SAP Best Practices for Discrete Manufacturing V1.605. Overview

SAP Best Practices for Discrete Manufacturing V1.605 Overview

General Information SAP Best Practices for Discrete Manufacturing was developed for small and midsize manufacturers to implement a solution quickly and easily. By means of an entry-level offering for manufacturing companies, you gain built-in support for the best business practices in the industry. Functionalities The SAP Best Practices for Discrete Manufacturing V1.605 solution supports your business in the following areas : Materials management Production planning and control Sales and distribution Logistics, product life-cycle management, and quality management Accounting Controlling Forms and reporting 2011 SAP AG. All rights reserved. 2

SAP BP for Discrete Manufacturing V1.605 Solution Scope (1 of 2) New Scenarios Enhanced Scenarios Manufacturing Sales Materials Management Financial Accounting Make-to-Stock Production Discrete Industry Make-to-Order Production with Variant Configuration Make-to-Order Production without Variant Configuration Repetitive Manufacturing Production Subcontracting (External Processing) Rework Processing for Stock- Manufactured Material Rework Processing for Work-in- Process Quality Management (QM) in Discrete Manufacturing Manufacturing with Kanban Supply in Production Planning and Processing of Semifinished Goods Co-Product Manufacturing Tool Production Engineer-to-Order (ETO) Project Assembly Make-to-Stock (MTS) Production with Order Split Records Management Lean Manufacturing: Heijunka Leveling Research and Dev. Internal Product Development Sales Processing Using 3 rd Party (w. Ship.Not.) Credit Management Sales Order Processing Sale from Stock Free of Charge Delivery Returns and Complaints Sales Quotation Sales Order Processing for Prospect Sales Processing using Third Party (without Shipping Notification) Sales of Nonstock Item with Order Specific Procurement Debit Memo Processing Foreign Trade Export Processing Customer Consignment Processing Returnables Processing Batch Recall Lean Warehouse Management Sales Order Processing with Customer Down Payment Sales: Period End Closing Operations Credit Memo Processing Handling Unit Management (HUM) for Production Order Sales with Scheduling Agreements Engineer-to-Order (ETO) Quotation Processing Sales Returns with Quality Management (QM) Advanced Customer Returns Management Cash Sales Orders Batch Management Serial Number Management Quality Management for Procurement with Vendor Evaluation Quotation for Procurement Consumable Purchasing Procurement without QM Stock Handling: Scrap and Blocked Stock Procurement Contract Stock Transfer with Delivery Stock Transfer without Delivery Return to Vendor Physical Inventory/ Inventory Count and Adjustment Subcontracting Procurement & Consumption of Consigned Inventory Foreign Trade Import Processing Purchasing with JIT Delivery Schedules Advanced Batch Management Outsourced Manufacturing Third-Party Order Processing with Subcontracting Analytics SAP ERP Reports for Accounting SAP ERP Reports for Logistics General Ledger Accounts Receivable Accounts Payable Cash Management Asset Accounting Asset Acquisition through Direct Capitalization Asset Acquisition for Constructed Assets (Investment Orders) Activate Document Splitting Segment Reporting Internal Order R&D Actual Overhead Cost Accounting Actual Period End Closing Financial Accounting Period End Closing Projects Internal Order for Marketing and Other Overhead Actual Activate Document Splitting for Discrete Manufacturing Controlling Purchased Material Price Planning General Cost Center Planning Manufacturing Cost Center Planning Internal Order R&D Planning Internal Order for Marketing and Other Overhead Planning Standard Cost Calculation 2011 SAP AG. All rights reserved. Shipping and Receiving with WM 3

SAP BP for Discrete Manufacturing V1.605 Solution Scope (2 of 2) Cross Functions Period End Closing Activities Period End Closing General Plant Inventory Valuation for Year End Closing Time Recording Travel Management Services Spot Consulting with Fix Priced Billing Internal Project Internal Maintenance Service with Time & Material Based Billing Service with Fixed Price Billing Procurement of Third-party Resources External Procurement Services Depot Repair Period End Closing Service Orders Maintenance and Warranty Processing Easy Depot Repair 2011 SAP AG. All rights reserved. 4

Industry-Specific Scenarios (1 of 3) New Scenarios Enhanced Scenarios SAP Best Practices for Discrete Manufacturing V1.605 provides the following industry-specific scenarios: 226: Handling Unit Management (HUM) for Production Order 227: Quality Management in Discrete Manufacturing 229: Advanced Batch Management 230: Purchasing with JIT Delivery Schedules 231: Sales with Scheduling Agreements 232: Engineer-to-Order (ETO) Quotation Processing 240: Engineer-to-Order (ETO) Project Assembly 233: Manufacturing with KANBAN Supply into Production 234: Planning and Processing of Semifinished Goods 235: Co-Product Manufacturing 2011 SAP AG. All rights reserved. 5

Industry-Specific Scenarios (2 of 3) New Scenarios Enhanced Scenarios SAP Best Practices for Discrete Manufacturing V1.605 provides the following industry-specific scenarios: 236: Tool Production 237: Sales Returns with Quality Management (QM) 238: Cash Sales Order 239: Shipping and Receiving with Warehouse Management 248: Make-to-Stock Production with Order Split 249: Outsourced Manufacturing 250: Advanced Customer Returns Management 252: Third-Party Order Processing with Subcontracting 253: Lean Manufacturing: Heijunka Leveling 661: Records Management 2011 SAP AG. All rights reserved. 6

Industry-Specific Scenarios (3 of 3) New Scenarios Enhanced Scenarios SAP Best Practices for Discrete Manufacturing V1.605 provides the following industry-specific scenarios: 245: Activate Document Splitting for Discrete Manufacturing 274: Maintenance and Warranty Processing 275: Easy Depot Repair 2011 SAP AG. All rights reserved. 7

Handling Unit Management (HUM) for Production (226) Handling Unit Management (HUM) is used to control logistical processes. A handling unit represents a physical object in the SAP system. It consists of a load carrier, one or more packed products and an unlimited quantity of packaging materials. Each handling unit has a unique identification number, which is typically printed as a barcode on a material tag. You can specify the material and the quantity that is to be packed in certain packaging, that is, in one handling unit. These requirements are reproduced in a packing instruction. This packing instruction can be used to create handling units automatically. Automatic packaging according to packing instructions Track movements of groups of individual materials by tracking the handling units that contain them Full integration into the logistic chain The scenario offers you the possibility to demonstrate HUM with or without warehouse management Creation and release of production order for handling unit (HU) production HU packaging in production order Goods receipt for produced HU Monitoring of HU Confirming production of HU HU handling with WM or HU handling without WM 2011 SAP AG. All rights reserved. 8

Quality Management in Discrete Manufacturing (227) This scenario deals with quality inspection activities during the production process. Quality activities are required both when a product is manufactured in-house and when the production involves external processing where parts of the production process are done by a subcontractor. Two sub-scenarios to cover both goods acceptance and goods rejection or acceptance and rejection of the external processing respectively. Quality Notification to track quality issues, and trigger further actions, such as rework or scrapping QM for goods receipt of production order QM with In-process control QM for goods receipt of external processing Acceptance and rejection of goods/ external processing work are both covered 2011 SAP AG. All rights reserved. 9

Advanced Batch Management (229) You get the complete batch history data including the evolution of a batch, by considering all relevant batch-related object types (BRO types) maintained in different SAP and external systems. To track the transactional data related to batches To find out where a batch was used, e.g. to perform a batch recall or for evaluation purposes To find out where a batch is used, e.g. in which stocks or inspection lots or material documents To have a single point of batch maintenance Batch information cockpit with Batch History 2011 SAP AG. All rights reserved. 10

Purchasing with JIT Delivery Schedules (230) This scenario focuses on JIT procurement. It describes an inbound process in a typical repetitive manufacturing environment. Streamlined demand flow from customer to supplier High integration of customer s and supplier s supply chain managed by cumulative quantities Shorter process times Reduction of inventories to a minimum Create scheduling agreement for vendor material Update scheduling agreement with forecast and JIT delivery schedules Enable traceability via batch or serial number assignment Create Scheduling Agreement Release Print and Transmit Scheduling Agreement to vendor Goods receipt posting with reference to scheduling agreement Billing 2011 SAP AG. All rights reserved. 11

Sales with Scheduling Agreements (231) Scheduling agreements are widely used in Discrete Industries. This scenario focuses on a order-to-invoice cycle. It describes an outbound process in a typical series business environment. Streamlined demand flow from customer to supplier High integration of customer s and supplier s supply chain managed by cumulative quantities Shorter process times Print out forms support the basic requirements of discrete industries Create basic customer contract called scheduling agreement Update scheduling agreement with forecast and JIT delivery schedules Display item due for delivery and create outbound delivery for available parts Enable traceability via batch or serial number assignment WMS controlled picking; packaging according to customer s packing instruction Invoice items and transfer to accounting Receive self-billing information from customer 2011 SAP AG. All rights reserved. 12

Engineer-to-Order (ETO) Quotation Processing (232) This scenario describes the quotation processing in a standard Engineer-to-Order (ETO) environment. SAP functionalities of Sales & Distribution (SD) and of Project System (PS) are used to control the complete process, from customer inquiry to the handover to project assembly (described in the scenario 240, ETO Project Assembly). In addition to the SAP reporting functionality also the special purchasing functionality long lead time procurement is part of the process. Deep integration to the project structuring and calculation allows for a consistent controlling of all steps and values Copy functionalities e.g. from inquiry to quotation are facilitating compliance with the process rules All values and parameters for the subsequent process (ETO 240) are available as default parameters The option for the creation of project versions are allowing a continuous recording of all relevant values along the controlling process and a later comparison of the several situations The long lead time procurement process is an important step to guarantee material availability on time Cost planning, budgeting and comprehensive reporting functionality allows for a detailed controlling of the project Creation of inquiry with linkage to project Easy Cost Planning Creation of quotation with reference to the inquiry Integration to the project system including calculation and scheduling functionalities Controlling and reporting along the complete process 2011 SAP AG. All rights reserved. 13

Engineer-to-Order (ETO) Project Assembly (240) This scenario describes the order processing in a standard Engineer-to-Order (ETO) environment. SAP Project System is used to control the whole process, from the SD requirement to planning, purchasing, production and delivery. SAP Project-Oriented Procurement (ProMan) is used as an advanced tool to control the planning/purchasing steps in the order procedure. Project structuring/execution via project system is used to control the collaboration between different departments Milestone billing is used to control the progressive payment procedure, and track back the status of the project Use of ProMAN to control and monitor the manufacture/procurement procedures centrally Assignment of personnel resources and technical documents possible Delivery the semi-finished goods via the project Handling the final assembly on customer site using network activity in the project Creation of sales order with reference to the quotation and billing milestones Use of ProMan for procurement process of components Assignment of personnel resources and time recording Assginment of technical documents Confirmation of project activities Subassembly for semifinished goods Delivery to customer 2011 SAP AG. All rights reserved. 14

Manufacturing with Kanban-supply into Production (233) This scenario focuses on different approaches to supply the production using Kanbancontrolled business processes. Comprehensive presentation of different Kanban processes The replenishment process controls itself and manual posting is reduced as far as possible. Reduction in lead time and stock. Components are not procured before they are needed (just in time). Prevention of overproduction. Reduction of required storage space. Simple and transparent method of organization. Event control and alerting enable timely reaction to changes and issues in the production process Creation an maintenance of Kanban control cycles Creating Planned Independent Requirements and Material Requirements Planning (Plant) Classic Kanban: External Procurement with scheduling agreements Classic Kanban with JIT calls, calculation and alerting Classic Kanban: In-house production (repetitive manufacturing) with quantity signal and trigger point Classic Kanban: Stock transfer from warehouse with alerting Event-driven Kanban with packaging instructions and alerting Repetitive manufacturing backflush 2011 SAP AG. All rights reserved. 15

Planning and Processing of Semifinished Goods (234) Forecasting level is the semifinished product. Planned independent requirements are generated for the semifinished material. Semifinished product is manufactured in a Make-to-Stock production (MTS) environment. Production of the finished product is triggered by customer orders (MTO) having the forecasted semifinished product as one component in its bill of material. Integration of main cost object controlling functions, such as preliminary costing and period-end closing. Production triggered by a production plan Batch management included Forecast of semifinished products Make-to-order and Make-to-stock processes in one scenario Creating Planned Independent Requirements Material Requirements Planning at Plant Level In-House Production (subassembly Make-to-stock) In-House final production (assembly Make-to-order) Confirming Assembly Activities Sales Order processing 2011 SAP AG. All rights reserved. 16

Co-Product Manufacturing (235) This scenario enables you to produce more than one material within one production order, which is often required in disassembly processes, such as cutting of tin. One or more components are used as input materials in the same production order. Two or more materials are produced simultaneously All products are posted into storage within the same transaction, so that during production execution value differences do not require different processes. The main production costs are distributed among the most important products, including production variances Production orders can be settled during period-end closing Creation of production order for co-production Check of material availability Production order execution for co-production Production order settlement 2011 SAP AG. All rights reserved. 17

Tool Production (236) This scenario enables you to produce tools in a MTS (Make-to-stock) environment. The tool product is manufactured anonymously and delivered to storage as a production resource tool. Tool production using MTS (Make-to-stock) production order processing Material requirements planning for the components Material staging for tool components Serial number assignment for tool product Equipment maintenance for tool product Creation of production order for tool production Check of material availability Production order execution for tool production Equipment maintenance for tool product 2011 SAP AG. All rights reserved. 18

Sales Returns with Quality Management (QM) (237) Sales order returns processing with quality management inspection lots. The creation of the return sales order references to the original billing document for the goods. The goods are shipped back and a return delivery is created with reference to the sales order. After quality inspection the goods are either returned to stock, scrapped, or returned to the vendor. A credit memo is created from billing, and posted to the customers account. Full integration of sales order returns and quality management Sales order returns are processed according to sales order reference to the original billing document Credit memo is created and posted to customers account Creation of return order Creation of return delivery Quality inspection Release returns for billing and billing 2011 SAP AG. All rights reserved. 19

Cash Sales Order (238) This scenario deals with cash only payment transaction for the sales of material to a customer. The cash sales process is used when the customer places the sales order and picks up and pays for the goods at the same time. The system automatically proposes the current date in the sales order as the date for the delivery and billing. Once the sales order is saved, the system automatically creates a delivery. Sales and delivery are created in one step Optional batch management Creation of sales order and delivery (automatically) Check batches (optional) Post goods issue Billing 2011 SAP AG. All rights reserved. 20

Shipping and Receiving with Warehouse Management (239) This scenario is an example of how warehouse management (WM) can be used. It does not cover all possible warehouse management processes for complete WM implementation (for example inventory counting is not part of this scenario). WM is used for the storage of raw materials and finished goods. Internal transfer orders are used for put away, internal transfers and removal from storage. This scenario shows the integration of WM with inbound logistics, production and outbound logistics Purchasing process with transfer orders Production order creation and processing of material movements with WM Sales order processing and WM transfer orders 2011 SAP AG. All rights reserved. 21

Make-to-Stock Production with Order Split (248) The scenario Make-to-Stock (MTS) Production with order split focuses on options how to split an existing production order for which processing may have already begun into two separate production orders. These production orders are then executed separately from a logistics perspective. Increased flexibility for the production planner to react to unplanned events on the shop floor, changed customer requirements or repriorization of production orders. Better cost transparency considering real shop floor-driven plan changes Reliable batch traceability information also after production order split Allows split of already partially confirmed production order Allows split to put material on stock Visualization of split history Supports meaningful comparison of planned vs actual cost on parent & child Fair split of planned cost between parent & child Update batch traceability during split 2011 SAP AG. All rights reserved. 22

Outsourced Manufacturing (249) Outsourced manufacturing enhances the typical subcontracting and external processing processes with advanced features which are part of EhP 5. Serial Numbers Assignment in Procurement Subcontracting ASN with components Monitoring of whole process with subcontracting process Material numbers can be transferred to purchase orders Usage of subcontracting stock In-time consumption posting of components Inventory Reports Monitoring of Batches 2011 SAP AG. All rights reserved. 23

Advanced Customer Returns Management (250) This scenario describes advanced sales order returns processing with material inspection. The creation of the return sales order references to the original billing document for the goods. The goods are shipped back and a return delivery is created with reference to the sales order. After material inspection and decision on follow-up activities a credit memo is created and posted to the customers account. Manage customer returns with advanced functions that provide end-to-end support for the returns process Sales order returns are processed according to sales order reference to the original billing document Automatic Creation of follow-up documents after material inspection Credit memo is created and posted to customers account Monitoring of the whole return process Creation of return order and return delivery Quality Evaluation and automatic creation of follow-up documents Release returns for billing and billing Process Monitoring 2011 SAP AG. All rights reserved. 24

Third-Party Order Processing with Subcontracting (252) This scenario focuses on the combination of third-party order processing and subcontracting Sold Products are finished by a subcontractor and sent to the customer directly by the vendor Reducing stock and cost, increasing efficiency Combination of third-party process with subcontracting functionality Handover of customer s requirements directly to external supplier Invoice from subcontractor bases on external services Third Party Sales Order Convert Purchase Requisitions to Purchase Order Shipping of components to subcontractor Post Statistical Goods Receipt with consumption of components Invoice verification Billing 2011 SAP AG. All rights reserved. 25

Lean Manufacturing: Heijunka Leveling (253) This scenario focuses on the Kanban-supported production planning and optimization in repetitive manufacturing By using a special algorithm the production process is optimized and demand fluctuations are balanced Stabilization and optimization of production process Transfer of uneven customer demands in smooth, stable and predictable production schedule Optimization of stocks and value flow Components are not procured before they are needed (just in time). Prevention of overproduction. Reduction of required storage space. Event control enables timely reaction to changes and issues in the production process Creation of strongly fluctuating planned independent requirements Production Planning in repetitive manufacturing Heijunka sequencing and optimization Kanban Processing with repetitive manufacturing backflush Production Schedule Evaluation Postprocessing 2011 SAP AG. All rights reserved. 26

Records Management (661) This scenario focuses on the creation of customer order records and equipment records It describes records management process in a typical project-oriented manufacturing environment Fast access to relevant information leveraging workspace efficiency and response time to customer inquiries Non-redundant, reliable information storage with efficient usage of resources Accelerated implementation of business processes by leaded process automation and early time-to execution Decreasing information management costs by using controlled distribution, updates and archiving processes Usage of records management enables focusing on the core business Note: Additional license fees may arise when records management is used in a productive environment 2011 SAP AG. All rights reserved. 27

Activate Document Splitting for Discrete Manufacturing (245) The online split is provided with the new General Ledger Accounting. Documents are enhanced with additional account assignment objects, or additional postings are done which split the original postings into lines referring to the account assignment objects. Account assignment objects can be defined according to selected dimensions. In SAP Best Practices the dimensions are profit centers and segments. The postings are done in real time (online). It is possible to draw up complete financial statements for the selected dimensions at any time (segment reporting). Key Points The online split is provided with the new General Ledger Accounting. The online split is based on segments. The online split must be activated before the start of postings in the client. Postings done before can cause subsequent online split errors (see also Note 891144). 2011 SAP AG. All rights reserved. 28

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