How can you quickly build your service parts planning capabilities to proactively predict and respond to disruptions in your supply chain?
This blog post introduces the SAP S/4HANA Digital Supply Chain Management edition for extended Service Parts Planning.
When analyzing supply chain challenges experienced over the last three years, it’s easy to see why businesses need to be agile. They need to be able to navigate and maneuver around obstacles that arise. We live in a new normal with pandemics, natural disasters, logistics delays, and other unforeseen disruptions that seemingly arise weekly. It’s more apparent than ever that aftermarket businesses need to optimize their supply chain quickly and economically without disrupting their core operations. Those who can’t accomplish this swiftly will fall short of expectations. It can take years for companies to transform their supply chain digitally. SAP Digital Supply Chain Management, edition for SAP S/4HANA, offers a new faster approach to these challenges.
Previously, to implement eSPP it required an implementation or upgrade from ECC to S/4HANA 2020 release or higher. However, implementations or upgrades to the ERP system can be undesirable due to time constraints, investments, and impact on other business functions. With the new extended Service Parts Planning as part of SAP Digital Supply Chain Management, edition for SAP S/4HANA, companies can begin their transition to SAP S/4HANA and realize the value of the new extended Service Parts Planning solution independent from the ERP system. Implementation can be swift, agile, and resilient. SAP Digital Supply Chain Management, edition for SAP S/4HANA, offers a modular interoperability implementation approach to transform your supply chain quickly. The concept for the solution is based on three design principles:
- Modularity – With the modular framework of the edition of SAP Digital Supply Chain Management for SAP S/4HANA, you can accelerate time to value by implementing the new global planning solution in a decentralized fashion. Your business can start its digital supply chain transformation today while keeping core enterprise processes stable.
- Synergy and integration – This helps ensure cohesive information and fluid communication between systems. This is achieved by modern interface technologies and aligned data and configuration structures. The model is a centralized hub approach that can connect with multiple ECC or S/4HANA back-end systems.
- One code line with SAP S/4HANA – SAP Digital Supply Chain Management, edition for SAP S/4HANA, shares a common code line with the core SAP S/4HANA system. This means you will receive future innovations on the same schedule as SAP S/4HANA, which minimizes disruption and streamlines implementation.
Accelerate your digital supply chain transformation
Whether you are currently on SAP ECC, SAP APO, have already transitioned to S/4HANA, or are new to SAP, you can take advantage of the SAP S/4HANA Digital Supply Chain Management edition solutions in a side-by-side deployment approach. It can be deployed independently of your ERP transformations and catalyzes your SAP S/4HANA journey. The edition includes several modular solutions that are tightly integrated and work with other SAP products (See figure 1).
You can deploy the different modules of the Digital Supply Chain Management Edition for S/4HANA on a single instance to share infrastructure & operations costs.
Aftermarket businesses can take advantage of the SAP S/4HANA extended Service Parts Planning solution as part of SAP Digital Supply Chain Management, edition for SAP S/4HANA as a side-by-side solution that is available as an on-premise or private cloud environment. This allows you to scale and deliver service parts planning value independently from your core ERP system(s). In addition, you can reduce risk and complexity due to independent upgrade cycles (separate from your ERP system) and minimize downtime. It enables easy entry to S/4HANA with immediate business impact and a step-by-step transformation journey. The Global Network Planning solution has two deployment options: embedded (see figure 2) and side-by-side (see figure 3).
| Characteristics of embedded deployment:
Figure 3: Side-by-side Deployment Option
| Characteristics of Side-by-Side deployment:
SAP S/4HANA extended Service Parts Planning (eSPP) – Solution Overview
A network-based planning solution for visibility and agility: Enjoy the same robust global network planning capabilities whether you deploy the solution embedded within SAP S/4HANA or side-by-side in SAP S/4HANA Digital Supply Chain Management edition.
SAP S/4HANA extended Service Parts Planning is a real-time network-based planning solution for complex and volume-intensive processes. It provides service-parts-specific planning functions and transparency throughout the supply chain, right from the moment demand occurs to the delivery of the product. Planners can make decisions in real-time throughout the network to avoid disruptions and protect competitiveness. The solution offers end-to-end capabilities: demand management, inventory planning, parts supply planning, parts distribution logistics, and real-time analytics and monitoring.
Key Solution Capabilities:
Model your entire physical distribution network with Bill-of-Distribution (BOD): At the heart of SAP S/4HANA, extended Service Parts Planning is the bill-of-distribution representing all locations within your supply chain, from suppliers, logistics providers, and distribution centers, to customers or dealers. The bill-of-distribution allows you to monitor and evaluate your entire supply chain network automatically and avoid surprises.
Increase forecast accuracy and improve demand planning: You can capture and manage demand for your location products to generate a demand history within S/4HANA. S/4HANA extended Service Parts Planning increases forecast accuracy with our advanced forecast models and automatic evaluation and selection of the optimal model (i.e., slow-moving items, sporadic demands, seasonal trends). You can react quickly to changes in demand behavior. To save time and manual efforts, it automatically considers product supersessions, changes to your network, stocking or destocking decisions, or changes to master data. This helps increase your forecast accuracy.
Reduce inventory investment and maximize customer service: The objective of the inventory planning solution is to minimize the inventory holding cost while ensuring that required service levels are met. The solution accomplishes these objectives by making stocking and destocking decisions based on cost, demand frequency, and customer-specific criteria. The entire network is considered when calculating safety stock for each material in each location in combination with the economic order quantity (EOQ).
Optimize distribution and deployment of your service parts: Aftermarket businesses need to optimize procurement and distribution of service parts within their supply chain network. Distribution Requirements Planning (DRP) considers all receipts and requirements when calculating net requirements across all locations of the network. The proactive procurement approach of the solution eliminates “firefighting” with specific functions such as supplier shut-down, anticipated demand coverage, and seasonal safety stock shift.
Deployment calculates the distribution quantities within the network based on demand priorities and fair share rules. It applies priority level processing if the available quantity is less than the demand quantity. You can avoid material shortages with our inventory balancing functionality and have a higher total availability of service parts at the points of sales.
Drive productivity with predictive analytics capabilities: S/4HANA extended Service Parts Planning integration with SAP Analytics Cloud (SAC) offers a single source of truth to analyze real-time live data quickly. It combines business intelligence, planning, and predictive analytics to help you make informed and timely decisions and adjustments during the planning process. You have complete visibility of forecasting data, inventory levels, alerts, and critical situations in the supply chain. Planners can gain efficiency by designing their dashboards to view end-to-end planning and execution data on one screen.
In summary, SAP S/4HANA extended Service Parts Planning as part of SAP Digital Supply Chain Management, edition for S/4HANA, offers a resilient global network planning solution to deal with disruptions in your supply chain. If you are an SAP ECC, SAP APO-SPP, and/or SAP S/4HANA version 1909 or less, you can quickly adopt this new solution without disrupting your core operations. You will enjoy the same robust functionalities as the embedded SAP S/4HANA extended Service Parts Planning offering. This can serve as an entry point to S/4HANA with immediate business impact and a step-by-step transformation journey.
This blog is in collaboration with Chad Campbell and Beatrice Hulde.
We are excited to support your global service parts planning transformation journey. Please reach out to your SAP representative or visit us online at:
- SAP S/4HANA Supply Chain for extended Service Parts Planning
- SAP Digital Supply Chain Management, edition for S/4HANA
- White Paper: Accelerate Supply Chain Transformation and Innovation
- SAP S/4HANA Digital Supply Chain Management edition
- What is happening in the Automotive Aftermarket?
- Development release highlights
- Implementation Guide for Using Extended Service Parts Planning Side-by-Side with an ERP System