Why does the SAP supply chain need optimization? “Didn’t we cover all the decision making during the implementation?” you might ask. You and your team went through countless classes and knowledge transfer sessions where the SAP supply chain was laid out right in front of you. Then you blueprinted and developed the prototype where all decisions for replenishment, planning, how to schedule and when to execute to a forecast, sales order demand or a production program where made.
Then all the (functionality) gaps were covered by add-on programs, third party products and maybe even modifications. As time goes on, new business requirements appear. You introduce a new group of products, for example, and you do not have any historical information based on which you could predict sales or inventory requirements. So you decide to wait for the actual customer orders and trade the inventory buffer for a time buffer, where you tell the customer that they have to wait out the replenishment lead time before they can have the product. But temporary Make to Order was never blueprinted!
Or you realize that what the Sales people forecast, exceeds the capacity on the production line by far and your schedulers give up trying. The fact that SAP’s S&OP allows for a rough capacity check during the planning phase might not be known, so we come to the conclusion that SAP ERP cannot forecast and one either opts for APO or, to make things worse, an external planning and forecasting system.
Or you have a “lean” initiative going on and SAP seems to be counterproductive to anything you learn about “lean”. That is because your consultant did not know how to configure repetitive manufacturing and sequencing in ERP and even though you produce standard products over and over, you are using discrete production or process orders to manage production lot for lot for lot. So you come to the conclusion that SAP is too cumbersome and you opt for an external production scheduling and capacity planning package.
You work yourself out of the system time and time over until you are running a silo ZAP system (Z is usually used to name modifications or add-ons) without integration
Figure 1: working yourself out of the system
Let’s get back on track and pull the most out of what you already own, instead of spending money on enhancements, modifications or the purchase of a best-of-breed forecasting package that promises to perfectly forecast your sales with exponential linear regression to the mean (yeah right!).
And by the way… SAP has added functionality over the last 35 years, using thousands of very experienced architects in an organized fashion, based on experiences from thousands of customers in almost every industry and spending an insane amount of money in their R&D investment and budget. How is your consultant, who promises to fix that perceived gap, stacking up against that?