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At one point, most analysts thought that APO would essentially capture the bulk of the attention that companies have put into PP. But the APO market has slowed considerably. It seems that many SAP customers have found APO installations too complex and costly to justify the advanced functionality. When we look at PP, we have to first understand that PP is not part of the core of SAP. The core of SAP on the functional side is FI/CO, HR, SD and some basic MM for companies in the manufacturing sector (MM obviously doesn't come into play in the services sector). PP is not considered core because PP gets into the core planning tasks that are specific to industries. And of course, there are plenty of best-of-breed systems in play here. Companies also want to make sure their PP processes are perfect for their needs, since this is such a key area of competitive advantage. If SAP didn't cut it, then companies weren't willing to use SAP's PP module. The bottom line is that we do see more and more companies investing in supply chain planning functionality, and the trend of standardizing on one software system is going to continue. This bodes well for the PP module. The way I would look at it is this: will SAP manufacturing customers, as a whole, invest in SAP supply chain planning functionality? Absolutely yes. Will this involve PP? Sometimes yes, and sometimes no. So it may be better to go forward thinking of yourself as an SAP supply chain planning consultant, and be flexible as to whether that means PP, APO, or some combination of applications. The key is to understand the best practices for an industry and how SAP can help companies achieve that. And of course, it goes without saying that expertise in using Web services to allow a company's partners to share data and provide visibility into the supply chain process is fundamental to being a cutting edge supply chain consultant in the years to come. The importance of building in quality checks and material inspections at every stage of the supply chain cannot be overemphasized. Besides saving time and money in the near term, integrating quality management into critical processes can deliver greater business benefits well into the future. The SAP Quality Management (QM) module completely integrates with several key supply chain processes, including procurement, production, and sales -- even plant maintenance. It can check the quality compliance of raw materials when they're first delivered by vendors and later during production and post-production. SAP QM can also check for compliance with customers' quality specifications before the finished goods are shipped.
With SAP QM, an inspection for lots of materials requiring examination can be created automatically or manually, and users can perform the following functions:
Record the results of the inspection. Record defects, if any.
3. Decide whether to use the material, return it to the vendor, scrap it or rework the material. SAP QM integration with SAP MM procurement The SAP QM module completely integrates with the SAP Materials Management (MM) module and all procurement-related activities. Inspections can be triggered even before goods are delivered, which allows a company's representatives to visit vendors to check the quality of the goods they produce. The process is called source inspection in the SAP QM module.
However, the most common type of inspection entails checking goods against purchase orders upon delivery. As soon as the vendor delivers the goods, an inspection lot is automatically created; the user then tells SAP QM to record to the results, then makes the "usage decision" on whether to release the material for consumption. The payment amount is directly linked to how much of the delivered good was of acceptable quality and how much was rejected or returned to the vendor. Finally, the vendor's quality scores get updated according to whether the good arrived on time, in complete quantity and at a competitive price. These quality scores help the user decide whether to continue the relationship or seek other sources of supply.
They can do so by integrating the SAP QM equipment data into the SAP PM module. The system prevents the expired or nearly expired material from moving from issuance to production until a decision (usage decision in SAP) is made to either extend the SLED or scrap the goods altogether. SAP QM offers a recurring inspection that is based on a predefined inspection interval or when the material approaches expiration. it's also possible to use SAP QM to map inspection scenarios onto other business processes.or any of the three other modules identified below -. preventive or predictive plant maintenance. an in-process inspection ascertains the quality of goods under production. Recurring inspection can greatly reduce time and cost by raising red flags so companies can quickly consume or sell materials before they expire. the SAP system creates an automatic inspection lot that must first be checked for compliance with the customer's quality specifications. SAP QM adds two additional kinds of quality inspections: in-process and finished goods. SAP QM integration with SAP PM maintenance If they use SAP Plant Maintenance (SAP PM) for routine. the user performs the SAP QM results recording. such as whether to buy the material from a new vendor or to change product specifications to match those of competitors. integrating QM with MM -. Managing additional inspections in SAP QM Apart from these supply chain management processes. . The user performs the routine SAP QM steps. whenever SAP PM creates work orders. The SAP QM module can also trigger an inspection when a customer returns defective goods. During the production process. the integrated system creates an automatic and corresponding inspection lot. Manual inspections in such situations as creating lots for stored raw materials or finished goods or following natural or manmade disasters. SAP QM integration with SAP PP production When integrated with the SAP Production Planning (SAP PP) module. defects recording and usage decision steps before releasing the material to the next stage of production. Then. Companies will want to consider using an SAP QM consultant if it doesn't have the necessary skills already in house. For finished goods. in which a company's or competitor's sample is evaluated to help in important decisions. including: Plant-to-plant inspections. SAP QM integration with SAP SD sales processes If the customer requires additional quality checks before goods can be dispatched.is not automatic. Physical sample inspections. However. the user performs the three steps before the stock is released for sale. In an in-process inspection. executing a usage decision before the maintenance department is allowed to put the equipment back in service.For batch-managed materials with a shelf life expiration date (SLED). companies should perform additional quality checks on equipment to ensure it adheres to minimal maintenance criteria. in which goods transferred within the company go through quality checks to ensure there are no damages during transportation. SAP QM can handle them once integrated with SAP Sales and Distribution (SAP SD). When goods are issued against a sales order.
warehouse stock. the SAP LTP system creates simulated planned orders (order proposals) for the specified scenario. 3. and warehouse managers will get advanced notice of the space that will be needed for the incoming stock. Average plant stock over the defined period The ratio of material requirements to actual stock Procurement values of raw materials 4. capital and manpower. LTP can also calculate average plant stock for all the materials that went through the simulation. LTP is a dedicated and separate area in SAP ERP for all simulation-related planning. It also can show how sales and operations planning. the purchasing and inventory management departments can better coordinate with vendors for timely deliveries. such as integration with thirdparty quality management tools or inspection results from laboratory equipment. Long Term Planning derives its planning details from information that is already in the SAP ERP system. performed on products under development to ensure they meet certain physical or chemical specifications. Armed with average plant stock figures. Custom inspections when the standard inspections in SAP QM fail to meet particular needs.also known as "operative planning" -. optimized procurement and production planningare difficult to achieve. Planners often find themselves scrambling to estimate or calculate variables for a defined period such as these: 1. If the results of an SAP LTP simulation are satisfactory. The option to copy . and can accordingly plan additional resources or manpower or procure additional machines. the department can use information about future requirements to estimate and plan orders. Looking ahead with SAP Long Term Planning simulation Almost all procurement and production planners must deal with what-if scenarios in their sales forecasts for finished products that have direct implications for production and procurement planning. It's fairly easy for a company to evaluate the impact of increasedsales on profitability and market share. It derives that figure by adding up the total stock for the evaluation period and dividing it by the number of months in the evaluation period. on which the actual MRP then is run. or BOM. This information also serves as a basis for negotiating delivery schedules and long-term contracts with vendors. for example. The planning data could include. capacities. including overloads. the company's capacity planner gains a comprehensive view of machine capacities. you can also transfer LTP simulation results into operative planning if necessary. Vendors also benefit because they receive a preview of the company's future procurement needs. 2. In addition. or S&OP.and mid-term planning. they can be transferred easily to Operative Planning. and details on their components that are managed in the bill of materials. monthly quantities of finished goods already entered in the system as planned independent requirements. or PIRs. The purchasing department can benefit from the results of SAP Long Term Planning in other ways. but some production and procurement planners might be unaware that SAP Long Term Planning (LTP) is a valuable tool that can support and facilitate their own what-if calculations. For an annual or rolling quarterly planning run. Here's where SAP Long Term Planning comes in. It's a simulation tool for testing hypothetical assumptions that affect business decisions. which could help them take action to ensure they can meet the impending demand. However. SAP Long Term Planning provides support for long-term procurement and production planning and for carrying out simulations in short.is that LTP doesn't affect the database of results that is created when MRP is run. influences resources. The advantage of using LTP instead of materials requirement planning -. Inspections for stability studies. for example. SAP LTP can estimate future stock and material requirements. The amount of Capacity Requirements Planning that is required Without information about these variables. When you run the simulated MRP. For example. This includes the planning data for finished goods.
simulated planning results to Operative Planning saves an enormous amount of work already done during the LTP process and eliminates redundant data entry. Figure 2: Monthly requirements and total stock of a component Figure 1 shows the results of a material planning process in SAP LTP. . Figure 1: Monthly SAP LTP results for a component. how much revenue must be received per month against the procurement proposals generated by MRP or LTP (shown in the right-hand column. the second column from the left shows the total monthly requirements for a component. it provides flexibility to change MRP. In Figure 2. You can use a standard price. titled GdsReceiptMRP). followed by the stock situation and finally. including a month-by-month breakdown of the value. quantity and price of a component of a purchase order. moving average or planned future price to calculate purchase order values. Further. including order quantities and total value You only need one to two hours of user training in SAP LTP to understand the basics of long-term planning and the factors that affect the results.
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