Time and time again, I hear people say “SAP did this to me” or ask, “Why did SAP do this to me?”. While this may be a natural tendency, it is a fallacy, nonetheless. SAP is not a sentient being, and it is not capable of “doing something” to people. SAP does not make mistakes, miscalculate, forget to trigger something, etc. Those are all human traits, not the traits of a tool or machine.
In reality, SAP acts based upon rules set by people. It acts using data provided by people. If data is incorrect, or an action is not taken, it is not, and can never be, SAP’s “fault” because it is not a person.
These situations occur because a person provided incorrect information or provided the necessary information too late. They occur because rules have not been set or have been set incorrectly. They do not occur because of a flaw in the system; rather, they occur because of flaws made by the people setting up and/or using the system.
Recently, I was on-site at a client when a crisis occurred. Employees walked in on a Tuesday morning to find that they were completely out of a product and would not have enough produced to resolve the problem for days. As they researched further, they found out that the raw materials to produce the product were on several rail cars that would not arrive for days, thus pushing out the production date further. Immediately, comments were made that “SAP did this to us” and “why didn’t SAP tell us this would happen?”
Reveal coached the team on conducting some root analysis. SAP was merely operating based on the rules and information it had received from the user. As the team dug deeper, it found that coverage (or safety stock) had never been set up on the raw material master in SAP. Therefore, with no such requirements, SAP never had the information to trigger a request for additional stock. Essentially, SAP was told by this set up that the raw material is always available on demand, as there is no requirement established by users for safety stock.
When organizations say, “we don’t trust the demand in our system”, or “what is available to promise?”, this is not because SAP has miscalculated demand or is unable to accurately calculate how much stock is available. What it does mean is that business rules have been created incorrectly (if at all) and/or accurate data has not been entered into SAP in a timely fashion.
Used correctly, SAP will predict a stock-out before it occurs, and trigger replenishment. It will always provide an accurate reflection of what is available to promise (ATP) to customers. The right level of inventory for each material will be maintained, so that stock-outs don’t occur, but not to a level that would negatively impact working capital. If this is not your organization’s experience, the problem is not SAP.
If your company has made the investment in SAP, but only sees this tool as a source of problems, Reveal can help. By applying our ongoing Value optimization or oVo Methodology, we can educate the users in supply chain best practices. We help them identify how processes must be changed, resources aligned by process rather than a silo, and how rules should be set-up so that SAP will operate properly. With our strategic approach, your organization will achieve the optimization and value that led to the original purchase of SAP, with no further investment in technology so that when issues occur- SAP will do the heavy lifting – not the other way around.Tags: Safety Stock, SAP, Supply chain