I must admit, every now and then, I get the urge for a little fast food! Recently, I broke down and pulled into
my local Burger King restaurant, and fed my urge. While ordering my Whopper with cheese, I remembered their
familiar slogan; “Have it your way”. While I was enjoying my Whopper, made to my specifications, I was multi-tasking
and answering an email from one of my customers. The email was a question about Variant Configuration.
Then it struck me!
Deciding how to set up your product structure is by far one of the most important and challenging decisions
in a Mill Products ERP implementation. While there are many key decisions and data points to evaluate,
one SAP tool is almost certain to part of the discussion; Variant Configuration (LO-VC). I have been involved in
many Mill Products SAP ERP implementations, and in my opinion, VC has been a terrific enabler for the industry.
Like many tools in SAP ERP, there are different ways VC is used and the extent to which you see customers
deploy it varies. Much of the variation comes from the amount of SAP ERP functionality is being deployed.
For example, if a customer is not using Product Costing in ERP, you typically see less utilization of the VC functions
as a result. Typically, a Mill Products implementation that covers all of the ERP modules will also be using VC.
Another major factor in the extent VC is utilized is the selling and marketing strategy of the
products. In today’s highly competitive markets, customers have come to expect more choices. For example
in the paper industry, in the past products may have been limited to smaller numbers of sizes like 1/4 of an
inch increments or only one core size. Today, it is common to see 1/16 or even 1/32 increment options being
sold to customers as well as multiple core options.
The chart below shows the impact of these product options to the number of material combinations needed to
Sizes are just one of the product attributes that are common in Mill Products implementations.
We commonly see finish options, packaging options, labelling and stenciling options
as well as branding and customer specific products being sold in the industry.
These many options can lead to a high number of material masters in the ERP system.
What is also common is that many of these options, do not greatly impact the manufacturing or fulfillment
processes. To a large degree, these products are much less complex from a recipe perspective as an example.
Supporting these options is not challenging enough to warrant separate material masters for each very often.
Just like Burger King does not require a separate menu item for a Whopper with no onions,
Mill Products customers commonly can support their customers’ requests without needing separate
materials for every request.
I recently helped a paper company that was about to start selling products to customers in the UK,
which meant they had to start selling products in metric sizes. They already had SAP VC deployed
and enabling all of the many imperial size options they offered. With some quick VC work, they
were also able to quickly add the metric sizes without creating any new material masters.
It was a relatively small effort to start selling all the new sizes.
SAP Variant Configuration may not be required for every Mill Products customer.
Some do not have very many product attributes that can be specified by customers.
However, the most common scenario is to see more and more of choices being offered, and
thus more reliance on Variant Configuration.