Product Management Update: SAP #S4HANA Cloud 1802 for Manufacturing
This blog provides you an overview of innovations in our SAP S/4HANA Cloud 1802 release for Manufacturing. Please check out also the video from my colleague Parvathy Sankar.
Production Planning and Execution
First and foremost, we have great enhancements in the area of Demand Driven Replenishment, which we’ve brought out during the last two releases. With 1802, we have now received the compliance certification from the Demand Driven Institute. The Institute has certified that SAP S/4HANA Cloud has enough capabilities to implement, sustain and even improve a DDMRP implementation.
Fig. 1: Compliance Certification from the Demand Driven Institute
Demand-driven replenishment helps the production planner to plan and manage supply chains efficiently based on customer demand, rather than through traditional MRP procedures. You do this by strategically decoupling material flows, and by maintaining lower inventory using dynamically-managed buffer (stock) levels for relevant products.
Decoupling material flows at strategic locations can help avoid the so called ‘Bullwhip Effect’, which refers to increasing swings in inventory along the supply chain in response to changes in customer demand. To find out more about the Bullwhip Effect, please visit this use case blog.
Keeping in line with this theme, we bring out a few changes along our demand-driven capabilities. Demand-driven replenishment forms the basis for a reliable material flow, by defining buffers at strategically important points and adjusting these buffers regularly.
A well-balanced buffer level for relevant products ensures they are sufficiently stocked to prevent excessive storage costs or losses without running out of demand. We use buffer positioning to classify products based on value of goods, usage and variations in demand, and buffer sizing to classify products based on decoupled lead time. The main innovations here are the ability to have planned adjustment factors and time-dependent (future) buffer levels.
Fig. 2: SAP Fiori app ‘Manage Buffer Levels’
We now have a new end-to-end process for Demand-Driven Replenishment Planning and Execution. With our Replenishment Planning, you can review the replenishment planning status of buffered components. Additionally, you can create demand or supply for buffered components after the planning status has changed. With replenishment execution, you can review the replenishment execution status of buffered components after converting supply into production execution. Thus, you can reduce on-hand stock to stimulate replenishment need or expedite supply and run production execution.
Record and manage the production progress
Quicker confirmation in production progress is very important to avoid showstoppers in the process. The new intuitive SAP Fiori app “Confirm Production Operation” simplifies the execution of production orders. This app improves the usability of recording the production progress and empowers the production operator to quickly
- confirm production operations partially or completely
- report produced quantities between batches
- report durations for the activities for selected production operations
- record yield and scrap
- record component consumption
Fig. 3: Intuitive SAP Fiori app “Confirm Production Operation”
The SAP Fiori app “Manage Production Orders” enables the production supervisor to easily monitor the progress of operation.
Fig. 4: Monitor the progress of operation with the SAP Fiori app “Manage Production Orders”
Statistical process control to monitor and control production processes
In Quality Management, we have introduced the ability to record results during production on a regular basis. Quality engineers can now use statistical process control and its most important tool, the quality control chart to monitor and control the quality of production processes.
Fig. 5: SAP Fiori app “Manage Control Charts”
Furthermore, I want to highlight the new SAP Fiori app “Record Results for Inspection Points” which enables quality technicians to easily process inspections during a production operation.
Moreover, we are introducing defect handling in the area of quality management. Quality technicians and engineers can create a defect and quality planners and engineers can easily monitor and manage defects which have been created during the inspection process.
Fig. 6: SAP Fiori app “Manage Defects”
SAP Predict Arrival of Stock in Transit
In the area of inventory management let me share a really intelligent innovation with you, the prediction of shipment dates.
For companies issuing and receiving goods from and to their plants, it is important to track the status of the materials in transit in order to take action in case of problems. The “Overdue Materials – Stock in Transit” app gives an overview on the status of the shipment allowing the business user to take action.
What can inventory managers do to directly get predictive insights, and to make better and faster decisions? The answer is: leverage our iERP.
With Predictive Analytics integrator (PAi) we are enhancing the app “Overdue Materials – Stock in Transit” with ‘Predicted Shipment Dates’. The system analyzes whether a purchase order item will be delayed and displays the predicted delivery date. Based on historical data the system tries to predict whether the stock in transit order item will be delayed which enables the inventory manager to identify and manage delivery delays in time.
Each predictive model is customer specific. An analytics specialist has to train the model first on the customer’s own historical data before it can start to produce predictive scores. The inventory manager will then be able to check the information so that he/she is able to adjust time scheduling and plan more effectively.
Fig. 7: SAP Fiori app ‘Overdue Materials – Stock in Transit’
In case you want to learn more about predictive analytics for stock in transit with SAP S/4HANA & SAP Leonardo, watch this video on YouTube.
Last but not least, I want to indicate further innovations like the integration of Advanced Variant Configuration into the sales quotation and the third-party warehouse management system integration which enables the integration of self-operated warehouses implemented with third-party warehouse management solutions to SAP S/4HANA Cloud.