All Videos

Demand & Supply Planning

P2P; PTM

MD04

Hey there, my name is Martin, and in this video, we'll be discussing what to do when you have more than one realignment or rebalancing exception message. When MRP controllers are first getting started in daily exception monitoring, it can be frustrating and often confusing when you see more than one exception message. That's alerting you to the need for rescheduling in, rescheduling out, or even cancelling. All in the same material. So I'd love to hear more about this and how we can do this quickly and really understand when to resolve and how to resolve these planning situations. Patrick, I couldn't think of anybody better. Why don't you tell us more about this? Definitely, Martin. I knew that this was a challenge for me when I was first getting started with exception monitoring. Come on SAP, what are you telling me here? Move this one in, move that one out um, and cancel this one over here. The good news is that there's actually deep opportunities in these exception messages. And once you're comfortable with reviewing the full planning situation for a material, rather than just responding to a particular exception message, it can become really powerful, even if there are several that seem to be in conflict on the same material. Let's go in, take a look, and figure out what to do with these. Before we get overwhelmed by the exception messages that we see on the MD04 screen, let's try to figure out what's really happening in our supply chain. In my personal experience, I find it helpful to take a look at the whole picture before jumping into any conclusions. The MD04 stock requirements list reminds me of a checkbook. First, I want to look at my stock balance. In this case, we have zero pieces on hand. It's like I have no money in my checking account. As we look at the next MRP element on the list, which is here, a forecasted requirement of 500 pieces we can see that that's April 11th, which is today. When MRP did the math and looked at the fact that I had 500 pieces that were supposed to be consumed today and saw that I had no inventory on hand, it showed us that our inventory balance would come down to negative 500 pieces. So if I go back to the checkbook example, if I had no money in my checking account and I tried to cash a check for $500, my account balance was going to go negative by $500. So if I don't find a way to put $500 in my bank account, we're going to have a problem. So before we panic, let's continue reviewing the information on the screen. The next row of data shows that we have an open purchase order for 1,000 pieces scheduled to arrive on April 18th. MRP did the math for us again, and it realized that if you were negative 500 and you brought in 1,000 pieces, you would actually end with 500 pieces on hand. However, we needed that inventory on April 11th. It's giving us one of the most common exception messages, which is 10, to bring the process forward. If we bring those 1,000 pieces in, sure, we can satisfy that 500 piece demand, and we'll end up with 500 pieces on the shelf, but we're not going to be able to meet the demand on the day that we need it, which was April 11th, we should be looking to pull this forward. Obviously this can happen for a whole lot of reasons. Maybe our recent sales were higher than expected. Maybe our forecast in the current period is higher than expected because we're expecting the business to take off. Maybe we had some inventory and then we had an inventory write off during a physical inventory. A whole bunch of reasons that we might get exception messages. But in this case, at least we know that the supply chain is out of balance. And this exception message number 10 is letting us know that we're going to have to expedite something. So let's make a mental note about that and continue on and look at the rest of the picture. So when we look at the next MRP element, it's another purchase order. This one is due on April 30th. And this one's for 500 pieces all the way over here. So that's great. When we bring in 500 pieces on April 30th, we're going to have a 1,000 in inventory. But the thing is, we don't need a 1,000 in inventory. We don't have demand telling us to bring in a 1,000, so we've got an exception message again. In this case, it's a different kind of message. It's an exception message 15. And that message is to postpone the process. So in this case it's telling us, take this purchase order and instead of bringing it in on April 30th, let's bring it in on June 1st. The first one we're supposed to pull that one in, the next one we're supposed to push that out. Things are looking a little bit out of control, but for now, let's not overreact. Let's just make another mental note for ourselves and continue going on down through the list because it's always important to look at the whole picture. So with that in mind, the next thing that we're going to see is a 500 piece demand over here on May 1st. And thankfully there's no exception message on this one, finally an MRP element without an exception message. So good news, the inventory will be decremented by 500 and we'll have 500 left. So fantastic, but we can't stop here. So let's carry on. The next thing we see is another purchase order. This purchase order for June 1st, but we have another exception message. This exception message number 20 is actually a cancel message. And I'm sure as you look at the screen here, you could probably tell why it's asking us to cancel it. We have 500 pieces in inventory. When we bring in 500 on this purchase order, we'll have a 1,000 in inventory. And then the only demand left in the system is on June 1st for 500 pieces. So if we bring in that purchase order, we're going to be left with 500 pieces on the shelf. And unfortunately, we don't want to end with 500 on the shelf, because we don't have demand for that. So I think we need to figure this whole thing out. We've got the whole picture in front of us. So, we don't need this purchase order. In this purchase order, we need to pull in. In this purchase order, we need to push out. We actually don't need to overreact. We're getting close to the end here. Even think about this on this purchase order with the reschedule, you have a reschedule pull in, you have a push out, and you have a cancel message. Maybe if we execute to that cancel message, it will provide our vendor some capacity relief. It can let them prioritize other materials that we actually need. So maybe it's a good story that we have all these different messages. Again, bottom line, SAP is keeping us in line. So now that we've looked at the whole picture, we've got the whole scenario, we've made some mental notes. I think I know exactly what we need to do. We have an opportunity to reach out to our supplier and to communicate that whole picture. Basically, we have to ask them to do everything we see on the screen, but all in all, it's a pretty good news story. We're going to ask them. If we can pull in this purchase order number ending in 157563, from April 18th to April 11th. And then we're also going to ask them if we can push out this PO, which ends in 726, from April 30th to June 1st. And then finally, when we've done that, we will ask them if we can cancel this purchase order that ends in 887. And once we've done that, we've had our full communication. And honestly, now that I'm thinking about it, hopefully you agree that wasn't too bad. So that's all I have. I got to go and just wish me some luck with that phone call to the supplier. So in summary, what we've covered today are three messages that often co exist on the same material to show our scheduled supply is either running ahead, behind, or no longer needed. We briefly discussed some of the common causes, the opportunities that these messages can create to prioritize, or provide capacity relief. And some suggestions for how we might resolve them. Thank you for allowing me to give you the tour. Thanks, Patrick. For MRP controllers, these messages provide daily insights to support decision making. And understanding that we should review and resolve these entire planning situations rather than a single exception message. Once again, thank you. So folks, if you want to know more about this exception message and all the other exception messages that exist, please check out our video catalog. If you're not sure what video to check out, ask the chatbot.

Procurement & MRP

P2P; PTM

MD04; MM02; MD03

Hello and welcome future supply chain experts. My name is Martin and today we're going to be exploring how we can tap into the untapped potential of your SAP system. Ready to dig deep? Let's get started. In this video, we're going to explore two different flavors of reorder point planning. Now I know we hear often a lot of confusion about reorder point planning versus safety stock and the reluctance to use reorder point planning because the demand disappears. So Sean, I know this is a topic near and dear to your heart. Tell us more about reorder point planning and specifically the perceptions that come along with it. This is such a great question Martin, thank you. And the great news is that we're not boxed in and we do have options. Today I'm going to give you a brief definition of two distinct categories of reorder point planning. And dive into how we define each and then show some examples. I know that I've personally dealt with some hesitancy in using reorder point planning as a standard part of the toolkit, but this is a decoupling technique and decoupling techniques can often help overcome significant volatility and variability when used correctly. So with that said, let's go and take a good look. Welcome to the discussion and demo on reorder point planning. So with reorder point planning in SAP, we set a quantity level or a reorder point below which the system will reorder or create an order for us. And getting to that level requires consideration of things like safety stock, like average consumption, replenishment, lead time, and so on. And SAP then will calculate from the sum of the plant stock and the firm receipts the replenishment that's needed to meet the demand Now there are two types of reorder point planning, the first is manual reorder point planning and here that reorder level and the safety stock level are manually maintained inside of the material master. The second is automatic reorder point planning, and here that reorder level and the safety level are determined by integrated forecasting programs, and we'll deal with it in a future video. Today, we're going to focus around the manual reorder point planning. And so with that said, let's just remind ourselves, how does reorder point planning work? And if we look in this diagram, we can see these consumption lines where we are consuming material and there is a reorder point, which once we breach that and go through it, the system will look to replenish so that we come back above the reorder point. And it will allow us in terms of lead time, normally we allow sufficient time to get down to a certain point and that then the replenishment takes us well above so we can continue the cycle on down. So that's really just high level, you know, some of the theory that goes with this. And what we're going to do today then, is we're going to focus on the manual reorder point planning. And that manual reorder point planning, what we're going to do there, is we are going to look at the VB and a V1. So we'll look at a few materials to get a sense of what happens in the world of reorder point planning and I'm going to go into my stock requirements list which you can see here in front of me, having found those materials and we can start to look at what's going on. If we look at this particular material, we can immediately see what is my stock on hand is 17 , we can see out there that there's certain demand, the forecast is driving, we can see some supply elements, and we notice that this particular item is set up as a PD, it's a P3 in this case here, so it's a plan on demand. And those plan on demand MRP types in the S4 environment, which this is, is PD and then it's of course P1 through P4 and this material is set up as a P3 material. So there we can see what that looks like. Now let's go and change this up and let's look at a reorder point material. Let's take a look at what that looks like. There we go. So in this case, we have a reorder point material and what you can see has happened here is that we have disconnected or decoupled if you want to call it that, this material from the rest of the system. And so there's nothing out here that tells us what's actually going on. The VB shows us that the moment the stock falls below the reorder point, it will set something in place. So the business case is that based on being a predictable material, probably with low cost, and maybe can be somewhat automated, we're able to minimize some of the touch points. So why don't we have a bit of fun with this particular one here. We can see that it's a VB, it's simply got 37 on stock and if I go and have a look inside of the material master, what I'll notice is that my reorder point is 10. So I'm going to have to drop from 37 to below 10 before this triggers anything. So I'm going to change this and I'm going to make this 40 and we'll save that, and once that's saved, I'm going to come back and say, well, here's our current environment, let's run a MRP against this. So we're going to run the MRP, there it is, and now I'm going to refresh this material and boom, there it is. SoI've come below the threshold of 40 with 37 therefore, I now have a replenishment of 5 that it's looking for. And that 5 is built off the rule set that we put in place and you'll notice that the rule set here was a minimum lot size of 5. And because of that what has happened is I've breached the reorder point of 40 and it's given me a minimum lot size of 5 so I'll be back to 42. So that's really what we see happening as far as the ROP now I hear a lot of hesitation sometimes around moving to reorder point planning. And often that hesitancy comes from the perspective of, well, you know what? We just need to see more of the demand drivers. And guess what? The good news is yep, that's possible and we can consider a reorder point MRP type, which is known as a V1. And that includes external requirements. So let's change up on this particular material here, and I'm going to share with you another one. There's my material, and I'm going to refresh that , and so now I see it is a V1 material, which means that it includes external requirements. That's how it's been structured. And as I look down here, I see the forecast demand. In this case, the forecast is within the replenishment lead time. Here's my replenishment lead time. And so that's considered along with the reorder point. And we will then see that the supply elements here have also been created. So there's a planned order, and here's another planned order. These supply elements, the system is putting in place in reaction to the demand that is landing and that is coming down the pipe. And so that's what those planned orders are doing for us. And so we can watch and manage progress in a decoupled environment that meets the same business case requirements that we spoke of with the VB manual reorder point. Now, the slight contrast in favor of V1 is where it is common for order reservations, for argument's sake, to be increased or added and where we might have a little bit more unpredictable usage, then we have a good opportunity to use the V1 and it's going to help us to prevent shortages. So folks, reorder point planning is an exciting option for us as we determine whether and how our materials to be planned. I really enjoyed that demo. So in summary folks. We took a look at two different options of reorder point planning The use case and prerequisites for each. How to tell if reorder point planning is performing and what kinds of changes should trigger a review and recalibration of that reorder point. This is a great technique that should be part of our toolkit. Thanks, Sean. I can see how that could be super valuable for most planners out there. Thank you. Folks, if you want to know more about some other planning techniques, we have a whole catalog on MRP planning, please check that out. And of course, if you have a specific question, feel free to submit it below.

Warehouse Management

WM

LL01; LX04

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here, and in this video, we're going to focus on two key features that every warehouse supervisor manager should view each day. So Steven, tell us why these features are so important to start the day. Absolutely, Martin. In this video, I will focus on capacity use per storage bin and the warehouse activity monitor. These two key transactions personally helped me as a warehouse manager, prepare for the day by viewing our potential supply chain disruptions and by analyzing the warehouse capacity health status. This video will demonstrate two key transactions that every warehouse supervisor, lead, or manager should really review every single morning to start the day. So this is something that I did and really paid dividends in the end. So the first is you want to take a look at your health as far as your warehouse capacity. So I would always go into LX04, enter my warehouse number, take a look and just get a high level overview of where I am with capacity usage percentage. How many empty bins I have per storage type. We utilized capacity usages, so the load percentage also meant a lot to me. This would give me a sense of where I could possibly move things. I could judge my inbound volume to see how much more I could put into each of these storage types. So really we were in a state of very, very, very high capacity so managing this, making sure that there was no bottlenecks was a big part of the morning function. Probably the most critical is going to be your Warehouse Activity Monitor. So your Warehouse Activity Monitor is going to be LL01. LL01, you'll enter your warehouse number, you have options here as far as entering movement type, storage types, etc, or you could just go ahead and click right through. This is your late or critical warehouse processes. So, moving into the morning in this will certainly fluctuate throughout the day. The goal is for it to be in green or as low as possible at the end of each day, if there's something that ends up here, it just means that it's exceeded a time parameter. So what you really want at the end of the night, if you're picking, depending on your hours of operation, you're picking all of your warehouse functions, there's a point where this should be the lowest for me walking into the day, you would have a bunch of unconfirmed TOs because we just started receiving, so all those inbound activities were created. So this will fluctuate overnight though, right, when that was kind of our, our dead period, as far as the least amount of interactions or transactions going on. I would expect that to be the lowest point or as close to green as possible, but you still want to open this and take a look at what's kind of pending what's out there and you could see when it was created on and really gives you a sense of what's still due, because all these are potential supply chain disruptions. So, this more of a critical supply chain disruption aspect, you want to go and research and alleviate all these potential issues. And again, the second was going to be LX04, which was taking a look at your health or your overall capacities in your warehouse. In summary, we have covered how capacity per storage bin can be leveraged to analyze warehouse capacity status and how the warehouse activity monitor can be utilized to identify supply chain disruptions that need immediate research and action. Thanks Steven. I can certainly see the benefit of how reviewing this information to start the day could pay dividends for a supervisor. Hey, if you guys want to learn more about this capability and others in your SAP system, please feel free to check out our video catalog and of course if you have any suggestions, please submit it below.

Order Fulfillment & ATP

OTC; P2P; PTM; WM

MM03

Are you interested in creating a more seamless customer experience with less churn and manual intervention? Okay, good, me too. Martin here. And are you equally interested to hear about three fields in the material master that might be helpful? Whenever we have an opportunity to set a rule in place, and that rule matches the behavior that's real, we're in business for improvement. So Kristie, I only have really one question for you today. Actually, three questions. What are the three fields in the Material Master that we need to know so much about? Take it away. That's all I have today. We've got loads of opportunity to leverage master data to make the process flow better. Make it easier and less disjointed when it comes to serving our customers. Today I wanted to just offer up three possible fields. That's three of the many. Today we're going to walk through the value opportunities around sales MOQ, delivery unit, and wait for it, sales unit of measure. And you know what? Since you gave me such a hard time, I'll throw in not one, but two bonus fields. And I'll pick really, really good ones. Let's go in and take a look. I love a good challenge and I love some tips and tricks. So let's get right into it and see if we can't locate a couple of fields that can really help us in making sure that we're getting the behavior we would like out of SAP and maybe simplify some of the things that we are currently doing when we have to go in and manually intervene with our sales documents. So I'm here in the sales org. 1 view, which means I had to specify my material, my sales org, and my distribution channel. And this is MM03, you can see the transaction code here in the lower right hand corner. And a couple of the fields I wanted to point out today that we tend to find very useful in troubleshooting and problem solving. So the first one here is the sales unit. So your base unit of measure, in this case, is pieces. When we sell to the customer, we've decided we would like to sell in palettes, and we are able to specify this based on the material, the sales org, and the distribution channel. So the other thing we can do is we want to make sure that that is consistent, or the same across all sales documents. We can choose the sales unit, not variable. Now, if we wanted the flexibility of having that to be different, then we simply would not choose to tick that tick box. But that can be very helpful if you're trying to make sure that things are the same across all of your sales documents. You may have a compelling business case why that should not be true. And in that case, we would not want to tick that tick box. Now let's come down here a little bit more. We have another field here called the delivering plant. So if we want to default a particular plant onto our sales orders, this is where we can come to do that. Now maybe we have a couple of plants that we could choose from and we want to go in and specify this based on the sales org and distribution channel. We can come in and maintain that field accordingly, and that can help to direct where we are landing that demand. And we can also choose it to help us inherit if we have materials that are available at a couple of different DCs, and we really want to direct those sales orders to a particular delivering plant. There are other places we can also maintain this master data with more specificity. So the lowest level we can maintain it here is at that material sales org and distribution channel. Another one that is really important. See, I'm already up to three. I'm going for bonuses now. Material group and just a comment on this. Material group is a cross functional field. So this is one where we really want to make sure that we are aligned with our friends in finance, and with our friends on the supply side, and particularly our friends in procurement, and how we are categorizing these materials and make sure we have a good understanding of where that is landing. Now, often overlooked, because you do have to scroll down to find it, we have a couple of other quantity stipulations that can really help us. We can specify a minimum order quantity, in this case we chose 12 pieces, a minimum delivery quantity, which could be the same, or it could be less, so let's say you allow for partial deliveries, maybe your minimum order quantity is 12, and your minimum delivery quantity is some multiplier that is less than that, so 8 or 6 or something like that. We can also specify our delivery unit just like we do above for the sales order units. One last thing here if we aren't sure what that conversion is from pieces to pallet or we'd like to see that information in a different way. We can come in here to additional data and simply move to the units of measure. This is where we can see that quantity conversion from pieces to pallet or any other unit of measure that may be helpful to have maintained. So in this case , we have four pieces per pallet, so perhaps on our delivery, we allow for eight, if we allow for partial deliveries, whereas on the sales order itself, we may be requiring a higher quantity. So those are some of the things that we can do to help make that sales order entry a little bit easier and a little bit more consistent to help us to differentiate where the business rules should be different based on the distribution channel and the sales org versus where we want it to be consistent across all of the distribution channels and the sales work. So a couple of different alternatives there. And again, most of this data can also be maintained more finitely or with more specificity as we get into the customer master data. But from materials management perspective, what we can maintain within the material master, this is some governing master data that we can have in place to help ensure consistency and lessen the load of that manual maintenance. Okay, whew, I think I made it with some bonus ones, and I think we hit five fields. So today we had the opportunity to explore some of the key master data fields that live in the material master and support sales order management. Much like our procurement or production related fields, there may be more specific records that take precedence over the material master. A basic principle in SAP is that it loves specificity. And in at least most of the cases. The business rules we looked at today were chosen because they are often options that come up and become useful as a part of problem solving. And that's how we learn how to best put them to use. And remember, as we're exploring and changing and evolving, we must make sure that we have a coordinated approach, especially if what we're working on directly impacts our partners. This is very important. Ah, I can't believe you caved to the pressure, Kristie, and added two more fields. Okay, seriously, five? Okay. We can work on it. But Kristie's right. There are so many more to explore. Taking the time to explore the definitions and the use cases for key master data fields is central to being able to deliver real and lasting value out of SAP. So again, thank you, Kristie. Hey folks, if you're looking more to maximize other features and functions in your SAP system, please check out our video catalogs. And of course, feel free to use the chatbot if you can't find something.

Demand & Supply Planning

P2P; PTM

MD07; MM03

Greetings supply chain enthusiasts, Martin here. And today we're on a mission to uncover the hidden value in your SAP system. So buckle up and let's get started. In this video, we're going to deep dive into 3 key things that an MRP controller should always know or be aware of. So Dave, tell us about these three things MRP controllers should know or be aware of. Hi Martin. Do you know how often I've experienced MRP controllers finding themselves a little lost in the weeds? There is so much going on in the day to day that it's easy to lose the plot. In this video, I'm going to highlight 3 key things that every MRP controller should know. First, we need to know who is responsible for the different MRP elements that show up in our planning. Who can we go to when we need help? Second, we need to know where we are behind on our work and work to bring that current. And third, we need to know what's new, what's changing from a business perspective, what's new since last night, what is the news of the day? We've got great tools at our disposal, so let's go in and take a look. Some of the most common inventory control questions a business leader is going to ask revolve around, who do I go to get a supply answer? Especially about materials that are in short supply or overstocked or holding up my production. Why do I have so much inventory of material? How long does it take to make or procure this item? Who's our most reliable supplier? Why are we making so much of this material? Or conversely, why are we making so little and constantly can't supply customers on time? All of these questions revolve around an MRP controller, he's a key person in the supply chain. In terms of planning and procuring, the MRP controller is one of those key personnel we need to have complete expert knowledge of a product we can rely on to help in key decisions. Now, how do we get to these MRP controllers and what do we do with them? Grouping and prioritizing. Typically, an MRP controller is either a planner or a buyer in some cases, a planner would handle internally procured materials and a buyer will handle externally procured materials. In some organizations, you could find one person doing both the internally and externally procured materials, but rare. The assignment of a material in a plant to a MRP controller is used to clearly define who is responsible and accountable for that product in terms of demand and supply issues impacting the implied supply chain, which ultimately impacts your overall profitability. SAP allows us to assign unique MRP control IDs for each material plant combination. We do the assignment in the material master field, MRP 1 designated for MRP controller. Let's have a look at what that looks like and where we do it. I'm looking at the material master, MM02, I'm looking at a material. Go to MRP 1 for my plant, and I have an MRP controller field designated. So in our instance, we have 001 Adam Kane. I can modify these on a weekly, monthly basis, typically, you want to assign that person responsible for these materials. So what does an MRP controller do? MRP controllers are either planning, scheduling, or buying materials, and because of these functions, they need to know the demand and supply related issues to the products they manage. These issues we trap in exception reports, these exceptions are generated by an MRP run. So how do they perform these important functions? MRP controllers have an arsenal of reports, which can be run at an MRP controller level for both a planner or a buyer, and they include stock requirement lists in different reports. MD04, MD06, MD07, or production COIS and CO24 for missing parts. The objective of using these tools is to help the MRP controller balance the supply chain, the supply and demand in his area of expertise by finding and managing exceptions that have been unearthed in the MRP process. Exception groups collect exception messages planners and buyers need. These exception groups are created at the time of an MRP execution. MRP is actually capturing these exception messages, advising of planning terminations, planned or production orders with due dates in the past, or exceptions during rescheduling, exceptions during availability checking. Let's have a look at some of what an MRP list would look like. I'm going to use the MD06 transaction. I'm going to put in my controller and I want to look at exception groups, in this example, I can choose what I want to look at. I look at new opening dates in the past, new start date in the past, new finish dates in the past, which are all messages or I can look at terminations. Execute the task for my plant and I now get a list of materials that have been assigned to my MRP controller, I have my exception groups and I have the count of exception messages in that exception group. I can now at this point drill down further into those messages to find out what they are. We're going to tackle that in further discussions. Using MD06, I as a planner can input my controller ID, I can input the plant that I'm working in, I can input what exception groups I want to see, I can input material data, and I can execute this task and look at the messages that are generated. I'm going to take one material that I, have issues on FG126-AB. I can double click on the material, I can see that I have overdue planned orders, I have a independent requirement that is well overdue, that's been satisfied by this planned order. So that's my only demand I have. I have planned orders out into the future and I can see that in this instance this planned order is being created 03/20 for this demand element. I have a stock transport requirement, this Ord.DS, which is generating the planned order. So this is my immediate feedback. I can see that these orders are overdue, I have to do something soon. Either I decide on, am I going to supply this STO, or I'm going to advise the buyer who initiated this and cancel the planned order. This exception message is giving me a great look at what's happening in my area of control. So in summary, if we focus on making sure we know these three key things, then this helps us to. Continually improve the quality of our planning and our supply chain outcomes. We have to acknowledge that sometimes the truth hurts or really bites. Our supply chains can get disrupted. Things may not go according to plan or our customers might surprise us with good or bad news. Last but not least, and I know this goes against many of our natures, but we need to focus on progress over perfection, or we'll never get to the wins. Motion builds momentum. Thanks Dave, much appreciate that. Especially that last point, it's so true. So if you want to know more about how to get the most out of your SAP system, please check out our other videos. And of course, if you need to know more about this particular topic, there's plenty more to go. And if you have a suggestion, please post it below.

Procurement & MRP

MM; PP

MD04; MM03

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we will focus on the three types of lot size keys available in SAP. This feature in SAP enables MRP to plan replenishment using static, periodic, and cost based lot sizes. So Kristie, tell us a little bit more about how to make the most out of these three lot size keys. You bet, Martin. Lot size keys are one of the key rules for MRP to follow. Getting these right helps us to tackle a wide variety of different planning scenarios and immediately improve the outcomes of our MRP runs. In this demonstration, I am going to focus on the following three things. First, I'll introduce the three different categories of lot size keys. Second, we'll discuss how MRP will respond to some of the most commonly used lot size techniques. And third, we'll give you a couple of tips or tricks on how to incorporate complementary master data for synergy in that planning run. One of the key planning rules for our MRP run relates to our lot size keys and today I want to go through and show you where to find this in the material master and then talk you through a couple of the different options. So I'm starting here from my stock requirements list, of course, because this is where I spend most of my time as a planner or buyer and I'm actually just going to go in and take a look at this material. Now, if I was just going to just I would double click, but I think we're going to do a little bit of changing here. So I'm going to go to environment and say change material and my lot size key lives on this very first MRP view. And there are really three different kinds of lot size keys, or categories of lot size keys, and I want to break them down for you. So the first is a static lot size key. So this is going to be things like a lot for lot order quantity. It's going to be things like replenish to a maximum stock level. These are the kinds of lot size keys that we will be using if we are going through and have a static way we want to replenish. Also things like fixed order quantity, which is what this guy is set up as. So let's say, for example, you always have a truckload of product coming in. You're going to have a fixed lot size with a fixed order quantity and MRP is only going to give you proposals for that full truck, or half truck, or pallet, or tier, or layer, or whatever the case may be but you know that you are only ever going to order in lots of that. So you may get multiple trucks for the same day, but you're going to get a proposal, a replenishment proposal, for exactly that amount. Or you might have something like a lot for lot, and so it's going to look and see what that requirement looks like, and if you need 2,000 units to supply production, then it's going to look at that value, and then you may have something like a rounding value or a minimum order quantity that is also going to go into play. So as soon as you see that you have a need for those 2,000 and you are required to order 2,200 it will follow those rules. So it will say, next proposal, and then what is my MOQ and my rounding value. Another good example would be something like an HB, which is replenish to the maximum stock level. So maybe you're working with a min max, let's say for example you are dealing with constrained storage, so maybe like a tank or a rail car or something and you're going to say okay as soon as I hit X volume in that tank then I want to replenish to the max, I'm going to go ahead and fill it up. This is often used sometimes with giving signals to our VMI suppliers, they are managing that for you but it gives them a good idea of what your forward looking plan might look like. The next kind of lot sizing technique is a periodic lot size. So now we're gathering requirements, so we're going out and we're saying, I want to supply for that entire day. So I might have multiple requirements within that day, I'm going to produce a daily lot size and again, this can work with minimum order quantities, or rounding values, or maximum lot sizes. Okay? So based on what those rules are for your supplier. Or I might be doing a weekly bucket, or a monthly bucket if it's a really, really low volume item and I'm only going to order it every once in a while. So those periodic lot sizes. Now, those generally will work in combination with what your planning cycle is, so how often you're placing those orders with your suppliers and to protect against variability and volatility we ideally want to place orders in the smallest quantity that is economically feasible and as often as possible. So really focusing on the richness of our mix to help mitigate the variability and volatility that we might be seeing in demand. So based on that ABC and XYZ classification or segmentation of your goods, that's going to help you to get the right assignment in place. The last type of lot size, or last category of lot size, would be something like an economic based lot size. So you might be running one of the statistical algorithms to help you to figure out what the most economical order quantity would be. Now that is a more advanced technique so that means your master data is beautifully clean, we've got a high level of trust in MRP, and now we're ready to start allowing SAP to put some of those economic principles in play for us. So really, more of an advanced technique once you've gone through the others. One other one I will highlight for you that is also a periodic lot size, this is PK. So let's say that you need to control your amount of goods coming in on a particular day or you need to divide what days particular suppliers are going to be delivering to you or you have a supplier that only delivers on a particular day. This is where you set up those planning calendars to say this supplier is delivering Monday, Wednesday, Friday, but never Tuesday, Thursday. You're able to go in and set up those kinds of calendars to help manage that influx of goods. This is also very effectively used for trying to balance out how you're receiving inbound goods across the week so you can manage your workforce or your dock doors and that will help play into what's happening with the warehouse. So, oftentimes this is not richly populated in the material master and there is a huge opportunity to be able to use these different lot size keys. You will want to use each of the fields that are available to you to reflect the rules of your supplier. So for example, don't use a monthly lot size because your supplier has a higher MOQ. Think about your replenishment cycle, think about how often you're going to place your orders with your supplier and then use your MOQs and your rounding values to reflect minimum order quantities and the rounding values associated with it. Your rounding values are really your container sizes. It helps to play into your price breaks, which you maintain in your price conditions, but that MOQ is the smallest amount that you would purchase and then you're going to use the amount of gathering. So if you're gathering a day or a week's requirements together in order to place that order with the supplier. So those are three different categories of lot size keys used in conjunction with several other settings in the material master in order to drive your planning. But this is a great way to go through and kind of model your procurement strategy and start to work through these pieces together. It's also incredibly helpful as a planner as you're setting up for manufacturing. You're going to tend more towards those EX lot sizes or very small buckets of periodic lot sizes if any periodic lot sizes at all. So, in summary, we have covered how the three types of lot size keys power MRP. To be able to allow a buyer or planner to control the size of the proposals for replenishment. Model the requirements of your suppliers or the production floor. And lastly, reduce the manual effort and eliminate one of the key areas where unplanned consumption can occur, which throws off the whole plan for our assured supply. Thank you Kristie. Lot size keys offers yet another great opportunity to keep SAP informed of the rules that power the supply chain so MRP can do the heavy lifting and generate a solid plan for replenishment. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and of course, if you have any burning questions, please submit them below.

Contract & Supplier Management

P2P

MD04; ME33L; ME38

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, and in this video we will focus on how to take advantage of SAP's schedule agreements. Now the reality is most people don't even know much about schedule agreements let alone that there are three different types. When used properly it can really help streamline procurement procedures, provide the suppliers of the forecast and ensure we get the resources and services we need when we need them. So Kristie, how about you tell us about these three types of scheduling agreements? Sure Martin. SAP, as you mentioned, offers three unique types of scheduling agreements, each offers powerful features when used correctly. And in this demonstration I'm going to focus on three key things. First of all, the types of scheduling agreements and their key differentiators. Second, the minimum setup that is required to work well with MRP. And third, a few of the key features that make scheduling agreements so useful to a buyer or planner. Scheduling agreements can be so helpful to us where we have suppliers that are delivering to us on a regular basis and we're able to accumulate their purchases all into one outline agreement. It allows us to set targets and it allows us to control things like our firm, slushy and free zones, and be able to communicate effectively with the suppliers about what each of those means. So today I want to walk you through just the very basic definition of the three different types of scheduling agreements that are available to us in SAP and where to find them, and so we're going to go under logistics in our menu path, and then we're going to go down to materials management, and then as you likely have guessed, we're going to go into the purchasing section, and then within that you'll see this section called outline agreement. Now outline agreements come in a couple of different forms, we have contracts which may be in the form of quantity or value contracts, and then we also have our scheduling agreements, and much like our purchase orders this is supported by list displays and reporting that's associated with it. Now within scheduling agreements though we have a couple of different types of scheduling agreements. We have our scheduling agreements that are related to stock transfer scheduling agreements, so moving from one facility to another, and those are going to be our LUs. And then we have scheduling agreements that are associated with our suppliers, and those are going to be our LPs and our LPAs. And so I'm just going to come in here and I want to show you the difference between the two. So let's go ahead and look at this one first, so this is an LP and an LP if you're first getting started, and maybe you've tried this going across facilities, so you've got some LU scheduling agreements where you're moving product back and forth and now you want to try something new. The next level up from that for dealing with your external suppliers would be your LPs and these are scheduling agreements without release, and I'll show you the difference in a moment, but it's a very basic outline agreement, so you can see here we have material and we have a target quantity and then associated with that, populated by MRP is going to be our delivery schedule, so that's what we'd actually be sending to the supplier instead of an actual purchase order, and I'll show you what that looks like here. And come in here and click on this delivery schedule and you can see we've got different line items that are due on different days. So it looks very familiar to us in terms of what we would see for replenishment across time. Now the awesome thing about this versus a purchase order is that if I have to come in and do some maintenance or if there's an adjustment that needs to be made, I'm doing an expedite request and I need to realign my dates, I can actually come in here to the whole delivery schedule for this particular material. I can do that from MD04 from the delivery schedule ME38 itself and I can actually come in and make all the adjustments that I need to write from one screen rather than having to open up discreet purchase orders and the other thing it allows me to actually share information with the supplier if I want to give them things that go further out, and let me show that to you here. So I'm going to come in here, I'm going to click on this item details or additional data button, and I can see here I have some new fields that I don't have on my purchase order, and that is this firm trade off zone. So I have what is essentially a firm zone, fully committed, supplier is either approved to manufacturer or approved to ship, depending on how you define it internally and with your suppliers. I have a trade off zone, which might mean that they are approved to manufacturer but not yet approved to ship or it may be that they are approved to position themselves to be able to produce, so we've got some gray goods commitment. And then we have the free zone, which is really just our overall forecast sharing of information with them. And then we can also control what MRP is going to do in terms of reacting and responding to this. There are no releases that are required for this in terms of actually generating a release to the supplier, of course you can still have your purchasing related releases in terms of your spend you may send this through, but this is just an ongoing document that is regularly updating and you're setting your controls in terms of what MRP is able to update versus what it is that you would like to update and control. Not a lot of history in terms of the changes in the delivery schedule that's driven by demand. Certainly changes that we're making to our data is tracked but when we have quantity changes to the delivery schedule generated by MRP that's not going to be tracked here. And so as soon as we update, then we're just controlling and scheduling our output to the supplier. Now, an LPA is a little bit different, we actually get some difference in the way that we're going to control that information and so let's take a look at that and you'll see the difference immediately. This is great when you need a little bit more control, you want to be able to see exactly what you have released to the supplier. You're generating a release and official release to them, you're choosing how that release is happening, when it is happening, and then you're tracking the changes. So you've got your current quantity and your previous quantity and all of that information is going to be held for you historically. And when we go in here and we look at the same thing, so we're going to go into the additional data, you're going to see we have a few different fields here, and I'm just going to go down a little, and this is the big guy here. We have this thing called a creation profile and we also have a just in time indicator, so we can actually generate a release for them to ship against, and then we can provide them with a separate document, a separate output that is their forecast. And in here we're able to actually control a lot of different things and we could talk for a very long time about this, but some of my favorite things are the aggregation horizon, so we can choose that over a certain period of time, they're going to see daily aggregation and then after that they might go to something like a weekly or a monthly. So you can see just in time delivery schedule, we are sending them the information in daily buckets. In the forecast delivery scheduled and based on the time horizon, we're actually starting to aggregate that up, and we can also do things like incorporate planning calendars. We've got tolerances in here that will allow us to control the way that we're receiving against those goods, and then we also have the ability to control when these things are generated. So we can control how often and even what day of the week and how we're actually sending that information through to the supplier, so this is very helpful. So think about it as LUs internal use, moving from one facility to another, they have their own separate set of transaction codes. LPs and LPAs depend on the amount of specificity and tracking and the way that you want to send that information to the suppliers. And then especially if you are working with a kanban environment or you're trying to get very specific in terms of like milk runs and those kinds of things from your suppliers, then this can be really helpful and LPA is very helpful in having that additional control. Again, we could talk for hours on this but hopefully that gives you just a little bit of information to wet your appetite and know that there are different types of documents to meet your different needs. So in summary, we have covered how three types of scheduling agreements will allow our buyers and planners. To efficiently track their spend MRP to do the heavy lifting so we don't have to do that manual maintenance. And being able to manage through different kinds of scenarios with different scheduling agreement types. Thank you Kristie. I mean obviously using this feature helps to optimally manage suppliers and increase our procurement performance. So if you want to learn more about how to get the most out of your SAP system please check all the other videos we have and if you can't find an answer to your question please submit a suggestion.

Demand & Supply Planning

MM

MB52; MMBE; MD04; MC48; MB5B

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin and in this video we're going to be trying to discuss five ways to review inventory in SAP. Clearly keeping your finger on the pulse of what's happening with our investment in inventory is critical to the success and to our business. SAP has so many reports that allow us to see what's happening. I'm actually interested to see which ones we're going to choose today. So Kristie, why don't you show us a couple of these specific reports, and do we really have five different types? Why yes I am, Martin. Five is really just the start. There are so many great ways to look at inventory in SAP, and it really just depends on what question you're trying to answer in that particular moment, I think we all have our favorites. Today, I'm going to cover. Five of the most common transactions we look at for inventory. What information in each one is best for. And for a feature or three that folks might not yet know about or have in their daily repertoire of analytical goodness. Let's dive in and take a look. All right, five different ways to look at inventory. Let's see what we can find here. So first of all, we are in MD52 and if you're following along, the transaction code is going to be in the lower right hand corner of the screen. And we're going to go through these five transactions and get a good idea of what it is. So this is your perpetual inventory. You would run this for either a selection of materials or across an entire plant or looking at a storage location. You can see here you've got quite a lot in terms of selection criteria. You can also bring in your special stock. So in this case, I've chosen to bring in Vendor provided stock, so things that I've got out at the subcontractor, I want to include those. Making a choice not to show any type of zero stock lines, so don't show me those and then down at the bottom I have the option to set up my display and either a hierarchical representation or a non hierarchical representation. These are good to play with and understand the difference and then you can also assign a default layout here as well. So perpetual inventory is great for looking to see what your status is as of right now. It allows you to look across a lot of different materials and it will run and bring back for you a wide variety of information. So you can see you've got material number, plant storage location. This is that special stock indicator. Coming across here, if you've got the supplier attached to that in the case of choosing a vendor provided stock, your unit of measure, and then all of the different types of stock that is available to you and you're going to see this both in units as well as in dollars. So again, this layout is highly adaptable, you can see here that you're able to go in and adjust it just like you would in any other transaction. But you're also going to be able to see things like what's in transit or in transfer, what you have in block stock and quality inspection stock. This is great for where are we today? Going into a physical inventory and freezing the books, knowing where you are ending and you're cleaning up going into a physical, so making sure that you've got good line of sight on what's going on with all your in transit and in transfer items. You know what it is that you're going to do there, so you don't accidentally miss that when you go to do your account postings, you've accounted for everything, you've cleaned as much of that up as possible. Same thing with block stock and quality inspection stock. So really useful transaction that is really regarded as the number one way to view your perpetual inventory. Okay, so loads and loads and loads of different options here in terms of the layout and what you can go through and include. And remember as well that you can adjust the position by just adjusting these numbers here if you don't want to have to drag and drop, as well as the length of your fields. This is a really nice way to be able to work with your layout and then you're able also to do subtotalings and totals in which case you're going to get this line two and line three depending on the front screen if you've chosen hierarchical or versus non hierarchical display. So I'd encourage you to play with both, because they're both there for different reasons. So that is MB52. Now let's go back to our stock requirements list. Here we are. And I want to show you a couple of different things that we can see from here. So first of all, this is an inventory report unto itself, right? It's telling us what our current stock is. It is also telling us what our projected stock is. And we can even get to a graphic that is going to show us a green line of where we're expecting our stock to go. And I'm going to go ahead and just choose our available quantity and that's going to bring up a chart for us so that we can see what our anticipated inventory level looks like across time. There you are. And you can scroll out and look way out into the future to see what is going on with your planning. Another option here is if you see these golden cubes appear, this means that there is additional stock out there. So if you click on this, this is alerting you that you've got stock in some place that you're not seeing as part of this available quantity. So in this case, it's block stock. So in addition to the 1, 700 pieces, we have an unrestricted use stock that's available for planning. There's also an additional 5, 500 that is hanging out there in block stock and we want to make sure that we're aware of that and that we're asking questions around whether that is going to be returned to use or what the plan is for disposition. And block stock should be the things that we should not be counting on, so it's excluded from our planning. We also might have some other categories here as you can see, there's a bunch of other options and so those golden cubes appear when there is other stock out there, we want to make sure that when we see that it's really an exception, we want to go in and take a look at that and see what's going on. Another place that we can go from here is our current stock status. So here, let's click on just the stock line itself, and I can see down here at the bottom, that's another way to get to the same place as the golden cubes. I can go to stock overview. What this is going to do is actually pass me through to MMBE and this allows us to see for that particular material, we can see where it's sitting, all the batch information, if it was across several different MRP areas or storage locations, you'd be able to see that. In fact, let's go back and pick one where we have some of that going on. I'm just going to pick a different item from the list and go to the same place. I'm able to quickly do this so I'm going to go ahead and choose this guy here and again, I'm going to double click on stock and go to stock overview. The other way I could do this is up at the top in the drop down menu. I can use go to to get me there. And you'll see here, this is focused on units rather than dollars. So if you think about the perpetual inventory, that was our giving us our on book value. This is giving us our units, so this is much more focused from a planning point of view, or a sales operations or warehousing point of view if you're not using warehouse management. If you're using warehouse management, obviously there's much better transactions to be able to see where your inventory is sitting. But really nice to be able to go in and take a look at this. It will have your batch information and it's going to have any splits across MRP areas. It's going to break this down a little bit further for you and you can again modify the order of these columns to make that process easier. All right, let's go to another one. From here, I'm going to go ahead and actually switch a navigation profile on, and if you haven't seen that video yet, go take a look. And I'm going to go to environment and navigation profile, and I'm going to say assign, and I'm going to pick, that's going to bring up a bunch of stuff for me, and I could go to MC.9 and I actually think today, that would take me through, so if I click on that, it's going to default in all the information for me, so I can go into MC.9 and look at my inventory. But I think I'm going to keep this even simpler for today, and I'm going to go to MC48. So, let's do that. Slash N, M, MC48. Alright, and it's brought my material number over, and I'm going to choose this plant. And this is going to give me my current inventory. MC49 will give me my average inventory. And so here is my current stock value. So if I needed this rather than in units, but in dollars, I could do that and then I can get to units from here. I'm just going to click on this guy, and I'm going to go to double line, which is going to bring up more statistics for me and it will tell me that this is this dollar value is made up by these 665 pieces. I can then even go into detailed display, select my item, detailed display, and I can choose stock level, that is going to give us our famous red line graph and it would bring up that visual for us. Okay, so really good stuff there. One last one I want to show to you. This one's very helpful, stock as of a particular posting date. So I'm going to go to slash n and I am going to MB5B and in this one, now, and this is a very common question, you can actually go back and look at your stock value based on a particular selection date. So you can put in the dates that you want to look at, or the date range. So let's say you're looking for a particular end of period value. You're able to put that in, and what it's going to show you if you put a range, is it's going to show you how many issued, how many receipts, and then what your value was on those particular periods. So really nice to be able to go in and say, hey, what was my stock value the same date or the end of month, the same period last year? And you're able to quickly go in and there is a ton of selection opportunities here. So storage locations, so if you want to see things in units, your evaluated stock, special stock, and then evaluated stock if you're in a consignment environment that's particularly helpful, and then you've got all kinds of scope of lists and settings here for what it is that you can see and then you can assign layouts. So, this one we could spend a couple videos on just going through the different selection criteria, but I just want you to be aware that it's here, MB5B, and this is what allows you to see your stock as of a particular period. So let's quickly recap. MB52, perpetual inventory, that's the first one we looked at and probably one that you're very familiar with. This is where we can see our value and our units based on a plant or other organizational object. Really, really helpful for getting snapshots of inventory when we're going into the end of period, or if we're going through a process where we're expecting to see some changes and you need to get it before and after screenshot. MMBE is where we're able to go in and see the details of a particular material, break all that down to batch level. We can do that in MB52 as well, but MMBE displays that in a little nicer way when we're looking at a particular material and we're really deep diving into the details. MC48 allows us to run our current stock value. We can run this across an entire plant or for material across multiple plants. This is going to allow us to see dollars and units. We have to go to the double line display to see the units. It's also where we can get our red line graph. MD04, we can get a green line graph representing our future forecasted inventory position. We can look at the gold box to see if we have stock that is in a non planable location or in other places other than unrestricted. And then lastly, MB5B, the transaction we're on right now, and this is the one where we can see, based on a particular date, what our stocking position was, or look at a range and see the puts and takes from point A to point B. Lots of different selection criteria here. Welcome back! I really enjoyed putting together this overview. There is so much untapped potential in SAP when it comes to reviewing our inventory investments. Today we focused on. Some of the basics as a jumping off point. And tried to offer a better context on where these staple report's best feature in our quest to efficiently balance supply to demand. And lastly, we pointed out a few tips that have made life easier when we've used these particular transactions in our own supply chain lives. I can't wait to hit some more. This has really been the tip of the iceberg. Yeah, I agree, Kristie. So much to explore here. But we have to start somewhere and understand where these common use reports fit into our ability to review our inventory investment. The accuracy and the placement is vitally important. Good stuff. So if you want to know more about this particular topic or any other topic related to SAP and inventory, there are so many videos in our catalog please check them out and if you have a burning question, please submit it below.

Order Fulfillment & ATP

SD; MM; PP

MD04; CO09

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin. In this video, we will be discussing the close relationship between ATP, MRP, and exception management. So often when we talk with clients, the focus is fixing ATP, but the only thing that fixes ATP is getting our supply in order. Our ability to quickly accurately provide available dates to our customers is essential. So Kristie, how do we make a promise and keep a promise? Well Martin, what can I say? It's easy peasy, one two threezy. If only. We know the accuracy of this information can be a clear competitive differentiator. We train our customers by our own actions, and in some cases they also have ERP solutions that respond to our performance. In this demo, we will walk through. Some common changes that might occur. And how it impacts the ATP check, including inventory counts, changes in dates. And conflicting business rules and behaviors. So often we hear clients talk about the idea that if only they could get ATP right, it would help to solve all of their supply side woes. And I'm here, unfortunately, to break some hearts, it's really about ATP being the customer of predictable and stable supply. So our ability to make and keep a promise to the customer is entirely reliant on our ability to have stable supply and to make that promise at a time when we can actually keep it. So what we're going to do today is actually go back through and revisit a common screen where we spend a lot of our time as planners and that is our stock requirements list. So, if you are working in customer service or sales support, my guess is you also have some familiarity with this screen, and depending on how reliable ATP is for you, tends to go hand in hand with how familiar you are with the screen. So when ATP is less reliable, you spend a lot of time here maybe even getting expertise that rivals your planning counterparts. So, it all starts with our ability to know what we have in stock and on hand, and in future videos we're going to go through this in great detail, but for right now, I just want to point out to you, if you see these little golden cubes here, the first place we want to start is, can we count on the inventory we actually have? And so some of the things that we would look at here, are things like, how often are we cycle counting? How often are we making significant adjustments to our inventory? Are we able to see things move through the quality inspection process and return to stock in a reasonable amount of time that's predictable and in line with when that quality inspection is supposed to be complete? So, for example, here you can see that we have 15 pieces in total that are in unrestricted use stock, that means on the shelf, ready to be available for customer orders. And then you can see we have 3 that is in block stock. And in SAP's world, block stock is stock that is not expected to be returned to unrestricted use stock and made available for the customer, whether that's external customer, sister facility where you're transferring goods, or even the manufacturing floor. It's assumed that something has to be done to that in order for it to be made back into unrestricted use stock. The likelihood of being able to use it is not good. We don't want to plan for it and we don't want to promise against it. And then we also have in quality inspection, so inventory that has come in, it's in the process of being reviewed, it is expected to return to unrestricted use stock and be good for use in manufacturing for the customer. And then you also see we have 15 pieces that are in returns, which also need to be inspected and brought back in. So overall, we have 41 pieces that we're planning on shipping out versus 15 pieces that we have available today and ready to go. So this is a good example of how we have to go through and look at the parts and understand what their status is. So if you know that you're getting good cycle counts, you're doing that regularly, the accuracy is good on a particular subset of parts, then we're in a place where we can start to really make and keep a promise. Now let's look at a different material. Let's look at this guy here. So the other thing we might be doing is we might be thinking about production that we have out there. So, you know, how reliable is our production schedule? For example, if we had orders that were in the past and needed attention, then we would want to make sure that we were making the MRP controller or the planner for that aware that we wanted to start to be able to promise against that production that is on the schedule. And so knowing that that schedule is able to be completed on time, or giving a reasonable, realistic, and actionable schedule to the manufacturing floor, is important before we can start to make a promise to the customer. And then if we were really good, and we had very, very accurate forecasts, or customer provided forecasts, we might even be able to go a little further out and start counting against things that are planned. But it's all a journey and it's a progression, and it's most important to understand is that ATP is reliant on predictable and stable supply, it is the customer of the supply plan. What are we trying to do with MRP? We are trying to supply the demand. What are we trying to do with capacity evaluation and leveling? Making sure that we have a schedule that's reasonable, realistic, and actionable. What are we doing with material availability check for manufacturing? Making sure the shop floor is set up for success and being able to produce that product and have it available to the customer. So all of these different pieces are integration points that come together in order to make sure that we are able to make and keep the promise. Making a promise or thinking about our reliability. So are we reliable or capable to serve? Are we capable based on the customer's requested date, and are we reliable once we make that promise and being able to keep it? And the more reliable we become, the better positioned we are to become capable for meeting the request date and the better positioned we are to be able to be successful for that customer and being able to meet their needs. So, ATP, available to promise, is reliant on predictable and stable supply. Being able to go through, group, and prioritize your materials and understanding what the reliability is of each of those different elements from what you actually have on hand, out through your schedule, and then ultimately what is planned. And knowing that, knowing the details of how that material or group of materials is performing is half the battle in terms of being able to set the right business rules that match our business behaviors with fewer exceptions and less manual intervention. Well that was a quick tour, but there's several other videos releasing on this topic. Let's summarize. ATP is a journey, and like most business rules in SAP, it's not one size fits all. Because ATP is the customer of predictable and stable supply. We will have differences across the product portfolio, and today we explored some common situations that can make getting ATP completely right every time, just a little bit challenging. And we also explored how to detect the exceptions and address them. If there's one message here, it's this. Don't give up. Focus on stabilizing your supply, start small, and manage the exceptions. Thank you Kristie. That is a huge topic. And I know we've got much more to discuss. The simple principle that ATP is reliant on predictable and stable supply is often overlooked. It takes a lot of the mystery out of the recipe for success and puts us back in the driver's seat. Focusing on supply and accurate ATP will follow. If you want to know more about this particular topic, this big topic, or any other topic that relates to MRP and ATP, please feel free to look at our other videos around.

Procurement & MRP

MM

ME01; ME03

Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and we know the best way to learn is by doing. So in this video, we're going to be reviewing the anatomy of source lists. Even when the source list is in use, it's often not used to its fullest potential. We thought this unsung master data hero is worthy of our discussion. So Dr. Kristie, why don't you tell us a little bit more about the anatomy of a source list? Sure thing, Martin. The source list is truly a powerful tool in the procurement toolkit. If you ever hope to take advantage of any form of automation or the more strategic sourcing tools like contracts or scheduling agreements or quota arrangements, getting your source list in order is a definite prerequisite. In fact, one could argue that it's really a prerequisite for strong value out of the MRP run for buyers. Let's jump in so I can give you a tour of. What that source list contains and how it's used. I'll highlight how we can monitor for exceptions and fix them. And lastly, what a well maintained source list actually looks like. Come on, let's go take a look. All right, let's jump right in and start to understand what the anatomy of a source list looks like. So you can see here I am in ME01, which is the place that we go to maintain our source list. And if you're thinking about your journey towards purchase order automation, where there is less touches involved, you're letting MRP do more of the heavy lifting in order to get your purchase orders out the door, this is a good first prerequisite to being in a position to do that because it allows you to control what sources are assigned for that particular material. So I've got my material and my plant in here, I'm going to go ahead and hit enter and that's going to pop me through to the actual source list. And yes, there are a variety of ways for you to be able to go in and maintain this, including just having the system go in and generate a record for you or going in and maintaining multiple source lists at the same time. But in this case, what I want to do is talk through the actual anatomy of what it is that you're seeing here. So the first thing that becomes really important is the validity dates, so if you think about this, this is a record of eligibility of your sources, so which sources are approved to provide this particular product? Which sources do we want to have automatically assigned and which ones do we want to have for reference? And you can control in the material master whether a source list is required or not and when you get a little further along in your automation journey, you're maybe using scheduling agreements, contracts, quota arrangements, or even the functionality that will automatically convert your purchase requisition into a purchase order. This is where you really want to make sure that you do have that requirement in the material master where you are saying, yes the source list is required. But first things first is you need to come in and set a validity period, and this is very dependent on how your qualification works for your suppliers if they are qualified for a finite period because there are requirements for you to go in and do a site visit or review documentation or get updated certificates from them or whatever the case may be that allows you to consider it a source to be qualified. This is where you would want to come in and maintain those effectivity days because they also then become available to you in reporting so that you can go through and say okay It's time for me to go in and do that review In this case, you can see that we had a couple of suppliers in a multi source situation from 2021 to 2023, and we had these two suppliers, 5595 and 1000, that were both qualified. In the middle of that, in June, from June until December of 2023, we actually switched sources to another supplier, 1472. So you've got your validity dates, you have your supplier number, and then next to that you have your purchase organization. Okay, so if you've got multiple purchase organizations, making sure that you've got that assigned properly so that you can go in and do spend analysis, run your PO reports, be able to go in and do that review. And then next door to that, typically a commodity is going to belong to the same purchase organization. And the next set is procurement plant, so let's say that in addition to external sources of supply, you also had within your own supply network, the ability to transfer products or produce and shift over, this is where you would assign that plant as well as you could have a mix of sources here that are available and you could choose then to split those volumes accordingly. Next door to that is the ordering unit. So if there's a variation from your ordering unit that is your base unit of measure or you're managing through alternative units of measure, here's your opportunity to have that as generally going to read from the associated document, so either a contract in this case, a scheduling agreement, that's where it's picking these up from or if you have something maintained separately in your purchase info record, that's where this is going to come into play. Next door to that is the agreement number. So, in this case, you can see that there was a agreement in place from March of 2021 through August of 2023. That's actually quite long for an agreement to be in place but this is what the source list is telling me right now and it has the item number. And this is smart, so the system's not going to let you put in a faulty document number here. In fact, you're able to come in, you can even go in and search. So if you click on this button here, it'll actually pop open the search window and it will help you to locate that particular document if you were to go in and run a search for it. You've got a variety of places, actually let me go back in there real quick and show you, if you do this little drop down here, you can see all the different options for how you might go through and search for that document, you might want to go in and look per vendor or for a particular material or be able to go in per agreement date. So there's a variety of different options here for you to be able to go in and conduct a good search, and then it will identify for you the item number. Now if you are working with central contracts, you do have that as an option here as well, so if you're consolidating your spend, maybe you have an agreement for across all of your plants and within a purchase organization, you're committed to X volume for X price or X lead time, this is where you're able to come in and manage that and then we get into some really fun things around pricing scales and controlling those price scales and how that's applying to your purchase orders as well as things like some rough cut capacity planning and being able to share information with your suppliers, being able to get centralized reports in the buyer negotiation sheet, all of that fun stuff as well. Now, next door to this is whether it is your fixed source of supply. So when MRP runs, if you want it to automatically assign a source of supply, this is where you're going to choose that. Now for this particular item, we have a quota arrangement in place, so within the quota arrangement effectivity period, which expired in the end of August, It would have managed that for us and managed the split. You can see that once we get out beyond it, there's no qualification requirements that the supplier can't continue on into the future. So you can see after that, MRP was just assigning to 5595. So at the expiration of all the other agreements that were in place, the arrangements, it's going to just go ahead and assign in the MRP run supplier 5595. Next door to that is really important, that is blocking. So if you need to block a particular supplier for a particular period of time, if you're no longer able to use that supplier, this is where you can come in and use the source list to basically disqualify that source for this particular material. Now this can be maintained at the business partner or vendor master level, however a lot of times it's for a particular material for a particular period of time. This is really important for compliance to be able to have a record of this information, so this is a nice way to be able to come in and maintain it. Next door to that is another very important setting, which is how MRP is supposed to regard the source. So it's going to tell you whether it is relevant to MRP. So if it is not, if it's a blank, then it's not going to go in and do something like look at that particular contract or scheduling agreement or purchase info record. This means it's very important that the information in the material master is accurate to what that supplier's lead time and MOQ and all of that fun stuff, everything is accurate and clean there because that's what it's going to read instead. And if you then assign the source after the fact and it goes through and it reads a scheduling agreement, a contractor purchase info record that has different master data. When you go to convert that requisition into a purchase order or when you go to assign the source and then pick up one of those other agreements, it's then going in here at that master data and sometimes you'll get a nasty surprise because they'll say your source list points you to a purchase info record and that purchase info record has 18 days of lead time, but the material master has 35. If that source was not valid, only when you convert it into the purchase order or you go in and assign the source and the requisition, are you going to pick up that master data so it can really throw off your planning. Very, very important. And here you have the opportunity to either get purchase requisitions or planned orders depending on how you're running your MRP, and then also whether you're going to get your schedule lines in place, and all of this works in conjunction to the settings that you have in place for your MRP run. All right, and then if there's an MRP area that is embedded in that document, then that's where you'll see that pop up as well, in this case, you'll see that for these very specific two documents up here. So that is one of the ways that we can go in and maintain and interpret the information in our source lists. And again, very important first step to getting going on your automation journey is going in here and providing that information but also incredibly helpful from a compliance or an auditing perspective to make sure that you have all this information in here and you've got good qualification programs in place that will help you with performance management and the source lists is one of the good backbones for being able to provide that information. So, my guess is you're not fully exploiting this today, so have a go at it and see if you can get some more mileage out of this very important and critical piece of master data. All right, so nothing to see here, that source list is no big deal. I think it's fair to say that in many businesses, and to many buyers and planners, it may in fact seem that way. But great things sometimes come in small packages, and the seemingly small master data record it certainly packs a punch when it comes to powering up your sourcing strategy, and it helps set us up for success and efficiency. Today we learned about. The various settings available in the source list. And their applicability to the various scenarios in planning and procurement. They aren't hard to maintain, and they are a gateway to so much good stuff. Yes, of course. Thank you Kristie. So often we find that organizations do not recognize how important the source list actually is. In many cases, the results have a great deal of unnecessary manual and offline work. Using a source list is one of the most important ways to keep SAP rules engine and MRP working and functioning as expected. So, it's a great way to build efficiencies, level of sourcing, and of course, keep everything moving in the right direction. So Kristie, once again, thank you. So, folks, if you want to learn more about source lists and procurement automation please feel free to check out our other videos and of course, if you have a burning question please submit it below.

Demand & Supply Planning

DM; IBP; P2P; PTM

MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, this is Martin, and in this video we will focus on supply chain balance using SAP's red, yellow, and green traffic lights, in the exception monitors. A very powerful tool, and when used correctly, this traffic light system provides organizations with real time visibility into the status of inventory coverage, enabling them to identify and resolve issues quickly and efficiently. So, Kristie, how about you tell us a bit about these traffic lights? Sure Martin, red, yellow, and green traffic lights offer us a powerful feature when used correctly, and in this demonstration, I'm going to focus on three key things. Where can we find red, yellow, and green traffic lights? What do the different traffic lights mean? And how do we set the settings for the traffic lights to be in a good starting point for tracking the health of our inventory coverage? Spoiler alert, we want to start with SAP standard. Alright, let's talk about how the exception monitor can help us to know whether we are in balance or not. So probably always wondered what these red, yellow, and green lights mean. Have a vague impression, right? Because we know what it means when we see red, yellow, and green in other areas, traffic lights, maybe inbounds on the floor. What they mean here, the red light, means that we do not have enough inventory on hand as of today in order to be able to service our current demand. So current or past due, actually. So what I'm going to do is give you a little better idea by clicking into this material, and what you'll see here is that we have 196 pieces on hand. So it doesn't mean that we don't have any inventory, it means that we don't have sufficient inventory to cover current or past due demand. So today happens to be Valentine's Day, it's the 14th of February, and so if I look at my requirements in the past, you'll see I've got a bunch of dependent requirements that are out there that are waiting to be served. So I'm currently at risk of not servicing the manufacturing floor. In fact, I'm not in a position right now to service the manufacturing floor for everything that they needed, prior to today. You can also see we've got a past due purchase order and the system thinks that's coming in any moment now, and so we need to get that updated to reflect the reality of when it's coming in. So really important to keep track of those exception messages and monitoring. But the red traffic lights will help us to know either we don't have enough on order or there's something going on where we're behind, but as of this moment that 196 pieces is not going to cut it in terms of being able to service our current demand. So we come back out here, what I'm going to do next, I'm going to go through and find my yellows, so I could scroll through my list, but I know that this is a pretty big one. So I'm going to go ahead and have the system just go ahead and find it for me in my list, find in materials, and here's all in my yellows. So yellow is actually the ideal state. That means our plan is in balance, and if we continue to action according to our plan, we can continue to stay in balance, and that's as of today. Now what we would want to do is continue to review the planning situation for these materials, make sure that we are taking care of any exception messages, because you can see that there's some exception messages even though these are yellow and that we're watching for any, situations where our next order would put us into a really positive, inventory position. We want to make sure that we are still keeping the supply and demand in balance as we go through and do those material reviews. But good news right now is of this moment, we are currently in balance and we want to continue to plan these materials according to the plan. The next piece is our green ones, so green means good, right? Well, sometimes what it means in this case is it means that we have enough inventory on hand to service our needs as of today, but you can see that sometimes that's just a little bit, so we've got enough to cover today. We've got 0.2 days, 0.5 days, 1 day on hand. Okay, so just because it's green doesn't mean that it doesn't require any love or activity. We still need to make sure that we are processing those replenishments and making sure nothing goes past due. On the flip side, not only does it mean we have a positive stock balance, but it can sometimes mean that we have more than what we need, or that there is no future demand or supply for this item. So you can see here we have 320 pieces on hand. We don't have any future demand for this particular item. We're maxed out at 999.99. So there's no future use, so that stock is also likely showing up for us on some of our other inventory analysis reports, so these are good opportunities where we can go in and refine those inventory levels or figure out how we can make best use of that inventory. What you really want to keep an eye out is for situations where maybe you have a target days of supply based on your ABC code or based on that particular materials usage, and maybe you're expecting to see something in the, 20 to 40 day range and you're carrying 16 to 90 days. Those are your opportunities to use these green lights to help really bring those stocking levels back to where they need to be, and the way we would do that is by going in and actually evaluating what's going on with that particular material, both historically and future looking, and then refining our master data parameters so that MRP is giving us a proper result for the inventory carrying that we would be looking for. So really helpful to have these red, yellow, and green lights. If you're not sure what your settings are, the best way to check is to go in here to define traffic light, and we always recommend when you're getting started to go with the basic setting. So you can click on this button here and then click save. That will change your exception monitors so that you're using the standard settings. If you have something different than this, it's good to understand, what those settings are, but if you're not currently making it all the way through your exception messages or you're not sure how to get started, starting with that basic setting is a really good place to begin. And then I'll let you see whether you tend to be, really short on inventory, how many red lights you have versus how many green lights you have, and then striving, to get to a place where you start to see some of those yellow lights pop up. Okay, great tool. Great to have those red, yellow, and green traffic lights, and hopefully this gives you a little insight into what you might do with them. So in summary, we have covered. How red, yellow, and green traffic lights allow us to quickly hone in on a few of our materials and how they are positioned. Where to find these red, yellow and green traffic lights so that we can make working with them a part of our daily habits. And lastly, how to set your traffic lights in a good place to get started, the basic settings that SAP provides. Thanks Kristie. Taking advantage of this visibility really helps control and monitor end-to-end supply chain and operational processes and resolves issues quickly and efficiently. So if you want to learn more about how to get the most out of your SAP system, please check all the other videos we have in our catalog and if you don't have an answer to a burning question you have, please submit a suggestion.

Demand & Supply Planning

DM; OTC; P2P; PTM

MD04; MD05; MM03

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, in this video we will focus on how to take advantage of SAP's assembled to order capability. Planning strategy, assembled to order, can help organizations streamline the process for assembly type production lines, which allows for much greater flexibility in meeting customer demands, allowing them to better plan their production resources, raw materials and labor, and increase manufacturing efficiencies. So Kristie. Tell us a little bit about this assemble to order. Absolutely Martin. Assemble to Order is one of the many planning strategies available to us in SAP. Planning strategies represent a powerful feature when used correctly and a planning strategy controls how we react and respond to demand, and is one of the most critical master data settings we must consider. In this demonstration I'm going to focus on three key things. First, how an assemble to order strategy can set us up for success in delivering within a customer's tolerance time. Second, when planning with an assemble to order planning strategy might look like and how MRP responds when the strategy is in place. And third, some important things we may wish to consider when thinking through the BOM and positioning for pull. All right, before we jump into SAP, let's talk just a little bit about assemble or finish to order. So the goal of having an assemble or finish to order planning strategy is to allow us to do late point product differentiation. So we want to be able to shorten the overall lead time by positioning our inventory at a level of the bill of material where it makes sense. And when I say where it makes sense, I mean that that inventory is able to be used in a reasonable amount of time, that it allows us to convert into the finished product within the customer tolerance time, and that we're getting good investment through velocity of the use of that inventory. So in this example, if we were to start this product from start to finish, so going out and preparing all of our raw materials, bringing them in, going through quality inspection, getting them positioned, going through the production for the semi-finished good and then ultimately finishing it into the final product, it would take us 40 days. However, if we were to position our stocking level midway through the BOM, all of a sudden we are in a position where we will be able to service this within 5 days. And the way that SAP will react or respond to that is that it's going to stock up to that nearly complete portion of the BOM, so all the way through the semi-finished, and then at the last moment when we actually receive that customer order in, then we would be able to convert from that semi-finished into the finished good within the customer's tolerance time or their expected lead time. Okay, and we can make that determination at any level of the BOM and this is one of the many planning strategies that allow us to do late point product differentiation or to be able to consolidate our demand. There's a lot of different ways that we can approach this, we can have a planning material where we're able to deliver a forecast for an entire product family, we can have this case where we're actually going through and just saying, hey, we're going to forecast the finish good but we are going to delay that conversion into that final conversion or the sub-assembly until we actually receive the customer order in. So what does this actually look like in SAP? So let me go ahead and pop over, I'm going to go into my stock requirements list, and if you're looking for information on make to order and make to stock planning strategies, there's also videos on those, so make sure you go check those out. But here I am in my stock requirements list and what you're going to see is something that maybe looks a little bit different. So we have our sales orders at the top, and then down here we have a planned order and this is a normal planned order, you can see it says stock at the end of it, and this is going to be a convertible planned order. So if I go in and I actually try to convert this into a production or process order, I go through the rest of my process um, with that planned order, it's going to perform just as it normally would because this has been cleared for production because we have sales orders already in hand. Down below that you're going to see this blue line, it says pre-planning without assembly. So this from here on down, these are forecasted requirements, and our demand program is all about how we are going to react and respond to both our forecast and our actual sales orders or stock transfer requirements. And in this case, we're saying, until that customer order comes in, we are not going to execute final production, but we do want to make sure that we're driving our demand down onto the components and that each individual level of the BOM, we make the decision on whether we are going to stock it or wait for the customer order to come in. And in total, for that entire replenishment lead time, we need to make sure that we are positioned to be able to service the customers typically in a assemble to order finished order model. Also we are planning to promise against that forecast. So our forecast is really our lever for both planning our semi-finished or raw materials, depending on if we are going to stock or not, and then also in terms of being able to pass that demand down the chain. So here you're going to see planned orders with a little different indicator on the end, these are responding to the independent requirements, in this case it's a VSE versus a VSF, which is what many of us are probably more used to seeing, and if I go in to convert this planned order, it is only for the purposes of being able to drive that demand down to the semi finish or the components, and if I go in to try to convert it into a production order, it's going to actually tell me that this order type is not convertible. Okay, and so that's really good information to have if you're not sure what's going on, if it's below the blue line, it's not ready, it's not cleared from takeoff for manufacturing, and if it's above the blue line and it says stock on it, then you can actually go through and execute that process. Okay, the other thing that you can do is you can actually see how this is pegging down to the components by clicking on a supply element and then clicking on the order report. It's going to bring up for you the bill of material, and if you bring this down a little bit, you'll be able to see what the current status is. So you can see this guy's got exception messages all over the place, but you can see how we're flowing that demand through and then how we're actually triggering production as a result, whether it's based on that customer order or it's based on the forecasted replenishment. So we're positioned and poised for success when that customer order comes in. Very helpful planning strategy, very useful, and many of us are only using what we would call make to order or make to stock. So assemble or finish to order is also a great opportunity for us to expand and find that plan for every part because most of us are a mix of make to stock, make to order and assemble or finished order. So in summary we have covered how assembled to order allows for us to. Be able to have flexibility in our final assembly by being in control of the stocking level of the BOM while respecting the customer tolerance time. Allows manufacturing to produce to a pull signal from the customer. And supports throughput, revenue enablement, and the fruitful investment of time, resources, capacity, and working capital by moving us closer to our customer's needs for a better outcome for all. Wow thanks Kristie. I mean planning strategies is a big deal. Really needs to be understood. Using assemble to order, or ATO, can really help align customer flexibility with manufacturing efficiencies. So if you want to learn more about how to get the most out of your SAP system please check out our other videos and if you can find a video to an answer of a burning question you have please submit a suggestion.

Production & Capacity Planning

PP; PTM

CR01; CR02; CR03

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, and in this video we will focus on how to take advantage of SAP's capacity availability capability. When used correctly, capacity availability check provides real-time visibility of an organization's production work centers or resources and their availability, therefore enabling more informed planning decisions and the opportunity to optimize utilization. So Eacliffe, tell us more about capacity evaluation. Sure Martin. Capacity availability check is a powerful feature when used correctly and in this demonstration I'm going to show you three things to focus on. How to maintain capacity for your capacity category. Recognize that available capacity can be maintained for different capacity categories. And finally, we will validate the results using capacity load transactions in daily, weekly, and monthly time buckets. Here we are in the capacity plan transaction CM01. To aid with defining available capacity for work centers and resources, regardless of which solution we're using via PPE, Repetitive or PPPI, the concept is the same. The goal is to reflect the correct amount of available capacity regardless of the time horizon we are looking at. So that could be looking at it in terms of daily, weekly, monthly, or even at a shift level. So let's take a look at the standard overview and we can see by default we are looking at capacity in weekly buckets. And our focus on this here is on this column here, available capacity. So for each week, how many hours of available capacity do we have and we can see that it's 40 hours per week. Where you see that 32 hours per week means it's a 4 day work week rather than a 5 day work week. So how is this information coming here? I'm going to switch over to the change mode of the work center. So that would be transaction CR02. So we can see that this is transaction CR02 and we specify the work center that we want to maintain their available capacity and click here on the capacity icon. Note, if we are working on a resource we would be going through transaction code CRC2, change mode for that resource. Basically given the premise that the work center or the resource already exists, the goal was just to maintain or update that available capacity. So here we can see we have two different capacity categories, 001 and 002. Where zero zero one represents machine capacity and zero zero two represents labor capacity. In terms of available capacity, we would maintain it, basically, hey, how much capacity do we have from a machine perspective? And then how much capacity do we have from a labor perspective? So let's take a look at the machine capacity, I'm going to double click on the 001 which brings me to the screen and just go to some key fields for defining available capacity. The first field I'm going to call out is this field here called pooled capacity. Just be aware that we can define available capacity from a pool perspective. We have a separate, video for this. If you think there is a need for this please keep an eye out for that video. The next field is the factory calendar. There's two ways the system, uses factory calendars. One is what you see here, where we said, look, we are going to create a calendar, that calendar is specific to how the operations run. You know, they could be like a 5 day work week, 7 day work week. We take holidays into consideration or we don't take holidays into consideration. So that's the type of information we would define in the factory calendar, and that's what we have reflected here. The alternative is there is a calendar associated with the plant, this plant being 1000. And if the belief is that the calendar that's associated with the plant is good enough we could have left this field blank and the system would then use the factory calendar that's associated with the plant. So be aware that this is not a mandatory field rather it's an optional field and if it's left blank, the information is then derived from the factory calendar assigned to the plant. The next field is active version. The question is for this work center, which version of data do we want to maintain? And what I mean by that is let's do the dropdown and we can see by default which version of data do we want to work with, is it normal, minimum, or maximum available capacity? Okay. So in this case we are going to work with normal. But if by chance we say, look, we want to alter the information in terms of available capacity and we want to reflect, let's say, maximum, where maximum is we are running a 3 shift operation, 7 days a week. Yes, we can come and modify this information and says that look, this information represents a maximum available capacity rather than normal available capacity. Okay, now come to the next field with the base unit measure in terms of the time that we are maintaining. So when we look at CM01, let's come back here briefly, what we will see is we can see that the timing it is H which is, look, when we present the information, please present it in hours and that's what, we are referencing on the other screen here. So this could be any time unit, it could be minutes, seconds. But again, when looking capacity, especially looking at it in weekly buckets and monthly buckets it's much easier to interpret when working with hours rather than minutes or seconds. But at the end of the day what is your business requirement? And that's what you would reflect here. And then finally, coming down in this last section here, what are the standard values of available capacity? In this particular case we're seeing based the available capacity, using a start time of 8 o'clock in the morning. We finish the line is shut down at 5 o'clock in the afternoon, and by the way there's a one hour break. So the total duration here is 9 hours but because of the 1 hour break, It says the operating time for that piece equipment is 8 hours. Okay. In terms of capacity utilization I reflected a 100%. We recommend that you use a 100% but you don't have to. By using 100% it says, look, my operating time is 8 hours, and by the way, it means that I have 8 hours of available capacity. It's not uncommon for some folks to say, look, we know production lines are not perfect and because it's not perfect I don't want to reflect a utilization of 100%. We would recommend that you reflect that in the production rate rather than here in the capacity utilization. But again, it comes down to, what is your business requirement? And recognize that if I came here and I am going to put 90 and hit enter you could see the number of hours per day has dropped from, 8 hours a day to 7.2 hours a day. Again, you could definitely work with this but it does make it a little more difficult to sometimes interpret the information you're looking at, and for that reason we strongly suggest that you keep this at a hundred percent and that then says, look, my capacity is 8 hours a day and then like the production rate says, hey of this 8 hours I need maybe 16 hours or 4 hours. And then of course we have H here to again show that the information we're looking at is being looked at in terms of hours. This could also be minutes, seconds, what works best for you but again we recommend hours. Finally a screen I want to take you guys to is the intervals and shifts and basically want to show that the information from the previous screen was then brought over to this particular screen where we could see that we are looking with version one, which is a normal available capacity. We can now see additional information where it says, look from now to the end of time we are working with start times. You can see the start times is reflecting in the 8 hours. The end times the default is 5 with a length break of 1 hour. The utilization is a 100% and in this case the number of individual capacity is 1. Let me just talk a little bit about this number of individual capacity where if this work center had represented 2 machines then ideally the number of individual capacities would be 2, to show that by defining it 2 the number of available capacity per day would then be 16 hours. In this particular case we are saying look, this work center represents an individual or single machine hence that's why we're using 1 capacity and that then says look, that machine is running only 8 hours a day. It's a good habit to come into the screen only because as you start maintaining things like a shutdown for example, or downtime for that particular work center, you would come in here, create a new entry and say, look, this start date to this end date, the work center is not running it's done for maintenance for example and we will then reflect that there is 0 capacity available during that maintenance time. Okay, so, that's it for this topic. I will say be aware that in terms of available capacity, required capacity, this information can be rolled up to a higher level. So at, at the beginning in the capacity evaluation, yes, we should be looking at it for a single work center, but if it makes sense to look at 5 work centers together for example, we can take this information and roll it up. We will demonstrate that in a feature video. So in summary, we have covered. How available capacity allows the business to define each work center available capacity. The business to define available capacity for different capacity categories, such as machine and labor capacity. And finally, how the business can validate the available capacity defined for each work center using the capacity load transaction in daily, weekly, and monthly time buckets. Thanks, Ecliffe. Using this feature provides information and tools needed to optimize production resources and improve operational efficiency. So for all of you out there that want to know more about how to get the most out of the SAP system, please check out our other videos and if you can find the video or the answer that you're looking for, please submit a suggestion.

Demand & Supply Planning

PP; MM

MD04; MD05

Hi, Martin here and welcome to the video service that unlocks and reveals the hidden value in your SAP system. So in this video, we're going to talk about an unsung hero called the pegging report. This is a hidden gem in SAP. Now this happens to be one of my personal favorites. When we say awesomeness, we don't take that title lightly. This is a time saver when something does not go to plan and you quickly need to make some decisions on impact and prioritization. It does come with a couple caveats though. As with most things there is some critical thinking involved to turn data into intelligence and into decisions. So as we know the best way to learn is by doing so Kristie why don't you take us away and show us more about this pegging report? I've got this one, Martin. I'm on it. I can remember way back in the beginning of my supply chain career, every week we had a voice of the customer meeting, and it was my job to analyze the shortage impacts, and in addition, provide a Pareto of all the root causes. I would go through this multi hour review in SAP, and then in Excel, and then in Crystal Reports. What? No, it was a long time ago and then there were unexpected questions or a new piece of information in the session and oh man, let the confusion and frustration ensue. The pegging report doesn't get rid of all that business by itself but what it does do is let you get a quick beat on what the supply element is currently destined to serve. So today we're going to jump into SAP and go find the pegging report. We're going to look at the information available. And we're going to then go in and look at the ripple effect. It's awesome. Let's go take a look. All right, I want to talk a little bit about something called the pegging report. And again, this is such a good find for when you are in that situation where you're being asked if this is late, what is it going to impact or whom is it going to impact? So let's say that you're a buyer, you're responsible for providing material to the manufacturing floor. So even down at the individual component level, you're able to take this and trace it all the way back up to sales orders, deliveries, forecasts, and identify which customers are potentially impacted as well as specifically which production orders are in jeopardy. And this is so important for those conversations. Now granted, this is all based on the priorities that SAP is currently aware of. So for example, in this case, you can see there's a really past due order reservation out there for this particular product. But getting your housekeeping in order helps you to identify these types of situations as well. So this is another tool in the toolkit to help ensure that everything is accurate. So I'm going to just take this particular item here. So this is a planned order, let's go ahead and double click on it, and I can see here I now have the option to see the pegged requirements, so it's going to look upwards as this is soft pegging, so what is this destined to supply? This might help us also with prioritizing or shifting around when we have limited supply available. I could also have got to it by selecting the line item and then just clicking on this button down here. But let's go in and just take a look and what this is going to do is it's going to say this particular element, so you can see the material number, the receipt date, the PO quantity, and it's going to tell you what all this is destined to supply. So the date, so how much coverage, so you can see this is pent up demand. So I'm actually covering, oh, roughly call it six weeks worth of demand is what this is pegging across. And it'll give you the material, material description. So let's say this particular raw material went into many different sub assemblies or finished goods, it's going to track it all the way back up to the top, tell you exactly what orders are going to be impacted. So in this case, this component only goes into one material, but it could be many and you would see all that listed here. And then you would see your material description and then if there was a material memo in place that you needed to be aware of, you could see some text here, your MRP area and then most interestingly is the element. So if we click here, you can see the drop down and this is where you can tell how much trouble or not you might be in. And so if I scroll down here, I can see I've got some PPs in place and the PP are forecasts, okay? So important, I want to respect the forecast, but maybe not as critical, but down here I have things like orders. So we can see we're impacting some specific orders and it's telling us the order, the item number, and then even the schedule line number that this is going to be supplying. It also is going to tell us if it is pegging against, for example, a delivery, right? So that is really important. So it tells you exactly the type of document that you're pegging against and what you're destined to supply. This starts to get you some much better information really quickly to go, okay, so this is actually going to impact sales orders that are out there. We really shouldn't see it impact deliveries very often, unless you are really in a place where you're counting on incoming components to supply your deliveries and your ATP check. That's a separate conversation for another day, but important to know. And we can very quickly get in here and start to understand what's going on and we can actually go in and look at these individual elements. The other thing that we can get that is super cool is a visualization. For those of you who are on S4, you do not get the same visualization as part of the graphics harmonization. This is for our friends on ECC and S4 we get some additional tools that help us to go through and do the same type of evaluation. So I'm just going to bring the graphic up, bring this over, and here you can see, and this again is a really simple example for the purposes of today's conversation, but you could have really complex order flows here, where you would see, your component going into many different subassemblies, going into many different manufacturing orders, supplying different orders and forecasts. And the deeper you get into the bill of material, if you have common components the greater the magnitude is. But being able to see if I have to spend money on expediting this, if I'm making my case for freight approval for air freight or something like that, this can be really helpful in being able to quickly go through and do that analysis. So here's the component that's being supplied, these are all the different orders. You can see here my scroll bar. And then these are what it is that we're impacting. So sales order, independent requirements, a couple of other sales orders. You're getting that specific information and how it's tying back to the actual manufacturing order as well. And you can also see then the status whether these are actually production orders that are out there, if you're still dealing with planned orders that are out in the future. If it's planned orders, then there may be something else going on with manufacturing, so before you decide to expedite this component, you may want to talk with your planners and schedulers and find out if this is even going to be able to make it out onto the manufacturing floor. There could be something going on that's beyond the availability of your component that's causing them to be backed up, they could have a capacity constraint. And so understanding when they actually plan to execute these orders helps you to make a on what it is that you want to do in terms of expediting this with the supplier. We know that we only have so many cookies in the cookie jar, so we want to be really smart about those decisions. And then knowing where it's destined for, what it's meant to supply, definitely helps with that conversation as well, and also leads you into conversations around making sure that everything is up to date and neat and tidy and clean so that you have the clearest picture possible to make these decisions on what you want to spend your time and energy on expediting. Nothing's worse than air freighting a component in and then having it go to the manufacturing floor and create clutter because they aren't in a place where they have the capacity available to do it or they are missing a tool or whatever the case may be. Definitely having those conversations is important and in another video, we're going to show you how to do the reverse of this, which is to take a planned or production order and look at the order report to see how many components you're missing so you can make decisions on where to spend your capacity. So all these things work together as one toolkit in order to be able to make the best decisions possible when you are in a limited availability situation. Welcome back from the tour. The Pegging Report is an awesome insight into the plan as of this moment in time. It helps us to understand the impacts and empower conversations and prioritization and constraint management all in one meeting. This is vitally important when plans change and they often do. And it really helps us to be positioned for success as a jumping off point for the moment the conversations happen and we think about what we could or should do. You can think of it as a foundation for what if scenarios. How did we do Martin? Hey, that's awesome Kristie. And of course, this is one of those things that if you're a cross functional team, just becomes super powerful. It's part of the planners home base, the stock requirements list embedded right there for us to use. Soft pegging is not the end and be all of being able to see where the supply is intended to go and what the impacts are is powerful. So again, if you have any more questions about this particular topic please submit it below and of course we have a series of videos that you can check out on our catalog.

Procurement & MRP

P2P; PTM

BMBC; MB52; MMBE

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, this is Martin, and in this video, we will focus on how to take advantage of SAP's batch management capability. Batch management has many use cases, all allow for real time inventory tracking. This enables organizations to enhance inventory traceability, product recalls, and promote quality assurance. But Kristie, tell us a specific use case for batch management. You bet Martin. Batch management is a powerful feature when used correctly, and in this demonstration I am going to focus on three key things. The first is the importance and usefulness of batch management when the bad thing happens, how can we contain, trace and contact folks based on those batches. Second, a use case for how batch management can support in a multi-source environment and help to control material proliferation, which I know a lot of us struggle with. And third, some of the key places where we see batch management information show up in our reporting. Okay. Let's talk a little bit about batch management. So batch management is such an important technique because it allows us to assign attributes that are important for us in terms of additional information around that particular batch of materials, and this can be really broad to really specific. So we're going to go in and just take a look at a couple of the transactions and I'll give you just a few use cases where this can be really helpful and the first and foremost is like when the oops happens and you need to be able to quickly trace where those batches or that material has gone, whether that's a raw material, a semi-finished or finished good. Being able to identify and locate the use of that material, whether that's in production, on a stock transfer, order out the door, on a sales order to a customer. Being able to kind of book in where you've had an issue and quickly retrieve it is very important, very good information to have. The other thing that it accommodates, of course, are specific customer requirements, so making sure that if you have a customer who has a, say, for example, remaining shelf life requirement or specific PH requirement or whatever the case may be then you're able to maintain those characteristics so that the system can go through and identify a batch that is a match for that particular customer's requirement. So lots and lots of good use cases, and we could spend hours and hours, probably days talking about the various options, but what I want to do today is just acquaint you with some of the data that's available and then talk you through one more use case and show you a couple of reports. So this is the batch information cockpit where most of the batch management information can be found, and this is BMBC for those of you who are trying to locate the transaction number, and I'm just going to run this wide open for a plant, it's going to give me way more results than what I can actually display, but just kind of give you a flavor of how this looks. I'll go ahead and run that through and I'm just going to go ahead and grab this list, last guy here 2068, and I'm going to go ahead and just grab a batch kind of towards the bottom. And all I want to do here is just kind of show you, now that I have selected a batch, I'm going to kind of click on that and it's going to bring the information up for me. And what I want to do is just acquaint you with some of the data that is available here. So this is, in this case, an ingredient that we're maintaining information on, and so there's things in here that will help us to know, for example, if this material is passed its shelf life. So one of the things I might be maintaining in this batch is the date of manufacture or if it's coming in from the supplier, potentially the date of goods receipt or the date of supplier manufacture. You can see we have the vendor information down here if you want to maintain the particular vendor batch information, and we can also attach a lot of other master data information to this as well, and also the status of the batch, so whether it is active or whether it has been deleted. And then I can come over here just kind of going through some more characteristics, we can start to see when this batch was created, if we have different dates defined, we can maintain that information here. But probably most importantly is the classification, so this is how we're setting up the class and the class type, 023 is going to be the standard for most of your batch management classifications and characteristics, that's what you'll see and the material master on the tab there. And then we can come in here and see a little more information in terms of what kinds of characteristics we're looking to maintain for this particular item. So it's going to track for us if we have remaining shelf life associated with the inventory in this batch, if there was any. It'll track how many more days we have left remaining and then we can come in here and we can also see information down here around the expiration date associated with that shelf life, the date of production, of the batch, any usage decision information that might be coming over from the quality inspection that's not just a thumbs up or thumbs down, but can actually contain some characteristics. And then here, in this case, for this particular item, they're really interested in PH value so that's something else that can be maintained. The other thing we can do is see what the origins of the batch were, so in this case, this was coming from a process order, so this was actually associated with that particular process order the batches out there and waiting to receive inventory. And then we can see the actual information that is related to it, so when the batch was created, and then we can also see if we have actually received inventory into this batch, we would see the information there for the goods receipt. So lots of good information that would help us to go through and just kind of see what's going on with that batch, the batch characteristics and the batch status, and gives you a flavor of the types of information that can be maintained. We can go very, very deep and there's also something called global batch traceability that helps you to actually see how this is traveling across your entire supply network. But this, that I'm showing here is just the standard batch management cockpit that is available to you once you've activated batch management. Now, it's very important to know that if a material is batch managed, once you turn that on, you are on, so we really want to be careful about making that decision because it's really hard to go back. But if you're considering turning on batch management for materials, chances are you really need it. So, in terms of where batches show up, so you're going to see those and MB52 as an example, you'll see you can actually select by the batch number here. And what I'm going to do is actually just look at this particular material in this plant and see if I have some batches associated with it. I'm going to go ahead and run this and it's going to go ahead and pull through for me any batches and the values that are associated with it. So that's going to show up for me in MB52. I would also, of course, see this if I branch to the stock status from MD04. So this is going to take me through to MMBE and I come in here and I click on the glasses and then I can go to stock overview and that's going to take me in again, so I can see the batches, and then I can navigate my way through to look at the information. Now I wanted to land here because the other use case I wanted to share with you is a common request that we get from our customers, which is that they have multiple suppliers and they feel like they have to have multiple material numbers in order to accommodate two or more suppliers, so they aren't using quota arrangements and they aren't able to take advantage of a lot of the MRP driven capabilities for assigning those materials and the material use. And one clever use of batch management might be to maintain your vendor information as part of your batch number. So this would be an example where the system isn't generating the batch number like when we were looking at the batch cockpit, those were system generated. Here you can see these were, actually named batches or entered batches. So if you have your vendor supplier number associated with the batch, then anywhere you're seeing inventory information, you're going to see that batch number associated with it and you could also choose how to route those batches into your production or your process orders in terms of being able to use one supplier over another or doing a FIFO, you can actually do some of those characteristics and serve strategies in order to enable that. So if you are in a situation where you have a lot of multi-sourcing opportunity and it's starting to cause you to create a lot of material numbers, just know that there are some ways to be able to accommodate that or you can quickly do some very simple, what I would call bash management light in order to be able to create the visibility and then as you get more robust in your use, you can actually start to use some of the logic in order to push the materials with the right characteristics into your production or your process orders. And the same thing of course on the delivery side. So not associating the batch numbers with sales orders but associating the batch numbers once you're in the delivery creation process, having it search and find the correct batches to assign for that particular customer's orders and that particular customer's requirements. That is just a very small taste of batch management and a couple of the key transactions where you can see that information, so you can go and explore and see if this is in use and how robust your characteristics are. But start to think through the use cases and certainly more videos to come on this particular topic. So in summary we have covered how batch management allows us to. Classify and control inventory by tracking through characteristics. Visibility, clarity, and flow of decision making in the application of inventory to demand. And proactive intervention should that bad thing happen and we need to contain it. Yep, thanks Kristie. Using this feature effectively can really help optimize our visibility into the application of our inventory in the end-to-end supply chain. So if you need to learn more about how to get the most out of the SAP system please check out other videos and if you have a question please submit a suggestion.

Warehouse Management

WM

LS12; LS06

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your system. Hi Martin here, and in this video we're going to focus on blocking and unblocking storage bins in mass. So Steven, tell us a little bit about how you do that in SAP. Sure Martin. Blocking and unblocking storage bins in mass is an important capability and tool in your tool belt to assist with warehouse projects and emergency situations. Mass blocking and unblocking could not only save a lot of time but can prevent future issues in SAP if materials are already allocated to bins. Blocking storage bins in mass is sometimes necessary in your warehouse. There's two transactions which we'll go through today. First one will be t-code LS12. LS12 is to block every bin in that storage type. So you can either block it for placement or for removal. So some reasons that you might want to do this, if you have a quality issue or there's a reason to shut down the put away or the picking for every single bin and material within a specific storage type. So to do that, it's just a simple check box, you select it and hit save and all those bins are now blocks for stock placement or in other words, put away. So I'll just undo that really quick, uncheck it, save once again. So again, it's all or nothing there in this option. The other transaction to do this in mass is going to be LS06. So LS06 is a little more specific and you have a little more flexibility here. So you still have to enter a given storage type there, and this is where you can then go into specific bins or you can enter a range of bins. So, if you don't want to block everything within 001, you would do so here. So, one example which we had to do when I was running a warehouse is I had to block a good portion of half the aisle because there was a fire in the warehouse, the sprinkler came on and the sprinkler damaged half the products within that aisle. Systematically, SAP wouldn't know that, right? So, you had to go in there and you had to block specific bins, but there's too many to go and do individually. So, that's where LS06 came into play. So, again, storage type you enter here, and you could just click away. So, you could click if you had entered that range of bins in the initial screen, it would just only populate those other bins, but you just click on which bins that you want to block, and then you can hit this block button, and then it gives you the option of, for put away, or for removal. If I just wanted to block them for put away, see it applied the put away block and then hit save. Same thing to unblock. You could just click away mass, unblock for put away, save and there you have it. So that is two transactions, LS12 for all bins within that storage type and LS06 could do the same, but this is where you'd want to use it for specific ranges of bins. Both these are transactions, by the way should not be given the access just to your everyday user. Really, you really want to lock these two things down because you could shut down your whole operation here. So LS06 and LS12, you have seen the power it's great when needed. In summary, we have covered how blocking unblocking storage mins and mass is a powerful capability that could save a lot of time for warehouse projects. It could potentially prevent warehouse service disruptions with the ability to block and unblock in mass. Thanks Steven. Wow, what a powerful tool that can be as a big time saver for the warehouse. So folks, if you want to learn more about this and other features in SAP, please feel free to check out our video catalog and of course if you have any questions please submit them below.

Production & Capacity Planning

PP; PTM

CM01; CM04; CR02; CR21; CR22

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, and in this video specifically, we're going to focus on how to take advantage of SAP's capacity backlog capability. When used correctly, capacity backlog provides a clear view of all the production orders and process orders, allowing organizations to better understand the production and equipment capacity utilization. So Eacliffe, tell us a little bit more about SAP's capacity backlog capability. Sure Martin. Capacity backlog is a powerful feature when used correctly and in this demonstration I'm going to focus on two things. How to retrieve capacity data for the work center experiencing the backlog. And, how to modify the capacity load transaction settings to identify when that backlog will get resolved. The intent here is to illustrate how to use transaction CM01, capacity planning, to identify when you will get out of a production backlog situation due to capacity constraints. So here we are on the initial screen of transaction CM01. Going to click on standard overview and we can see that the first three weeks is over capacity, significantly over capacity. So the question is how many weeks will it take to produce all this inventory using this current production rate? So we start by coming into planning, actually, you're going to go into settings, general, and we are going to click on this icon and do a green check. And we can see that all the weeks over capacity. Basically it's doing accumulation where it's adding up the available capacity so you could see the available capacity increasing as well as the required capacity. Comes up to 640, hours and that's the max. So let's take this and move it into the future by coming back to the settings general. I'm going to increase this to, let's say 180 days, I'm going to hit enter and now we can see that, the capacity situation, we are in a over capacity situation for several weeks before we finally get into the clear. Now, this is based on the current demand so of course this, most likely will not represent the worst case scenario because there's a high probability of added demand coming within this time horizon over these many weeks. So it's about 17 weeks, it will take the credits so this is the way we get to do a quick evaluation to say, hey, that existing demand, how quickly can we get out of the situation? It's at least 17 weeks. This is from a machine perspective and then of course what happens is if we come down to labor, yeah, there's definitely a lot of labor requirements. So the point is that we would also need to see what we can do from a labor perspective to address the production requirements. So, depending on your manufacturing circumstances you might be able to add labor to resolve the issue, great, otherwise you would've to say okay, what else do we need to do to resolve the situation or to resolve the backlog? So on that it's a wrap for how we perform a quick assessment of a capacity backlog situation. So in summary, we have covered. How capacity backlog allows us to retrieve capacity data for the work center that's experiencing that backlog. Plus, the business to modify capacity load transaction settings to identify when that backlog will get resolved. Wow, thanks Eacliffe. I can see how this will be super helpful for planners and schedulers, making informed decisions, optimizing production lines, and managing customer expectations. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and if you can't find a video or need an answer to a question that doesn't exist please submit a suggestion.

Production & Capacity Planning

PP; PTM

CR02

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in the SAP system. Hi, I'm Martin and in this video we're going to discuss an overview of the business rules needed to help us set up our capacity evaluation settings within SAP. When utilized properly these settings and these business rules benefit the organization by providing a comprehensive view of production capacity, which enables more accurate planning of production processes and helps avoid overloading and underutilization of capacity. So Eacliffe how about you tell us a little bit more about these general business rules that we need to apply? Sure Martin. Capacity general setting is a powerful feature when used correctly and in this demonstration I'm going to focus on three things. The different fields that influences both required and available capacity. Educate on how to apply the settings to the different capacity category. And educate on screen required maintenance for capacity evaluation to work properly. The intent here is to review and demonstrate some of the key settings in the general settings of transaction CM01 capacity planning transaction. These settings can be applied from either the selection screen, which is where we are sitting at right now, or within the transaction which you'll see later on. So let's go to the menu, get the settings, click in general and what we are going to do is start with the first option under general which is a cumulative over period. So I'm going to select that, the other thing I'm going to do is to show that I'm going to change it to minutes so that you can see the information in minutes rather than in hours. Screen checked. I'm going to bring up the information here and what you can see here is the available capacity is now displayed in minutes. Okay, as well as the required capacity. The other thing I want you to see is that you can see that the available capacity is cumulative, in other words it's increasing over time. Likewise, with the required capacity, there is one business scenario which is basically trying to clear backlog. So if you have a backlog of orders for example and you want to determine how soon you can clear that backlog. In other words, you have insufficient capacity, let's say in the first three weeks by taking this approach you will see that basically have an idea of when that backlog can be cleared. So let's go back into settings, I'm going to come here, go back into general, what I'm going to do is, I'm going to no longer do cumulative, I'm going to do what we typically do and I'm going to say derive the unit of measure from our master data or orders rather than using the min. Provided the min is not what on the documents. So green check, you could see that it switched over to hours, you could now see it's no longer cumulative, rather we are seeing the hours, we have 40 hours per week and here we can see the capacity requirements in hours for each week. Okay, so let's go back and look at other options within this pop-up. Again, settings general, I'm going to leave this on in this section here, the default is G, which is number of calendar days and you could basically say, start from the current date, that's what you have with a 0 and in this case up to 60 days into the future. You can change this to 90 days, for example and if I do a green check this did extend. We are going to come back here, do general, we are going to see is that it went from April to May when I changed it from 60 days to 90 days. The point is that you can work in daily buckets, there's a whole slew of options here in terms of do I work in calendar days, factory days, posting periods and so forth. It's typically easier just to work in days, but if there is some requirement where you need to use some alternative, like maybe you want to do it in monthly that's an option. Okay, so moving on one option, which is used a lot is in this section here, the period. So with the profile I'm using it defaults in to weeks you could easily look at it in terms of months. So by coming back here now you can see the information is presented in monthly buckets and this is especially true if you want to look at things like one year into the future, two years into the future. So if you maintain demand that far into the future, you can do a quick capacity analysis and monthly buckets to see, huh, do I need to make some key decisions now in terms of outsourcing to another plant or outsourcing to a vendor, et cetera. The point is you can really have vision not here as well as in long-term planning so long-term planning is other functionality the point is that regardless of which side of the fence you're working on you would use the same approach in terms of looking at the general setting. Okay moving on I'm going to come and look at the hierarchy. So there is the option to work with what we call a planning hierarchy. Typically I don't maintain things like available capacity and the planning hierarchy and if you don't the thing is you want the information from multiple members or multiple work centers to roll up to the superior work center for evaluation. So this is definitely another key field that you would use I know I do have a hierarchy out there let's take a quick look here and if I do this, let's see what happens. Okay, we're still looking at the work center. So here with an S this is the superior work center and the point is by maintaining that hierarchy it did pull in the superior work center and as a result of that, it then took information from the previous work centers CHEM_PK1, CHEM_PK2 and is now displaying it but a different capacity category, if I came down to 2 you can see there's information there. Okay and with that let's go back and see what are the options, e do have this option of distributing the capacity information so if the information spans over, let's say multiple days you would display the information in daily buckets for example you could use a formula on the work center to do the disaggregation. So it says, hey put so much capacity on the final day, the day before, basically do backwards scheduling, so that option is available. Otherwise, it would just pick up the distribution from the profile and that would be maintained down here. So if he came down here, you can see for the different capacity categories, so 001, you'll use SAP060 if you had a different rule, that different rule is sitting on the work center it would employ that otherwise this is how you would alter the distribution of capacity inform. Okay and then finally you have this here where in the intervals and shifts you can maintain three different type of available capacity, you can see what is normal capacity versus what's minimum capacity versus what's maximum capacity. So normal might be, let's say two shifts, minimum is one shift, maximum is three shifts. So you can do by picking one of these, the default is one and the point is that this information here at available capacity is based on the normal, and you can also see which profile is used to do this evaluation? Okay, so that's it for this illustration of how to use the general settings in CM01 to alter how this transaction behaves. So in summary we have covered. How capacity general setting allows the business to define settings required for required and available capacity. The users to apply the correct settings for the different capacity categories. And the users to maintain the work center type and screens required for capacity evaluation to work properly. Thanks Eacliffe. Using this feature allows a centralized real-time view of production capacity to quickly identify potential bottlenecks and take appropriate action to avoid disruptions. So if you want to learn more about how to get the most out of your SAP system please check out our other videos and if you can find a video looking for please submit a suggestion.

Production & Capacity Planning

PP; PTM

CM01; CM05

The best way to learn is by doing. Welcome to the video series that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we will focus on how to take advantage of SAP's capacity overload reports. When used correctly, capacity overloads can help organizations better utilize their resources such as machine and labor, and detect when the capacity requirement exceed the available capacity. Eacliffe, how about you tell us a little bit more about capacity overloads? Sure Martin. Capacity overload is a powerful feature when used correctly and in this demonstration I'm going to focus on four things. Distinguish capacity overload from capacity backlog. How to perform capacity valuation using capacity load and capacity load transaction. Distinguish the difference between capacity load and capacity overload. And why you may not want to just use capacity overload transaction. The intent here is to discuss working with capacity planning to identify where capacity overload is taking place within your manufacturing plant. Typically capacity or throughput analysis is done based on mission capacity. Basically how much output can we process, so generate in a 24 hour day for example. Then the next step is to determine is there sufficient labor for the amount of production that's assigned or scheduled for that production asset? So let's go into transaction code CM01 and I'm going to bring up work centers that's starts with CH in plant 1000. So let's go into the standard overview and in a weekly bucket, before we get into the details here let's first take a look at things in the monthly bucket. So I'm switching over to a monthly view and we could see for this work center CHEM_WK1, both machine capacity category 001, we have sufficient capacity in the month of February and also from a labor perspective, we also have sufficient capacity. So let's go back into the weekly view because we did see some red. Every time we have a red row it means we are overloaded for that particular week. So first year we are looking for week 7 and right now there's 0 capacity available in week 7. So the point is that we need to take just 10.66 hours and move it into the future. We know that the sufficient capacity, because from a monthly perspective it told us look for the month of February, we can cover these capacity requirements, hence we can move this into the future. However, when we just look at this from a label perspective 002, what we are seeing is, again there's 0 capacity available for week 7. Okay, so 14 hours we need to move into the future, and even though we could move, if I come to week eight I more than have ample capacity from a machine perspective, but from a labor, I'm already over the amount of labor I have available for week 8. So this is where we have a conversation with operations to determine, hey can we address this issue here by adding more labor, and typically based on how that conversation goes, it dictates whether or not we add additional labor here, or do we need to reduce the amount of available capacity so that when we do schedule production, we are not having so many issues from a labor perspective and of course you can see which orders to move. We can take from a machine perspective, you could drill down, see all the orders, which is contributing from a, from a machine perspective. So let me arrow back, you know, and if I came down to, from a labor perspective and drill down, we will see the same orders. Each one of these orders, you can get to them from, either from a labor perspective or from a machine perspective. Make the change, so I can take this for example, come into the plan order, and I can change the timing of this. So let me come here, I'm going to drill down and I can say, look I'm going to move it to like week 24, I'm going to reschedule this. I got a warning, okay it calculates the new timing. I can click save and what you can then observe when I do a refresh this one line item is going to move and by moving into the new timing it also takes the required capacity, both from a labor and machine perspective. So refresh and the line did decrease. I can then come back here, I can do a refresh and we should see these numbers up here adjust. The point is it already adjusted. So that's one way of addressing capacity overloads. What I'm going to do is take you into another transaction, this is CM05. The selection screen looks exactly the same, and the options are also the same. So what's the difference between the two, CM01 versus CM05? The difference is that, let me go in here, CM05 only brings up those weeks or months that has over capacity. So yes, I can come settings general, you know, you can also look at it from a monthly perspective so we can see here from a monthly perspective it is highlighting some issues the issues based on what I had initially retrieved, so the work centers category one, category two, they disappeared. Why did it disappear? Because of the fact that when we looked at it from a monthly perspective there was sufficient capacity. So the information we are seeing here is only based on remaining work centers in the facility that has a bottleneck or capacity overload. If I come back and I switch back to weekly bucket, then the initial work centers that we were working with will then come back. So you can see now this is the work center we are working with capacity category 001, week 7 versus 002, which is week 7, 8, 9, and 11, and week 10 is not here. So with week 10, we do have sufficient capacity but the fact is that with transaction CM05 it only focuses on the weeks and work centers that has capacity overload. We saw that when we went into the monthly bucket, this work center for this labor category, it did not have any issues, hence it was not presented as an issue. So you can really zero in on, hey, where do I truly have capacity issues, depending on if I'm working on daily, weekly, or monthly buckets. Okay, so that's the concept of capacity overload, doing analysis, identifying where the overloads are located within your facility. So in summary we have covered how capacity overload allows users to. Perform capacity evaluation using capacity load and capacity load transaction. Uses to understand the difference between capacity load and capacity overload transcation. And users to appreciate the value in using capacity load transaction. Thanks Eacliffe. Using this feature will provide the planner and schedule with greater visibility on when the capacity overload will happen and allow them to prevent it and therefore increase production efficiencies. So if you want to learn more about how to get the most out of the SAP system check out our other videos and if you can't find what you're looking for please submit a suggestion.

Production & Capacity Planning

PP

COR1; COR2; COOHVPI

Hey folks, welcome to the video service that unlocks and reveals the hidden value in your SAP system. Martin here and as we know the best way to learn is by doing, so let's get going here. In this video, we want to identify how the system determines which checking rule to use for each component required to create a process order. As we migrate through the maturity of a manufacturing order from planned order, to create a process order, and finally to release process order. We typically want to apply different business rules into which inventory supply elements we want to include in our checking rule to be able to make sure that we know that in the process order or production order for the scheduled and production timing. So once again, Eacliffe you're the best guy I can think of to help explain this, take us away. Thanks Martin. This is a process that is automated in SAP with configuration. The key to getting the desired results is ensuring that the scope of check configuration aligns with the business rules regarding which inventory elements to consider. Too often, many clients do not use this functionality because they don't understand what the system is doing or it is configured incorrectly. By demystifying what the system is doing and having the correct configuration, this functionality improves scheduling, productivity, and eliminates guesswork. So let's look at how process order component availability check determines which checking rule to apply for each component needed. Do all components use the same checking rule? By default, the checking rule for each component is based on the material master setting for each one of these components on the MRP3 view and the business process that is triggering the check. In this case, it is the process order and it creates status that is triggering this check. In this session, we're going to take a look at component availability check for a process order in create mode. So here's my process order, let's go into it and here you can see that looking at the system status, it is sitting in a create status, and we can also see that ATP was ran previously where it had missing parts. So the question is, do we still have missing parts or not? So we're going to come here, click on this icon to determine if there are any missing components, and this pop up is telling us that yes, we still have missing components. So let's go into this pop up and we can see that we have two components where they each have insufficient inventory. We need a quantity of 78.75 units of each and it is needed by the 19th of April versus the commitment date of 12/31/1999, indicating that we don't know when that supply is going to be made available. So what's being taken into consideration, at least for this first component? So we're going to select it, come in here, and what we can see is that for this item, the first component, again, we can see the requirements, how much is needed. and we see the date it's needed and the confirmed quantity is 0. So whether or not we see a confirmed quantity is dependent on things like what supply elements have been taken into consideration, as well as taking a look at a replenishment lead time, for example, again, depending on the settings. To see what settings is being employed, what we're going to do is take a look at this scope of check, and here we can see things like, in create mode we can say that, hey, take a look at safety stock and whether or not to take in transit, quality stock, and so forth. In this case, this check mark says do not take replenishment lead time into consideration, rather we want to look at more firm source of supply, things like a purchase order for example. If we were making it we know that it's a produced item, so, semi finished material, so in this case, we're not even taking process orders into consideration. So depending on what you are trying to accomplish, or what rules you employ to say whether or not you have a sufficient source of supply this is the area that you would take a look at to say hey if I'm doing this manually, which elements do I take into consideration? What inventory supply elements do I need to compensate for some of it? Looking at some demand, maybe demand for shipment to another plant, for example. So these are the things that we then reflect here in the scope of check. And then what happens is when you click on this icon here you can then see, hey, is there any inventories, like what receipts are we looking at? What sort of issues or goods issues that we can expect? And what's being confirmed in terms of if any of these demand elements were confirmed, we would see a quantity sitting here. Sometimes you want to see this because the fact that look, something may have reserved inventory and the point is you no longer wanted to reserve inventory. So again, this is just some of the insight you can gain by coming into this screen for that particular component to say, can I get inventory or not? Can I juggle things around so that I can run this specific process order? Hey, welcome back. In this demo, we showed. How to identify which checking rule was applied to each component in the process order with a create status. For a process order in this status, inventory elements are considered to say yes, no, or partial in terms of component availability to meet the demands of the process order. Checking each component for inventory availability should be the same as if you were making this decision manually. Wow, that's extensive Eacliffe, thank you so much. The last thing we want users to do is guess the results the system is providing. What's probably worse is duplicating work that the system should be doing for us. So as a manufacturing order goes through the different stages of planning a production run, going from planned order to created process order to finally to be a released process order, we typically want to apply different rules for the checking component of the availability of that component and the reliability of that availability. So folks, if you want to learn more about checking rules, ATP, and even just process orders, generally speaking, there's a whole bunch of other videos you can check out and of course if you have a burning question please submit it below.

Procurement & MRP

PP; PTM

COOIS; MD07; MD16

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we'll focus on housekeeping, specifically planned orders. Planned orders are planning elements MRP generates which provide the supply chain with short, mid, and long term visibility. When they're old and overdue, they create mistrust and confusion. Okay, so Eacliffe, tell us a bit about how to do housekeeping with planned orders. Sure Martin. Cleaning overdue plan orders is a powerful feature when used correctly and in this demonstration I'm going to focus on three things. How to identify old planned orders. Why delete old planne orders. And how to delete all old planned orders. Our intent is to perform some housekeeping by deleting old planned orders. Technically MRP should be automatically deleting or cleaning up these planned orders unless these planned orders has been firm or MRP is no longer planning the material. Of course, you can go into the stock requirement list which is Transaction MD04 or the collective view MD07 and delete them one by one but it's definitely much more efficient to use transaction like MD16 to maintain multiple planned orders at once in this case delete multiple planned orders at once. Users need to be educated on how to use this transaction, however to ensure that they're only deleting planne orders that they're responsible for. Understanding the impact of deleting these planned orders and the fact that they may be related to other MRP elements and which they also need to address and that they're not deleting planned orders which are currently driving planned activities. So what I'm showing here on the screen right now is MD07 and we are going to use the find function to find all planned orders. So I'm going to use the binoculars, come to MRP elements, select the planned orders because this is what we are focused on and in this case right now we're sitting in 2023 but I'm saying go find all planned orders up to the end of 2022. Then I come down here, say find all MRP elements and the system found 83 materials that has planned orders which are older than 2023. So in this case click on the glasses to display the first material that has old planned orders and looking through here we can find what's selected or highlighted in blue are the old elements where we see the first planned order it has an asterisk here which means it's firm. MRP is still active for it but it'll never delete it because it's firmed. So this is an example where we would need to intervene so we can come in here the planned order, I can go into change mode for that planned order and I can hit the trash can and click yes and that's one way to delete the planned order. Okay, in this case, I chose not to delete it but you can also see here that not only do we have MRP elements or planned orders sitting in the past we also have demand sitting in the past, so the cadence would be also to address the independent requirements which are sitting in the past. Okay, the alternative as I stated is to run a different transaction like MD16. So this is Transaction MD16, it has multiple ways of querying only those materials that you are responsible for. So right now the assumption is that I'm gonna use MRP controller because the MRP controller is being used in such a way that it basically brings up only the materials which I am accountable for. So let's go ahead, click on find, this is my MRP controller ID 101, the other key piece of information is that besides the plant is the date. So again, the goal is to find all old planned orders which are older than 2023 and in this case I use December 31st, 2022 and I will then hit the green check and here we get a listing of all the planned orders that I am responsible for, for deleting. So of course you can come through here, and you can see the dates going back into 2020, 2021, there's some entries in 2022, and for the orders, for each planned order I feel comfortable deleting I can select them. Okay, and by doing that I can then hit the trash can and again the system will then give you this pop-up to ensure that you want to delete the selected planned orders. You would select yes and this is how we would clean up multiple orders at once. You can even come back here and say, look because they're all sitting in the past I can do a select all example and also hit the trash can. Again, if you are comfortable with the data objects or the data range that you are working with. Okay, so that's it for how to clean old planned orders. We should not be having any old planned orders in the system and if we are overwhelmed with the number of orders that we are dealing with in this case, look, we have like 12 pages of planned orders this is the way to go about cleaning up those old planned orders. . So in summary we have covered. How to clean overdue planned orders. Show users how to identify old planned orders in mass. Appreciate the need to delete all plan orders and show users how to delete all old planned orders in mass. This will be very helpful for planners trying to wrangle control over demand placed on the manufacturing. So thank you EacIiffe. So if you want to know more and learn more about how to get the most out of your SAP system please check out our video catalog and if you can't find what you're looking for please submit a suggestion.

Procurement & MRP

PP; PTM

CO02; COOIS; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi Martin here, and in this video we'll focus on housekeeping and keeping our production orders to reflect reality. Real time and relevant production orders can help organizations more accurately plan and schedule their production processes, reducing their likelihood of bottlenecks, reducing the need for excessive inventory levels. Eacliffe, how about you tell us more about that? Sure. Martin. Clean overdue production orders is a powerful feature when used correctly and in this demonstration I'm going to focus on four things. How to identify all production orders. When to set the deletion flag on a production order. When to TECO a production order. And how to evaluate the results using the transaction slot requirement list to validate the results. The intent here is to use transaction COOIS to identify and clean overdue production orders. So you come to the selection screen and specify the criteria for overdue production orders. Say in my case I'm looking at Plant 1000. I'm going to scroll down. the first scenario I'm going to look at production orders in the create status. But they're sitting in the past and what I've opted to do is come down here to the date field and here I specify, give me everything up to the end of 2022. And this is what I'm going to start working on. So with this I'm going to click on execute and here you can see I have a lot of orders where the finished date is sitting prior to 2022. So let's look at this scenario a little closer. I'm going to take this material for example, P-103, control C, I'm going to look for order 4008, I'm going to come to the stock requirement list, control V, enter and here I can see 4008. So for this scenario, the fact that we're sitting in a create status, we have to ask ourselves a couple of critical questions. One, is there intent to reschedule this to a later date given that in this particular case it's actually close to four years old, I would say that we no longer want this production order. So then what I can do is either it from this transaction MD04, the stock requirement list, or from this other transaction, we can enter that sales order in change mode. So click on the pencil and I'm going to do function and come back to delete flag and I'm going to set it to delete. So why did I pick the lead over TECO? And the point is that if I TECO an order, there's a potential that it could have an impact on finance. I don't know how finance is querying their information in terms of what is settled from a month end perspective. So the fact that it's in create mode, I know there's no activities against it, hence I'm going to use the deletion flag and that way, even the financial month end process should not pick this up. I'm going to click on save and come back to the stock requirement list that show that look 4008 if I do a refresh, okay its gone. So that's one production order that's cleaned up. So what I'm going to do now is come back to this COOIS. I'm going to take a look at a different scenario and that second scenario is, let me scroll down, instead of create, maybe the production order is released, but it's not confirmed. So let me make sure I have release and I'm going to say look for the confirmed status and we are going to exclude this and let's execute that. I'm again looking for stuff in the past, production orders in the past and here we have quite a list sitting here. Okay, so I can see here one, there is partially confirmed, say if it's partially confirmed, then what I will do with this particular one is tcode this particular order. So let me grab the material number, control C, 4205 is the production order number, control V and let's scroll down and see if you could find 4205 and here it's sitting here. This time I'll make the update using the stock requirement lists. Double click on this, enter change mode, we can see the status here, it's released, it was partially confirmed, so order was a 10 and they only delivered 5. We would say that this was not processed complete properly because at the end they should have done a final confirmation that would've made this a CNF rather than a PCNF. But given the age of it, we'll just come along and do function and I'm going to come and do a restrict processing and do complete technically, it puts the TECO status I'm going to hit save and if I do a refresh at entry on 6th of June, the 5th of June, 2020 would then disappear. Okay and it's gone. So that's the second scenario that we just dealt with An alternative is, I'm going to come take another order for example, it's released but no activities, there's no confirmation or anything done to it as yet. So in this case let's see what I can do here is I'm going to take one of these down here. Let's take this guy, control C, again, nothing has been done on it. Okay, I'm going to take this, bring it into into the stock requirement list, that's to provide better visibility, 4215, let's see that's the one we're working with 4215 and in this particular case, whether in the stock requirement list, I'm going to double click on that again, going to change mode, function and I'm going to set the deletion flag again because nothing was done as yet this is why I opted to use the deletion flag. I'm going to save this and I'm going to do a refresh and 4215 should disappear and there it is it's gone. Okay, so those are two different scenarios, where it was released but not fully confirmed and we did two different approaches to get rid of that old production orders and then I'm going to do is come back here and look for one more particular scenario where that scenario can be, it's actually the one I just covered off, but I'll do it again. I can specifically come and look for a PCNF explicitly. So let's see, do the drop down here's the PCNF partially confirmed, I'm going to get rid of this over here, so you could zero in on that's particular status and in that case, there aren't too many, I should have excluded the TECO, so let's come back here. I'm going to come here, scroll down and I'm also going to say, if it's already technically complete, I don't want to be looking at that. So here is the TECO, I'm going to do an exclusion, let's execute this, the list is even shorter. So here's, one example, it's done for material T-XS, actually this one has multiple row so let's pick this guy. Going to take P-102, control C, come back to the stock requirement list control V, and I'm going to do a refresh, here we go, I'm going to drill down, go into change mode and here we can see there's nothing delivered and because there's nothing delivered, this one is interesting, the fact that we had no activity so it makes sense that this, has nothing delivered, there's no confirmation. So in this particular case, I'm going to take the function deletion flag and set okay and one of the key point I should make is look, if I TECO the order or if I set the deletion flag, if we discovered that this was done in error, we can always come and reverse it. So in this case, I'm going to come here, I'm going to reverse the delivery and I can say undo and you can do this at a later time and it's open again. Okay, so don't be too concerned about setting these statuses. Do be more concerned about, hey, is it impacting finance or not? If you did something and does it impact the finance? Yes, you can come back and take further actions to address it. So in this case I'm going to come back and say deletion flag, set, save, do a refresh and the order is gone. So in summary, we have covered. How to clean overdue production orders, which allow you to identify all production orders. Determine when to set the deletion flag on a production order. Determine when to use the TECO functionality to close a production order. And to evaluate the results using the start requirement less. Thanks, Eacliffe. Using this feature allows you to more effectively manage and optimize production operations. Okay, so if you want to know more about how to get the most SAP system, please check out our video catalog and of course, if you can find what you're looking for, please make a suggestion below.

Procurement & MRP

P2P

MD04; MD05; MD06; MD07; ME22N

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. My name is Martin and transactional excellence is critical for a good supply chain. In this video we'll focus on PO housekeeping. When used correctly, utilizing housekeeping principles to clean overdue purchase orders can help organizations ensure that SAP has a true reflection of the incoming supply and associated financial commitments. Kristie, how would you tell us a little bit about how to do housekeeping for PO's? Sure. Martin. When we use housekeeping techniques to properly identify and clean overdue purchase orders, we are one step closer to being able to use MRP. We all know that MRP is a powerful planning engine when used correctly and in this demonstration I am going to focus on two things that will help us in taking the first step to get their. Letting the system do the heavy lifting on generating requirements and exceptions when supply does not serve the demand allows our buyers to rise above the orders. First up, how to identify past due purchase orders and when we're looking at something that is really old and moldy. Second, the proper way to clean them up and close them out and spoiler alert, it does not involve the trash can. So now let's go in and do a little bit of housekeeping. We want to go in and find some purchase orders that are past due and need to be cleaned up. So how we would identify these, there's lots of list displays that you probably use regularly if you're a buyer, but another way to do it is actually through exception monitoring and so you can see here I am in my exception monitor, I happen to be working in MD07 because that's going to be my live current picture of what is going on with my supply and demand and I'm going to come up here to binoculars and what this is going to do is it's going to identify various situations in the list so that I'm able to go in and find any overdue elements. So the reason why cleaning up these overdue elements is so important is that, the system believes that they are coming in today. Anything that is past due, it's going to live in this really naive world where it believes, oh, at any moment, at any moment this is coming in and you can see here we've got some dates on these MRP elements so anything that's related to supplier demand that are quite past due. And so the first thing that we want to do is go in and focus on, these particular purchase order items. So I'm going to click on this here and what that's going to do is it's going to actually highlight for me that we are looking for PO items that's what we're telling the system and then I'm going to put in a date range and what I likely want to do is work from the oldest to the newest. The oldest stuff is going to be the most obvious to close out and then as we move forward in time there's going to be a little bit more collaboration that has to be done with our suppliers to make sure that we aren't closing something out on our side that's open on theirs. So I'm going to go ahead and back this up by a few months I feel pretty safe that anything that is older than the end of last year is legitimately ready to be closed. Okay and there is a difference between needing to close purchase orders out, clean them up, versus adjusting the dates when we know that we have a new date that's been provided or we know that we're falling behind. I'm going to click on the selected stock requirements list you can see in the lower left hand corner of my screen, 69 materials were selected. I'm going to go ahead and click on this it's going to bring those in for me and what we're going to see is, especially when we're starting with our housekeeping, we're likely to see that we've got lots of different elements that are out here that are past due and when we see a combination of demand and supply, we want to make sure that we are cleaning the demand and then cleaning the supply. But in this case what I want to do is I want to go ahead and get this particular purchase order closed out, and you can see it's highlighted for me here. I'm going to double click on the element and what it's going to do is bring up some of the details. So I've got the purchase order document, I've got the delivery date, so when it was expected to be here, I then have any exception messages that are associated with it. So you can see that by doing housekeeping it's also going to help me with my exception monitoring because I actually have two different exception messages here. I've got a reschedule in to meet that past due demand and then I have a finished date in the past and so the importance of cleaning up the demand elements is that when MRP runs it will repropose additional supply. But at the very least, by getting the purchase order cleaned up we're getting rid of an element that MRP doesn't have any control over because it's firmed. So I can go right to this purchase order from here just by clicking on the pencil or the eyeglasses to view or change. I'm going to go ahead and go into change and what I want to do here is first let's look at the delivery schedule. This is down in the information for this particular line item. I'm down at the delivery schedule level and I can see that this was generated from a purchase requisition so that's how it originated, which is good to see and good to know, and then I can go over here and what I want to do is actually close this out. I don't want to delete the line item, I want to close it out so that it closes clean and we still have all of the necessary information associated with it. So that's my first and best option anywhere I can actually just go in and close it out is what I want to do and the way I'm going to do that is by clicking on the delivery tab and then what I want to do is I want to click on this delivery complete indicator. By ticking that tick box what's going to happen is it's going to say that as far as SAP is concerned we are not expecting to receive any additional inventory against this purchase order. The other thing that's nice about this is that should something happen and you find you do need to post against this purchase order, hopefully not something that that is sold, but should you find that you need to, with something that's more current, you can come in here and make it reeligible for delivery. Okay, but this is going to take it out of planning so it's no longer going to be expected to arrive any day now and it'll clean up the firmness of the elements so when we go back through and MRP is rerun against that demand and it's proposing the supply, it will be able to realign with that demand as it's getting cleaned up as well. So really important to go in and clean up these elements. When you go to post this, especially for your old stuff, you might encounter some error messages. So what you might want to do is go in and just run the check first and allow it to come back with any issues that you might be facing. That way if you need to reach out to someone else to help you to get these clothed or if you've got something that's stuck this will will help you identify what the problem is and get that resolved. Then once you've saved and you go back to MD04, if you hit refresh you'll see that purchase order is no longer showing there, it's been cleaned up and you can move on to your next element. Really easy way to go in and clean up your purchase orders. Just need to go in, review them and then click the tick box in order to show that this is no longer relevant for planning and we're not expecting to receive any additional material against this purchase order. So in summary we have covered how utilizing housekeeping techniques to clean overdue purchase orders allows us to. Have an accurate reflection of open orders with our suppliers and when they are expected to arrive. And use MRP to properly balance the supply plan with the demand plan and send us quality proposals for replenishment and actionable exception messages. Our buyers will be able to rise above the orders and look at the supply plan for their materials, overall sourcing strategy and their supplier performance. So not only are we keeping our supply chains relevant, we are also increasing cash flow, providing more accurate financial commitments, so thank you Kristie. If you want to learn more about how to get the most out of your SAP system, please check our other videos in the catalog and if you can't find a video to answer a burning question, please submit a suggestion.

Procurement & MRP

P2P

MD04; MD05; MD06; MD07; ME52N

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, this is Martin, and in this video we will focus on housekeeping, specifically regarding purchase requisitions. Purchase requisitions are procurement planning elements. This is how MRP tells us what we need to buy based on the current and future supply chain demands. When overdue, they create imbalance and potential overbuying scenarios. Kristie, tell us a bit about this whole housekeeping for purchase requisitions. Absolutely Martin. When we perform housekeeping in this case with a focus on past due purchase requisitions, we position MRP to properly plan for replenishment and provide us with quality exception messages. In this demonstration I'm going to focus on three things that will help us to get healthy with not only MRP, but also our other reporting around open requests. First, we'll look at how to best identify purchase requisitions for materials that are past due. And second, what we do with them when we find them and how we close them out. And third, how MRP can help us to keep our purchase requisitions in line with lead time if we follow some basic rules and principles. All right, let's jump right in and see if we can go on the hunt for some outdated elements, in this case, we're looking for old outdated purchase requisitions. Housekeeping is really important, it's what creates the correct base of reference for materials requirements, planning, or MRP. It also contributes to the amount of exception messages that we have, and so it makes it harder for us to find the things that are relevant to what is happening today. The most important thing is that MRP is not going to generate adequate proposals, if there's something that is in the past, it believes that demand or supply is still real and still happening, so it's really important that we clean up the system. In this case and what I'm going to show you today is what it might look like if you're just getting started on your housekeeping journey. So I'm going to go in and I'm going to click on the binoculars, because again that's going to help me to be able to find the materials with a particular situation that I'm looking for. In this case, I'm looking for materials that have really old, outdated purchase requisitions and I'm going to go to the Find MRP Elements tab, and you're going to see here a list of items, these are all MRP elements are the pieces that are demand and supply that are relevant to MRP and so you'll see the list here and you can see my housekeeping is just terrible. Like I have some things that are really, really old. Looks like probably since either this particular SAP installation or even maybe coming over from a legacy system, you may find yourself in the same situation but we're going to go in and we're going to look at purchase requisitions and what you want to do when you have lots and lots of outdated elements is to start to break it down into bite size chunks. So today I think I'll go for anything up to 2020. I hope that's not too many and I'm going to go ahead and pull those items and it's going to go search the whole list for me, and it's identified a total of 12 materials that have outdated purchase requisitions that are now three years old or more. So I'm going to go ahead and click on that selected stock requirements list and let's just see what our situation is and you can see I have two purchase requisitions. The first one's highlighted in blue because it's older than 2020 and then you can see I have another one that's old from 2022. This one's probably really much easier to clean up and the older one may be a little bit more challenging, but let's see what we can do. So our preference, I'm going to go ahead and double click here and open this up and click on the pencil to edit. Our preference here is to actually go in and just close these out. We're going to try not to delete these items, even though they're planned elements it allows for everything to stay in sequence and it's the cleanest way for us to close them. So I'm going to go ahead and click on closed here, and we're going to cross our fingers and stay no whammies because the older the item, the more likely that this process is going to be a challenge for you. But this will work really well for the things that are more current. Go ahead and we can check to see if we're going to get an error message just like we would on a purchase order and it says, no messages issued during check. That's a really good sign, I'm going to go ahead and click on save and it did change for me, so now I'm going to click the refresh button and I can see that purchase requisition has disappeared and it's been cleaned up. So now I would go through and I would look at this particular item that's got a past due purchase requisition from 2022, go through that same process of cleanup and ensure that everything is as up to date as we can possibly get it and that's going to allow MRP to generate the right requirements at the right time in order for us to be clean. The other option for purchase requisitions, particularly if they're not firm, is we can actually just run MRP and MRP should take care of those for us. You can see this purchase requisition changed, so I don't need to do anything manually. I'm going to click the green back button, it's going to take me back into my list and watch this date right here that says 11/21/2022. I'm going to click refresh and you're going to see that it's now dated out to lead time, that's the proper time. We still need it because we need this 1,000 pieces to satisfy our safety stock requirement but now that purchase requisition is out to the normal lead time. So two options for you for closing things out. If it has been firm, do you want to use that closed option? Go into the purchase requisition itself and click on that tick box and then if it's not firming and there's no asterisk after it you can actually go in and just run MRP and it will clean it up. So in both cases today that would work for us. We could run MRP, it will realign the plan, and we don't have to do that work manually. So good ways to go in and clean up and we do this for every MRP element that we can, we want to go through and either let MRP readjust it and or go ahead and close the document out rather than deleting it. I hope this is helpful. So in summary, we have covered how using basic housekeeping techniques to clean overdue purchase requisitions allows us to. Have valuable line of sight into the open request that require action. Correct information for MRP to run off of in order to produce a quality supply plan that is in line with our rules lead times in this particular case. And ensuring we don't firm plan elements unnecessarily keeps the housekeeping to a minimum and allows MRP to keep the supply plan in line with the future and provide us with a reasonable and realistic supply plan in the first volley with exceptions to help us manage those requests that fall within lead time. Thanks Kristie. This provides greater visibility into our actual procurement needs and is essential to begin receiving quality procurement plans from MRP. So once again, if you want to find out more about your SAP system please check out our other videos and if you have a specific question please submit it below.

Scheduling & Shop Floor

PTM

COGI; MMBE

Hey, welcome back supply chain superstars. Martin here, and today we're going after a super glamorous topic. Resolving errors in goods issues. Okay. Okay. Okay. I know it's actually is not the most glamorous of topics, but it is truly an important one. Having a clean and healthy system that reflects timely and completed transactional postings is a big part of having a system we can trust. Accounting for our inventory properly and knowing where it is located opens the doors to better quality and ATP. Our advisor for today is going to lead us on this quest, and to tidy our system is our friend Tom. Tom, tell us more about COGI errors and how we can actually use them to improve our system accuracy. Well, as it happens, Martin, not only are we going to talk about how to resolve COGI errors as they occur, but also how to reduce the number of errors we're getting in the first place. Like all cleanup after the problem has occurred, the investigation and cleanup is easier the quicker you get to it. In this case, sooner is much better. If you have a COGI error, SAP can't find the balance of materials that was to be issued to the manufacturing order in the place that it was supposed to be looking. So, we need to see if the quantity or location is incorrect and then get it pointed in the right direction. Let's get in the system and look at some examples. I'll tell you a story or two as we go. Now let's dive into SAP and take a closer look at COGI errors. We'll start by looking at the SAP menu and finding the transaction code for COGI. We start at the top in the Logistics folder. We drop to Production, drop down to Shop Floor Control, drop down to Confirmation, drop down to Reprocessing, and there you'll find the COGI. The other simple trick for finding COGI is just go into your menu, type in COGI, off you go into the transaction. As we enter the COGI transaction, we can clearly see that there is a number of search criteria we can do to limit the search for specific errors, specific plants, specific situations we might be looking for. In this example, we're going to just look at plant level COGI errors and make sure we understand the status of our COGIs for the entire plant. So we're going to go into plant 1000 and execute to look for COGI errors. As we enter, we see there are two COGI errors. And it's important to remember that we want to make sure our COGIs are up to date because there's impacts on the operation in our organization when COGI errors go unchecked. We have data accuracy issues. We'll have inventory discrepancies. We will have operational inefficiencies and we'll have a financial impact if we try to close our books at month end and COGI errors haven't been processed. So as we dive into this situation here we can see we have two COGIs. We'll highlight the first one and we'll discuss the details. As we can see here we have 300 pieces in our requirement for this error. It's also looking for these materials in storage location 1. So SAP expected there to be 300 pieces of this raw material in our storage location 1. Now as we dig a little deeper, we can look in the stock location situation for this material. As we look here, we can see we're in plant 1000, storage location 1, and we see we only have 12 pieces in unrestricted use. That means we did not have enough raw materials in the proper storage location for this confirmation. We can also see we seem to have plenty of raw material in other storage locations in the same plant. The issues we're facing here is that we've consumed 300 pieces but we haven't accounted for them in SAP. So now our raw material quantities are inaccurate. We also have the inefficiency of needing to go back now and fix this error, fix the process, and understand what happened. Was it a simple transactional error, or was there a process issue involved that caused this issue? Root cause analysis on that will be very important because as we fix those root causes and we understand what's causing these issues, they will not reoccur. Meaning, if we fix our process of transferring the right materials at the right time, this COGI error doesn't happen in the first place. So as we dig in and we look at these COGI errors and we need to understand why they happen in the first place, it'll help us prevent future COGI errors from happening in general. In this situation here, we may ask for a cycle count to determine, were raw materials taken from one of these other storage locations and brought to our storage location 1 without doing a transactional piece in SAP? If so, we do a simple transfer in the system to clear up the issue and the COGI will go away. So that's a simple example in the system how one COGI error can affect us in many ways. To recap, we needed 300 pieces, we consumed 300 pieces on the production order, yet SAP did not consume those materials. So now we're sitting here with 300 pieces inflating our inventory that aren't actually there because the situation wasn't resolved. So it is vastly important as we go into COGI that we make sure we have timely execution of our COGI errors, because it's going to keep our data system integrity accurate. It's going to help us by not wasting time chasing in root cause analysis, these errors and these issues. It will also help our financials closing at the end of the month, not having stuck processing errors that we need to correct before we can close our books. Listen, I know the after the fact cleanup task in SAP are no one's favorite. But if we make COGI cleanup a shift by shift or daily practice, we can start to get the value out of the messages. This is a type of exception monitoring and it's letting us know that we either have a process issue, a transactional timeliness issue, or a master data issue. Looking for trends leads us to making corrections that go beyond just that one error in processing. We can reduce the noise and improve the quality of our process flow and our data at the same time. We all benefit when the system is neat and tidy. And I can tell you, that as a planner, I want to know that all of these transactions went through and the system is clean, clear, and under control. Thanks for that walkthrough, Tom. No one wants to see stranded postings, especially as we cross periods. Let's make sure we act on these quickly and resolve them with process or data fixes to make things better over time. Thanks again, Tom. Hey folks, if you have more questions related to how to keep the house clean, please use the chatbot. It will recommend some videos for you to watch. But if you have a very specific question for us, please submit it below.

SAP Optimization

DM; P2P; PTM

MC.9

Hi there SAP and supply chain professionals, Martin here, and today, we're on a quest to unlock the hidden treasures in your SAP system. Okay, let's jump right into this video. We're going to be exploring one of my favorite features called dual classification. We're all looking for quality insights out of our SAP, right? The things that arm the business community to critically think, turn information into insights and insights into action. Dual classification is a powerful tool that empowers our teams to do just that. Man, I'm excited about this topic. Wayne, please take us away and share all your experiences on this particular topic of dual classification. Certainly, Martin. This is one of my favorites too. Dual classification allows us to compare two key figures to get some really smart work lists. In today's walkthrough. I'm going to briefly define what dual classification is. I'll show you one of the ways you can get to it. And I'll explain some of the different use cases. Let's go in and take a look. The dual classification capability in SAP can be accessed using multiple transactions in the logistics information system. For purposes of this analysis, I've run a MC.9 report at a material level of detail and I'm going to show you how this dual classification allows us to analyze the data across two dimensions simultaneously. This then allows us to evaluate that information based on these criteria, and certainly can indicate opportunities for improvement or understanding as the relationships between these two sets of data are explored. So if I look at this result, I've called it out at a material level of detail, choosing key figures, I can see on the right hand side here that there are still very many key figures I could have elected to use. On the left hand side of the screen are the figures I've decided to use and if I then go back and look at my dual classification capability, I can see that the relationship between two fields is dictated by those key figures I've selected to report out on, the report. I'd be really interested to understand in this analysis what my average stock on hand is versus or juxtaposed to unplanned consumption. In other words, those materials that have relatively high values on hand but also reflect relatively high values of unplanned consumption and what that might mean for us. So, if I execute that report now, here you will see that the unplanned usage value across the top axis and the average stock value down across the left axis. In this bottom quadrant, these 19 materials have both a high average stock value on hand relative to the basket of materials, but they also have a relatively high unplanned usage value on hand. That may indicate, for example, that some of my bills of material or my recipes need some attention because I'm consuming more or less than planned and that would be an interesting analysis to dive into. And by a simple double click on that 19, I can see those 19 materials here that have both a high average stock value as well as high unplanned usage value. In summary, by utilizing dual classification analysis in SAP, we can gain insight into specific combinations of classification, enabling better decision making and more targeted analysis. This functionality is particularly valuable in scenarios where data needs to be examined across multiple dimensions simultaneously to understand correlations or patterns that might not be evident when analyzing each classification independently. Welcome back. In today's walkthrough, we highlighted some important principles of dual classification. This is a piece of functionality that offers a good amount of utility. And versatility. It has many different applications and when applied correctly can help us drive insights into actions. I've used this functionality to support my curiosity and explore theories and what ifs to drive better supply chain outcomes. Today was the tip of the iceberg and sets us up for more discussion in the future. Oh Wayne, I enjoyed that so much. Thank you very, very much. As you said, it's a tip of the iceberg and we hope to inspire more curiosity in your exploration. So if you want to explore this topic and more, please check out our video catalogue and if you have some recommendations or some questions, feel free to submit them below.

Demand & Supply Planning

DM

MD04; MM03

Hi there, Martin here, and welcome to the only video series where we unlock the secrets and reveal the magic behind your SAP system. In this video, we're going to highlight a feature that nearly every client is looking to solve for, SAP consumption based forecasting. This is such a hot topic. I actually can't wait to hear more. Ed, please introduce us to this consumption based forecasting. I think for most people, the question really is, can SAP do that? It's such a great question. Yes. I'm very pleased to share that SAP actually can do that, and there's no additional software required to get started with a basic statistical forecast, driven by consumption. In today's walkthrough, I'm going to focus on a few key things. First of all, I'll show you that yes, SAP can actually do this. Second, I'll explain the basic building blocks that help to get a statistical forecast off the ground. And lastly, we'll explore options for where the right place to start might be across your product portfolio. This is one of the best kept secrets in SAP. So let's get in and take a look. Alright. Here we are in our favorite place for planning the stock requirements list. Let's talk a little bit about the makeup of a demand program. Our demand program can be made up of several different demand inputs. We might see sales orders, stock transfer orders, and requests for transfer or requirements for use in manufacturing. In addition to these elements, we may also see a forecast, and that forecast can find its way into SAP in a variety of ways. But what if you are just getting started and you'd like SAP to produce a forecast for you? Yes, SAP can actually do that, and the limitation is the limit of predictability and statistics, but that's really about it. We've got some really good bones to work with here. Now notice the requirements type on this material. It may be different from what you might be used to seeing. We can tell by the MRP type that this is a consumption based forecast. See here, the MRP type is vv. This is also the requirement type that lets us generate a statistically driven safety stock. And that's an exciting feature for another day. Now let's look at the periodic totals and let's see the monthly view. We can see that this forecast is still considered a planned, independent requirement, and we can see the quantity we have open remaining to sell or what has not yet been consumed. This is also compatible with the total requirements display for help in exception monitoring and quality checking. So how is this happening? In your material master, let's get there by double clicking on the material. Let's go to the tab where all the magic is happening. Okay. Really it's where the math is happening. One of the nice things about this flavor of forecasting is that it's not a big scary black box. This is the forecasting view. Here we see the history, and you can see that there's options for adjusting or correcting outliers. This is what the stat engine will use to create the forecast. So we want to start here if something looks out of place. We can also see we have options for forecast type and selections, time horizons, and more. There is plenty of functionality that we can go to and use to get started. I'm going to make a quick correction here so we can see how MRP will respond. Okay, here are results. See the change in the forecast and the response of the plan. We can produce forecasts that follow a constant, trend or seasonable model. But where to start? Look for items that have reasonable history. We're looking for a detectable signal here to base a forecast on. If that's not happening for you at an item level, is there a product group that makes sense to forecast together? Should we be forecasting at a different level of the bill of material where there is a common subassembly or component? This does require some data maintenance, thinking through your planning hierarchy, focusing on horizons that make sense, and then tuning results. But folks, this is a great place to get started and let SAP do some of that heavy lifting for us. There's so much to talk to here in terms of how SAP gets this done, and this is one of the many videos. So please make sure you check the other ones out as well. Thanks for taking the tour with me. We love talking to folks about the feature, especially if they're just getting off the ground with getting demand into the system. Or are struggling with variability or volatility driven by finished goods forecast to components with stable consumption. Today we reviewed. Where to go to set up your consumption based forecast. The different types of forecasts available. And discussed some of the care and feeding required to get started on this journey. Consumption based forecasting on items that have stable history is a very powerful tool to have in the planning arsenal. I hope this information will help you become curious and explore what SAP offers in this arena. Thanks, Ed. Consumption based forecasting on items that have stable history is a very powerful tool to have in the planning arsenal. I really appreciate that you've shared with us today. It was a great food for thought, so thank you. Okay, folks, if you want to learn more about this topic and specific topics related to forecasting, please check out our catalog. And of course, don't forget our chatbot. You can ask any question you want.

Contract & Supplier Management

P2P

MD04; ME01; ME33K

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Martin here, and in this video we will focus on how to take advantage of SAP's contract consumption management capabilities. Contract consumption management features gives organizations a centralized, automated system for managing contracts, making it simpler to track and keep track of how much of the goods and services promised in those contracts are actually being consumed. Kristie, how about you tell us a bit about contract consumption management? I'd love to Martin. Contract consumption management is a powerful feature when used correctly and in this demonstration I'm going to focus on three key things. First, how consumption is tracked versus target and where we can see how we are tracking to that target. Second, how we connect our purchases to the contract, or essentially call off from the contract volume. And third, the importance of validity periods and managing our spend versus contract, especially if we have guaranteed particular volumes to the supplier and may need to renegotiate based on the rate of pull. Sometimes we get the volumes wrong versus how the demand will actually fall. It happens, but contracts can help us to proactively manage that and negotiate a positive outcome for ourselves and our strategic partners. All right let's go in and take a look at how we manage the consumption against a quantity contract. So we know we have two different kinds of contracts that we can issue. We can have target values or target quantities. In either case we're able to see the consumption or how much of that contract that we have used and so I'm going to go in here and just grab one contract and you'll see that this is , ME33K is going to be your transaction code to go in and take a look at this and I've got a particular contract in mind I'm just going to go ahead and pop in. This one's a really simple one, so it should be good for us to take a look at and review what's going on and you'll see here we've got our agreement number and then we can see the agreement type and if you ever forget, you can always click on this and then click on this little dropdown and it's going to let you see the description for which kind of contract you're dealing with. So your MK's or your quantity contracts, your WK's are your value contracts. So this is allowing us to accumulate history so that we can compare that with our terms and our conditions and our effectivity dates as we're going across time okay? And so I'm going to go ahead and close that and you're going to see here we've got the material and the short description, a target quantity, our pricing information, our material group, our plant and storage location and then if we also have some additional text related to this that maybe outlines our terms and conditions, we would be able to see that information here and then if we go up to our header level, we're also going to see the effectivity period for this so you can see this particular contract expires in May. Right now we're in the middle of February, okay so this has been good it was initiated right after Thanksgiving, so at the end of November, it's good until the end of February and then I can go in and actually look at my terms and conditions and other pieces, if I had a release strategy attached to it I could also go in and take a look at the release strategy that's associated with it. So that I know exactly what's been happening with this particular contract. So I'm just going to go back out here and come in and look at the item level and I can come in here and I can actually see the history and that's what we're most interested in today. So if I click on this, I can see that from this particular contract I now have placed 3 purchase orders and of my total target quantity of 5,000 pieces, I have released 1,137 pieces so far. So that's my 500, my 537, and my 100. That tells me that I still have remaining balance on this contract of 3,863 pieces. Now, what that remaining balance means to you is different business to business. Now, if we've committed to pulling that much from the supplier because we're on allocation over a particular period of time, a contract is a great way for us to guarantee that purchase in the background so we know how we're tracking to it, what we've promised or committed to the supplier and then we're able to negotiate based on how our demand is actually pulling. Or if we are over consuming the contract and we're beyond the effectivity target value or effectivity time period, then we know that we also need to go in and renegotiate or reupdate that information. Okay, we also know that we can maintain discreet pricing and planning parameters in the contract so that is good for a particular effectivity period and that the contract ties directly to the source list. So if you want your purchase orders to be connected to your contract, you want them to call off, you need to have them in your source list, so then you want them to be MRP relevant. You can see there's been several contracts over time for this item, all with their own unique effectivity period and all with their own unique terms and conditions. This is the most recent and it's relevant for MRP and it's also our fixed source so we know that every time a purchase requisition is generated, it's going to be attached to this source and when we convert that into a purchase order, the purchase order is going to show up in that consumption history for the contract and then we're able to see that information when we go into this release documentation or the notes here, so we can see how we're performing versus contract. The other thing you can do is you can pull this into a list display and be able to evaluate many different contracts at the same time and once you're in here you can also navigate into the individual purchasing documents if there's ever anything that you need to review. Okay and it'll show you the order dates versus the contract effectivity period and you're able to review that consumption of the contract over time and be able to make adjustments or renegotiate as appropriate. So in summary, we have covered. How contract consumption management allows a buyer to have visibility of the purchase versus target or in some cases commitment. Link our purchases to the contract based on the effectivity period or the validity. And manage one of those contracts at a time or use a complete list display to review information for a buyer's portfolio or area of responsibility. Wow, that's a lot Kristie. Thank you. Using this feature improves contract management, cost management, and supplier collaboration. Nice. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and if you can't find a video to answer your burning question, please submit a suggestion.

Contract & Supplier Management

P2P

MD04; ME01; ME33K

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we will focus on how to take advantage of SAP's purchasing contract types. A very underutilized feature when used effectively outline agreements can give organizations real-time access to contract information, such as terms, conditions, and obligations. Empowering them to make better educated sourcing decisions. Kristie, tell us a little bit more about what SAP calls outline agreements. Sure Martin. Contracts, which are part of outline agreements, break down into two main categories and we're going to take a look at both today. Contracts are a very effective strategic sourcing tool available to us in SAP when correctly utilized. They are part of this family of features called outline agreements and they offer not only tracking but also a great deal of flexibility and automation when they reflect our sourcing strategy. In this demonstration I'm going to focus on three key things. What the two primary contract types are and the kinds of scenarios that fit each. Where we maintain key data in the contract and the importance of differentiating where it matters. For example if you have a pre-negotiated price, specific lead times or specific terms. How to invoke the contract into the planning process via the use of the source list. Okay let's talk a little bit about contracts and the different kinds of contracts that are available in SAP. And today we're talking specifically around procurement contracts so we're going to go into the logistics segment of our SAP menu, down to materials management, into purchasing. What we're looking for here is something called outline agreements. So there are a couple of different kinds of outline agreements available to us in SAP, you can see them listed here. There are contracts and then there are scheduling agreements. Today we're going to talk about contracts and within contracts there are two different kinds. The first is a value contract and the second is a quantity contract. So our value contracts are going to be used when we have terms and conditions that are based on a certain dollar of spend. More commonly these are going to be used for things like services or purchase orders that are not related to specific material numbers or specific projects that we're going through for capital expenditures and those kinds of things. Our quantity contracts are going to be anytime that we can associate a particular volume with a material and we want to be able to track that volume over time. Now there will be a second video that we'll talk about contract consumption and monitoring how that is going. But we're going to talk today a little bit more around the setup and the tieback to the material planning process. So let's go in here to change, I have one that's set up just as a basic shell and the first thing I want to talk about is the agreement type, which is that value or volume. So if you look here, this is an MK, which is a quantity contract. Our other option is the WK, which is a value contract, and I'll show you the difference between the maintenance for both. So if I go to the header here, you can see here this contract has a validity period, that is very important. We want to make sure that our contracts have a specific validity period that governs how we're tracking that spend versus the terms and conditions that have been negotiated. This contract can be used for internal purposes only if you prefer. It can also be used to be shared with your suppliers if you would like. But there's nothing that says that this has to be sent out to the supplier, it can be used to govern your own internal terms and conditions based on what you have negotiated. Now, if this was our value contract, it would be required that we entered in a target value here so that we have something to track against and this is meant to represent what we have agreed to with the supplier. You'll notice here that these fields are open for adjustment, so we are able to adjust for specific terms of payment that are associated with this contract only, as well as any specific terms in for prices, price scales, planned delivery time, special requirements in terms of shelf life, those kinds of things. You can see here, we can actually modify this based on what is going on from our negotiation standpoint. So if we've negotiated special terms and conditions we're able to do that from here. Okay so there's a lot that we can maintain in here in order to get the specific requirements for what we've negotiated in terms of our deal. So this particular contract is good for now until the end of August, so August 25th. I'm going to go ahead and back out of here and I can actually navigate over from here to our source list which is the next thing that we need to maintain if we want this to show up for MRP. Now this will only allow us to display and if I want to do a quick check to see if this contract has been added, I can see that it has not been. So what I want to do is actually go in and maintain this. So I can enter my information in manually or I can click on generate. I'm going to go ahead and generate the records, and what it's done for me is it's gone out and looked and it picked up the agreement number so it knows the contract. I want to make that my fixed source of supply, so that means that it's going to look to the contract and know that is the requirement and I'm going to go ahead and hit a one to make it MRP relevant. The other thing I'm going to do is I'm just going to adjust the second entry so that this is good at the end of the contract validity period because I'm going to continue to use this source, I just have temporary terms and conditions that are associated with this contract. Now at the end of the contract, if this wasn't the correct source, then I would leave the record exactly as it is now. That way everything after the contract end period would not have a source assigned. In this case I've been purchasing from the supplier for some time, I know I'm going to continue to purchase from them, I have a purchase info record in place that goes beyond the validity period of the contract, this is just special terms and conditions, so I'm going to go ahead and actually add my secondary source as well. So that when MRP is running, when that contract ends, it's just going to seamlessly pick up the source and continue running with it. But again, if that wasn't the case and it was just for the contract validity period, or if I wanted to see that I needed to renew, I would not enter in fixed or MRP one for that second record. I would go ahead and let it expire at the end of August, I would see I didn't have a supplier assigned and I would need to go in and deal with that as an exception. And I'll go ahead and hit save here. No changes were made. Very good. Now I'm going to go into MD04 and I'm going to look at the planning for this material. Because we set up the contract and we made it a valid source and we made an MRP relevant, I can now go out and run MRP. I'm going to go ahead and do that, and for the sake of being able to demonstrate this today, I'll make my purchase requisitions go all the way out. Okay? And that's done. I'm go back, I'm going to hit refresh. See those planned orders they've changed to purchase requisitions. Now I'm going to put on the vendor button so I can see I am assigned all the way out through the entire planning horizon because I made not only the contract relevant but that supplier relevant in general. But I can see my contract's reference now on my purchase requisition. So I'm going to go in and take a look. I'll show you on my source's supply. Here is my contract number. So when I convert this purchase requisition into a purchase order, it's going to carry the contract association through, and that purchase order spend will be attached to the contract so I can track many purchase orders versus one contract document and see the history as we go and that way I know if we're ahead or behind and I can adjust. Now, if I look at this purchase requisition that is out in September, what I'm going to see is that the contract is not associated with this document because it's beyond the validity period of the contract. So MRP is going to track that for us and those effectivity periods become very important for us to be able to track our volume performance or our value performance versus that contract. So that's a basic look at how contracts work in SAP. So in summary, we have covered how contracts allow the business to. Bring the product of their negotiations and strategic sourcing strategy into SAP by using either a quantity or a value contract. Drive specific terms and conditions, pre-negotiated master data and other information into that contract. And, reference the contract automatically by setting the source list up and reviewing the results of MRP. Wow. Thanks Kristie. Using this feature can really help improve contract management spend visibility, compliance, and supplier collaboration. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and if you have a question that's unanswered, please submit it below.

Scheduling & Shop Floor

PP; PTM

COHV; COMAC

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, this is Martin, and in this video we are going to focus on how to take advantage of SAP's material availability check when converting planned orders to production orders. When used correctly, converting the planned orders to production orders with material availability check capability, also known as ATP or available to promise for production, can help organizations automate the material availability checking process, making it more efficient and reducing the risk of production delays. Eacliffe that sounds like a mouthful, but help us out here. Sure Martin. Converted order ATP check is a powerful feature when used correctly and in this demonstration I'm going to focus on these four things. How to trigger plan order ATP check. Which plan orders to include in the ATP check. Be aware that SAP icon switches between material ATP and component ATP. And we'll also focus on the scope of check. It's basically which demand and supply elements are taken into consideration during the ATP check. The intent here is to use transactions COMAC to perform a component ATP check. That's an availability check for all components needed for production orders in a create status. The goal is to determine which orders can retain its current schedule dates versus identifying which ones need to be rescheduled out into the future due to one or more missing components. So let's go ahead and run this transaction. I'm going to run it for both production orders and plan orders. And what we get is the production schedule, that consists of released production orders, created production orders, and then planned orders. So here we are going to focus on created production, orders. The question is, can we support this schedule that's sitting here right now from a component perspective. So let's go ahead I'm going to do a select all, going to then check our settings to make sure we are doing an ATP check, so the settings looks good. Let's adopt that and what I'm going to do now is proceed and execute the availability check for the released orders, created orders, and the planned orders. So this is now complete, let me do a refresh but before I do that refresh, we can see that we have a status of, MANC, which is basically telling us right now that the check was not done prior to executing this transaction. Going to do a refresh and now we can see the status changed to, MACM and we can see that we did get some confirmation here from a ATP so we're a hundred percent good with everything that's on schedule so far. Let's take this production order, drill into it, and again, we see the status MACM. Let's take a quick look at the status, you can see, it's saying material committed and what this means is it's really talking about the components. The components are committed to this production order. Let's come back here and in fact let me come in here in change mode because in change mode I can also run ATP at the order level. You can do it from the header level where it says check material availability. Again, it's really talking about the components. It's unfortunate that SAP was not consistent in its name and convention, in some places it says material availability check, in other places it will say component availability check. But recognize it's these words are being used interchangeably. So what I'm going to do is I'm going to come to the component overview and you can see here there's also the possibility of doing the ATP check here and they use the label component rather than material. But the key reason I'm doing this, even though the check was done, I am doing this to show how the rules are applied in terms of what to consider when doing the ATP check. So let me run through this one component and I want to take a look at the scope of check and within the scope of check because we are dealing with a production order. The point is that we want the rules for the ATP check to be tighter than the rules we use for a planned order ATP check. So for a planned order we may say, look, take requisitions in the consideration, take planned orders in the consideration. But from a production or at least a created production order perspective, the expectation is things should have been ordered already or they should have been scheduled already. So in that case, look at purchase orders recognizing that delivery might be taking place within the next one or two days, or take production orders into consideration again recognizing that we might just be producing it slightly before we need to use it in the released production order. So through configuration we created a separate check-in rule and that check-in rule is basically to mimic what you would physically do if you were to do a manual check on, are we ready to execute this production order? The point is we have taken that manual process, automated it, reflected the business rules, within this checking rule and then that's applied to the ATP check. Again you can see what's confirmed, if there was a shortage that would be reflected here. In terms of shortage meaning there's insufficient inventory and or combination of inventory and other firmed supply elements are not available that results of that would be reflected here. So in summary, we have covered. How to do an ATP check for a converted planned order to a production order, show users how to trigger a ATP check for these orders. Show users which planned orders to include as part of the ATP check, and Make users aware that SAP uses two different icons, material ATP versus component ATP. Both meaning the same. Show users the scope of check, which basically defines which demand and supply elements to take into consideration as part of the ATP check. Thanks Eacliffe. Using this material availability check during the production creation stage can really help produce costly production delays. So if you want to learn more about how do you get the most out of your SAP system, please check out our other videos. And of course, if you have a question, please submit it below.

Procurement & MRP

P2P; PTM

MD04; MM03

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Martin here, and in this video we will focus on how to take advantage of SAP's coverage profile capability. A very underutilized feature in SAP. When used effectively, coverage profiles can help companies reduce the risk of stockouts and overstocking by ensuring that they have the right inventory coverage of products on hand when they need it. Kristie tell us a little bit about coverage profiles. Sure Martin. Coverage profiles provide a powerful feature when used correctly and in this demonstration I'm going to focus on three key things. First, the difference between static and dynamic safety stock governed by a coverage profile. Second, how a coverage profile drives dynamic safety stock coverage based on either usage or consumption. And third, where the coverage profile sits in SAP and some of the key decisions we need to make when we set the coverage profile up. All right, so let's talk a little bit about these coverage profiles that govern the way that our dynamic safety stock is calculated. So just as a refresher, this is a material that has a static safety stock value on it. Okay. So it's a predetermined, discreet value of 50 pieces. MRP is always going to try to make sure that we have the 50 pieces in reserve, it comes immediately off of our balance and it's very obvious when we're looking at our planning screen what that value is meant to be, it's right here for us, it's upfront and anytime we're falling below, it's giving us an exception message to let us know that we've violated that safety stock value. Dynamic safety stock a range of coverage is going to move around and adjust based on what is happening with that particular material across time. So it is going to actually move with the demand and so this is a different material and what you're going to see here, as this is the MRP list and the result of the MRP run we are carrying a positive balance, right? So it's not netting to zero. There's not a safety stock value that's specifically called out. We're not getting an exception message at the top that says that we're below, although we are getting an exception message that says we need to get this here sooner and the result of that is because of the coverage profile. So you can see here after this dependent requirement on 3/3, we have 29 pieces in stock. However, we're getting a message to move this particular purchase order in because it's not enough to be able to provide for the coverage we're looking for through the coverage profile. So think about a coverage profile and I'll go in and show you where it lives as setting your upper and lower control limits for that particular material in terms of how much coverage you would like to have and that coverage is going to dynamically recalculate based on what is going on with the demand. So it is how you are actually consuming or using that material will drive the amount of units that you need in order to maintain that target days of supply. So you see down here at the bottom in the net requirements calculation section of your MRP 2 view. You've got this thing called coverage profile. This is a little bit of configuration that has to happen in the background in order to set the rules for how this material is going to calculate and so you can see here these are very simple rules. There is a number of weeks you could do a number of days of coverage to be able to protect that particular material and then based on looking at that particular material's behavior you're going to choose the right amount of coverage as it relates to either your lead time or your opportunity to place orders with that particular supplier. So in this case, we're holding an additional week of coverage to protect us against variability or volatility in demand. Our lead time is 33 days but we're able to place orders with that supplier throughout the week so we can have several orders in flight if necessary and so this is giving us the protection that we're looking for. Now when we look at this we can see a lot more in the math section here if we go to the period total. So I'm going to click on that and I'm going to go so that you're able to see, I think in monthly buckets might be a little bit easier, so we can see our requirements, we can see what's planned to come in in terms of goods receipt and then we have all of these additional columns that we do not have when we're only looking at the static safety stock. Okay, all of these new pieces come into play and so we are trying to maintain, our target is 8 days of coverage, so we're trying to keep 8 days on hand and then it's calculating based on the average daily usage or average daily consumption, what is necessary in terms of units. We also have a minimum. We could also have a maximum, and those are your lower and upper control limits to make sure that your stock is staying in balance. So that's the additional inventory on top of your requirements you can expect to have. So we're going to see anywhere from 29 to 48 pieces is what our remaining balance should be after our poll and so if I go back to my periodic totals here or back to my individual totals here, I can now see on top of whatever my requirement is I'm driving to that additional balance based on that target number of days of coverage that I need to have in place in order to make sure that I am protecting against any additional variability or volatility in demand. I can also choose the horizon that I look at so if I have a very predictable item I can even that out across time based on average daily consumption. I could look in a more broad period, if it's something that tends to be really, really reactive, then I might want to go even broader with that. But I'm able to go in and maintain those averages for what the horizon is that I'm going to look at and then I can set my target and my minimum days of supply so that I have the appropriate coverage to protect this material and it will be dynamically recalculated across time. So in summary, we have covered how coverage profiles allow. SAP to dynamically recalculate values over a period of time that follow the demand. Allow us to set the horizon of values that we are looking for to ensure they are appropriate coverage for material is maintained. And lastly, keep the supply chain in alignment with those objectives to keep pace with this ever increasing VUCA world. Thanks Krisite. This feature is critical in creating a dynamic mechanism for managing the inventory needed in the supply chain and improved delivery performance. So if you want to learn more about how to get the most out of your SAP system please check out our other videos and if you can't find a video to answer a burning question, please submit a suggestion.

Production & Capacity Planning

PP; PTM

CM01; CR01; CR21

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we will focus on how to take advantage of SAP's capacity hierarchy capability. When used correctly creating these hierarchies can really help organizations roll up their capacity requirements that will provide planners with greater visibility across their capacity constraints. Eacliffe, how about you tell us a little bit more about how to use this capacity hierarchy? Okay Martin. Create hierarchies is a powerful feature when used correctly, provides summarized capacity information for multiple work centers or you can use it to retrieve your subset of work center information or work centers themselves in various transactions. In this demonstration I'm going to focus on three things. How to set up a superior work center needed for a work center hierarchy. How to set up a work center hierarchy itself. And how to use the work center hierarchy in capacity evaluation. Here we are in transaction CR02 work center change to review a superior work center, which I created to work with the work center hierarchy. The superior work center is a light version of any other work center required to define a works of hierarchy. So looking at the basic view what we can first notice is, yes, we have some of these fields maintained but observe the standard value key 000, the point is we don't need any standard values parameters. Okay, the other thing I'm going to call out is when we go to the capacity view, this is during the interview which I've maintained for this work center and all I'm really doing is identifying which capacity categories I want to report on using this work center, superior work center. So we have category 001 machine time, again no formula needed and when I go into the details, you could see there's no calendar, no start finish time because this information from a reporting perspective is going to come from somewhere else. So this observation can also be applied to capacity category 002 label, again I drill down and literally we don't really need all these settings is irrelevant, we don't need these settings. And then finally I have a third capacity category, so let me scroll down, page down and now I can see I created a pooled capacity category and also with this again, if you go into the details, there's nothing maintained. So now that we have this understanding, what I'm going to do is go into the work center hierarchy, create transaction, so this is transaction CR21 and what I want to do is identify the name of the hierarchy I'm going to create. So with the superior work center I basically use the same name but I put an S just so we can make the distinction of, am I looking at the superior work center versus am I looking at the hierarchy? Okay, and so I have the H to represent the hierarchy and I'm going to hit the hat, go to the header and then give it a description, so I'm going to use the name it's two packing lines that this hierarchy is going to represent, packing line 1, packing line 2. Okay, and I am now going to say, okay, let's do some work center assignment, so you maintain your parameters that will bring up the work centers of interest, I know with me I can use this as an example and here we will get a listing of all the work centers that began with the letters CHEM. Okay, so I'm interested in the superior work center and then packing lines 1 and 2, not the last one. So I'm going to come here, do a select all, I'm then going to deselect the one not of interest since this was the fastest way of getting what I wanted and before I save it it's a good idea to come and look at the graphics of this. So looking at the graphics, what you can see is we have the superior work center again the one ending in S and the goal is to take information from packing line 1 and pack line 2 accumulated together and presented against the superior work center and that's why I call this work center lite because all the details we need from a reporting perspective will come from these two work centers. Also, please be aware that the superior works and must sit on the top when you do this graphing. If it's not on top you need to fix that and make sure the superior is sitting on top. So I'm going to come here now, hit save and that's it. I have now defined this hierarchy, so what I'm going to do is return to transaction CM01. So let's do this /ncm01. Okay, which is capacity planning transaction and if I want to bring up information I'm going to get rid of that work center. I can now retrieve my reporting based on under work center hierarchy, so click on selection, work center, I'm going to come here and do it through this transaction, so you could see I have the hierarchy again it's the object name ending in H. So here we can see again there's the representation of the hierarchy where we have the superior work center and then the individual work centers. So with that said I can then green arrow back, we could see it listed here, these are the objects I'm going to retrieve the data for and then go click on standard overview. So here we have the superior sitting on top. Currently, everything is sitting at 0 in terms of requirements and available capacity that holds true for machine. Just to aid with visibility I'm going to present the data in monthly buckets, and by doing that I can now get more information presented all at once. So again, machine capacity, everything is 0 at the superior level, same thing with label. Let's go down one page, I am now looking at the pooled capacity again, this is also at 0. Now we get to the individual capacity and you can see packing line 1, there's 50 hours needed out of availability of 96 hours, and let's scroll down again, we could see the pool, the red means it's over capacity I need 225 hours I only have 192. And then for parking line 2, similar situation, there's also 50 hours required out of 96 and the pool issuing, it's also over capacity which makes sense because the pool is really sharing a labor force between packing line 1 and packing line 2. So what I'm going to do is do one more thing by going to settings general, and you can see my hierarchy, in this case it defaulted in. If it ain't default in you can find it with a dropdown and I'm going to say, look accumulate the requirements, capacity requirements, and also the available capacity, green check and you could now see again we had a superior resource and now we could see, remember we had 50 hours coming from parking line 1, 50 was coming from packing line 2, so that summation of that is 100. We had an available capacity of 96 on both machines so that also got reported here and we could see for the other months the available capacity in terms of labor, there was no labor defined that's why everything is 0 and. I am going to come here and scroll down slowly so we can validate this and then we could see that the pool, even though we said to accumulate the information, because this is a pool it did not accumulate because that logic has already been taken into consideration saying, look, you don't double up the requirements and you don't double up the available capacity. Okay, so this is how we go about defining a work center hierarchy, this is how the functionality works and this is how you can use it to retrieve work center information within the capacity planning transaction, for example. So in summary we have covered. How to create work center hierarchies, which allow users to create a superior work center which is needed to create a work center hierarchy. It allows the users to set up the work center hierarchy itself. And it allows users to perform capacity evaluation using the work center hierarchy. Thanks Eacliffe, a very underutilized feature for sure. However I can see how this feature can allow users to aggregate the data to better support their decision making. So once again, if you want to know more about this particular feature or other features in your SAP system please check out our other videos and of course if you don't find what you're looking for please submit a request.

Production & Capacity Planning

PP; PTM

CR11; CR12

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here and in this video we will focus on how to take advantage of SAP's pooled labor capacity capability. When used correctly creating pooled labor capacity can help organizations more effectively manage and allocate production capacities and resources. Eacliffe tell us a little bit more about this pooled labor capability. For sure Martin. Pooled labor capacity is a powerful feature when used correctly and in this demonstration I'm going to focus on three things about pooled capacity. Define what pooled capacity is used for. How to create pooled capacity. How to assign pooled capacity to a work center. Here we are in the pooled capacity transaction, CR11, to provide a perspective of what pooled capacity is and how to apply it to work centers and resources. We use the same transaction regardless of which manufacturing solution is being used in SAP. The solution could be PP, repetitive or PPPI. Before maintaining data it's good to know what we're using the pooled capacity for. The typical business scenario is to reflect more than one work center or resources that share a common labor pool. I will illustrate the scenario with 2 work centers. So I'm already sitting in the initial screen of transaction CR11, I'm going to maintain a pooled capacity in the manufacturing plant 1000, the pooled capacity I'm giving it the name labor pool 1 and because it's a labor capacity we are going to use capacity category 002, where 002 is labeled. So I'm going to head enter and here we can give it a description, I'm going to cheat a little bit I already have predefined a description, packaging labor group 1. Again it's being done for labor capacity, I'm going to put this indicator on to indicate that it is pooled capacity that we are defining and then the factory calendar, I'm going to use the same factory calendar we use for the machine capacity which was in category 001. So this one is 01, something that I know ahead of time. Okay, and the other thing I'm going to change is, the machine capacity says that the line starts at 8, we expect the people to start working at 8, so I'm going to modify this 7 to an 8. Okay, so the labor force is going to start at 8 o'clock, they're going to finish at 5 o'clock, there's a 1 hour break. So when I hit enter, what we'll see is operating time is 8 hours and we are going to say the number of people that reside in this pool is 10 people. Okay, so my capacity is going to be 80 hours and the interpretation of this is 80 labor hours. I am going to turn off the relevant to finite scheduling since we are not doing any kind of finite scheduling on the labor force, rather we just want to do capacity evaluation. Then finally, like what we did with maintaining capacity for an individual work center, we are going to take a quick look at the interval and shift only because this is where we would come and maintain the labor force over time. So for example, if we know that starting 6 months from now the pool is going to go from 10 individuals down to let's say 5 individuals, we can reflect that change here so that when we do capacity evaluations 3 months out, 6 months out, 1 year out, we can pick up the correct labor capacity as part of our evaluation. Okay, so I'm going to click save here and now we have the labor pool. I'm going to copy this, so highlight it, control C, let's go into maintaining the work center, so transactions slash 0 for a new session, CR02. Okay, I'm going to bring up the first packing line, which is PK1, I'm going to go to the capacity tab, right now there's only 1 capacity category, so what I'm going to do is scroll down, click on create, I'm going to enter capacity category 002, and I'm going to do a control V here and then we should have formulas. This should be SAP007 for working with labor hours. Hit enter and you can see this information is now sitting here and this is how we now link the first work center to that pooled capacity, and I'm going to save. I'm going to go now to the second work center that shares that labor pool, so that's packing line 2. Again, I'm going to go to the capacity tab, there's no capacity category 002, so I'm going to scroll down, create a new capacity, maintain 002. Again, I'm going to maintain the labor pool and I'm going to maintain the formula for calculating labor hours. Okay, and with that I'm now going to hit save. So these two work centers, packing line 1 and packing line 2, when we create a plan order or production order that puts requirements in terms of labor hours against these work centers, the goal is to do an evaluation against a common labor pool. So let me illustrate that, at least from an available capacity perspective, so I came here what I'm going to do to bring up both my work centers, I'm going to use a wild card, so I'm going to get rid of the one, put an asterisk and click on standard overview. Okay just to provide better visibility I'm going to go to settings, general, let's look at it in monthly buckets and what we can now see is we have packing line 1, we have the capacity, available capacity in terms of machine hours. So January has 16 hours left versus when you come to capacity category 2 which is labor, we can see that because we said there's 10 people available under labor pool, you can see available capacity is down at 160. You can also see clearly called out that we are dealing with a pooled capacity situation here. So if I come down to the packing line 2, it has its own individual machine hours. Basically doing the same profile as packing line 1 but in this case, we can also see the 160, which is also coming from the pool and again this allows us to say, look, when I have labor requirements, that labor requirement, let me compare it to the pool of people rather than comparing it to available direct labor on that work center. So in summary we have covered how pooled capacity allow users to. Understand what pooled capacity is used for. It allows the users to correctly create a pooled capacity. And finally to allow users to correctly assign pooled capacity to work centers. Wow, once again thanks Eacliffe much appreciated. A powerful feature for sure. Something that I can really see benefit the planner in their job. Once again if you want to learn more about this feature and others please come back to our other videos in our catalog and of course if you don't see what you're looking for please feel free to submit a suggestion.

Procurement & MRP

P2P; QM; WM

ME22N; VL31N; ME23N; MIGO

Hey everyone, it's time to dive into a useful piece of functionality to support your business. This video specifically, we're going to tell a story to help illustrate how you might take foundational piece of functionality and use it in a slightly less known feature to take the benefits further. Whether the story fits your exact need or sparks your curiosity, enjoy the ride. Rutul is here to show us how we can take an inbound delivery and introduce a batch split to the process to meet a pressing business need and make the process easier on the receiving team. Rutul. Tell the story. Hey Martin. The story goes like this. We have a client in the food and beverage industry that has shelf life requirements on incoming goods. They need this information to make sure the supplier is abiding by the standards they have in place to meet customer requirements and for compliance reporting purposes. It's very important and very visible. So in their old world, the receiving team had to put the shipment to the side, then have the compliance team go in and perform the receiving and the split the batch so that the vendor batch was properly notated and shelf life and the other attributes were also properly referenced. We showed them an alternative wherein they could split the batch at the time of supplier ASN via the inbound delivery. This does a couple of things for them. First, they know the goods are coming. Second, the split is done in advance and is part of the inbound delivery. And third, the receiving team can go ahead and receive the goods and has a reference to physically inspect against. It saved them about three days in getting the goods processed and on the shelf for their customers. Let's go in and take a look. All right, let's take a look at how we can create an inbound delivery when suppliers notify us through ASNs, and further, we can also create this inbound delivery with the batch split to show us that there are different dates of manufacture, vendor batch, or shelf life dates. For that, we will need a PO, let's find one ,We can expand item detail to show us all the details, we can see that there are no confirmations yet entered for this purchase order line item. So, let's go ahead and create an inbound delivery for this purchase order line item with the batch split. Now, of course, ASNs can be part of EDI, but we will create this inbound delivery with manual process here. We are going to go to transaction VL31N to create inbound delivery. We're going to put in the purchase order number and the date, and we will have the information pre populated. Now to do the batch split, you have to go into the line item and click on the batch split tab. And here we have two batches already set up. So we're going to enter those two batch numbers here and you can also look it up in your system and then based on the batch quantities that you want to split, you can assign the quantities. You can see that the system automatically assigns the shelf life date based on the batch. This batch is expiring on July 8th of next year, and this one is expiring on May 1st of next year. Now, let's go ahead and save this and we have an inbound delivery number that we want to make sure we save.The next step and process would be to issue a goods receipt on this inbound delivery. But before we do that, let's go ahead and look at the purchase order number again. We are going to expand the item detail and now you can see that the two delivery items are created, the system automatically assigned the inbound delivery number to the purchase order. It also assigns different batch numbers as well and item numbers and batch numbers and the quantities that are assigned from that batch. All of that shows us which batch number has which quantity we are going to assign and what are their shelf life dates are. Alright, let's go ahead and try to put postcodes receipt on this inbound delivery. For that, we can go through VL32N and, make sure you put in slash N from here, but you could certainly do a postcodes receipt on VL32N. Thank you very much for taking that little walkthrough SAP with me. Let's take a moment to highlight the importance of what we just ran through. First, we saw what happens when we can take data and have it in place and ready for processing. Second, with the data in place ahead of time, we can check for any issues. And third, if there is any problem or a deviation from what's expected, we can easily identify it and issue a return to vendor if needed. Thank you, Rutul. Wow, what a good story. I appreciate that a lot. More than anything, I hope this encourages our viewers to be more curious and think about maximizing the use of standard SAP to encourage flow, information quality, and decision making. So once again, my friend, thanks for joining us. If you want to learn more about this topic and others, we do have a chatbot that can help you find the videos more readily. If you have a specific question for us, feel free to submit it below.

Procurement & MRP

P2P

MD04; ME21N

Hello and welcome future SAP supply chain experts. My name is Martin and today we're going to explore how we can tap into the untapped potential of SAP. So if you're curious, let's get started. In this video, we're going to explore the topic of subcontracting. Subcontracting allows us to expand and flex our supply chain to accommodate the needs that may not fit easily within our own existing capacities, our manufacturing footprint, or even our capability. We love flexibility. So, let's turn to Jake to share more. Jake, why don't you share subcontracting functionality with us? Specifically, how do we issue a subcontracting PO to a subcontractor. Definitely, Martin. You hit on a very important point there. And that is the ability to add flexibility to our supply chain footprint through the services provided by a subcontracting service provider. In this example of a traditional subcontracting PO, we're providing the subcontractor with at least some of the components. And then when we receive the product back in, it's coming in under a new material number, and that represents the sum of the parts plus the value that was added by the subcontractor. So let's go in and take a look at how we set up the PO and what happens when we receive against it. Let's get right into it. So we find ourselves in MD04 and we have a semi finished good that a subcontractor is going to supply for us. Let's keep it simple today, and in this scenario, the only source is a single subcontracting partner. Now MRP has the capability of handling multiple sources, so if that's a need for you, ask our chat assistant to help you find some other helpful videos to navigate multiple sources of supply. So there's a couple of things to notice here. First of all, we know who the vendor or the supplier is, even for the future plan replenishment. I can see that by clicking on the vendor. This means that we have maintained the source list. We have a fixed source and the record is relevant for MRP. Now, let's double click on the material number. This takes us into the material master and let's go to the MRP2 view. And if we look here, we've got a special procurement key in place. Special procurement key tells us that this item is following a special process in procurement, which in this case is subcontracting. The other thing that's in place for this item is a subcontracting purchase info record. More on that and other variations of the purchase info record in another video. Okay, let's go back out to the stock requirements list, and from here I'm going to grab one of these requisitions that's due or past due for release , here we go. This looks like a good one. Now I'm going to convert this requisition to a PO. This has automatically taken me to the create PO screen. Now it's time for everyone's favorite activity. It's time to go shopping. Let's toss this requisition into the cart. This means that the attributes that are already in the requisition as a result of that master data setup are now being inherited into the PO. So, the PO knows the source, it knows what we need, how many we need, and by when we need it. It also knows that this is a subcontracting item. It knows what the lead time is, and it'll now warn us if we're ordering inside of lead time. Let's see what else. It knows the price and the destination. Most importantly, if we've set our master data up correctly and there's a valid bill of material in place for this guy, it knows the components that are needed. This is critical. The components list drives the requirements from the top level finished good or semi finished good to the materials we need to provide to the subcontractor so that they can add their value and return the finished product to us. Without this transfer of requirements, we won't set our subcontracting partner up for success. This is another critical piece. Now, we also have the ability to reread the BOM from the PO. So if there's been a recent change or correction, you can make that update from the PO. Another critical importance of the BOM is that the material provided to the subcontractor sits on our books until we receive the semi finished or finished good back from that subcontractor. This step controls the back flush and we get one more chance to true up usage so we have an accurate account of the material used. This is everything to creating a smooth process, and this is our happy path. Otherwise, we're scrambling, the supplier is not set up for success and we have inaccurate inventory balances. What's really nice is that SAP provides a whole suite of tools that will help with this process and we know this is a growing need in many industries. We hear stories all the time from customers that need some extra love and support in this area. So, if that's you, we're recording a whole track of videos dedicated to subcontracting and be sure to check them out. I appreciate you coming along on this tour of a typical subcontracting PO. Today, we discussed some of the data prerequisites to successfully issue and receive against the subcontracting PO and we saw how those prerequisites made it easy to issue the PO and then receive against it. That is the happy path. So if you're finding that you need to enter information manually, it's good to review the master data. Lastly, today we spoke about a variety of ways that subcontracting as a service can add flexibility to the supply chain and diversify the products that you're delivering to the market, respond to the changing requirements, or simply to increase capacity temporarily to compliment your own internal process. Okay, Jake, thank you. That was a great summary of the subcontracting PO process. Hey folks, there's a lot about this topic on the videos that are linked on our catalog. And, of course, if you are not sure what to ask for, use the chatbot, it'll recommend some videos.

Warehouse Management

WM

LL01; VL03N

Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here and in this video we're going to focus on critical deliveries within the warehouse activity monitor. So Steven as we know, the best way to learn is by doing so tell us more about how to do this in the system. Absolutely Martin. Critical deliveries within the warehouse activity monitor have surpassed the time allotment and are now deemed as critical and are creating a supply chain disruption. In this video. We will demonstrate how to analyze this portion of the monitor and review strategies to manage and take action on. In this video, I'll demonstrate the critical deliveries that have exceeded the time parameter in the warehouse activity monitor. So we'll go straight into tcode LL01. The default that you want to enter here is your warehouse number. Once that is entered, go ahead and then execute the transaction. You can see here, the open deliveries are at the bottom. There's no movement type, because I'll explain why in this next second here, as we go into the report. You can see, I have two critical deliveries within this bucket. When I click on the subfolder, it just gives me two options as one is partially processed and one the delivery hasn't processed yet. So it hasn't really started, it's in that initial phase, so just double click straight into both of them and what you get here is you can actually again select, create those TO's from these deliveries. You absolutely want to research them, so in doing so, you can jump straight into the delivery if you double click onto one of them and you can see it jumped me right into the view of VL03N and my delivery. What I have here is the material, the delivery, I'm on the picking status tab, so it has been picked, however the WM status of this is set to a B, which means it's partially processed or this TO has not been confirmed. So it's been picked, it just needs to be confirmed and then we can go ahead and post goods issue this or PGI this. So in this case, this has exceeded the actual loading date, which is why it ended up on this monitor. So to get this closed again, you'll confirm that TO after we do our due diligence and investigation. We'll just check out the second one here, you can see it's a little different status. The actual picking has not started yet, we have zero picked quantity in there of our 15, but it'd be the same process, we'd want to investigate why, because we've exceeded the time parameter and this is now a potential supply chain disruption. So in summary we have covered. How critical deliveries are supply chain disruptions pushed through the warehouse activity monitor and have surpassed the time allotment. These deliveries are late and need action to be researched and quickly corrected. Again thanks Steven. Those are certainly great strategies to review and take action on processing those late deliveries. If you want to learn more about how to get the most out of your SAP system please check out our videos and of course if you have a burning question please submit a suggestion.

Demand & Supply Planning

DM

MD04; MM03; MEQ1

Hey there supply chain friends, Martin here. In today's video, we're not just scratching the surface, we're going to go deep to unlock some of the full power of your SAP system. So ready for this journey? Let's get going. In this video, we're going to provide some insights into a very common question for those with more complex supply chain networks. And that is, where to place the forecast. Ed, I know that this is a real problem for many people. How do you expect us to attack this particular challenge? Well, Martin, the good news is that the question of where to place the forecast is not terribly difficult to answer. Where organizations typically struggle is in how to make sure the demand signal is making it to the right place. In today's tour, we're going to highlight a few key things. First of all, how we can use the forecast to make our supply chains more demand driven. Second, how we use the choice of placement to pull to the place where the demand is consumed. And third, how we drive the visibility of the connection. Let's go in and take a look. Let's take a walk through where to place the forecast. As you can see, this is MD07 and we have one material in multiple plants. The first thing we want to focus on when we're thinking about placing our forecast is where we should ship from. We want to place the forecast as close to that demand signal as possible so that we're able to pull to the place where the customer order is fulfilled. Then, we need to think about how the plants and DCs are connected to one another. A good first check is the procurement type. A second is who is supplying whom. We want to link the supply chain together with no gaps in the chain. This helps to ensure the consumption of the forecast happens properly, as well as making sure that we're able to efficiently transfer the demand to the supplying partner. Let's go a little further and jump into the stock requirements list and flow through the connections. This plant functions as a DC. We can see it here that it receives material from multiple manufacturing plants on an ongoing basis. See the supplying plant? There are a few ways to set up these transfers. Special Procurement Key, if there is one primary source, and any other sources are an exception. Quota Arrangements, if you are intentionally splitting volumes across multiple plants or sources. Or Scheduling Agreements that support stock transfers. We can see here that if we flip now to the supplying plant, that the demand is flowing through nicely. This gives us the visibility we're looking for and allows the forecast to be consumed as firm requirements come in. Sometimes we see organizations placing large or blanket transfer orders. If we do that, it erodes MRP's ability to keep the balance in place and moves planning much further from the pulse of the customer demand signal. I would like to emphasize the importance of keeping the signal as clean and clear as possible. The forecast needs attention and regular maintenance. Check the quality of the signal, the bias in the forecast, regularly review consumption profiles, and get going on a regular cadence of deciding whether to keep or roll forward the process. The supplying plant is the customer of this information, so we must support them in supporting the customer and positioning inventory in a productive way. We need to actively pursue excellence in housekeeping. Our transactions need to post in a timely manner, orders need to be cleaned up and kept current, and the demand picture needs to be trustworthy. And last but not least, we need to make sure our master data rules are aligned between our shipping plants, or DCs, and the sources that supply them, so that we're moving our inventory with nice flow and cadence through the process. This includes how we buffer in time and quantity, and where we place the buffer to protect the demand. Not only is that the location, but also the level of the bill of material. We want to be flexible and efficient. If we pursue these things, then we are building supply chain visibility that creates the responsiveness the market is looking for. So that's today's tour. To recap. The first step to getting this right is to visualize the connections between supply and demand. Second of all, as with all things, it's very important to keep the signals clean, clear, and under control. And lastly, the point of consumption drives the placement of the forecasts, in most cases. Focusing on that will get you started and special cases can be worked from there. Great stuff. Thank you, Ed. Appreciate it. That gives everyone a great place to start in placing their demand close to the customer and connecting the supply chain to drive the right activities. Super cool. Thank you. Folks, if you want to know more about this, please check out our chatbot, ask your question, and of course we have a video catalog and library that you can check out as well.

SAP Optimization

PTM; P2P

MC48

Hi folks, Martin here. Welcome to the only video series where we unlock the secrets and reveal the magic behind your SAP system. Intrigued? Stick around. In this video, we'll be introducing a goods receipts and goods issues diagram. This is one of SAP's many natively available visualizations that provides information about a material's history and performance. Wayne, this sounds amazing. Please tell us more about this. Of course I can. It would be my pleasure. As you mentioned, this is standard functionality in SAP, and not only does it provide insight into a material's history, it also provides insight into the performance of our plants and suppliers, as well as the quality of our planning. In today's demo. We're going to see where we can find this diagram. What it's meant to tell us. And why that information is valuable to us as planners and buyers, as well as our own constituency throughout our own organization as well as our partners. Let's go in and take a look. Comparing the cumulative goods receipts and issues diagram can provide valuable insights into the inventory management and material flow within our organization. The derived value of this comparison includes several key benefits and analysis points. We can look at inventory control and patterning, certainly that highlights all those anomalies that we might be seeing. We can fine tune our master data settings like reorder point, lot sizes, safety stock to suit receiving and issuing frequency. And we can help support and understand our demand patterns in more detail. I've already executed MC48 for a pre selected plant and I did this to save a bit of time because some of these reports, given the underlying data, can be quite resource and time consuming. And I did this to thought that would be more efficient for me to show you the functionality that I'm talking about, rather than showing you how to execute the report. So having run the MC48 report, I went and selected detail display, and you then get this pop up here that you see here on the screen. And right at the top, there's cumulative receipts and issues diagram. If I click on the checkbox, I'm going to expand my selection, here I can see on the report, and it's always useful to add the legend, which you can drag around to make sure it doesn't get in your way. What I can see here is that these top two lines show me the frequency of receipt and the frequency of goods issued. And the difference between these reports is reflected in the stock level you see in this bottom red line. It shows you how the stock has altered in level relative to these two lines. What is really insightful on this report here is you can see that from a receipts perspective, clearly the MRP controller has been changing some of the frequency and lot sizes that they've been using, and you can see these patterns here in this receipts line. And that might be worth exploring as to why those changes were made. Maybe it was to get full truck loads, or maybe the supplier had a allocation process going that said, please let's have monthly lot sizes instead of weekly lot sizes. So all these graphs are very valuable in highlighting certain anomalies in the data and allows us to then start asking targeted questions to understand what our processes and what our environment looks like. In summary then, the derived value of comparing the cumulative goods receipt and issues diagram in SAP lies in its ability to optimize our inventory control, identify operational patterns, enhance financial management, improve process efficiency, and support demand planning, all through a process of continuous improvement that we can drive across the supply chain and make sure that our inventory management meets our requirements. I want to thank you for the opportunity to share this key feature with you. Here's what we'd love for you to take away from today's video. First, the cumulative receipts and issues diagram provides a picture of material history and performance. Second, we know that the pictures are worth a thousand words, and this visualization is good for prompting great critical thinking discussions for continuous improvement. Lastly, this is a highly valuable information that can lead to improving the quality of our planning and the performance of our supply chains. Awesome stuff, Wayne. Thank you so much. This is such a great visual and it really helps understanding these analytics and gets the right conversation started. So folks, if you have a burning question please submit it below. And of course, if you have other suggestions or other videos that Wayne's done, please feel free to check out our video catalog.

SAP Optimization

P2P; PTM; FICO; OTC

MC.9; MB52; MC49

Hey everyone, Martin here. Today we are diving into a key field that is critical to reporting and analysis. It can be used for flexible planning, It can be used for allocations, supporting PO placements, and may even be used in financial reporting and analytics . In other words, it's a little field with a big impact and loads of cross functional implications and ownership. As such, it's often not well understood and people are afraid to make updates. We want you to feel confident in diving into some of those conversations and of course, here to help us today is Sean. Sean, what should we know about material groups so that we can make better decisions and better use of them? Sure, Martin. Any time we run into cross functional impact the conversation can get a bit tricky. Here's a few things to be aware of. First of all, as the name implies, material groups are meant to represent a logical grouping of materials. There should be a common characteristic that make that grouping make sense and drive value. This becomes exceptionally important for reporting and analysis. You'll see material groups show up in many of the selection criteria for reports in SAP and as a characteristic for drilling down into the details. And this is in and of itself the best way to see how your material groups are performing. If you have a little to no activity or crazy amounts of material and activity flowing through the material group, it may be time for realignment. You want the insights coming out of the data to make sense and empower processes. This requires regular review and alignment. Let's go and take a look. Hello and welcome to our demo on data insights material group. I want to give you a few examples of where you might use the material group in your day to day work in SAP. Let's start with material analysis, which folks are pretty familiar with. This is MC.9 and as you can see, there is a material group selection criteria that I can adopt if I wanted to focus on a particular material group. But let's go inside and take a look and notice that once we're in the transaction, we also have a characteristic. So if I was to switch my drill down, I have a characteristic, material group, that can help us break down our analysis. And so there is my material groups that are out there, and this is a great place to come and to review how the material group distribution works for us. The questions you might have is, are you getting good intelligence out of these groupings? Are there some that need to be broken down further? Or are there others that maybe need to be consolidated? Now since this field is used cross functionally, the proposal for any realignment should also be reviewed cross functionally. Interesting enough that the material group is one that is persistent across our inventory reports. So if we take this here, our warehouse to stock display, here we have material group, and we can see what those look like. And in our previous analysis of materials, we had a plant 1000, we saw the chemicals was quite high, and I think that was 004, so let's take a look at that and see what we get. So now we're able to see, in the warehouse stock analysis, a particular plant and that material group with which we are interested at the moment. And some of the other reports, if we continue on to our average inventory for argument's sake. If I was to look at the average inventory, and let's assume I wanted to do the same thing, I've selected my plant, I know what that is, I have a material group, there it is 004 and I select that, and what I find is that over the period of my analysis here, I have 153 materials in the chemical group, and that stock value is in the region of 310,000 euros. So back in our materials, if I was to go back to the original, analysis that we did, and I was to take a look at this, I'm able to, from the sorting and descending order, see which particular materials, and there I can see my chemicals right on the top. So if I wanted to, let's go back to our material group, once I'm inside chemicals, there it is. I might want to take a look and say, now show me only those materials that are inside the chemicals, and boom, I get a list of exactly what they are so I'm back to that particular group that I'm wanting to take a look at. Now we could apply this kind of thinking even as regards our procurement spend. So let's take a look at procurement spend. We'll take that same plant, and we'll run that. And now what we'll start to see that this is the Plant 1000, I'm looking in my materials and I'm looking at the purchase order values that I have out there that's been placed against these different materials. There's my top chemical right there of 43 million and I've just sorted them down descending order and that's where we notice that the chemical one is at the top of the list. Now here's something I want to just point out, it's not on my screen but if you were to see, for argument's sake, a line at the top here that was blank, then that would be an indication of my non material spend, which is really, really helpful. And so the question is, again, do we see an intelligent breakdown of our spend into logical groupings? Are we seeing that? Does the information aid my supplier evaluation? Does it aid risk management? And what about my overall sourcing strategy? And are we using the material groups well enough for our non material procurement process as well? Now we said earlier on that, material group flows through for use in procurement as well when we create our purchase orders. So let's take a look at some of our requisitions that are out there for the same plant. So if we look at our plant and we have a material group, we're interested in our chemicals, and let's run that report. There we get the list of requisitions. So, these are those that will aid us in constructing our purchase order. But we need to ask the question of non material or free text and take that maybe further. Because here, we can assign that spend to a material group in the purchasing document and then based on that material group assignment, we get things like proper account assignments, and this ties back to finance, ensures that we're properly planning and landing our transaction activities into the correct accounts. To close off this discussion today, material groups are often part of our sales and operations planning structure and can be leveraged in allocation, pricing conditions, and even material determination. So there are many great uses for this one field and I want to encourage you to look into your system and see how material groups performed. Material group is such a goodie and well worth the investment of time in making sure we've got the right groupings and assignments. If we achieve good quality of groupings and consistency of definition, then we can start to get great value using material groups to analyze our spend. We can then use them to manage, PO placement, and the selection of materials to move into a PO. And as you're thinking through these things, continuing the conversation with finance, demand planning, and customer excellence remains key, especially as we think about financial reporting and analytics. Hey, thank you Sean. I think you've really exposed some good nuggets there. Something that's really well worth our attention. OK folks, if you want to look into some more of these kind of thinking and processes that we're talking about today, please check out our video catalog. And of course, if you have a specific question for us, feel free to submit it below.

Demand & Supply Planning

DM; IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Martin here and in this video we will focus on how to take advantage of SAP's days of forward coverage capability. Days of forward coverage is a critical statistic that allows the material planner to see how their plan is currently set to supply, and if they are at risk of long-term service level erosion or grossly over stocking. This is a very valuable insight to the health of your inventory and our supply chain. Kristie, take it away. Sure Martin. Days of forward coverage is a powerful feature when used correctly and in this demonstration I am going to focus on three key things. First, how to understand the days of forward coverage that appear in our exception and monitor and stock requirements list. Second, our options for how to define the different coverage statistics that we'll see there. And third, what value this can drive for the material planner and the overall quality of our planning processes. So now let's explore what this next section of the exception monitor is all about and that's this little middle piece here. This is helping us to understand how we are planning both for our current stock situation and then for our recovery. So if you think back to just some basic supply chain fundamentals, it's almost like looking at a pipeline report, so understanding how much stock that you have as of this moment in time and how long that's projected to last for you. How much stock you have based on firm elements so production orders, purchase orders, shipment notifications, those kinds of things and then how much stock you have with all of that plus planned elements. And what's really neat about the way that this is set up is that we can control what elements are considered in each bucket. So the first important decision to make is around this stock days of supply. So this is figuring out how long the current inventory on hand is going to last us and you can see here we're at the top of our screen, which means these are red lights, so we're in the negative right now. So we don't have enough inventory to cover our demand that is either due today or past due. So even though we have some stock on hand, in some cases it's not enough to to cover our current demand. So then the big question is okay, well what does it look like after I start to receive some replenishment? The first important decision that you have to make for your stock days of supply is whether that is going to calculate based on when you hit your safety stock level or whether it's going to calculate based on your physical stock level. So you can either set it to be a really early warning system based on your safety stock or you can have it evaluate based on what you currently physically have and whether that is, going to be used in either manufacturing or for transfer or use by the customer. So in this case we have this set up to consider what we physically have and then in the second bucket, we want to see how we're recovering and so this is going to be based on those firm scheduled items. Now you could break this out any way you would like, so you can choose what counts as that first receipt days of supply. So perhaps you want to consider only things that are totally firm like you've got a ship notification out there, versus a purchase order or purchase requisition. Same thing based on the status as you're moving through your production process so which MRP element is related to that. And then from there, you make decisions for the second receipt days of supply. So not the second time you're receiving a purchase order, but delineating what kinds of MRP elements, qualify. So plan, schedule versus actual and here you might choose things like purchase requisitions or planned order, so if I execute according to my plan, then what kind of shape am I in. So let's go ahead and look at this particular item. So right now we are at negative 5 days, let's call it 4.8 and then after we receive all the purchase orders that we have out there, we're going to be at 199.4 days. So I'm going to go ahead and click in here, and it always subtracts 1 day, so based on when things are needed it'll offset by a day based on the first time that you're going to run out of stock when you're in a negative situation. So we can see here this is our current planning situation, I'm going to put this in summary view because it's a little easier to understand what's happening and I'm going to look at it in terms of months. So you can see here we have that past due receipt that was planned to be here in January, so we need to clean that up, and then we have some more goods that are coming in February and March and then you can see we don't have any more replenishment happening until November. So that replenishment that's happening in November that is a purchase requisition, everything above this is a purchase order, so you can see that once we receive in these purchase orders, we're going to be covered for a little bit more than the next 6 months, so that's how it's calculating that 199 days of forward coverage based on our current receipt days of supply, and then from there, if we had some things that were in the near terms and it was split between purchase orders or purchase requisitions or production or process orders or dispatch planned orders versus regular planned orders, then we could start to delineate across those levels of firmness. So what do I currently have on hand? What do I have scheduled to come in? And then what do I have out there that is planned and I can work through and use those receipt days of supply buckets to help me understand what my recovery plan is and whether I am over or under ordering versus our current demand. So really helpful in trying to manage the balance of the supply chain but also really helpful in determining whether you're in a good place for recovery. So let's just scroll down to the bottom where we might see some more things in terms of our green lights. I want to get just where we're starting to bridge over. Okay? So this would be a good example here. Let me highlight this line for you so that you can see it. So we currently have 42 days on hand, and then we have, 76 after our next purchase orders are received. So that might be a good way for us to see if there are any issues. You can also see here down below that when we get into some of our planned replenishment, we have 42 but then we get into our purchase requisitions or our planned orders we're actually going to be in an overstock situation where we have more supply coming in than any future looking demand so we're going to actually run out of demand for this item based on our current plan. So those are the ones where we want to make sure that we have a, a full picture of the demand but B, if we have the opportunity to avoid, that replenishment and not actually place those orders we wanted to go through and take a review to see what's happening there. I bet as we're looking at these exception messages we're going to see some things that are related to the stocking situation if this is more than what we would expect to have on hand. So helpful tool not only for understanding your recovery plan, but also to help you evaluate the quality of your plan going forward and looking for opportunities to continue to refine your master data settings so that you're getting the best output possible from MRP and modeling those business behaviors into business rules which equates to master data in the system. So hopefully this is helpful for you. It's a really interesting way to be able to look at things and I think a really underutilized piece of functionality that's sitting right here for us in our exception monitor. So in summary, we have covered how days of forward coverage allows. A material planner to evaluate whether they are on the right path for replenishment. It won't tell us if we're on time, but it will tell us if we have the right quantities in motion. Second, set up of the statistics to include the right buckets of in-flight replenishment for each category will help us to make the quality of our planning better. And this is yet another way to proactively monitor how we are supplying the demand with an exception minded focus. Thanks Kristie. This is a huge help to ensure we don't run out of product anytime soon. So once again, if you want to learn more about how to get the most over SAP system, please check our other videos. And if you don't see the one you're looking for, please submit a suggestion.

Procurement & MRP

MM

MD04; ME23N

The best way to learn is by doing, welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here, and in this video we're going to focus on how we can decode SAP purchase orders dates to make the full use of this capability. Date management in SAP can sometimes be a tricky one. But the good news is there is a strong method to the madness. Kristie, tell us more about this strong method to the madness. Of course Martin. This is one of the most common questions we get from our clients and we have the decoder ring. In this demonstration I'll focus on three key things. First of all, what is the purpose of the different date fields available and what does SAP expect to happen with each of them? Second, when the dates are "locked in" from a performance management standpoint, so we know when we can make those changes. And lastly, the importance of keeping our dates, well, up to date. There are so many different dates on purchase orders that it can sometimes be really confusing on what we should update and when. So I'm going to try to go through the anatomy of the purchase order dates today and explain them so that you can see how they would interact with your business process and help to make our lives a little bit easier. So here I am in MD04, that is my stock requirements list. It's where I live and spend most of my time as a buyer and a planner and I'm going to come in here and take a look at this particular purchase order. I'll double click on it, and now I'm going to go in and just go into view and you can see here we've got a few different dates. Let's just start right from the top. At the top, I have a document date of June 9th of this year. Down below that at the item level, I have a delivery date of July 2nd. This is based on my lead time for this particular supplier and for this particular material from this particular supplier. And then down below that, now I'm at the schedule line level where I may have one or more entries here, and I have my statistical delivery date of the 2nd of July based on my lead time. This is the date I am going to measure my supplier's on time performance to. That is the purpose of this date. This date is not locked in until we have actually output our purchase orders, and that's a pretty common one that we'll hear from our clients. Folks will say that their stat date just keeps changing, and most of the time, if that's what's happening, it's because you have not actually successfully triggered the output. So whether you're sending it via PDF, via email, via EDI, you have to actually save that purchase order, creating it and putting it on hold will not lock in that statistical delivery date. And then you have your actual MRP relevant delivery date. So let's say your supplier lets you know that they are going to be late. Your manufacturing floor or your customer may be running ATP against this order. So it's very important that we know when this item is actually coming in. So if your supplier is going to be late, you would need to adjust your delivery date, your statistical delivery date, the date that you wanted it from your supplier based on their lead time would still stay the same. Now if the reverse happened and you asked your supplier to move the date in or move the date out and the supplier was able to accommodate that, then you could adjust the date you're measuring their performance to and in this case that would again be the statistical delivery date. So this is your vendor performance measure. This is what is actively happening in the supply chain. Now, we can take this a step even further, and if your supplier is providing order acknowledgements or ASNs to you, then there's no need to update the delivery date here. It will get updated in your confirmations and this really is the best case scenario. Your supplier is providing you updates on when that will be available, and if you are able to trust that information, then you can make a choice for that to be MRP relevant. So, it was supposed to deliver on the 2nd, the supplier is not going to be able to get it to us till the 5th. Then they would confirm the 5th back, and we have the opportunity to evaluate that and when it comes in, we'll get that most up to date information in MRP, and we'll see an exception message if it's misaligned with our supply, and then we can go back and have, or misaligned with our demand, then we can go back and have that conversation with our suppliers. So we can use exception monitoring to really be able to help us with that. And the other thing that can happen is that your supplier may be providing you with an ASN, and if that supplier is providing with the ASN, which would be an LA, then when they enter that information in, you'll get the inbound delivery, you'll see the status update in MRP, so it'll go from a purchase requisition to a purchase order to an acknowledged purchase order to a shipment notification. So now we're really getting some good signal in the supply chain for what's happening and maybe your supplier is going to need to take that quantity that you provided them and they can only give you 500 units on the second, and then you're going to get the other 700 later down the line, and that's actually going to come in on the 5th. Now, without having to go in and split that line on the purchase order, we're able to accurately reflect when the supplier is going to be able to deliver to us. So this is a great way to be able to receive information from your supplier, maintain the integrity of the data in your purchase order, and still let MRP know what the most current date and quantity information is. Then exception monitoring will tick in and let us know if we have a problem and if that supply is coming in too early or too late and we'll be able to see the status so that we can have the right conversation with the supplier based on where we are in the replenishment cycle in order to be able to either take an action or have a conversation for mitigating that kind of issue in the future. So, great way to do this without having to go in and start splitting purchase order lines or having purchase orders fall into the past simply because we're trying to manage our supplier performance. We really want to be able to measure that performance while still having the most up to date information for MRP and ATP so we're able to make an accurate promise to the manufacturing floor, to our sister facilities or to our customer. So that's a little more on the dates that are available to you and your purchase orders. So in summary, we have covered how decoding purchase order dates you will now be able to. Firstly, measure your supplier's performance with confidence. Second, track the status of your purchase orders. And lastly, keep MRP and ATP up to date and informed. Thanks Kristie. Having confidence in date management really makes it easier to manage the supply chain and collaborate more effectively. So if you want to know more about this video and other SAP system capabilities, please feel free to check out the other videos in this library and of course if you have a specific question please submit it below.

Procurement & MRP

MM

MD04; ME52N

The best way to learn is by doing, welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here, and in this video we're going to focus on how to decode purchase requisition date logic and how to use this logic to help effectively drive actions. Date management in SAP is a commonly misunderstood concept. So Kristie, how about you share more about that? I would love to Martin. Sometimes date confusion causes us to focus on only one aspect of the process and we miss the cues that SAP is giving us to make our lives easier. This is definitely true with purchase requisitions. In this demo, I am going to get you oriented by walking through three key things. First of all, how the delivery date is determined on a requisition that is generated by MRP. Second, why that sometimes changes when you move from a requisition into a purchase order. And lastly, and possibly most importantly, what the release date means on that purchase requisition and what we're meant to do. Alright, let's get out those decoder rings and take a look at the dates that appear in our purchase requisitions. SAP has so many dates, it can become really, really confusing. But the great news is that they all mean something specific and they're all meant to help us with our process. The first date I want to talk about in regards to purchase requisition is the start or the release date. So you'll see I'm here in MD04, which is where we're going to spend a lot of our time as buyers and planners and you can see I've got a purchase requisition out here and SAP is helping me to manage this process by sharing with me the date I'm meant to actually get this purchase requisition converted into a purchase order so that we can get through that process. So that's why it's called the release date, is it's the date that we need to actually start the next step in the process and move it through. So if I come in here, I can actually go in and take a look at this purchase requisition, I'll open it up and then I'm going to show you some other places where you can get some more information on dates. So this particular item, the delivery date for it is actually the 5th of July, so in order to be able to honor our lead time, I need to go ahead and get this released actually yesterday, I'm already a day late. The other thing that's here is it has the date that it's going to be available, so based on the goods receipt processing time in order to meet the needs of where we're supplying this to or whom we're supplying it for, it needs to be actually available on the 10th. So I'm going to go in here and just take a look at the purchase requisition. I'll show you where to find the same information here, and so we know the date that this was actually created. We can see here the delivery date that we're looking for, we can see the date it was originally requested, and the release date. Okay? So our planned delivery time is 23 days and those are going to be calendar days and then our goods receipt processing time is 3 days, and that is going to be based on our planned calendar. This is helping us to know when we should actually get this through the process. So if you are using, for example, an ME5A or an ME57 or an ME58 to help you search for the requisitions that are ready for processing, you really want to be focused on this release date to help you to know when it's time to actually act on that purchase requisition. So instead of having to remember what the lead times are for your different suppliers or your different materials if you go by the release date you'll be on time based on the planned delivery time and goods receipt time that is in the system. So if your lead times are accurate the release date becomes very helpful and being able to make that process more efficient. That's going to help us to make sure we're positioned for success in meeting that delivery date, okay? So a lot of folks run their list of requisitions that are due for processing based on the delivery date and what we would want to do instead is actually use that release date to help us to be able to move it through the process and if your purchase requisition has a release strategy on it, we really want to make sure that we're getting through that process in a timely manner so we're able to get that purchase requisition converted on the correct day. And let's say for example, perhaps you are going to be out of the office for the next little bit here, you might do something like put your release date out by a couple of days so that you can look and see what is in front of you that's going to need action and activity while you're going to be out of the office and work through managing that, it makes it a lot easier. If someone is sharing your desk while you're away and they're managing your work for you, then also using that release date will help them, they won't have to know what the lead times are for your various suppliers in order to know what's out there and ready for conversion. And as you think through your journey towards automation, the release date will be pivotal to your success there and being able to get that through the process. So MRP will always calculate that for us, it's going to also look at you know, our schedule margin key to give us additional time, or if we have any purchasing admin time in there, it will work through all of those pieces in order to be able to get us a review period, a release date, and then ultimately the delivery date for the supplier. So very helpful, those are your purchase requisition key dates decoded. So in summary, we have covered how the dates in the purchase requisitions will help us to set up for on time and in full delivery from our suppliers by. First of all, providing an accurate delivery date for that delivery. Second, queuing the buyer on when that purchase requisition should be released. And lastly, know if we are ahead or behind and getting that purchase order to our suppliers on time. Wow Kristie. There's some really good signals embedded in that process to help buyers stay on track and set suppliers up for success, very cool, thank you. So if you want to know more about this video or any other of the video services that are available in this library, please go along and look at all those different options that exist, otherwise please put a suggestion in the box below.

Demand & Supply Planning

DM; P2P

MD04; MM03

Greetings from the SAP supply chain universe. My name is Martin, and I'm going to be your guide in unlocking and revealing the hidden value in your SAP system. Okay, so if you're curious, let's just dive right in. In this video, we're going to be talking about how to use the decoupling technique called material forecasting. Today's discussion is specifically focused on driving a forecast for raw materials or semi finished goods that have stable demand and are used in many different end items where the demand is far less stable. In these cases, the bill of material explosion may not drive the best signal to position us for success and may either significantly over or under drive stocking levels. Hey, Peyton, this is a big topic. Why don't you share with us a little bit about how do we position ourselves for success? Sure Martin, my world is procurement and making sure that all of our partners have what they need to produce or distribute to the customer is what we get up in the morning to do. In this brief tour today. I'm going to highlight what characteristics make a good candidate for a material forecast. How to monitor performance, we got to look at the results right. And I'm going to talk about some of the risks and where you might need to go in and revisit this choice. Let's go in and take a look. So let's talk about what types of materials may be great candidates for consumption based forecasting. Generally, we will look for materials that have a high, predictable volume, a low cost, and a long lead time. And for my purposes for this demo, I'm going to use material 1400-710, which is blue paint for tires. So here we can see the MD04 view. We don't have any demand in there right now, but what I want to look at here is the consumption, because if I come in here and I look at the consumption, I can start to see is there a pattern, is there opportunity to use consumption based forecasting. And from this view, while it fluctuates a little bit, I can see as I go through 2024 and into 2023, that there's a bit of a pattern that things drop off in January and February and a little bit in December, and then they come back for the rest of the year. So that might come in as a seasonal forecast or a trend based forecast, but we'll take a look at that in a minute. From there, I want to look at the cost of the material, since we do consider that when we're looking for which materials may be good candidates, and I'm going to go to the info record for that. I'm going to put in my vendor as 2008 and I'm going to hit enter. Let me go back so we can see the rest of those settings. I've got my purchase organ as 1,000, plant 1,000 in my material. So once we hit enter to display the info record, we're able to see all the information that's already been input. I'm going to go to Purchase Org Data 1, and I'm going to look down here, my net price right now is $5.65 per liter, which makes it a relatively inexpensive item, but we sure do use a whole lot of it, so it may be a good candidate for using consumption based forecasting planning technique. So to do that, it means we have to decouple. I'm going to go to MM02 here. It means we have to decouple the raw material or semi finished part if it's purchased, from the finished good. When we're decoupling a material, what that means is we're taking a component part that's purchased and decoupling it from the finished good it's used in. And so we'll go into the material master here to take a look at what that means master data wise. I'm going to go to the MRP1 view for this material, put in my plant as 1,000, and here I can see the MRP type for this is PD, and that's the MRP type that's used standard when you have a material that's in a BOM, and we want that material to come up as demand for the parent part, the finished good, comes into the system. If I change this to VV, which is the MRP type to use a consumption based forecast, and I put in consumption based forecast parameters, it's going to decouple that component from the finished good and what that means is that when we go into MD04 next time, if there had been demand that we saw from the PD setting, we're not going to see that anymore. We're not going to see all that production related data because we've taken that PD out and now we're using the consumption based forecast. So that is, one of the things that changes if you go to this model. Now once we've changed it to VV, we would then go to the Forecasting tab and we've got to tell it how we want it to forecast. If we look here at the forecast model, SAP can choose the forecast for you by using J Automatic model selection, and what it will do if you use J, and you execute the forecast is it will look at the historical data that you enter there and it will decide, do I see a trend, do I see seasonality, or is it a constant thing, and we're going to do a constant model. I'm going to select J for this purpose. to see what the system gives me back. I've put in my historical periods as 24, telling it to look back at 24 months of consumption, but I want it to forecast 12 months, and if I have seasonality, the number of periods in a season will be 12. The tracking limit tells the system how much you want it to consider recent history in that forecast, and here the default is 4, that's what will automatically come in. We'll put an X for initialization, since it had already been initialized, it didn't give me an X, but we'll put an X in there so that when I hit execute forecast, so it's taken out the gamma factor, I don't need it for the forecast that it's chosen for me, we'll hit execute, we tell it to do for April, automatic model selection, it brings in these figures. We want it to look for trend and season, and this is what it gives me back based on the pattern of consumption values that are already in the system. And I can tell from that that it's chosen a constant model, which is why it's changed it to the letter D. So the system has decided that it would be best for me to order on a constant model, where maybe I'm ordering more material in a particular month than I need, but the next month that will roll into the demand for that and it'll all balance out. From there, I'll save that. I will run MRP really quickly so that we can see what this looks like in MD04. We'll go there, 1400-710, and here you can see these forecast requirements that it's put in for me based on the forecast that it calculated and we can see the purchase requisition that it's given me to satisfy those forecast values and because this has a long lead time, and I just entered the forecast, it's giving me some purchase requisitions that are behind and need to be rescheduled because of that. We also need to check up on the forecast and make sure it's looking how we expect and so if I came in here and I saw that for whatever reason one of these values was way too high or way too low based on what I knew about the product, I might go in to MM02, go to the forecasting tab, and run another model. You can go into the material master and you can try another model and execute the forecast once again to see what figures it gives you back and you can compare that to the history and see if it matches more what you were expecting. Alternatively, if for some reason we find that this doesn't work for us and we are not really into the VV model, we can always go back in, change that VV back to a PD or a V1 if you're using reorder point planning, save it, run MRP, and the forecast is going to go away, and we'll have a demand picture based on what we've told the system to give back to us. And that is a brief look at finding materials that are candidates for consumption based forecasting and executing that forecast. That was fun. Okay, so in summary today. We discussed some of the key benefits of deploying a decoupling technique, like moving to a material forecast. Highlighted some of the challenges that come with any decoupling technique. And spoke about the empowerment that comes with staying squarely in the driver's seat with your planning. Techniques like these, a decision to separate the information flow from the end items, should never be made in isolation. So use the power of teamwork to be curious, think critically and drive good decisions. Hey, thank you, Peyton, that was really fun. I love the highlights on what to look out for and how to pick the best candidates, as well as how to close the loop on performance and adjust if necessary. So once again, thanks Peyton. Okay, folks, if you want to learn more about this topic and others, please check out our video catalog. And if you have a burning question, feel free to try the chatbot.

Demand & Supply Planning

DM; IBP; OTC; P2P; PTM

MD04; MD07; MD73

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi Martin here, and in this video we will focus on housekeeping for demand. When used correctly, a demand plan provides an effective line of sight for future requirements. When the forecast sales order deliveries are overdue, it creates imbalance and mistrust in the actual demand. So Kristie, why is this a problem for us? Sure Martin, let's talk a little about it. Demand plan housekeeping is a powerful feature when you use correctly and in this demonstration I'm going to explain it by focusing on three key things. Where and how do we find materials that have one or more overdue elements? What is the best practice for cleanup and what does that typically look like? And then how can we communicate across functions to ensure that we're effective in identifying and responding to the demand? All right, we spend a lot of time talking about how to do housekeeping on the supply side of the house and how to do exception monitoring and if you're curious about that, there's lots and lots of videos out there that will walk you through the different exception message types and housekeeping for supply side. But now what we need to talk about is the other side of the house, which is our demand plan. So what I'm going to do is I'm going to go ahead and navigate, I'm going to go to MD07 today, that's going to be the collective display or my stock requirements list. And I'm going to go ahead and just run this wide open for my plant and while I'm letting this run, I'll explain why it is that we're going in and taking a look at this. So just like our supply elements can get out of date, our demand plan can as well, and the demand is what's driving supply so it's very important that we're keeping that up to date and up to date means that the sales orders and the deliveries that are in there are real demand, the forecast that is in there is expected demand, and we're keeping the dates within a reasonable timeframe. So typically, we're looking to keep everything except for forecasts within a 7 day horizon. And forecast, we're trying to keep up to date within 30 days just so it's sending the right signal. Now, your consumption parameters may cause you to have some variance to this depending on whether you're having rest in terms of quantity of your time. We work in demand planning, or lucky enough that we can have either or come into play and our customer orders and deliveries may be impacted by customers being able, if they're doing customer pickup, getting in and making those things happen in a timely manner. But we really need to keep them as up to date as possible and make sure that every element in there is in fact relevant for supply to be planning to, otherwise we're not planning the right inventory and we'll end up not being flexible where we need to be because we're going to be over capacity or overuse of material, or we're going to be investing space time or materials in a way that isn't conducive to being able to supply the actual relevant demand. So first of all, sad news for those of us on the supply side of the house, exceptions only happen on supply side elements. There are no exceptions on demand side elements except for safety stock, which is both a demand and stock and the reason for that is because at its core safety stock is stock that's available, which is a supply side element. Other than that, you're never going to see an exception message on a forecast, a delivery, a sales order, or the demand side of a stock transfer order. However, we can still do the housekeeping and so when it's time to do that, I'm going to pick on independent requirements today, but you would pick any of your demand side elements and then you would go ahead and locate those by putting in a, from and to date. So if I want to get anything that is really past due, I might throttle my independent requirements just even to the beginning of this year and slowly work my way into current. I've got some stuff that's dated all the way back to 2017. This is a messy system and for most of us getting started, we're going to encounter some things like this where in some categories we may have some very, very aged materials and you can see I've got the full gamut here in terms of dates. So I'm going to go ahead and just run this out to the beginning of this month and I'll actually run it just to the end of the last month that way I don't get anything that has been cleaned up already for the month of April, and I'm going to go ahead and click find MRP elements, this is going to bring up some forecasts for me, and then I'm just going to go ahead and say, okay, so I have 27 materials that have forecasts that are older than March 31st of 2023, and for those of you who are wondering it is, April 13th of 2023. So should expect that those have been dropped at the beginning of the month or rolled forward if appropriate. I'm going to go ahead and click on that and it will take me in so I can see what kind of housekeeping it is that we're dealing with. Okay, and one of the things that I can do is I can actually navigate in here and take a look at my total requirements planned. But before I do that, let me just point out the sales order here. So here's a sales order with 10 pieces open from 2019. That is a great example of something that we could look at cleaning up. Okay, and so I could come in here, take a look at that order, see what's going on with it, and validate that indeed, we still do have a need for it. Okay, and it looks like this particular order's on hold, but this will be another good indication something's wrong. I should be able to see my customer name right here as well to see what is needed for that particular customer. Okay, I also have these forecasts that are past due, and you can see that I'm actively driving replenishment with exception messages associated with it. So there's a symbiotic relationship between cleaning up your outed demand and cleaning up your supply. So once you are cleaning up the demand, MRP is going to run and realign the plan, bring that demand and supply into good match with one another and then when that happens, then we don't have to go in and do all that manual work to realign the plan and we're not chasing exception messages that are not real. Now could be valid demand, we could be past due and we need to deal with those situations as well, but I can see on my forecast it's performing. So a couple of things here, I can go in here to periodic totals and I can see here, if I want to bring this into months, I can see anything I have past due. So it's 2,350 pieces still open to sell from January, so I probably want to clean that up and then also 650 from February and then actually we've exhausted all of March, and you can see we're starting to peg some requirements against April and May already. So I want to go in and clean that up so I can go in here also to environment and I can go into total requirements displayed and what that's going to do is it's actually going to take me in so that I can see how I am matching to my customer order. So where things are pegging and then the remaining balances where I don't have anything that is pegged against that yet. So I have the opportunity to go in and start to clean these up. One of the ways I may be doing that is, first of all, if I am on the supply side of the house, if it's a sales order or a delivery or stock transfer order that's originating from another facility, then I could actually go in and reach out to my friends and colleagues and ask them to help me get those items cleaned up. I can also work with my global planning or my sales and operations folks and see if they can help us on the forecast side to make sure that they're doing that reorganization of the forecast on a regular basis so it's getting cleaned up. And then the last thing I might want to take a look at, and this will be a conversation again with my demand planners and for any demand planners listening to this, is really focusing in on what that consumption profile looks like. So on the MRP 3 tab, making sure that that consumption mode is set appropriately. So both forward and backward looking if appropriate, making sure that we've got the correct consumption periods assigned so the horizon of confidence. So we think we are correct in terms of quantity, but might have some issues with timing that spans say two periods, then I can set my consumption periods up appropriately so that is pegging the orders in the best way so that I'm making the best use out of that forecast. But certainly we want to go through and clean those things up and where we can, starting to break that forecast down into weekly buckets will also help with that process. Being able to see our rate of consumption as we're going through the month and seeing our remaining balance that's open to sell. But yes, certainly sales orders, deliveries, requirements to shift to a different facility, transfer requirements out to subcontractors, and then of course our forecast, those are all demand elements that we want to make sure that we're going through and still tending to and cleaning up. We may not be able to do that as the MRP controller or the person who's responsible for the material, but we do want to communicate with the folks who are, and make sure that we are keeping our plans in good alignment. Basic housekeeping goes a long way towards reducing those exception messages and ensuring that we are prioritizing our supply appropriately in order to facilitate the real customer needs. So in summary, we have covered how demand plan housekeeping allows you to. Send the right signals to SAP MRP and our supply side counterparts so that they are focusing on the things that matter. Quickly identify materials that require clean up. And start an effective dialogue across functional areas so that you can manage our plans in harmony. Thank you. Keeping our forecast sales orders and deliveries clean will improve the accuracy of our plans and exception messages, allow for better decision making and most importantly, better customer satisfaction. So if you want to learn more about how to get the most out of the SAP system please check out our other videos and of course if there is an unanswered question please submit a suggestion below.

Procurement & MRP

DM; IBP; OTC; P2P; PTM

MD04; MD05; MD06; MD07

Okay the best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin and in this video we will focus on the overview of SAP's demand and supply planning capability via MRP. When using MRP to develop a demand and supply plan can help organizations better align their supply chain activities to promote flow across the supply chain. MRP's job is to create a plan that will supply to that demand. In its simplest terms, MRP tells us what we need, how many we need, and when we need it. Kristie, it seems simple, but how about you tell us a little bit more. Absolutely Martin. Demand and supply planning via MRP is arguably the most powerful planning feature available to a materials planner. It is the engine that determines how to best supply the demand. It's a huge topic. In today's demonstration I'm only going to focus on three key points. One, what MRP's job is and how it works. Two, how to read the results of what MRP has produced. And three, the kinds of rules that MRP will live by. All right, let's go in and take a look at what MRP is actually doing when talking about supplying the demand plan. So you can see here I'm in my stock requirements list, and I could also look at this in my MRP list if I was just getting started with the day. But this is going to gimme the current dynamic situation based on everything that is going on and what you're going to see here is that MRP basically works like a checkbook. Not to oversimplify what's going on in the background but it really is simple math. So it's saying how much do you have on hand? So in this case, just to keep it simple, we have 0 units on hand and then what is your first demand? And this case, it's safety stock, we have 50 pieces of safety stock that we should be maintaining at all times but it looks like we're pulling ahead of our plan a little bit and we've actually depleted that. So MRP's job is to try to balance this, to rectify that problem as quickly as possible and you can see I'm already getting an exception message, I have an exception message 96, which is letting me know that I'm below my safety stock level, so when I double click on that it gives me the explanation for what that exception message means. So then the next demand that I'm seeing here, if I had customer orders, I would see those based on the date, the material availability date, or the mad date, the date the customer gets mad if product's not available and then the next thing I would see if this is a make to stock item is I'm going to start to see my forecast. Okay, so whatever the makeup of your demand program is, whether that is a combination of forecast, customer sales orders, quotations or guarantees for the customer, any other types of customer sales documents like deliveries, stock transfer orders, or plan stock transfers, any of those things that make up your total demand picture are going to show up for you here and those are all going to show up as negative. So if you're ever not sure, if it's a demand or supply element because sometimes the names can be a little bit confusing, just look for the negative sign at the end of that particular element and you can see here what the math is doing so zero minus 50 is negative 50. Negative 50 minus six is negative 56 and we keep going until we get to a positive here, we got 10 units in production that's adding back in. So this is MRPs trying to go in and balance this. Now, in this particular case, I have a planning time fence which says that MRP is only allowed to plan up to a certain number of days out. That's my, my frozen zone, the zone that I as a planner am in and working on. Anything beyond that is my slush year, my free zone. So that's where MRP is able to do its work, and so all of my exception messages and everything that I need to work hard to bring in because we're still at negative 18 pieces at the end of our planning horizon, is all parked out here. It's like a speed bump. Okay, so it's waiting to be told that it can cross the line. And so if I'm able to fit that into my schedule, I would need to manually move it in. Everything outside of this though, MRP is going to work with. So let's make a quick change. Let's pretend like that planning time fence is not there just so we can see MRP do its work and rebalance. So I'm going to just go ahead and get rid of that and I'm going to change my MRP type just to be regular old PD planned to the demand with no restrictions and I'm going to go ahead and save this now. This is just for the purpose of showing how MRP will respond, this is not telling you you shouldn't have a planning time fence, a planning time fence is great. We just want to make sure that it's the appropriate size based on whatever the bottleneck is for that particular capacity or the lead time is for the process and I'm going to go ahead and run MRP and I'm going to run this according to lead time scheduling. Let it run through and it's always going to ask me if I'm sure and I'm going to say yes and then as a result of that I get all of my statistics. So just by making that small change you can see all of these adjustments that were made. So I did do a multi-level MRP, so this was a finished good, so it went through and it planned everything that was down below it and it made changes in order to align the supply and demand plan together so that everything is working well. And then I can hit refresh because I'm an MD04, my stock requirements list and when I do that, it's going to give me the new plan proposal and so I can see my planning time fence is gone. It's moved some of these orders up, I'm getting some new date alignment for what it's requesting that we need to do in order to be able to bring this in, in time for the customer and right now, based on all of our current plans, we can see that the first time we'll be back to a positive inventory position, including our safety stock, is actually on 3/9. So whenever MRP is not able to balance based on the rules that we have in the system it's going to give us these exception messages and that's so that we can make decisions on how we want to proceed. So MRP is very good at following our rules, follow lead time, it's going to follow our lot sizing, it's going to follow our MRP type, any planning time fences, safety stock values, and it's going to take all of those things into consideration and determine for us what we need, how many we need and buy when that we need it. So its whole job is to balance that supply to the demand based on the rules that we have in the material master and that's why getting those business rules correct is so very important. So check out all of our other videos talking about the master data pieces, but that's the general principle for how MRP will work. So in summary. We have covered how demand and supply planning via MRP allows a material planner to receive a plan that balances supply and demand without having to do manual work or math. Set rules in place that govern the way MRP will produce that plan. Become proactive and exception minded by receiving alerts or exceptions in the demand and supply planning process via the exception monitor. Thanks Kristie. Wow, that is a big topic. Using MRP effectively enables supply chain activities to run more effectively and efficiently. If you want to know more about MRP and learn more about how to get the most out of the SAP system please go check out our other videos and of course if you have a question that we haven't answered please submit your suggestion.

Procurement & MRP

MM; PP; QM

MD04; MD3

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here, and in this video we're going to focus on how SAP plans for the time it takes to go from dock to in stock. This feature in SAP helps an organization ensure that it's properly planning for the activities that occur when a product is received from the production line, a sister facility, or an external supplier. So Kristie, tell us a little bit more about how to make the most out of this master data that governs SAP in terms of how to go from dock to stock. Absolutely, Martin. The master data field that governs planning for the time needed from receipt to availability is called the GR processing time. This is a commonly misunderstood field, and today I am going to show everyone three different things in this demo. First of all, where to maintain the goods receipt processing time and how to see its impact using the stock requirements list. Second, the purpose and value of this important master data field. And lastly, some of the common misuses that may need some attention in order to get the value out of proper planning. Okay, let's talk about dock to stock time. So, this is reflected in our goods receipt processing time, that's the master data field and the material master and you are going to find that on your MRP2 view. We'll go ahead and take a look at that in just a second. I know that all the different lead time breakdowns in SAP can become a little bit confusing, but they are so important in being able to accurately reflect our process flow and continuously improve the quality of that master data and those process performances to our customers. So all of those lead times accumulate up. So plan delivery time, goods receipt processing time, which includes quality inspection time, plus your put away time. Things like your picking and your staging and your loading and your transportation planning time for your sales orders and your stock transfer orders, all of the manufacturing related lead times, being able to break those down into buckets and have them be accurate is very important. And it's also very important that we don't buffer for variability in the process in those lead times. We want to make sure that we're handling that through a lot of the other tools, around our safety stock, our coverage profiles, our safety time, all of those other pieces. Really, these lead time buckets need to be broken down and to be as accurate as possible so we're accounting for those activities in the right way. So here we are in our stock requirements list and there's this button down at the bottom, it says GR, so the dates that you're typically seeing and your stock requirements dates list are the dates that things are expected to be available. So those are the dates that things like a material availability check or an ATP check are going to work off of. If I click this GR button, you'll actually see the dates will shift. So, we are expecting to receive these goods on the 2nd of July and the 5th of July, and then we will expect them to be available on the 7th and the 10th. Now, I'll show you how we tell whether those dates are calendar or working days, but we can sense here that there is a calendar coming into play because those are not the same amount of days and so if I actually look at my calendar for that first little piece of July, not only do we have a holiday that is occurring, but we also have a weekend. So, you know, if it's coming in early in that week and then we have some availability on Friday, we're then skipping the weekend and the next shipment is then available on the 10th. So the 8th and 9th must not be working days for us. So let me go ahead and show you where to find this information. Let's go into the Material Master, and get there in a variety of ways, we're going to go to the MRP2 view, and we're going to take a look at some of our lead times. So first of all we have our planned delivery time and it's very important to know whether your lead times are reflecting a factory calendar, a working day, or whether they're based on calendar days and an easy way to do that is just by going in and using your F1 key on your keyboard to bring up the information and in this particular case our planned delivery time because it's an external procurement is going to be in calendar days and that's because we do not know what the working calendar looks like for our suppliers necessarily. Or we may be having inventory that's moving across the water and of course that doesn't stop necessarily for weekends. So, it's factoring in the amount of time that it takes from the time we get that purchase order or scheduling agreement to the supplier till the time that it is actually going to receive on our dock and then that goods receipt time is then going to be the dock to stock, or if it's coming from manufacturing, from the production floor into stock. And so any activities that need to occur, so any type of put away or staging, anything related to our quality inspection, we want to make sure that all of those dates are aligned and so if I look at this field, same thing, I'm going to go to F1 and it's going to tell me that this is the number of working days required. So it's 3 working days and so it's going to look at the calendar that we have set up and it's going to tell us with 3 working days when that inventory is going to be available and this is critically important because it affects our ATP check, it affects our exception monitoring and our exception management, and it affects our ability to break down our processes and understand where there's opportunities for improvement. So it may seem like 3 days is not a big deal, but if you think about an extra day or 2 days that you could potentially work through your supply chain, that is a lot of additional inventory, it starts to really add up, so we want to make sure that this is accurate and correct and allows us just the right amount of time to be able to go through that process in a way that is reliable, so that we're able to then make our promises against it. So that's our dock to stock time, or otherwise known as our goods receipt processing time. So in summary we have covered how to properly reflect dock to stock. This allows you to be. Realistic in promising your material availability. Work to reduce the amount of time that it takes to go from dock to stock with continuous improvement activities. And lastly, avoid adding inventory unintentionally to your planning. Remember, lead time equals additional inventory. Thanks Kristie. By properly aligning our activities with the correct lead time buckets in SAP we can continue to improve our processes and our working capital. So if you want to learn more about how to get the most out of your SAP system please check out our other videos and of course if you have a burning question please submit it below.

Demand & Supply Planning

MM; PP; DM

MD04; MM03; MC42; MC43; MC.9

Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here, and in this video we're going to focus on whether or not that safety stock level that we've said really make sense. Safety stock feature in SAP is intended to reduce the risk of stock outs due to volatility or variability in demand. As we know, the best way to learn is by doing. So, Kristie, tell us if the safety stock level we place in it is really the right level. I would love to Martin. It's always important to make sure that a safety stock level makes sense, and in this demonstration I'm going to focus on three key things. First of all, how to determine how much coverage that safety stock is actually providing. Second, some tips on how to set a safety stock that is meaningful and drives value. And third, what kind of care and feeding is required to ensure that that safety stock is set to remain as a positive contributor to the well performing inventory levels that your organization is looking for. Let's talk safety stock values in SAP. Okay, here we are and we are in MD04, which is the stock requirements list, looking at this particular material. This is a raw material that is serving production for this particular finished good. Raw materials may supply many, many different finished goods, in this case to keep it simple, it just is supplying one, and we can see that we have some ongoing demand in this case going out through the end of the year, and we have a safety stock set of 2,400 pieces and a current quantity available of 2,560. So what are some things that we want to consider when we think about safety stock? One of the things that we want to think about is lead time, so before we go anywhere else let's just check that out, and what I'm going to do is go in here and I'm just going to display material, I could also just double click on it or I could use the drop downs at the top. But for ease of use, let's go over here and let's talk about lead time. So the first thing I want to consider is my planned delivery time, so it's set to 21 days and planned delivery time, because we don't know what our supplier's factory calendars look like, is in calendar days. So this is 3 weeks of time here and then we have our goods receipt processing time which is 3 days, so 3 additional working days according to our factory calendar for this item to become available. So let's call it, you know, 3 1/2 weeks or so depending on how we hit the weekends in order for us to get this material replenished, so think about that. That gives us a good indication of what our full lead time looks like. Now, the other thing you want to consider is how often you are able to place an order with your supplier, so you do not need to cover your entire lead time, particularly on long lead time items. In order to be safe from a safety stock perspective, you want to also think about how frequently you're able to place orders and receive shipments from them. So maybe it's 120 days or 180 days, but you're able to place an order every week or every other week and you're receiving goods from them on a regular cadence. You do not need to cover the entire lead time in order to be safe from a safety stock perspective. There are loads of calculations online and also in actual books. I'll leave you to your own devices to look up some of those calculations, but there are a lot of different options there for how you might consider the variability and volatility involved and then also lead time. So the other thing that we want to do here is just get a good feel for how we're actually consuming or using this item. So I'm going to go over to my average daily requirements, so looking forward in time, and I like to look both forward and back. You might look at 90 days or up to 6 months, it depends on again, what the lead time of that product is, and I'm going to go ahead and put in here our plant, and the reason I look at both is because if they are significantly different from one another I want to make sure that I understand why. So if history is very different from what we're projecting in the future, how we've been using the material is very different from what the requirements look like, I want to make sure that I go through and evaluate that. So your two transactions here are MC42 to look back in time, or MC43 to look forward in time. We're looking forward and I'm going to go ahead and click the execute button, and what this is going to do for me is it's going to go out and calculate what my current coverage is and then also how much I'm planning to use on a daily basis looking forward. So I'm going to go ahead and click on the double line here and you'll see this is my range of coverage. So I have 2,560 units on hand, which includes 2,400 units for safety stock. That is meant to last me about 47 days. So between the safety stock plus the additional 160 pieces, if all goes according to plan, I'm covered for 47 days versus my lead time of 21 days, so 3 weeks plus my 3 days of factory calendar time to get through the goods receipt process or dock to stock. During that period I'm expected to use just about 55 pieces per day. Now, this is where it's getting meaty. I've got some pretty good information here in terms of my planned usage per day over the next 3 months to give me a good idea of what I might want to do with that safety stock, and if I compare that to how I've been consuming, that's going to give me something of a picture of variability or volatility. The other thing I can do is I can come in here and I can look at the detailed display. So I click on this, select my item first, click on this, and then it brings up a bunch of different pieces of information that I can look at, and what I'm most interested in right now is the stock level. So what I'm going to do here, because this item doesn't have a ton of history on it, is I'm going to go ahead and just show you some examples of other items that would give us a good indication. So the red line graph is always looking backwards in time , so that's that stock level looking back historically and on this particular item, you can see we've got tons of history, and I can see here, during that entire duration, we have never hit 0. Okay, so what we want to do is we want to look for our opportunities, so the lowest period in time, and what we can see here as well is that that stock level is starting to come up, right? It's starting to trend up and obviously there's a big buy here. So we'll ignore this piece as an outlier for now and just look at the rest of the pattern. But I can see here that really over the last almost 2 years, you know, I haven't gone much below this 7,000 piece line. So I've got some room potentially to bring that safety stock down. Let's look at another example. So in this case, we can see that we have some predictable consumption, although it looks like this is all over the place. This is showing us our goods receipt and goods issues accumulating across time and you'll notice that where there's a gap or there's some black space between the goods receipt and goods issue, that's when you will start to see that stock value begin to tick up and grow. So we want to make sure that as we're thinking about our safety stock, we are not causing ourselves to have additional dead stock, right? No dead stock rising. We want to make sure that we are covered and we're covering, but that is performing the way we would expect it to. Here's another good example. So you can see the safety stock level is just over that 700 piece line. Okay, so there's some times we are actually dipping into it and using it. That is okay, that's what it's there to do, is to help protect against the variability and volatility. But recently it's gone really, really high. So we are, for whatever reason, oversupplying versus our safety stock by quite a lot. So by managing this and monitoring it, we can work to bring that safety stock level down and then we get a good, repeatable pattern where we're still staying off the deck and not at risk of stock out but we're getting more frequent replenishment and we're starting to study that lot sizing so that we are reacting and responding to the demand in a better way. Anytime we set our safety stock, we want to be thinking about our inventory investment and make sure that we're monitoring it for performance. It's really important to look at the red line graph going backwards in time, as well as the green line graph going forwards in time. If you're not sure where to find this, you can find this in MD04 and what you will see here, I'm going to go ahead and close out of this guy and we'll just go back to where we were. If you go up to list and then graphic, this is where you're going to find that green line graph and the green line that we're looking at is the available quantity. So I'm going to go ahead and bring that up, and this is going to show how we are planning to replenish across time. That's where you would see that picture that we were just looking at, where it's showing us that out across time, this is what the new plan looks like. You want to make sure that you are not changing your safety stock with great frequency, but you do want to go in and evaluate it. So something like a quarterly or twice annually review, certainly looking every month for outliers, but then really going back through and doing a thorough recalculation of your safety stock. Now, this is for static safety stock, if you watch a few of our other videos, it will walk you through what happens with our dynamic safety stock, our range of coverage profile, so how many weeks of coverage we're providing, as well as safety time. But hopefully this gives you a little insight into how to look to see if your safety stock is performing well and the value you're considering matches well with your history. So in summary, we have covered how. Going through the process to calculate whether that safety stock makes sense will allow a buyer or planner to legitimately protect against volatility and variability in demand without creating undue burden on working capital. To be able to revise safety stocks as necessary and make informed decisions on where investment truly makes sense dependent on business conditions. And continuously review performance to make sure that safety stock is working and we aren't leaving dead stock behind. We always want to make sure we're investing wisely. Thank you Kristie. Once again excellent information. Setting those appropriate levels in safety stock is a challenge for most organizations. Thank you for highlighting the fact that there's a lot of key takeaways here around how to evaluate safety stock performance and to get the return on an inventory investment. So, if you'd like to know more about this particular product or topic and any other topics in SAP, please feel free to check out our video library otherwise put your suggestions in the box below.

Production & Capacity Planning

PTM; DM; OTC

CM01; CM04; CM05

The best way to learn is by doing, so welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hello everyone, Martin here, and I'm thrilled to engage with you on some of the information insights that you can draw from capacity evaluation in SAP. This powerful area of SAP is often underutilized. So today, we'd like to show you some ways that it can be used to help with answering questions in your organization. To lead us through this walkthrough today is Tom, who has a ton of practical information and experience in this area. So, Tom, take us away and share a lot about capacity evaluation. Hey, Martin. Well, when we think of capacity evaluation, it's often around the challenge of either being over capacity or figuring out a run plan for a work center or resource that are not fully booked out. Both are good uses of this functionality. But today, I want to take it a little further and hopefully show something that is new to you. First, we'll go in and look at our work centers that have a current backlog that needs addressing. Next, I'll show you how to accumulate capacity and requirements to see what the planned recovery date or next bookable date for that work center looks like. And lastly, I'll extend the time horizon and change to monthly buckets for a longer term outlook. Let's go in and take a look. Now we're going to dive into SAP and look at capacity planning and how we can understand our current state of what's happening, and also future state of what's going to happen. We'll begin our journey today by looking at CM04. CM04 is going to show us any backlogged production that we have on a work center. So this list, if we come in here, I'm going to put in my work center, which is already limited in my plant. When I look at this work center in this plant and select the overview, it's going to pull up any backlog work that's on this work center for me to see. Now as I click deeper into this, just by double clicking in, I can see the requirements of what's out there that what my production is behind on. This allows me to focus on these orders first, knowing that we're behind in its tying up capacity that we did not plan for today because these are past due orders that have not been completed. So using this CM04 tool, we can understand where we're truly behind and what specifically the orders that we're behind on to get caught back up in production. Once we understand and know where we're behind and what's affecting past dues for capacity, we can now turn our attention to looking at a current state of capacity. For that, we'll go in and look at CM01. CM01, again, gives us the same sort criteria as we can look at a work center in a plant, or we can look at all work centers in a plant, just to know that is also an option. As we look at the standard overview for this one, we're going to see a much different picture. So instead of just showing us what we're past due on, it's going to show us current and future requirements as well. So as we can see here, clearly anything that's red shows that we're over capacity. That's a concern for the shop floor. We need to understand why we're over capacity and how we can overcome that situation. Whether that's going in and looking at the details again and understanding can I move any of these orders out to lighten the capacity load. Or do we need to work overtime to overcome those capacity requirements? The other thing I can do inside of CM01 is I can break it down into different buckets. Currently, we see we're looking at it in a weekly bucket. However, if I were just to go up to the general settings, I have the option in here to change the capacity into any buckets that I prefer. I can see right down here I have a selection of different periods. First we'll look at it in a daily bucket. If I look at it in a daily bucket, this allows me to understand on a daily basis how am I utilizing my capacity. It could be that I'm over capacity on Monday, but fine on Tuesday and Wednesday, which then I know I can smooth those requirements to the other days of the week. In this current example, we can see here we're over capacity on most days in the current periods, but I can go out and look and see, okay, what's the next day I can actually put orders in where my capacity is open again? And in this example, I can see out on 12/9, I have 88 percent of my capacity remaining. So again, I can possibly move orders out into these dates, or new orders can go in those dates because I have capacity. In the short term, if I can't move orders out, I'm going to need to work some significant overtime or possibly hire more employees. But this gives me a picture of when I can recover and when I can actually add new orders into my production. The other thing we'll look at now, as we look at longer term planning, we may want to look at this again in weekly buckets, which we already saw an example of, but if now I pull it up in monthly buckets, I can start to look out to the future to see, okay, how are my monthly buckets of capacity looking in the future? This allows me to have more of a long term planning picture of what's going on in my production environment. As I can see here I only have three months showing with loaded requirements. So when I go out to the third month, I've got plenty of capacity and I can add tons of orders and lots of production in that, and I'm getting a little tight in the month of December, but my current month is way over capacity and I need relief. But this allows me to have a picture as far out as I'm holding a forecast or customer orders, any requirements I can see in the system, I can evaluate how that looks on a long term basis. So when we look at capacity in SAP, we not only have the ability to look at past due requirements, current requirements, we can also look at it with future requirements to understand our capacity situation and what we have to do about it and what we have to do to resolve any issues. So I have to confess, today we only hit three features on my favorites list. There are more, but this is a good start. With the features we looked at today, we can start to draw some insight of capacity evaluation. Are we ahead, or are we behind? What is our current lead time to put more work on that work center or resource. And we can proactively identify challenges or opportunities as we look across the broader horizon. There's a lot here, and I hope you'll go back and see what you can find. Thank you, Tom. That's such good information, and it's really easy to navigate. But folks, the challenge is making sure that we have the right rules to give us the right information. If capacity evaluation isn't SAP's part of your process, there a number of other videos that you should explore. This is a great gateway between S&OP and S&OE. So folks, if you're looking to maximize the value in your SAP system, please check out our chatbot that will share with you what recommendations can provide, specifically on capacity evaluation as an example. Or if you have a specific question, please submit it below.

Procurement & MRP

P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, and in this video we will focus on how to take advantage of SAP's dynamic safety stock capability. When used correctly, dynamic safety stock can help organizations maintain a optimal level of inventory to meet custom demand while reducing the risk of stockouts and overstocking. So Kristie, tell us more about this underutilized feature in SAP. Absolutely Martin. Dynamic safety stock is an underutilized and powerful feature when used correctly and in this demonstration I'm going to focus on three key things. How dynamic safety stock differs from static safety stock, and specifically how we can see those differences in the stock requirements list. How dynamic safety stock chases the demand and adapts across time. And lastly, where we set the settings that govern the type of safety stock we may wish to use. Okay, let's demystify the difference between the static safety stock and dynamic safety stock, a range of coverage features here in SAP. So you can see here I've got an item that has a static safety stock value, this is what we're all very used to seeing, it's 50 pieces, it's discreetly calculated. That information has either been entered into the system or we've allowed SAP to determine that for us but that is the discreet value that has to be reviewed on a periodic basis. It does not matter what is happening with the demand for this particular material, it's just always going to consider that 50 piece value that we have in there. So if you've got a really good plan for continuing to review your items and you're doing that consistently on an ongoing basis, and product lifecycle management is a big part of the way that you're evaluating that, there's lots of good places for static safety stock to be used. But an alternative to that is dynamic safety stock, a range of coverage profiles that allow us to dynamically calculate how much safety stock we need. So basically that safety stock value moves with an average daily usage or an average daily consumption value for that material. So we will cover the specifics of a coverage profile in another video, but right now what I want to do is just change this to dynamic that you're able to see what happens. Okay, so right now that 50 pieces comes right off the top, we've got our exception message and you can see that SAP is working to recover that and across time it's going to net us out to zero pieces, which really will mean that we'll have 50 pieces on hand to protect against any variability or volatility in demand. So let's change this now, I'm going to go to environment, I'm going to change my material and I'm going to go to the MRP 2 view, which is where all of the safety stock settings live and you'll see I've got the 50 pieces in here, I'm going to take that out. You see I've got safety stock, safety time, and my coverage profiles and I'm just going to go ahead and assign for right now coverage profile at random and then we'll talk about what these mean in just a few minutes in a different video. So I'm going to go to Z05 and what this is going to do is based on whatever it is I've set for how many days is my target and what kind of range I want to look at for my demand signal, I'm going to go ahead and hit save, and immediately when I hit refresh, watch for this value, hit refresh, the 50 pieces comes off because I made that change in my material master, some of my exception messages immediately adjusted based on that information and you can see now I am ready to go ahead and run MRP and you'll see there's a lot of adjustments that were made, I lost a lot of my exception messages, I've got to reschedule out because I just removed that safety stock as demand. So if you're wondering what kind of impact on your plans that safety stock has, you can see the immediate effects. So I'm going to go ahead and hit MD02 so that I can blow this through my BOM and what it's going to do is it's going to dynamically calculate across time how much safety stock is necessary and it's going to put that into my plans. I'm going to hit back now before I hit refresh just note the balances here. So as I go across time I'm just going to page down a little bit so we can see outside of our planning horizon. Look now, instead of netting to zero, you're going to see we've got some positive balances that are sitting out there. I'm going to hit refresh and you'll see that those balances are now adjusted based on the dynamic safety stock calculation. So I've asked for it to cover a certain number of days and so it's controlling that value for me. So where we had 50 pieces before, we now have things like 8 or 4 or 18. So it's working the plan based on that rate of pull for what we need to hold in safety stock. So we're basically setting a target days of supply and it's using that to make sure that we have sufficient forward coverage and when you go into your periodic review you'll be able to see you've got a bunch of new columns that were not there before and what this is doing is it's telling you what that target days is based on the rate of pull, what your minimum is, and then how it's going to re-trigger in order to ensure that you have the correct target stock balance in order to meet your minimum requirement for how many days on hand you'd like to have. Okay, all of this is configured into your coverage profile. We'll cover that in a separate video. But this is what the difference is between the dynamic and static safety stock, is that this safety stock value is going to recalculate across time based on that current or projected rate of pull and the number of days of coverage you've identified for that material. So in summary we have covered how dynamic safety stock allows you to be able to. Move and groove with the demand, sometimes gracefully and sometimes not so much. Review targets and period totals and see the overall expansion of statistics in your MRP list or in MD04. And protect against variability adaptively. Okay, thank you Kristie. Obviously a big step up from just static safety stock, but when used properly, it'll help improve and drive customer satisfaction, reduce stockouts, and increase visibility and agility in our supply chain. So if you want to learn more about how to get the most over SAP system please check out our other videos and if you can find a video to answer a burning question submit a suggestion.

Warehouse Management

WM

LLVS

Hi, Martin here. And as we know, the best way to learn is by doing so welcome to the video service that reveals and unlocks the hidden value in your SAP system. In this video, we're going to focus on SAP's easy access to warehouse management. I often hear that WM is a complex and has a lot of transactions to deal with. Furthermore, these transactions are behind many layers of folders and subfolders and still may not be what a warehouse associated needs to do their job. So Steve, are you telling me there's a quick way to access only WM transactions? Absolutely, Martin. This is something that I wish I knew when I was running a warehouse. This simplifies and brings forth only the transactions relevant to operating a warehouse. Folks will typically save our favorite specific transactions, but may not be aware of others that may provide value in the warehouse. So let's get into SAP, where I'll demonstrate. The streamlined transaction list. And discuss new ways to potentially utilize these transactions. Your SAP screen may look similar to this or very different. I've seen a lot of different things and strategies, people have favorites, folders where they save their favorite T codes or the ones that they most use. You could have SAP standard drop down lists like this, where you just have a bunch of subfolders, depending what you click in here, you might get to the right place or may not. You may have to, depending on your job function, go to a variety of these things. But is there a way to actually streamline only the WM or warehouse relevant transactions just simply off your menu path like this? And the answer is obviously yes. So here's the standard out of the box menu path, but if you just go into your bar here and enter T code LLVS, it transformed my menu path to only WM stuff. So here's the master data folder, which now is all relevant only to WM. I have my bin level detail in there, I can look at any material, I can make changes, so on and so forth. You could look at a display from a material master setting. You can look at all of your TRs, TOs, so on and so forth. You know that these are only in the actual warehouse. These are really the only T codes that you need to operate within WM. So it's a cool little toolbar. Let's say I don't like this and I want to go back to the main menu path. Another little trick, if you go right back here into your menu bar and enter SAP1, it resets it right back to the standard menu path of all of your menu tree of all of your WM transactions, so on, so forth, you get the standard LE stuff. Just different ways to set up your home screen, your default settings. But again, for the sake of just WM, LLVS gives you just the WM relevant transactions. Welcome back. In this demo, we've covered how switching to easy access warehouse management. Streamlines and simplifies your WM transactions. And may even replace or subsidize your WM favorites folder. Well, thank you Steve, much appreciated. This is great stuff, right? It's something I can certainly see would be a useful to someone who touches warehouse transactions. So folks, if you want to learn more about this video and other related videos, please check out our video catalog and of course, if you have a specific question or just a general one please feel free to submit it below.

Procurement & MRP

DM; IBP; OTC; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I am Martin, and in this video we will focus on a very important topic exception management prioritization. Organizations that become exception minded increase supply chain performance significantly, however the order in which we address these exceptions or critical issues is key for us to maximize supply chain performance. Kristie, this is a good topic, help us out, yeah. Absolutely Martin. Exception management prioritization via the exception monitor is a game-changing, dare I say, life-changing feature when used correctly and in this demonstration I'm going to focus on three critical things. The first is standard definitions of the exception message assignment to exception message group. Tips for how to prioritize a material planner's review of their exception messages. And lastly, how to respond to the prioritization. It's about way more than that particular exception message. Here we are at our exception monitor and what I want to do now is give you some tips and tricks in terms of how to prioritize your exception messages. So I imagine that this is one of the hardest things to get started with everybody naturally gravitates towards the exception message group 7 exception messages, 10, 15, and 20. But I want to highlight some other ones for you today. So if you're ever looking for the list, it's really easy to get to it, you just click on the little information icon next to exception groups and it's going to pop in and give you the description. So this is the standard setup for exception message groups and exception messages. Some of you clicking on the video or the demo today may have thought we were going to talk about renumbering these and that's actually not what we would suggest. We would suggest you keep the standard settings for the exception message groups and the associated exception messages and that's because they're already grouped in a logical fashion. So the things that are related to one another are sitting in the same exception message group and that actually helps you move through the prioritization of the exception messages. So when you're getting started, the first thing that you're dealing with is really your housekeeping, that is really important to tackle, so you want to do a lot of that cleanup because it's going to help to lower the water level on your exception messages. The second most important thing is actually going to be this guy down here at the bottom. This is your exception message group 8, exception message 98, and it says abnormal end of materials planning. And this exception message is so critical because it tells us if we've had any terminations in our MRP run. You will not see these in MD07, these will only show up for you for MD06. So for those of us who've moved on to MRP Live and S/4, you're going to get this type of messaging in a different way. But for those of us who are still on ECC or who are either not running MRP Live or running MRP Live but also have materials that are being planned in the old way as well you would want to make sure that you're monitoring this. What this means is that we have passed the baton to MRP and it's not able to complete it's run for us. So it's being a good friend, it's being a good communicator and saying, hey, I wasn't able to move through this process and so it's letting us know. So we want to make sure that we're tackling that, so housekeeping and terminations. The next thing that we want to start to focus on is anything that lets us know that we are late. So most critically, the mad hatter messages, this is really around how do we plan our process according to schedule. We know that we're already behind if we're getting an exception message 30 and there's a whole video that is dedicated to that. So we need to make sure that we're getting after that. From here, the exception messages start to break out into a couple of different categories. The first is what we're most familiar with and that's the stuff that's happening in exception Message group 7. These are your realignment messages, so reschedule in, so expediting trying to move that supply element forward, de-expediting, moving it out equally critical because that helps us to free up capacity or time at the supplier. Make sure that we're making the best use of inventory, materials, labor, freight costs, all of those good things, canceling our processes. So if we have something that's out there that's in excessive demand, we have the chance for cost avoidance. And then we have things that are letting us know if we have a stocking issue. So we've got excess stock in an individual statement that needs to be dealt with. We don't have demand but it was allocated specifically for our particular need. We have situations where our stock has fallen below our safety stock level or we've exceeded the amount that we're able to purchase from a particular supplier, produce on a particular manufacturing line because we're in excess of our quota. We have master data related items that let us know that we don't have a BOM or a routing situation, we're missing some information in terms of how our schedule is being produced. We have informational messages that let us know if we are in a situation where we have an order that has a start date in the past or is finished date in the past and needs to be covered. So it's a lot of different exception messages, but the ideas that you move through them in a synergistic way helps make the process of evaluating our demand and supply situation much easier. But the most important thing, the very most important thing when we're in and we're doing exception monitoring, is that when we go into an item we don't just address a specific exception message. The purpose of exception messages and prioritizing them is to identify the materials that have the most urgent planning situations. While we have that material open, we're going to go through and evaluate the entire planning situation and make sure that we take care of all of the exception messages that are out there so that when we're done with that material review, we've cleaned it up as much as we possibly can and when we were doing so, we really think about the master data that is informing that MRP run to make sure that we're getting the best possible results with the least amount of manual intervention. Every time we manually intervene, it's going to cause exceptions to occur because we're inserting a process issue into the work that we're doing. So we start to see that integration breakdown and we want to make sure that we're eliminating that as much as possible from the process. So it may seem like there's a lot of exception message groups and a lot of exception message numbers to work through. It may feel like you're trying to find needles in haystacks in terms of how you should prioritize, but the thing to know is that there is a logical way to move through this and if you attack the planning situation and not the exception message you're going to find you're getting far further along the line and if you're really working on your housekeeping and getting your master data rules in place, you're going to start to drastically reduce the amount of exception messages and it's going to become more and more manageable as you develop that daily habit of getting in and doing that review. For more on this, you can definitely look at some of our blogs and and webinars on our website, we have a lot of content around how to prioritize exception messages and reach out to us for conversation around this because it's a complex topic and we can give you some more information, but know that it is possible and as you're thinking through it and you're thinking about your planning situations, make sure that you're attacking the planning situation, not just the exception message, and use the exception messages to help you prioritize the review of your materials. Do that and you'll find it's far more effective and you'll be able to get in the daily habit, it'll become manageable and something that you can attack and tackle every day. So in summary we have covered how the exception management prioritization allows you as a buyer or planner to. Prioritize materials and their planning situations for review and intervention based on the criticality of that particular exception message that's occurring. To develop a manageable daily habit that you can tackle in the day-to-day every day. And begin with some foundational cleanup via housekeeping and addressing terminations to get better signal from the exception messages MRP is trying to share with you. Yep, so true Kristie, thank you so much. I can see without proper prioritization of these exceptions how overwhelming they could be and how it could impact the supply chain performance and of course the human struggle hours. So if you would like to know more about this topic and others please go and visit our video catalog and of course if you can't find what you're looking for please put on a recommendation we'll try and build one for you.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin and in this video will focus on SAP exception message 05. This exception message indicates that we are behind in our process and will need to evaluate whether we can get our orders in motion in time to satisfy the demand. That's a big deal, so Kristie tell us more. First, how to find an exception message group 1 Exception message number 05 via the exception monitor. What exception message 05 means and how to diagnose the planning situation in MD04 or MD05. Lastly, a few considerations for when we're thinking through the options to resolve the planning situation at hand. All right, let's see if we can find some of those exception message number 5. So this is part of exception message group 1, and the first thing that I'm going to do is I'm going to go ahead and pull in my particular product portfolio. In this case it's MRP controller 099, and I'll hit enter to let SAP go gather those statistics for me and it will ask me if I'd like to set up the list beforehand, I'd like to say yes to that. And here's what we're working with today in our collective exception monitor and I'm going to go ahead and click on the binoculars to find the particular materials in question. So I want to find materials that specifically have that exception message number 5 associated with them and that's part of our exception message group 1. So you can see here I've clicked on find exceptions, which takes me into the list for all the different exception messages I have to work with today. Not too bad, I've been keeping up with things, so this one is the opening date in the past, and I can see I have two of them here and that may be on one material or two materials, could be either one. Let's go ahead and click on find exception and it's going to go out and it's going to look for me in the list. And it turns out it is just the one material. Oh, and this one is red, so I definitely want to take a look and see what is happening here. I could double click on the material or click on the selected stock requirements list that would bring in more than one material if I had several to review, and now I'm going to look for the ones that have the exception message number 5, and what the system is going to do for me is it's going to highlight in blue what I've asked it to be searching for and you can see it's down here. I've got these two exception message number 5's and what this means is that we had an opening date in the past, and so if I look up here in order to get this party started on time, I needed to start working with this particular planned order around the 23rd of February and today is the 26th so I'm three days into my period where I needed to be working through my production planning process to evaluate and level and finite schedule this thing so that I can actually release it on March 2nd so that it can be produced in time. So that's the desire there is that it needs to get updated so that we can get it in process a little bit faster. I don't have a time machine, so obviously that can't happen, but what SAP is letting me know is about how far into my timeline I am so that I can think about what I can do to potentially expedite and bring this forward. And in this particular case, I can see I already have several production orders that are out there that are scheduled to go out to the floor this week that are already in flight. So I could look at this and see if maybe I can add some additional quantities if we can make these orders a little bit bigger or if they're fixed size of 10, if the floor could handle a few extra ones, but I'll have to go through and look at my material and my capacity from both a machine and a labor perspective and then if that's okay, then I can start working through getting these expedited. And as long as I'm in here, I want to look at the entire planning situation for this material and I can also see I've got one of those exception message number 30's, which means we're already late, so this was actually needed to satisfy the safety stock on 2/26, so I'm well below where I should be. Based on my current firm plan, I'll be at negative 18 pieces, so it's really encouraging me to get this started a little sooner. I do know because I've got these 50 pieces of safety stock, I am still somewhat protected, I will have enough inventory to ship to customer orders according to my forecast, but I don't have that additional safety buffer to protect me from any additional demand that comes in. So exception message number 50 lets me know that I'm behind and I'm eating into my process, I violated my opening date, which is when I needed to get everything started in order to make sure that I followed my dispatching and got the order released to the floor on time so that they can do what they need to do in order to be able to deliver this in time to meet our current forecast. So that's exception message number 5. So in summary, we have covered how exception message 05 allows you to. Recognize when we are eating into our process lead time and may need to intervene to recover the time. Quickly focus on the criticality of the situation and evaluate options to get things back on track. And review the entire planning situation for a material rather than focusing on exception message 05 in isolation in order to ensure that the material is set up to live its best life through the full planning horizon. Thanks Kristie. Monitoring and reacting to this exception message helps right the ship before the situation becomes completely dire and work the plan to resolve it. If you want to know more about how to get the most of your SAP system please check in with our other videos and of course submit any suggestions if you have a burning question.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin and in this video we're going to focus on SAP's exception message 06. This exception message indicates that an element has a start date in the past, basically we're behind. So Kristie, how would you tell us a little bit about what that means for us if we're behind? Absolutely Martin. Exception message 06 provides powerful information when used correctly and in this demonstration I'm going to focus on three things. First of all how to find materials that have one or more occurrences of this exception message group 2 exception message 06. How to evaluate the planning situation and materials that currently have supply elements with the start date in the past. And how do we deal with that messy situation which a lot of us might find that we're dealing with regularly when we're first getting started. Okay, let's see if we can go in and find some items that have start dates in the past, this means the process should already be underway if we want to be able to execute that supply on time. So to find this I'm going to go into the binoculars, I'm going to say find and I'm looking for exception message group two, exception message 06 and that says, start date in the past and you can see I have 33 occurrences of this particular exception message across all the materials that I'm looking at. I'm go ahead and say find exceptions and it's going to look in the list for me and find all the materials that have this particular issue. So it's going to search and then once that returns, we can go in and it will highlight in blue the items that have this particular situation. Now you can see there's 13 materials that popped up down in the lower left hand corner of my screen. 13 materials were selected out of the entire list that have this particular problem and I'm going to go ahead and click on it and we're going to see some messy things here because my system is still pretty dirty, it needs some help in getting cleaned up. So this first item, you can see I have 15 units on hand but I'm meant to be carrying a safety stock of 22 pieces and so there's a purchase requisition that has been generated out here and based on the lead time, the soonest that this could get in to us is going to be on the 24th of February and so in order to get it here on the 24th I would've had to start the process yesterday. So you can see I'm getting this exception message group 06 it's highlighted for me in blue and if I double click on it you're going to see down at the bottom, it'll say the start date is in the past and then in this column here, it tells me the date that I was meant to start this process on and if I double click on the element itself, I'll see all those dates. So in order to deliver on the 24th, I actually need to release this to the supplier on the 7th, so I'm past that date now and so it's letting me know that there's a problem. Let's look at one more example, maybe a messier planning situation. So you can see here this particular item has a bunch of things going on with it and needs some housekeeping. There's an old firm planned element, we don't ever want to see that, we, want to only see purchase requisitions in the future and not in the past. It's got a purchase order out there that's got a finished date in the past so that's outdated and needs to be cleaned up and you can see some other purchase requisitions that are hanging out and most importantly down here at the bottom you'll see the exception message highlighted in blue. This is the one where that start and release date is in the past, now all of these above have that same situation but their finished date is also in the past. If I was in here and I was attacking this exception message 06, I would want to clean up this entire planning situation. So the first thing that I would do is I would go in and run MRP to clean up and bring up to date all of my plan elements and then I would go in and clean up my firm elements that require some attention in order to bring these things back up in alignment and into a good position. So I'm going to go ahead and do that right now and it's going to take care of a chunk, I'm going to let MRP do some of the work for me. Go ahead and execute that and I might be running MD03 so I was running single level and I'm going to go ahead and hit refresh and you'll see that it's gone through and it did a lot of cleanup for me already. So it brought the dates more current, I just now need to go in and deal with these old firmed elements that need some love and attention and that will bring things back into alignment. So MRP is taken care of a lot of that work for me. So we want to make sure we always go after those things that say start date in the past because unless you are Superman or you have a time machine, unfortunately we can't go back in time to get things done. So in order to keep the system up to date and current, we want to make sure that we go in and clean those puppies up and if we have production that has fallen behind and relate in a release to our suppliers, it's only fair to both our suppliers and the manufacturing floor that we're going in and getting those things cleaned up and expedited and alerting them that we have an abnormal condition where we're asking them to do something faster than what was originally agreed to. So communicate, communicate, communicate and that exception message is one of the ways that we need to know which things need to be tackled and communicated effectively. Very helpful and easy to find so really good to make this part of your daily habits and it will help you to get things in on time. So in summary, we have covered exception message 06 and how it allows us to. Identify when we are behind. Communicate effectively with our partners, suppliers, or the shop floor to evaluate our options. And lastly, evaluate and resolve messy situations that may surround this exception message. Yeah. Thank you Kristie. I can see how by monitoring and reacting to these exceptions efficiently and effectively will prevent us from falling behind and not meeting our supply chain needs. So if you want to learn more about how to get the most out of your SAP system please check out our video catalog and of course if you don't find what you're looking for please submit a suggestion below.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin and in this video we are going to focus on SAP exception message 07. One of my favorites, frankly, because this is a, a really important message, this exception lets us know when we have a finished date in the past. This means we are behind to our plan and may be making a promise we cannot. Kristie, tell us more. Absolutely Martin. Exception Message group 3 exception message 07 provides a planner, a scheduler, or a buyer with powerful intelligence when used correctly and in this demonstration I'm going to focus on three things. The first is how to identify materials that have one or more exception message group 3 exception message 07's. The second is how to review the supply elements that have this exception message and provide some thoughts on how we might follow up. And the third is how housekeeping and this exception message are related to one another. All right, let's see if we can find some of those exception message group 3's exception number 7. Those are items that have the finished date in the past. So I'm going to go to the binoculars here from my exception monitoring screen, and I'm going to go to find exceptions. Now, when you were first getting started, you're likely to have a lot of these and the further you get on your housekeeping journey of going in and getting things cleaned up by date, the less of these you will have. So at first when we're getting started, we do a lot of housekeeping and we work that in different buckets. So the oldest stuff that we know there's no other activity on, we work on closing those items out and then the newer pieces that we currently know a lot about what's going on with them, we can go in and clean those up. What really gets difficult is the middle, so the stuff that maybe is closed, maybe isn't, may have more activity, may still be coming, but in either case, this exception message is really important because it lets us know that we have an item that was expected to be in or complete and isn't yet. And the problem with that is that both MRP and ATP are expecting this item to be available any moment now. So we need to go in and update it with the most current information. You can see here, it stops counting at 99, so I know I have more than 99 occurrences, and we're going to see a huge number because I've run this across my entire organization and I'd be surprised if it's not over a thousand because I'm just started working through this. So overall, I think I've got about 25,000 materials in my exception monitoring list and I'm going to let that return. Yeah, of those about 867 have housekeeping issues where the finish date is in the past and I am getting that exception message group 3 exception message number 7. Let's go in and take a look at one particular item, I want to show you an example where, It's got some recent activity that suggests that, you know, we're in that kind of muddy middle where we need to find out exactly what's going on. I'm going to go in and pull this guy. Okay, so it found that for me in the list, you can go ahead and double click in here and it's going to bring me into the planning situation. Now you'll note that we have a safety stock of 50 pieces and we have nothing on hand and then we have three orders that all have finished dates in the past, so they were all due in December, and then we jump forward to something current that's actually due next week, so a production order that is actually scheduled for the future. So for these guys that all have this exception, message number 7, I'm going to double click and it's going to show me down at the bottom what that description is. So finish date in the past and I could bring up the entire list if I wanted to by clicking into that box, you'll see the little selection box pop up there. If I click on it, it will show me all the exception messages in their description but if I go in here because that safety stock is due immediately, I'm going to bet I have another exception message that's hiding. So let me go ahead and double click on this last one here. Yep, sure enough, so I've got finished date in the past, and then I can see that once I resolve that, It's going to ask me to bring the process forward because I need to have that replenished immediately for that, safety stock and then to be in a good position for our upcoming supply. Now, because this is a production order, there's a few things that I need to check, I need to go through and validate a, we didn't just miss a confirmation, so this order has legitimately not been produced, always good to triple verify that, and then the second thing is I need to go through and evaluate when it can realistically be worked into the production schedule. So I'm going to look and see when I have materials, labor and capacity available to execute this and I might also see if I can adjust the existing order that is scheduled for next week to a higher quantity. So depending on what my lot sizing rules, I would go through and do that evaluation, but my goal is to bring this current and put a realistic date for execution on here so that MRP and ATP can properly plan for me going forward. This is a lot of work at first, and then as we get caught up, it becomes easier and easier and easier as we make it a daily habit and we work on resolving these messages, but so important to go in and attack these and make sure that the information in the system is up to date and correct so that we can accurately make promises and plan appropriately to supply the demand. Great tool to have and easy to go in and find the elements that need tending to. So in summary we have covered how exception message group 3 exception message 07 will. Allow you to clean up the system so that MRP and ATP can work effectively together. Identifying materials once clean that are behind and not available as planned. And review and clean up the planning situation in total. Thanks Kristie. Exception message 7 is a critical message for sure and needs attention otherwise we will be disappointing our internal and external customers due to material unavailability. So if you want to learn anything more about exception management, exception messages, or even how to get the most of SAP system please check out our video catalog and of course if you need to submit a request or suggestion please do so.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

Best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we will focus on SAP's exception message 10. This exception message indicates that our supply chain is out of balance with our demand plan and we need to reschedule replenishment in to meet the demand, our supply is coming in too late. In essence, we need to expedite. Kristie, talk to us about Message 10. You bet Martin. Exception message group 7 exception message 10 provides us with powerful recommendations when you used correctly. Now this is the exception message that we all are probably most familiar with, and in this demonstration I'm going to focus on three key things. First of all, how to quickly find materials that have one or more exception message group 7, exception message 10's associated with them. Also how to evaluate the planning situation and the information that's provided. And lastly, how we might address the planning situation that is occurring on the materials that have this particular exception message. As planners and buyers we see this one a lot, so it's really important to understand what's happening. Okay, so we're headed over to SAP and we're going to go to one of our exception monitors. You may be using MD06 or MD07. I'm headed to MD07 today. I want to see what's happening at this moment in time. MD06 would show me my results as of my last MRP run, and I'm going to run this wide open for my plant. Now you are likely running this just for your MRP controller and that is just fine. I don't have very many materials, so I want to give us the best chance of locating some items that have exception message group 7 exception message 10's today. I am going to say set up lists beforehand, this is very important, and this is the part that always takes a moment. We make the joke, it's time to go make your cup of coffee or tea and then come right back and SAP will have return your results for you, but it's actually pretty incredible when you think about the amount of data that it's crunching through. So what's happening now in the background is, we're getting the population of our exception monitor, so it's calculating for us our red, yellow, and green lights, it's looking at our current days of supply as well as our days of supply as of our first and second goods receipt, it's enumerating out for us which exception message groups we have in the number of occurrences per material, and it's going in and collecting all the master data that backs that, as well as some of the other statistics. So it's actually pretty powerful that it comes back that quickly. It's a lot of work that's going on in the background that we don't have to do ourselves. So to find a particular exception message, we want to go to the binoculars. Okay, that's going to allow us to find, I'm going to go ahead and click on that and again it's going to prompt me and ask me if I had a large group of materials, if I want to update statistics. So it's going to go ahead and do that for me in the background and what it's doing is it's figuring out each of the exception messages that we can find in this particular population and materials, as well as the different r MRP elements that are sitting out here. So if I came in here, you'll notice that we have about 45 different exception messages that could potentially be on this list. I've got a small subset of that that apply to these 6,300 materials, and the one I'm after right now, my exception message group 7 exception message 10's are right here. I'm going to go ahead and select that line so that it can search the list and identify the materials that have this particular condition. Okay, I'm going to prioritize those for review today because on these I know I need to bring my process forward or I need to expedite something because my supply is out of balance with my demand. I'm going to go ahead and say find exceptions, and you'll see here I have two materials that were selected at found two for me in this list that have this particular condition. From here, I can click on the selected stock requirements list, or I could double click on the material and it will bring me into the stock requirements list for this particular item. Now we know that we need to expedite, our plan is out of alignment, you can see we actually have 0 in stock, and this is worrisome because we're supposed to be maintaining a safety stock level of 50 pieces. You can see here we have some independent requirements or some forecast that's out here, as well as some planned production and when we get to our second production order, this is where we start to see those exception message group 10's, because that's what we ask SAP to look for. It's returning that particular exception message number for us in blue it's highlighting it because that's the condition we asked it to search for. And it's actually asking us if we can bring this forward to right now because that safety stock is always asked to be replenished immediately, and you can see here it's going to provide us with a rescheduling date. So if we go out across our horizon based on our current plan, we have some orders out in the future that also need to be brought in this guy right here that's planned for just after the first of the year is actually needed on December 12th. So it's giving us that information, and that's great because we don't have to do any calculations in terms of the dates or the quantities that something is needed, and it's giving us the information on when that order would've needed to start. So on the 22nd, in order to be complete on the 28th, or in this case, if I click on this one down here for the 12th, it would need to be brought forward to deliver on the 12th of December rather than the 2nd of January. So really nice helpful tool there to help us know what we need and by when, and you'll notice a little further out, there is a planned element that's also needed this planned order in order to bring our supply and demand back in balance and resolve this negative quantity, and this one actually has an exception message 30 because we need to first start by actually getting it from planned into schedule and then from there we can work on expediting as necessary. So this would get us into the review process to figure out if we had the necessary capacity available, if we had the necessary materials to supply the manufacturing floor, and then if both of those conditions existed, then we would be able to get that into the schedule quite easily if we had constraints in either materials, labor or machine capacity, then further conversations would need to happen, but SAP is helping us to understand what it is that's needed and by when. And this is our early warning system. So in summary, we have covered how exception message Group 7 exception message 10'S will allow you to. Quickly identify when supply is coming in too late to meet the demand. Know how many are needed and by when. And lastly, evaluate the planning situation to determine what actions can be taken. One note, when we're getting our orders placed it's a good practice to always err on the side of placing the order at lead time and then work to improve the plan unless the customer requires a specific lead time for the order to be valid, in which case we need to speak to our counterparts in sales or customer service. What's the best thing about supply chain? It's an integrated discipline, we get by with a little help from our friends. It's also the most challenging piece all that integration. Thank you Kristie. Monitoring and reacting to these exceptions effectively and efficiently will be critical to ensure we are able to keep meeting the supply chain needs. So if you want to learn more about exception messages and get more out of your SAP system please check out our video log and of course if you have a burning question feel free to submit it.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here and in this video we're going to focus on SAP's exception message 15. This exception message indicates that we need to reschedule our incoming supply out to a later date to align with demand. Often considered not a high priority message, however if not addressed we will carry more inventory for longer periods of time than we need, this impacts cash flow, warehousing costs, et cetera. So, Kristie, tell us more about 15. Sure. Martin exception message roup seven, exception message 15, offers us powerful intelligence when used correctly. This is one of the exception messages that folks are most familiar with. This is one of our realignment messages that helps us to rebalance our plan. In this case we're being told to pump the brakes, that supply is still needed but it's coming in too early. In this demonstration I'm going to focus on three things. Where and how to find materials that have one or more exception message 15s. What SAP or MRP is trying to tell us. And how we can review the planning situation to resolve and realign our plan. Alright, let's talk about these exception message 15s. They're part of exception message group seven, which are the exception messages that help us to know how we should realign our supply in order to meet our demand. So it's going to let us know if we need to move something in or out in this case, if we should cancel or if we need to get moving and get that process in according to schedule. So I'm going to go ahead and click on my binoculars, we're getting really familiar with this by now if you watch some of our other videos and I'll say yes to updating statistics and then I'm going to go in here and find the exception message group seven, exception message number 15 which tells me I need to reschedule out. It's also going to tell me the number of occurrences I have, so I have 9 occurrences of this and I'll say find exceptions and then it's going to tell me how many materials in the list have this particular situation. I've got 8 materials to look at. I'm going to go ahead and click on my selected stock requirements list and I've been in here doing some work this morning already so there's a particular one I want to take a look at. We're going to go to this FG29 and you can see here that we have a process order that is currently set to be available on the 20th of February and we have a customer order. So this is the supply for this demand, this customer order that is requested for March 9th or promised for March 9th. So what I want to do here is consider how I might bring this in line with the customer's requirement and this is really important because for an exception message 15 what you can think about this as is our opportunity to free up capacity. Supply, materials in order to make room for other things or if it's externally procured, if the supplier is trying to allow for some expedite requests, this would be something that we could offer as an opportunity to move something out in order to make room to fit something into the schedule. When I see this exception message, the cool thing about it is it tells me exactly what the date is that I need to reschedule to and if I double click on it down at the bottom left-hand corner of my screen it's going to gimme more detail. So it says, hey you can reschedule this out so your finished date will now be on the 8th of March and that will make your availability the 9th of March for shipment out the door to the customer. So this is the customer's date, here is the material availability date, that's when it's needed by also known as the mad date, the date the customer will be mad if the product is not available and then this is aligning those two things together and giving me all the information that I need. So what I could then do is I could actually go through the scheduling process to clean this up, so depending on what tools you're using, if you're doing finite scheduling you can actually move through that process and go out to your graphical planning board, make that adjustment and get it realigned. If you're not there yet and you're just managing order by order, then you can go in and update the dates in your order so that they're current and then review that impact through capacity evaluation and ensure that you haven't created an overload situation in the week that you're moving it out to. So, but we can go in directly from here and make this edit, I'll go ahead and click on the pencil and I could go in here and just adjust my dates so that they're correct. If you're using finite scheduling though again you can go through your normal production planning process, do your capacity evaluation, then go in the process of leveling to make sure that everything is sequenced properly and delivered nicely to the manufacturing floor. Okay, and then once I've done that, I can refresh my screen and we'll see that everything is back in alignment and move on to my next exception message. So that's how you find and adjust for an exception message 15 in order to de-expedite and free up room in your schedule or free up labor and materials capacity at your supplier in order to be able to meet the customer's needs at the right time. So in summary we have covered. How exception message 15 will allow a buyer or planner to realign their plan based on how much is needed and buy when. Allow SAP to do the math for you and propose quantities and dates. And take advantage of the opportunity to free up resources, capacity, materials, and space by delaying what's not needed in favor of what is needed now. Thanks Kristie, good one. Scheduling out does not always feel like it needs to be addressed but when we are trying to become a world class just in time supply chain rescheduling out is an important as rescheduling in. If you want to learn more about exception message 15 and other exception messages please feel free to look at our video catalog and of course if you can find what you're looking for please submit a suggestion.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi Martin here, and in this video we are going to focus on SAP's exception message 20. The exception message indicates when we have supply coming in that is an excess of our plan for demand. Kristie, that sounds like it could be a problem. Tell us more. Absolutely Martin. Exception message group 7, exception message 20 is a powerful feature when we use it correctly. This is our opportunity for cost avoidance if we legitimately have more supply than demand and it's also a great way to double check if something unusual has occurred and we're missing part of our demand picture. In this demonstration I'm going to focus on three core things. Where and how to find materials that have one or more exception message group 7, exception message 20s associated with them. What a planning situation that has an exception message 20 looks like. And lastly, some considerations for how we might resolve and reconcile the planning for that material. All right, let's go see if we can find some of those cancel messages. So the way we're going to do this is we're in either MD06 or MD07 and I'm going to go ahead and click up on the binoculars here to find, and I'm going to look for that specific exception message number. So these are our 7 20 s that say cancel process and you can see we have a lot of these and at first when you're getting started on your journey to effectively use MRP you may see these pop up a lot, especially if your demand picture is not complete in SAP for MRP to reference. So the other reason this can occur is if usage has dropped off and we're not consuming as fast as we were forecasting to, we might start to see many more of these cancellation messages. This means that, it's not just a matter of rescheduling out, which would be a 15, but these are items where there is no future demand for that particular PO and you can see we have about 24 materials that were selected and we're going to go ahead and click into these and see what is going on. And so you can see down here at the bottom, we have several different schedule lines that are out into the future that are not currently needed in order to be able to meet our current demand picture. So we're over purchasing and so a cancellation message for procurement is an opportunity for cost avoidance and it also helps us in situations where maybe we are constrained in terms of supplier capacity, resources, and or material and so we really want to follow these and have the opportunity to go in and address them and clean them up. So, first of all making sure that we have a complete picture of the demand, but then once we're confident in that then we have an opportunity to go in and get these canceled and cleared. On the production side, it allows us to free up potentially capacity for other items that are a priority. So what I'm going to do is go ahead and go in here, we're going to modify the scheduling agreement. So if this was not yet firmed, then MRP would realign it for us but because these items are indeed fixed, that means that MRP is no longer going to touch. So we would need to come in here and clean these puppies up so that everything is neat and tidy and so I'm going to do that. And the nice thing, because this is a scheduling agreement, I can do several different line items at the same time. So let's say for example, we determined that we could need cancel this entry for 4 and the 2 and the 6 and the 2, I can come in here and balance those out. I'm just going to remove those schedule lines and when I do that you'll see they'll come off of the delivery schedule. I'm going to go ahead and save and it's going to track for me any changes, so no worries there and you can see now I've cleaned up all of my message 20s where I had the opportunity to cancel. Now my next opportunity is for some housekeeping, looks like we have some old order reservations that need to be cleaned up, and then we can realign the rest of the scheduling agreement. Let's take a look at another item here before we're complete. I can see here I've got a bunch of outdated independent requirements, so that's forecast that's out there and I'm going to go ahead and scroll down until I see the items in question and you can see here it's always going to be highlighted for me in blue. So I've got this item down at the bottom, I've got my exception message 20 and I can see I have a firm purchase requisition out there. So in order to close this out what I would do is I would double click on it because I'm not going to convert this into a purchase order beacuse it's not needed. I'm going to go ahead and click on change element, especially beacuse I haven't made a commitment to the supplier yet, it's just a purchase requisition and I'm going to go ahead and click on closed. That's going to close the purchase requisition out for me, I'll hit save and then I'll hit refresh and we'll see that item has disappeared. Let's look at one more and see if we have another situation. So let me go ahead and scroll down, I'm going to use this page down button to help me find the exception message that I'm looking for. Ooh, and this is a really, really, really awful planning situation that needs to be cleaned up and what you can see here is that more than likely I've accidentally run an automatic job and batch job that's gone out and it's firmed in and dispatched these planned orders for me. It's going way, way, way out into the future so that was more than likely not intentional. So I can now go through and I can clean these planned orders out and get them out of the way as well. So several different ways to go in and cancel, if that order has been placed with the supplier released to the manufacturing floor then obviously we need to coordinate with our partners before we go in and we action that cancellation request but we're able to go out and do that and make sure that we are getting those things cleaned up. If we are able to cancel or reduce quantity then that is our cost avoidance and our ability to free up time, space, materials, for the next thing that is needed by our customer, so a really good thing where we can coordinate to do it and certainly on any elements that are planned that have not yet been released to the manufacturing floor or have not yet been released to the supplier, going and cleaned up those planned elements that have been firmed is very important. Really there should be nothing in a planned state like purchase requisition that is sitting out there as a firmed element unless it's going through your release process. But other than that, we really shouldn't see those beacuse we won't allow MRP to do that heavy lifting and continue to realign those planned elements with our schedule as needed as we go through the process, it's a lot less work, it's a lot less clean up for us as we go through. So that's how we go through and resolve some cancel messages. So in summary we have covered. How exception Message 20 allows the buyer or planner to recognize when there's an incoming supply in excess of demand. Think through options for cost avoidance with your partners. And lastly, free up resources, capacity, material, and space for materials that are needed right now. We often hear from planners and buyers that they can't do anything with an exception message 20 because they have already committed to those goods. However, in this increasingly VUCA world that we live in our partners are often also constrained. It is certainly worth the conversation with our suppliers, our sister facilities and our manufacturing floor. Not only is that cost avoidance on the cost to make or procure, but it's also in the cost of what you're not able to get when you need that product right now, and the cost of carrying, or in some cases, writing off that inventory down the road. It's definitely time to negotiate. Okay, that's good to know. I love how this is a perfect example of how we can use the exception message to proactively notify us to do and perform the strategic part of our job, in this case, building strong relationships with partners so we can have these tough conversations later. Okay, so if you want to learn more about how to get the most of your SAP system please check in with other videos and of course if you have a question please feel free to submit it below.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. So today we're going to talk about what SAP exception message 30 means. This video specifically is going to talk about how do we address this very important message. This exception message indicates where we are late in the process, in essence, behind the eight ball already. Kristie, tell us more about this number 30 message. Absolutely Martin. Exception message group 7 exception message 30 is a powerful exception message when used correctly, and you are correct it is one of the most frustrating for folks because we're already late to the party and most of us don't have a time machine yet. I call these the mad hatter messages. So let's get into it, in this demonstration I'm going to focus on three key things. Where and how to find materials that have one or more exception message group 7 exception message 30's. What SAP MRP is trying to tell us. And how we can think through and action this planning scenario. All right, let's go in and take a look at these exception message group 7 exception message 30's. Now, these are one of the more difficult exception messages to deal with because what is essentially telling us is that we're late in the process and so we're going to go through and take a couple of examples and see what SAP is telling us about them. You'll see here I'm already in my stock requirements list. I'm looking at my exception monitor through the collective access, this is MD07. If it was early in the morning, I would start my day by working through the business of the day in MD06. So both are good options. The difference is that this is dynamic and it updates throughout the day versus MD06 which is as of the last time that material was run through MRP. So let's go through and find these materials that have this particular planning situation and what I'm doing here is I'm using the exception message to help me prioritize the review of my materials. You can see I have quite a few here that are in a difficult planning situation, I've got quite a few red lights. So to find this, I'm going to go up and I'm going to click on these binoculars that's going to help us to go through and evaluate where in this list of materials that I have materials that have this particular planning situation. So I'm going to click on find exceptions and here I'm going to go find exception message group 7 exception message 30 plan process according to schedule, and you can see I've got quite a few of these. I have 99 and SAP stops counting at 99, that means that we are so all over the show that it's given up, it can only go out to two digits. So more than likely I have many more than 99 messages out there. I'm going to go ahead and say find exceptions, it's going to locate the materials in the list that have this particular exception message associated with them and it found of those 99 plus exception messages, they're actually occurring on a total of 43 materials. Still quite a few, that's a lot for me to work through, but I'm going to go ahead and pull up the list and start to take a look here, and let's see if we can identify what is going on with these messages. So one of the first things I'm going to do, you may experience this as well, your columns might be a little bit collapsed so I'm going to go ahead and expand them out just so I can clearly see the dates that are involved, and you can see for me here that SAP has actually already highlighted the materials that I want to take a look at. You can see here they have the exception message 30 associated with them. Now I have two others that are also of interest, they have exception message 6's on them so they're actually in a similar planning situation. The difference is they've got multiple exception messages associated with them, and the 30 is just buried. So I want to go through and this has helped me to prioritize this material, I want to look at the planning situation overall. So I can see I have nothing in stock and I have an order for 10 pieces, this order's actually quite old, you may experience this as well. Looks like there's some housekeeping that needs to be done on this particular item and then down below that I can see I have some forecasted demands. So some sales orders we're still expecting to have come in, sales orders, stock transfer orders any type of use of this material that's independent from flowing through the BOM is going to show up here for me because this is a finished good. If it was a component, I might be seeing some order reservations or dependent requirements there that are a result of that BOM explosion in passing that demand from one level to the next. But the exception message 30 is here to tell me that I'm behind in my process, and so if I double click on this, what is going to show me down at the bottom is that I need to plan the process according to the schedule. Well, I don't have a time machine and it's asking for this to be available on the 2nd of January, that's not possible, so what I want to do is I want to go ahead and I want to convert this planned order into a production order once I've gone through my process of making sure it's ready to be converted materials, labor capacity, is all available for me. And then that's going to schedule it out based on its normal lead time. Same thing for a purchase order, if I converted that purchase requisition, it's going to schedule based on that supplier's lead time. This at least gets the process started. Now I know I have an expedite situation, I actually have several orders here that are all needed to be moved up according to my current demand plan, and so I can start to address those and then once they are on order, then I can work on expediting, but what often happens is you'll have this exception message 30. You'll convert based on lead time or based on what the current availability is, and then you'll get an exception message 10 that will help you to know that you need to reschedule that in. All along the way SAP will do the math for us, it's going to let us know what that date needs to be in order to be able to service that demand and it's going to prioritize the orders that are best fit to meet the demand that we have, that is sitting in the past, that we now need to address with this order. So no time machine, so I can't go back in time but what I can do is I can get this in the process. I know that I'm behind and it's letting me know that I need to prioritize these materials in order to be able to handle that demand. Now, the other thing I can do here is reach out to my counterparts in sales support or customer service, and just confirm that the customers does indeed still want this order because it is very old. So go through and do that housekeeping, I'm going to get a better picture, bring those dates in alignment, and we'll get this party started and start to bring inventory in at the right time and the right place. So in summary we have covered how exception Message 30 allows you to. Be able to recognize when you have a severe planning situation where you are behind to demand. Get orders in motion in many cases at full lead time. And work through the plan and pre-flight checks for, to expedite or improve to the best possible date. When we talk about the other alignment messages that allow us to reschedule out or cancel, these are the types of planning situations we're trying to create room for, and many of us when we're first getting started have a lot of these. So it can be frustrating but it is very workable and we'll get better over time. Thank you. Definitely a high product exception message to attend to. So if you want to learn more about exception messages and of course get the most of your SAP system please check out our other videos and if you have any questions please feel free to submit them below.

Procurement & MRP

IBP; P2P; PTM

MD04; MD05; MD06; MD07

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, it's Martin here, and in this video we are going to focus on SAP's exception message 96. One of my favorites, frankly, this exception message indicates where we have breached our safety stock level. So Kristie, tell us how big a deal this really is. Absolutely Martin. Exception message group 6 exception message 96 offers us powerful information when used correctly and in this demonstration I'm going to focus on three key things. First of all, where and how to find materials that have exception message group 6 exception message 96's. Second, how safety stock is viewed by SAP and MRP. And lastly, ways we can think about how to react to and resolve the planning situations with materials with an exception message 96. All right, let's see if we can go find some of those exception message group 6 exception message 96's that let us know that we've breached our safety stock level. I'm going to head over to MD07, this is the collective view for the stock requirements list or MD04 and I'm going to go ahead and run this for my whole plant. You're likely to run this for your particular MRP controller number, you can see it's prompting me to do that here, but I have only a few materials to worry about today. I always want to say yes to setting up lists beforehand that allows SAP to go out and collect all of the statistics for us so that we can use the find feature in order to find our exception message group 6 exception message number 96's. Now if you're ever not sure how to determine what the exception message, group number, or exception message number means, you can always click on this information button. It will take you in and give you the description for the particular exception message group. There's eight of them and exception message numbers and there's about 45 of those. So there's a good description here that lets you know, in this case, we're looking for 96,s stock has fallen below our safety stock level. That's our early warning system to let us know that we are below the designated buffer that we're trying to use to protect us against variability and volatility. Now to find this, I'm clicking on the binoculars and then I am clicking on update statistics so that it gets the information necessary to go in and find the particular materials with this condition in the list. Okay, so it's searching through all of those 270 materials and it's telling me that out of all of those, there are 9 that have occurrences of exception message group 6 exception message 96. And I'm going to go ahead and select that and then click on find exceptions. It will go through the list and find those 9 materials, and then I'll click on the selected stock requirements list to display it. I'm going to go ahead and turn on my overview tree because there's one material in particular I want to take a look at here, but what this does is generate my work list so you can see the 9 materials in question. I'm headed to QM001 and you can see here I'm meant to have 145 pieces of safety stock, there's my exception message number, anytime SAP finds something for us it highlights it for us in blue. So with the 14 pieces I have on hand, less my safety stock of 145, I am a negative value of 131 pieces. So what does my replenishment plan look like right now? Well, the good news is I have 30 pieces on hand that's sitting in QM-lot due to come off of inspection today, so hopefully I'll get those, that'll help a little bit. Following that though, I have 1 piece that's not due until the beginning of December. I'm going to check and make sure that's still real because it looks like 1 piece might be a straggler. After that I don't have anything until mid-December, that's 30 pieces, and then I have an additional good news, 30 pieces coming in on purchase order, that's going to take me to negative 40. So at that point, if I take 1 45 minus 40, I'll have 105 pieces on hand. After that, I have a planned order that hasn't been converted into a purchase requisition yet, and you can see SAP is encouraging me to do that and to try to get this on hand as quickly as possible. Safety stock always shows up as immediate demand, so it's going to recommend to you for rescheduling that you bring it in as quickly as possible, and because safety stock is meant to protect us against volatility and variability based on whatever that situation is, then you would evaluate what kind of actions or activities you might pursue in order to be able to bring that in more quickly and to deal with any type of associated costs with doing so. Now, what is concerning about this, as you can see, we have forecast out here for every month, but there is nothing left for December, which likely means we've oversold our forecast. We are in negative state below our safety stock, and we do not have enough on order to replenish this. So we need to take some actions here in order to get our plan to be whole and this exception message 96 will persist until we have sufficient stock back on hand. That's how SAP can help us to identify which materials need review, and also to help us see what the current replenishment plan is in order to supply that demand, as well as recommending what dates or quantities we need in order to be able to bring us back to a situation where we are in balance with our supply to meet our demand. So in summary we have covered how exception message 96 will allow you to. Identify materials that have eaten into their protection from volatility and variability. Work through and resolve the planning situation for that material. And lastly, provide an early warning system to help us take action and avoid stockouts before they happen. One other thing to note. It is critically important that we review our safety stock performance on an ongoing basis. This exception message is only helpful if the buffer is the right size for the rate of consumption versus the protection we are looking for and should especially be reviewed both seasonally and as our materials mature through their life cycle. So true, thanks Kristie. This message is critical when using safety stock as an inventory strategy. For folks that do use safety stock as a strategy please feel free to watch our safety stock videos as well. So if you want to know more about how to get the most out of your SAP system please check out our other videos and of course if you have a burning question please feel free to submit below.

Contract & Supplier Management

DM; P2P

MD04; ME57; ME21N; ME01

Hello and welcome future supply chain experts. Martin here. And today we're going to explore how we can tap into the untapped potential of your SAP system. Okay, so let's get started. In this video, we're going to explore how to resolve a common exception in the procurement process, dealing with the requisition that has no source assignment, and where possible, resolving it for the longterm. Peyton, why don't you tell us more about this particular issue and explain to us about how to resolve these exceptions in source determination. Definitely, Martin. This is a good example of if you know, you know, how great it is to be able to use automatic source determination. So step one, we're going to go in and see how we can easily tell if we're getting a source assigned in the MRP run. Then, we're going to look at the results of the tool that will tell us if we're missing sources. Show how to assign a source manually, and then remind everyone about a key underpinning to source determination, the source list. Be the right kind of lazy and fix it once. So it works the next many times. Let's go in and take a look. Now let's dive in to finding whether or not a source has been assigned for a particular material, and also a little bit about source determination in general. So I've got a test material here, which is GTS-1400-710, and I'm going to look at it in the MD04 view to take a look at how you might be able to see if a source is assigned for a material from that view. So if we hit enter it will bring us here to this lovely demand picture. And if we hit the vendor button, now I have two columns with the vendor number and the vendor name that tells me that this is the source that's designated for this particular material. And in this case, I have a quota arrangement set up for this material, and so it's giving me the sources based on that quota arrangement and based on any outline agreements I may have assigned in the source list. However, if I look at this material, same material but dash 705, and I hit my vendor button, It tells me there's no vendor and that's because we haven't assigned a source for this material and designated it as fixed in the system. So how do we work with materials that may not have a source assigned? We can do that using the ME57 and so I'll go to the ME57 transaction. I have my purchasing group which is 002. My scope of list is A. The plant for me is 1,000. Those are the items I need in order to see those unassigned purchase requisitions under my buyer code. I can also run it by release date, so I can make sure that I put in, I only want to see things that are due for release today and before, and I'll execute that. So you can see here the GTS-1400-705 is on my ME57, it needs to be ordered, in order to assign it to a supplier, I can hit this assign manually button after I check the checkbox right here. And so that's what we'll do. And we want to put in our vendor number here. For me, it's going to be 2007. It asks me if the delivery date can be met because the delivery date is in the past. We can fix that in a minute. And it pulls in that info record for me, and I hit assign source of supply, go to my Assignments, and there's my without outline agreement, the 2007, I can double click on that. I've got Order Type NB, and hit enter, and now it brings me here, and I'm able to highlight the Open Requisition, hit the adopt button and now I have a purchase order for the requisition with the supplier assigned through the manual assignment in ME57. But if I know I'm going to order it from supplier 2007 every time, then I can use the source list in order to make sure that next time the source is assigned and I don't have to do a manual assignment over and over again when I know that I'm going to order it from 2007. And the way that we do that is we go to ME01 which is Maintain the Source List. My material is already in here from the previous transaction, and the plan is correct. Source lists are plant specific, so you'll have to put that plan in down there with your material. I'll hit enter, and I can see here that no source has ever been assigned for this particular material and so I'm going to do that now to save myself time in the future for the next time this material comes up. And so I'm going to put in today's date as the valid from date to make sure that I'm checking on my suppliers and evaluating how suppliers are doing, I'm going to let the end date be 12/31/2024, I'm going to put in my vendor, my purchase org, and I'll hit enter there. I can tell it here if I want that to be the fixed vendor every time that this comes up for order, and I do. And the way that I make it MRP relevant is by putting a 1 here, you can see the drop down, makes it relevant to MRP and gives me purchase reqs. And once I save that, the next time the system generates a purchase requisition for this part, it will automatically assign it to vendor 2007 through source determination. And so here we've looked at how we can go into MD04, we can see if a vendor has been assigned to a particular material just by using the vendor button. We can go into ME57 to do that manual assignment for things that we need to order that don't have a supplier designated and then to prevent having to do that again in the future, when we can, we can go into the source list, designate that vendor as the source, make it relevant to MRP and now we've saved ourselves time in the future. So all, in summary. Today we took a look at how to monitor for purchase requisitions with no source assigned. Then we reminded everyone of how the source list supports efficient flow of sourcing information and how we can use this to avoid Groundhog's Day when the next purchase requisition comes out. The last thing I'll mention today is that source assignment can happen even in a multi source environment. For more on that, check out our videos on quota arrangements. Thanks, Peyton. That was great. I think in the moment, it often feels fast as you just fix it manually. We're in a time crunch and we just want to get it done. But by fixing the underlying master data, assuming there's a rule we can apply, we can save time to prevent this error in the long run. Thanks again for sharing. Hey folks, if you want to know more about this particular topic, master data, lead times, etc, please check out our video catalog. And of course, if you have a specific question, feel free to ask the chatbot.

Demand & Supply Planning

MM; PP; SD

MD04; MB52; MMBE

The best way to learn is by doing, welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, Martin here. And in this video, we'll be focusing on the tools SAP provides to help us identify stock stranded on a customer order. These tools in SAP help us to identify inventory that is at our customer without a current plan for use. This is very important so that we can redeploy the inventory to the business and get the best advantage out of our inventory and investment. So, Kristie, tell us a little bit about how SAP deals with excess customer stock. Absolutely, Martin. So when we talk about Exception Message Group 6, Exception Message 26, and we talk about Stock that is reserved for a customer order. That stock is stuck. It's held at ransom because it was produced for special use. So it sits there as though it's attached to the customer order, even if there's no longer a sales order that is open to consume it. So it's really important that we don't leave that inventory stranded. So what we're going to do in today's demo is we'll walk through how to identify these situations. We'll talk through some of the different reasons why this can happen. And also what you can do to try to get them resolved. It's very important that no inventory gets left behind, so we want to make sure that we're cleaning this up on a regular basis. Alright, let's talk about how to find stranded stock in SAP. So there's a couple of different places that we can look for this. The one we're going to highlight today is actually being able to find this via exceptions. So you'll see I'm in here, I'm in my exception monitor. So this is MD07, it's associated with my stock requirements list, so it's the collective view of that. And I'm going to go up here to the binoculars and I'll click on find. Yes, I want to update statistics so I get the most current information, otherwise it's going to come back through and it will just list everything without the actual numbers and I really want to be able to see that. And the exception message I'm looking for here is exception message group 6, exception message 26. This is excess stock in an individual segment. This means that there's inventory that is sitting in a specific bucket, and it's not accessible to other spots. So let's say, for example, it was stuck at a subcontractor, in this case, we're going to look at examples where it is in a customer specific stock, so it was supposed to be tied to a sales order, and there is product that is in excess of what that sales order requires. I have 23 occurrences of this, and I'm going to go ahead and say find exceptions, and there's a variety of things that can cause this to happen and a variety of different places where it can get stuck. Today's just an example of how to go through and find these. So you can see I have my material list on the left hand side, these are all the materials where there is inventory that is sitting in excess of demand in a particular location, and I'm going to go through and just grab a couple of these to take a peek at. Let's look at this guy right here AM2-520, and what you'll see here is down at the bottom, I have my Exception Message 26, SAP is always going to highlight for me in blue what it is that it's found that's related to my search. And I just have a piece that's left over, and this particular sales order has already been shipped, but we have an additional piece that was produced in relation to it that is still sitting out there. So if I go in here and I look at my document flow, I'll see we've actually gone through the entire process. We've issued our delivery out and gone through and completed the sales order, but we still have a piece of inventory that is hanging out there. So we need to go back through and clean that process up and figure out what we would like to do with that inventory, and so I'm going to go ahead and go through to the next one. You know, can it be used somewhere else? Does the customer still want it? Is the document status just not where it needs to be so it's not reflecting correctly? A similar situation here. And then we have one more, two pieces. So this is a great way to quickly identify where you have inventory that's stranded and you're able to go through and evaluate what it is that you can do either in terms of getting that document fully through the cycle, or if the inventory pieces are out there and they are not needed anymore for that particular document or for that particular supplier, going through that inventory and getting it to a place where it is indeed usable if it's usable for other customers or back at your plant if it's been off site of the supplier. Make sure that we're moving that through the process so we can make good use of that inventory. So, Exception Message Group 6, Exception Message 26 will help you to find your stranded inventory. Welcome back from the demo. Today we walked through where to find Exception Message Group 6, Exception Message 26. This is stranded inventory, so we want to make sure that we're going through and cleaning this up and moving it through the process. Now, if you have inventory that was produced or purchased to support a specific customer requirement, the next step would be to evaluate whether that customer will still take it, and if not, how we can repurpose that inventory or liberate it from being stuck to that particular sales document. This is very important. We don't want to leave any inventory behind. Martin, I'll hand it over to you to bring us home. Perfect, thank you Kristie. That was interesting, I love that there is a few different ways to get the information that will help drive root cause analysis, continuous improvement, and solid decision making. If you want to know more about this particular topic or any other topic related to how to get the best out of your SAP system, please feel free to check out our video catalog, or if you have any burning questions, submit your request below.

Procurement & MRP

MM; PP

MB52; MD04; ME20; ME20N; MMBE

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your system. My name is Martin, and in this video we're going to focus on the tools SAP provides to help us identify stranded stock at a subcontractor. These tools in SAP help us to identify inventory that is at our subcontractor without a current plan for use. This is very important so that we can redeploy the inventory to the business best advantage. Kristie. Tell us more about how we can use this feature in SAP. Hey Martin, thanks. This is a very important topic, no one likes stranded inventory. So in this demo I'm going to demonstrate three ways to locate this lonely inventory before it becomes old and moldy. First, we'll take a look at an exception message that is designed to identify this particular planning situation. Second, we'll look at a report for perpetual stock that will identify vendor provided stock or stock typo. And third, I'll pop into the subcontracting cockpit and highlight where we can find stranded supply with no demand. So there are several different places we can go to find stock that has been stranded at a subcontractor. So when we're talking about that, what we're really talking about is vendor provided stock or stock type O, where we have sent supply to a subcontractor, they are going to be performing some services on that particular material, maybe they're heat treating, maybe they're kitting, maybe they're doing any number of things and then they're returning that back to us. So we send the goods to them, they perform a service, and it's coming back in. It is not at all uncommon when we are looking at clients who have had subcontracting as a part of their supply chain to find lots of material that has been stranded at that subcontractor without any demand and oftentimes it's because of the timeliness of transactions or lack thereof or inaccurate material counts or material usage with those suppliers or master data issues related to the purchase order and the backflushing process when it's received back in. More to come on that but for right now what I want to do is show you a few different ways you can actually find that stranded stock. So you can see here, I've got a list of materials that I'm working through, I came in to MD07 and I looked for exception message number 26, part of exception group 6 and this lets me know when I have stock that is stranded in an individual segment. Individual segment can mean a wide variety of different things, but in this case I'm looking at the items that are stranded at a subcontractor. So we can see here, this is my subcontractor, this is my stock that is sitting there, and you can see it does not have any demand associated with it. So it's hanging out there as supply without a partner. Another good place for me to see this would be by looking at perpetual inventory. So running something like an MB52, I could look across the plant and find all of the special stock O. Another way to see it would be to come in here and go to my stock statistics, it will tell me exactly where I have stuff that is set at that particular supplier by coming in here and clicking on the stock overview. This is going to take me directly into MMBE for this particular item, and you can see that we've got units that are sitting out there at that particular subcontractor. So, I'm able to see what inventory is sitting where. Now, to know if it is actually needed or not, though, I do need to start from a place where I can see the demand that is needed. So, looking at it through stock requirements list or even better through the subcontracting stock monitor would be good places for me to go. So two different places there. I could go to ME20 or ME20N and I'll go ahead and navigate there for you right now. So ME20 and I think I'll actually go to the new one. I'll go to ME20N. And this is going to come in here and show me everything that is sitting out there. So I could run this without a material number in here, I could run it for a specific supplier, let's say I'm transitioning out of a particular vendor, I could put that information in here. I could look at specific requirements dates, but I'm going to go ahead and just look at this particular item. Go ahead and run that through and it's going to come back and it will show me exactly what the situation is. So I can see that I am in a positive stocking position, that I'm actually at two different suppliers, so I've got my 190 pieces that are sitting out at my first supplier, Vendor 1000, and then I have an additional 999 that are sitting out at this other supplier, and I have no demand for these, this inventory is just hanging out there. So that's going to help me to know if I have inventory that is in excess of my demand, I may want to go out and work through that process. It's a good way also to audit at the end of the month and see if there's any stranded inventory after the backflushing has occurred for the activities for that particular month and to true up that inventory on a regular and ongoing basis. From here, I can also navigate to my stock requirements list or back to MMBE through the stock overview and be able to see what specifically is going on this particular item. And again, I can run this by vendor, I can run it by requirement date, or I can run it by the specific components that are provided and get an idea of what is sitting out there that needs a little love. So in many cases it just needs to be transferred back or it needs to be processed out because it was not consumed in production for a variety of reasons. But again, taking a look at that master data, taking a look at the timeliness of the transactions will help to make sure that we get these things cleaned up and we don't have incorrect entries on our books. So in summary, we have covered how identifying excess subcontracting stock will. Allow a buyer or planner to make the best use of available inventory. Reduce storage, labor, and count requirements, lowering the cost to serve at our suppliers. And reinforce process discipline from planning to execution including the need to execute timely transactions and have clean and accurate master data. Ah, as always Kristie, great information, thank you very much. I love that there are a few different ways to get the information that will help drive root cause analysis, continuous improvement, and just good old solid decision making. If you want to learn more about how to get the most out of your SAP system please check out our other videos and if you can't find a video to answer the burning question you have please submit your suggestion below.

Procurement & MRP

MM

MD04; MEQ1

Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin and in this video we're going to focus on SAP's quota arrangement functionality and specifically its fair share rules capability. This feature in SAP helps us reduce the risk in our supply chain and honor our commitments to our suppliers and internal manufacturing by enforcing fair share rules in sourcing. And as we know, the best way to learn is by doing so Kristie, how about you tell us a little bit more about these fair share rules in SAP? Fantastic idea Martin. Quota arrangements offer a great way to realize our dream big supply strategies in an effective and efficient manner. They can be a little challenging to get off the ground, but they are powerful when understood and used correctly. In this demonstration, I am going to focus on three key things. First, getting started with a quota arrangement. How do you get started? Second, how to enter fair share rules onto that quota arrangement, which is the most basic rule. And third, how to review the results once MRP has been run and decide if you like them or not. All right, ladies and gentlemen, let's jump in and take a look at this quota arrangement fair share rule functionality. So we know how important it is to be able to diversify our supply base and be able to have multiple sources of supply for the same material. So these are materials where the form, fit, and function are the same, regardless of which source it's coming from. And you can see here I am in MD04 and I am sitting just outside of my replenishment lead time. I have some purchase requisitions out here, and they are all assigned to a single supplier, in this case 5595. Now, what you may note is that there is a new field up here at the top that says quota arrangement. This is not part of my navigation profile, which is what's giving me these specific transactions, but this shows up as soon as this item is set up for quota arrangements. So after that master data is in place, you'll see the option here and I can actually go and navigate directly to my quota arrangement right from MD04. So I'm going to go ahead and do that, I'll click on this button, it's taking me into the header information for this particular quota arrangement and I can go into the detail, and I can see I have two suppliers set up here and right now 100% of the volume is set to go to vendor 5595 and what I want to show you today is how to change those fair share rules so that it will get redistributed across multiple suppliers. Now quota arrangements can help us with a variety of different constraints or a variety of different strategies in terms of honoring demands with splits between multiple sources but in this case we're going to start with the simplest one, which is just the fair share rule. So I'm going to go ahead and say maintain and I'll come in here and I'm just going to change this to a 50:50 split and I'll hit enter. When I put in 50:50 it does the calculation for me on percentages. You'll see my allocated quantity here when it was 100% assigned was 26,000 units to supplier 5595. Now I can go through and simulate, which we'll show in another video right from here and see what the effect is, but I'm going to actually go back through and run this through MRP so that you're able to see. I'm going to save, and it's going to take me right back to the stock requirements list. From here I'm going to go ahead and kick off an MRP run just for this particular material, go ahead and let that run through, and you'll see there were some changes here, so we had some planned orders changed, some purchase requisitions changed, and then some schedule lines created, because I have one of these suppliers set up on a scheduling agreement. I'll click the green back arrow and then I'm going to click refresh because MD04 is live as of the time you enter the transaction, so I'll hit refresh so it brings in the new data and you'll notice over here we now have alternating supply coming in from two different suppliers, so 1000 and 5595, and if I go back and take a look at my quota arrangement, just by clicking on this button here, and go back into the detail, and you'll see that that 26,000 is now redistributed and so it's aiming for a 50:50 split. We have one additional replenishment proposal that went to 5595 just because it's the first supplier listed in the list. And so the next piece of demand that comes in that would cause us to replenish is then going to go to supplier 1000 in order to be able to maintain those fair share rules. Pretty neat, it's an awesome tool that can help us to be able to honor our splits across suppliers and help us to manage through any risks or challenges we might have in the supply chain or even just being able to take advantage of some commercial terms that are favorable for us. So in summary, we have covered how utilizing quota arrangements to enact fair share rules allows you to. Effectively split volumes across sources, be they internal or external. Quickly enact or update the fair share percentages and see the results. And empower your sourcing team to dream big on the strategy, knowing that they have the tools to back it up. Thank you Kristie. This is such a common request from our clients. We've seen the downside of not feeling able to implement fair share rules to support a multi source environment. From loads of manual workarounds to not doing it all, to a massive material proliferation just to accommodate a different source providing material with the same form, fit, and function. There's so much opportunity here. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and of course if you have a particular question at heart please submit it below.

Warehouse Management

WM

LX14; MCLD

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your system. In this video, we're going to focus on identifying the fastest velocity materials in a warehouse. So Steven, we know the best way to learn is by doing so share a little bit about how SAP will do that for us. Of course Martin. Identifying the fastest velocity of materials is an important capability that can be leveraged for strategic purposes, such as slotting to increase efficiency and throughput within your warehouse. In today's video we will focus on the analysis of material transfer frequency and the material quantity flows to unpack hidden value in WM. In this video, I'll quickly demonstrate how to identify the fastest velocity or fastest moving materials in your warehouse. WM unfortunately doesn't have slotting built in. However, that does not mean we can't leverage WM to identify these fastest moving materials and perform a slotting decision or potentially put the fastest velocity material into a fixed bin. So in order to do so, the quickest way is going to be going into t-code LX14. LX14 is the analysis of material transfer frequency. Essentially just looking at your past TO data and how many times that material has moved out of a potential storage type. So the mandatory field here is going to be your warehouse number. We'll go ahead and leave all TOs populated and then the date range is what you'll need and you can go back spot really flexed this to seasonality if you would like, in this case, since this is our test system I'm going to go very far back, just from year 2000 all the way to today and then this would be your source storage type, where the material is coming from. We'll go ahead and I'll just leave that blank and execute it. It's very nice because it's just high level simply shows this material, here's the description moved out of that storage type 80 times within this date range. It is not accounting for the actual quantity. It's accounting for the number of times that is actually left 001 to somewhere else, could be a different storage type could be for a pick, etc. But really that's going to be your velocity, which is fantastic. It's also nice too because it sorts automatically in descending so you could just see your top materials that you have in a descending fashion there. I Would take these if I wanted to if these were important of re slotting these Identify whatever that this top I would take maybe a pareto approach my top 80%, and create these as fixed bins because I want these relocated specifically because of the fastest moving materials. So you could utilize this report in that way in order to utilize it from a slotting perspective. Another great transaction which uses an LIS infrastructure is going to be MCLD. MCLD is a little different. You'll need to enter a month date range there. So we'll go back again to the year 2000, and we're just going to leave this as 001 warehouse and execute this. What this shows is you get the capability of switch, drill down, drill down by, little different layout here, but it's very powerful because you can have multi warehouse numbers if you have multiple warehouses, but then it shows a total quantity moved. The three asterisks just simply are there because there's multiple units of measure. Not a consistent one, but now let's break this down and see what materials moved out of there. So we can go ahead and we'll go to switch drill down. You have many options of which you can drill into. You can go by type, where it came from, the stock placement, where the stock removal was from. We just want the material. So now it will populate the 45 materials that moved from that date range, but from a quantity perspective. So, unlike LX14, where it shows the total, or just a, that material was moved out, irrespective of the actual quantity, MCLD shows the quantity, or the pieces moved, really that unit of measure. It also has weight, time that the TR was created to transfer. So you have many, many options of what you could do here in MCLD from really the perspective of it took this time from here to here you could do so. You have many options too of what you could bring in. So again, you have, this is what's already populated here, but you have a lot of different, average weight moved, average move quantity, so many different options, we'll just go ahead and bring that in there, that you can throw in there and same thing as the other reports, you can save this in a variant if you really like this. But again, it's going to show the actual quantity moved. Another nice thing too is you have some graphs available to you if you, would like to see. We can just go ahead and select the move quantity and you could do time series graphs, you could just show this in different graphs that are embedded and already available to you all in the EWM. So, two different reports there, LX14 and MCLD that could be used to identify really your material velocity. So, in summary, we have covered how identifying the fastest velocity materials can be used for strategic decisions, such as slotting, to increase efficiency and throughput within your warehouse. Wow. Thanks Steven. Those standard velocity tools are pretty neat and I can certainly see how they can be used for strategic slotting. So folks, if you want to learn more about this and other warehouse management features and videos please check out our catalog and of course, if you have a question please submit it below.

Warehouse Management

WM

LS09; LX29; MM03

Hi, Martin here and welcome to the video service that unlocks and reveals the hidden value in your SAP system. In this video, we're going to focus on SAP's fixed bin maintenance capability. So Steven, tell us a little bit about this. We know that learning by doing is the best way to do it, so share with us what you know. Absolutely Martin. Fixed bins are excellent strategies when utilized correctly. You can leverage SAP to make strategic decisions such as which bins material should be assigned to for put away and picking. Fixed bins do require some maintenance, so in this video, I'll demonstrate some strategies and transactions, both to help and assist with that. Fixed bins in a warehouse are very powerful, but they're very specific and come with a lot of maintenance. In this video, I'll quickly walk you through two reports. One in order to quickly find a material that has a fixed bin. The second is more of your everyday maintenance fixed bin report. The first one is going to be Tcode LS09. LS09 is simply, I have a part number, where is that fixed bin assigned? If you know a part number, I'll just enter one here, you just need to enter the warehouse number for the only required field and execute that, and it'll show you the warehouse number, that part, the storage type that it's in, and then the fixed bin. If you have min max data replenishment quantities, it would populate that as well, but this is just where that part is located or that fixed bin right here. It's showing up here in storage type 001, no fixed bin assigned because that part, this material is in that storage type as well, it's just not a fixed bin assignment and it's not located there. So good info if you want to just see some replenishment quantities and where this material has a fixed bin. The second transaction, probably where you want to spend a lot of time for maintenance purposes is going to be LX29. LX29 is extremely powerful and it comes with a lot of different check boxes, which all pull up different reports for specific reasons. So this first one just simply shows your bins that within a fixed bin storage type, that do not have an assignment yet. So they're fair game to occupy or to assign a material to it. So if you have new parts that come in and you want to locate them, you would execute this and it'll pull up all the bins that do not have anything located. The second one is going to be your bins without assignments that have stock. So probably not the best if you have a storage type that's a fixed bin and there's materials in there and you want to go ahead and get those assigned. So kind of a good report to run for maintenance purposes if you actually want to go and pull those materials and you want to make a decision with them, you either want to assign a fixed bin to it or you want to move it out of that storage type. With this you have storage bins with assignments and without stock, just simply there's that bin is located at this part it's just out of stock. This middle report, you have bins, that are assigned and stock. So similar to LS09, you could just enter this for a whole storage type in order to pull up all of your fixed bin locations that have stock. This next report is probably going to be the biggest one where you want to troubleshoot if you have problems. If your fixed bin, comes up with a scenario where you have warning messages versus a hard stop, this is where you want to go and troubleshoot a lot of this. So for example, when I was running a warehouse, we had the warning messages that If you tried to put away a material into another material's fixed bin, it would just give you a warning message essentially saying, are you sure you want to put this into this location, it's assigned to part 1, 2, 3, 4, 5. All you would have to do is blow through it and it would allow you to do the bin to bin. Then the issue is the next time that part comes in, there's already now that one part in there, so you want to absolutely go and clean this up, because it's telling you where all those incorrect materials are located. These last two, these overviews, are really with respect to mixed storage. So the first one, Overview of fixed bins multiple materials assigned not allowed, just says, hey you've got a storage type that allows mixed storage, you've got warning messages here, there's multiple parts assigned there, so you only want one in there. The second one is just the overview of mixed storage with the correct material assigned. So this is really a good use for kanbans for a lot of production supply areas. So if you have multiple parts that you want staged close to production, all within the BOM, you can have multiple parts all within that same bin. Same thing is you could utilize fixed bins really for kitting orders. Same use, if everything goes in a kit and you want all those materials all within one bin you can utilize fixed bins for that as well. So we'll just go ahead and I'll click all these and you could see which ones have data coming back. Okay, so the first one is going to be your materials that were, good to go, you could assign any materials to them. So they're in storage type 005. They have nothing assigned to them. So if you have a new part, you can go ahead and assign them. This one is that error. This storage type, 005 and this bin B-01 is assigned to this material. However, this material T-MS02 is actually there with this quantity. So again, this bin is assigned to here, this is actually in there. So you would want to pull this out, you could maybe run LS09 for this if it doesn't have a fixed bin already, you want to go ahead and assign it to maybe one of these but just definitely not this bin because it's already assigned to this. This is just simply saying yep, this is the fixed bin for it so very similar to LS09, here's the quantity, this is just it's out of stock, storage bin, here's the part and these other three are the ones that I mentioned without assignment with stock and here's really those mixed storage scenarios. So great, great report here, very powerful, you could use this in a lot of different ways. So as I mentioned, fixed bins are excellent if utilized correctly, but you do have to maintain them a lot. Especially in those last two scenarios for production for kitting even if you have very high velocity materials and you want to go and have a specific bin that's close, that's in the golden zone, that's a scenario where you want to use some fixed bins. In summary, we have covered fixed bin strategies maintenance, and how we can leverage WM to assist with our fixed bins. Thank you, Steven. That's good information. That was some really great stuff covered on fixed bins. And I can see the benefit on how these tools can help maintain them. So folks, if you want to learn more about this feature and others in your SAP system, check out our video catalog and if you have any suggestions, please submit them below.

Warehouse Management

WM

MM02; LP21; LP22; LP24

The best way to learn is by doing so welcome to the video service that reveals and unlocks the hidden value in your SAP system. Martin here, and in this video, we're going to focus on fixed bin replenishment options within the warehouse. Replenishment is a big part of the supply chain and can take form in many ways, such as replenishing specific plants, storage locations, and in this case, we will touch on how it occurs in the warehouse. So Steve, what are the different transactions you can use to replenish storage bins within the warehouse? Yes, Martin, there are a few different ways, and replenishment is one of my favorite topics within WM. It's one of my favorite topics because replens in my warehouse were critical in our environment to be proactive in keeping our storage bins full and healthy in our fast paced, high volume bins that maximize efficiency. What I wish I knew before was the different options and scenarios, what transactions to use based on what scenario I want replenishment to occur. So let's jump into SAP where I'll demonstrate how replenishments work. Which transactions to use. And what material master settings to utilize for your specific situation. In this video, we will cover the replenishment options that you get with fixed bins. In our previous video, we touched a little on just assigning a fixed bin and some strategies of when you would want to utilize fixed bins. In this will jump into how the replens work with fixed bin. So we'll first go straight into the Material Master, MM02. This material was our fixed bin material that we used last time. So we'll go with it on 100-600. I'm going to only select the WM1 and WM2 tabs. Really our replen data lives in that WM2 tab, but it's good practice just to populate both when dealing with WM data. Now, at the very minimum, you need your plant and warehouse number. Now, if you know your storage type for fixed bins, you have to enter that here. So I know it's 005 and now I'll go ahead and select it. It'll default to WM1 tab because we selected both. But again, that data lives on the WM2 tab. If we did not select that storage type, you would not get this additional tab of the fixed bin data in there. So from our previous video, all we did is we entered that storage bin for it, which is A02, now we could talk a little bit more about the quantities and the replen quantities behind there. So, I went ahead and put a maximum bin quantity of 100 there. So obviously that bin will not exceed 100. Put in a minimum quantity of 5. So anytime it drops below 5, it will then be eligible for a replenish, which there's a multitude of reports, which we'll get into here shortly. There's one additional tab here that we'll talk about right now is the replen quantity tab. So here you could enter data here and what that'll do is it'll replen in quantities or increments of this quantity, so in this case 5. You'll do this really, it's a good strategy if you know the case quantities, or if you don't want to break pack. So if I were to enter 5 there and it dropped below 5, it will then replen in increments of 5 to our max quantity. So it really takes that replen quantity and multiplies it until it reaches that max. You do not need to use this replen quantity though. If you just kept that as a blank, well now it'll take your current stock situation in the bin, so let's say that there was 10 in there, and it'll just fill it up to 100. So it create a TR and TO for 90 to fill the maximum quantity of a 100. So that's how the replens work with the replen quantity, your min, your max. The final thing I'll touch on is the control quantity. So control quantity is simply a plus or minus. So if I put a 50 control quantity in there, what this will do is if there's a open pick for this particular material in this bin for 49, it will pick it from this bin because it's below this control quantity threshold. If it's 50 and above, it will then go to a overstock bin to not deplete this fixed bin for a pick. So that's how control quantity comes into factor as well. So again, that's the replen quantity and and information that you get and options with fixed bin. So we'll jump into now the reports of how to generate some of these replens. So the first one that we'll touch on is going to be LP21. And LP21 is probably one of the most flexible ones because you get your storage bins, you can enter a range of bins and or materials and what's nice is this considers your open picks and put away. So it takes into consideration, if you have like a 916 or it registers those interims that are going to be put or picked from that bin, and then it will execute those replans. It'll create TRs first, and then obviously your TOs. It's nice to do this again in the foreground before, because you have that option of seeing those bins and then you could see all that information before you actually execute. So that's LP21. LP22 really takes into consideration planning and deliveries. So you can see here, you get some additional information, really that integration from SD. You can enter shipping points, and the biggest thing here is going to be your picking and GI dates. So it takes into consideration your future deliveries or picks, if you know your picking date and goods issue date range, and it'll replen those bins based on that as well. The final case here, two little bubbles are on your control quantity. So we just touched on control quantities, that plus or minus. So if you include this bubble on control quantity, it will take the consideration of those deliveries and that control quantity and then make the replenishment recommendation based on those two factors. If there's a pick there in the future and a replen. If you hit ignore, it will actually ignore that delivery and control quantity if it is there. So really LP22 is a good report to run proactively and really you want to do this probably after you're picking or,overnight before those deliveries or the picking begins, because then it's taking into consideration those bins, the transfer requirements are then created, and you want to execute those replens before that picking actually starts for this delivery. So that's LP22. And the final one that we'll touch on is going to be LP24. LP 24, is really good if you are using auto TO, it creates replens straight to the TOs. LP24 does not actually consider picking or put away. So it doesn't touch those interim storage types. It's just going simply off of your data in that WM2 tab, your min, your max in your current stock situation. So that's LP24. Covered a lot here in short round on replen options, they're LP21, 22, and 24. Depending on your current situation, will determine the best replen situation and report to run for you. Welcome back. In this demo, we've covered all things replenishment within a warehouse. I hope this video clarifies a lot of questions that may be out there. With and when to use which transactions. What master data to populate. And how to maximize the use of replenishments. Thanks Steve, it certainly did for me. And I can now see how these critical replenishments are within the four walls of a warehouse. So folks, if you want to learn more about this video and other videos, please feel free to check out our video catalog. And if you have a particular suggestion or something you'd like to know more about, please submit it below.

Warehouse Management

WM

MM02; LX04; LS09

[00:00:00] Hey folks, Martin here, and we know the best way to learn is by doing so welcome to the video service that reveals the hidden value in your SAP system. Today, we're going to focus on a fixed bin stock removal strategy within the warehouse. Steve, I know that this is one of the many stock removal and picking strategies. I'm sure there are many benefits that come with the fixed bins. Please share. There certainly is, Martin. Fixed bin strategy also can come with a lot of maintenance, such as minimum quantities, maximum quantities, and replenishment quantities. These additional features to fixed bins are an extra layer of goodness. And if used correctly, can dramatically increase the efficiency in your warehouse. So let's get into SAP, where I'll demonstrate how these additional layers work with fixed bins. The first thing we'll do with fixed bins is identify the storage types where it allows fixed bins. From previous videos, you'll find out LX04 is where we want to start. [00:01:00] LX04 is titled the capacity used per storage type, but we're going to use it for something a little different. So I'm going to use my default warehouse as 001. Just go ahead and execute that, and you can see it just gives you the breakdown of all the storage types, the names, the percentages, kind of how many bins are within each storage type. But the real reason we're here is to find the rules behind there. You can see here, 005, just from the description, is fixed bin storage. But to find the rules behind that, just to verify, you'd select it here, hit storage type details, and then you can start to see the actual rules behind that storage type. So in this case, it does have a F or fixed bin put away strategy, and then a actual fixed bin removal strategy here. So, it's fixed to a material, it's going to allow a specific material to be assigned to a bin for picking and for stock removal. So [00:02:00] what we see here is we have 6 total bins, 4 are empty, 2 are occupied, and we know it's storage type 005. So let's find the materials that are in there, we're going to go ahead and hit the back arrow, back arrow, and we're going to go into LS09. LS09 can be used in a few different ways. If you have a material number and you just are curious if it has a fixed bin or not, you can go ahead and enter that there. It defaulted to my warehouse, we just found out storage type 005 is our fixed bin, so we'll just go ahead and populate that there. And then we just have our warehouse number, storage type, and let's execute this. What this does is shows you, in my warehouse 001, here's my materials that I have there. They are assigned to that fixed bin storage type, so they are allowed to be signed in that fixed bin storage type. They're all right here, 005, and if they have an actual bin specified here, [00:03:00] that means that is the fixed bin for that. There's additional data, which we'll touch on in the next couple screens here. You'll see you have your max, your min, and replenishment quantities. That is not populated, but if it was and we wanted to use that for replenishment purposes or really to kind of enhance our fixed bins, you would see that data there. So, let's just go ahead and pick this material, we know it's now assigned to this particular bin, A-02. I'm going to select that material, let's do a CTRL Y to bring up the plus, and now we have our material selected I hit CTRL C and then, just to view, this is going to be very critical for fixed bins, we'll go into the material master. In this case, I'll just go into the change view of MM02. We have our material populated there, 100-600. Then, the only relevant information that we really want [00:04:00] is the WM tabs, the Warehouse Management 1 and 2. So, go ahead and select both of those. we have our plants , warehouse number. The most critical part of a material master for fixed bins is, I'll show you very quickly, if you just enter, so we have our material here, we have our plant and warehouse defaulted, if I just hit this without selecting the storage type, it drills in on the WM1 tab, you see your information here, the stock removal, bulk, bulk. Warehouse Management 2, you only get this amount of data there. So, it's kind of taking a default, view of just a material in a warehouse view. So go back in there hit both, and now you'll populate your warehouse number, and we know storage type 005 Because this is what you'll want to do when setting or doing any information with fixed bins. [00:05:00] So, 005, now it brings up a different set of criteria. See this little box down here that did not exist before? Well, there's our fixed bin assignment. So, for any bin that you want, you would assign right there. If you wanted to assign a maximum quantity to it to say, hey, I can only fit 200, pieces in there, you would set that. A minimum quantity we'll talk about in a few replenishment videos coming up here. Rounding quantity, you get all these additional fields that you can enter that, that enhance your fixed bins. If you just want to leave them blank that is completely fine. The stock placement and stock removal strategy will still drive it to this bin but without this additional information, you won't enhance or really get those replens, all these additional levers work in conjunction with other fixed bin storage types or rules and or replenishment quantity. So that is fixed bins, [00:06:00] they're specific and really used for high velocity materials because you really want to be specific with where you actually place them because again, you are, you're picking the singular bin for that stock placement and stock removal. They're also used many times in the manufacturing realm for close to a production supply area or near like a work center where you want to keep that close, keep all those components close, that's another way fixed bins are typically used. Welcome back, in this demo. We've covered not only fixed bin strategy. But a lot of the additional features that come along with it. Especially the replenishment strategies. Yep. Thank you, Steve. Much appreciated. This was, of course, very informative, and I love learning about the additional layers of fixed bins and how they can drastically improve the warehouse efficiency. So, folks, if you want to learn more about warehouse management videos and SAP, please check out our other videos, but just general features and functions that [00:07:00] exist. And if you have any specific questions, please submit it below.

Demand & Supply Planning

DM; P2P; PTM

MD04; MM03

Hey, welcome to the ultimate guide to maximize your SAP system. I'm Martin and today's video will help you unlock functionality you didn't even know existed. Okay, so shall we? Okay, in this video, Patrick is going to be our guide as we dig into another one of our forecast consumption modes. Today it's going to be backwards consumption only. I'm excited to hear more about this, when this particular consumption mode should be used, and how we should think about setting the horizon. Patrick, what do you have for us today? Outstanding question. Our forecast is never perfect, and while we should always be working on improving accuracy, we need to accept that we are likely to be wrong in either timing or quantity. The forecast consumption strategies that help us with demand management are a great way to help deal with this challenge. Today, we're going to explore. The consumption mode, backwards only. We'll discuss how to think through the number of days back we might want to allow. And for this consumption mode, we would want to think about materials where we have a tendency to under forecast, and we do not want to allow future periods to be consumed. A picture is worth a thousand words, so let's go in and explore together. So today we are talking about backwards consumption mode. Let me show you how to get there so I can explain it in greater detail. And if you ever worked with me, you know that I start virtually all of my SAP conversations from the MD04 screen. So let's get a quick overview of the current state on this material number before we start making changes. This specific material number has planned independent requirements loaded to represent the forecast. It also has some sales orders loaded. But let's switch our view to summarize the data in weekly periods. So here we can see in weekly periods that we've got a forecast of 22, 23 per week. It spans weeks 14, 15, 16, 17, 18, 19, 20, so every week's got a small forecast of 22 or 23. But then in week number 18, we have a requirement of 100. That's from our customer order that we saw on the previous screen. And so MRP is actually going to add that customer order to the planned independent requirements that are loaded and when MRP runs, it's going to try to bring in enough inventory to cover 123 pieces for both the forecast and the customer order. And in many cases, we don't actually want that to happen. So something we can do is we can actually go get into that consumption mode field and define how our forecast should be decremented when we get orders. So, let's get right to it. The first thing I want to do is I'm going to go click on the material number and move over to the MRP 3 tab, which is maybe not used as much as some of the other ones, so here's an opportunity for us to see what's here. The consumption mode that I've been talking about is actually populated down here and it controls the direction on the time axis in which the system consumes the forecast, and by that I mean it can look back and consume forecast, it can look forward and consume forecast, it can do both. So actually what I'm going to do is I'm going to show you the options. You have backward consumption only, and that's obviously a very good option, we're going to review that one today. You have the opportunity to do backward and forward, there's actually another video out there if you want to read and hear more about that. We can do forward consumption, which will consume demand in the future and you can do forward and backwards. So combining these fields in the right way for your business is obviously something you're going to want to evaluate. But for today's session, we're going to focus on backward consumption only. So, along with consumption mode, we want to make sure that we properly populate the consumption periods. So if we're using a backward consumption period, we want to make sure that our backward consumption period is, populated and the number that you put in there is critical to how the system works, obviously. But one main thing to be thinking about is that it is defined in work days. So when you define something in work days, you actually have to think about how your business runs. So if you run 5 days a week, if you put 5 days in there, your forecast will be consumed in the past for a week. If you put 10 days in there, your forecast will be consumed in the past for two weeks. So it's something to really carefully consider before you decide what number to put in there and honestly, your business practices and how things work will determine the right number. I've been with companies that use one week, two weeks, or even a month. In this case, you have to do what's best for you. So, let's actually go see what happens when we populate the backward consumption period for this material number. So, I'm going to navigate to the MM02 screen, change mode, then we're going to go to the MRP 3 tab, and we're going to go to the plant that we were just looking at, and we're going to go define the backwards consumption period. So let's start with one week or 5 days, let's save that and check through and once I've saved it, I want to go run MRP, which is again, just the best practice for me, I tend to run MRP after I make master data changes, and once that's done, we'll go right back to the MD04 screen. So here we are, MDO4, let's refresh the screen and look at that summarized weekly view again. So what we can see now is before, right, week 14, 15, 16, 17, 18, 19, all had some planned independent requirements. Well, now week 18, because we just put in that consumption mode backwards and a week backwards, it's actually decremented the planned independent requirements for that week because the forecast can be decremented for a week because we have requirements of 100 or a sales order. Let's make one more change just to show you how this worked, and now let's go change it from 1 week to 2 weeks. And same exact process, go right back here, we're going to go into our backward consumption periods and we'll change that to 10, so now we're looking back 2 weeks. Once it's done, we'll go run MD02, MRP again, just changing our settings, execute, execute, and now back to MD04. When we're finally back on MD04, let's take a look at that summarized view for weekly buckets, and what we see now is weeks 14, 15, 16 still have a forecast, week 17 is gone, that has been consumed by the order of 100 pieces, as has week 18. So as you can see, when we decremented 1 week, we took 23 pieces out of the forecast. When we decremented back 2 weeks, we decremented 46 pieces. If we wanted to go back 3 weeks and 4 weeks, the system would decrement the demand from planned independent requirements up to the quantity for the sales order. And so now that we've made those changes, MRP is not planning those sales orders on top of forecast, they're planning those sales orders in conjunction with the planned independent requirements that we just set. So one more thing that I want to discuss before we wrap it up is forecast bias, you've probably heard of it. So a forecast bias is the tendency to over forecast or under forecast. If a material is typically over forecast because sales is too optimistic, you might want to look at forward consumption periods and weighting them pretty heavily. But in this case, when we're talking about backwards consumption, I would probably, for materials that were typically under forecasted, I would want to weigh my backward consumption period heavily enough to leave future demand in the system so they can keep driving in material to support sales that will inevitably exceed the forecast. So the consumption mode will allow for a little flexibility in how orders come in, but it can truly help ensure that future periods will remain intact. So hopefully you found that helpful. I encourage you to go out there and try to use that consumption mode yourself. Hopefully you'll find that picking the right number of working days in conjunction with the right consumption mode will get you what you need and if not, we are here to help. That was a peek into how backwards consumption can be used to help manage volatility and variability in demand. We know we might be right for quantity over a period of time, but we might have trouble being exactly right in a particular period. This key feature helps us to manage risk that allows for roughly versus precisely right. Timing is everything, so it's important to think about your consumption periods in relation to your forecast split and the timing of your decisions around rolling forward or dropping forecast. And last but not least, we learned that this consumption mode is meant to allow for some slip in time, but vigilantly protects the next period's forecast. Hey Patrick, thank you. When you talk about this, I can hear the legacy of living it in your voice. It's nice to learn from someone who has been there and done that. I suppose the only question is whether you also bought the t shirt. Managing variability and volatility in the demand signal is a challenge for most organizations. However, when we look, we often find consumption is more predictable than not. Isn't that interesting? Okay, Patrick, thanks again for doing that. Okay, folks, if you want to learn more about this particular forecast consumption mode, there are quite a few videos on that, please check out our catalog. And, of course, if you have a specific question, feel free to use our chatbot.

Demand & Supply Planning

DM

MD04; MM03

Hey, everyone, Martin here. If you're all about maximizing the ROI in your SAP system, you've come to the right place. In this video, we're going to delve into the forecast consumption. And in this case, specifically backward and forward consumption. So often we hear from clients, well, if we could only get the forecast fixed, everything will be just fine. The truth is forecast is all about knowing the risk in the forecast and being prepared to manage it. Today, Patrick is going to take us and introduce us to one of the key features that can help us with this. Okay, please, Patrick, tell us more about what the forecast consumption mode of backwards and forwards offers us. You bet, Martin. I know from personal experience just how tricky demand management can be. Even with a decent quality forecast, it can be challenging if you don't have the right settings in place to help you deal with variance in either time, quantity, or both. So, let's [00:01:00] dive in and take a look. Today, we're going to touch on where we find the consumption mode and how to select it. Discuss how to set the number of days, in this case working days, to deal with that variability. And how to think about choosing the consumption mode based on the demonstrated bias. Let's go in and take a look. Today we are going to talk about some forecast consumption parameters. These fields are often misunderstood and they can make a significant impact on your supply chain if used incorrectly. First, I want to show you where to find the consumption mode so I can explain it in greater detail. I almost always start on the MD04 screen when evaluating planning parameters. So let's start there and do a quick overview of the data before we jump into the material master. We can see that this material number has a planned independent requirement loaded to represent the forecast. It looks like the forecast is roughly 23 pieces per week, April 1st, April 8th, April 15th, and so on and we can also [00:02:00] see a sales order for 100 pieces on May 2nd.Now, let's switch our view to summarize this data in weekly periods. We want to do this because we're going to make some changes to the system down the road, and this will give us an idea of what it looked like before we made those changes. So, here we have the planned independent requirements at a rate of 23 or so per week. We have requirements of 100 pieces on week 18 for that sales order that we looked at. And as MRP does its math, it says you need 23 this week, 23 this week, 23 this week, 22 this week, and then all of a sudden we need 23 pieces for planned independent requirements and 100 pieces to cover that sales order. So a total of 123 pieces there in week 18. So MRP is actually adding the customer demand to the forecast. Are we sure we want to do that? Let's leverage some built in functionality by letting the system [00:03:00] know how we want our forecast to be decremented when we get orders. Finally, we are ready to talk about consumption mode. So, the consumption mode controls the direction on the time axis in which the system consumes the forecast. Let me show you what I mean and then you can start using it as you see fit. So, from the MD04 screen, we're going to double click on the material number and then, we're actually going to navigate to the MRP3 tab. Maybe a tab that you don't use too often. So, in this case, we want to scroll and look into the planning section and there it is, consumption mode. So, before we start changing numbers, let's look and see what consumption mode does and we're just going to click into the field and look at some of the standard options. So, here we are, let's click, and let's see what the system is telling us. So, today's topic is actually going to focus on one of my personal [00:04:00] favorites, option 2, backward forward consumption. But before we can get to that one, I've used SAP in many industries, and it's always hard to predict when the orders are going to come in. If you have a steady flow of orders throughout the week, or if you have a month end push or a quarter end rush to hit sales quotas, these options can be extremely valuable tools and the reason that I said backward forward consumption is one of my favorites is it actually gives us some flexibility. So, let's start with a quick overview of backward consumption. With backward consumption, sales orders consume forecasted quantities that lie before the requirement state. And with forward consumption, sales orders consume forecasted quantities that lie after the requirement state. So naturally, with backward forward consumption, sales orders consume forecasted quantities that lie before the requirement state. And if the actual demand is not satisfied, the sales orders [00:05:00] then consume forecasted quantities that lie after the requirement state in order to satisfy the remaining demand. Too confusing? Let's try it out. So, the idea here is to start with backward forward consumption and then see how it changes that view that we looked at on our MD04 screen. So, let's quickly go over to MM02 and go into change mode and go to that MRP3 tab and then go to our plant and from here we're going to actually go in and we're going to update our consumption mode. Again, I'll show you the examples, backward forward consumption is the one that we want to use. But, this doesn't work by itself. Just defining the mode doesn't work by itself, you actually have to go in and tell the system how many periods backwards, how many periods forwards, you need to populate so that those orders can be [00:06:00] consumed. So, before we jump in there, we take a quick look at backward consumption periods and just show you all that this is populated in work days. So, when we populate our consumption periods, backwards and forwards, we want to make sure that we populate it in work days. So if your company works five days a week and you want to consume a week of forecast, you should populate five. Whereas in some other SAP date fields, we use seven calendar days to represent a week. So it's always best to double check before you load the data. Now, let's go take a look at those numbers, backward consumption, forward consumption and look at what happens when we actually populate them. So again, these are in work days. So we'll start with 10 work days backwards. So when a sales order comes in, it's going to look back two weeks to see if there's forecast. We'll do 10 work days forward, [00:07:00] so if it sees demand 10 work days in the past, it will delete that, and then it will look forward if it hasn't consumed all of the independent requirements, it'll look forward 10 more days, two more weeks to decrement the forecast. So I'm going to save this, I'm going to execute MRP , we will run the MRP , and then go back to our MD04 screen, and double click on our material number again, enter, and I'm going to go just refresh the screen. And take a look at that summarized view to show our weekly demand. Now, what you'll see here, is you have that forecast, 23 in week 14, 23 in week 15, 23 in week 16. Now there's nothing in week 17. There's nothing planned in week 18. There's nothing planned in week 19. And there's nothing planned in week 20. Because this 100 piece [00:08:00] order, when it came in, SAP said, Oh, we have a 100 piece order? Let's go back two weeks and remove the forecast, but the forecast there wasn't sufficient, so it deleted roughly 46 pieces and then it said, okay, well, I deleted 46 pieces in the past backward. Then it looked forward and said, let me go delete whatever demand I have in the next two weeks. And it deleted more so that weeks 17, 18, 19 and 20 were all zeroed out. And now, instead of planning for 123 pieces in week 18, the backward and forward consumption has allowed us to not overplan. Because we have this 100 piece order, while we were expecting to get orders at a rate of 23 per week, we can't always tell when those orders are going to come in. So, thankfully, by changing those parameters, MRP will now, again, replan for us, and we're not [00:09:00] expecting orders in week 17, 18, 19 and 20 because we just got this one order for 100. And it actually looks pretty good to me, right? I don't want to bring in my forecast and sales orders inventory. I want to just aggregate the whole plan and figure out how to proceed. So, one more thing that I think we should talk about is forecast bias. I'm not sure if you've experienced it, but generally speaking, forecast bias can be described as a tendency to either over forecast or under forecast, leading to a forecasting error. If a material is typically over forecast because the sales team is overly optimistic, I would probably weight my forward consumption periods more heavily. We don't know if those sales will materialize, so let's start reducing the future forecast as those orders come in. However, if a material is typically under forecasted, I would do the opposite and weight my backward consumption periods more heavily. Let me come back into MRP3 and just remind you where we're talking [00:10:00] about. So, when we see that, you want the system to keep driving in material to support those sales that will inevitably exceed the forecast because of that bias. So, I'm actually pretty confident that knowing how to properly leverage these fields will help you to smooth variability when you don't know exactly what day or week your orders will come in. And it gives you an opportunity to leverage standard SAP functionality in the best way possible for your specific business patterns. Whew! Okay. Welcome back. In today's chat, we covered a lot. We discussed the options for forecast consumption, and as a reminder, if backwards forwards consumption, the demand will be matched with the current period. Then work backwards. And lastly, work forward. We discussed how this helps to smooth the variability in timing and quantity. And, before I leave you, I just want to note the importance of thinking about consumption and maintenance, or the reorganization of the forecast. Both as key parts of [00:11:00] facilitating your demand management program. This is a great topic, and all that was just the tip of the iceberg. Okay, Patrick, thank you so much for taking this robust topic and really breaking it down for us in actionable steps. This is such a good start, guys. Go forward, be curious, and explore. Speaking of exploring, feel free to go check out our video catalog of all the different videos that exist. And of course, if you have a specific question, feel free to submit it below.

Procurement & MRP

P2P; WM

MIGO; MMBE

Hey folks, welcome back, Martin here. Today we're introducing a topic that falls into the category of seems like a good idea, but also a lot of work. It's worth it. Today we're introducing the concept of vendor consignment. This is a great opportunity to work with your strategic partners to share in the responsibility for carrying inventory. Organizations who do this well are able to negotiate terms with their suppliers that are fair, equitable, and reasonable to manage. I'm going to hand it over to Dave, who will give us a high level orientation to vendor consignment and provide some insights into how we might get started with this program. So Dave, take us away. No time like the present, Martin. In today's dive into SAP, I'm going to take the time to provide a simple definition of vendor consignment. I will introduce you to one of the key concepts that help us identify consignment materials in the form of special stock. And I'll briefly outline what the typical consignment process might look like. All of this to be further explored in later videos. Today is just the start. Let's go in and let SAP assist with bringing this introductory orientation to life . Processing the MIGO goods receipt MIGO 101 goods receipt for the document I just created quantity I'm going to receive the full quantity in, this is going to be put into my consignment warehouse, check the item is OK, and, document is OK Item is posted. Now, I can check my inventory level to see where this item is, it's been receipted into my vendor consignment inventory, you can see it's sitting in unrestricted, but it's in vendor consignment, so at this point, it is unvaluated. Now I am at the point where I want to use up this material, I am ready to consume the material in my warehouse or my operation, I'll execute a transfer posting. The transfer posting does a 411 movement type, K. The material again, FG13, I can change the destination, what material is going to be posted to, or I can leave it the same, I can indicate what location I want to move it to, all in one transaction, so 1710. You go from location 71A, I'm going to keep it in the same location to keep this simple presentation. And I'm going to indicate who was my supplier. So at this point, I need to just insert the quantities that I'm going to consume, I don't have to consume the full quantity, but I'm going to consume it. And once I have completed the 411k, I can check my movements, and as you can see, the vendor consignment has now been moved into my own stock in location 171A. There are some significant benefits to a vendor consignment program when properly designed and qualified. It helps us to share in the burden of inventory risk and holding and brings our suppliers into deeper strategic partnerships. However, we need to carefully consider the materials we select and the terms we agree to. Consignment programs require diligent care and feeding to ensure that we've been great stewards of both our suppliers and our own investment. We need to make sure we're all on the same page for how much risk we're willing to take in terms of inventory stocking position, expected turns and associated terms of ownership and payment. Spending the time up front to focus on preparation sets the program up for success and eases the burden and anxiety of starting something new or expanding a fledging program that has yet to find its wings. That's awesome Dave, thank you. The importance of getting this right is often undervalued and it's a big missed opportunity for a lot of organizations. I'd wager most folks listening to this could uncover a hidden opportunity in their organization simply by reviewing some of the highlights from this video in their own business. Can't wait to hear about some of these outcomes. If you want to learn more about this particular topic or other videos about how to exploit your SAP system, please check out our catalog, and if you have a specific question, feel free to suggest it below.