Next-generation Just-In-Time Supply to Production
Just-in-time / just-in-sequence processing is important to the automotive industry. In my second blog, I will focus on the supply to the production process and how the next-generation JIT Supply to Production solution in SAP S/4HANA helps
Manufacturers need to ensure that inventory levels are kept minimal due to limited space on the production line and line-side storage being the most expensive storage space in a production plant. As a result, external suppliers and internal warehouses are requested to deliver smaller quantities of components multiple times a day via just-in-time and just-in-sequence call-offs.
Next-generation Just-In-Time Supply to Production in SAP S/4HANA lets you replenish materials required for manufacturing and assembling from an internal location or from an external supplier in the required quantity and at the necessary time.
For both summarized JIT calls (JIT calls) and sequenced JIT calls (JIS calls), the solution covers the complete end-to-end process. The operations covered include the release to the warehouse, supplier or external service agent up to the receipt of components and assemblies at the production line.
Now let us discuss what the solution offers
The JIT control cycle provides the production supply area as the destination and the warehouse or external supplier as the source. Also, it specifies the material, the quantity, and the duration of replenishment.
For materials that are short in supply, JIT calls can be triggered manually by indicating the control cycle and the desired quantity.
For automatic JIT call creation, various planning procedures apply, such as demand-driven and consumption-based replenishment:
- If you choose consumption-based planning, the system checks the stock level against the threshold maintained in the control cycle and triggers a replenishment request accordingly.
- If you select demand-driven planning, the stock level at the production line is monitored. A JIT call is created as soon as the stock needs to be replenished based on future demands within a specified planning horizon. This procedure can also be applied for primary and secondary control cycles, considering planning elements and planning parameters of control cycles using primary and secondary storage bins as the source.
These capabilities enable a production supermarket scenario: The secondary control cycle manages the stock level in the production supermarket by triggering JIT calls from the warehouse. The primary control cycle drives the stock level at the production line by triggering call-offs from the supermarket.
A production supermarket allows for a secondary storage location close to the production line, which provides more flexibility and agility. The advantage is that no unneeded material is stored in the supermarket if there is no demand on the production line.
With integration into SAP S/4HANA inventory management and SAP Extended Warehouse Management (SAP EWM), tasks can now be created directly in SAP EWM embedded in SAP S/4HANA.
The process is tightly integrated: The JIT call status reflects the warehouse status so that, e.g., changing a JIT call is not possible after starting the picking process. In SAP EWM, a new document type SJIT was introduced exclusively for the JIT process. This provides more flexible warehouse processes for JIT call components and modules.
External replenishment from suppliers is done using SAP Transportation Management combined with advanced shipping and receiving in SAP EWM for inbound goods processing.
In case you want to send the JIT calls to multiple message partners, communication groups can be set up that are a combination of supplier and subsequent message partners (e.g. carriers). These communication groups are assigned to control cycles for external replenishment.
For parts that need to be supplied together as a set, e.g., left and right rearview mirror, the solution provides the summarized JIT call for coupled parts. The set parts are called off and supplied together.
Re-ordering of sequenced JIT calls is key in case of e.g. damage or quality issues. A new JIS call can be created referring to the original call and then changed accordingly.
Finally, the solution offers lifecycle management for control cycles, such as model year upgrades or engineering changes, embedded analytics for real-time transparency in the operational system and shop floor integration and migration via APIs, e.g., a JIT call can be triggered by shop floor automation.
Our next-generation just-in-time solution in SAP S/4HANA takes outbound JIT processing to the next level. Enhanced capabilities combined with improved transparency help automotive companies streamline their processes, improve reliability, and maximize customer satisfaction.
I hope, you enjoyed the read. For more information, please refer to my first blog in this sequence Next-generation Just-In-Time and Just-In-Sequence Processing in SAP S/4HANA, and to SAP S/4HANA 2021 and Supply to Production.
Please contact me at email@example.com for more information.
A big thank you goes to Alexander Kühn, Product Manager Discrete Industries, for his support on this blog!