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Service Parts Planning (SPP

)
at Intuitive Surgical, Inc.
Dheeraj Singh,
LEARNING POINTS
Hear how Intuitive Surgical transformed its service parts planning
with the implementation of SAP SPP Service scenarios.
Review the solution highlights including custom developments
built to meet the business requirements.
Review Benefits and essons learned
Contents
• !ompan" #verview
• Pro$ect #b$ectives
• %h" SAP&
• Pro$ect #verview'Implementation (etails
• Implementation )imeline
• Benefits
• Summar"'essons earned
*
Coman! Overvie"
+ounded in ,--., IP# /000
/0,/ +inancial Results
Revenue 1/.,2 Billion, up /34 from /0,,
5et Income 6 17.3 8illion, up **4 from
/0,,
1/.- Billion in cash 9 investments
:/300 emplo"ees
:,000 field based Sales and Service team
Appro;imatel" 3.0,000 da <inci=
procedures performed in /0,/
/.2. da Vinci® S"stem installed base as of
,/'*,'/0,/
,2>2 ?nited States, 3,7 @urope, /-, Rest of
%orld
)arget 8arAets B ?rolog", C"necolog",
Ceneral, !ardiac, )horacic, )rans oral
Surger"
4
Coman! Overvie" #Rec$rring Reven$e %o&el
5
Ann$al 'orl&"i&e Proce&$res
6
(ni)$eness o* SPP at Int$itive
<er" high number of parts and locations
+ast replenishment requirement
Sporadic demand
ow turnover but high impact
Single ' limited sourcing
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+e! Drivers *or SPP
Increased business volumes
!omple; Spare parts logistics
5ew product introductions
Support for older versions
Increase in global marAet
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Project O,jectives
Plan b" e;ception capabilit"
Re6plan parts on a dail" basis
@fficienc" gains in planner time
Better future forecasting of material
needs
Scalable for future volume
Introduce Automation
Better management of global inventor"
locations
Increased inventor" optimiDation
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'h! SAP SPP
Seamless Integration with other SAP solutions6 @quipment, Procedures,
field returns, material movements, financial integration
Robust and comprehensive service parts functionalit" 9SAPEs vision for SPP
Service and its breadth of solutions
Scalable with future I) architecture
Stand6alone implementation of SPP
@ffective solution for Repair <s. Bu"
@ase of Support B leverage in house SAP e;pertise. (evelop in house
emplo"ees to support SPP
SCM - SPP
ECC
CRM BI
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11
SPP Sol$tion Architect$re
SPP -$nctionalit! # .OD
Service networA represented using Bill of (istribution
Storage locations from @!! read as 8RP areas based
locations in SPP
SPP -$nctionalit! # %aster Data
• 8aster data and transaction data from SAP @!!
integrated using !I+
• Product 8aster @nhanced to default SPP relevant fields
• 8aterial StocA Inventor" interface enhanced to consider
inventor" at special storage locations
• Supersession chain considered in the inventor" chain to
add all older versions
• Repairable inventor" recogniDed based on Split <aluation
in @!!
SPP -$nctionalit! # %aster Data
!ustom program to auto create Procurement
Relationships that differ from @!!
#rder Interface enhanced to restrict based on order t"pe
Part substitution logic used in the order !I+
Planned Independent Requirements from @!! !I+Ed to
SPP as special demand
SPP -$nctionalit! # -orecasting
• (emand and Returns Histor" captured based on
inventor" movement from @!! 6 standard IS
• !ustom logic to calculate Return ' repair forecasting B
standard SPP allows onl" demand forecasting
• (emand histor" realigned along supersession chain using
standard functionalit"
• +orecasting calculated based on standard models along
theB#(
• !ustom enhancement done for appl"ing inde; factor for
product ' product groups
SPP -$nctionalit! # -orecasting
SPP -$nctionalit! # Inventor! Planning
StocAing levels B Safet" stocA and @conomic #rder
Fuantit" determined based on demand, lead times and
target service levels
5ormal distribution method used for the calculation of
stocAing levels
!ustom enhancement to overwrite @#F as , after it
was calculated for SS, to avoid rounding during
procurement
SPP -$nctionalit! # Inventor! Planning
SPP -$nctionalit! # Distri,$tion Planning
(istribution Requirement planning for net demand
calculation
SAP recommended BA(IEs implemented for Repair vs
Bu" determination
!ustom enhancement to suppress the requirement of
B#( ' P(S in the Repair ' Planner order proposals
Planned Independent Requirements from @!! read as
Incoming receipts for demand not converted as orders
Repair process integrated with F8 process in @!!
(RP Gin SPPH and 8RP Gin @!!H ran together with out
an" adverse effect
SPP -$nctionalit! # Distri,$tion Planning
SPP -$nctionalit! # Distri,$tion Planning
!ustom logic to create Planner #rders not
recommended b" s"stem
SPP -$nctionalit! # Delo!ment
S)# recommendations for stocAing at child locations
Pull methodolog" used with appropriate priorit" tiers
!ustom enhancement done to recogniDe In transit
inventor" from @!! as incoming receipt using +i;ed
Receipts
(eplo"ment program modified to suppress the impact of
substitution demand for low volume parts
Priorit" )iers implemented in a fashion to ensure demand
and SS at forward stocAing locations are fulfilled from the
entr" locations
SPP -$nctionalit! # Delo!ment
SPP -$nctionalit! # Delo!ment
SPP -$nctionalit! # Delo!ment
(eplo"ment integrated with Shipping Process in @!!
Inventor" transactions used instead for S)# for sloc B
sloc movement
SPP -$nctionalit! # Delo!ment
!ustom logic to create (eplo"ment S)#Es not
recommended b" s"stem
SPP -$nctionalit! # (I
Planners %orAlist aids in approval and alerts for
e;ception handling
!ustom 5otes functionalit" implemented to record
approval ' re$ection notes
!ocApit modified to add custom stocAing level fields
%orAlist Refresh functionalit" modified to adapt the
selection screen from current screen and applied to all
queries.
SPP -$nctionalit! # (I
Planner %orAlist
SPP -$nctionalit! # (I
!ustom 5otes
SPP -$nctionalit! # (I
SPP !ocApit
Project Timeline
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Accurate forecasting of future demand
#ptimiDed service parts stocAing resulting in reduced storage cost
Reduced Procurement cost due to intelligent repair vs. bu"
Increased operation efficienc" with s"stem recommended (eplo"ments
Increase in parts availabilit"
Scalable to new customer facing locations
!onsideration of supersession resulting in utiliDation of old versions
/o" SPP a&&e& 0al$e
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Lessons Learne&1 'hat "or2e& "ell
#utstanding support from top management.
+ull engagement of Ae" staAeholders.
@ntire pro$ect team Bbusiness and I) worAing on6site with close coordination.
<erification of strategic planning results with actual production data.
Rapid global implementation in si; months.
+lawless go live with concurrent SAP pro$ects.
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Lessons Learne&
,. Significant learning curve for functional and technical I) resources that did not
have prior SPP e;perience
/. )esting with real6time data and realistic volumes that users are familiar with
flattens the learning curve
*. 8ore testing and preparation needed for integration with all staAeholders
3. @nsure @nd users are trained well and use the solution e;tensivel" during testing
and pre6go6live.
.. SAP solution on Repair vs. Bu" process is not mature and needs further
enhancements
7. SPP challenges plannersE operational and tactical abilities.
>. ?nderstand and emphasiDe the impact of process re6engineering as a result of SPP
implementation.
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'hat ne3t4
,. Resolve issue around S"stem not suggesting accurate deplo"ment orders in case
stocA goes below Safet" stocA for Parent location.
/. +ine6tune the recommended bu" suggestions made b" the tool6consider changing
parameters for parts based on attributes
*. Provide abilit" to use Procedure histor" 9 installed base as a leading indicator for
spare parts planning
3. Integrated Procurement
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+e!s to o$r s$ccess
It is safe to say that we would not be here without the support of
partners
1. Westernacher- Primary Consulting partner
2. SAP
3. Other Consulting partner- DGN Technologies
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5$estion4
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