There are many planning phases of materials within Product Lifecycle Management (PLM). Forecasts, inventory levels, and sales may fluctuate within each phase in PLM. Prompt action, realignment, communication channels, and how the process is managed are crucial success factors when managing PLM throughout the supply chain. Is there a way to manage this process within SAP? The short answer is yes. Additionally, to the system rules in SAP, processes and communication channels need to be established.
The material master in SAP is the rules that control how a material behaves and is managed. In the basic data 1 tab, cross-plant material status and the corresponding valid from date are standard fields that may help plan and manage phases in PLM. The two phases in which these fields are excellent in utilizing the functionality are the introduction phase. These occur when launching and initially forecasting for a material and the decline phase when discontinuing a material.
When I was responsible for operations of warehousing, one of the specific planning elements we focused on was the decline/end of the lifecycle phase. This planning element was managed for warehouse capacity. Following the process of the rules in the system was critical for our success. We would capture the materials that had a “DS” (Discontinued Soon) cross plant material status along with the date associated with. This process would help to identify which and when materials would be discontinued. The system information alone only displayed that the material was sellable, would not be purchased again and would be discontinued at the respective cross plant material date. This information did not provide any indication of the anticipated volume such as the last spike in demand or on the contrary if a material is moved to DS status as it is truly a slow mover. This is where the communication channel from the merchant/planner to operations was critical and provided the story and background beyond what the system could do. Having all the information (both system and verbal) enabled us in the warehouse to make strategic decisions on where to slot/store materials and within warehousing, slotting is one of the main drivers in increasing efficiency and throughput.
An example of this process and system working flawlessly; was when R-22 (freon in refrigerators) was being discontinued due to government regulation and replaced with R-410A. Each warehouse in our network had over 100 pallets of R-22 and the merchant communicated the situation to each warehouse. They advised us there would be a large last time buy and prepare from a capacity standpoint and volume since customers intended to stockpile before the cutover. This resulted in our supply chain network receiving and selling over 160,000 units of R-22 within 1 week with no issue. Had we just viewed the cross-plant material status and date; we would have been unprepared for the anticipated spikes in inventory and outbound demand. This is why the communication channels up and downstream were so critical to our success.
This article is a continuation of our product lifecycle management education. If you haven’t read our piece on New Product Development (NPD) and Sales & Operations Planning, which provides how to be effective in Product Lifecycle Management (PLM) cross-functionally as an organization to reduce data redundancy and capitalize on potential synergies.Tags: Forecast, Inventory levels, Supply chain