Procurement & MRP

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Procurement & MRP

P2P; PTM

MD04; MD05

Martin here and welcome to the video service that unlocks and reveals the hidden value in your SAP system. So we know the best way to learn is by doing so, in this case, in this video in particular, we're going to explore the touchstone transaction for planners and buyers. It's called the stock requirements list. This transaction is so powerful because it's jumping off point for all planning, procurement and other related activities and it's all to date as of the moment you entered it and hit the refresh button. So we know it's real time, it's telling us what's going on in our supply chain. So Kristie, how about you share a little bit more about these specific details on the stock requirements list? Kristie: Hi, Martin, yes I think we should. There are so many great tools to make a planner or buyer's life easier that exist embedded in the workspace that's offered in MD04. I can't wait to walk you through a few of them. We're going to explore some of the options for how to set up your workspace. We'll hit on some of the places you can easily get to right from the stock requirements list, and I'll [00:01:00] highlight the periodic totals. We'll also talk about how those can be useful and we'll go into some of the options to dig deeper into the planning situation for discussion and decision making. Today will be the highlights and then we will have videos that will dive deeper into some of these features in detail. Let's get into it! Let's dig into some of these hidden gems in the stock requirements list. So you can see here, I am in MD04 and I've just pulled up a stock situation for this elephant phone holder in the color blue, and I'm just looking to see here what's happening with this material. And what I wanted to do today is point out some of the things that ~um,~ you may or may not be aware of in terms of how to set up your stock requirements list to meet your needs. The first is this overview tree. So as we're going through and we're navigating from material to material, this actually will build out the work list for us, it's like the breadcrumbs of where we have been. And if you've done something like gone through and searched for MRP elements or [00:02:00] exception messages from your exception monitor, you see your entire work list here. But if you're paying attention as you go through and you navigate from one plant to another or from one material to another, you'll actually see this continue to build out. And one of the things that's important to know is that there's actually additional information here that's just kind of sitting in the back in terms of descriptions and things. So you can actually control how much real estate this is taking up and where you would like this to sit. And where this becomes more important is if you're doing something like using the pegging report or the order report. So the order report tells you whether you have the necessary components to take this into production. The pegging report, as we've seen in other videos, actually shows what that supply element is meant to supply, so like a purchase requisition all the way through to the finished good. And you can see if it's pegging against your forecast or if it's pegging against a customer order or even a delivery. And there are a lot of different options up here in [00:03:00] terms of how you can choose to display your fields and your sequence. So you can actually come in here and decide what fields you would like to have show and then what sequence you would like to have them appear on, so that's really nice. And if you come up to settings at the top and then go to settings, this is where we actually can control the way that we would like this to display. So if you see down here, overview, tree for materials, and the order report, we can control whether this is going to be positioned at the left, which is what we're most used to seeing, or at the top, and then also what percentage of our screen it is allowed to take up, and then whether the overview tree is going to be displayed automatically or not. So those are some really good options in terms of customizing exactly how you would like your MD04 or MD05 screen to look. And one of the things I will say is that when you're doing something like using the order report, you have a lot more information, so you may want to have that up on the [00:04:00] top so that it's actually stacked on top of your stock requirements list. So as you're trying to work with these different features, this is a good place to come, again, under settings, to see ~What is, uh,~ what is happening there? And then also, as you're going through, you'll see that there are different settings that will control the way that you will see ~um,~ groupings set, if you're going to see some aggregation or non aggregation, if you have the cross plant view in place, if you want to see stock transfers there or not. And then also in your periodic total, so you've got individual line displays, but you can also control periodic totals displays in weeks, months, or even based on a planning calendar. So lots of good stuff there that you can play with. In terms of dates, you can choose your default on whether it's going to show the availability date, so when that is meant to be available on shelf for use, versus your goods receipt date, which is the date it is meant to arrive to you, and that is ignoring the additional goods receipt processing time that needs to happen before it's available. And it's very helpful to be able [00:05:00] to toggle back and forth, so this actually will help you to be able to quickly make decisions on the fly ~so Um,~ if you're able to evaluate whether your supplier is past due or manufacturing is past due based on toggling back and forth between availability date and goods received date. Same thing down here for safety time, so if you have a temporary situation that's causing you to bring in material early, so your supplier lead time or your manufacturing lead time is X number of days, but you're actually offsetting the requirements, so it comes in a bit early. You can choose whether you're seeing when that safety time is coming into play or if you want to see when it actually is going to ~um,~ align ~with this,~ with this demand plan. Okay, and then also you can insert the line that will show the end of the total replenishment lead time , which is also very helpful, so your stated lead time, and this actually is super helpful for customer service or anyone who is supporting on the demand side of the house, so that you have an idea of what the stated lead time is. And then lastly here, I'm going to flip over to the general settings, and this is also very important, this is where you assign things like your [00:06:00] order report profile, the checking rule you're going to be using as you're going through and you're evaluating the availability, and then also your navigation profile. And we have another video on this where we go through and we explain all the different options for navigation profiles, but that's what gives you these hot keys or the buttons at the top that allow you to navigate. So lots of really good stuff here in terms of being able to customize the way that this is going to look and feel. The other thing is you have, of course, your period totals, and by clicking on this you can actually get out of the weeds a little bit and look to see what your plans look like at ~you know,~ maybe a week or monthly level. So you can go, okay, so for week 10 we still have 4 units remaining to sell and no requirements currently pegged in that week. The following week we have 5 units remaining to sell and we have 20 requirements already in hand. ~So, and ~That could be a combination ~um,~ between order reservations and sales orders or stock transfer orders, anything that falls in the category of firm demand that's part of your demand program. Then if you have receipts coming in, you'll see those here, [00:07:00] and sometimes it's really helpful to get in here and look at this at a periodic total so you can get an idea quickly if someone asks you, you know, when's the next time you can take an order or what's your next recovery period, you can get a good idea of how you're looking in terms of coverage and what's available to you. The other thing to highlight is that because this is a cockpit transaction, you have so many options of where you can navigate from here. So, if you come in here, you can go under Goto, and you'll see that you can navigate to things like MMBE for stock statistics, or you can go into the sales statistics to look at ~um,~ what orders you have out there and open, you could evaluate your capacity situation and many, many other options. You can also come in here and go into your ATP Quantities or your Total Requirements Display to see how that demand plan is stacking up and it's pegging against materials. You can also come in here and go directly into the material master and of course you can get there also by double clicking on the material. So lots and lots of good information. And lastly, I think most folks are aware of this, but let me just highlight it for you. If you click on the header details, we can actually go in and [00:08:00] see much of the master data that's sitting in the material master, well organized in a way that makes sense. We can quickly go through and evaluate and make some decisions ~um,~ based on the information that's here. It gives us a lot of really good stats and information for what is happening with this particular material. We're able to organize this data in a way that makes sense and actually save ~um,~ that information. And the same goes here for ~in~ your ~actual, um,~ stock requirements list. You can actually control the order in which you'd like to see these columns and save that as well as control things like the width. Also, some of your columns may be hidden, so you have your opening date, your start or your release date, very, very important ~for, um,~ when you need to get orders out, and then of course your rescheduling date so if you have an exception message, it's going to do the math and tell you how many you need and by when you need them, so that date will appear here as well. If these columns don't show for you, what you'll see is that you'll have a little double line arrow, and if I close this you'll be able to see it, let me do that for you, and then what you have to do is actually [00:09:00] see the double line and then you can expand it out so that you're able to reveal that hidden column and start making use of that in your day to day, and then you use this over here to actually go through and save those settings. ~So,~ So many good little hidden gems and nuggets that are available to us right from the stock requirements list, and this was just a quick tour about the tip of the iceberg, but so many good things here to help us make sure that we have a good customized environment that is providing for exactly what we need without hiding anything and allowing us to be able to organize our workspace in a way that makes sense. Whew! That has been the whirlwind tour of some of the hidden gems or underutilized features that are embedded in or associated with the stock requirements list. We saw options for shaping how our workspace is oriented. Some of the more interesting tools to support our discussions and problem solving in the room or in meetings. And we saw loads of places that we can get to from [00:10:00] navigating right from that home base, the stock requirements list. Now, it is important to note that most of these features are also available from the MRP list as well, and we've chosen to focus on this from the perspective of the stock requirements list today because of its dynamic nature and availability for all materials. There is so much more here to explore. Over to you, Martin. Martin: I like these little tours, Kristie. Man this is powerful stuff. I look forward to exploring some of these features in other videos, and I hope that it generates a lot of curiosity and discussion for MRP controllers, planners, etc. These nuggets are just perfect for what we need to be doing here in this particular video series. So, once again, if you have particular questions, please submit them below , and please go and explore all the other videos we have in our catalog.

Procurement & MRP

P2P; PTM

MD02; MD03; MD06; MD07; MD05; MD04

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 broach a hot topic and it became quite controversial, frankly. It's around the critical question, how often should I run MRP? I think I know the answer, but let's ask someone who's in the field being asked this exact question by the organizations all the time. Jason, I can't tell you how much I hear this question over and over. You deal with this every day. You know the answer. Take us away. No joke, Martin. This has become a question I'm asked to weigh in on regularly. I suppose we could take the easy way out and say it depends. I love that answer. And to a certain extent it does. But there's some good guidelines, some important questions an organization should ask themselves. So today, we're going to dive into the system and highlight a few things you can do to prepare for a world with MRP Live or even classic MRP run more frequently than overnight. I'm going to focus on two really important things and the first measures the second. The processing indicator for those of us still on ECC or running classic MRP. And the second is around the importance of daily habits so you can get to a place where you can run and review MRP more frequently. So let's go in and take a look. So our going in position is always to run MRP once per day, as close to the start of business as possible. And unless you have a robust daily cadence of exception monitoring already in place, anything more runs the risk of playing exception whack a mole and while that's a fun arcade game, it's really no way to run a supply chain. Just think about it. The picture can be changing constantly. New orders are coming in all the time, potentially from all over the world. At all hours of the day, an inventory is constantly moving. Trying to manage exceptions in real time, in that type of environment, is daunting, even for the most mature organization. So we want to reduce the noise and churn, establish consistent daily habits in order to create a stable planning environment to work with. Okay, so we've established our once daily MRP run. Now what? First off, cadence keeps the chaos away. I think we're going to copyright that phrase, we use it so often. It all starts with consistent daily habits. When you come into the office, step one is check and address your exceptions. Maybe you can flip on the coffee pot first, but in the world of single serve coffee, who even does that anymore? So start your day with exceptions. Let's jump into SAP and take a look. I've displayed ZMD06, which shows the exceptions as of the last MRP run. We'll have many videos around how to perform exception monitoring, so I'm not going to get into great detail here, but a couple of things I want to point out. First, I can get a quick feel for the current picture by using the binocular button to find exceptions. I always want to update the statistics when I do this. So you've got some tabs up here, you can look at MRP elements with dates, you can find specific materials, red lights, exception groups. But for me, I'm going to go in here. I'm going to grab the 720s because that's SAP telling me that I have some supply coming that I don't actually need. And as much as I love to mess with the warehouse guys, it's probably best for us all if we avoid buying stuff we don't need. You can see that SAP was nice enough to highlight the materials with this exception, and I can use selected MRP list button to bring these up. So now I'm into the first material, I can click through these using the arrows up at the top to get a quick feel for some of this. So this guy's got some other exceptions. I'm going to bounce around a little bit, lots of cancelled stuff, so something has definitely gone haywire here with our MRP run. Big shift in demand, it appears. Let me come back to this first one here. It looks like something has changed and these last two POs are no longer needed. So I guess I'm going to have to have a chat with the supplier to see if it's too late to cancel them. And I'm a bit forgetful about these things, so I'm going to go in and add a note. This will also help if someone else happens to come look at this. Reaching out to supplier to see about canceling. All right, we don't really care that that's probably not spelled right, but I'm going to save my text. I'm going to back out and now you'll see that it's noted here that I added text. So now if someone else comes into this to view this item, they'll see that I'm already working on it. Now it may take some time for the supplier to get back with me, and in the meantime, I don't want to have to look at this exception every day. So I'm going to check the processing indicator. That guy's now on, as you can see by the message down here. Processing indicator, you say, what is that? Checking this tells SAP you've reviewed the item and that you don't want to see it again unless something changes with the planning situation. I'm going to run the list again to show that this material is no longer displayed and let's remember we were looking at this DPC1102. So I'm going to back out, yes, I want to exit, and I'm going to rerun it real quick. And now if I scroll through this list, it's all alphabetical. You'll see that that item is no longer in the list. So once we start using the processing indicator, there's one thing to keep in mind. Going back to the selection screen, down here we have this guy that says only with new exceptions. So if I check that, what's going to happen is if something changes with that particular item that I marked the indicator for, it's going to display that message. So let's say that demand shifted and MRP runs and it generates a new supply requirement. Well even though I've checked that processing indicator, that item is now going to pop up because the picture has changed due to this new MRP run. And that could happen, MRP could run 25 times before that picture changes. But when it does it's going to grab that particular item and show it to me. Now, if for whatever reason, I'm curious as to which items I have set the indicator on, I can go here to all processed MRP lists, run that, and you'll see, here's our DPC1102 with the indicator turned on. It's not a bad idea to check this periodically just to make sure something hasn't gotten stranded. This is a great way to reduce the noise in your daily exception monitoring. But also quickly get back to review these items so they don't fall through the cracks and you can process them and always you can take this off, so let's just say I'm in here, I want to turn that off, I'm going to exit, I'm going to go back in and we will see, got to change my indicator, don't forget SAP remembers. So I'm going to go all MRP lists. I'm going to run it, and you will see now that our friend DPC1102 is back in the list with the indicator turned off. So that's a little bit around MRP list, around the cadence of running MRP and it's super important as we move forward to establish these great daily cadence of exception monitoring. Eventually when you get to S/4 you have the option of running MRP Live, which essentially means this MRP list view is real time. You won't have that processing indicator because everything will be in real time. And if you've got great daily cadence already established it's going to make your life a lot easier when you get to MRP Live. Otherwise again, it's whack a mole and again, nobody wants that. So that's MD06, that's MRP run strategy. Again, we'll have a lot of other videos around how to really dig in deep on exception monitoring. We all want to get to a place where we can see and process information in real time. And for that, we have our stock requirements list. But to realign our plans and propagate demand through the supply chain at a rate that's faster than we can consume can create a lot of churn and instability in the process. We don't want to do the wrong things faster. The way we get there from here is in getting our daily habits humming. Ensure we have excellent quality of master data and a solid plan for every part. That's the ticket to being able to take advantage of all that SAP has to offer, including running MRP more frequently or taking advantage of MRP Live. Thanks Jason, and thanks for not saying "it depends". I much appreciate that. Slow is smooth and smooth is fast. I know we can get there and we can all appreciate the importance of getting it right, where we are today, and then progressing from there. So folks, if you want to know more about MRP and when to run it and how frequently, like we discussed here with Jason, please check out our video catalog, and of course, if you have some specific questions, feel free to submit them below.

Procurement & MRP

P2P

MD04; MM03; ME33L; ME84

Hello fellow supply chain spelunkers, Martin here. Ready to dive in with you and get an introduction into just in time releases to facilitate replenishment from key suppliers. This is a feature of SAP that is more widely used in some industries than others, but has much broader applicability than people realize. It's an effective way to communicate needs to your suppliers and manage a forecast to plan versus a release to ship effectively. Now we've talked a bit about it in the past, about firm and trade off zones in scheduling agreements. We're going to try and take it to the next level today in more formal arrangements and a higher degree of control. Here to introduce us to this topic is Patrick. So Patrick, what do we need to know to make this feature work for us? Yep Martin, it's a good question. As you said, a lot of folks aren't familiar with this option. Once we get out of specific industries. Automotive, I'm looking at you. And that's unfortunate because it does have a high value proposition, which we'll explore together today. So, I'm going to cover a few things today to get the wheels turning. It should always start with the why, when we're talking about new to you functionality. So that's a thread we'll explore throughout. We'll also see an example and some of the setup required. This leads us to a few points around communication and making sure we're communicating effectively. Are we all receiving the right signals for success? Let's dive into SAP and explore. I'm eager to see what we can find. Okay, so here we are in SAP and you can see that I'm on the MD04 screen, obviously most of you are probably familiar with this. What I wanted to show here was some scheduling agreements, if you aren't familiar with them, they look like any other purchase order and they have exception message and reschedule dates. So we should probably be thinking about how we're going to address those. But for today, we want to actually get some more details on the just in time indicator. So I'm going to double click on this material number. And that's going to bring me into MM03, which is to display our material master. The section we want to go to is actually purchasing, and in the purchasing tab, if we scroll down into the other data slash manufacturer data section, we'll see the JIT scheduling indicator. And I'm going to click here just to show you guys what the options are. Here we have an option to do no JIT deliveries. We also have an option to automatically do those deliveries. So let's keep that in mind because when we go look at our scheduling agreement, this is going to be an important piece of information for you. So, let's actually go to that scheduling agreement, and let's go to ME33L. That brings us in to display our scheduling agreement. You can see that it's pre populated the scheduling agreement number here. Now, I'm displaying our scheduling agreement, and as stated, we're on the ME33L transaction. What we want to do is we actually want to go look at this little magnifying glass up here, which is to display additional data. So I'm going to click on that. I actually have to highlight the item first before I click on it, now that the item has been selected and we're in the additional data section, again, we're going to scroll down to the bottom to see some information about our JIT deliveries. So, you can see in the output controls section of this,additional detail, we have some information related to just in time indicator. And this is, again, the same one that we looked at on the material master, being populated on the scheduling agreement. It's best practice to set this on the material master so it can be automatically populated here. In addition, we can see a few other things here in the output control section. We can actually see the next forecast delivery schedule transmission date, which is September 3rd. This is when the next forecast delivery schedule is going to be transmitted to the vendor. We can also see the next just in time delivery schedule date and this is when the next JIT delivery schedule will be transmitted to the vendor and that's important to us. Our just in time delivery schedule involves releasing specific quantities at precise times according to a schedule line. So it's pretty important for us to make sure that this is accurate and you can see here, the next delivery is set for August 7th. Now, let's do one more thing before we wrap it up. Let's use the ME84 transaction, and we can use that to see the parameters that are used to create releases. So, here we are, we can see the parameters that are used to create releases. We have a lot of options here that specify the types of scheduling agreement releases that need to be created. In this case, we're going to create delivery schedules but you could do forecast, you could do, JIT, you could do forecast and JIT schedules. So, our default is set to forecast and JIT, so we're going to do that one. But there might be other options that you prefer for your particular business. And we have the ability to execute this as a test run, just so that we can see the results, and that's exactly what I'm going to do. So, down here, If I scroll down, I can see that we have test run selected, which means nothing's actually going to get transmitted when we run this. We're just going to see the results. So let's see what it tells us. Here we are. We have our test run and we have green lights, which is great. Obviously, yellow lights and red lights mean something different, but at the end of the day, we should remember that JIT releases help streamline shipping for our vendors and help them optimize their processes. So if we can help them streamline, it will benefit all of us. Diving into SAP really is the best way to learn by doing. Thanks for joining me today. Before we wrap, just a couple of key points and reminders to take with you as you contemplate the use of just in time delivery schedules for your organization. First, do you have a practical need that could be addressed? We talked through a couple of use cases today and there are certainly others. With this change, will you see value? Is the information now clearer for your suppliers? By providing a forecast and a firm delivery schedule, does it set up your suppliers for success and get you the deliveries you need when you need them? And last but not least, based on how you are able to send requests to your suppliers today, can they reliably receive and respond within a time frame that meets your expectations? This is a really nice tool, and I think it's underutilized. Hopefully this preview will spark a desire to learn more. Hey, thank you so much, Patrick. That was such a good summary of just in time releases and how we might think about them. I too hope people will be inspired and go and explore more. Thank you again. So folks, if you want to know more about this topic and some of the other topics that exist within this particular area, please check out our video catalog, and if you have a particular question, feel free to submit it below.

Procurement & MRP

P2P; PTM

MD04; MM03

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. Martin here and in this video we're going to be discussing how MRP performs its calculations. Now I was told there would be no math, but I think we're all in trouble here. Good news is my co host today loves math. I'm almost afraid to turn her loose on this, but the good news is that MRP really operates at scale and not complexity. All the math is pretty straightforward here and is very helpful to understand. So, Kristie, take it away. Kristie: Oh, yes I am, I do love math, but one of the best things about MRP is that it does all of the math for us. However, there's nothing worse for a planner than not knowing what the planning engine is doing, it just breeds mistrust, so our diligent and skeptical minds. So let's dive in and I'll unpack and translate what MRP is actually doing. There's no great mysteries here, but it is very [00:01:00] helpful to understand. All right, let's look and see what MRP is doing for math here. So let's just start really simply up at the top. So this is our available quantity, in this case we have 87 units that are available for planning. And if we come down here, the first thing that's going to come off is our safety stock. Now in this case, MRP is viewing safety stock as a demand element, that's why it has a negative next to the number. And then the 78 pieces is 87 minus the 9 is 78. From there, it's going to start to pull through any other demand and supply elements based on the date that we see them, and from March 4th until April 1st, you can see everything we have is a demand element, and I know that because it has the negative sign against it and we can see this inventory slowly but surely running down until we get to the end of our replenishment lead time on 4/8 and it leaves us with a balance of 17 pieces. So all it's done so far is [00:02:00] deduct demand from the 87 pieces. Now, I'm going to go ahead and hit the page down up here, ~okay?~ and I can see here on 4/8 we have an additional 4 pieces in forecast that's coming out. On 4/15, we have another 5 that's taking us down to a balance of 8 pieces. Now, on 4/22 we have an additional demand for 7 and what is happening here is that in order to prepare for that demand, we actually have a planned order that is meant to start on the 16th and it's for 5 pieces and then the following week on the 25th we have an additional 5 pieces and then ~four weeks,~ 4 pieces happening the week after that and so on and so forth and so you can start to see we have planned order, forecast, planned order, forecast, planned order, forecast, planned order, forecast and it's going to continue to [00:03:00] follow the rules of our lot size key and our minimum order quantities as well as our lead time and our goods receipt processing time to balance our supply to our demand and to try to get our balance as close to that allowable minimum as possible because our safety stock has already come off. When we see a balance of 0 here, it actually means that we still have the 9 pieces of safety stock covered because that came off of our balance immediately and that is really important to know if you're using a static safety stock value. Now, If you are using ~um, ~ a range of coverage or coverage profile, then that will be the other piece is that you'll see that balance happening, but you're going to see the discrete numbers for it in your periodic totals, but you'll actually just see you're carrying more than 0 [00:04:00] pieces of inventory, and that's driven by how many days of supply you're trying to hold. The other thing, if you just noticed, I just hit the safety time button and we had positive balances before and that's because we had some safety time in place. So it was actually driving that inventory to arrive a little bit sooner. I've just turned safety time off so this is the purest view we can possibly get and you'll notice that as we're going through and we're doing all this supply to demand balancing now you'll see we're supplying to 0 pieces. So it's really 9 pieces in safety stock and so our balance is 0 ~um, of~ available inventory, so that's the minimum level that we're trying to plan to, so we're going to try to plan as close to 0 as possible. Now if I come in here and I actually make some modifications to this material, this is where it gets fun and where we would encourage you to play. So this is a lot for a lot, so this is stripped down so we can just see the balance, but I could do something like change it over to a [00:05:00] weekly bucket. And because we are in MD04, by the way, as soon as somebody makes an update to any of those demand elements as you're going through the day, if you hit refresh, you're going to see that. And once you adjust your settings here, if you go in and you run MRP, of course you'll be able to see those settings immediately as well. I could also do something like put in a minimum lot size, let's say of 9 pieces and I could hit save and now, if I go through and I just run MRP, I'm going to see that there will be some changes. You can see all these things that were adjusted, because this is a finished good, so it ran through the entire BOM. I could have run it single level too, just to get an idea of what was happening before I went ahead and released it out to all the other materials. But let's just keep an eye right now on what's going on with our quantities. So you can see, we've got some 5's, some 4's, some 8's in terms of replenishment, I'm just going to go ahead and hit this, and now you'll see we're starting to, turn safety time off, we're starting to run with a [00:06:00] little bit more of a positive balance and the reason for that is see, we now have this minimum lot size of 9 pieces. So as soon as we need to make, we're going to see that we'll have a minimum of 9 pieces each time. And so just by virtue of adjusting that minimum order quantity and changing to a weekly bucket, we would start to see the impact of that on our inventory balance. And it's very easy to go back through and check your settings and see what ~exactly~ is driving that . Because our forecast is in weekly buckets, the big adjustment there was purely in the lot sizing that we put in. We can start to see and understand what is happening with the inventory, and there's nothing magical about this, and if you start to see a number you're unsure of, then just back out one of the master data settings, go back to basics, and adjust from there, and again focusing on goods receipt, planned delivery time, the nature [00:07:00] of your lot size key, so whether that's a lot for a lot or fixed lot size, or if it's a periodic lot size like weekly or monthly lot sizes, you're going to see that impact here as well as your minimum order quantity and your rounding value. And that's going to be what helps to trigger what's happening. But again, negative numbers demand, positive numbers supply, and you can slowly but surely kind of follow the path through and understand exactly what is happening. Awesome. So no more black box. I'm only kidding, MRP is very, very far from an advanced optimization technique that's available in things like advanced planning solutions. Those can sometimes feel a bit black boxy. However, it is vitally important to understand how the system thinks, and today we went through a really basic example. What I would challenge all MRP controllers, all buyers and planners, and all the folks that support them, is that when you go in and you make a change to your planning, you think about how you would expect MRP to respond. And then you check your knowledge by walking through [00:08:00] the math, you'll be way more comfortable with what the system is doing, and you'll get a start on the place that we're working from in terms of refining the actual planning. It comes fun, yes I said fun. Martin: Brilliant Kristie, thank you. Being able to narrate the planning situation and understand that the system is doing very important MRP controller work day to day, understanding how the data and information flows in SAP is just going to drive optimization through the supply chain, second to none. So once again, thank you very much, Kristie. And folks if you want to know more about this and other topics related to your SAP system, check out our video log. Otherwise, please submit your questions below.

Procurement & MRP

DM; IBP; P2P; PTM

MC48; MD04

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 inventory graphs and analytic capability. Very much of an unknown feature in SAP yet incredibly powerful. When used correctly inventory graphs and analytics in SAP provide visualization of real time statistics and information on inventory levels, movements, consumption patterns and trends, which can really assist organizations make informed decisions on inventory management. Kristie, I'd love to know more about this cool feature. I'd love to tell you more Martin. I know you're excited about this one and so am I. This small demo represents the tip of the iceberg on one of the most valuable yet underutilized capabilities in SAP. Inventory graphs and analytics is a powerful feature when used correctly and in this demonstration I'm going to focus on three key things. Number one, one of the many places where we can access this information. Number two, some of the key figures and statistics that are available to us. And number three, the red line graph and what it's telling us. Okay, let's go in and take a look at some inventory graphs that will help us to analyze what is happening with this particular material. So this is one of the most undervalued and underutilized features in SAP and I'm really excited to show you a little bit of the information that is available. So we're going to go in here, I've already selected a plant and an MRP controller. You can do this from most any MC report both LIS or document evaluation. In this case I happen to be an MC48. I'm going to go ahead and click through here. This is telling me my current inventory value and then it's telling me about the contribution of that particular material to the grouping of materials that I've chosen, what the percentage contribution is of that value and then the accumulation. And I'm just going to pick one of these, we're going to go ahead and take a look and see what is going on with the red line graph. So I'm going to go to detailed display. Okay, so the purpose today of this demo is to talk about the red line graph that we're seeing here. If you're curious about these MC reports I am quite certain we'll have future videos that walk through them, but I'm going to go in here and just choose the stock level graph first. Okay, and I've chosen that and now I'm going to go ahead and bring it over because it's hiding on my other screen, here we go and I'll make that nice and big so that you can see. So what this is going to show us in the document evaluation reports if we access it from here, it's going to show us the entire history of the material. If we find it through MC.9, then we'll be able to throttle that to a particular period of evaluation, but let's go ahead and see what's been happening with this particular material across time. This was a 2020 material, that's when it started to have some activity and you'll see here, it's moving up and down across time but we can see that we recently have started to build quite a lot of inventory, so there was a very large goods receipt. So this is our stock level historically so looking backwards in time. Every time the inventory goes up, that means that we have received it in or cycle counted it in, or did something that increased our inventory level. Every time we see it go down, that's our consumption or our utilization. And then any point where we have just black underneath that is the stock that is on hand that is not currently being used and so the lowest point over the period of evaluation, this guy right here, this would be our dead stock or opportunity stock, so that's the lowest portion of the inventory that we would get down to our lowest inventory value. But recently we've done a large goods receipt. So as we're looking at this, what we're really looking for is the consumption predictable? If so, there's lots of things that we could do to make the planning of this material far more stable. So there are a couple of exceptions where there's some significant or more steep drops, and we're going to look at what the pattern has been across time to see if we adjust our supply pattern, if we could have a more stable and predictable rhythm. This guy is all over the place if you think of this like an EKG, there's a lot of movement that's going on here and what we would want to do is make this steadier and easier, and that's going to help to protect us a little bit more against volatility. I'm going to close this guy out. I want to show you one more here. Now let's look at our cumulative receipts and issues diagram. So there's a really cool correlation here that makes it easy to understand. So if you have a hard time kind of laying the lines across the graph to go is this predictable or unpredictable? The other thing you can do is look at the consumption versus goods issue. So over time as we accumulate, I'm going to put the legend on here for you, as we accumulate our goods receipts and goods issues, what we're going to see is that we develop some gaps. So as we're moving across time, you're going to see times when you get more of the black space, so more time delay between when we've issued and when we have received that inventory and so the longer the delay between the time it's received and the time it's issued out or used, you'll see the peak up at the bottom in terms of stock level. So biggest gap, highest gain, and stock level. So this is another really effective way to look at the history of the material to see what's happening. Did you know that also in SAP you can get future looking graphs? So in one of the screens that you are probably most familiar with as a buyer or planner MD04, you can actually go in and see what the future is going to hold. So let me go ahead and put this item in here and I'm going to go through and find my future looking graph. So this helps me to evaluate how replenishment is currently being planned. So how long is it going to take us to dig out of the situation we're in? If we're in a negative situation or if we're building inventory, how long is it going to take us to bring that inventory level down? And so I'm going to pop into this chart here and this is going to show us our projection over to the future. Now I'm expecting, because we just had that really large production that it's going to take us a while to bring that down and so you can see how long it's going to take us based on our current demand plan to exhaust that inventory and we're all the way out until the end of the year, which is probably the end of our forecast horizon. So as we're going forward, what are some ways that we could work to optimize the planning output so that MRP is giving us really good results? Are our business behaviors accurately reflected in our business rules, are our master data and SAP so we can start to really manage this inventory. And so every material has its story and this is a good way for us to go in and see what's been happening and then work on trying to improve the process going forward so that we've got a good flow of material that's available for our customers without overstocking or overusing our capacity, our materials, our labor, our freight, or our space. Okay, so really cool to be able to do this both forward looking and backwards looking to be able to go in and find these graphs and charts and see what is happening. So in summary, we have covered how inventory, graphs and analytics will allow you to. Review the history of a material. Identify opportunities for improving the planning for the future. And, quickly grab statistics that are invaluable to us as supply chain practitioners. I would've loved to have made better use of these features right from the start of my career. I used to do so much of this work manually and you know what's exciting? The analytics suite and dashboard and capabilities that come with us for in Fiori just keep building on what we see here. So it's great for us to get a start in using these today. Thanks, Kristie. Yes, definitely a feature that I think all of us would've liked to have known more about and as they say, a picture's worth a thousand words. So if you want to know more about these inventory graphs and even other SAP capabilities, please feel free to check out our other videos and of course, if there's a specific question you have, please submit it below.

Procurement & MRP

P2P; PTM

MD04; MM02

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 why proper lead time management is so important. Often lead times are loaded at go live and never really maintained again. So when properly managed it can help your organization shorten replenishment cycles and become agile supply chains. Kristie, often people think it is a good enough to just get lead times right in their master data. Of course, that's an important first step however for world class lead time management the goal is to work on shortening your lead times with your suppliers, production lines, and of course, sales delivery. Tell us more about that. I'd love to Martin. Lead time maintenance is a powerful feature when used correctly, and in this demonstration I'm going to focus on three key things. One, common places where lead times are maintained. Number two, things to think about as you look at the various lead time buckets available to you, breaking down those activities so we can make them better. Number three, the criticality of truth in the application of lead times and how they are used in MRP could not be more important. I want to talk a little bit about lead time maintenance. So we talked previously around how to evaluate lead times, and if you missed that video what we did is we went in and we looked at a transaction called WPDTC. Very, very powerful transaction, if you haven't watched the video on that yet, make sure you go back and take a look at it. What that allowed us to do was compare our information in terms of what the purchase info record says, to what the material master says, to what the vendor master says, to what we are actually seeing in terms of on time performance from the date the purchase order is issued until the date that we are receiving product in. And that evaluation is really important in terms of making sure that we have good insight into how our lead time is being managed and there's a lot of other tools that will allow us to do that too, in terms of the purchasing information system and vendor evaluation. But what I want to talk about today is what you do with that information. So through WPDTC there's some updates that are available, but most of us, most of the time are going to manage our lead times directly in the info sets. So first, let's start by just talking a little bit about the material master. We want to make sure that we remember that we can maintain lead times in a variety of places for items that are sourced. We can maintain it in the purchase info record and in the material master and scheduling agreements or contracts. I'm going to make sure that we have a good amount of alignment all throughout. Let me pop into the material master and I'm going to talk about why it's important to make sure that these things are consistent, or at least make sure that we're flagging them appropriately. I'm going to go ahead and hit change material. Okay, so all of our lead time information is going to be on the MRP 2 view. And I want to talk about the two different kinds of lead time. The first is our planned delivery time, so this is how long we are expecting from the time that we release an order to the supplier until we receive goods in the back door. That is our planned delivery time. And this planned delivery time field lives in a lot of different places. So it lives at the vendor master level, if you had just one lead time for everything that was coming from that particular supplier, it lives in the purchase info record, so you're able to maintain it there and it lives in the material master, it also lives in the contract, the scheduling agreement, and any discreet purchase orders. Now, why is this important? It's important because depending on how you have your sources flagged, you could get a big surprise if you have it in a material master say 15 days, but in your purchase info record as say 45 days. When that item is sourced, if it's not set appropriately in the source list, when the item is sourced, it's going to inherit the values from the record that is the most specific, and so we want to really make sure we've got good alignment based on the reality of how the supplier's delivering to us in all these fields. So let's talk a little bit about what plan delivery time means. So first of all, this plan delivery time is in calendar days. SAP does not know what your supplier's calendar looks like as a default. So when you come in here, it's going to go based on calendar days. So when I have 10 days, that is not two weeks. 14 days would be two weeks, 21 days would be three weeks. So this is really important to know, and if you're ever not sure what the setting is, if you hit F1 on your keyboard, it's going to help you to know whether it is calendar days, or work days. So the first thing it's going to tell you is the number of calendar days needed to obtain this material. Okay, and that does include the transit time from the supplier. Okay, so that's from the time you order it till the time it hits your back dock. The second thing that's important for us to make sure that we're getting correct in terms of lead time, making sure we have the correct buckets for everything set up, is the good to receipt processing time. So this one is your dock to stock time. So from the time that it arrives at our dock, or it's been released from production till the time that we can actually use it. And again, looking here, we can see what this is, and this is internal time, so it is work days. If you have quality inspection, your goods receipt time should align with that anticipated inspection time, if it's happening after you have received the goods in. Okay, so that's very important. Lead times in general shouldn't be buffered. They need to be set to what your actual expectation is, both for performance monitoring as well as to reflect the correct activities in the system so that we're able to work to improve those. So you've got lead times for pick, pack, and load, so all your staging time. You have a lead time from your supplier, which is your planned delivery time that reflects the time from the purchase order release until goods are received in your back door and you have good to receive processing time, which reflects how much time you need once that product has hit your back door to make it available for use, and we really want to make sure we account for all of these things in the correct buckets and then when we need to buffer in terms of time or quantity, that is what we have the safety stock types for, and there are three different types that we'll discuss in another video. But as you're going through and you're thinking about this, make sure that you're thinking about the specificity of the information. So whether it is in a contract or outline agreement or scheduling agreement, those are contracts and scheduling agreements or your two different kinds of outline agreements, your purchase info record, your material master, your vendor master. Just make sure that we the planned delivery time consistently maintained and that we're differentiating only where appropriate and where there's specific effectivity periods or source differences and then we're also accounting for the goods receipt processing time separately from that planned delivery time and that is reflective of your dock to stock time. And that's a little information on how to maintain those lead times once you have that information. So in summary we have covered how lead time maintenance allows you to. A plan for success. B, differentiate where it matters. And C, continuously evaluate and improve so we can focus on shortening those lead times successfully. Thanks Kristie. I completely agree. Using this feature allows you to position your end-to-end supply chain for success by ensuring we're getting these critical rules right while not inflating our lead times to buffer for volatility. Honesty truly is the best policy. So if you want to know more about this particular feature and of course other features in SAP please check out our other videos and if you have a burning question submit your request below.

Procurement & MRP

MM; PP

MD04; MM03

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 key master data rules, lot size keys. Lot size keys define where the MRP will accumulate quantities and the timing of proposals for replenishment. And as we know, the best way to learn is by doing so Kristie tell us more about lot size keys. Oh, Martin, lot size keys are often misunderstood and commonly underutilized. This key master data field sets the stage for replenishment and there are great use cases for the different types of lot size keys. Today we will touch on. The different lot size keys. Review where to find this key information in SAP. And provide some tips on how to get more value out of this underutilized key rule to empower MRP. 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 display, 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 and 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 replenished 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 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 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 applying a quality lot size key allows you to drive better plans for replenishment. Meet a variety of different business needs. And be set up for success with your suppliers, sister facilities, and the manufacturing floor. There is so much goodness in this topic that we will most certainly be back for further exploration in another video or three. Thank you Kristie. Driving synergy across the different rules for planning is the fun part. We can definitely put MRP to work for us and start to drive better results as we explore the options here. This is a key one for managing working capital and reducing manual interventions. So folks if you want to know more about how to use lot size keys or any other feature in SAP please feel free to check out our other video services, of course if you have a 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 Martin here, and in this video we're going to specifically focus on the taking advantage of SAP's MRP exceptions. When used correctly MRP exceptions can help organizations be much more proactive in responding to supply chain disruptions, allowing the business to become more agile. Kristie, how about you take us through some of those specific examples to teach us how to be a more agile business? I've got some great tips and tricks for you today. MRP exceptions viewed via the exception monitor is a game changing feature when used correctly. And in this demonstration I'm going to focus on three key things. First of all, where and how do we find these exception message? I'll give you a tour of the exception message groups and what standard looks like. And then lastly, I'll cover off on MRP's job and the reason we receive these exception messages. So everyone knows that SAP is built for exception monitoring and we talked a little bit about the fact that there are tools in every functional area for exception monitoring. Whether you work in demand planning or demand management whether you're in order to cash or customer service, whether you're in the warehouse, production planning, there's all these different tools that help you with exception monitoring. But of course, the one that is most known to planners and buyers is the exception monitor. So we'll go in and we're going to take a look at this today through MD07. I could also look at my business of the day if I'm on ECC or I'm running standard MRP versus MRP live and MD06. And I'm just going to go ahead and pull up one of our plants here and take a look and I want to just talk a little bit about what an exception message actually is, and what it means, much like all of the other alerts that we would receive in life or doubt on the floor, like an and on alert, a stoplight, anything that pops up on our dashboard, the buzzer on the dryer, going off the beeper on the stove or the microwave, letting us know that something is happening. The purpose of the exception messages is to alert us to a situation, and what we can see here is that there are 8 different exception message groups, and they all mean different things. But the purpose is to let us know which materials need attention and to allow us to prioritize based on the severity of that exception message, which material we want to look at first. And if I click on this information icon here, it tells me a little bit more about each of the exception message groups. And so there's 46 total exception messages spread against 8 groups. They are grouped logically, and so you can take a look and see what your system says versus what you're seeing here, this is the standard setup for the exception messages, and they're grouped in a way that makes sense. So let's take for example exception message group 7 and exception message group 6. So these are the ones down here at the bottom. You can see here that exception message group 7 is all about exception messages that let us know that there's a misalignment of the dates or quantities of supply to meet that demand needs. So you're going to see here bringing process forward, pushing the process out, canceling the process, or we're behind and getting the process started, that's exception message 30's, exception message 6 lets us know that we've got a problem with either where we're storing the stock or based on the rules around how we're able to supply that demand, and so it's letting us know where we need to go through an explore those types of things, but they're grouped in a very logical way so that we're able to go through and address them. It's, really any type of alert when something is not happening as it's expected to, when there's a deviation from plan. So if you think about MRP, it has kind of two jobs. The first is determine what we need, how many we need, and buy when we need it. So seriously, fifth grade math, if not second grade math. Really, it's just the puts and takes on a large scale that we can't do just with Excel or another tool. So it's going through and it's actually addressing that constraint for us and processing all of that information through and exploding our BOM's. So that we get the right requirements at the right time with all the different considerations for the different rules around lead time, lot sizing, safety strategy, all of those good things. So it's going to do all that math for us, and then whenever that plan does not match up, it's not able to satisfy the demand based on the rules that we have in the system, or based on the firmness of the element, it's going to let us know by generating one of these exception messages, and that is going to help us to be able to go in and review our materials. But when we review our materials, when we're doing exception monitoring, it's not about resolving a particular exception message, it's about resolving the planning situation for that particular material. So as planners and buyers, that's what we're looking for, is to prioritize our materials for review and as long as we have them open, we want to be the right kind of lazy, we want to address the entire planning situation so that we do not have to go back and look at that material again. And that is the point and the purpose of the exception monitoring and management tools that you will see all the way throughout SAP is where we need to intervene, let the system do the heavy work for us, and then proactively manage the planning situations so that we're in a good place as we move forward through time, and we start to reduce the amount of exceptions and get to a place where it's manageable on a day-to-day basis. So in summary we have covered how MRP exceptions will allow you. First of all, proactively manage what's happening in the supply chain. Second, resolve an entire planning situation for a material by using the exception messages as a way to hone in on the materials that have the most severe planning situations. And lastly, develop a daily habit because we all know a good cadence of daily habits helps to keep the crazy away and the chaos at bay. Thanks Kristie. As always very insightful. Changing to an exception mind in organizations is critical in becoming world class. Proactively responding to these exceptions will allow us to be more agile and responsive. If you'd like to learn more about how to get the most of your SAP system please check out our other videos and if you can't find something you're looking for feel free to submit it below.

Procurement & MRP

P2P; PTM

MD02; MD03; 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 how to interpret SAP's MRP run results. Often organizations ignore the MRP results since they don't understand how to interpret these results. However, when you understand how to read the tea leaves, this becomes a very powerful tool to set up your daily work. Kristie, take it away from here. Absolutely Martin. Reviewing our MRP run results provides a powerful feature when used correctly. Let's take a look at what happens after an MRP run, in this demonstration, I'm going to focus on three key things. First of all, MRP basics.,I'll provide a basic house tour. Second, the processing indicator and what it means when we check it. It's way more important than we typically will value it as. And lastly, a key exception that we need to be on the lookout for that commonly occurs in our MRP runs. Okay, so let's pretend for a moment as though it's the beginning of our day and we were coming in and we want to see what has happened overnight so that we can see what's going on with our MRP list and what the business of the day is. So we're going to go first MD06 and this is we're going to be able to see collectively the results of the latest, greatest MRP runs. I'm going to go ahead and do that, and while I'm working through bringing this up, just a note, we still would use MD07 or MD04, our stock requirements list throughout the day. This is to get the day started, so what is the most recent information? And when you come in here, you're going to enter most likely your plant and your MRP controller number if you have the extended selection criteria in place, then you're able to enter multiple plants or multiple MRP controllers or buy materials, so you get a lot more of that selection criteria. But if you're using just standard, regular old MD06, this is what you're going to see. And if you're on S/4 you may be doing something similar, except you're going to be doing this through MD07 if you're running MRP live. So you'll come in here and you'll enter your plant and MRP controller, in this case I just want to look, I'm going to look wide open, I just ran for this entire plant. So I'm going to, I'm going to bring the whole thing up today, but I just want to point out a little bit of the additional selection criteria when you're going in to review your results there's a couple of additional pieces of information if you want to be able to really hone in on the results from last night's run. And so you can actually come in here and you can put in your MRP date, so let's say your last good MRP review was last Thursday because you took Friday off and now it's Monday morning. You can put in a range of dates so that you're seeing all the MRP results for the MRP lists that were created in that period of time. So that can be really helpful if you're out for a period of time. Otherwise, as you're going through your week, if you're able to get through your exception messages on a daily basis, which I know for a lot of us that are getting started, probably sounds nearly impossible, but rest assured it is. When you're at a place where you're able to get through them on a daily basis, you can actually just run for the last day, which is awesome. The other thing that you can look at is the processing indicator, so you can look at just the things that have not been processed. So let's say you get started in the morning, and I know this would never happen, but you get interrupted for reasons, right, and you have to go attend to something else. If you're clicking that processing indicator then you can come back later in the day and just focus on the things that are not yet processed. Okay, but for me I've done nothing, I'm going to go ahead and just run this wide open, and this is going to bring in my total list. So I had about 1,100 materials that fell into the criteria of what I was looking for, and you can see now I'm in here and I've got my red, yellow, and green lights, which you cover at length and some other videos, but the other thing I can see here is my MRP date. So this is the date that this item was last run through MRP, so you can see I've got this one that was really recent. So if I'd used my dates to filter. I wouldn't see a lot of this old stuff, and there's an opportunity for you to go through and reorganize your old MRP list and just make this cleaner, and that's part of the process of just getting into the daily habit, but you're able to quickly, at a glance, see when the last time MRP was run. The other thing you can see here, this is that processing indicator I was talking about. So as you're going through and you're reviewing your materials, and I'll go in and pull a couple up in a second, you can actually click that processing indicator, that means I've reviewed this, I've cleaned up that entire planning situation, not a particular exception message, but the entire planning situation to the best of my ability, and there is nothing else that I can do with this material right now. Then you click the processing status that updates and then you will not see that if you filter it out at the beginning until the next time something changes. So the next time MRP is run on that item, the processing status will reset because there's new planning information and it's going to highlight that for you. The other thing that's going to happen as a result of this planning run is you're going to get updates to all of your statistics as well as any exception messages. So just as a reminder, there are a couple of exception messages that are going to show up for you here in your MRP list that will never show up for you in your stock requirements list or your collective use. So your MD07 or MD04, and the first is the exception message group 8's, those are the ones that tell us if we've had a termination in the process of running MRP. So that's MRP saying, hey, I tried, I did not complete my job and I'm letting you know about it beacuse I am like very trustworthy. And then the other thing you're going to see is there will be some of the exception message group 4's that will not show up for you because they are informational and related to the MRP run. So let me click on my binoculars here and I'm going to go ahead and update my statistics beacuse otherwise I'm just going to see the list of exception messages and no numbers and the MRP elements and no numbers. So I definitely want to be able to get that information so I can see here, here's some examples of what will not show up. So here's your exception message group 8, abnormal end of requirements planning, and then things that are directly related to the MRP run, like newly created proposals, order proposal has been changed, order proposal has been re-exploded. So those are new things that have happened as part of the MRP run, and it's going to let you know about this here. Everything else, aside from those informational messages and the exception message group 8, will show up for you in MD07, and so you're able to monitor and resolve for any master data issues, process integration issues or misalignment of the plan and be able to go in and action that and clean it up throughout your day. But this is very important so you can come in and make these adjustments. So very quickly here, let me just pick one at random, I'm going to pick my cancel processes and that I want to look at because I want to see if I have an opportunity to free up some capacity. I'm going to say find exceptions and what I really want to do here for you is just show you where that processing indicator shows up so you can see it right here. So once I've reviewed and I've done everything I possibly can to update this material, this one is obviously in need of housekeeping, it's got stuff from 2017. Once I've gone through and I've cleaned it up, then I can click that processing indicator, that way we know that we've addressed it for the day and it's also a really great metric if you are, say, in the leadership of your supply chain organization, you want to support your folks. Being able to see how much they're getting through in any given day in order to be able to make sure that they're getting the support that they need, you're able to come in and click on these processing indicators to get an idea of how that's going for them. So great tool and then it'll lets them step away and come back as a planner or buyer and address it as you're going throughout the day. So that's a little introduction to what you will see, as you're looking through the results of your MRP run and how you can identify what is new and recent, you can look at those informational messages and then particularly focus on any of those terminations to make sure that everything is looking good and you can manage and throttle what it is that you're seeing based on the MRP date, and also that processing indicator. So in summary we have covered how MRP run results allow you to. Get into the business of the day first thing we do every morning. Second, resolve planning situations with some view on the prioritization of those messages. And lastly, set the processing indicator to keep track of the progress as you clean up and address the planning situation. Thanks Kristie. Understanding the MRP results allow users the ability to identify and resolve planning inaccuracies proactively. Resulting in better production planning, procurement and inventory management. So if you want to learn more about how to get the most over the SAP system please check our video catalog and if you can't find a video you're looking for or have a burning question please submit it below.

Procurement & MRP

MM; PP

MD04; MEQ1

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 use SAP's quota arrangements for managing capacity constraints and prioritizing across sources. This is a feature in SAP often underutilized and is very important. So often we create multiple material numbers to manage multiple sources, even when the form, fit, and function of the material is the same. In a previous video we discussed fair share rules, today, we're going to level up on another important opportunity with quota arrangements. So Kristie, tell us more about quota arrangements and this capability in SAP. Well, of course. I've got to say this is one of my favorite use cases for quota arrangements. In today's demo we're going to. Get into the system and see how setting up simple capacity rules can influence the volume split across our sources. We'll also talk about how to prioritize the allocation of volume from source to source. And lastly, what the MRP results will look like once we put those rules in place. All right, let's jump right in and let's take a look at how we can use quota arrangements to help us to manage some of our supplier capacity constraints. So what we want to do here is take a look at this MD04 screen. You can see I'm in the stock requirements list right now and I have an item that is set up on a quota arrangement and I can tell that because it says quota arrangement right here, this button appears as you set your quota arrangement up, and then also down below I also have my supplier split already in place, and you can see it's going back and forth between two different suppliers, supplier 1000 and supplier 5595. And what I want to do is I want to go in and I'm actually going to constrain supplier 1000, and I'm going to limit how much volume we can send to them over a period of time. And I'm going to do this so that we can see what would happen if we had a supplier that was able to, say, only supply a certain number of units and then you wanted your secondary supplier to provide the remaining volume, rather than just using a simple fair share rule. And if you're looking for information on a simple fair share rule you'll also find that, there's another video But if you come right in here, this is taking me directly to my quota arrangement, I'm going to go into the details, and you can see I've got this 50:50 split right now, and you can see the allocated quantity based on the volume that is out and available for the suppliers to replenish, and you can see that 5595 has a little bit more right now. Next up would be supplier 1000 and that's just because we need more demand to create that next replenishment proposal and net it out. So what I'm going to do here is I'm going to go in and actually change this to maintain and we're going to go all the way over to the right hand side so that we can get some additional options for how we can set this up. And what I'm going to do is I'm going to impose a maximum release quantity in here and I'm going to say, I'm going to keep it really simple and say this supplier can do a total of 1,000 units and then I'm going to say every week, and I'll set this to weekly buckets. You can see here I can choose between week, month, or if I was dealing with a production planning situation, I could even use a PP planning calendar to help me with that. And I'm going to go ahead and say save. I could also simulate right from there, but I think it's a little easier to see this if I just run MRP, so I'm going to go ahead and do that, before I do just take a look down here at the screen. It's not going to change this one because you can see the asterisk, that means that schedule line is firm, it's already been released to the supplier, so it's not going to make an adjustment there. But where we would expect to see it as we're going further out into the July timeframe. So I'll go ahead and run MD02 and let that happen, confirm my entries, and you'll see here that there's been some updates. You can see the planned order changes, purchase requisition changes, and schedule lines that have been changed, and I'll go ahead and click the green back arrow to take me right back into the stock requirements list. And because this is live, as of the moment I enter it, I'm going to hit the refresh button. It's going to bring the new information in and what you'll see is that it's actually controlling how much can be released to the supplier and it's going to let me know any time where I might be bumping up against more volume than what I can send through. So you'll see here there is an exception message that we actually are already over because of the other schedule lines that are in place. So because of that it's letting us know we need to purchase additional volume from our alternate source, in this case 5595. And as we look further down, you'll see restrictions, so it's not going to exceed that volume. So we've got 850 in here, and then if I page down a little bit more, you'll see the requirements across time. It's going to limit how much is going out to that particular supplier and always going to keep it under the quantity that we put in in a given week. So it's throttling that based on the maximum volume that we've told that particular supplier can handle based on the periods that we've entered. And so we could do that across every two weeks, we could do it across a month, we could easily do it across a quarter, and then go in and prioritize the suppliers accordingly. So if you're looking for a quick and easy way to cap the capacity for what you would want to send to a particular vendor and you're in a multi source environment, meaning you could either be procuring from multiple external suppliers, from multiple facilities within your own network, or across a combination of internal work centers and manufacturing and external supply. This is an effective way to just do a quick rough cut on how much you're sending through to that supplier in a particular period of time. A bit of an uncommon use for quote arrangements, but that is part of what it's designed to do is to help us to be able to control and throttle the maximum award volume to a particular supplier over a particular number of periods. So in summary, we have covered how using quota arrangements to manage capacity and priority across your sources will allow you to. Honor volume constraints that have been shared. See the results of post MRP runs. And note exceptions that may occur. And often we feel like we have to do this management offline. We are here to tell you that there are tools that will help you. Let's put SAP to work on the execution so that we can focus on the strategy. Wow, thank you, Kristie. SAP does love to follow rules. This is another great example of how keeping the system informed relieves a chunk of manual work and brings our sourcing strategy to life. So folks, 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 question please submit it below.

Procurement & MRP

P2P; WM

ME22N; MD04; ME2N

Hello to the curious, we are here to feed your appetite for change and improvement. Martin here, ready to dive in and explore how SAP can empower your processes. Today we're going to explore a situation that none of us love, but all experience, the need to send product back to our supplying partners. There are a few ways SAP can facilitate this for us and in this video we're going to start simply and explore the return to vendor PO. It's the most basic approach, and once in place we can continue to build from here and manage more complicated scenarios. Today we are Patrick with us, who has lived this life by supporting supplying partners and helping them improve. He's very data-centric and takes a very pragmatic approach, so I'm very keen to hear his introduction today and how to manage the returns to vendor process. Patrick, you seem like you have a lot of experience in this space. Take it away. I would love to. Martin. No one loves having to do this, but sometimes we do have goods we have to return. We've all been there. The product didn't meet spec, there's an issue with the quantity , it doesn't meet minimum shelf life requirements, or maybe you have an excellent and flexible partner who will help you mitigate excess inventory. Bottom line, supply chain stuff happens and it's a matter of when not if. So we want to be prepared for that and make it as easy as possible on us and our partners. As Martin alluded to, there are a variety of ways for how we can initiate the return, and today we're tackling it as if the buyer has been notified and is issuing the return. Last but not least, I'll point out some ways that we can keep an eye on the return and encourage progress. Since I hear the best way to learn is by doing, let's get into it. So off to SAP we go. Now a return to vendor facilitated via return to vendor PO looks really just like a normal PO. We'll see that this PO looks strikingly similar to any other PO and that's both a good and not so good thing. It's good because we understand it. It's easy to use and it falls within all the normal reporting structures that we use to working in that makes it easy to work with. And by the way, I didn't mention it, but I'm in the ME23N transaction. Unfortunately, the not so good piece also lies in the similarity. Sometimes it can be confusing or easy to miss that it's a return to vendor and to make that easier, let's look at some of the telltale signs that will clue us in that this is indeed a returns PO. So first of all let's acknowledge that this PO is very old, October, 2018. Unfortunately, this is not uncommon when it comes to less common processes like returning goods to a supplier. It should get a ton of focus because it is less common and there is a reason why you're returning these goods, so that could drive to a corrective action in the process, and at the very least, represents time and money that we don't want to have tied up. So, as I said at the header level, this is a standard PO, if we scroll over to the right though on the item level down here, in this case way over, we're going to see that it's a returns PO. And how do I know that? There's a little text checkbox next to the info record here, if I hover over it, you'll see that this is for returns item. That controls the rest of the process change. Now you can totally move this column over. Right, move it over to the left so it's closer for you to see. You can expand the width so it's harder to miss, I'm going to actually expand that column right now. Here you go, so you can see returns item. Do all that stuff and save this as a default view so that next time you can see that little checkbox. But let's go highlight a couple other ways to keep our eyes on these return PO's. We can also see this in our stock requirements list, so as you know, we're going to go navigate to MD04. All right, here we got our material number, I'm going to execute that, and one of the things I want to point out might stand out, might not, but if you look at the PO that we were just on, it actually has a negative quantity, so it has a -5. This is showing us that we plan to ship 5 pieces of this material back out to the vendor. So that's not something you'd normally see, right? With a purchase order, you usually see a positive value, like 1 piece, 9 pieces, those are regular PO's bringing product in. While this is a PO for 5 pieces getting shipped out. So MRP plans to send those 5 materials out and then replenish what's needed. We also have an exception message here letting us know, right, that this activity was supposed to already happen. Message 07 tells us the finished date is in the past, so that's another way to monitor and manage these and let us know if something is falling short in the process. But that's a little reactive. What else can we do? Well, we have other options. One great option is to put our list displays to work. We can use something like ME2N or ME80FN, to keep an eye on these PO's and track them through the process. So let's start with ME2N. So here, let's set up a variant that's going to include the characteristics that we want. So in this case, you could see I have a purchasing organization populated, I have a best scope of list, selection parameter of WE101 to show us the PO's that are still open for processing, my plant, all that normal stuff. But now we need to go find that little tickbox. So this is a little tricky, but let's give it a shot. We do this by adding a field from the dynamic selection criteria. That's the multicolor sort of traffic light looking thing up here, you could see it's popped up, dynamic selection. So I'm going to click on that. Now we've got two options. Our purchasing document, header and purchasing document item. As we saw on our ME23N transaction, we want to go down to the item level, and also like before where I have to scroll away, right, in this case, I'm going to have to just scroll down until I find that returns item flag. So bear with me while I do that. Okay, so I scrolled down and now I found my returns item. I'm actually just going to double click on that and it's popped up the dynamic selection over here, right? And what we're looking for is we're looking for returns item where we have an X. So if I've got an X here, I can now go and save this as a variant, and once I save it as a variant, I'll be able to look at my return to vendor PO's pretty easily. So I'm going to click save for this one, I'm going to save it with a variant name of our RTV, let's do that and as our description, we'll call it RT PO's. Okay. And let's save this and run it. Okay, so it's saved, let's go and execute and there we are, right? You see up on the screen, we've got our return to vendor PO so if we had more than one, unfortunately we just have this old one from October, 2018, the other ones would show up here, but now we can track the status and make sure that we get these PO's fully processed in a timely manner. Welcome back from the tour on how to recognize and create visibility around your return of vendor PO's. By using some of these techniques, it helps us to stay connected to the process. Monitor progress and watch for trends. If we have recurring issues, then that's a strong indication that there's an issue and we need to look deeper into what's happening and how we can set up the supplier for success in the future or look for better performing alternatives. Thanks for spending the time with me today. That's some great stuff. Patrick. Thanks so much. We need to commit to closing the loop on these processes. Yes, the PO is a good start, but we need to make sure the goods move and the credits come in as well as preventing issues from recurring in the future if the need to return becomes excessive. Thanks again, Patrick. Well, this was a good topic guys, there's plenty more on this PO processing side that you can check out on our video catalog. Otherwise, please submit your questions below.

Procurement & MRP

MM; PP; SD

MD04; MD05

Best way to learn is by doing and so of course welcome to the video service that unlocks and reveals the hidden value in your SAP system. My name is Martin. In this video we will be discussing something called navigation profiles. Now, navigation profiles are typically a role based selection of transaction codes that are embedded in the top of the MRP stock requirements list and it makes for moving seamlessly between transactions as it relates to the planning process that we have to conduct. They aren't hard to set up, they do drive significant value, and profoundly important. So Kristie, show us where these navigation profiles exist and how to use them. Fantastic, Martin. I'd love to tell you more about this efficiency builder. Let's jump into the system and understand. What navigation profiles are. Where they live. And how they work. Now a navigation profile is a planner's best friend when they are properly configured for that role. Let's go take a look. Navigation profiles are one of those great tips or tricks that really help to enhance our experience when we're working in these cockpit transactions like MD04 and MD05, so the stock requirements list and the MRP list. And if you're not sure what a navigation profile is, it's when you see these little buttons that appear. Now there's a couple of different ways to make this happen. Navigation profiles are kind of hotkeys but the navigation profile is the standard way to be able to add transactions to the header of your screen and be able to navigate directly to them. So if I click on MD02, It's going to take me directly through for this particular material, in this particular MRP area, in this particular plant with my standard default values for single item, multi level MRP. Now, depending on your environment, it may make a lot more sense for you to be going to MD03, which is single item, single level MRP. But, it's very nice to be able to have these transactions listed here for us and I'm going to show you a couple of different ways for how you can get to and select your navigation profile. So the first option is under settings. And if you go to Settings and then down to Settings, you'll see here we've got a whole lot of different options for how to customize our experience in the stock requirements list and the MRP list. If you haven't started exploring in here, there's so many good things that can really help you with being able to get the most out of your experience. It just makes life a lot easier. This is all the usability stuff that helps to be able to get to a place where you're seeing your information exactly how you would like to see it. It really is helping you to make decisions and flow. One of those things is the navigation profile and if you've been through a transformation with us you probably will see one that has oVO in the description, that's what I have displayed here. And then if I click on this button right here to see the drop down list, what this is going to show me is all of the navigation profiles that are out there. So this is something you can have your IT department go out and configure for you so it appears in the list and it will appear for everyone. And when you come in here, and you can also default these, when you come in here you'll see a bunch of different options. So, right now I'm on the Optimization Profile for OVO. I could also go in and choose based on the type of role, or the type of experience that I'm looking for. So you can see here, I've got one for Buyer. Let's go ahead and click on that. And then when I choose this, it's going to come in here and I'm going to say save, if I wasn't sure I wanted to keep it, I could just hit continue, but I'll go ahead and hit save and it's going to say settings for my user have been saved. I'll go ahead and click continue and now you'll see up at the top, I have an entirely different list of transactions that I can move to that are really germane to the role that it is that I'm trying to perform. Some of us are planners and buyers, so we may want to flip across navigation profiles depending on what it is that we're trying to do, where we are in our daily cadence of activities. So we might want to be able to quickly navigate to these other transactions. And there are so many different ways to move directly from MD05 and MD04 to other parts of the system. We know we have these elements here that we're able to move through. We know also that we have all the different options under Go To as well as under Environment and all of these things are related to the work that we're trying to do. So the other thing that you can do here, we went to Settings, Settings and selected Navigation Profile. You can also use this Navigation Profile button right here. And so if you come in here, you can choose Assign, and it's going to take you right back into that screen, and you can select a different option to help you with the process. I'm going to go here and just go to a third one, Profile for Planning, and again you can go out and explore these. and see what is the most useful to you. So simple little trick or tip that can make things much easier. And you can see I just picked one for planning and this is really oriented around more of the long term planning, going out and working with the forecast and those kinds of things. So again, depending on where you are, your area of responsibility, what you're working on at that particular point in the day, where you are in your daily, weekly, monthly cadence, you may want to use different navigation profiles to help you with that process. And the more you think about orienting it to your process and the types of transactions that you might want to seamlessly move to from your MD04 stock requirements list or MD05 MRP list can make a huge difference in the usability of these transactions and they're intended to be a cockpit and really help you with the end to end process. So this is another way that you can increase the value and make it easier to go out and do the things that you need to do. So today we learned a little bit about the navigation profile and how it can actually make our life easier. We explored some of the standard profiles as well as the ones we typically have for our transformation teams. We will focus on some of the key transactions that are most vital to their success. And lastly, we looked at how to choose a navigation profile and began actually working with it. Great stuff, thank you, Kristie, much appreciated. Navigation profiles are super powerful for planners and buyers and can really make life so much easier to just seamlessly kind of work around different environments and different transaction codes. So guys, if you want to know more about this video service and anything else please check out our catalog. And of course if you have a burning suggestion or question please submit it below.

Procurement & MRP

P2P

ME5A; MD04; ME53N; ME38; MCBZ

Hey there procurement professionals, I am Martin, and we're thrilled to have you join us as we work with you to help you set up your suppliers for success. In today's video, we're seeking to provide clarity around how you might provide a forecast to your supplier. Now I'll start by saying this, when you share information with your suppliers for the purposes of planning, it's very important that everyone's on the same page with how that information will be used and what your commercial obligations are or not. This is very important piece of conversation to have with them. Okay, folks, so let's hand this over to our ever diligent, Rutul. Rutul I'd love for you to walk our viewers through specifically how to use some of these tools and techniques that will actually allow them to successfully provide a forecast to one or two of their suppliers. Hello everyone. This is a common request and fortunately we have a few options to achieve the outcome we are looking for. Let's start with clarity on what sending a forecast really means. First things first, are you providing your supplier with your forecasted demand or their forecasted supply? These are two very different things. Most of the time, we would recommend sending their forecasted supply or your expected goods receipts. The good news is that we have a few options to get to this information and I'll walk you through three of those options today. Let's go in and take a look. All right, we talked about multiple ways where we can share the information with our suppliers about forecasted supplies or demand. Let's take a look at a few ways that we can see this information in SAP. First one we will go to is called transaction ME5A. This is a list of all purchase requisitions, they are not firm, by nature purchase requisitions are only a pre step for firm purchase orders. So we're going to take a look at this here in this transaction, where you can see all the different purchase requisitions for different criterias. We can put in purchase material, specific selection criteria, the vendor number. But what we are going to look at here right now is everything in the plant and then I am going to change the scope of list as a layout for ALV. I want to see this list in a little bit better format. So I'm going to put the plant as 1000, one of the plants that you want to look for and the scope of list. And when you click on execute, you have all of your purchase requisitions by material, sorted out that you can see and perhaps communicate to vendors in terms of forecasting. Please be careful here that purchase requisitions again are not firm requirements yet. Another way you can look at the purchase acquisitions is also through MD04. So we're going to go there. We have this material, we are looking for, 100-130. And then the material requirements list, stock requirements list shows everything from all the exceptions and the purchase requisitions, sales orders, reservations, those things. We can easily filter the information in this requirements list to say I only want to see receipts. So you click on this display filter and that standard display filter is showing only receipt. So you click on the SAP only receipts and here it tells you what your purchase requisitions are. You can see the number and you can see the date that is coming in. We can also navigate from here to purchase requisition itself and you can see the information about when it's supposed to be coming in, delivery date of July 8th 2024. That's when it's supposed to come in. So that's a couple of ways that you can see and communicate with your vendors on the forecasted supplies. Another way you can do if you have scheduling agreements in place, then you can see that information at the delivery schedule level. So we will go ahead and look at that. For that, we will navigate to transaction ME38 and enter the scheduling agreement number. Here it shows what the material number we are scheduling agreements for and then when you select the line and click on delivery schedule it will show you all the different delivery schedule for this material that is agreed upon with the vendor. Now you'll see one of the things that you want to see here in the scheduling agreements additional feature is in scheduling agreement is what they call the firm zone and trade off zone. What the firm zone means is that vendor can ship against those schedule lines and delivery lines that is communicated with them. Firm zone falls within certain time frame that vendors can without any further communication, it's ready to go, ready to be shipped versus there is also called trade off zone. And if the scheduled delivery lines fall under and mark as a trade off zone, that means there may still be room for changes to the delivery schedule for that. So that means vendor should not ship against that request yet until it goes into the firm zone. How do you know, or how does the system let you know which is firm zone versus the trade off zone? You'll see that each of these delivery lines has this indicator called firm zone versus trade off zone. Let's take a look at that. You'll notice that when the delivery line is indicated with 1, that indicator means firm zone, which means the suppliers can ship against this quantity requested for that material. If the delivery schedule line was marked with 2, that means they cannot, and they should not, ship against that request yet. All right. Now, there is another, scenario and another way that we can look at the past and even future goods receipt and goods issue information. For that, we will go to transaction MCBZ. You can put in the plant information and we will look at this material again We are going to expand the date period, that we are looking the data for so that we can see goods receipts and goods issues in the past or in the future. So we will go a couple months back and we will go all the way out to the next year. We're going to look from March of 2024 till August of 2025. We'll see what the goods receipt and goods issue picture looks like for this material. Now by default, it does not bring in that information. So we will bring in that additional information and we will look at goods issues, MRP, and goods receipt, MRP, and we will bring them over. Now standard SAP functionality, you can select this line and we can drill down by, and then we look at them by month and now you are looking at what your total goods receipt, and goods issue, projected goods issue and projected goods receipt for this material from March 2024 till August 2025. These are the projected goods issues that's already assigned, which is these are the projected goods receipt assigned and projected for this material. We can look at this graphically, we can select the two goods issue and goods receipt information that we want to look at and we can expand this view a little bit, and we can certainly also look at the options, configure the 2D options as lines and you can see the projected goods receipts and goods issue for this material. This will help you communicate with your vendors or for you to know how much is going to be issued and received and then contractually contact your vendors to make any adjustments that they need Excellent. So to wrap up our time together today, a few key reminders. First, sharing a forecast of your anticipated goods receipt plan with your supplier is meant to help them with the pre planning. Second, there needs to be upfront conversation and clarity around which signals you are sharing with them, and for what purposes? This leads us to the third and very important point, and Martin highlighted this earlier. It is very important that you align with your suppliers on what the commercial implications of acting on that signal in advance of a firm PO or a delivery schedule really means. Hey, thank you Rutul. Always a pleasure to hear your perspective on things, and walking through the options with you. I feel like there will be many more discussions to come out of this video. And I kind of look forward to part two. So once again, thank you. Hey folks, you're going to learn more about this topic or others and even part two, please feel free to check out the video catalog we have. If you have a specific question for us, feel free to submit it below.

Procurement & MRP

MM

ME12; ME32K

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 determine if that price break is really a good deal, using standard information for decision making directly in SAP. How do we know if we're really getting a good deal? As we know, the best way to learn is by doing so Kristie tell us how we're going to analyze the quality of that data in SAP to determine if that's a good deal or not. Oh boy, this is a great one. I had a friend in college who always bought a lot of what was on sale because he was actually always "saving money". Whether he needed that great deal item or not. Let me tell you, even canned goods eventually expire. Sometimes volume discounts make a ton of sense, and other times that seemingly good deal, well, it just really isn't a good deal. Now in terms of total cost, in today's demo. I am going to highlight a few key stats easily available in SAP to help evaluate the quality of that price break. How that price break should be maintained. And some options for potential negotiations to make that break work for you. So what happens when you get a quote back from your supplier and they are offering you some price breaks based on volume discounts? Well, we want to make sure that we have the opportunity to capitalize on that and at the same time we don't want to over purchase because what that can result in is dead stock, so inventory that is sitting there, not turning, not being used well in our process and sometimes even what we call slow moving or even excess or obsolete stock within your own organization based on your definitions. We don't want that. We do want to make sure though that we are taking full advantage of the pricing. So here's a couple of different options for you. First of all, I'm going to talk a little bit about what not to do. So oftentimes when we get price breaks back, the temptation is to do one of two things. It's to come in here and it's to set this minimum order quantity based on what you think that the best price is from your supplier. So let's say the supplier said, hey at 500 units you now get a lower price. You come in here and you go, okay, I think that you know $2.22 is really the most I would want to pay for this particular item. So I'm going to go ahead and set the minimum order quantity here. So what I do like about that is that you're providing a specific quantity. Never cover your lot sizes or your minimums that you're going for with periodic lot sizes. Meaning, if you think that your average usage per month is 1,200 units, don't set your lot size key to be a 4 week lot size because what if your demand changes? Then you're not getting, you're not necessarily achieving what it is that you were trying to from a discount perspective, and it's really hard to see and understand what that quantity is. So, make sure your minimums are your minimums. So, what is the smallest lot size that you would purchase from that supplier? And then also consider your rounding value, and then consider how frequently you have the opportunity to place orders and receive shipments from that supplier, and sometimes you may even have something like a fixed lot size that you're adhering to, or you could have a maximum lot size that you are adhering to. So make sure that we set this up properly. This section, this lot size data section is frequently underutilized, so make sure that you take advantage of that. The other thing is, if you are able to negotiate with your supplier so that you can get your volume discounts over time, another great alternative is an outline agreement. So something like a scheduling agreement or even a contract. So you can see here this is the same item, this flywheel and we have a contract that has been set up. What you'll note is as I select this item and I go into our item conditions, we have some conditions out here and you'll see here there's a little tick box that says scales. What this means is that there are price scales for this item. So there is a price per 1, but then there are also additional prices as we increase the quantities that we are procuring. And when we set this up, you can see here if I buy 1 I pay $45, if I buy 40 I pay $40, and if I buy 80 or more, then I'm getting $35. So I can go in here and manage this and you'll notice that the validity period here goes out quite a ways, but the contract has a validity period that goes through February 25th of 2023, so it's going to be governed by that overall document. What we want to make sure of is that then we are referencing this contract in our source list and every time we buy, it is looking here to see what those price breaks are so we're able to accumulate across time. Same thing with our scheduling agreements. We can also make sure that we are getting our price breaks there, and this allows us to bring in material at the rate that we need it and still accumulate our volumes so that we are able to get those price breaks where appropriate. So, as you're placing your orders, ensuring that you don't have to go and manually remember or key in, oh, this order is for 40, so it should be $40, or this order is for 120 and it should be $35. It will automatically reference the scales that are associated with the contract and every time you go in and you place that purchase order, it will read the correct value for you. So, this allows you to have multiple price breaks and be able to reference them accordingly as you are calling off those documents. And, there are a ton of different scale types that will allow you to model the price strategy that you're experiencing with your supplier, so you can get more creative with your negotiations so that you're able to go in and make that happen. So, really awesome ways to do this without just saying, I want to go for this economic order quantity and not be able to adjust that based on changes in your demand. If you are going to do something like that and enter an economic lot size in, you must review it regularly to ensure that that value still make sense, and the best way to do that is to look at what your consumption history has been through MC42 or look at your requirements going forward through MC43 and we cover those transactions in a variety of other videos. So, make sure it's a good deal, don't overpurchase and use outline agreements to help you to make sure that you're getting the right price based on those purchase orders each time you place an order with that supplier. So in summary, we have covered how to. Quality check the value of that volume discount. Properly planned for the discount. And some options or alternatives for how you might set the rules in place to capitalize on that quality buy without unplanned purchases or relying on manual intervention. Thank you, Kristie. No one wants to be your friend from university who took advantage of what turned out to be not such a good buy. But however, this is a serious concern. We want to negotiate great deals but we also want to make sure these deals work for us. Allowing SAP help to analyze and then apply the rules for those purchases is a huge help in making the right decisions in consideration of the total cost of ownership. So if you'd like to know more about this particular topic or any other topics in SAP about how to utilize SAP better, please feel free to check out the video library.

Procurement & MRP

P2P

ME2M; 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. Hi, my name is Martin and in this video we're going to focus on how to take advantage of SAP's purchase order management capability. When used correctly, purchase order management can help an organization stay current on the status of open orders. This is critical for success when making promises to customers and of course to the manufacturing floor. Kristie, share with us some knowledge about that. Sure Martin. Purchase order management for overdue purchase orders is a powerful feature when used correctly and in this demonstration I'm going to focus on three things. First, how do we find overdue purchase orders? Second, what should we consider in how we should resolve these overdue purchase orders? And lastly, what is the value and impact to MRP when we are able to keep our dates up to date and what happens when we don't keep them up to date? Erosion of the quality of our planning. All right, let's go into the system and talk through some PO management. So in a couple of our other videos we've gone through how to find overdue MRP elements. So in this case, purchase orders through using the exception monitoring tools, so things like MD07 or MD06. In this case, we're actually going to go into a list display to identify purchase orders that are past due, and then we'll talk a little bit about some of the date maintenance that can go on in order to be able to help you to manage those purchase orders successfully. And it's really important to maintain your purchase orders with the correct dates because not only does MRP rely on that in order to balance supply and demand but so does ATP or available to promise both to the manufacturing floor, to your affiliate facilities and to your customer. And this is essential that we have the dates in the most correct or accurate fashion possible because without that, the system assumes, SAP will assume that it is coming in any day now it's very hopeful, it lives in a somewhat naive world so it believes any moment that's going to arrive. So our list displays for purchase orders are going to be found under the logistics, materials management, purchasing, purchase order, and then list display. And we may use a wide variety of options here, we could be using everything from an ME80FN to something like an ME2L, or ME2M, or ME2N. Okay and we're just going to go ahead and go in by material for the moment, and for the purposes of our evaluation today, I'm going to choose any purchase orders that have a material number on them, so not equal to blank, and our part of Plant 1000. I could then specify my purchasing group or my purchasing organization, or even a subset of documents here if I wanted to. But the most important selection here for us is really in the selection parameters. So if you look WE101, these are the items that are still open for goods receipt and it's notable that a purchase order can remain open for a variety of reasons even if it's not still eligible for delivery. But within the context of worrying about MRP and ensuring that we're in a good position there to be calculating the correct requirements plan and ATP to be able to promise accurately, we're looking specifically for items or purchase orders that still have open goods receipts, so that's going to be the WE101. Okay but these statuses in general are really helpful as you're going through and you're trying to evaluate different conditions of your purchase orders and making sure that we're taking good care of them and closing out the cycle. The other thing I'm going to do is I'm going to say, hey, I want to look at my purchase orders that are passed due by more than a week. So I'm going to go ahead and drop a date in here of 4/6 and then I'm going to go ahead and run this. And what this is doing is it's going out and it's identifying any purchase orders that have materials on them, so not free text POs, and anything where the dates are at least 7 days or more in the past. Okay, and this is going to bring me in at the line item level, I can then go into the delivery schedule and this is going to show me for every single line on the PO. Now for the purposes of this conversation, I'm going to turn some of this subtotaling off, so I'm going to go ahead and pull that out, and then I'm going to read you my sort sequence here once that comes up. Okay, so now you can see that I'm starting to get some date information so I can really see what's going on. So I've got my document date, I have the quantities that I'm dealing with here, and then I have also my delivery date and my statistical delivery date. Okay, these are very important, it's important to pay close attention to the difference. I'm going to actually sort this into sending order by document date, and I'm going to go ahead and just bring this out a little bit more and see if we can find a good example that we can go in and take a look at. And what I'm looking for here are some purchase orders that maybe need a little love and attention because they are still sitting out there open. You can see that in this case I've got a wide variety of document types. I have scheduling agreements, I have standard purchase orders, and I have stock transfers. You can see that in the type category, and what I want to do is just go ahead and go in and take a look at one of these just so we can see what's going on. So I'm going to select that line item, and I'm going to go up to go to, and I'll say purchasing document details and that's going to bridge me right into that purchase order. Okay and this is taking me directly to the delivery schedule tab, which is perfect, that's where we should start our conversation today. So my document date is the 22nd of February and my delivery date is the 3rd of March, and so is my statistical delivery date. Okay, so if I had a more accurate date from my supplier, then what I would want to do is go in and update my delivery date to reflect that, okay? That's the date that's going to be relevant for MRP and for ATP. So we are able to get a more accurate read, and that's going to allow manufacturing or the customer to be getting the correct dates as they're going through their planning process. The statistical delivery date is the one that we would use for evaluating performance. So all of our performance metrics would be here. So only in the case that we ask the supplier to move that date out for our own benefit, would we want to change that statistical date. Otherwise, that date should stay the same, and it's the delivery date that moves as we run into issues in the supply chain. As soon as we output the purchase order, that's when that statistical delivery date locks in. Otherwise, if we haven't sent it to the supplier, that's how SAP tries to be fair lets us know if we've actually sent it out to the supplier or not. If we have not output it, then it will continue to recalculate that statistical date based on the planned delivery time. Okay, so if you know your purchase order is going to be past due and you have a better date, or you are currently past due, and you need to give it your next best guess on when it's coming in, while you're working on confirming with the supplier, this is the field you'd want to enter is the delivery date. That's the one you want to update, and the statistical delivery date would stay the same. Now if something has happened and you are no longer expecting to receive more on this purchase order, it's closing out short, then you would want to make sure that you tick this delivery complete tick box. Okay, that's going to be very important. You would tick that and that lets us know we're not expecting to receive any more against this line. The last thing I wanted to show to you here though, is the confirmation. So if you're not currently using confirmations, this is another awesome opportunity. So a couple of things here. When the supplier receives the purchase order, they can acknowledge it and send that confirmation back. Okay, that can be received into SAP in a wide variety of ways. You can even be manually entered if your volume is low enough but there's a wide variety of ways for us to accept that information back in. When we have that, we can choose to make that confirmation relevant for MRP or not but we want to make sure that if that is the better quality information and it's the more accurate date and it's being tended to, well then we want to be able to use that so they can acknowledge it and that means that it's now on their books and they've acknowledged a date back for when they can facilitate delivery of goods. The other option is to allow them to also make changes so that acknowledgement would move based on as they're moving closer and closer to the date, if there are differences in when that delivery date is going to be. And then the third thing that we can do is we can actually have it move from the acknowledgement type AB for order confirmation to actual shipment notification, so an inbound delivery or an advanced shipment notification can be posted and then we'll see that actually change to an LA which lets us know that this is inbound. Now, what's really great about both of these is that we can actually expose that field also in MD04 so we're able to see the confirmation types progress as we move through the cycle of that purchase order. So a couple of different options there. So again, statistical delivery date stays static based on the planned delivery time unless you have asked the supplier to move that date out. The delivery date is relevant for MRP, and so you would modify that as you're getting new information from your supplier in order to be able to keep your planning current. Once you get to a point where you're mature enough to receive information back from your supplier, then instead of you modifying that delivery date, we start to use the confirmations both for order acknowledgement for changes or updates, and then also ultimately for that as a inbound delivery, which also helps us to reduce errors on the delivery processing at the dock and then if we know that we're receiving that purchase order short, we received all that we were going to receive, then we're going to go to that delivery tab and we're going to go ahead and close it out by clicking on the delivery complete indicator, rather than doing anything like deleting the line off of the purchase order because we want to make sure that we have the integrity of that document staying intact. So it's a little information for you on how to update your purchase orders and PO management and being able to use the list displays to get there. In addition to how we would use that for housekeeping through the exception monitor, if you check out the video how to clean up overdue purchase orders. So in summary, we have covered how purchase order management allows you to. Keep the transactional integrity of the system intact. Support quality replenishment, proposals, exception messages, and ATP checks so important for our customers. And lastly, stay in sync with our suppliers and suss out any problems sooner rather than later. Thanks Kristie. Staying in sync with when our suppliers will be delivering goods is critical to our success. Nothing is worse than finding that the supplier is missing an order or we've expedited an order to the manufacturing floor but are missing a key component. If you'd like to learn more about how to get the most of your SAP system please check out our other videos and if you can find the video you're looking for please submit a suggestion.

Procurement & MRP

MM; PP

MD04; MEQ1

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 use SAP's quota arrangement rules to manage transitions. I know this is a pain point for a lot of companies when they are getting started with quota arrangements. This feature in SAP allows a material planner or a buyer to introduce or retire sources, manage changes in volumes and commitments and support all those important transitions. So we know the best way to learn is by doing so Kristie tell us more about how to use SAP quota arrangements for transitions. Absolutely. I agree that this is a pain point that comes up again and again. Let's dive in and see if we can help make this functionality a little bit clearer. In today's demo, we will. Review active quota arrangements. Introduce a new source of supply. And adjust the rules. I'll also highlight a key field in the quota arrangement called quota base quantity that is oftentimes overlooked, and a key indicator that will help us to identify if we are experiencing a problem. It's all about getting to the right starting point. Okay, let's talk about how we can use SAP's quota arrangements to help us manage transitions from one supplier to another. You can see here we are in the MD04, the stock requirements list, and if we look at our planning situation we have a couple of different sources of supply that are out there where we are alternating back and forth between multiple sources. And you'll see here SAP is giving us recommendations on the quantity for each of these replenishment proposals as well as the dates that we need to start working on getting this information over to our suppliers. So our start or release date for when we need to actually be working through getting those schedule lines over if it's on a scheduling agreement or getting a purchase requisition turn into a purchase order. These are outside of our opening date so we're not late enough as of tomorrow this will actually turn into either a schedule line or into a purchase requisition depending on what we have out there. So what we want to do here is actually go in and we're going to introduce another supplier into our quota arrangement and you'll see because this item does have a quota arrangement it is up here as an option at the top of my screen. As soon as this has a quota arrangement available for it you will see that button appear. We're going to go ahead and click on this, it takes us through to our quota arrangement and I can double click on this line. Okay. And here you can see we have two different suppliers and we have a 50:50 split, so 11,000 going to the first supplier, and a little over 11,000 going to the second supplier. As soon as there's another demand element, it'll go to the first supplier, and it'll continue alternating back and forth, trying to keep that as in balance as possible, since we're using simplest rule in a quota arrangement which is just a percentage split. In our quota arrangements we can have a variety of sources, it could be a production line, it could be a specific production version, so a combination of that BOM and routing. It could also be a mixture of both internally sourced and externally sourced items or sources, and it could also be transferring from another location. So, one of the most confusing things about the way the quota arrangements work is that when you are transitioning or introducing a new supplier into the mix, a lot of times folks will add that and add the percentage split and then all of a sudden all of that volume is going to your new source of supply, and I'm going to show you today how to prevent that from happening. So first of all, if you're transitioning, if you're proving in a new supplier or you're starting to ramp one down, remember that you can use your fair share rules to help you with that. So you can put in whatever split you would like here in order to manage slowly across time that introduction or exit from the supplier. Remember as well that you have validity dates on your quota arrangement, so you can control that split over time, maybe you want to do a slow ramp down over a couple of months or a couple of quarters. You can go ahead and control that with the quota arrangement validity periods. When you're at a point, though, where you want to introduce a new supplier to the mix or start to remove an old supplier, the way that you would do that is actually to pay really close attention to this thing called the quota base quantity. That is where the calculation starts in terms of awarding business to the next source of supply. And so what we're going to do here is we're actually going to introduce a third source. We're going to start to dampen our, valuation on 5595, we're going to take them down to 25%, and we're going to introduce a third supplier into the mix for the last 25%. So I'm going to go to Quota Arrangement at the top and I can switch into Maintain from my view, and I only want to do that when I'm actually ready to make a change. It's really important SAP that you don't go in and just go in to change for change's sake, you want to make sure that that's really, a good reason. And I'm going to go ahead and put in my new supplier, which I think is 1472, and then I'm going to adjust my percentages, I'm going to go to 25 here, 1000 is going to stay at 50 and my first supplier is going to go down to 25 as well. I'll hit enter and I'm going to go ahead and click on the save button. Now I have the option also to simulate right from there, but for the purposes of today's demonstration, I'm going to go ahead and just run it through MRP. And we're going to keep a look at this time horizon, we know this is about where our lead time hits, so kind of from that July 31st and onward standpoint. So I'm going to go ahead and run and it's going to say, are you sure? Are you sure? Are you really, really sure? I am indeed sure. And you'll see we had some changes here, so there were some plan orders that were changed and then some schedule lines that were adjusted for our scheduling agreement. I'll come back here and remember that your stock requirements is live as of the time that you enter the transaction, so because we just ran MRP, we do need to hit refresh. So keep an eye right now on our vendors over here. I'll go ahead and click the refresh button and you'll see now we have introduced 1472 into the mix. What I want to do is go back to the quota arrangement and show you the results and so you'll see here we've had an adjustment. So we've got 6,000, 6,000, and just about 11,000. Now I can control where we start that math from by adjusting the quota base quantity, and sometimes that might be necessary. So if I was removing the first supplier altogether and I was just adding the third, I might need to adjust where we were counting from. So I might come in here and just even these out and say I want to start the new supplier from 10,000 and the old supplier from 10,000 and then have it award from there. So make sure you pay attention to this, if your numbers look off after your MRP run, this is where you want to want to make that adjustment because it's controlling where the start of that calculation is from. So if you have had that quota arrangement in place, you have activity against it, you definitely want to make sure that you adjust that quota base quantity and that will start to level things out. In this case, because we haven't had a whole lot of activity against this quota arrangement yet it's okay for us to start from zero. But if you've had activity against it, the quota base quantity is your key to being able to get your suppliers balanced and get the correct ratios. Just look at that allocated quantity, bring it over, use that as your base quantity to start from. So if you're taking it from 50% down to 25%, start your allocation quantity for the supplier you want to bring down to that 25% of the total volume. Start your 50% guy from 50% and then your newest entry is going to come in and it will start to pick up based on that quantity you started also at the 25 percent in order to be able to make sure that that is working for you. Okay, so a couple tips and tricks there to help you get started, but that's how you introduce a new supplier into quota arrangement and help to manage transitions. So in summary, we've discussed how. Care and feeding requirements for managing transitions from source to source can be clear in SAP. How we might adjust our volumes to ramp up or ramp down. And one of the most common pitfalls that comes up and commonly erodes the faith in the quality of planning. And how we can overcome this and be confident going forward. Thank you Kristie. Managing such a key component of the company's sourcing strategy is risky business, and since the purpose of source diversification is to reduce risk, we definitely want to do what we can to get those activities back into the system so SAP can do the heavy lifting for us. So once again folks if you want to know more about quota arrangements or any other features and functions in SAP please check out our videos and if you have a question please submit it below.

Procurement & MRP

P2P; PTM

MD04; MM02

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 how to take advantage of SAP's reorder point planning. Now, reorder point planning is often considered kind of an old planning technique, but when properly deployed can really help automate the replenishment process for consistent low value, high turn items. Kristie, I know this is a near and dear topic to your heart, tell us more. I'd love to Martin. Reorder point planning is a powerful feature when you use correctly, this is one of the coupling strategies available in SAP and in this demonstration I'm going to focus on three key things. The first is the master data decisions required to support the reorder point planning process. The second is how MRP recognizes and responds to the plan for a material that is on reorder point. And lastly, how reorder point and safety stock differ and yet work together to provide an early warning system when our reorder points are at risk, this is especially important because it's very different from how we traditionally think of the role of safety stock. Alright, let's talk some basics of reorder point planning. So first and foremost, reorder point and safety stock are two totally different features of SAP and we're going to go ahead and show you how safety stock comes into play with reorder point but please note that they are different features with different purposes. We've got some videos out there that explain safety stock. We're going to talk about reorder point planning today, which is all about replenishing when you hit a certain stock level. And there are a couple of different kinds of reorder point planning techniques that are available to you in SAP. So this particular material, you'll notice that the stock requirements list looks really empty, and that is because this is on a manual reorder point. So I can see here, based on the MRP type, it's VB and that means that I'm running purely off of hitting a particular inventory level, like physically hitting that is what's going to trigger it. As soon as the system is showing that I've hit a particular level, then it will trigger replenishment and so you can see here there's a lot of different choices for reorder point planning. You're going to look in this when you get into the V's here, these are all your consumption based planning techniques and you have some that are based off of just hitting a particular stock level and others that are based off of projections in terms of external requirements. So something like an order reservation from production may also come into the reorder point calculation and the system is able also to calculate reorder points for you and adjust them. So those are also options as you get more advanced but this is the most basic, so this is just a manual reorder and I can see my settings here, I just click on this little button and what this is going to do is it's going to show me some of those key planning scenarios. So you can see here I've got a reorder point of 40, so as soon as that available quantity hits 40, it's going to trigger me to replenish. I'm using a lot sized technique of HB, so I'm replenishing to a maximum sock level. So when I hit that 40, I'm going to go ahead and place an order that will take me up to 160 and then I'll work my way back down and as soon as I hit 40, it's going to replenish again. So because I have 52 pieces in stock and to be able to show you some things here, I'm going to go ahead and start making some adjustments. I'm going to adjust my reorder point now from 40 up to 80. So I'll go into environment and I'm going to change material and to calculate my reorder point, I'm going to look at a variety of different factors, including how I've been consuming the material, what my lead time is, what my cadence of placing orders is with the supplier, all of those kinds of good things are going to help me come up with that correct reorder point. But let's say I've reevaluated and it should be 80, I'm going to go ahead and save this, and then right from here, I'm going to go ahead and run MRP. So note that I don't have any requirements right now. It's going to ask me if I'm sure I'm going to say yes, and you'll see I have a purchase requisition created. Now, for those of us who are buyers and planners, we're used to seeing like a full horizon of planning or requirements, and that's just not what you get with reorder point planning. So first it can be really, really scary, but this is a great technique to use when you have materials that are relatively low cost, have fairly consistent usage, and are relatively low lead time, like 21 days or less. I'm going to refresh this here and you'll see I now have a purchase requisition and that purchase requisition, because my lot size is replenished to the max stock level or an HB, it's taking me up to 160 pieces, so it's calculating the difference between my current available quantity, which is less than 80 and my replenished to stock level, which is 160, and that is driving how much it's proposing to purchase. Now you may also find you have reasons to use a fixed lot size or a lot for lot with a minimum order quantity or rounding value, but you definitely want to make sure that you have a value in there so that it's taking you up to the appropriate stock level. Now let me show you this other piece, this is the part that's always confusing and that is safety stock. I'm going to add a safety stock to this material and I'm just going to go with the static safety stock here because there's nothing for me to calculate dynamic off of in terms of forward consumption and my reorder point is 80, so I'm going to set my safety stock for 60 pieces. And if this was a material that was on deterministic planning or planning to the demand, that safety stock would drive additional replenishment would make that purchase requisition increase. Watch here though, it's not going to make any difference. You'll notice I now have an exception message. It's my early warning system that says, hey, not only are you below your reorder point, but you're below that number that you said, let me know because if I get below this number, I'm worried I'm not going to get my replenishment in time and I could be at risk of stock out. The safety stock becomes your early warning system, but it does not add to the quantity that you need. So I'm going to go ahead and run MD02 you'll see that there's no change in my procurement proposals as a result of that safety stock and that safety stock could be any value and it's not going to trigger anything additional on this manual reorder point planning without consideration of external requirements. So you'll see that adjustment here, there's nothing that has changed, it has not adjusted in any way based on the safety stock, it is simply giving me the exception message, but very effective to have that exception message as your early warning and help you make you feel much more comfortable in your reorder point calculation. If you're starting to see that a lot, you may need to revisit the reorder point number and then make sure that that item is being replenished on a regular basis and your lead time information is all correct. So that's how the basics of reorder point planning and reorder point planning with the safety stock work. So in summary, we have covered how reorder point planning will allow you to be able to. Decouple and protect materials to position for pull. Focus on materials with shorter lead times, lower dollar values, and a reliable and responsive supplier. And facilitate storage constraints via fill to max strategies. I've used this feature a lot for light replication or proving in a kanban work or managing constrained storage, like tanks or silos. It can be very, very helpful. Thanks Kristie. We consistently find that reorder point planning is underutilized, but it's such an awesome opportunity to let MRP do some of the heavy non-value added work for you. We want to reduce most of our human struggle hours, that's primarily our goal. So if you'd like to know more about other SAP features and functions please check out our video catalog and of course please submit any suggestions or comments below.

Procurement & MRP

P2P; DM

MD04; MM02; MD02

Hello supply chain aficionados, Martin here and today, we're on a quest to unlock the hidden treasures within your SAP system. Ready to reveal its full potential? Let's jump right in. In this video, we want to take a deeper dive into the key differences between reorder point and safety stock. Many organizations struggle with where to use each one of these distinct techniques. Today, we strive to bring clarity to the definition and purpose of each. So Monique, what do we need to know about the difference between reorder point and safety stock? Definitely, Martin. Here's the good news. We have two really great techniques in our arsenal. And they can quite happily coexist. In today's demo. We're going to review the definition and application of both techniques. We'll talk a little bit about determining the value because that's one of the key differentiators in how we might think about each. And lastly, we'll highlight the types of exceptions an MRP controller should expect to get when using either or both options. So let's go in and take a look. Okay, so here we are friends. And I'm sure by now if you have watched many other episodes of Reveal TV, you know we're jumping right into SAP to get the party started. This is the stock requirements list. This is where an MRP controller lives. It is our news feed so we have what we need to manage the day. And as we can see here, what we need is to replenish our safety stock. We have a number of videos that speak to safety stock, but what we are discussing today is the difference between a safety stock and a reorder point. A safety stock is meant to protect against variability and volatility in demand. It needs to be reasonable to the volume we're expecting to sell and protect us against normal fluctuations. It is not meant to cover the outliers that happen once in a blue moon and we should only be dipping into it every now and again. A good safety stock is regularly reviewed and is not chosen in isolation. It needs to be a conversation with your counterparts and woven into your overall inventory plan and demand program. It's about how much additional coverage you want and over what period of time that needs to be covered and it can be static or dynamic. In this example, we're looking at static safety stock. Now let's go to the material with the reorder point attached to it. This material is now on a reorder point type that is manual with external requirements. If that's Greek to you, don't worry, we've got you and we'll explore that detail in another video. The purpose of a reorder point is that it becomes the mechanism for reordering. When I hit this number here, MRP is going to trigger replenishment. The makeup of the reorder point is based on the lead time of the product, includes any safety buffer, and either does or does not include external requirements. You may not have known you have options here. A lot of folk avoid reorder point planning because of the limited visibility, but know you truly have options. My friend Sean will tell you about that in another video. Now, the quantity for replenishment will be influenced by the lot size key and any other lot size information that influences quantity. Reorder point items are generally lower value items with shorter lead times and are sometimes space constrained as well. So here's what I want to do next. I want to add a safety stock back to this item so you can see how reorder points and safety stocks can work together. That's right, they are distinctly techniques that work together. But here's the thing, the safety stock is there as an alert only. It is a warning to us. Danger, Will Robinson. You are depleting that inventory faster than expected. You may need to expedite. And oh, by the way, if that's happening a lot, it's time to understand why and then come up with a plan to address any performance issues and logistics or at the supplier, confirmed orders are going out the door as expected, and there is not a process hiccup in planning. And where necessary, adjust the reorder point. They do require regular care and feeding. There is no set it and forget it here. And the good news is that SAP will not allow it, it's going to let us know, just like setting the safety stock, the reorder point is something that directly impacts your inventory plan. Okay, so now that the safety stock is set, let's run MRP. Here's the result page and you'll see nothing has changed. Now let's go back to the stock requirements list. See our safety stock? While it is driving an exception message, it's not driving replenishment. In reorder point planning, the safety stock is a warning system. It is always lower than the reorder point and is there to alert us when we need to hustle, intervene, review, or correct. Alrighty, everyone. Let me just highlight a few things before we end our conversation today. First, it's important to appreciate the distinction in definition and use case between the two techniques so we can deploy the techniques in the most effective way. This is important because they are both valuable and have a place in the toolkit. Lastly, I want to leave you with this. As I've explored new tools over the years, I've found that shifting from the theoretical to the practical speeds the journey along. So give it a try, and refine as you check your planning results. You are in control and that in itself is empowering. Thank you, Monique. I think it's a great call out, though, that when we're trying to solve big problems like this and try to help understand the differences between certain topics, it's good that we get together like this and actually share ideas and experiences with each other. That way, we get to the best solution. So, folks, if you want to know more about this topic or other related videos, please check out our catalog, and of course, if you have some suggestions for specific topics related to these or any others, feel free to submit it below.

Procurement & MRP

P2P; PTM

MD04; MM02; MD03; ME53N; ME13

Martin: Hi there reveal TV Community, Martin here. We are here with a video that was requested by one of our fellow consumers of Reveal TV. They submitted a request to help with the challenge they're facing to dynamically round the proposals for replenishments to make their inbound logistics and storage more efficient. We love getting these requests, how to solve business problems and challenges that you face. Here to help us with this specific topic is Jake. Jake, can you tell us more about rounding profiles in procurement? Jake: Certainly Martin. I expect most of us are very familiar with MOQ and rounding values that are used by MRP when producing proposals for replenishment. Rounding profiles allow us to take this one step further by applying logic to how we round and what value we round to. Today I am going to start off with the business challenge. Then we'll go in and define what a routing value is and how it influences MRPs proposal for replenishment and the subsequent documents. And then finally, I'll give you a quick rundown of where they're maintained. Let's go in and take a look. Sometimes our suppliers or logistic partners have rounding values that go beyond the straightforward static value. So let's explore how to answer this business challenge. Since we're discussing rounding profiles as part of our plan for replenishment, a good place for us to start is here in the stock requirements list. We can quickly review the planning situation for this material, and as you can see here, there is no rounding happening. Now, most of us are probably familiar with rules like fixed lot sizes, minimum and maximum order quantities or static rounding values. Static rounding values are straightforward and help to make sure that we're not ordering in partials where partials don't make sense. Let's say, for example, that this supplier shipped in boxes of 24, and then that was the smallest increment after we exceeded the MOQ that we could buy. It might make sense to then have a rounding value of 24. Or, let's say you had a make to stock item that was split from a monthly value to a weekly value. Now, that split might result in decimals, but you would never produce or purchase a partial unit, so your rounding value could be as simple as one. In either case, MRP will take those rules into account and apply them when generating proposals for replenishment. Here we can see the additional field for rounding profile. I'm going to add one here, then I'm going to save. Now, unlike a normal rounding value where you can enter any value you'd like, a rounding profile is configured. It's either configured with value thresholds, or it's configured with logic that rounds from one level to another. In fact, it can consider tolerances to decide whether to round up or down at all. There are some interesting options for you to set up your rounding profile. So, okay, let's save and go back to the stock requirements list. Now before I run MRP, let's make note of the current plan without any rounding. Good. Now let's run MRP. It's going to ask me if I'm sure, and I'm going to say yes. I can see here that there have been some changes to my plan, and that's good news. That's what we're after when we added that rounding profile. Now let's go back to stock requirements list and hit refresh. And we can see here the new updated quantities based on the rounding profile being invoked in the MRP run. Now this works for planned orders, purchase requisitions and delivery schedules, any supply proposal generated by MRP. Now, let's say you wanted to be more specific. You could also maintain the rounding profile on the purchase info record rather than in the material master differentiate where it matters and is impactful for you. Here's where you can find the field in the purchase info record. Since the PIR is more specific and assuming the source is relevant for MRP, it will take precedence over the material master. So thank you for following me through how rounding profiles can be effectively applied to the procurement process in SAP. Like most things in life, communication is key . Before we can add logic and reason to the system, we have to have a good handle on what the rules are for what we're trying to achieve. The good news with this particular feature is that it offers the opportunity to reduce the churn in the ordering process in an area where we may often be frequently intervening. Now that you have the basics of rounding profiles, the next job is to go identify good candidates that might benefit from this feature in SAP. Martin: Excellent. Jake, that's fantastic. My hope for all of you watching this today is that this sparks your curiosity on a feature you may not yet be using. Are you ready to round up to the next level? What is your business case for the type of functionality? We can't wait to hear how you apply this in your own business. And if you get stuck, please submit a question below or reach out to us. And folks, of course, if you are looking for more stories like this particular one, there is an entire video catalog on how to use our procurement features.

Procurement & MRP

P2P; PTM

MD04; MM02

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 the basic setup of SAP safety stock capability. When used correctly, setting and managing safety stock can help organizations maintain stock levels to ensure they have the inventory available to meet customer demand and reduce the likelihood of stock outs. Kristie, this is a feature that can really be misplaced and misunderstood and misused. How about you share a little bit with us? Let me see if I can take some of that risk out Martin. We all know what safety stock is, but let's dig into some of the basic principles of safety stock, which provides a powerful capability when used correctly and in this demonstration, we're going to focus on three primary things. First of all, where do we find the safety stock settings in SAP and what are the different flavors of safety stock that we have available? How does MRP react and respond to safety stock in planning? And a few tips for how we might get this right. All right, let's go take a look at some of these safety stock settings. So you can see here I've gone to the material master, I'm in MM03 because I don't plan on making any changes today, so I'm in display mode and I've gone to the MRP 2 view and then I've scrolled down just a little bit until I got to the bottom where we can see the net requirements calculation. This is where our safety stock settings lie and we talked a little bit about the purpose of safety stock to protect us against volatility and variability. Any types of process breakdowns or variants to plan that safety stock is going to provide us with a cushion. And the other thing to know about the safety stock is that if you think about how inventory gets pulled out or accounted for in our planning safety stock comes right off the top. So it is the highest priority because it means if we are dipping into that inventory that something has gone differently than how we plan. So SAP's going to try to get us to a place where we've are going to replenish that as soon as possible. So it's really important that that safety stock value is really meaningful and that we're getting the performance that we're looking for out it. So you can see here there's three different kinds of time or quantity buffers, and I'm just going to walk you through the settings briefly. There'll be some more videos that go into each of these in detail, but the first one is the static safety stock value, and that's probably what you're used to seeing and you're most familiar with. So this is a value that is either set manually, meaning we looked at the material and analyzed it, looked at future forecasted consumption, past history, how our inventory levels have been performing, and you know, really adapting or adjusting for any volatility or variability in the plan. So we put that value in here. Otherwise we might be going through some sort of safety stock modeling or calculation, or we may be having SAP help us to be able to drive this safety stock value. We want to do that, it's a couple of different complimentary settings, but one of them is a service level percentage. So we set our target service level, we have to go in and set some things around MRP type, other master data settings that are complimentary and a little bit of configuration. With that in place, yes, safety stock can be generated by SAP and that's a question we get asked fairly regularly is, is whether SAP can help us to come up with that value and the answer to that is yes. The next kind of safety stock is down here under this coverage profile, so range of coverage or dynamic safety stock and what this does is it allows us to set a target value for how many days on hand we would like to maintain and then it also lets us set a range for what we would like to consider to develop that target value. So we want to come up with an average day's usage, that ADU calculation, and then that allows us to set up a profile that says something like, hey, I'd like to have five days on hand, that's my target. I'd like that to be based on looking out over a horizon of X number of days or weeks, calculate my average daily usage, and then continue to update this. So where our static safety stock values require us to do regular reviews on a cadence to ensure that we've got the correct static values set for that material. The range of coverage or coverage profile is a little bit more forgiving because it's going to move with that demand signal. So as we're using things or we're changing what that forward looking plan looks like, it's going to handle that and move with it. Now, the downside of range of coverage or coverage profiles is that when we do have outliers those big drops or increases in the plan do play out in the way that we're replenishing and so we have to keep an eye on that, and that's going to show up through our exception monitoring to help us understand what's going on there. The last kind of safety stock or flavor of safety stock is a time buffer, and that's called safety time and what this does is, is adjusts when something is needed. So let's say for example, I had 200 pieces that I needed two weeks from now. I could have a safety time in here where it says I want to be covered for an additional week. So instead of that 200 pieces being due in two weeks time, it's actually going to be due in one week's time for the safety time basically gives me an extra week in case something unusual happens. So while safety stock static and range of coverage, or coverage profiles, dynamic, those are for ongoing use. Safety time is really meant to be used for a very specific purpose. So let's say we have a supplier that is struggling, we're working through some transportation issues, you know, ongoing issues at the port, whatever some of those bigger concerns may be in the supply chain, we can use safety time to help offset that. Let's say you had a lead time improvement project with your supplier and they've been struggling to deliver to you, you might have something like my stated lead time is 24 days, that's what I want to have on the purchase order, that's how much time the supplier gets from the date the purchase order is issued until it's received but because that supplier has been underperforming, I'm going to actually have that requirement due in a little bit earlier. So what I actually need in 36 days time, it's going to show the supplier that they have a 24 day lead time, but it's really coming in 12 days early in order to give me that additional buffer. We would want that in there as a temporary measure and we would want to be measuring that and working our way out of it. You also have the option with safety time to consider what you would like to have included in that. So if you look here under your safety time indicator, there are a couple of different options. So it can be for all of your requirements or it can be for just your independent requirements, you're able to set that appropriately in order to be able to buffer serve for some of those constraints. So as we're living in more of a, you know, VUCA world ever increasing, it seems like this is the opportunity for us to help manage through some of that volatility and be in a good position to be able to service the customer. So, three different techniques available to us all located here in your material master under MM02 and we'll start to explore how those impact our planning and some in our future videos. So in summary, we have covered how safety stock will allow you to have. The appropriate shock absorbers in place to weather the storm and protect against variability and volatility. To measure the performance of the inventory and what we're building or holding as it relates to being able to serve our customers, whether they be internal or external. And receive that bat signal when we've dipped below and want to recover before we actually stock out. Thanks Kristie. Using this feature facilitates a supply chain stability and increases our opportunity to deliver on time and in full to our customers without carrying unreasonable amounts of inventory. Very important to review and improve on a regular basis. Okay, so if you'd like to know more about this and other features in the SAP system please feel free to check out our video catalog and of course please submit any questions.

Procurement & MRP

DM; IBP; P2P; PTM

MC42; MC43; MD04; MM03

The best way to learn is by doing. Welcome to the video service that actually unlocks and reveals a hidden value in your SAP system. Hi, my name is Martin, and in this video we are going to focus on how to take advantage of SAP safety stock level management capability. When used correctly, setting the right safety stock level can help organizations establish more efficient and effective inventory management processes to meet our customer demands, and of course avoid stockouts. This is a foundational feature to manage through volatility and variability. So, Kristie, tell us how we know when you've got the right level of safety. I will do that Martin. Let the healthy debate begin, setting the correct safety stock level has a profound positive impact when set correctly and can cause massive problems when it's not. It must be reviewed regularly and in this demonstration I'm going to focus on three things to help us get it right. First, the options for setting your static safety stock level in SAP. How to evaluate a material safety stock level versus consumption. And how to evaluate whether we are following the signal based on the settings that we have in place. So do we even consider our safety stock as important? So how much safety stock is the right amount? Pretty common question and an ongoing struggle for anyone who is buying or planning to make sure that we have the right amount of inventory to help protect us against variability and volatility while not covering for every possible outlier that could occur. So how do you know if your safety stock is performing or not? So you can see in this case here, I have a material that has 500 pieces in safety stock. Safety stock is priority demand, it's our early warning system, so the moment that we fall below that safety stock level, we are going to get an alert and exception message 96, it's going to tell us that we need to get this resolved as quickly as possible, and it's going to show up as an expedite request in order to be able to get that safety stock back into a good position. So it comes out first. It comes out first before any other demand. So when we place that there, there's a lot of importance that surrounds safety stock. Okay, so we went through principles in another video, but I'll just quickly remind you here where this information sits. So if we double click on the material, it's going to take us into the Material Master and the MRP views. MRP2 is where we're setting that safety stock value. So you can see it sitting right here. So we can either manually calculate this, we can calculate this through any type of third party or offline models and maintain it here. We can have SAP calculate it for us by setting some master data in place around MRP types and enabling the right features in order to be able to generate the safety stock level based on our service level percentage. So there's a lot of different ways for us to get the static value in here, but when we say safety stock, we are talking about a static value. So in this case, the safety stock that has been chosen is 500 pieces. So I'm really curious about how long does 500 pieces last us? And so I'm going to go ahead and just go into period totals here and I'm going to look at kind of, if we look across the month, how much do we use in a month? And you can see here that we use quite a lot, so it's quite variable. So we've got our planned independent requirements and our requirements stacked together represent the total demand for the month. So it looks like we've got between 6 and 7,000 pieces that we are typically moving through and we are setting a safety stock of about 500 pieces. So it's a very tiny safety stock versus what the ongoing requirements are. So that's probably the first thing of note, is that it represents a very small number of days of supply. So the other thing I can look at here is I can look at the historical performance of this, so this is my red line graph, it's looking backwards in time and you can see that we had some stockouts that occurred, right? We don't ever want to see that getting down to zero, but then recently as we came into January there's a significant uptick, right? So we've moved the stock level up and since then, since we did that large goods receipt, we've been sitting at a little bit less than 3,600, that's been our low point so we're way exceeding our safety stock level which should be what we're coming down to and then replenishing above, we're way exceeding that, which is down here in the 500 range. So there's definitely an opportunity to look and see what is going on with the planning situation here. But either way, that 500, if we look at the variability in demand, so if we ignore some of the larger ones and we look at the more normalized variation, we can see that there are swings that are easily three times that amount, that are happening in terms of our demand fall off, so how we're actually issuing inventory out the door. So one other thing that we could do here is we can actually take a look and see what our average daily usage looks like. So let me go ahead and pull us into a transaction that will allow us to see that. And this is already defaulted, so over the last three months how much have we been using? And I'm going to go ahead and pull into this report and it's going to ask me what plant, because I foolishly didn't put it in, so there you go, that's an example of what not to do. Let's put in our plant number here and it's going to be US07, I'm going to go ahead and choose that and then I'm going to go ahead and execute this. And so what this is telling me is it's telling me how much coverage I have right now, so I have 24 days on hand and I'm going to go into double line which is going to give me a little bit more information. And so I can see my average usage per day is 223 pieces, my safety stock is 500, so realistically I'm only holding about two days worth of inventory in that safety stock. So now I should really go through and consider whether that is reasonable and realistic based on the lead time for this product and based on the variability that we're seeing. So not every outlier, but what do those normal deviations look like if we look at the consumption pattern? And then I can also compare this around what we're going to be using in the future so I can run the same report forward looking. So this was MC42. I could also run MC43, and that would tell me my daily usage going forward. That in combination with my lead time would give me a good sanity check to see if that safety stock is doing what we need it to do. And then as I get closer to that safety stock level, as we start to bleed off of some of that excess inventory that we have stocked up now, we can start to evaluate whether that safety stock is performing well for us. So this is a couple of different ways that we can look at that static safety stock value and make sure that we're investing in the right areas and that we have enough on hand to make a meaningful difference because we want to make sure that safety stock is really performing for us. So in summary, we have covered. How setting effective safety stock levels will allow you to have an early warning system when demand pulls ahead of supply. Evaluate on an ongoing basis that safety stock is performing as expected. And to look for opportunities to reduce the investment in our inventory on some materials and increase it in others where we're going to get the most bang for our buck. Thank you, Kristie. I don't think it's possible to overstate the importance of getting this right. Too little and we suffer ongoing misses to our internal and external customers. Too much and we reduce the flexibility by committing unnecessary resources, time, labor, materials, space, and of course working capital, which reduces our flexibility and overall success. Okay, so if you'd like to know more about safety stock, safety stock levels, and other MRP settings and just general SAP features and functions please check out our video catalog and if you have any questions specifically related to any of these please feel free to submit them below.

Procurement & MRP

P2P

MD04; ME22N; ME32K

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 take advantage of SAP's scaled pricing capability. When used correctly scaled pricing can help organizations to replicate price breaks from their suppliers into SAP. It improves data quality and flow of information and it reduces the opportunity for errors. Kristie, I know this is a topic you like, tell us more. I would love to Martin. Scaled pricing is a powerful feature when used correctly and in this demonstration I'm going to focus on three primary things. First of all, our options for where we can maintain pricing scales. Second, how they differ from the MOQ rounding values that we are using to drive MRP. And lastly, how the price scales activate in our purchasing document. Scaled pricing is an underutilized feature in SAP and there are a lot more options for how to integrate them into your overall strategy than what a lot of folks might think of right out of the gate. So let's dive in and see what some of those options are. Okay, let's go in and take a look at price scales. So one thing I want to say before we dig into what this looks like in SAP is just to remember, that your price breaks and your lot sizing techniques and your minimum order quantities and your rounding values are related, but they are not the same thing. Oftentimes price scales are not reflected in the system, and that's because we don't think that SAP can handle the logic for how we have our pricing set up, and so what we end up doing is we just say, okay, this is the economic order quantity, I'm going to have all my planning work to this quantity, and the problem is that as your demand changes or business conditions change, what you might perceive as a good price break may not be the best in terms of your total cost of ownership. And so what you really want to do is you want to have price breaks in the system to be able to take advantage of those cost breaks, but have your minimum order quantity be your legitimate minimum order quantity and then think about the lot sizing techniques in the rounding values that work with how you're logistically moving product, how often you're placing your orders, how long you want to cover in terms of days, weeks, or months, with that particular order, and then let your price breaks work independent from that so as you're actually going in and you're creating your purchasing documents, you're grouping materials, or you're grouping quantities together over a period of time and allowing you to take advantage of those different cost breaks. So we can set up scaled pricing in a variety of ways and today I'm going to show you the simplest which is just a quantity scale, and you're able to set this up most commonly in your purchase info record, also in outline agreements, so things like your contracts, which is what we're showing today, or a scheduling agreement as well. And all of our price conditions will have very specific validity periods associated with them, and that's very importnat, and we're going to go in and we're going to actually adjust this guy right here. So I'm going to go ahead and click on this line and then I'm going to go to price conditions and anytime I am adjusting my price conditions I do want to create a new validity period for that. This one is already reflecting today's date, so we are good to go, you don't want to overwrite you always want to create a new one. Okay, and I'm going to go ahead and select this line, now to get to scales you can see I've got a tick box right here that means that there are quantity scales that are out there and available to either add or adjust those, I'm going to click on the scale button, I could also have gone to go to and then added scales in, and I'm going to actually go in and set up my price breaks here. So you can see I've already decided I'm doing a quantity scale and I'm going to come in and make some adjustments. So if I buy one piece, one piece is going to give me a $45 price. Let's say I buy 40 pieces, and that's going to take me down to $40, and let's say I buy 80 pieces, and that is going to take me down to $35. Now most often with our quantity scales, those are going to be related to reducing the amount of setups or changeovers and might be related to some of the logistics costs, like freight is built into our piece price and it's not a separate item. All of those kinds of one time charges that are related to our procurement, that's where we're most commonly going to see the strongest price breaks. Now, sometimes that's also just a function of getting a better deal based on quantity, but a lot of times it's tied into the actual manufacturing process. We want to think through that and use that as a negotiation technique. Now this is a quantity scale, which is the simplest form of scaling, but you can see in here there's a ton of different options, and this is the tip of the iceberg in terms of how we can actually develop our pricing in order to get the right price onto our documents. But you can see we can do quantity or value. We can even do things by weight or size. So as you're thinking through logistics, you can also see that you've got things around periodic, so, days, weeks, those kinds of things, distance, there's a lot of different options here in terms of how we can set that up. And this is, again, tip of the iceberg in terms of how we can actually determine what that price should be. So once I have this in here, I'm going to go ahead and hit save, and then I always, always want to just double check. So I'm going to pop right back in, I'm going to select my line item, I'm going to go back to my price conditions and I'm just going to just triple check and make sure that everything looks the way that I'm expecting it to. Go right back into my scales and I can see here all of my different price techniques. So this is great. Now I know that I've got some conditions set up, and so anytime I am issuing a purchase order that is tied to this contract, I am going to see those price conditions are going to be honored as a part of that process. So let's actually go through and let's try to convert one of our purchase requisitions to a purchase order. So go back to the main menu I'm going to go to MD04, this is the best place for me to see what is happening from a planning perspective, refresh, and I'm going to go ahead and try to convert this purchase requisition into a purchase order and we will see how we are looking. ​ Okay. It's one of my favorite things to do in SAP, I get to go shopping, so I'm going to go ahead and grab this requisition and I'm going to drop it into my shopping cart. Okay, and it knows I'm ordering 60 pieces and I can come over here to my conditions and I can see what is actually happening with my pricing. And I can see if we remember if we ordered one piece then we were going to be paying $45 and then we set up some discounts from there so that we could actually get that price break automatically determined for us on the purchase order, and if I'm ever unsure, I can always click on this analysis button and it's going to tell me exactly how my pricing was determined. So that I can see what is actually happening in that price determination, and it'll tell me everything that has been looked at as it's gone through and flown through that condition record so that I can see exactly what's happening. And so when we say it's robust all of this is what is telling us that these are all the different pieces that can come into play in terms of being able to get that price onto our purchase order. And if there's been an update and it's eligible for this purchasing document based on my update techniques, I can actually come in here as well and I can actually redo my pricing or re carry out my price procedure and it will allow me to go through and see what is actually happening with the pricing and it will re-reference all that information to ensure that we have the correct price on the purchase order. Okay? So very important, very helpful information to have in terms of being able to come in here and see what is going on, but scaled pricing is very easy and we want to make sure that we are getting that set up so that we have good, repeatable, sustainable pricing on our purchase orders without having to manually intervene and adjust. So, in summary we have covered how scaled pricing allows you to. Be able to ensure the correct price is being applied without having to manually intervene. Have a symbiotic relationship with MRP and PO automation. And save time and effort by focusing on the upfront setup of pricing structure rather than managing every transaction every time, this helps our buyers rise above the order and make time to focus on negotiations and other sourcing related activities. Brilliant, thank you Kristie. I can see how this would be helpful. So many buyers find themselves mainly adjusting either lot sizes or pricing on a document by document basis. How incredible would it be to let SAP help us with this? Between our lot size strategy and our scale pricing, there seems to be a great opportunity to let SAP do a lot of the heavy lifting for us once we provide them with the right rules. If you'd like to learn more about this topic and other topics to relate to SAP please feel free to check out our video catalog and of course if you have any concerns or questions submit them below.

Procurement & MRP

MM

ME32L; ME38; MD04

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 two key features in SAP schedule agreements, zones and creation profiles. These key features in SAP offer support for common requests from suppliers. The zones help us to manage signals and agree to activities, and creation profiles cover a lot, but more specifically include the ability to aggregate information across time. Kristie, why don't you tell us more about these schedule agreements capabilities? Definitely. As you alluded to, there's a lot going on here, so we're going to hone in on a couple of key points. Firstly, we'll cover off on the zones. The definition of firm and trade off zones offer great signaling capabilities to our suppliers and another level of negotiation for our buyers. Really cool. Then we'll talk about creation profiles and the level of aggregation so that suppliers get the right level of detail at the right time. Think of this as relevant information at relevant time ranges. I'll also show where this information is maintained in the scheduling agreement. Let's go into SAP and check it out. I am so excited to show you this functionality in SAP. Scheduling agreements are a great tool to strategically manage our sources of supply and to be able to provide them with good information and one of the most underappreciated features of scheduling agreements is our ability to differentiate between the different zones. So if you think about firm, slushy, and free zones. It's a similar concept here and what I want to walk you through today is where this information is stored and also the impact that it can have as we're trying to set boundaries with our suppliers for what activities are happening when while endeavoring to share more information with them especially when it comes to our outlook on what we would be expecting to supplier our forecasted quantities. So you'll see here I'm in ME33L and I'm just going to go look at this particular scheduling agreement and when I come in here, you'll see I just have this single material set up and I want to go in and take a look at some of the details. So you'll see here this additional data, this is where a lot of the master data for this particular scheduling agreement is stored, and this particular scheduling agreement is an LPA. So there's three types. There's an LP, an LPA, and an LU, this happens to be an LPA. But you can set these zones on any of the types of scheduling agreements. You'll see here, the first scheduling control piece is called a firm zone. And then you also have something called a trade off zone, and then everything beyond that is the free zone. So think firm, slushy, and free. And what this does is it provides a really amazing opportunity to have an agreement with our suppliers on what specifically each of these zones mean and it allows us to also print this information on our outputs and incorporate that into the actual documents that we're sending to the suppliers when we're allowing them to see our delivery schedule. So for example, firm zone to you may mean okay to ship or okay to produce, depending on what kind of lead times we're dealing with and what kind of commodity we're dealing with. The second one, the trade off zone, this may mean okay to commit capacity, okay to purchase raw materials, or this may be your go ahead for production. Again, depending on what kind of relationship you have with those suppliers, what kinds of goods or services you are procuring from them. And then the last piece is the relationship with MRP. So what is MRP allowed to change? Is it allowed to adjust within the trade off zone, or is the trade off zone going to stay exactly as it is and it's just going to adjust outside of that. Now, most of the time, your firm zone is exactly what it says, it's firm, no adjustments by MRP. Trade off zone depends on what this means to you commercially and how you have that conversation with your supplier. You may want to provide that to them as an outlook, but they may know that there's going to be slight shifts in those dates or quantities. So you need to make that decision based on those conversations and what the relationship is with your supplier and whether they're holding inventory for you or not. The second option here or opportunity within the scheduling agreement that I wanted to highlight for you is something called a creation profile. And this is very cool because it has a lot of different settings that control the way that we share information with our supplier. For example, if we're working with an LPA scheduling agreement, we can do a just in time delivery schedule and then a forecasted delivery schedule, we actually provide two separate documents to the supplier, we can do two separate outputs for them to be able to see what's happening, and we can control the way in which we issue those changes. Another really awesome opportunity here are the aggregation horizons. So maybe in the near term you want to be able to provide your suppliers with information in daily buckets, in the midterm you would like to have weekly buckets, and in the long term you actually want to roll that up to month. This is a great way to share information with your suppliers based on the relevant information at relevant ranges and how accurate you are able to be from the near term out to the long term. This also sets the tone for those conversations around what that data should be used for in their planning processes. This is a great way to be able to set this up and share that information with the suppliers in a way that is easily consumable by them and so that they understand what the data means. So this aggregation level, the way in which we choose to create releases or changes to the scheduling agreement and the firm and trade off zones are great communication avenues to be able to adjust the way that we're having conversations with our suppliers and share information so the right activities are happening at the right time. This does require a little bit of configuration and a lot of business rules discussion, as well as setting up your outputs to show the correct information, but a super valuable tool in terms of being able to make your strategic sourcing strategies a reality and easily executable and monitorable directly within SAP. So in summary, we have covered how these key features in the scheduling agreement will. Allow you to be clear in your communication with the supplier on what those signals mean. Provide suppliers with broader outlooks while still restricting your commercial obligations. And set the supplier up for success and reduce churn through aggregation. Thank you Kristie. The more we help our suppliers the better positioned our suppliers are to help us. These sound like valuable options to enrich the conversation with suppliers. So folks if you want to know more about how to get the best out of your SAP system please check out our other videos and of course if you have a burning question please submit it below.

Procurement & MRP

DM; MM; PP; SD

MD06; MD07

Hey, folks, Martin here and in today's video we're going to be talking a lot about whether we should be using MD06 or MD07. So welcome to the video service that unlocks and reveals the hidden value in your system. Let's get cracking. So in this particular case we're going to look at whether an MRP controller planner or buyer should be using an MRP list, i. e. MD06 or a stock requirements list, i. e. MD07. It's a pretty common question, and the answer is both. This is one of the many situations where it truly is not an or, but rather an and. And it really helps with the day to day planning. Kristie, I know this is a common topic that comes up all the time, why don't you share some more details on this? Yes, I would love to. Both of these are fantastic transactions, and they are absolutely essential to a planner and buyer's life. They have a ton of similarities, but they also have some key differences. The best way to explain is to go in and take a look, but spoiler alert, and most of you have probably already noticed this. The MRP list is static, as of the last MRP run, great for managing the business of the day and for troubleshooting when something looks off. The stock requirements list is dynamic, it's alive, and it's keeping pace with the activities of the day. Also, as the names imply, the MRP list is only relevant for the materials that ran through MRP, and the stock requirements list exists for all of our materials. Both are very valuable, so let's go in and do a side by side comparison. Such a common question, do I use MD06, which is the MRP list, or do I use MD07, which is the stock requirements list. Let's go through some of the differences between the two, and I'm going to specifically focus on when we go in and we're seeing the exception monitor and so I'm going to point out some of the key differences to you. So the first one is that the MRP list is static as of the last MRP run. So as things are happening with your materials, they get planning file entries, and that tells the system that something has changed and it's time to go out and run MRP. And on a regular cadence, you may be running across your entire planning book, either on a weekly or monthly level, and going through and making sure that everything gets the opportunity to run through MRP. But in general, most of the time, you're going to see that you have different MRP dates out here for different materials, and you can see that clearly. So every piece of information that we see here is static as of that last MRP run. And if you have any challenges with your discontinuation process, very often you'll see older materials that are hanging out here with really old MRP dates where they haven't been pushed to the process in a while. Now this is a test environment, so you're going to see all kinds of different information. But we're just going to do a compare and contrast here. So, this is MD06, and I'm going to flip screens so that you can see MD07, I'll tell you we're going to go through the differences so that you can see on the screen what those are, but to make it really easy for you to tell which one I'm looking at, MD06 doesn't have any materials highlighted. MD07 I've highlighted some materials just so it's really obvious as we're going through here which one we're looking at. The other thing you can do is look down here in the lower right hand corner of the screen if it ends in 7. This is MD07, the stock requirements list exception monitor and if you look at this one, it says MD06, this is for the MRP list. So a couple of telltale signs that you are in and you are working with the MRP list, and this is also one of the big advantages, is first of all, you'll see the MRP date. We do not have this column in MD07 because it is dynamic. It is live as of the moment you enter the transaction, and the reason you see that little refresh button in MD07 is because it's as of the moment you go into the transaction. So you can go in and you can refresh right from there to make sure that everything is up to date or you'll get a queue to update your statistics. So it's collecting that data and information. But the other thing that you're going to see in MD06 or the MRP list is your ability to set the processing indicator. So as you are going through your morning ritual of reviewing your exception messages and cleaning up your planning results, as you're doing that, when you go through and you pull this in and you're working through your list you have the option to go in and click on the processing indicator. When you set this, then the rest of the day, when you go to run your MRP list, you can choose to exclude the items that you have already worked on. So this is for our folks who are either running classic MRP or are still on ECC. You no longer get an MRP list if you're running MRP live. So that is really powerful and important because it also lets you know how far you're making it into your day. And I don't know about you, but you know, there's interruptions all the time. So it's nice to be able to go, oh, yep, click, click. I've gone through and I've looked at that one and then I'm not going to see that come off until the next time that item runs through MRP, which means that there's been a change. Okay, so it will come back off though the next time that it runs through MRP. So you see here, we don't have those things. So that's one of the ways that we can tell that we are in MD07. A couple of other things you're going to see here is you're going to see your stock information and then you're going to see your forward days of coverage, or your receipt days of supply, as well as your exception messages. So if I come back over here to MD06, yep, same thing, I've got some master data elements, I have my inventory information, and then I have my stock days of supply with my forward coverage based on different parameters. There's a whole other couple videos on that to explain how to work with those because they're very, very powerful when they're set up correctly. And the next door to that is my exception messages. So here's the big question. Which one should I be working with? And the answer is both. You actually want to start your day with the business of the day. So you want to work with your MRP list first. What has changed since you went home last night? What is going on that needs attention today? Where are those new messages? And you're going to note that one of the big differences we'll see here is we're going to see a different group of exception messages available to us. So I'm going to tell us to go ahead and update our statistics. You always want to say yes, otherwise you're just going to get a gray screen, it's going to show you all of the different elements and all the different exceptions with no counts. And what you're going to see is we have some exception messages here that do not show up in MD07 because they're related to the MRP run. And those are going to sit in group 4 and group 8, okay? And really when you run your group 8s, instead of selecting it here, you want to actually choose it and find the materials and then choose that exception message group. All the rest of your exception messages, you're better to find them from here. But you're going to see things like newly created, an order proposal has been changed, an order proposal re exploded. You're not going to see any of those in your stock requirements list. You will see scheduling master data inconsistent though because that goes beyond the MRP run, that is a planning problem, so you're going to see that information over there as well. So it's really, if MRP isn't able to run, and it's information like, hey, hey, I'm just letting you know something changed and I want to let you know about it because it's really important because you gave me a job to do and I'm trying to get it done. So MRP is really good about communicating that to you and sharing that information. So let me flip over to the other screen and let's look at the same thing there. So I'm going to go to get into my binoculars and you're going to even see that the counts are going to be different. If I've filtered my MRP list based on a particular date range that it's run, I'll see some things there. So again, find an exceptions and you're going to see the list here is much shorter. We don't see the 8. We don't see the exception message group 4s. And those other three exception message numbers that tell us about what the MRP run was doing, because this is what is going on with this material active as of now. And the list in general is a bit shorter because this is the MRP list might have some things in there that are outdated if we haven't adjusted it based on the run date or if we haven't run any type of reorganization on the MRP list in a while. So, again, if your discontinuation process, if you put materials away and they're not clean, then the MRP list can start to look really, really messy and there's definitely an opportunity to go in and clean that up. And that typically, once you've got a good process in place, you're no longer creating that problem. Going through and doing that cleanup can be a big effort, but it's well worth it because it gets all the clutter out and the things that you're looking at are way more powerful to the buyer, planner, MRP controller that's working with it. So you're going to see a different group of exceptions here. So start your day with the MRP list, go through your materials, get your exception monitoring done, get queued up, make sure that you know what the planning results look like. If you're not happy with them, adjust your business rules and your master data to get good results and then let it roll. And then throughout the day when you're having conversations with folks, then you really want to be over here in the stock requirements list working on those materials. And whether you're doing that collectively coming through the screen that we're looking at right now or whether you're going in and you're choosing an individual material. So this is going to give us a work list or we could be working on an individual material. We can continue to add materials throughout the day to this list just by entering them in and then hitting, the refresh button. We are going to be able to generate that list. So live in the stock requirements list. Bring the work of the day, the problems of the day, the opportunities of the day to the forefront by looking at the MRP list so you know what has changed. That's your business of the day to work through first and then move over into the stock requirements list for the rest of your day to be able to continue to drive value. Excellent, welcome back. This is a great discussion and I love the good conversations we are having. We have more than one tool in our toolkit that supports our planning and as material planners, we definitely need to be using both of these tools on a daily basis. Today we jumped into SAP and did a side by side comparison between the stock requirements list and the MRP list. We compared and contrasted them and added some context on where each could be used. We also highlighted the order of attack, so using the MRP list to gather the business of the day and then moving on to the stock requirements list to help resolve particular situation as the day goes on. Both are invaluable and an MRP controller should have a home base for the work that we do in both of these transactions, right in SAP. Thank you Kristie, great differentiation. This is the workspace and there is so much capability right at our fingertips. We definitely need more conversation on both of these particular features but that's a good starting place for now. So folks, if you want to know more about this and see some more advanced videos on these particular topics, please check out our catalog and of course if you have a particular question or a need please submit it below.

Procurement & MRP

P2P; LOG; OTC

MM03; MD04; ME13; ME01

Martin: Hey folks, Martin, here we are in the midst of a quickly changing landscape when it comes to these tariffs. It's a lot to keep up with, let alone fully consume, and come up with a solid game plan for your business. It's tough. What we thought we'd do today is help with a quick list of practical tips to keep SAP up to date with all these dynamic adjustments . As an SAP community, we're all in this together and the more we can share about how we are coping, the better for each one of us. We need a beacon and who better to guide us and ground us than Sean? So Sean, guide us through this process, teach us what SAP can do to help us deal with these dynamic changes every single day. Sean: Thanks Martin, a timely topic of course. So well, folks, it certainly is storming out there. So many changes in such a short period of time. Today we want to focus on some of the key features in SAP that can help us. Let's walk through three pieces. The first is, let's talk about master data. Very key for keeping us compliant and setting us up for success. Second, let's discuss the changing of the sources of supply for those of us trying to move our business from one place to another. And last, but certainly not least. Let's discuss whether and how we might account for those changes in pricing to our customers. Now, some of you may have TM and or GTS in place, and that opens the door to a lot more functionality. Today's walkthrough is for those who may not have access to those tools. Let's get into SAP and brainstorm. Before we dive in, here are some ideas around actions. Let's review the master data that must be in place to ensure we're recording everything as we should, so that we are compliant as a business. Now, there are two key master data elements that provide the foundation. The first is the HTS code, and this lives inside of the material master. HTS it stands for harmonized tariff schedule, and it sets out the tariff rates by category for all goods imported into the United States. And similarly, most goods traded worldwide also follow a harmonized schedule. The second critical piece of master data is the country of origin. Now, country of origin can be maintained in the material master as we see here, or it can be in the purchase info record if it varies by source and can subsequently be maintained by a batch number in cases where there is more than one country of origin in play. In that case, the batch lets you track the country of origin, where it went, and on which order as well. So both of these pieces of master data, the HTS code and the country of origin should always be well maintained in order to meet regulatory reporting and compliance standards. You may also have some other customer restrictions on which they will accept or some other commercial agreements that need to be part of it. So with that, let's get us started now. Now many of our viewers are currently working on transitioning source from one country to another, and we know that's proved difficult as the tariff rates are continuing to change and evolve and will continue to do so as negotiations unfold or as our world leaders respond. In many cases it's not as easy as finding a US source. There's just some materials that are not readily available in the US and others that are much more costly to produce tariffs or no tariffs. If you have a transition in mind, therefore, SAP can help manage the timing of the transition from one supplier to another. The source list is a great tool for supplier qualification, control and timing and can be coupled with quota arrangements and outline agreements to help strategically manage the volume splits. Not only does this help with transitions, but it can also help with temporary, additional and alternative sources. And here we can see an example as we see it here on the screen. If you have a country of origin requirement for customers or in manufacturing, that's when you want that extra layer of batch management assignment to help manage those more complex environments. Now, let's think if you're changing source and want to go to an entirely new material number, you can use tools like material determination for incoming orders to push orders to the new part number or to split customer volume by country of origin. And this is handy in particular for use up scenarios, so you want to use things up and finish them out, it's very helpful in that regard. As things continue to shift and change, you're likely to experience shifting demand patterns. So be sure to update your demand plan with the best outlook you have and get that forecast into SAP where appropriate. In that regard, then pay close attention to your forecast performance and opening remaining items to sell that you've got already in your pipeline. Now we're onto the tricky one. How will these changes affect our customers? If you're considering a change, please just bear in mind, that you do not have to make a fixed price increase. You could consider a temporary surcharge that's easy to maintain or determine with solid price procedures. And that's going to be the subject of some further conversations. So folks, as we've taken a bit of a tour around SAP, I hope we've sparked your curiosity. I think it's safe to say that you'll be seeing more on this topic with deeper dives in the future. To recap a few critical points from our time together today. Maintaining the proper master data helps us to meet regulatory and compliance requirements. Now is a very good time to double check your work and make sure that you have the proper HTS code and country of origin on all of your products. This is always critical whether or not we're going through a round of tariff changes or not. And then really dig into how we can have SAP help you . From price conditions, to a reasonable approach to transitioning from one source to another, to really digging into the puts and takes of your demand plan. We can put SAP to work and managing the churn, quietening the chaos, and navigating the changes. Much more to come on this subject, folks. Good luck. Martin: Wow, Sean. Thank you. That was super comprehensive. So folks, if you are struggling to keep up or are managing some of these pieces Sean just walked through outside of SAP, I'd encourage you to phone a friend at Reveal and just ask some questions. We know that this is a challenge for many of us right now. Hey, folks, if you want to know more about this topic in particular or just other areas that you can use SAP to become more agile, please check out our video catalog or use our AI chatbot to find specific videos for you.

Procurement & MRP

QM; PTM; P2P; OTC; WM

MD04; MMBE; MB52

Hey there, welcome back Reveal TV community. Martin here. Today we're going to talk about the topic that no one really wants to talk about. Today we'll be discussing how to clean out the proverbial SAP junk drawer, also known as blocked stock. Now blocked stock in SAP is pretty straightforward, but we regularly see unconventional uses of this important stock status, leading to unnecessary exposure, tie up in working capital, and incorrect planning and promising to the customer. The bottom line of blocked stock is this it's an intermediary status that requires decision making and action. Here to add a little bit more context and clarity on this topic is Jayden. Jayden, why don't you tell us a little bit more about the better use of blocked stock and where to use it appropriately. Hey Martin, thanks for having me. So there's two things we need to keep in mind about blocked stock. First, it's a valid status that indicates that we do not expect to be able to use that product without another action occurring. By standard definition, it's not meant to be valid for use or relevant for planning. Second, if we don't stay on top of it, it can quickly build up and because it's not expected to be usable material, that can result in financial exposure in terms of over procurement or production. The thing with blocked stock is that it has a tendency to sit and we don't want that to happen. We want to use this status with its standard definition and rules and then make decisions that are followed with action. So let's go in and take a look. Here we are in SAP. I'm going to walk through a couple of transactions today. You can see where I am at by looking at the transaction code in the lower right hand corner of my screen. First, I'm going to head to MB52. This is a great transaction to see our perpetual inventory, and we can see loads of good statistics from here. This is one of the most commonly used transactions for inventory management, so many of you are probably familiar with MB52. It's a good one. Okay, now we're going to sort by materials that have blocked stock associated with them. Martin mentioned that we are making this video today because we've recently answered questions for a few organizations that have redefined the stock status. What I want to point out to you here is that there are so many options for how to classify our stock status and each has its own definition and rule set. We would recommend using blocked stock as it is intended. Do you have a situation that just doesn't allow for that? You can always reach out to us. We have a good material here and let's head over to the stock requirement list to take a closer look. Here we are in MD04 and we can see that we have the golden cubes up here in the corner. This means that we have stock and classifications other than unrestricted. By clicking on the cubes, I get a pop up that tells me what's in the blocked stock. We can see here that we have unrestricted, quality inspection, blocked, and several other options. Blocked stock is not meant to be relevant for planning use or promising. There is a clear difference between quality inspection, which is expected to have a positive outcome. It is expected to be available for the use in the future, and often has a date associated with it for the release of that lot. Blocked stock is assumed to require an action before being made available for use, such as rework or not to become available at all and require disposition. Let's go back to the golden cubes one more time. I want to show you one more place that is often helpful. From here, or from the Goto menu, We can click on the stock statistics, and that will take us to MMBE for more detailed information on this material, including things like batch number, storage location, MRP area, and many others. When we think about blocked stock, it is really intended to be a short term stopover. We want to keep an eye on the aging, so looking at something like MB51 to see how long that stock has been sitting is also very useful. From there, we can track the material movements and see where the stock came from, who worked on it, and how long it's been hanging out there. This, in addition to value and criticality, can help us get to the decisions flowing because the inventory, while in blocked, is definitely not. Blocked stock is an interim step. It's a white point. And sometimes, when we don't focus on keeping it moving, it can become a junk drawer. This is not where a cycle count write off from three months ago should be sitting for further verification. This is not where material that has failed inspection with no plan for rework should live. This is not where non conforming materials you intended to return to your supplier 18 months ago should still be sitting. We need to keep it moving through regular review and consistent monitoring. Blocked stock is a deviation from plan, schedule and actionable. If the blocked stock is reintroduced into the process, that is also an unexpected action, even if it's a positive one. So let's keep an eye on the blocked stock process and make sure that the decisions are constantly flowing and the actions are being realized as a result. Thanks, Jayden. I really appreciate you kind of weighing in on this and kind of sharing the topic of blocked stock and bringing some key insights to the table. So thanks. This is inventory that is not performing for you, folks. We know it's hard to say goodbye, but don't shy away from disposing it if that's really what's needed. And make sure we're communicating cross functionally with our partners in procurement, manufacturing, quality, engineering, warehousing ops, and of course, finance. You'll find what you need to make the right decisions for your organization. Hey folks, I know this is a hot topic so feel free to use our chatbot and you'll get a recommendation for other videos that are relevant to this particular topic of inventory planning.

Procurement & MRP

P2P; PTM

MD04; MD03

Hey there supply chain enthusiasts, Martin here with a topic to help you tackle a beast of a challenge. SAP offers a variety of ways to tackle variability, volatility, and disruptions in the supply chain. From conventional static safety stock, to dynamic ranges of coverage, to safety time, they all have their place and purpose. And so long as you're not stacking them on the same material, all have a place in the planner's toolkit. But did you know that we also have something called dynamic or time period dependent safety time? This is an opportunity worthy of conversation. Hey Sam, I know you're here to talk us through time period dependent safety time and some of the ways it could be useful. Please help us understand what exactly it is and how we could use it. Yep Martin, it's a good question. We're always going to be dealing with challenges in the supply chain. The question is, what we can do to provide practical protection and risk mitigation without sacrificing inventory performance. So, we want to protect, but not be overprotective, and one of the things we need to consider specifically with safety time is that there are rules for when it should and should not be used. First and foremost, it should be specific in purpose and intended to be a temporary solution. With time dependent safety time, we can go a step further, and when we want to apply it, pre plan for a known temporary constraint, and then return it to normal. It does require a bit of setup and configuration, so think of this as a pre planned events or known time dependent constraints. And for those of us on S/4 and living in the Fiori world, there's an app for that that makes things easier. This is the beauty of solution for some of our most beastly challenges. Let's dive into SAP and explore, I'm excited to give you the tour. Let's go to homebase. Here we are in the stock requirements list and we're looking at a material that has had some challenges in consistent delivery. It currently does have some safety time in place. I'm going to go into the Material Master, head to the MRP2 tab, and scroll down a little bit. These are the current safety time settings. Having safety time in place means we want to follow the demand and not add additional inventory on shelf. But we want the inventory to appear to be due earlier. Now, we may be protecting against variability in demand, in which case we want it on the shelf early because we're not confident in the timing of the demand but we don't want to bring in more than what the demand plant states. Or, we have a process performance issue that we're trying to address. We know it may be late and we're working to improve the performance with that supplier. Safety time should be here for a specific reason and should be intended to be temporary. We can put a note in the material memo for what, why, and how long. The other thing we can do here in the stock requirements list is that we can toggle the safety time on and off to understand the impacts. Speaking of impacts, sometimes we know we've got a tricky situation coming up. Think port congestion at peak times, holiday season, Chinese New Year, things we would proactively go in and try to plan around or pull orders forward for. Well, when we do that, A, it's a beast of a job because we have to do all that manually or get creative, which can be risky, and B, MRP doesn't know why we're doing what we're doing and we get a ton of exception messages. Now, whenever we change key master data, which includes all safety stock , we're going to get some exception messages. There's always a transition period. But you don't want your exceptions firing up and telling you to delay something you've intentionally sped up because you need safety time in place. That is counterproductive. Now, you can see as we've been talking, I've been adding in time dependent safety time. And the beauty of that is that going to plan for a temporary beast of a challenge and then return planning to normal after it's through. It's candy season in Chicago and we can't get trucks. So, I've set this for November 5th to December 5th. Let's run MRP just to get a nice, refreshed line of sight on planning. Yes, yes, I'm sure. Run, baby, run. Okay, good job, MRP. Now, I'm going to go back to the stock requirements list , and let's take a moment to toggle safety time on and off. There we go. Hopefully a new trick to add to your toolkit. We live for aha moments and contemplative looks around here. I really hope this gives you some ideas around how to keep the system and the planning engine that is MRP up to speed on known periods of challenge. It is no fun having to go in and manually manipulate dates or expedite a process off cycle. This gives us an opportunity to plan in advance and meet the challenges in a more elegant way. After all, in supply chain, all we truly have to work with for planning is quantity and time. Hey Sam, thank you so much. I'm a big proponent of MRP running with a full deck of insight. So this is an interesting tool to add to the toolkit. It's a different way to rise to a common challenge. So thank you. Good stuff. Hey folks, if you are looking for some more details on this topic or others, feel free to use the chatbot to recommend some videos for you.

Procurement & MRP

P2P; PTM

ME2ON

Hey everyone, Martin here. And every once in a while, we have a transaction to share that surprises a lot of folks. And today we're talking about the evolution of the subcontracting stock monitor. This new version, which adds finesse and utility to raw functionality. I'm so excited to introduce Rutul to you, who will walk us through why this transaction is sometimes not present, and will share some of the key differences between both versions of the subcontracting stock monitor. Rutul, love to have you here today, take us away. Hello, Martin. Yes, I really like this new version of an always powerful, but not always flexible transaction. It's an excellent evolution. This transaction is the new place to be. People will like it much better and it has all the same fundamental elements. This is still a strong cockpit transaction. And it's great for supporting and achieving process adherence. Let's go in and take a look. Okay, I am in the subcontracting cockpit transaction ME2ON. I am going to run this transaction for my plant 3000. You could do that for multiple plants, or a single plant, or a vendor. You can choose how you want to run it. For this one, I am going to run for plant 3000 , click execute and right from the get go, it's a very different look and very different, feel from the subcontracting monitor. It's much better, much cleaner, and easy on eyes, right? But it also has a lot of additional information. So, first of all I am going to expand this line item here, and you will see that in addition to the material information and stock information and overage, where we are short, it also tells me the PO number. So, in cockpit monitor you do not have that information. Now, it also hassame functionality as monitor, but it has even more. You can still create deliveries, do post course issue, delete, reservation, stock overview, go to stock requirements screen that's also there in the monitor. But one of the cool things is that now you have PO number, a line item number, and so on as well. In this transaction, you can select a particular PO line item, and actually when you create delivery, click on create delivery, now you have, hey, you have this information already filled out. But the additional functionality here is that you can change your movement types, you can change your plant, storage location, shipping point. Those pieces of information you can change and make a decision on whether we need to change that or not, and then create before creating delivery. What it will also do is that it will tie this delivery directly into the PO,for the purchase order line item history. So now you can directly, quickly take a look at it, right? Then, you can also change your layouts, for example, if you are running for multiple plants, you can change the layout let's look at how you can do sort order. In a sort order, I want to look at my plant summation at the plant level and then I want to have the plant, the vendor, and the material. So I'm going to select the summation level subtotals as plant, I'm going select it, and I'm going to move it on top. So now you'll see the subtotals at the plant level, then the vendor level, and then at the material level. I'm going to click OK, and then you can have that. Then in addition, you can do the refresh list quickly. So if you are in this transaction for a while and you are taking a lot of different decisions and a lot of different actions, you want to refresh the data so that it actually refreshes the information for you as the other members are also making decisions and making changes you have the most up to date information as well. You can also go to the stock requirement list. Just like the monitor, you have your stock requirement list, all the information is already passed from the cockpit to the stock requirement list and now you are in your stock requirement list transaction . Okay, You can go to the stock overview, so the material number 2156, stock overview, and now you have 2156, the plant is 3000, and then how much quantity do you have on order, in unrestricted use, you have that information directly. you also have post codes issue capability, just like the other one. You can select, again, it will allow you to change the information, if you need to, and make the decision on the fly, rather than the fixed information that you have in the stock subcontracting monitor. Alright, these are some of the key differences. Cockpit transactions are all encompassing transactions that will allow you to do much more things than the subcontracting monitor. Welcome back. This new version of the subcontracting stock monitor. Really packs a punch. It acts as a single source of truth. Helps keep us on track, and closes the loop on the entire process. That's good stuff, Rutul, thank you so much. Subcontracting is a valuable and much needed opportunity for many organizations. So much so that we're actually releasing a whole series of videos to support this specific conversation. Thank you again for sharing your thoughts and experience with us today Rutul. So folks, if you want to learn more about the subcontractor monitor and this whole series of videos we're going to have around this, just check out our video catalog. Of course, you can always use the chatbot for any kind of help you need.

Procurement & MRP

P2P; WM

ME2O

Hey folks, Martin here. If you're about maximizing the ROI on your SAP system, you've come to the right place. In this video, we're going to delve into another great tool for visibility and execution. Today's topic is on the subcontracting stock monitor, and Monique is here to introduce us to it. Monique, tell us more about the stock monitor. Hey Martin, I spent many years working in the warehouse, so tools that bring planning and operations together are near and dear to my heart. So today we're going to take a brief tour of the subcontracting stock monitor, which is like the backbone to the subcontracting process. It's where you want to be for managing inventory, POs, and transactions related to the subcontracting process. This is what we call a cockpit transaction, where we can manage to get many functions from one place. Think of it as your home base. It also helps keep our processes on track. So let's go in and take a look. So let's dig in. Now this tool I'm about to show you is not pretty, but it's highly functional. It's been around for a while, and I have to say again, as a warehouse operations person, I think this is a great opportunity to bring a cross functional team into one place where they can pass the baton and execute the process. So here we are at the selection screen this is where it all starts. As you can see here, we have some solid selection criteria to generate our list of materials to review. First up is the vendor. This is the supplier of the subcontracting service. Below that is the component, which is super nice, and also the star of the stock monitor. These are the components that need to be provided to the subcontractor for them to do their thing. Next is the assembly, or the finished or semi finished good product that will be delivered back to you. From there, we get into some of the usual suspects, plants, dates, etc. As well as some inclusion and exclusion criteria. For today's discussion, I know we don't have a crazy amount of data out there, so we'll run it fairly wide open. As expected, pretty quick run. Let's take a second to ground ourselves. The purpose of the subcontracting stock monitor is to monitor the stock at our subcontractors. It helps us to identify if we have stranded stock, perhaps intentionally if they are storing it for us, or perhaps unintentionally. This happens when there's an overshipment to the subcontractor, a miscount, or an error in master data that causes us to incorrectly consume the goods during the receiving process. We can see the results of all of our sins right here, so let's take a look. We also have some items where there is upcoming requirements. In this case, we can see we have an item that has sufficient supply and a couple others that don't. Here, we can see PO information, which also tells us when the components need to be there to set the subcontractor up for success. Now when we see we need to ship more inventory over, we get to one of my favorite parts and where it becomes very operationally relevant. Right from here, I can select the item and initiate the transfer process. I can even post goods issued to complete the transfer. You'll see the movement type 541. Components shipped to the subcontractor are considered vendor provided stock. This means we still own the inventory even though it is on their premises and within their control. So the tools here help us monitor the state of their inventory position, identify stragglers or anomalies in the inventory or receiving and conversion process, and make sure we're getting inventory to them on time so we can set them up for success every time. And that is a whole lot of value all from one place. There is so much to explore in the subcontracting stock monitor. It allows us to make sure we're closing the loop on in flight transactions and our inventory is looking clean, clear, and under control. We can easily see if we are running ahead or behind, even get transactions and start our inventory moves right from the same place. And with the end to end process capabilities of this transaction, we can have folks across functions from planning to warehouse ops all work and transact from the single source of truth. And that makes me happy. Once again, thank you, Monique. Great insights. Subcontracting is a valuable and much needed opportunity for many organizations. So much so that we're releasing a whole series of videos to support this particular conversation. So folks, if you want to know more about that particular topic and some of the subcontracting things we've been talking about today, please check out our other video catalogs. And Monique, once again, thank you for sharing your experiences. And folks if you have another question or suggestion please submit it below.

Procurement & MRP

P2P; WM

ME21N; MIGO

Hello, SAP supply chain aficionados. Martin here, and today we're on a quest to unlock the hidden treasures within your SAP system. Ready to reveal some full potential? Let's jump straight into it. Today we're going to dig into a topic that has been popping up for several of our clients. How does SAP support taking possession of goods at a port or origin? How can you readily see that the supplier has done their part, but the goods are not physically at the location, physically inspected, received or put away? Today, we're going to have a brief overview of this important capability in SAP. Dave's going to tell us more about what we can do around standard procedures to allow for this process and the associated information and the statuses to flow in SAP. Dave, take us away. Hi Martin. Yes, this is an area where we've seen some very creative workarounds. But this is not an uncommon practice, and there is a standard solution. It's a two step goods receipt process, which allows us to acknowledge the transfer position, kick start the payment terms, and still have visibility into the stage of processing we're in. For example, if you take possession at port, you don't want to show the goods as fully received and available immediately for use. There is an expected process to facilitate this arrangement. So today, we'll go in and get an overview of the basics. I will show you a PO that's in flight and how the movements which trigger the changes in status, which enables the different activities to occur. Let's go in and take a look. This demonstration is going to show how we take ownership of a product at the shipping location. It could be external, it could be international. We have to create a purchase order. purchase order is created and, once we receive the goods, in fact in this case, we take ownership of the goods almost immediately. purchase order number ends in 284. So what I want to do is now process a MIGO 107. So I'm gonna do a goods receipt for purchase order and the goods receipt movement type is a 107. 107 puts it into goods receipt block stock. 107, here we go. Quantity that I need to put in 450 units. What's on the delivery note? I'm putting it into my, block stock. On completion of the 107. These goods are now owned by my company. The next step is now to process the goods receipt. Once the goods arrive physically at my warehouse, I now actually want to put them into my unrestricted stock so I can use them. This could take a number of days, but when the goods arrive, I am ready to process them. I can indicate what quantity was received at the dock. So I'm putting in the same quantities. I can indicate where I want to post it to, in this case, it's going to my store location, finished goods store location, and I can then close that receipt and these goods now belong to us and are actually in our warehouse. Welcome back from our little basics overview. Today we saw how the 107 and 109 movement types, triggered by the way we set up the PO, facilitates a process where we acknowledge the supplier has sent the goods. It's now in our hands to handle the logistics of getting it to our facility and the subsequent process of making it available for use. This creates much needed visibility. Allows us to meet the payment terms as agreed without additional math or manual intervention. And still allows for subsequent processing if an unexpected situation pops up upon goods receipt. So this is the standard process. Give it a try, and see if it meets your needs. Thanks again, and as always, great inputs. We've seen some really interesting ways to facilitate this process. It's nice to get an idea of how SAP is already prepared to handle this for us. So folks, as always, if you have a specific question, please submit it below. And of course, if you have different thoughts or questions around what you want to see, check out our video catalog.

Procurement & MRP

MM

MD04; ME57; ME01

Hi, Martin here. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. In this video we're going to talk about SAP's capabilities to identify and resolve unsourced requisitions. This feature in SAP helps a buyer identify exceptions in source determination where they need to intervene and offers an opportunity to adjust the rules so that there's less manual work required. As we know the best way to learn is by doing, so Kristie, how about you tell us more about this unsourced requisition capability? Fantastic topic. So it's super interesting. We often run into clients who handle a lot of their sourcing manually and aren't even aware that SAP can assign the correct source of supply as a result of the MRP run. We want to get to a place where this is happening consistently, but doing all that master data work can feel really overwhelming. What we'll go through today will help you to get started. In the demo, I will walk through a few things. How to identify unsourced requisitions. And what to do with that information. And what the cadence of work should look like to enrich the data quality so that this becomes fewer and fewer. So what we want to do here is actually go in and find some purchase requisitions that do not currently have a source assigned. So we would think about this as exception monitoring in the procurement cycle. So if our source lists are well maintained, then when we run MRP, when we get our replenishment proposals, we're going to see a source assigned. And even if we have multiple sources we can actually see that split there based on whether we've maintained quota arrangement and fair share rules or capacity requirements or whatever else the case may be to drive that split. One of the ways we can find our unsourced purchase requisitions is through this transaction here. It's ME57. Okay, and as a buyer, we can come in here and look for any requisitions that do not currently have a source assigned and then try to use our master data to get that corrected so that we can be the right kind of lazy and we don't have to come in here and review this every time. Now there may be certain cases where you do need to make that sourcing decision on the fly in which case this will produce a work list for you so you're able to go in and take a look at that. What I want to do right now is look for some items that are eligible for release, so I'm going to look just kind of within this little week period here and I'm going to see if I have anything that is sitting out there that needs my attention. And this is going to give me anything that is not assigned, you can see the tick box down here and I'm focused on the release date because these are the purchase requisitions I'm actually past due and releasing right now, I would actually want to go out another day or two because today happens to be the 10th of June. I don't ever want to release my requisitions too early because I want to have the flexibility that if there's something wrong I can make that adjustment. Now, this is an ugly view, there's a lot of different ways that you can have this information present, but this happens to be the items where I am not able to find a source of supply. So I have some options here, I could tell it to go ahead and assign automatically for me. I could go ahead and work through the process and get it into a purchase order and then assign the purchase order there or I could go through the process and assign it manually. So, if I'm seeing this show up here and I've got a missing source, the first thing I would want to do is let the system try to assign it automatically, but the follow on to that is to look at my master data and to see what is going on and why I'm not able to get my source assigned through the MRP run. So let's go ahead and try this and see if it's able to find a source for me. So what it's going to do here, is because there's no source that is assigned in the source list and relevant for MRP right now, is it's giving me every one that we have ever purchased from in the past. So if we have an info record out there that is valid, it's going to go ahead and pull that through for me and then I can choose which source of supply I would like to proceed with. So I can make that selection and assign it manually. What I really want to do here, though, is I actually want to go through and get this cleared up in my source list. So once I have my list, I can go through and I can process and then I can review my assignments and then I can actually get my purchase order cuts. ME57 is going to help me go through that entire process and we'll go through and demonstrate that in another video. But right now what I want to focus on is how I actually go through and get this assigned. So another place I could see this is if I was in my MD04 and I was looking at this item, I would be able to see that there is no supplier assigned. Another good place would be ME5A, I could see that I don't have a source assigned. That's my purchase requisition kind of list, my information list, so I can see what's going on. But let's go to MD04 real quick just so I can show you how to see it there as well. So it's really quite simple. So these purchase orders that I've already been cut, you can see these are quite outdated, maybe your housekeeping looks a little like mine. You can see these are assigned to a supplier but if I go down further and I get into some more current time, you know, I'm out in 2023 and I've got some requisitions and see all these guys stacked up. If I click on vendor here, I have no supplier that it was able to locate. So let's go in and let's take a look at the source list and see what is happening because clearly we've had sources of supply that have provided us this material in the past. If I come into ME01, this is my source list. This is what is going to allow MRP to pick up the source and the MRP run, so that I don't have to go in and manually do this work all the time. I can have multiple sources set up in here. I can have one that's relevant to MRP, if appropriate, if I want to have it fixed and assigned. And you can see that what this is, is actually just an expired source list. So it's expired as of 2017. Here's the supplier that was involved, it was fixed and it was a relevant record to MRP. You can see that here in the drop down, so it's going to go through and create purchase requisitions. If it was set up for a scheduling agreement, I could set it to a two and it would generate the schedule lines for me. So if this supplier is still qualified, at this point I would want to go through and review my pricing, make sure everything is up to date, validate my lead times, any minimum order quantities, but if all that checked out, then I could extend the source list until the next point where I needed to do a review. So if I have a constraint on how long I'm allowed to have that supplier qualified, and then my exception is going to be when I get a purchase requisition that's not assigned, I know I need to go through and review that information. So what I'm going to do for today's purposes is I'll just go ahead and extend this out so we can take a look and see what happens in the MRP run and I'll just make it good through the end of this year. Let's say we've done all the due diligence and everything is okay. I'll go ahead and save that, and what I would want to do with my source list if I had an expired source is I would probably want to go ahead and create a new record that shows the gap in the validity period. In this case, I'm assuming it's been okay all along, and I just have been remiss in updating it. Now I'm going to go in and I'm going to actually go back to my stock requirements list, pull in here, and I'll go ahead and run MRP on this guy. And you can see I've got 11 purchase requisitions that were changed, probably all those that were stacked up because I'm so far behind in taking good care of this item, and we'll go ahead and just zip on down there, and if I click on the supplier now, we'll see that we actually got that supplier automatically assigned for us in the MRP run. Now, maybe when it's one off, this is not a big deal to have to go in and assign these, but if we have to do this all the time, that can become really challenging, so as you're seeing them, a good way to go through and clear it up is to just go ahead and run for your next day, work through the process of getting your source list set up and in good working order, and then MRP will take over and start to assign your either single source or multi sources based on the rules that you have put in the system. So very helpful to get that initiated through the MRP run, and this is also where we maintain all the information on our outline agreements. So if we want to call off contracts and track our volume in that way, or we have scheduling agreements in place, it's really important that we take good care of that source list and keep it up to date. So in summary, we have covered off on the. Importance of monitoring for unsourced requisitions as part of your daily cadence. How SAP makes recommendations on the potential sources. And how to maintain the data in the source list to indicate the source where possible so that we can adopt that in the MRP run. Thank you, Kristie. Proactive monitoring source determination is a key part of buyer's daily cadence. This is really a great highlight, thanks again. So, if you want to know more about how to get the most out of your SAP system or any other features and functions in the procurement process please check out our other videos and of course if you have a particular question please submit it below.

Procurement & MRP

P2P; PTM; PM

CO24

Hey there Reveal TV community Martin here, and we're about to get into a tool that should be embedded into your cadence or planning and setting the shop floor up for success. This particular feature of SAP is excellent for bringing planning and procurement onto the same page. Today we're exploring the missing parts list, our last chance to address missing materials as we queue up our orders for the shop floor. As a shop floor works to manufacture products to the customer, we need to make sure that we are setting them up for success in doing so by not releasing orders that are unexpectedly short on materials, and we need to make sure they can get the job done. We don't want to waste time, effort, or materials or capacity if we don't have those things in place. So Patrick, you are probably the perfect person to introduce us to this particular topic, the Missing Parts list. How should we be thinking about this key feature of SAP and how can it support our cross-functional integration and processes better? Hey, Martin, you know what? The pool can quickly get a little deep when we venture into the topics that surround material availability and the rule sets that govern it, when the checks should be made, how the rules change from the plan to schedule to release or delivery. It's a lot, and we have a plethora of videos on those topics. Today we're zooming in on just one tool that offers the opportunity for key conversations, prioritization, and specific actions. Today we'll focus on three very basic but very important things. First, we'll look at some of the selection criteria, options for producing the missing parts list. Then we will review the information available once the report has been run. And lastly, I'll give you some things to consider as you work to maximize availability. I can't wait to dive in. Come with me and we'll go take a look at the missing parts list. Here we are in SAP. You can see in the lower right hand corner of my screen that we're in the transaction code CO24. This transaction accesses the missing parts information system, which then carries us into the resulting missing parts list. The selection screen is simple but powerful. The top selection is geared towards the materials required in production and may resonate most with buyers. If I'm a buyer, this is where I can go to see where my materials may be short. I can dial in on the list based on the criteria you see here. A few items of note, we have our MRP controller field here that allows us to focus on our area of responsibility. The other one that I like to pay close attention to is the requirement state. As a planner, if your buyers warned you of a supply disruption or shortage, you can quickly put those materials in here and see what orders look to be impacted. This can only be done once since they've made sure SAP is aware of the change. The second set of selection criteria is from the perspective of the semi-finished or finished goods that require the component that's down here. This is perhaps a little more suited from the perspective of production or maintenance planners and schedulers focusing in on their area of responsibility. Again, we have the ability to hone in on our MRP controller or even select high priority orders. Note that we're gonna see the needs associated with maintenance orders and production orders here. So what we're seeing here should be shortages that we should be concerned about and that need attention as the order may need to be rescheduled. Our checking rules may need refinement if the shortage is not something we would want to action, or if there are shortages happening on the floor that we're not seeing here. Also, of note is that if you're looking to proactively check material availability on a planned order that's another critical stage in production planning and happens in another transaction by the time it's showing up on the missing parts list, in CO24, we've done those pre-flight checks and our expecting materials should be available. This is a list for exception management. Okay, let's run it. So tell me where I need to focus SAP. In most cases I should know about these from exception monitoring and working with the orders themselves. But this tells me which issues are still open and also helps to highlight the criticality of the issues. You could see here that we have so many fields available to make this layout really valuable. These are the ones that I've selected. We can also leverage sorting and totals or subtotals to help organize our thought process and decision making. If I were working with this list, I would also have the stock requirements list open and also my schedule. With this list, I can see partial commitments, consider redeployment, rescheduling our changes and prioritization, and connect with the buyer and what the options are. Obviously you can see the requirements state and the requirements quantity in here as well. If there's a shortage, I want to use the material we have to its best advantage to serve the customer. So this is a great way for me to find out how to actually use that material. One last note, this is an exception report. If we've done all the pre-steps to the point of getting here, we should be seeing only exceptions. Now we have things show up for a lot of reasons, delayed deliveries is one of the main ones, other disruptions, lost or missing, materials corrected via cycle count, unanticipated scrap and yield issues, things that get hung up in quality. Whole bunch of different reasons. One, we should also keep an eye out is overproduction, re-sequencing or pulling ahead. There are a lot of ways the deck can shuffle and all of a sudden we're short and addressing those issues is a very worthy pursuit. Man, does life get easier when we start to address some of those issues and get into a standard case of communication and success? I think it does . We tackle some big topics and concepts on Reveal TV. I really appreciate the opportunity today to give you something. That helps to promote connection across teams and highlight where there are shortages, or to say it another way, needs that require action. The missing parts list provides actionable intelligence that promotes quality decision making when regularly reviewed and brought into the regular cadence of work. This is one of the last chances we have to catch issues that can impact execution on the floor. Super important and worthwhile work. If we're holding Ops and Manufacturing accountable for excellence and in particular for schedule adherence, we have an obligation to catch issues before they reach them and avoid wasting that effort. As a buyer, you may find that you have a pile of requests to work through. This is one more tool to help you drive focus and work through that pile. Patrick, thanks again for sharing. Folks you want to learn more about this and other ways to find your missing parts, please check out our video catalog, and of course, if you have a specific question related to this, submit it below.

Procurement & MRP

P2P; PTM

MD04; MD03

The best way to learn is by doing, so welcome supply chain practitioners. Martin here. Ready for another topic to ante up the value of your SAP solution? Okay, today we're diving into an important topic around how to buffer and protect against disruptions. Today's topic is an introduction to safety time. Now SAP has a variety of safety techniques from traditional static safety stock, either via entry or by letting SAP calculate it to dynamic safety stock that moves with demand based on coverage profiles assigned to them. Now SAP has a variety of safety techniques from traditional static safety stock, either via entry or by letting SAP calculate it, to dynamic safety stock that moves with demand based on coverage profiles assigned, to safety time, which seeks to address challenges with the timing of demand or delays in supply. Each has their uses, and we have a series of videos dedicated to the exploration of each. For a topic like this, we need a solid tour guide, and we didn't have to look far to find a good one. Today, I'm pleased to introduce you to Luke. Luke, why don't you share your idea specifically on the topic of safety time. I will take that baton, Martin. While I'm just getting started in my supply chain career, I do know that the one thing that is always constant is our need to work with volatility, uncertainty, complexity, and ambiguity. We need a really solid toolkit to address these conditions and prevent disruptions. And I find safety time to be an interesting way to protect and problem solve. It literally seeks to buy us time. And yes, that time does come with a cost which we need to be aware of. On our tour today, I'm going to show you how MRP responds to safety time, and how we can toggle it on and off in the stock requirements list, so we can check our planning and evaluate what's happening. And while we're there, I'll walk through some options for settings. Let's take a look. Well, if the best way to learn is by doing, we should get right to it. What we can see here is a planning situation which we're going to review from our home base, the stock requirements list. Whenever we want to explore a new feature or even master data value, it helps us start with a simple or familiar planning situation and then build up from there. We can see that this material has a demand plan and a simple plan for replenishment that uses a lot for lot size procedure. Let's take a look at our planning settings. We can bridge the material master via change mode because I do intend on making an adjustment. If I was not planning to make an adjustment, I'd be going in with display only. That's an important habit. Okay, here we are in MRP1. You can see we're using an MRP type that is deterministic in nature and follows the demand plan. Here's the aforementioned lot size procedure that is matching the demand, lot for lot, and I've not added a MLQ or rounding value. We'll come back and play with those in a moment, but let's head over to MRP2 for now. Here's where our procurement type, lead time, and GR processing time lives. Let's take a look at our safety options. Okay, picture this. You have a supplier that is struggling to deliver on time, you are working with them on their challenges and want to continue holding them to their stated lead times, but also want to protect the shop floor and ultimately the customer from your supplier's performance. This is a specific and temporary condition that aligns well with the use of safety time. So let's add some here. I need to do two things. Choose how much safety time and set the safety time indicator. We have two options for which demand we want to include in our offset. Independent demand only or everything. We're going with everything today. Okay, so let's save. Now using my handy navigation profile, I'm going to ask MRP run. But before I do, let's take a second to look at the current timing of supply. Confirm we like the settings, and here we can see that there are some changes. Okay, now let's go back to the stock requirements list and refresh. Here we can see that offset. A good way to make this really easy when you're getting started or sharing this technique with the team is to toggle safety time on and off. It makes it really easy to see the offset. Now last thing, let's go back to the Material Master and add a periodic lot size. Let's add a MOQ and a rounding value as well. Now we can save and let's go run MRP one more time. Confirm we like the settings. See, those are some pretty big impacts. Now, as we see, this is a very important tool, but it does firmly demonstrate that time is money. Thank you all so much for taking a tour through Safety Time with me. I think this is an interesting tool that should be a standard part of our toolkit. Now before you go, I do want to mention a few Surgeon General Warnings. First, it's worth saying one more time. Although this is a time buffer, it does reflect a commitment and inventory investment. Second, Safety Time should be used in specific and temporary situations like the example we walked through today. Lastly, please be careful to avoid stacking safety techniques. Choose a path, define a well and make it transparent to the team. Thank you very much. Hey, Luke, I appreciate your guidance and your perspective on this. Thanks for the tour. I know that we have another video to share on the additional features of dynamic safety time. So be on the lookout for that and explore it when it's available. That'll be a great way to continue this conversation. Also, if you're struggling to find videos, feel free to use the chatbot or if you have a very specific question just for us, please submit it below.

Procurement & MRP

PTM; P2P; DM; OTC

MD06; MD05

Hey there Reveal TV community. Today we're going to go back to basics and produce a quick video to sure up the foundational understanding on the planning engine in ERP called MRP. Now we have loads of videos around MRP, but this one is for those of you who are not really using MRP today and want a little level set. First of all, I want to clear up confusion around the acronym. MRP stands for Materials Requirements Planning. Second of all, we commonly hear organizations say that they don't run MRP. Most of the time, this is not true. MRP is merely running along in the background. You've just never had the opportunity to find the value in the results. This is an epic journey filled with value. And today we're going to start with some inspiration. It is in my opinion that there is no better human in this world to get you excited about MRP than my friend, Sean. He has helped dozens of organizations come to grips with the journey and quality of MRP and has seen the outcomes for the business and for the people time and time again. So Sean, please tell us more about the definition and the purpose of MRP. Like many things we encounter in life, getting MRP up and running and delivering great value can be challenging. However, at the core, it's very simple. MRP's purpose is life to the supply, the demand, and it does so by determining what is needed. How many are needed. And by when they are needed to be there. It's time and quantity, it's primary school math, at scale, running on a set of rules, which are discussed in some of our other videos. It's a plan for every part in each location. Now then, let's go and we take a look. Well, welcome to the demo on what is the purpose of MRP. Now, in his introduction, Martin addressed MRP as an acronym and acknowledged that MRP stands for Material Requirements Planning. This is important because it is a good descriptor of what MRP does. However, what we want to do this morning is to use a transaction called MD06, and we are going to look inside of a plant at what does the MRP list look like in terms of the last run when MRP ran. And we'll take a look at that out there and you can see here there is a date at which the last MRP ran, which tells us this is the last time that MRP went to work to produce a plan for replenishment. Now we already know that MRP is responsible for determining what materials need replenishment, how many, and by what date. And that's all according to the rules that we've set. Now, most organizations run MRP on a regular cadence. And so even if you don't trigger it yourself, it's out there producing replenishment plans and managing the balance of supply and demand. It's a really, really good communicator. So let's look at our find in lists, which is really a material finder. Let's just focus ourselves for a moment on the group 4 messages where MRP is telling us what has happened. And we'll notice down here are my group 4 messages on the side. The first one, it's telling us is that these are the new proposals that we might want or need to review and to act on. It then also tells us that these are proposals that have been changed and we might want to look at that in case we've already acted and sent out an inquiry, whatever the situation might be, but we may want tolook at that because it has changed. It can even tell us that the replenishment has been triggered by the explosion of a bill of materials. Now, this last one is important to mention because MRP came about to allow companies to scale effectively as product assortments became more diverse, BOM's became more robust, and with more changes MRP could follow the rules and start letting us know if we had inconsistencies or if there were any other challenges that were out there. Now if you've ever wondered about these messages here that MRP is sharing with you and want to get some more background, I'll close this for the moment, you'll see here's an information tab. Inside of that information tab we get to see the groups, the messages, and what their definitions are. And I would encourage you to go and watch some of our other videos where we've done a ton of work around specific messages in terms of understanding and giving you insight into what they are and how you might want to respond. But if we go back to the Group 4 that we were dealing with, maybe let's just see from the highlights some of those exceptions that are coming out against those materials. You'll notice that it highlights them for me and if I go in to take a look at each one, I start to see my Group 1 messages. Here they are down here. This is a new requirement that came about from the last MRP run. And I get that opportunity to look, here's a good one, it's got plenty. All these new requirements have suddenly hit us, and we're going to have to respond to this, and make sure that we bring those materials in on time. Because often these messages , they get neglected. And we really need to guard against that. We spoke, for instance, earlier on about the message 42, which is the second one. So the proposals have been changed. Likewise, we allow the system to do the heavy lifting, we can get in and we can find a material that has now been changed, where the message is telling us it's been changed and we may want to act on that. And as we just go through, we'll just look at a few of those and you can start to see where these changes are and determine whether that's going to have an issue for us. Now, lastly, what I want to do is just to go back to all the exceptions and look at what's known as Group 8. So we look at these Group 8 messages. This is really telling us that MRP was unable to run, and you'll see there's quite a few of these that are out there, that it was unable to run and we need to fix or address the issue or the master data that is preventing MRP from running these materials. If we were just to take a look at it, here's an example for us, this one says it's in status blocked for procurement, warehouse does not allow for planning. So there's a rule that's put in place, but we still have an MRP type that wants to be planned, and therefore there's a conflict, and we need to take a look at trying to resolve that. Okay, so once more, if we go back to our exceptions, and we just look at a couple of materials, and I'm going to pick one or two. I'm going to pick this material, 1417. I'll say find that material, there it is. And when I start to look at it, here I start to see all of these new requirements that are out there. So I can see a number of new requirements which is message 01 for replenishment. So it's seeking supply for the demand and it's following certain rules. And so we don't have to do the math ourselves. Instead, we can focus on managing the process and then proactively intervening with exceptions as they occur. We saw it earlier on with some of the message 42, the new proposals. That is exactly the same thing that we would want to take some action and make sure that we stay ahead of the game as far as looking at business operations Now, the truth is there are probably tens or maybe hundreds of thousands of parts of several locations to plan across. And we quickly lose the ability to scale when only people are involved. And so MRP, it really is our next best friend, provided we have the right rules set in place to enable accurate replenishment proposals. And so folks, I would encourage you to explore what MRP has to offer. It can be a bit of a hill to climb initially but it gets easier as we go and the view from the other side, I can tell you, is great. MRP is a highly effective approach to managing replenishment at scale when it's set up and running well. It requires the discipline of daily cadence to stay relevant and move from the theoretical to the practical and operational. To recap our conversation today MRP is a rule based engine that produces a proposed plan for replenishment. Its job is to supply the demand. And when it's really humming, it puts us in a position to proactively manage by exception, alerting us to deviations from plan so that we can make decisions on how to best move forward and assure quality of supply. I'm a fan, Sean, that is amazing. Thank you for telling us more about MRP and thank you for showing us the power and the purpose of this particular functionality. Thanks again. Hey folks, if you want to learn more about MRP, there is an entire video catalog on MRP and all the exceptions and results related to that. And if you have a specific question, please feel free to submit it below.

Procurement & MRP

P2P

MD04; MD03

Hey, welcome back Reveal TV fans, Martin here, and I really hope you're thriving. Although I suspect that if you're watching this particular video, you have either trouble on the horizon or in the thick of it right now. If so, we're here to help. And you know that if you're dealing with constrained materials and facing being put on allocation is not a new challenge. Although, the cyclical nature certainly makes us feel like we're running an ultramarathon. As soon as we get one sector of the regional supply chain stabilized, it seems like we just have another one firing up. Now some of that is just normal supply chain life. But notice of allocation is certainly at the more extreme end of the spectrum. It's not fun for anyone. But there are some great tools to help us deal with the situation. And here to help us navigate the world of allocation today is Kelly. Kelly, you're quite the negotiator, I'm really interested to hear how you can introduce these tools to all of us. Thanks, Martin. No one likes to be told they can't have something, or that they are limited in what they can have, even if it's the best, most fair approach for the market served. For a lot of us, our response to the constraint of allocation has been alternate sources, often at a premium. Sometimes we've had to hedge our purchases and work with the burden of inventory carrying costs. Potentially expiring materials if we hedge too much or purchase from a less strategic source. And loads of other fun stuff. You're right. It's no fun. Even for someone who enjoys problem solving through negotiations like me. So here's a few things to know. We're on allocation when a supplier is managing priorities across customers in a limited or constrained environment. This can then limit sales potential to our customers and also result in a much higher cost to serve. I think in difficult situations like this, it is important to know that you're not alone. There are a lot of organizations going through this and comparing notes may be very helpful. For our demo today, I'm going to explain how three tools can work together to help you navigate the challenge of being on allocation. Let's go in and take a look. Sometimes it helps to bring the big picture together. I'm starting here in the stock requirements list. And if you look in the lower right corner of my screen, you'll see that I've asked SAP to show you the transaction code I'm in. This should help you as we go along. This is the current planning situation for a material that I've been told will be on allocation for the "foreseeable future". If you can't tell, I used air quotes for the foreseeable future part. I don't like that. I want a date. So here's what we're going to do. It's August right now, and my lead time is 90 days. I'm going to put a restricted plan in place for the next six months, and we're going to revisit this with the supplier monthly. My normal supplier has told me that to maintain the maximum allocation of X units per month, I need to guarantee a certain volume. I've pushed them, and we've agreed on a target quantity of the units you see here over the next 66 months. I've told them we will pull based on demand, but at a rate of no more than this many units per month. In addition, I am introducing a second source that will take my remaining volume, but at a price that makes us say, yikes. I'm going to have to chat with the sales, customer experience, and product management to see if we will weather the increase or pass some on. We hate to do that, but we may need to have that tough conversation to achieve customer tolerance time. To make this work, we're using several techniques. First, is a scheduling agreement that provides a forecast outlook for our supplier that has us on allocation. They have an idea of the pace of our demand and also an agreement that shows the total target quantity. In this document, I can also work with alternate master data related to lead time or pricing. I can update my source list to see this as the relevant source for the next six months, with a return to normal after that. I am also using firm and trade off zones for the commercial obligation of the information I'm sharing with them. Firm, they are cleared to produce and ship. Trade off, we will take it, but timing is not guaranteed and we've got a generous time horizon to meet our obligation. Second is a contract for my secondary supplier with specific information on the terms of the agreement. We've been eyeing this supplier for quite some time now. This may be an opportunity, if we can get them to give us better pricing and terms. I've asked for scaled pricing, which I will reflect in the price scales of the contract. This contract will also go into the source list as a valid source. Last but not least, I have a quota arrangement in place that's managing the split for me and restricting the volume that can go to my primary supplier. The one that has issued the allocation notice per month. I could base this on all kinds of different periods, but this month is good for now. The final product is in the system rules. That produces a balanced plan within the constraints. We have right now and a relatively easy exit to normal if normal arrives again. I can work with this. Today you were introduced to a few tools that can work together to help you manage the challenge of allocation. We have several other videos that go deeper into these tools and can help you get started. Without a doubt difficult situations require creative solutions. Sometimes people have great ideas for how to navigate rough waters, but the practicality of executing the plan can be daunting. I'm here to say that it can be made manageable. If you have an idea, let's explore how to get SAP to empower you to deliver it. Things change and when it's time, all of these tools we're talking about can be expired or discontinued , offering you a way out and back to business as usual or better. I love a good negotiation. Thank you, Kelly. Great insight. I too love a good negotiation and trying to turn what starts as a seemingly losing situation Into something good for the future. Out of a crisis comes innovation. So navigating tricky waters is a great time to see what you have to work with. This is a good starting point for a conversation. Well, folks, if you want to learn more about how to use some of these tools to be able to deal with suppliers and customer allocations, please check out our other videos as well.

Procurement & MRP

P2P

ME5A; MD04; ME53N

Hey, welcome back fellow SAP explorers, Martin here. And today we're going to be looking and exploring a feature in SAP that has a strong value proposition, but is often overlooked. What we're chatting about today is the importance of the release date in driving the procurement process. What drives your PO placement today? Do you run off the release date or the delivery date? So today, Kristie is with us, and I know you love the process cadence, so have at it. Tell us more about the value of release date in procurement. Cadence keeps the chaos at bay, Martin and yes, the release date is one of the many dates in the procurement process. And it is one that is often overlooked. But it really represents a critical milestone. It is what helps ensure we're setting our suppliers and ourselves up for success by smoothly running through key process steps with the right amount of time to get them done. Today I want to show you how the release date is calculated and where we can find it. Let's go in and take a look. I love making a Reveal TV video on something that I have done wrong in the past and have found so much value in once I learned what it was for. And I remember in the early days of setting all of this up not knowing exactly when I need to get a purchase order to my supplier and being really worried that I could be past you and passing that ball to them and then not set them up for success and not get what we need when we needed it. So enter math on the part of SAP and enter this lovely field called the start or the release date. The start date if it's production, it is the release date if it is purchase orders or purchase requisitions that need to be converted into purchase orders. It is the starting line for the procurement process. It lets us know when we need to start moving that purchase requisition onto the next stage in order to be able to get that purchase order delivered on time based on all the master data that we have maintained in the system. So if you cannot see this column right now in your stock requirements list, it is hiding from you. And there are a number of columns here that are sometimes missing. Sometimes you'll be missing opening date. Sometimes you'll miss start and release date, and sometimes you'll miss rescheduling date. It's fiddly, but you just have to hover over the fields until you can see you'll see actually a double line arrow appear and then you have to drag that out in order to be able to get theparticular column exposed But this is a good one. And so it lets us know when we need to release. So in order to have this purchase order here on time, we have to start the process or get that purchase requisition converted into a purchase order no later than 08/27/2024 in order for it to get here on September 23rd. Okay, and if I double click in here I can even get a little bit more information without even having to leave my stock requirements list. So I can see the goods receipt processing time for this is 3 days, so the date that it is planned to be available. So the material availability date is the 23rd of September. That means we have to receive it from the supplier so that it can go through all of its stock to stock activities, receiving, quality inspection, etc. We have to have it by the 18th of September, okay? So that means that we have a weekend in there because those are our working days, subject to our factory calendar, and in order to make all of that magic happen so that the supplier can be set up to deliver on time, in order to start our process and get through it, get the purchase order out the door and over to them on time, we have to release this by the 27th of August. And if we go into the purchase requisition, we can further look at those details and see the planned delivery time. Okay, so all of that math is happening for us, we don't have to look at a calendar, it's right here and then all along the way it's letting us know if we have any exception messages. So you can see this is some old housekeeping that needs to be taken care of because not only is my start date in the past, but also my finish date is in the past too. So we really missed the boat on that. So how do you make sure that that doesn't happen? Well, you go to List Display of Purchase Requisition. So you might be using any of the ME57, ME58, ME59 transactions to move through your procurement process. You may be working in ME21N and pulling a list of requisitions. This is another great place to look. This is ME5A, you can see right down here. And when I was coming in here previous life, I would run this based on delivery dates and then try to estimate my lead time offset. Don't need to do that. Come in here, put in the release date. This is everything that you would want to go and work on. So your release date up to whatever the date is that you're working with. So you know, today, tomorrow, if you're about to be out of the office for the holiday break, you might reach out a little bit further than that, but it should be very, very near term. And then you would go in and pull a list of purchase requisitions that were standing out there that needed to go through, be released, and converted into a purchase order. This should not be reaching far out into the future. When we release things to our suppliers early, we can no longer get a good read on their performance or their ability to deliver on time and in full. Because we've released it to them early, we're giving them more lead time than what they asked for. And we also are limiting our flexibility. So the one thing we know about demand is that it changes. And so if we have trouble being correct in terms of time or quantity, we want to make sure that we maintain that flexibility for as long as possible. If you're struggling with that and you're trying to give your supplier more visibility, so maybe you're releasing really early, like this case, this is way out into the future. We don't want to do that. We want to have our dates be nice and tight to what we should be working on today, tomorrow, this week. If you find that you're needing to do that, then chances are you need to explore other options in sourcing such as scheduling agreements or other ways to get a good forecast to your supplier. So make sure you check out some of those other Reveal TV videos and they'll help guide you through that. But this release date is here and it's present in many of our purchase requisition related transactions. Extremely helpful for helping us to produce a list of purchase requisitions that we need to go through and work and get out to our suppliers in purchase orders. So, release date. It's a very, very helpful field available to you in SAP. Welcome back from the demo. As we highlighted today, Release dates represent the date we need to act to give our suppliers the time they need to successfully deliver to us. They can be a leading indicator of process adherence, improvement, or challenge. We can work with them in variants and we can use them to select our requisitions and convert them into POs. And we no longer have to do the math around lead time to determine if it's time to cut that PO or not. And I totally used to do this. I had a calendar at my desk and I was figuring out if it was 63 or 91 days of lead time and what date I needed to release it. Now we even have Google and other tools to help us get better, but why use those when SAP is already doing this work for us? Time marches on Kristie, thank you so much. The release date sounds like an asset to the process that gets us the right signal at the right time. Win win. Thanks again. Hey folks, if you want to learn more about other particular topics related to procurement, we have a whole section on procurement that you can look into. And if you're struggling to find a video, feel free to use the AI chatbot.