david zatz, applications consultant february, 2013 · blueprint eis with apo now, have all the data...

SAP/EIS - Enterprise Inventory and Service-Level Optimization David Zatz, Applications Consultant February, 2013

© 2013 SAP AG. All rights reserved. 2

Agenda

Overview of Inventory Planning – Business Needs \ Current Challenges – Safety Stock Planning -> Inventory Optimization – How does EIS complement APO? – How EIS fits into SAP Landscape

SmartOps Analytics Module – Pre-Delivered Dashboards – Backend Webi Reports

EIS - Enterprise Inventory and Service-Level Optimization Implementation Outline

– Timeframe, Resources

Questions


What is Enterprise Inventory Optimization?

Determining optimal and visible inventory targets across the

supply chain that drive successful planning and replenishment in a

dynamic and ongoing manner

for every item at every location across time,

resulting in lower aggregate cost and working capital

with equal or better customer service


What is Enterprise Inventory Optimization?

Determining optimal and visible inventory targets across the

supply chain that drive successful planning and replenishment in a

dynamic and ongoing manner

for every item at every location across time,

resulting in lower aggregate cost and working capital

with equal or better customer service

The Right Products The Right Location The Right Time


Enterprise Inventory Optimization Benefits

Improve visibility and decision support and effectively optimize operational targets

Determine optimal, time-phased inventory policies for multi-tier assembly and distribution supply chains Set Inventory Policy for each finished good, work in process,

and raw material in the Supply Chain

Reduce working capital and improve cash flow

Improve Order Fulfillment

Improve planner and analyst productivity

Ensure sustainable assembly and distribution supply chains

In this tough economy, finding the lowest-cost inventory targets that meet services levels is a business imperative


Instead of this…

Raw Steel Intermediate

Valve

Final Assembled- to - Order

Tree


Finished Product Suppliers (US and

International)

Manufacturing Distribution Distributors Customers

Central Distribution

International DC

US Assembly

US Component

Plants

International Manufacturing

Component And Raw Materials Suppliers

Suppliers

Your Locations

How much Inventory? Where ? For How Long ?

You have something like this…

Supply chain complexity has exploded and is now the price of admission in today’s global market


Inventory at each node can and should impact inventory decisions at other nodes

How about here? Here? How much inventory here?


EIS - Enterprise Inventory and Service-Level Optimization Data Requirements summary

Uncertainty Data • Forecast Error/Std Deviation • Total Lead Time Std Deviation • Attainment loss % and Std Dev • Source Reliability • Risk pooling factor

Scenario Analysis and Alerting Inputs • Initial on hand inventory • Planned receipts • Max ship life • Costs: processing, transportation,

order administration, handling, unit purchase, unit transfer price, other

Master Data • Item-Locations • Inventory unit cost • Units of measure • Holding cost percent Replenishment Planning Data • Forecast demand mean • Review frequency • Total mean lead time • Target service level • Minimum/incremental batch size • Sourcing fractions/quotas • Frozen window/Planning fence • Service time • Minimum stocking requirement Manufacturing/Process Data • BOM relationships/qty • Yield • Max process capacity • Min process quantity

S

C

Bold = Basic input Italics = Additional input Blue = Time-varying input


“Fix the Mix”

-3%-5%-12%

11%

-18%-25%

-6%

-18%

-30%

-19%

-40%

-7%

-16%-21%

2%

-25%

-33%

15%

-31%

-7%

-35%

13%

-28%-30%-23%

-30%

-19%

-43%

13%

-25%

-10%

46%

8%4%

-14%

-33%

-60%

-40%

-20%

0%

20%

40%

60%

Change in Inventory Level by Item (EIS vs. Actual )

Items

Cha

nge

in D

OH

Inve

ntor

y More Needed

Less Required

Optimization is not across-the-board inventory changes; it’s about correcting the product mix at the item-location level to meet service objectives


Evolution of SAP’s Integrated Supply Chain Planning Foundation

Tactical

Operational

Strategic

Demand Supply Production

S&OP

Customer Collaboration

Supplier Collaboration Inventory

Supplier Manufacturer/Distributor Customer

Transportation Order Promising

Analytics/ Reporting Supply Chain Performance & Event Management

Better classify and manage demand and supply uncertainty

More intuitive dashboard for inventory planners to assess inventory drivers

Optimize inventory placement across end-to-end networks


How does EIS complement APO?

SAP Inventory Policy Approaches versus Enterprise Inventory Optimization

What are the SAP APO planning modules? What inventory planning capabilities are provided by SAP APO? How does SAP provide advanced inventory planning capabilities?

What is the value of these advanced inventory planning capabilities?

DP – Demand Planning SNP – Supply Planning PPDS – Prod. Planning & Detailed Scheduling GATP – Global Available to Promise

A. Planner must determine and input inventory policies

(manual, days coverage) – OR –

B. Planner may let SNP calculate statistical safety stocks

for single locations in the supply chain EIS - Enterprise Inventory and Service-Level Optimization Determines optimal, time-phased inventory policies for

multi-tier supply chains

Extends and leverages ERP, APO, and BW capabilities Higher product availability and responsiveness with

significantly lower total inventory cost and liability


Demand variability

Inventory Planning Capabilities Inventory Planning Elements SAP APO SAP EIS

Supply variability

Supplier reliability

Product availability targets

Variability pooling

Minimum order sizes vs. demand

Scenario analysis

Multi-stage optimization

EIS captures complexities in inventory planning that APO does not address

No Capability Partial Capability Full Capability Moderate Capability Limited Capability


EIS accelerates APO value

Increase Planner

Acceptance

Start with a manual interface to give faster business results and help fund the extended APO project

Quick savings with lower inventory and better product availability levels through EIS

Move to automated mode for full supply chain

Provide more granular and accurate inventory targets Planner workbench provides the ability to do root-

cause analysis of supply chain issues Analytics and reporting for planners

Blueprint EIS with APO now, have all the data and processes set up to manage EIS now

Avoid rework in the future needed to accept EIS inputs and outputs

Faster Time-to-Value

Avoid Re-Work

LOWER RISK

FASTER VALUE

SUSTAIN-ABLE

VALUE


SAP EIS Pre-built Integration Assets Reduce the Cost and Risk of Implementation

Lowest Cost Faster to implement Fewer project resources

Intelligence Modules

Topology Converter

Multi-Stage Inventory

Planning & Optimization

SAP Connector

Source Systems Data Gateway Loader & Validation

Data Gateway

Data Store

APS ERP Extract

Transfer Load

Outputs Outputs

Outputs

Standard SAP Enhancements

Easiest to Maintain Leverages existing data Sustainable automated

process

Least Risk Proven enterprise integration Accurate inventory targets

over time

Inpu

ts

BusinessObjects Universe &

Reports

DW


SAP Connector reduces the time and effort to link EIS with ERP and APO

SAP Connector is a library of commonly used and custom BAPIs Extracts input data from SAP master data

tables, including: – Item-material list – Location-plant list – Sourcing – Bill-of-material – Forecast – Sales – Purchase orders – Planned production – Actual production

Feeds inventory targets to SAP MM or APO tables

Co-developed by SAP and SmartOps, and updated with SAP upgrades

Reduces interface development time and effort


Intelligence Modules leverage existing transactional data to calculate up-to-date planning parameters

Transactional Data Forecast error Identifying and adjusting for:

– Bias – Intermittency – Seasonality – Outliers and missing data

Forecast history Sales history

Order date Ship date Receipt date

Planned production Actual production

Planning Parameters

Lead time mean – In-transit – Order processing / goods

receipt

Lead time variability

Schedule attainment mean Schedule attainment

variability

Demand Intelligence Module

Supply Intelligence Module

Production Intelligence Module

Intelligence Module


Agenda





Questions


BusinessObjects Universe & Reports rapidly deploy supply chain dashboards and ad hoc reporting

Leverage SAP BusinessObjects Enterprise (BOE) modules Data universe defined for BOE

modules Supports analytics & reporting needs

for essential common workflows – Monitoring of Supply Chain performance – Executive dashboards – Ad hoc reporting Pre-defined dashboards, include:

– Demand Analytics – Target Performance – Scenario Comparison


Demand Analytics Dashboard – Review Forecast Error, Bias and Intermittency


Demand Analytics Dashboard – With Drill Down Capability


Inventory Target Performance Dashboard – Demand, Supply, and Inventory at a glance


Inventory Target Performance Dashboard – Also in Tabular Format


Scenario Comparison Dashboard – Review any Supply Chain Scenario


Webi linked to Universe enables users to rapidly create reports and graphs


Reports support aggregation or drill down needs


Agenda





Questions


The SmartSteps methodology is flexible to meet the unique needs of every customer situation. Based on a customer’s specific use cases, the tasks and deliverables tied to a successful implementation can vary. One of the key implementation variables that has a significant impact on the amount of time, effort and resources required, is the method the EIS data inputs and outputs are received.

Manual Path: Users create and maintain data inputs via the EIS user interface or by populating a spreadsheet template and uploading the data by clicking a button on the user interface. Outputs are available on the user interface or the EIS Data Store. Type duration 2-3 Months

Integrated Path: Input data is provided in automatically from the customer’s existing systems to EIS via a scheduled or automatic batch process. Outputs are then sent back via similar processes. Typical duration 4-6 months

Deployment Strategies


EIS - Enterprise Inventory and Service-Level Optimization Implementation Process

Deploy Validate Configure Design Mobilize

Early in the SmartStep process, the team will analyze the business needs to determine the best rollout schedule to provide tangible value early in the implementation

Cur

rent

Inve

ntor

y Le

vels

Implementation Difficulty

Value

Cur

rent

Sto

ckou

t Lev

els

Data Quality Base Product Fit

Resource Availability

Attended – SC 2-4 Unattended - All

Planner Group A Planner Group B

All

Division #1 Division #2

Division #3

Wave 1 Wave 2 Wave 3

SmartSteps’ Rollout Priority Matrix Examples of Potential Rollouts

Attended – SC1


Methodology Overview Deploy Validate Configure Design Mobilize

♦ Project Mgt Office ♦ Kick-off Meetings ♦ Sandbox environment

creation ♦ Core Team Training ♦ IT Assessment ♦ Define high-level Use

Case(s) & Deployment Strategy

♦ Data Source Matrix ♦ Project Charter ♦ Identify KPIs ♦ Identify Org. Impacts ♦ EIS Phase Review

♦ Integration assessment

♦ Solution Definition Document (SDD)

♦ Baseline KPI tracking ♦ Develop Org. Impact

Plan ♦ EIS Phase Review ♦ Steering Committee

Update

♦ Inbound Interface Document (IID)

♦ Draft of Batch Process Design Doc. (BPDD)

♦ Gather/Cleanse/Validate Data inputs

♦ Application Parameters Document (APD)

♦ Production/Test Environment Creation

♦ Ongoing KPI tracking ♦ EIS Phase Review

♦ Interface development - Inbound (customer) - Outbound (customer) ♦ Batch Process Design

Document (BPDD) completed

♦ Integration Acceptance Test (IAT)

♦Issue Resolution ♦ Define IT cutover plan ♦ Performance Tuning &

Testing

♦ Users Acceptance Test (UAT)

♦Issue resolution ♦ Ongoing KPI tracking ♦ EIS Phase Review ♦ Steering Committee

Update

♦ Execute automated system and data cutover

♦ Training - end user / train-the-trainer, Executive

♦ Ongoing KPI tracking ♦ Transition to Customer

Support Migrate to Final Production Environment

♦ EIS Phase Review ♦ Final Steering

Committee Update

Common Tasks

Integration Tasks

Options

♦ Published Report Document (PRD)

♦ Software Requirements Document (SRD) for new/custom elements

- Pre/Post Processing - Publishing – reports - Interfaces - Infrastructure - Other new/custom req. ♦ Input data

transformation/cleansing

♦ Current state process flows

♦ Hosting services set-up

♦ New/custom development

- Technical design / code - QA plans and execution - Documentation ♦ Environment Certification ♦ Interface

support/creation

♦ Custom Acceptance Test (CAT)

♦ Detailed output analysis

♦ Operational Support ♦ Additional Services

Project Management Project Management Project Management Project Management


End-to-End Workflow

Intelligence Modules

Topology Converter

Multi-Stage Inventory

Planning & Optimization

SAP Connector

Source Systems Data Gateway Loader & Validation

Data Gateway

Data Store

SCM (APO)

ECC or R/3

Extract

Transfer Load

Outputs Outputs

Outputs

Standard SAP Enhancements

Inpu

ts

BusinessObjects Universe &

Reports


List of BAPIs

BAPI Name Direction Description

/EIO/MATERIAL_DETAILS Inbound Material Details extraction including IL and ILC

/EIO/SALES_DETAILS Inbound Sales History

/EIO/FORECAST_DETAILS Inbound Forecast Details

/EIO/PLANT_DETAILS Inbound Plant Extraction

/EIO/SOURCING_DETAILS Inbound Sourcing Extraction

/EIO/BOM_DETAILS Inbound BOM Extraction

/EIO/VENDOR_DETAILS Inbound Suppliers Extraction

/EIO/SIM_DETAILS Inbound Purchase Order Details

/EIO/PIM_DETAILS Inbound Production Order Details

/EIO/TRL_QTA_DETAILS Inbound (APO) Transportation Lanes and Quota Arrangements

/EIO/PIRSRVAPS_DETAILS Inbound (APO) Forecast Details from planning book

/EIO/MATSAVE_DATA Outbound Safety Stock Update

/EIO/BAPI_UPDATE_KEYFIG Outbound (APO) Updates APO Planning Book with Safety Stock Values


Example: MRP2

Outbound BAPI: Safety Stock values are uploaded to the MRP2 view in SAP Material Master


ECC Data Management: MM01, MM02, MM03

New functionality has been added to allow the entry of EIS-specific data to the Material Master in SAP. Transaction codes /N/EIO/MM01, /N/EIO/MM02 and /N/EIO/MM03 will provide users with the opportunity to create, change and display EIS specific data.

IL = Item-Location

ILC = Item-Location-Customer

/N/EIO/MM02 /N/EIO/MM01 /N/EIO/MM03


ECC Data Management: EIO1, EIO2

EIO1: Item-Location (IL) data management

EIO2: Item-Location-Customer (ILC) data management


ECC Data Management: Mass Upload of Data

Mass upload Item-Location (IL) and Item-Location-Customer (ILC) data into SAP via transaction /N/EIO/MMUPL. Users can enter data into one of two MS Excel template files and then save the data as a text file for upload to SAP.


ECC Data Management: EIS Custom Tables

Item-Location EIS Parameters

Item-Location-Customer EIS Parameters


Settings in EIS


Agenda





Questions


Thank You

David Zatz Applications Consultant EIS - Enterprise Inventory and Service-Level Optimization mobile 845-558-1023 | [email protected]

© 2013 SAP AG. All rights reserved.

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david zatz, applications consultant february, 2013 · blueprint eis with apo now, have all the data...

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