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SAP for Mill Products

Alfred Becker, SAP AG


April 2013
IBU Mill Products
Introduction
SAP Solutions for 25 Industries

Aerospace & Automotive Banking Chemicals Industry Business Unit


Defense
is the only
organization
Consumer Defense & Engineering, Healthcare responsible globally
Products Security Constructions &
Operations for a specific industry
segment
Higher High Tech Industrial Insurance
Education and Machinery,
Research Components
 Advisory Councils
Life Sciences Media Mining Mill Products  Solution Architecture
 Thought Leadership
Oil & Gas Professional Public Sector Retail
Services
 Partner Engagement
 Global Roll-Out
Sports and Tele- Transportation & Utilities
Entertainment communication Logistics
 Business Analysis

Wholesales
Distribution

www.sap.com/solutionexplorer
© 2013 SAP AG. All rights reserved. Customer 3
Industry Ownership of IBU Mill Products & Mining

Forest Products Pulp & Paper Packaging


 Solid Wood  Brown Paper  Paper Packaging
 Plywood  Fine Paper  Plastic Packaging
 Particle Board  Hygiene  Aluminum Packaging
 Pulp  Glass Packaging

Mining, Non Ferrous Met. Primary Metals Fabricated Metals, Cable


 Mining  Flat Steel  Metal Service Centers
 Copper  Long Steel  Cable
 Aluminum  Aluminum  …

Building Products Textiles Cement & Concrete


 Bathroom  Flooring  Yarn  Cement
 Windows  Roofing  Fabric  Ready Mix Concrete
 Ceramics  Furniture  Carpet & Rugs  Concrete Products

© 2013 SAP AG. All rights reserved. Customer 4


Product Definition with SAP
Product Definition: Examples

Cable

Length 1000 m
Quality A
Colour Roll
Category
Quality 1b
Weight 400 kg
Chair
Width 1m
Color RAL1004
Color RAL3003
Rolls Standard
Size Large Steel plates
Armrest Type A
Length 1500
Width 800
Thickness 20
Grade A

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Classification: Product description II

Configurable Material 1
(Product Group)

Roll 2

Roll 3
Roll 1

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Classification: Product description III
Material Variant 1
(Configured Mat.)

Variant Class
Grade 1b
Material Variant 2
Weight
(Configured Mat.)
Grade Color
Weight Width 1,2 m Grade 1b
Color Weight 400 kg
Width Color RAL 3003
Configurable Material Width 1,2 m
(Product Group)

Roll 2
Roll 3
Roll 1
Routing
Bill of Material

© 2013 SAP AG. All rights reserved. Customer 8


Variant Configuration: Routing Configuration

Routing Roll 1
If Quality = 1a
Then
Select Inspection
...

Inspection

Packing If Length > 100


Then
Op. Time * 1,2
...

© 2013 SAP AG. All rights reserved. Customer 9


Classification: Level of classification

Configurable Mat. A Configurable Mat. B

Material A Variant 1 Material A Variant 2


(Configured Mat.) (Configured Mat.)

Grade 1b Grade 2b

Type ... Type ...


The number of
Color Color
batches per material
Width Width master needs to be
carefully considered
due to performance
reasons!!
Variant 1 Batch 1 Variant 1 Batch 2

Weight 403 kg Weight 398 kg


Length ... Length ...

© 2013 SAP AG. All rights reserved. Customer 10


PP/DS – Multi-level Production Planning

Consume
Preplanning
Sales Order
ATP 100 120

Jan Feb
Mar

CT
P
Bill of Material Routing

Planned Order Planned Order Planned Order

Mat: Sheet Mat: Roll Mat: Reel


Start: 27.09.03 Start: 21.09.03 Start: 20.09.03
End: 01.10.03 End: 27.09.03 End: 21.09.03

Qty: 12 TO Qty: 14,2 TO Qty: 18 TO

© 2013 SAP AG. All rights reserved. Customer 11


IS Mill Enhancements
Agenda

Enhancements in ERP
• Sales & Distribution
• Production See help.sap.com for detailed
description of all Mill Products
• Materials Management related functions!
• Quality Management
Processes in APO
Global Batch Traceability

© 2013 SAP AG. All rights reserved. Customer 13


SAP for Mill Products vs. IS Mill

SAP for Mill Products

Industry Solution
Mill Products

SAP SAP SAP SAP



SRM SCM ERP CRM

SAP NetWeaver

SAP for Mill Products = SAP offering addressing needs of Mill Products industries
IS Mill Products = Additional functionality in ERP extension

© 2013 SAP AG. All rights reserved. Customer 14


Agenda

Enhancements in ERP
• Sales & Distribution
• Production
• Materials Management
• Quality Management
Processes in APO

© 2013 SAP AG. All rights reserved. Customer 15


Industry Solution Mill Products - SD Functions

 Fast Data Entry


 Sales Order Amendment
 Customer Material Information Record
 Configuration in Make-to-Stock Environment
 Delivery Related Trading Unit Change
 Characteristic Based Packaging in Outbound Delivery
 Billing Of Packaging Materials
 Returnable Packaging
 Non-Ferrous Pricing

© 2013 SAP AG. All rights reserved. Customer 16


Sales Order - Fast Data Entry

Characteristic
valuation display
and maintenance

= Inherit characteristic
© 2013 SAP AG. All rights reserved. Customer 17
Sales Order - Copy Values from Reference Item

Reference item  Global item


(Global item)  Certain values already
Grade High assigned to
thickness 0,3 mm characteristics
width 450 mm
Length 5000 mm

Copied item  Local item


(Local item)  Characteristic values
Grade High are copied and can be
thickness 0,3 mm changed
width 300 mm
Length 5000 mm

© 2013 SAP AG. All rights reserved. Customer 18


Sales Order Amendment - Overview Of Changes

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Customer Material Information - Scenario

Material Info Record


Customer: CS-01
Order Material: CS-VC0
Sales Order
Characteristics
Customizing:
Customer: CS-01 Length 1000
Item 0010 CS-VC0 Definition of
Tolerance +
Transfer Rule
Tolerance -
Characteristics
Packaging REEL02

Length 1000
Tolerance + 10
Material Info Record
Material Variant: CS-MV0
Tolerance - 10
Packaging REEL02 Characteristics

Length
Tolerance + 10
Tolerance - 10
* Characteristic values from info record
** Characteristic values from material master Packaging REEL99
*** Characteristic values of the info record
overwrite the values of the material master

© 2013 SAP AG. All rights reserved. Customer 20


Agenda

Enhancements in ERP
• Sales & Distribution
• Production
• Materials Management
• Quality Management
Processes in APO
Global Batch Traceability

© 2013 SAP AG. All rights reserved. Customer 21


Industry Solution Mill Products - PP Functions

 Multi-Item Order
 Under-delivery Tolerance
 Fast Data Entry in Production Order
 ERP Order Combination
 Order Split

APO-based Functionality
 Configurable Production Order for Material Variants
 Block Planning
 Trim Optimization Interface (TOI)
 Batch Pegging Information (=synchronize APO & ERP)

© 2013 SAP AG. All rights reserved. Customer 22


Multi Item Order

Business Background
 Combined manufacturing of item through e.g. cutting and splitting processes
require flexible creation of co-products
 No automatic optimization, but manual creation of orders by planner

Features
 Manual entry of item quantities in fast data entry
 Cumulate manually selected item quantities (only co-products) into header
quantity
 Scheduling and component quantity calculation based on new header quantity
 Components can be manually selected for fixed quantity
 Item quantities are not changed when header quantity is adapted

© 2013 SAP AG. All rights reserved. Customer 23


Underdelivery Tolerance : Process

Production
Production
Order
Order
Sales Order
Quantity
Quantity
MTO
MTO 500
500 TO
TO

Final
Final Confirmation
Confirmation
Quantity:
Quantity: 495
495 TO
TO
MRP

Yes
Quantity
Quantity within
within No
No further
further Planned
Planned
Tolerance?
Tolerance? Order
Order

No
Planned
Planned Order
Order
55 TO
TO

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Fast Data Entry in Production Order

Characteristic valuation
display and
maintenance

Characteristic propagation from


component:
 automatic or manual
 from material variant or batch

© 2013 SAP AG. All rights reserved. Customer 25


Order Combination - Process

Order selection Selected Order combination


orders Original order conversion
Standard selection
 Production
Order Combined order creation &
Order preselection
 Sales Order Original order update
Manual selection  Planned Compare operations
Automatic selection Order Edit components

Order confirmation
Customer-specific Cost Distribution
selection Quantity Distribution
Customer specific
selection and
display Combined order processing:
 add original order
 change original order
 remove original order
 change combined order
User
Exit

© 2013 SAP AG. All rights reserved. Customer 26


Order Combination - Backwards scheduling

Order a
BEFORE Operation Operation Operation Operation
10a 20 30 40a

Order b
Operation Operation Operation Operation
10b 20 30 40b

Order a Order a
Operation Operation
10a 40a

Order b Order b
Operation Operation
AFTER 10b 40b
Combined order

Operation Operation
20 30

© 2013 SAP AG. All rights reserved. Customer 27


Agenda

Enhancements in ERP
• Sales & Distribution
• Production
• Materials Management
• Quality Management
Processes in APO

© 2013 SAP AG. All rights reserved. Customer 28


Industry Solution Mill Products - MM Functions

 Fast Data Entry for Characteristics in Purchasing & Goods Receipt


 Batch Quantity Split in Goods Receipt (MIGO)
 Characteristics-Based Order History in Reference to Purchasing & Prod. Order
 Single Unit Batch
 Original Batch
 Work-in-Process Batch
 Stock Overview Based On Characteristics
 Cutting
 Purchasing Info Record

© 2013 SAP AG. All rights reserved. Customer 29


Batch Quantity Split in Goods Receipt

Business Background
Good receipt for one quantity with several batches
Example: Purchase order of 17000 m = 17 batches of
1000 m

Solution
Automatic split: Customer specific
logic to create quantity split with
batches. (Example provided by SAP)
Manual split: By entering number
of batches
Characteristics of batches can be
maintained on split screen (display
variant)

© 2013 SAP AG. All rights reserved. Customer 30


Characteristics-Based Purchase Order History

Example Scenario 2 - Set “completed indicator” based on customer logic:


Situation: Purchase order 5000m with 5 x 1000m; 5 partial goods receipt are posted
Result: Purchase order is complete. (open quantity, but 5 pieces have been delivered)

Automatic
proposal of
delivery
complete
indicator Characteristics

Customer specific
Logic to set „final
delivery indicator
(badi) 5 Batches delivered

© 2013 SAP AG. All rights reserved. Customer 31


Single-Unit Batch: Usage and Example Scenario

Example
1. Customer order entry: 2. Available material on stock:
Material „roll“ - 1 PC = 5 m Single-unit batch # 4711 „roll“1 PC = 50 m

4. Adjustment conversion factor: 3. Cutting process: Simple


Material on stock: batch # 4711 1 PC = 45 m transfer posting or production order

Used for materials


 That are batch-managed and managed with product units of measure
 That must be uniquely identified (jumbo, coil)
 That must be managed as individual units, where stock is one or zero

Limitations
 Negative stocks not allowed
 Valuation of product unit of measure not supported
 Goods receipt posting to an existing single-unit batch is not possible. Exception: Stock = 0

© 2013 SAP AG. All rights reserved. Customer 32


Original Batch - Creation and Assignment

Production
Order
Purchase
Order
1. 2. Batch 1

Create Goods Receipt


Original Batch
Batch 2

Original Batch: 222

Grade 1 Batch 3
Coating 873
Batches refer
to Original
batch

© 2013 SAP AG. All rights reserved. Customer 33


Original Batch - Example of Inheritance

Production Order: PP-2003

Sheets
Sheets
Goods Goods
issue receipt
Roll:
Roll:
Batch
Batch222
222

Component Batch: 222 Finished Batch: 999

1 Grade 1
Grade
873 Coating 873
Coating

Original Batch: OB222


Original Batch: OB222

Grade 1 Result in Batch where use list:


Coating 873 OB222 -> batch 999
-> batch 222
...

© 2013 SAP AG. All rights reserved. Customer 34


Original Batch - Batch Status

Process
The status of all batches managed
1. Change status of the original batch in stock is dependent on the status
2. Activate button “Copy batch status” of the original batch
All related stock-keeping batches are updated
Prerequisite
Batch where-used-list must have been build up
Batch status management must be active

© 2013 SAP AG. All rights reserved. Customer 35


Work-in-Process (WIP) Batch

 Production Orders consist of multiple operations


 Granularity of MRP levels in ERP and Shop Floor System can be approximated
 WIP Batch allows modeling of intermediate materials / characteristics, providing full traceability
 Valuation of WIP Stocks can be done in MTS segment
 Product specifications are inherited from and to stock batches

? ? ?
ERP

MES

Shop Floor

© 2013 SAP AG. All rights reserved. Customer 36


Work-in-Process Batch Scenario
Width: 26 inch
Width: 26 inch Goods receipt
Inventory batches Length: 36 inch
Length: 36 inch
Batch 25/1 Batch 25/2
Inventory

Order
Assign Width: 26 inch
Width: 26 inch Op. 20
to order item Surface: coated
Process batches Surface: coated shearing
Length: 36 inch
Length: 36 inch
PB 25/1 Split PB 25/2

Width: 26 inch Op. 10


Surface: coated
coating
Length: 72 inch

PB 25
Width: 26 inch Create with
Process batch Surface: reference
Length: 72 inch

Order

Inventory

Width: 26 inch
Inventory batch Length: 72 inch Goods issue
Batch 4711

Production Order
Op. 10 coating
Op. 20 shearing
© 2013 SAP AG. All rights reserved. Customer 37
N : M traceability from component to produced batch:
Modeling the real material flow

Stock

Legend:
End product batch

Order line item/Output

WIP batch

Component/Input

Component batch

Assignment of WIP batch to order item


Relationship between incoming batches and
Stock
finished batches

© 2013 SAP AG. All rights reserved. Customer 38


Stock Overview and Object Search by Characteristics

Customer specific
function code
e.g. materials
movement, create
customer order etc.

Customer specific fields


and list manipulation

e.g. calculations,
additional fields etc.

Search for
 batches
 documents (SD /PP
order with specific
attributes)

© 2013 SAP AG. All rights reserved. Customer 41


Cutting - Transaction

Functions
 An issuing quantity is distributed to a number of receiver quantities
 Easy transfer from unrestricted to customer stock
 Scrap: The rest quantity can be posted to
 scrap
 another scrap material
 stock difference
 Inheritance of batch characteristics from issuing batch

Limitations
Costs and capacities for the cutting process are not taken into account

© 2013 SAP AG. All rights reserved. Customer 42


Cutting of Rolls - Example

„Mother“ Batch material A


Batch Scrap
Scrap
Piece 1 Quantity:
Quantity:16,5
16,5kg
kg
Weight 300 kg
Length 900 mm
Width 450 mm
New Batch no. 0452

Batch material B
Cut to 3 length with
300, 300 and 240 mm
Piece 1

Weight 83,5 kg
Length 250 mm
Width 450 mm
New Batch no. 0450 New Batch no. 0451

Batch material A Batch material A

Piece 1 Piece 1

Weight 100 kg Weight 100 kg

Length 300 mm Length 300 mm

Width Width 450 mm


450 mm

© 2013 SAP AG. All rights reserved. Customer 43


Agenda

Enhancements in ERP
• Sales & Distribution
• Production
• Materials Management
• Quality Management
Processes in APO

© 2013 SAP AG. All rights reserved. Customer 44


Existing Integration VC  QM

Purchase
Order
Production-/ Goods
Sales Order Delivery
Process Order Receipt
Variant Config. Variant Config. Batch Characteristics
Characteristics like Characteristics like default like
 Dimensions  Dimensions values  Dimensions
 Quality Criteria  Quality Criteria  Quality Criteria
 Specifications  Specifications  Specifications
 …  …  …

Integration via Quality


Master Inspection Certificate
Characteristic

Inspection Lot Inspection Lot Inspection Results


 Tolerance Limits  Tolerance Limits  Measured
for Inspection per for Inspection per Characteristics
Inspection Inspection  Usage Decision
Characteristic Characteristic  …
 …  …

Inspection Lot

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QM specifications with rules-based calculations
Look up spec db with sales order configuration & get specific QM tolerance

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Agenda

Enhancements in ERP
• Sales & Distribution
• Production
• Materials Management
• Quality Management
Processes in APO

© 2013 SAP AG. All rights reserved. Customer 47


Mill Products in APO (Advanced Planner & Optimizer)

 Multi Level Planning


 Optimization
 ATP & CTP (Capable-to-Promise)
 Block Scheduling
 Trim Interface

© 2013 SAP AG. All rights reserved. Customer 48


ERP-PP and PP/DS Comparison

PP/DS offers:
Simulation Capabilities
Heuristics-Framework (in PP/DS + offers open interface)
CTP Capable-to-Promise
Optimization
Online scheduling
Block planning
Alert monitor
Trim-Integration
Multi-level planning
Make-to-Stock with variant configuration (with IS Mill)
Different resource types (single/multi activity, bucket resource)
Internal procurement (create production order, stock transfer orders)
and external procurement (create purchase order) in one run

PP/DS does not offer:


Sequence dependent setups and alternative sequence are called
‘mode’ in SCM. Mode dependencies are not supported
Order combination
Fast Data Entry in Production Order

© 2013 SAP AG. All rights reserved. Customer 49


PP/DS – Scheduling Strategies

• Infinite scheduling
• Finite scheduling
• Scheduling directions forward, backward, with reverse
Insert - Forwards
• Consider order-internal relationships
• Consider pegging relationships 5 4 3 2 1
• Find slot
• Insert operation 5 4 3 2 1

• Schedule to non-work time


• Scheduling sequence 5 4 3 2 1
today time

Find Slot - Forwards Find Slot - backwards Insert - Backwards

5 4 3 2 1 5 4 3 2 1 5 4 3 2 1

5 4 3 2 1 5 4 3 2 1 5 4 3 2 1

5 4 3 2 1 5 4 3 2 1 5 4 3 2 1
today time today time today time

© 2013 SAP AG. All rights reserved. Customer 50


PP/DS - Optimization

Decision Variables Constraints


Resource Allocation Time Constraints between Activities
Start dates Pegging constraints
Due Dates / Deadlines
Objective Functions
Production Capacities
Delay (Sum/Maximum)
Calendar (Shifts and Breaks)
Total lead time
Sequence- and Resource-dependent Setup times
Sum of setup times
Breakable activities
Sum of setup costs
Effectiveness of PDS
Resource capacity (per shift)
Resource utilization (per shift)

© 2013 SAP AG. All rights reserved. Customer 51


Integration SD – PP/DS
…including Multi-level Production Planning

Preplanning & Stocks


Sales Order

ATP
100 120

Jan Feb Mar

CTP

Routing
Bill of Material

Planned Order Planned Order Planned Order

Mat: Sheet Mat: Roll Mat: Reel


Start: 27.09.03 Start: 21.09.03 Start: 20.09.03
End: 01.10.03 End: 27.09.03 End: 21.09.03

Qty: 12 TO Qty: 14,2 TO Qty: 18 TO

© 2013 SAP AG. All rights reserved. Customer 52


ATP-Check against stock, quota and planning

Product A
 Individual time series per product,
location, storage location, batch and Location 1
characteristic based
Location 2
Storage location 01

Storage location 02

 Planning of allocations for customers,


customer groups, product groups,
countries, etc.
Allocation
Object

Customer *
A B
group
1000 pcs 1300 pcs 2700 pcs

Custo- A1 A2 * B1 B2 * *
mers 150 pcs 250 pcs 600 pcs 400 pcs 300 pcs 600 pcs 2700 pcs

© 2013 SAP AG. All rights reserved. Customer 53


Capable to Promise (CTP)

• Based on the customer order, planned orders are created on


the finished good level

• Depending on the system setup, planned orders to cover the


dependent requirements are created on multiple levels as
well Sales Order

Desired date Confirmed date


and quantity and quantity

Capacity 1

Capacity 2

Capacity 3

Today
t

© 2013 SAP AG. All rights reserved. Customer 54


Rules-Based ATP

Different Product
Rules:
1 Different Production
Start 2
2 Same Product in
Different Location
1 3 3 Different Production in
Different Location
4 4 Different Product

Different Location

Different Production Method (PDS)

© 2013 SAP AG. All rights reserved. Customer 55


Change of Production Method

Check all locations for the same production level first and then a
different production level

Production
Level

10 ATP ATP ATP


FG

20 CTP CTP CTP


PDS 1

30 CTP CTP CTP


PDS 2
FG = Finished Good / PPM = Production Process Model / CTP = Capable To Promise
© 2013 SAP AG. All rights reserved. Customer 56
Change of Production Method

Check all production levels for every location

Production
Level

10 ATP ATP ATP


FG

20 CTP CTP CTP


PDS 1

CTP CTP CTP


30
PDS 2

FG = Finished Good / PPM = Production Process Model / CTP = Capable To Promise


© 2013 SAP AG. All rights reserved. Customer 57
Block Scheduling: Based on Quantity or Time

 Basic philosophy is, that blocks are independent from products


produced in a block

 Blocks are defined based on the characteristics of the products and


resources; their length is defined by time

 Nevertheless in some
cases there is a rough
conversion between time and
another unit of measure (normally:
quantity)

© 2013 SAP AG. All rights reserved. Customer 58


Block and Campaign Planning

Sales orders

Blocks
Shift schedule

© 2013 SAP AG. All rights reserved. Customer 59


Flexible Block Boundaries & Changing Blocks

With Definition of Tolerance for Blocks, APO can over schedule a block
if capacity in the following Block allows it

Tolerance

Extending / Moving / Shrinking


selection of multiple Blocks allows to move a group of Blocks and apply
change to other non adjacent block

© 2013 SAP AG. All rights reserved. Customer 60


Blocks with Capacity Tolerances and (In)finite
Planning

Blocks with capacity tolerances defined in non-time units of measure


Block definitions should not get adjusted too frequently
Tolerances modeled with single-mixed resources
Variable buckets (not only days) defined by the blocks
Bucket part of a single-mixed resource can be planned finitely in PP/DS
Cycle can be defined to limit the scope of the planning heuristic

Available block capacity


Theoretical available with tolerance
block capacity

Infinitely planned bucket part of the resource

Finitely planned single activity part of the resource

© 2013 SAP AG. All rights reserved. Customer 61


Blocks with Capacity Tolerances (cont.)

After running the planning algorithm

Adjusted block
capacity

Adjusted buckets

Adjusted blocks

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Reporting on Block Utilization

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Trim Sheet Order

Optimal combination of cutting


10 Operation 4711/10 4711/20 operations to use supply in the
Setup best way
Cut 4711/10 0815/10
10 4711/10 20”/50”/I Realistic representation of the
20 4711/20 25”/50”/I
trim optimization result
4711/10 0815/10
20 Operation Detailed description of each
Setup product getting produced on
911/40 911/40
Cut the winder
10 4711/10 20”/50”/I
20 0815/10 26”/50”/I
Trim loss
911/40 911/40
Single instruction for the shop
. floor
. 4715/10 4711/20
Each physical pattern is
.
represented by an
 Trim sheet order
.
operation
4715/10 4711/20
Each roll is represented
by an output node

© 2013 SAP AG. All rights reserved. Customer 64


Agenda

Enhancements in ERP
• Sales & Distribution
• Production
• Materials Management
• Quality Management
Processes in APO

© 2013 SAP AG. All rights reserved. Customer 65


Thank you

Contact information:

Alfred Becker
Global Lead Paper Industry
IBU Mill Products, SAP AG
alfred.becker@sap.com
+49 160 90823279
© 2012 SAP AG. All rights reserved.

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