What does an enterprise gain by having precise production planning & production execution information in SAP? This is one of the many key questions when trying to achieve 100% customer service levels with the caveat too possess as little inventory as possible. A Make to Order (MTO) planning strategy would satisfy this goal if it wasn't for the additional condition of customers wanting their purchase inventories within hours or days of placing their orders.
Having real-time production order confirmation and goods movements (receipts/issues) contributes to achieving 100% customer service levels. But, where does the prioritization of this effort align with the other changes needed to achieve OTIF goals, keeping inventory levels and lead time constraints into consideration? The priority of actuals can be very important in making concise decisions if manufacturing often experiences significant inventory variances due to the implication of ATP processes. For manufacturing, however, I would argue that focusing on reflecting and leveling the production plan for the short- and medium-term planning horizon, and a stable production schedule within a frozen period.
How can you tell if a work center is ready for real-time updates to the manufacturing order it is processing? The answer correlates to the short-term production planning process and the amount of discipline that exists within them. Will the data required for this effort available in SAP to feed the data collection system promptly? Is the data stable enough in SAP to have practically no last-minute changes to what was fed to the data collection system? In place of having a gut feeling, start this assessment by interrogating the MRP exception messages/monitor alerts. Are there too many exceptions or key exceptions that exist frequently? Other symptoms, like planning outside the system and having to filter out unprocessed manufacturing orders chances are automated updates should not take place yet. What does capacity evaluation results in daily buckets look like for the short-term horizon? The process begins with SAP reflecting in the realistic depiction of what will take place on the manufacturing floor and providing information to the system(s) which is collecting the data. How good is the production planning process? How accurate is the information coming from SAP?
The Overall Goal Is to Achieve 100% OTIF
While there are benefits to be gained with the automation of real-time updates to manufacturing orders, there are perquisites to be satisfied to have success with such effort. Remember, the overall goal is to achieve 100% OTIF. Whether or not this is achievable is debatable, but this is what all participants within the supply chain should all be striving for since this will better identify the challenges in achieving this goal. Any effort towards this goal should involve a process align team (SOP, Demand Planning, Sales, Traffic, Production Planning, Purchasing, Inventory Management, Warehouse Management, Quality, Finance, Master Data, etc.) removing silos, to reduce the risk of integration conflicts.
To achieve manufacturing execution, you must let SAP do the heavy lifting and stop working in outside systems such as excel. For manufacturing to be truly effective you must have the right demand and planning strategies in one system of record. Real-time data and trust inaccurate master data must reflect the reality of the processes but educating your users must be a high priority. The benefits of an optimized system are endless when working in one system of record. Reveal strives to help organizations within their SAP system by aligning business rules with business behaviors and educating their employees on the system itself.
This article is based on a series of Manufacturing Execution topics, to read all the articles you can start from the beginning of the series. To learn more on OTIF, read our latest white paper on "How to Confidently Make a Promise to Your Customer and Keep It Every Time".