The SAP supply chain can be finely tuned like a packaging machine
In my pharmaceutical career we had a 27 year veteran packaging machine mechanic named Owen who could hear peculiarities of each machine from his office. But all I could hear was a steady drone of humming, whirring and clanking. I’d be in mid sentence with Owen; he’d excuse himself; call the junior mechanic and say “Bill, check bagger #2; I can hear that the vacuum bottle is cracked”.
Owen was really good with the flow-wrapper too (think of a 5 pack of Trident chewing gum; that’s the machine I’m talking about). An electric eye “read” the black square on the film web and sent a signal to the film clutch which either loosened or tightened the film so as to keep the cutting/sealing jaws in the exact same position on the web, package after package. This mechanic could set up the machine with only 10 meters of film and run 100,000 packages with less than 0.1% wastage. This is because Owen was completely attuned to the machine. Every time he walked past it he instinctively knew when to make an adjustment or when to leave it alone. He even knew how the room temperature and humidity affected the machine and the film.
I admire mechanics with this talent!
In the exact same way, as supply chain professionals, we can be attuned to our Supply Chain. A Supply Chain is just like a big mechanical machine with inputs and outputs. The longer I work in SAP consulting the more clearly I see how true this is:
- You load the machine with independent demand (the forecast) and through the use of correct planning strategies you control if and how sales orders will consume the demand and add to the requirements.
- You tune the engine (MPS/MRP) by setting the fields in the MRP views of the Material Masters so the engine will crank out correctly sized planned orders with the right lead time
- You start up the engine and it first creates planned orders and purchase requisitions that you further process within the machine as production and purchase orders
- You provide a consistent source of fuel: the component materials and labor and machine capacities
- The output of this process is inventory, produced on time with the minimum amount of fuel.
With only 14 years of SAP experience under my belt I don’t know even 10% of SAP’s functionality; it’s a huge program after all. And a genius one at that! But I will say, that I am becoming “attuned”. I’m finding it easier to diagnose problems and am gaining intuitiveness as to how various settings affect the outcome of each client’s SAP “Machine”.
You can consider each one of these a “process controller” on the SAP Machine; each one has to be set just right to get the inventory to pop correctly out the end:
- “Rough cut capacity check” during S&OP Processing
- Planning strategies
- Consumption mode and periods
- Period of adjustment
- Sales Order ATP “scope of check”
- MRP Type
- MPS/MRP run settings
- Planned Order to Production/Process Order conversion program
- Control key in Routing/Recipe
- the list goes on and on….
Lucky for us, we have a diagnostic tool attached to the side of our SAP machine to tell us when our process controllers need adjustment. Poor Owen doesn’t have one. Ours is called the SAP Exception Monitors: MD07 and MD06.