Next-generation Just-In-Time Supply to Customer | Part 3
Just-in-time / just-in-sequence processing is important to the automotive industry. In my third blog, I will focus on the supply to the customer process and how the next-generation JIT Supply to Customer solution in SAP S/4HANA helps.
Let me recap what we learned from my earlier blogs: With line-side storage being the most expensive storage space for most companies, manufacturers need to keep minimal inventory levels on the production line. Therefore, suppliers 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 and Just-in-Sequence Supply to Customer in SAP S/4HANA ensures that components and modules required for manufacturing or assembling at the customer site are delivered in the required quantity and at the necessary time.
The solution covers the end-to-end process for both inbound summarized JIT calls (JIT calls) and inbound sequenced JIT calls (JIS calls). It is available in both SAP S/4HANA Cloud and SAP S/4HANA. The operations covered include, for example, receiving call-offs with subsequent component group determination for modules or assemblies, packing in sequence, and a new, state-of-the-art delivery confirmation process.
Now let us take a closer look at the solution
The solution offers enhanced usability due to native Fiori apps. An overview page for the JIT Planner and analytical apps such as the Stock Availability Analysis and the Demand Analysis increase transparency and visibility into the stock situation and into demand deviations. In addition, the solution provides comprehensive monitoring apps so that the planner can move from a reactive to a proactive working mode.
The flexible action control enables customers to adjust the processing of JIT calls to their needs, introduce their own actions (process steps) through extensibility, interlink multiple actions with or without intermediate status updates and to add logic to JIT actions provided by SAP through extensibility.
A capability I would like to highlight is the new delivery confirmation process. It provides significant improvements compared to our traditional solution.
The next-generation JIT/JIS solution supports collective delivery confirmations with access to multiple JIT calls. To support ‘pay by consumption’, which is a standard procedure in Automotive, the delivery confirmation handling has been enhanced with a consignment process:
- When the components or modules are shipped to the customer, a consignment stock fill-up is posted to reflect that while the goods were physically shipped and are visible as consignment stock at the respective customer, they still belong to the supplier.
- As soon as a delivery confirmation from a customer has been received (indicating that the parts were consumed), the delivery confirmation items are matched automatically with what has been delivered to the customer. During matching, the delivery confirmation items are released, triggering the consignment issue process.
- As part of the consignment issue process, an outbound delivery is created and posted goods issue, reducing the consignment stock to the customer. This outbound delivery is the basis for billing or self-billing.
- Finally, the customer sends out self-billing invoices based on the delivery confirmations.
It is important to mention that the next-generation JIT/JIS solution is fully integrated into the SAP Self-Billing Cockpit in SAP’s industry cloud.
The delivery confirmation process can be activated on the JIT customer supply control level, depending on the combination of customer, customer supply area, plant, and component group material. In addition, it can be specified whether and how reorders are included in the delivery confirmation process.
Packaging group specification / packing groups
Another highlight is the packaging group specification for JIS processing. It defines the packaging material and the slots for a component group material/module to be packed (for example, to represent slots in racks).
The packaging group specification is the foundation for the creation of packing groups for JIS calls. Based on the sequence number, the component groups/modules are assigned to a slot within the packing group, depending on the withdrawal sequence.
In case of sequence number changes, the slots are re-allocated automatically if the packing groups are not released yet for production or packing.
Multi-level packing, as well as separate packing for reorder JIT calls, can be handled as well.
To support this process, we created two new Fiori apps:
- The Fiori app Just-in-Time Packaging Group Specification enables you to create and maintain the packaging group specification, including packaging material, a total number of slots, group of slots, and slot IDs. You can also assign the component group material/module and the lower-level packaging specification via this app.
- The Manage JIT Delivery Sequence Groups app allows for creating and editing groups of component group materials packed and delivered in sequence. You can specify number settings for unique number intervals per packing level and that are separated by packing for normal and reorder JIT calls and assign component group materials/modules by JIT customer supply controls.
Apart from the capabilities mentioned above, the solution provides high flexibility in component group/module determination either through rules-based component group determination (based on the business rules capabilities of SAP Business Technology Platform) or via BAdI.
Also, for summarized JIT calls, we provide integration to SAP Extended Warehouse Management embedded in SAP S/4HANA.
Finally, we have enhanced the solution with RPA processing for increased automation.
I hope you enjoyed the read. Stay tuned for more in the coming months.
For more information, please refer to the following documents: Solution Summary, SAP S/4HANA 2021, and the online help on JIT/JIS Supply to Customer.
For the setup of a first prototype, please check out the Quick Start Service for JIS processes in SAP S/4HANA.
Simone Finger, SAP Industry Business Unit Automotive
A big thank you goes to André Nuglisch, Product Management Discrete Industries, and Julia Ponzini, Industries and Customer Advisory GTM, for their support on this blog.