Today, globalization creates an increasing number of companies struggling for customers. To ensure competitive advantage, companies are forced to customize products and services and to quickly place them into the market. To be successful, companies have to quickly react on challenges by precisely adapting their production system to new demands. The result is a high number of engineering changes that have to be processed simultaneously.
In practice, engineering change needs to go through a complex decision process. It involves many departments and takes a lot of constraints into consideration such as production capacity, procurement lead time, product launch date etc.The big challenge today is how can quickly figure out an optimal plan that satisfy every constraint.
In this Conceptual demo, engineering change manager coordinates stakeholders from different function to assess the impact of change.
When EC coordinator logins the system, EC coordinator notices one engineering change request is highlighted in my work list. This ECR has good potentials to increase margin and reduce cost. However, the inventory of old materials is high. That means it may result in huge waste if the change is implemented too early.
This ECR consists of 2 change objects: material BOM and Routing.In BOM view, the replaced item – battery is highlighted. I can easily understand the change in 3D visualization view.In routing view, 3 operation steps are optimized. This will save assembly time 45 minutes for each product.That’s an amazing improvement!
Engineering Change Cockpit aggregates all information from ERP, PLM and other legacy legacy systems. Now, stakeholders can work and collaborate on single source of truth. For example, Sales & Operation Planning data is replicated into SAP HANA. Sales VP can
- View sales forecasting
- Analyze the impact of engineering change to Sales KPIs such as Turnover, Margin and sales volume.
- He can set constraints such as price, promotion.
Similarly, other stakeholders like Engineering, Finance, Manufacturing, Inventory, and Procurement can analyze the impact and set constraints in their own view.The system can detect conflict. In this case, new product can’t be released on schedule due to supply shortage. So I trigger an online collaboration among Sales, Manufacturing and Procurement. After some negotiation, they get agreement on delivery schedule and resolve the issue. Now, EC coordinator can kick-off the last step – Simulation.
In simulation view, EC coordinator can prioritize business goals, for example time-to-market, profit or return on investment. Firstly he gives priority to time-to-market. With the power of SAP HANA, the system can simulates all possible situation in a second and recommend the earliest effective date – April-9th. In this bar chart, higher bar means better performance. When EC coordinator change the priority to profit, the system recommends a new effective date April-18th. That means postpone the change 2 weeks can bring more profit.I can compare the two options. Obviously, the blue option is much better than the green option because it brings more margins. With comparison of break-even point, cash flow and delivery schedule, EC coordinator can fully understand the pros and cons of the two options.Sometimes, minor change to certain constraint may bring big benefit. The system can identify such opportunity and recommend high potential alternatives. In this case, relaxing to the constraint of equipment down time from 10 to 6 hours per week can significantly improve margin. That’s fantastic!In summary,
The potential future SAP Engineering Change Simulation solution will be able to
- not only figure out an optimal plan with given constraints
- but also can maximize profit beyond boundary.
Powered by SAP HANA, the only limitation is your imagination.
This blog outlines our general product direction and should not be relied on in making a purchase decision. This blog is not subject to your license agreement or any other agreement with SAP. SAP has no obligation to pursue any course of business outlined in this blog or to develop or Release any functionality mentioned in this blog. This blog and SAP’s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP intentionally or grossly negligent.