shortages are identified and resolvedfaster and beyond barriers of responsibility and location

MRP Cockpit

SalesOrder

PurchaseOrders

Delayedmaterial order

Shipment delayinformation

Out of stock alerts

Sales order fulfillmentinformation

Shipment andstock information

Simulate Issue Resolution

Change incustomer order

Manufacturer

SupplierSupplierCustomer


MRP Cockpit – Material Shortages

• Identify critical materialshortages based on currentinformation

• Highlights issues acrossthousands of material stocksituations.

• Real-time material shortageissues from a sales order,inventory and purchaseorder point of view.

• Materials for which receiptscannot cover sales orders

• Real-time a graphics ofstock situation for the next21 days

• Filter on and get differentviews of shortages.

• Re-calculation of thousandsof material situations andflows in real-time.


MRP Cockpit – Identify and Apply Solutions

• List of all supply and demandrequirements for the materialshortages.

• Real time visibility toprocurement lead times,inventory stock availability,lot sizes, manufacturingscheduling and sales ordersacross multiple sites

• Using HANA, suggestspotential solutions

• Ability to evaluate thepotential viability and resultsof a solution.

• Ability to apply desiredsolution


The Plan to Produce Process: Release to Production

Roles


ProductionConfirm


ProductionPlanner


ProductionWorker

Monitor &Control

ProductionPlanner


SAP Fiori Applications: Release Production Orders

Lauch Demo


The Plan to Produce Process: Production Confirmation

Roles


ProductionConfirm


ProductionPlanner


ProductionWorker

Monitor &Control

ProductionPlanner


SAP Fiori Applications: Production Confirmation

Lauch Demo


SAP Fiori Applications: Confirm Production Operations

Lauch Demo

Value Proposition


Material Requirement PlanningBusiness Value for High-Speed Material Requirements Planning

Prediction of Inventory coverage forcritical parts is difficult

Better synchronized material demandand supply planning with reducedbullwhip-effect

Today With Suite on HANA

MRP runs in batch mode daily or lessfrequently.Decisions based on periodic MRPruns means decisions based onoutdated information.

Faster re-planning allowing morefrequent MRP runs in shorter cyclesInstant reaction to demand changesand updates to the supplierDemand information is propagatedfaster through the supply chain

Inability to re-plan quickly ifconditions change due to long runtimes.

More frequent MRP runs:Allows reduction in inventory andsafety stock levelsFaster information flow towardssuppliers enabling them to reactfaster to changed planning conditions

Reduceout of stocks by

36%Decreaseinventory and safetystocks by

29%Limitbullwhip-effect

* KPI improvements are based on benefits of traditional MRP. Improvements based on HANA will need to validated with specific customers


Material Requirement PlanningBusiness Value for Smart Business for MRP

• Complex analysis of largevolumes of complex stock data todetect material shortages

• Time consuming and complexissue solving process

• Automatic calculation ofalternative solutions guides theplanner to the best solutions

• Better identification and valuationof sales orders affected byshortages or delays

Today With Suite on HANA

• Decisions in production planningand purchasing often based onlong batch-runs and outdatedinformation

• Analyzing MRP stock situations isbased on outdated information

• Actual and updated MRPinformation allows better materialallocation

• Determine fraction of demandneeded for sales orders leads tolower WIP

• Problems in material stock andflow remain undetected ordetected too late

• Early Identification of criticalmaterials based on order value,range of coverage belowthreshold, unconsumed forecast,inventory without demand

• Exception handling based on realtime data

Reduceinventory and safetystocks by

29%Improvematerial flowreducing lead-times

Enhanceplanner productivity

* KPI improvements are based on benefits of traditional MRP. Improvements based on HANA will need to validated with specific customers

In Summary


Optimizing MRP and PP with SAP HANAKey Take-Aways

MRP Live delivers faster and more frequentmaterial planning runsSmart Business for MRP provides real-timevisibility to material information, facilitatingimproved issue resolution and decision makingSAP Fiori for Production Planning deliversvisually appealing and improved UIAll of which improve the efficiency of the materialplannerReduced material shortages contribute toimproved supply chain metrics and KPIs acrossthe enterprise

Thank You!


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Rapid Planning with MRP on HANA SAP Manufacturingfm.sap.com/data/UPLOAD/files/Rapid Planning with MRP on HANA... · Rapid Planning with MRP on HANA SAP Manufacturing ... and functionalities