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2007 | Book

Service Parts Planning Overview Read chapter Read first chapter

Service Parts Planning with mySAP SCM™

Processes, Structures, and Functions

Author: Dr. Jörg Thomas Dickersbach

Publisher: Springer Berlin Heidelberg

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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About this book

Service parts planning in mySAP SCM 5.0 is part of the service parts management solution that was developed in a joint effort of SAP AG, C- erpillar Logistics Services, Inc. and Ford Motor Company and generally released in 2006. This solution addresses service parts specific functions, and is based on new functionality within SAP APO (plus some functions for monitoring in SAP ICH and business content in SAP Netweaver BI ). The main planning areas of service parts planning are forecasting, inv- tory planning, procurement and distribution – similar as ‘normal’ SAP APO . Nevertheless the functionality is significantly different. Also the ‘look and feel’ of service parts planning is quite different. At the same time the effort for the creation of F1-help was significantly reduced. - cause of these reasons we use screenshots in this book to a comparatively large extent. The purpose of this book is to explain the functionality of service parts planning with mySAP SCM and the covered business processes. The t- get audience of this book is anyone who is considering or is already - volved in the implementation of the SAP service parts management so- tion – whether as project manager, as project member or as consultant.

Table of Contents

Frontmatter
1. Service Parts Planning Overview
Abstract
Supply chain management is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. SCOR structures the supply chain management processes into plan, source, make, deliver and return (SCOR 2006). Another way to structure the processes is to differentiate between goods movements within the company and goods movements to the external customer resulting in a structure as demand planning, order fulfilment, distribution, production and procurement (Dickersbach 2005). These structures fit for most of the companies — at least we are not aware of any counter-example — even though the supply chain and the supply chain management might look very different from company to company — especially across different industries. From this point of view, the same approach fits for service parts as well. Nevertheless there are several specific features for service parts planning which have justified SAP AG in alliance with Caterpillar Logistics Services, Inc. and Ford Motor Company to build a completely new solution for service parts management. According to the nature of the development partners, the primary industry focus within the service parts management solution is engineering, construction and automotive.
2. Master Data, Services and Basis Functions
Abstract
One of the specifics of the service parts solution is that the supply chain network has a tree-like structure with one or more entry location — this is where the supplier delivers to — and for each entry location (optionally) one or more child locations. Looking from the demand side, there is a strict single sourcing. This fix and hierarchical distribution structure is modelled as a bill of distribution (BOD). The BOD is used throughout the whole service parts planning solution — from capture demand to inventory balancing.
3. Capture and Manage Demand History
Abstract
The demand history is the basis for forecasting and the stocking decision. Therefore the capturing of the demand history is the first step for service parts planning. The sales history is loaded from mySAP CRM™ (or for test purposes from a flat file) using the SAP BI™ data staging process. During the upload the data is processed in order to fit the specifics of service parts planning — e.g. an aggregation along the BOD is performed and other steps which are explained in chapter 3.2.2. The demand history is stored both on item level (in the ODS object 9ARAWDAT) and on aggregated level (in the info cube 9ADEMAND).
4. Stocking Decision
Abstract
One characteristic of service parts planning is the huge number of products and locations. In order to reduce inventory and warehouse costs not all products are kept in all locations. The decision whether a product is stored in a location depends on the demand and on the costs for the products. The decision is recorded in the authorised stocking list (ASL). The function of the ASL is modelled in SAP APO™ by the replenishment indicator, see next section. There is however no standard report to display the replenishment indicator for multiple products.
5. Forecasting
Abstract
Since service parts planning is mainly a make-to-stock respectively a procure-to-stock process, planning is almost entirely based on the forecast. The forecast drives the procurement and replenishment of service parts either directly or indirectly as an input for the safety stock determination. The basis for forecasting is the aggregated demand history (including realignment and interactive changes). Depending on the forecast strategy, not only the demand quantity but also the number of order items and the average demand quantity per order item might be used as an input (per forecast strategy only two out of the three).
6. Economic Order Quantity and Safety Stock
Abstract
Most of the service parts — especially in the automotive and the engineering industry — have an immediate demand, i.e. the service part has to be available on stock. Since the forecast is always just an estimation of the future demand, it is necessary to compensate the deviations from the real demand (and the irregularities of the supply) by safety stock.
7. Surplus and Obsolescence Planning
Abstract
The goal of surplus and obsolescence planning is to identify inventory within the supply network — i.e. the BOD — which exceeds the projected demand and therefore only consumes warehouse space. In order to identify the surplus and remove it from the concerned warehouses, first the total surplus within the supply network is determined. This is done based on the total expected demand (including a safety buffer) and the total available stock and the stock in transit. In a second step the total surplus is disaggregated — in other words, the surplus quantities for the individual locations are determined. If the value of the surplus is within the predefined limits, orders for scrapping the surplus are created automatically. In the other case the scrap orders need to be approved interactively. Figure 7.1 shows the overview of the surplus and obsolescence planning process.
8. Distribution Requirements Planning
Abstract
One characteristic of the service parts planning solution is the tree structure which is defined in the BOD. The implication of this structure is that the demand for the whole network is sourced via external procurement at the entry location (or at the entry locations, if the BOD has multiple entry locations). The purpose of DRP is to determine the procurement quantity taking the demands (forecast, safety stock, confirmed stock transfer demands and fixed demands), the inventory, the confirmed receipts, the lead times, the days of supply (i.e. the economic order quantity) and the pack stages of the whole supply network into account. Figure 8.1 shows the process overview of DRP.
9. Procurement Approval
Abstract
The purpose of the procurement approval process is to prevent an unusually high procurement — quantity or value — without notice. The procurement approval process is subsequent to the DRP run, figure 9.1.
10. Deployment
Abstract
Deployment is concerned with the distribution of the goods along the BOD. While DRP calculates the requirements along the BOD in order to determine the procurement quantity at the entry location, deployment creates stock transfer orders from each parent location to its child locations. Figure 10.1 shows an overview of the process.
11. Inventory Balancing
Abstract
The supply of locations is done via deployment along the BOD. Lateral stock transfers are usually avoided because there are more costly: The service part has to transferred one more time, which means additional costs, and the lateral transfer itself might be less cost efficient due to low volume. In exceptional cases a lateral stock transfer is desired nevertheless.
12. Supersession
Abstract
The replacement of a service part with another service part (or with several other service parts) is called supersession. Reasons for supersession might be changes in the product, changes in the service parts portfolio or changes in the sales package — e.g. from a kit to separate service parts or the other way around. Therefore supersession is not an independent process but relies mainly on the service parts planning processes manage demand, forecasting, EOQ and safety stock planning, and DRP.
13. Sales Order Fulfilment
Abstract
Within service parts management two scenarios for sales order fulfilment exist: sales from stock and third party order processing (TPOP). Sales from stock is the common scenario where a sales order is confirmed (and delivered from) based on available stock. If service parts planning has been performed properly, this should be possible — unless it was decided that the customer facing location should not contain any stock (see chapter 4). In this case — or if the customer demand exceeds the forecast and the safety stock — it is checked whether any other distribution centre within the supply network is able to confirm the sales order. For the check within the supply network (i.e. the BOD) rules-based ATP is used. In the second scenario, third party order processing, the service part is procured directly from the supplier to the customer. Neither scenario is part of service parts planning, but at least the more straightforward scenario of sales from stock is briefly introduced in order to complete the picture from a supply chain management point of view.
14. Monitoring and Reporting
Abstract
Within the service parts management solution different tools exist for monitoring and reporting. Monitoring is used to observe the supply chain in order to help the planner intervening in case of imbalances and other problems. Imbalances are shown in the shortage monitor, and for other problems the alert monitor is used. Both tools are in SAP ICH™ and allow the supplier to have a look at the imbalances and other problems that concern him. As a third tool in SAP ICH™, the SPP cockpit provides an overview of the planning situation of a service part within the BOD — e.g. stock, stock in transit, forecast etc. The data for monitoring in SAP ICH™ is read mainly from tables that are used (and filled) by SAP APO™ applications.
Backmatter
Metadata
Title
Service Parts Planning with mySAP SCM™
Author
Dr. Jörg Thomas Dickersbach
Copyright Year
2007
Publisher
Springer Berlin Heidelberg
Electronic ISBN
978-3-540-32652-6
Print ISBN
978-3-540-32650-2
DOI
https://doi.org/10.1007/978-3-540-32652-6

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