logistical applications and optimizations

h_DA WS 2011 Logistical applications and optimizations slide 1

Matthias Mekschrat

Logistical applications and optimizationsLogistical applications and optimizations


Matthias Mekschrat

overview

Introduction

October 28 - definition of business processes

November 11 - overview of logistical business processes

December 02 - functionality of production processes

January 20 - special problems within the supply chain handling

December 16 - functionality of sales and distribution processes

November 18 - functionality of purchase and supply processes


Matthias Mekschrat

Review on the last session

You have learned about business processes and composed business process

You have learned1. that translating business processes into IT application processes is a very

challenging task which needs some experience2. That process integration is an important factor for an optimal IT application

system3. Why to avoid individual developed interfaces if ever possible

You have seen the different types of business processes 1. supply chain business processes2. logistical crossover business processes3. business support processes

You have learned about procedures and tools to 1. analyse business processes2. visualise business processes3. document business processes

You have seen the needed components to implement an IT application system1. customizing2. master data management3. user exits and modifications


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About this lecture

All sessions are split into 2 blocks: from 08:30 to 10:00 and from 10:15 to 11:45Each session starts with a short review of the last lectures subjects

Next I will give you a short theoretical overview of the days subject

Each group will then present the results of their discussions

I will present theoretical explanations for the discussed subjects

Then I will show a example solution for a potential written test question

Finally I will give a summary of the key messages for this session

Next you probably will develop 3 different subjects in a brainstorming session in 3 groups


Matthias Mekschrat

overview

Introduction

October 28 - definition of business processes

November 11 - overview of logistical business processes

December 02 - functionality of production processes

January 20 - special problems within the supply chain handling

December 16 - functionality of sales and distribution processes

November 18 - functionality of purchase and supply processes


Matthias Mekschrat

Overview of logistical processes

Supply chain processes

Business support processes

Short break

Part 1

Logistical crossover processes

Applications tasks to assure process integration

Part 2


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Short break

Part 1



Part 2


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7%16%14%

63%

Usage of SCM Tools in chemical industry (November 2008)

none

In use planned

considered

Overview of logistical processes, Part 1Problems and potentials


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Overview of logistical processes, Part 1

As a consequence many companies do not use the potentials of an appropriate SCM

Very often suboptimal SCM processes are implemented by the IT application system

Problems and potentials


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Understand the need for both external and internal collaboration processes

Understand the important inputs and outputs of each component

Understand the main component structure of a supply chain application system

Learning targets

Understand the involved acting logical business units

Understand the business support components, that are needed in assistance to run a supply chain application system


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Short break

Part 1



Part 2


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Plant CustomerStore TransportSupplier


Supply chain processes represent all main logistical activities for creation of value according to the business definition


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A3

A2B

C

A1

Raw Material

Transport-unit

Production1. level

Entry Stores

Productionn. level

Plant CustomerStore TransportSupplier



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Plant BPlant A Transfer Prices A

Customer A

Prod. A

Customer B

Prod. B

Customer C

Prod. C Transfer PricesB


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SalesProduction

planning andscheduling

Shipment and distribution

Purchasing

Logistical crossover processesLogistical crossover processes

Business support processesBusiness support processes



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Core Business Processes and X-over Processes

PTP – purchase to pay

FFG – forecast to finished goods

OTC – order to cash

AE - asset effectiveness

FAC – finance & accounting

MITO CS APS BW

core process

cross process

mat

eria

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pu

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ou

tpu

t

chem

istr

y se

rvic

es

adva

nce

d

Pla

nn

ing

sys

tem

s

bu

sin

ess

info

rmat

ion

war

eho

use


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Purchase

requirements Materials requirements planning

(MRP)

Materials requirements planning (MRP)

Sales and operations planning(SOP)

Sales and operations planning(SOP)

Conversion of planned ordersConversion of planned orders

release of productionas process orders

release of productionas process orders

Actual productionActual production

ConfirmationConfirmation

Production controllingProduction controlling

MRP lists

Goods Receipt

Production Papers

Planned order

Goods Issue

Sales order Forecast

Time and Material

MES


DistributionDistribution


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Production Production DistributionDistribution Sale Sale Purchase Purchase

Network Design (ND)Network Design (ND)

Supply Network Planning (SNP)Supply Network Planning (SNP)

ProcurementPlanning

ProcurementPlanning

Demand Planning (DP)

Demand Planning (DP)

Global ATP Global ATP

Transport. Planning

&Vehicle

Scheduling (TP/VS)

Transport. Planning

&Vehicle

Scheduling (TP/VS)

ProductionPlanning

&Detailed

Scheduling (PP/DS)

ProductionPlanning

&Detailed

Scheduling (PP/DS)

Supply Chain CockpitSupply Chain Cockpit Monitor Monitor

Lo

ng T

erm

L

on

g T

erm

M

id T

erm

Mid

Ter

mS

ho

rt T

erm

S

ho

rt T

erm

DistributionPlanning

& Deployment

DistributionPlanning

& Deployment

Supply chain planning


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Demand Planning (DP)Demand Planning (DP)

Supply Network Planning (SNP)Supply Network Planning (SNP)

Transport Planning (TP/ VS)Transport Planning (TP/ VS)

Detailed Scheduling (DS)Detailed Scheduling (DS)

Production Planning (PP)Production Planning (PP)

DeploymentDeployment

Planning Horizon

Supply chain planning


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Plant A

Plant B Plant C

Plant E

Plant D

External customer

External customer

External customer

External customer

Supplier

Customer

Supply chain planning model

External customer

Internal customer

Plant


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2nd Supplier Manufacturer Retailer

From sequential supply chains...

One-to-one Communication Excessive Inventory (Bullwhip-Effect) Manual Communication Asynchronous Planning Cycles Assumption bases Planning

1st Supplier


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Collaboration One-to-many Communication Synchronous/asynchronous

Communication Synchronized Planning Cycles Automated Decisions Tracking and Tracing Technological Openness

….. to networked Supply Chains.

Retailer

2 nd Supplier

Carrier

Trade Exchange

TransportationExchange

Customer

1st Supplier


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Advantages of Collaboration

Customer Supplier

No safety stock More precise demand planning

No purchase ordersAutomated consignment fill-up and

consignment issue orders

No quality inspection No printing of CofA‘s

„Pay only what you have used“ No printing of invoices

No incoming invoice No invoice verification


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Short break

Part 1



Part 2


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Business Support Processes represent all non logistical activities to support the main logistical activities

Controlling

Budgeting

Invoicing


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...

InfoCube

InfoCube

CC-CC-CubeCube

Cluster A

CC-CC-CubeCube

CC-CC-CubeCube

CC-CC-CubeCubeInfo

CubeInfo

CubeInfo

CubeCluster Business Warehouse

Business support processes, strategic planning and reporting

Cluster B Cluster C Cluster D

ERP Systems


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Practical part: developing the subjects

Group A: Please design the SC Model for 1. 4 Plants A,B,C,D 2. A, B, D have own Customers3. C, B have own Suppliers4. A supplies C and B, B supplies C and D5. Please design as an sequential model6. Please design as a network model

1. you have 20 minutes for group discussion and writing down your ideas2. afterwards each group has 5 minutes for the presentation of your ideas3. your are free to use any presentation medium

Group B: Please design the SC Model for 1. 4 Plants A,B,C,D 2. A, C have own Customers3. C, B, D have own Suppliers4. A supplies C and B and D, C supplies B and D5. Please design as an sequential model6. Please design as a network model


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Example solution for a potential test task, Part 1

design the SC model for 1. 4 Plants A,B,C,D 2. A, B, D have own Customers3. A, C, B have own Suppliers4. A supplies C and B, C and B supply D

Plant A

Plant C Plant D

Plant B


Matthias Mekschrat

Summary and key messages, Part 1

The SC components are sales, purchase, production and distribution

Literature1. Stadtler, Kilger – Supply chain management and advanced planning,

Springer Verlag, Berlin Heidelberg, 20002. Dangelmaier, Busch (Hrsg.) – (in german) Integriertes Supply Chain

Management, Gabler Verlag, Wiesbaden, 5/2004

There are models and tools to describe SC processes

SC planning processes effect all SC components

SC networks are the basis for collaboration

Business support processes are mainly calculation, budgeting and reporting


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Short break

Part 1



Part 2


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There are many logistical processes, which do not belong to the main SC processes, but effect all those components

Problems and potentials

The integration of these components assure the most effective use of the supply chain

Distribution of information in case of disturbances is a challenge a high potential


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Understand the important inputs and outputs of each component

Understand the structure of logistical crossover processes

Learning targets

Understand the involved acting logical business units

Understand the applications tasks to assure process integration


Matthias Mekschrat




Short break

Part 1



Part 2


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Logistical crossover business processes represent all logistical activities to support the main logistical activities


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Life-Cycle Data Management

Document ManagementProduct Structure

ManagementRecipe Management Integration

Change and Configuration Management

Asset Life-Cycle Management

Technical Assets Management

Preventive and Predictive Maintenance

Maintenance Execution Work Clearance Management

Program and Project Management

Program Management Project Planning Project Execution Interfaces

Life-Cycle Collaboration and Analytics

Design CollaborationCollaborative Project

ManagementQuality Collaboration

Enterprise Portal Content

Analytics

Quality Management Quality Improvement

Environment, Health and Safety

Basic Data and Tools

Product SafetyHazardous Substance

Management

Dangerous Goods

Management

Waste Management

Industrial Hygiene and

Safety

Occupational Health

Audit Management Quality Control

Quality management in the SC


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Quality management in the SC

Q Info

Technical delivery terms and conditions

Inspection lots

Fault reports

In-process inspection

Batch classification

Quality control charts

Quality reports

Inspection lots/Delivery

Certificates

Customer reports

Service reports

Procurement Production Sales Service


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Quality reports can be evaluated according to different criteria.

For instance, an overview of problems occurring with one material can be provided.

Questions such as what happened during production or have complaints been received from customers can be answered easily.

Quality management reporting in the SC


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Quality management reporting in the SC


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Sample management in the SC


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Goods receiptOutward stock

movement

Periodically Deadline monitoringbatch

In-process

Create inspection lot

Print inspection instruction/labels/labels

Record results

Usage decisionsubsequent acsubsequent action

Manually

Inspection orders in the SC


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A manufacturer of chemicals has to

comply with the respective laws>

be able to provide seamless information about the properties of the products that leaves no room for doubt>

provide foresighted information about handling>

take preventive action against emergencies>

have clearly structured development routines, production procedures and supply chains

>

R & D in the supply chain


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Regarding R&D, the product life cycle management consists of

Strategic R&D planning

Compliance of R&D requirements in the running system

Operational R&D handlingPha

ses

Core Phase



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Implementation of subsequent settings in the ERP environment

IT support of the total actual R&D process>

>

Requirements for an Operational R&D handling

Document the results of the R&D activities >

R&D handling is more than writing down structures and recipies>



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Short break

Part 1



Part 2


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Lacking exchange of information is one of the main problems, why business processes do not run optimal. Very often you will find human factors as a reason

JIT manufacturing and outsourcing are creating many more shipments to a wider variety of destinations. The likelihood of breakdowns increases.


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Which logistical consequences emerge through a missing Process integration?

Work Arounds

Badly designed Process flows

Additional Manual effort for coordination

Which costs arise through a missing Process integration?

Costs for individual Interfaces

Costs for necessary modifications

What should already be considered during a project planning ?

Cost analysis for the Process Integration

Detailed functional Process analysis

Preliminary Study



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Process Integration is surely not given by creating interfaces between individual

solutions afterwards, Process Integration is part of the System planning process

Process Integration is more than a try to connect two different Plugs,

but rather a complex Challenge where the interactive details of a lot of components have

to be identified and where the following implementation has to be kept in mind



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What is Supply Chain Event Management (SCEM)?

SCEM is a solution to

MONITOR and CONTROL

Supply Chain Processes.

It enables to react to events

immediately,over heterogenious systems,over company boundaries.


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SC Event Management consists of four steps:

Define: Event Profiles for business processes Monitor: Event MessagesNotify: Actual and coming Problems by As-Is Comparison Control: by manual Interference, automatically,

SAP AG 2001, SCEM, Andreas Otto 51

What is Supply Chain Event Management (SCEM)?


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Summary and key messages, Part 2

Literature1. Stadtler, Kilger – Supply chain management and advanced planning,

Springer Verlag, Berlin Heidelberg, 20002. Dangelmaier, Busch (Hrsg.) – (in german) Integriertes Supply Chain

Management, Gabler Verlag, Wiesbaden, 5/2004

QM and material management are the most important crossover processes

Distribution of information in case of disturbances is an important success factor

A supply chain event manager (SCEM) is urgently recommended for an optimal SC organisation


Matthias Mekschrat

Thank you very much for your participationThank you very much for your participation

…… and see you on Friday, 18th of November…… and see you on Friday, 18th of November

logistical applications and optimizations

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