Just-in-time / just-in-sequence processing is important to the automotive industry. In this blog I will cover why it is such a crucial process and how SAP S/4HANA helps.
‘The customer is king’ is a key principle for automotive companies, that is why, in many markets, automotive manufacturers offer a high number of configuration options for the end customer to choose from. Combined with the fact that multiple vehicle models are produced simultaneously on the same production line, this means that a high number of different components are required for production.
However, space is limited on the production line so manufacturers want to reduce inventory as much as possible. As a result, external suppliers and internal warehouses are requested to deliver smaller quantities of components multiple times a day.
While in a just-in-time (JIT) environment, the sequence of the parts does not matter, in just-in-sequence (JIS), the right components need to be delivered to the line in the right sequence. This is particularly important as many suppliers act as outsourced manufacturers, building complex modules or component sets that are delivered directly to the line.
Now SAP S/4HANA supports next-generation just-in-time/just-in-sequence processing. Including summarized JIT call (JIT) and sequenced JIT call (JIS) processing from both an outbound and inbound perspective. This means that the new solution covers the needs of automotive manufacturers and suppliers, as well as of the wider ecosystem.
There are 2 specific processes covered
- JIT Supply to Production covers the complete process from the release to the supplier, warehouse or external service agent up to the receipt of components and assemblies at the production line.
- JIT Supply to Customer covers the end-to-end process from receiving the JIT or JIS calls, up to delivering and billing the components or modules to the respective customer.
Now let us discuss the highlights of JIT Supply to Production:
- JIT Supply to Production for both summarized JIT as well as sequenced JIT calls, which is a fundamental change to prior solutions as it provides a simple demand-triggered pull signal to internal or external sources of supply.
- Automated or manual JIT and JIS call creation based on JIT control cycles with integration into SAP S/4HANA inventory management and SAP Extended Warehouse Management (SAP EWM), now tasks can be created directly in SAP EWM embedded in SAP S/4HANA.
- Summarized JIT call for coupled parts that need to be supplied together, e.g. left and right rearview mirror, can be called off together.
- Communication groups can be created for several JIS call recipients (e.g. for a supplier AND an external service provider).
- Re-ordering of sequenced JIT calls in case of e.g. damage or quality issues. A new JIS call can be created with reference to the original call and then changed accordingly.
- Lifecyle management for control cycles, such as model year upgrades or engineering changes.
- Embedded analytics for real-time transparency in the operational system.
- Shop floor integration and migration via APIs so that e.g. a JIT call can be triggered by shop floor automation.
These features make the JIT Supply to Production a highly flexible solution that can be adapted to customers’ specific needs.
Now let us cover the highlights of JIT Supply to Customer:
- JIT Supply to Customer process supports both summarized JIT as well as sequenced JIT calls: SAP S/4HANA supports the end-to-end process, enhanced with capabilities such as SAP Intelligent Robotic Process Automation for call creation and real-time analytics directly in the operational system.
- Support of collective delivery confirmation with reference to multiple JIT calls as well as integration into the self-billing process.
- High flexibility in component group/module determination due to rules-based component group determination (based on SAP Business Rules service that runs on SAP Business Technology Platform).
- Simplified grouping of sequenced JIT calls, which allows grouping of sequenced JIT calls for packing in the right order. Calls can be assigned to JIT packaging specifications with e.g. slot assignment in racks. Multi-level packing is enabled as well as separate packing for reorder JIT calls.
- Integration to SAP EWM embedded in SAP S/4HANA, which allows picking from SAP EWM for summarized JIT calls.
- Enhanced usability thanks to the new user interface (SAP Fiori) such as an overview page as well as a monitoring app for JIT calls.
- Enhanced transparency thanks to SAP S/4HANA embedded analytics such as the stock availability analysis and demand analysis, which deliver more visibility and user-friendliness.
Our next-generation just-in-time solutions in SAP S/4HANA take JIT processing to the next level. Enhanced capabilities combined with improved transparency help automotive companies streamline their processes, improve reliability, and maximize customer satisfaction.
Where to find more information:
A big thank you goes to Alexander Kühn and André Nuglisch (both Product Management) for their support on this blog.