Frank Platt | Senior Director | SAP LoB ManufacturingApril 2014
Rapid Planning with MRP on HANASAP Manufacturing
© 2014 SAP AG. All rights reserved. 2
Disclaimer
“This presentation is a preliminary version and not subjectto your license agreement or any other agreement withSAP. This document contains only intended strategies,developments, and functionalities of the SAP® productand is not intended to be binding upon SAP to anyparticular course of business, product strategy, and/ordevelopment. Please note that this document is subjectto change and may be changed by SAP at any timewithout notice. SAP assumes no responsibility for errorsor omissions in this document.”
© 2014 SAP AG. All rights reserved. 6
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
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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:
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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
© 2014 SAP AG. All rights reserved. 1010
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
© 2014 SAP AG. All rights reserved. 11
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
© 2014 SAP AG. All rights reserved. 12
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
?
© 2014 SAP AG. All rights reserved. 13
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
© 2014 SAP AG. All rights reserved. 14
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
© 2014 SAP AG. All rights reserved. 15
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
© 2014 SAP AG. All rights reserved. 16
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
!
© 2014 SAP AG. All rights reserved. 17
The Plan to Produce Process: MRP Run
Roles
Sales OrderEntry MRP Run Release to
ProductionConfirm
OperationsInteractivePlanning
ProductionPlanner
ProductionSupervisor
ProductionWorker
Monitor &Control
ProductionPlanner
© 2014 SAP AG. All rights reserved. 18
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
…
© 2014 SAP AG. All rights reserved. 19
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
© 2014 SAP AG. All rights reserved. 20
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)
© 2014 SAP AG. All rights reserved. 21
The Plan to Produce Process: Interactive Planning
Roles
Sales OrderEntry MRP Run Release to
ProductionConfirm
OperationsInteractivePlanning
ProductionPlanner
ProductionSupervisor
ProductionWorker
Monitor &Control
ProductionPlanner
© 2014 SAP AG. All rights reserved. 22
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
© 2014 SAP AG. All rights reserved. 23
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.
© 2014 SAP AG. All rights reserved. 24
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
© 2014 SAP AG. All rights reserved. 25
The Plan to Produce Process: Release to Production
Roles
Sales OrderEntry MRP Run Release to
ProductionConfirm
OperationsInteractivePlanning
ProductionPlanner
ProductionSupervisor
ProductionWorker
Monitor &Control
ProductionPlanner
© 2014 SAP AG. All rights reserved. 27
The Plan to Produce Process: Production Confirmation
Roles
Sales OrderEntry MRP Run Release to
ProductionConfirm
OperationsInteractivePlanning
ProductionPlanner
ProductionSupervisor
ProductionWorker
Monitor &Control
ProductionPlanner
© 2014 SAP AG. All rights reserved. 29
SAP Fiori Applications: Confirm Production Operations
Lauch Demo
© 2014 SAP AG. All rights reserved. 31
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
© 2014 SAP AG. All rights reserved. 32
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
© 2014 SAP AG. All rights reserved. 34
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
© 2014 SAP AG. All rights reserved. 36
© 2014 SAP AG. All rights reserved.
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