Serving the Extended Supply Chain

Struggling to find the balance between having too much vs too little Inventory?
Having too much Inventory impacts working capital and profitability and too little effects service levels and growth.

Limited understanding of SAP’s planning tools often leads to inventories that do not meet demand fluctuations.

Key Benefits of getting it right:

• Improved service levels
• Right-sizing of inventory
• Improved inventory turns
• Reduction in dead stock and obsolete materials
• Order cycle improvement
• Effective lot size and lead time management
• Educated users focused on higher value activities
• Improved planning effectiveness
• Optimal automation of mundane tasks
• Increased value from the system you already own

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Being able to make a promise and then keep it is how you grow and retain customers. So being able to promise a ship date and meeting that promised date is a key component of customer satisfaction. If you don’t have a product in stock, what level of confidence do you have in being able to promise and fulfill a ship date to a customer?

Key benefits of getting it right:

• Improved customer service levels (internal and external)
• Better visibility and trust in the data
• Stability and predictability throughout the supply chain
• Increased shop floor efficiencies
• Optimal use of manufacturing resources
• Lower inventory levels
• Educated users leveraging the system to work for the business
• Increased value from the system you already own

Is there a need to know where your product currently is, who has handled it, is it delivering on time? Providing visibility to the status of products and being able to take pro-active action when a breakdown in the supply chain occurs makes good business sense and provides a good customer experience.

Key benefits to getting it right:

• Improved customer service by providing track and trace details on a real-time basis
• Improved visibility to the status and location of products
• Improved efficiencies and reduces costs managing by exception
• Faster reaction and reporting on batch genealogy leading to more focused recalls, holds and withdrawals
• Ability to provide Chain of Custody for serialized product

Executives are continuously challenged to drive decisions downward to directly impact the day-to-day activities in sales, purchasing, production and service, all while at the same time they must also drive upward so that the company’s financial plans can reflect accurate current and future operational plans. Ineffective planning is one of the key elements that are holding companies back from being world class.

Key Benefits of getting it right:

• Higher customer service
• Lower finished goods inventories
• More stable production/service rates
• Faster and more controlled new product introductions
• Reduced obsolescence
• Shorter customer lead times
• One set of numbers in both units and dollars, with which to run the business
• Tight linkage between strategic plans and day-to-day activities

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Trying to control changing schedules, capacity constraints and constant demand changes? Effective use of Production and Capacity Planning will give operations visibility and information across the supply chain as well as determine the best economic use of resources. World class organizations effectively translate the S&OP plan into a doable execution that constantly increases schedule and plan attainment.

Key Benefits to getting it right:

• Improved customer service by providing realistic order ship/availability to customers
• Better decision making based on actual work center information
• Optimal use of labor and equipment through capacity evaluation and leveling
• Predictable production scheduling and capacity visibility
• Minimized exception messages as production moves from the planning cycle into the schedule cycle

Struggling to maximizing asset performance to ensure the utmost throughput and minimize the downtime? Leveraging SAP’s EAM, Plant Maintenance and Customer Service functionality you to manage the entire asset lifecycle more efficiently by improving asset usage, cutting costs, and limiting capital expenditure.

Key benefits to getting this right:

• Reduce maintenance labor costs by increasing labor efficiency, 20-60% productivity improvement
• Reduce maintenance materials costs by as much as 30%
• Reduce mean time to repair (MTTR) while increasing mean time between failures (MTBF)
• Reduction in equipment downtime costs by 15%
• Increased asset availability and uptime
• Increased value from the system you already own

The ability to produce timely and accurate financial statements within a reasonable period of time after the month has ended is critical to management in their ability to understand the financial health of the organization and allow management the opportunity to make decisions in a timely manner. Organizations that leverage SAP capabilities and Best Practices to address labor intensive monthly closes, manual processing of standard functions, underutilization of New G/L, Ledger and sub-ledgers not synching, GR/IR not clearing, and more are able to drastically optimize their Central Finance processes.

Key Benefits to getting this right:

• Reduced Close Cycles
• Automate finance processes
• Increase COPA effectiveness
• Improved and accurate Planning and Forecasting
• Improved usage of standard analytic reports
• Trustworthy reporting and decision-making information
• Increased analysis capability and exception monitoring mindset
• KPIs aligned with business performance and objectives

There is no value in a forecast (even if we could forecast at 100% accuracy) if we cannot execute and supply to that forecast. Good companies are able to build a supply plan that meets the forecast no matter its accuracy. Great companies have been able to use the supply plan to help drive predictability and increase forecast accuracy throughout the end to end supply chain.

Key benefits of getting this right:

• Optimal use of MRP/DRP/Heuristics
• Availability of the right materials required for production, on time
• Timely delivery of manufactured goods to your customers
• Improved accuracy of plan attainment
• Optimized Lead time management
• Maintain the lowest level of inventory possible while maintaining sufficient safety stock
• Ensure that materials are available for production and products are available for delivery

Do you have visibility into your long-term capacity constraints? Rough-cut capacity planning (RCCP) is used to check feasibility of the production plan with a typical view being 3-18 months. Utilizing RCCP provides management the ability to convert the production needed to capacity required, then compares it to capacity available. Armed with this information organizations can take action when capacity is limited including adding shifts or equipment, revising the production plan, subcontracting, etc.

Key Benefits of getting this right:

• Vision of the strategic plan against bottleneck capacities
  • Machine
  • Labor
  • Vendor Capacity for Critical Materials
• Visibility to prevent over procurement of Materials and Labor
• Ability to conduct scenario planning against plant capacity
• Simulations to assist in the creation of valid production plans

Frictionless procurement is not a myth. It is possible and organizations that have leveraged SAP automated procurement, MRP and sourcing functionality to decrease manual intervention down to as little as 5%. This elevates the procurement department to a strategic entity that has time to negotiate with suppliers, find alternative sources and optimize raw material usage while letting the system manage the transaction and the “cutting” of PO’s.

Key benefits of getting this right:

• The elimination of manual intervention and “touching” of each PR and PO
• Reduced Raw material inventory by as much as 25%
• Supplier spend reduction
• Supplier performance improvements
• Lead time and cycle time reductions
• Material availability improvement for production