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Matthias Mekschrat
Logistical applications and optimizations
h_DA WS 2011
Logistical applications and optimizations
slide 1
Matthias Mekschrat
overview
Introduction
October 28 - definition of business processes
November 11 - overview of logistical business processes
November 18 - functionality of purchase and supply processes
December 02 - functionality of production processes
December 16 - functionality of sales and distribution processes
January 20 - special problems within the supply chain handling
h_DA WS 2011
Logistical applications and optimizations
slide 2
Matthias Mekschrat
Review on the last session
You have learned about business processes and composed business process
You have seen the different types of business processes
1.
supply chain business processes
2.
logistical crossover business processes
3.
business support processes
You have learned about procedures and tools to
1.
analyse business processes
2.
visualise business processes
3.
document business processes
You have seen the needed components to implement an IT application system
1.
customizing
2.
master data management
3.
user exits and modifications
You have learned
1.
that translating business processes into IT application processes is a very
challenging task which needs some experience
2.
That process integration is an important factor for an optimal IT application
system
3.
Why to avoid individual developed interfaces if ever possible
h_DA WS 2011
Logistical applications and optimizations
slide 3
Matthias Mekschrat
About this lecture
All sessions are split into 2 blocks: from 08:30 to 10:00 and from 10:15 to 11:45
Each session starts with a short review of the last lectures subjects
Next I will give you a short theoretical overview of the days subject
Next you probably will develop 3 different subjects in a brainstorming session in
3 groups
Each group will then present the results of their discussions
I will present theoretical explanations for the discussed subjects
Then I will show a example solution for a potential written test question
Finally I will give a summary of the key messages for this session
h_DA WS 2011
Logistical applications and optimizations
slide 4
Matthias Mekschrat
overview
Introduction
October 28 - definition of business processes
November 11 - overview of logistical business processes
November 18 - functionality of purchase and supply processes
December 02 - functionality of production processes
December 16 - functionality of sales and distribution processes
January 20 - special problems within the supply chain handling
h_DA WS 2011
Logistical applications and optimizations
slide 5
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 6
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 7
Matthias Mekschrat
Overview of logistical processes, Part 1
Problems and potentials
Usage of SCM Tools in chemical industry (November 2008)
none
63%
14%
16%
7%
considered
In use
h_DA WS 2011
planned
Logistical applications and optimizations
slide 8
Matthias Mekschrat
Overview of logistical processes, Part 1
Problems and potentials
As a consequence many companies do not use the potentials of an appropriate
SCM
Very often suboptimal SCM processes are implemented by the IT application
system
h_DA WS 2011
Logistical applications and optimizations
slide 9
Matthias Mekschrat
Overview of logistical processes, Part 1
Learning targets
Understand the main component structure of a supply chain application system
Understand the business support components, that are needed in assistance to
run a supply chain application system
Understand the need for both external and internal collaboration processes
Understand the important inputs and outputs of each component
Understand the involved acting logical business units
h_DA WS 2011
Logistical applications and optimizations
slide 10
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 11
Matthias Mekschrat
Supply chain processes
Supply chain processes represent all main logistical activities for creation of
value according to the business definition
Supplier
h_DA WS 2011
Plant
Store
Transport
Logistical applications and optimizations
Customer
slide 12
Matthias Mekschrat
Supply chain processes
Supplier
Raw
Material
Store
Plant
Entry
Stores
Transportunit
Production
1. level
Transport
Customer
Production
n. level
A1
A2
A3
h_DA WS 2011
B
C
Logistical applications and optimizations
slide 13
Matthias Mekschrat
Supply chain processes
Customer C
Customer B
Prod. C
B
Prod. B
A
Plant A
Prod. A
Plant B
Customer A
h_DA WS 2011
Logistical applications and optimizations
slide 14
Matthias Mekschrat
Supply chain processes
Business support processes
Logistical crossover processes
Production
planning and
scheduling
Sales
Shipment and
distribution
Purchasing
h_DA WS 2011
Logistical applications and optimizations
slide 15
Matthias Mekschrat
AE - asset effectiveness
FAC – finance & accounting
BW
business information warehouse
OTC – order to cash
APS
advanced
Planning systems
FFG – forecast to finished goods
CS
chemistry services
PTP – purchase to pay
MITO
material input to output
Core Business Processes and X-over Processes
core process
cross process
h_DA WS 2011
Logistical applications and optimizations
slide 16
Matthias Mekschrat
Supply chain processes
Sales order
Purchase
requirements
Sales and operations planning
(SOP)
Forecast
Materials requirements planning
(MRP)
MRP lists
Planned order
Conversion of planned orders
release of production
as process orders
MES
Production Papers
Actual production
Goods Issue
Confirmation
Goods Receipt
Time and Material
Production controlling
Distribution
h_DA WS 2011
Logistical applications and optimizations
slide 17
Matthias Mekschrat
Supply chain planning
Purchase
Distribution
Sale
Supply Chain Cockpit
Demand
Planning (DP)
Network Design (ND)
Supply Network Planning (SNP)
Procurement
Planning
Short Term
Mid Term
Long Term
Monitor
Production
h_DA WS 2011
Production
Planning
&
Detailed
Scheduling
(PP/DS)
Distribution
Planning
& Deployment
Transport.
Planning
&
Vehicle
Scheduling
(TP/VS)
Global ATP
Logistical applications and optimizations
slide 18
Matthias Mekschrat
Supply chain planning
Planning Horizon
Demand Planning (DP)
Supply Network Planning (SNP)
Production Planning (PP)
Detailed Scheduling (DS)
Deployment
Transport Planning (TP/ VS)
h_DA WS 2011
Logistical applications and optimizations
slide 19
Matthias Mekschrat
Supply chain planning model
External customer
Plant B
Plant C
External customer
Internal customer
Plant A
External customer
External customer
Plant E
Supplier
Plant D
Customer
External customer
h_DA WS 2011
Logistical applications and optimizations
Plant
slide 20
Matthias Mekschrat
From sequential supply chains...
1st Supplier
2nd Supplier
Manufacturer
Retailer
 One-to-one Communication
 Excessive Inventory (Bullwhip-Effect)
 Manual Communication
 Asynchronous Planning Cycles
 Assumption bases Planning
h_DA WS 2011
Logistical applications and optimizations
slide 21
Matthias Mekschrat
….. to networked Supply Chains.
Transportation
Exchange
Carrier
Customer


Retailer
1st
Supplier





Collaboration
One-to-many Communication
Synchronous/asynchronous
Communication
Synchronized Planning Cycles
Automated Decisions
Tracking and Tracing
Technological Openness
2 nd
Supplier
Trade Exchange
h_DA WS 2011
Logistical applications and optimizations
slide 22
Matthias Mekschrat
Advantages of Collaboration
Customer
Supplier
No safety stock
More precise demand planning
No purchase orders
Automated consignment fill-up and
consignment issue orders
No quality inspection
No printing of CofA‘s
„Pay only what you have used“
No printing of invoices
No incoming invoice
No invoice verification
h_DA WS 2011
Logistical applications and optimizations
slide 23
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 24
Matthias Mekschrat
Business support processes
Business Support Processes represent all non logistical activities to support the
main logistical activities
Controlling
Budgeting
Invoicing
h_DA WS 2011
Logistical applications and optimizations
slide 25
Matthias Mekschrat
Business support processes,
strategic planning and reporting
Cluster Business
Warehouse
Info
Cube
Info
Cube
CCCube
Cluster B
Cluster A
ERP Systems
h_DA WS 2011
CCInfo Cube
Cube
CCInfo Cube
Cube
Cluster C
CCInfo Cube
Cube
Cluster D
...
Logistical applications and optimizations
slide 26
Matthias Mekschrat
Practical part: developing the subjects
Group A: Please design the SC Model for
1.
4 Plants A,B,C,D
2.
A, B, D have own Customers
3.
C, B have own Suppliers
4.
A supplies C and B, B supplies C and D
5.
Please design as an sequential model
6.
Please design as a network model
Group B: Please design the SC Model for
1.
4 Plants A,B,C,D
2.
A, C have own Customers
3.
C, B, D have own Suppliers
4.
A supplies C and B and D, C supplies B and D
5.
Please design as an sequential model
6.
Please design as a network model
1.
2.
3.
you have 20 minutes for group discussion and writing down your ideas
afterwards each group has 5 minutes for the presentation of your ideas
your are free to use any presentation medium
h_DA WS 2011
Logistical applications and optimizations
slide 27
Matthias Mekschrat
Example solution for a potential test task, Part 1
design the SC model for
1.
4 Plants A,B,C,D
2.
A, B, D have own Customers
3.
A, C, B have own Suppliers
4.
A supplies C and B, C and B supply D
Plant C
Plant D
Plant A
Plant B
h_DA WS 2011
Logistical applications and optimizations
slide 28
Matthias Mekschrat
Summary and key messages, Part 1
The SC components are sales, purchase, production and distribution
SC planning processes effect all SC components
There are models and tools to describe SC processes
SC networks are the basis for collaboration
Business support processes are mainly calculation, budgeting and reporting
Literature
1.
Stadtler, Kilger – Supply chain management and advanced planning,
Springer Verlag, Berlin Heidelberg, 2000
2.
Dangelmaier, Busch (Hrsg.) – (in german) Integriertes Supply Chain
Management, Gabler Verlag, Wiesbaden, 5/2004
h_DA WS 2011
Logistical applications and optimizations
slide 29
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 30
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 31
Matthias Mekschrat
Overview of logistical processes, Part 2
Problems and potentials
There are many logistical processes, which do not belong to the main SC
processes, but effect all those components
The integration of these components assure the most effective use of the supply
chain
Distribution of information in case of disturbances is a challenge a high potential
h_DA WS 2011
Logistical applications and optimizations
slide 32
Matthias Mekschrat
Overview of logistical processes, Part 2
Learning targets
Understand the structure of logistical crossover processes
Understand the applications tasks to assure process integration
Understand the important inputs and outputs of each component
Understand the involved acting logical business units
h_DA WS 2011
Logistical applications and optimizations
slide 33
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 34
Matthias Mekschrat
Logistical crossover processes
Logistical crossover business processes represent all logistical activities to
support the main logistical activities
h_DA WS 2011
Logistical applications and optimizations
slide 35
Matthias Mekschrat
Quality management in the SC
Product Structure
Management
Change and
Configuration
Management
Life-Cycle Data
Management
Document Management
Asset Life-Cycle
Management
Technical Assets Management
Preventive and Predictive
Maintenance
Maintenance Execution
Work Clearance Management
Program Management
Project Planning
Project Execution
Interfaces
Program and Project
Management
Life-Cycle Collaboration
Design Collaboration
and Analytics
Audit Management
Quality Management
Environment, Health
and Safety
Collaborative Project
Management
Basic Data and
Tools
h_DA WS 2011
Product Safety
Recipe Management
Integration
Quality Collaboration
Enterprise Portal
Content
Quality Control
Hazardous
Substance
Management
Dangerous
Goods
Management
Analytics
Quality Improvement
Waste
Management
Logistical applications and optimizations
Industrial
Hygiene and
Safety
Occupational
Health
slide 36
Matthias Mekschrat
Quality management in the SC
Procurement
Production
Service
Sales
 Q Info
 In-process inspection
 Inspection lots/Delivery
 Technical delivery
terms and conditions
 Batch classification
 Certificates
 Inspection lots
 Quality control charts
 Customer reports
 Quality reports
 Service reports
 Fault reports
h_DA WS 2011
Logistical applications and optimizations
slide 37
Matthias Mekschrat
Quality management reporting in the SC
Quality reports can be
evaluated according to
different criteria.
For instance, an overview
of problems occurring
with one material can be
provided.
Questions such as what
happened during
production or have
complaints been received
from customers can be
answered easily.
h_DA WS 2011
Logistical applications and optimizations
slide 38
Matthias Mekschrat
Quality management reporting in the SC
h_DA WS 2011
Logistical applications and optimizations
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Matthias Mekschrat
Sample management in the SC
h_DA WS 2011
Logistical applications and optimizations
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Matthias Mekschrat
Inspection orders in the SC
Goods receipt
Periodically
Outward stock
movement
Deadline monitoring
batch
Manually
In-process
Create inspection lot
Print inspection instruction/labels
Record results
Usage decision
subsequent action
h_DA WS 2011
Logistical applications and optimizations
slide 41
Matthias Mekschrat
R & D in the supply chain
A manufacturer of chemicals has to
>
comply with the respective laws
>
be able to provide seamless information about the properties of the products
that leaves no room for doubt
>
provide foresighted information about handling
>
take preventive action against emergencies
>
have clearly structured development routines, production procedures and
supply chains
h_DA WS 2011
Logistical applications and optimizations
slide 43
Matthias Mekschrat
R & D in the supply chain
Regarding R&D, the product life cycle management consists of
Phases
Strategic R&D planning
Operational R&D handling
Core Phase
Compliance of R&D requirements in the running
system
h_DA WS 2011
Logistical applications and optimizations
slide 44
Matthias Mekschrat
R & D in the supply chain
Requirements for an Operational R&D handling
>
R&D handling is more than writing down structures and recipies
>
IT support of the total actual R&D process
>
Document the results of the R&D activities
>
Implementation of subsequent settings in the ERP environment
h_DA WS 2011
Logistical applications and optimizations
slide 45
Matthias Mekschrat
Overview of logistical processes
Part 1
Supply chain processes
Business support processes
Short break
Part 2
Logistical crossover processes
Applications tasks to assure process integration
h_DA WS 2011
Logistical applications and optimizations
slide 46
Matthias Mekschrat
Applications tasks to assure process integration
Lacking exchange of information is one of the main problems, why business
processes do not run optimal. Very often you will find human factors as a
reason
JIT manufacturing and outsourcing are creating many more shipments to a wider
variety of destinations. The likelihood of breakdowns increases.
h_DA WS 2011
Logistical applications and optimizations
slide 47
Matthias Mekschrat
Applications tasks to assure process integration
Which logistical consequences emerge through a missing Process integration?
 Work Arounds
 Badly designed Process flows
 Additional Manual effort for coordination
Which costs arise through a missing Process integration?
 Costs for individual Interfaces
 Costs for necessary modifications
What should already be considered during a project planning ?
 Cost analysis for the Process Integration
 Detailed functional Process analysis
 Preliminary Study
h_DA WS 2011
Logistical applications and optimizations
slide 48
Matthias Mekschrat
Applications tasks to assure process integration

Process Integration is surely not given by creating interfaces between individual solutions
afterwards, Process Integration is part of the System planning process

Process Integration is more than a try to connect two different Plugs,
but rather a complex Challenge where the interactive details of a lot of components have
to be identified and where the following implementation has to be kept in mind
h_DA WS 2011
Logistical applications and optimizations
slide 49
Matthias Mekschrat
What is Supply Chain Event Management (SCEM)?
SCEM is a solution to
MONITOR and CONTROL
Supply Chain Processes.
It enables to react to events



immediately,
over heterogenious systems,
over company boundaries.
h_DA WS 2011
Logistical applications and optimizations
slide 50
Matthias Mekschrat
What is Supply Chain Event Management (SCEM)?
SC Event Management consists of four steps:
Define:
Monitor:
Notify:
Control:
Event Profiles for business processes
Event Messages
Actual and coming Problems by As-Is Comparison
by manual Interference, automatically,
h_DA WS 2011
 SAP AG 2001, SCEM,
Logistical applications and optimizations
Andreas Otto 51
slide 51
Matthias Mekschrat
Summary and key messages, Part 2
QM and material management are the most important crossover processes
Distribution of information in case of disturbances is an important success
factor
A supply chain event manager (SCEM) is urgently recommended for an optimal
SC organisation
Literature
1.
Stadtler, Kilger – Supply chain management and advanced planning,
Springer Verlag, Berlin Heidelberg, 2000
2.
Dangelmaier, Busch (Hrsg.) – (in german) Integriertes Supply Chain
Management, Gabler Verlag, Wiesbaden, 5/2004
h_DA WS 2011
Logistical applications and optimizations
slide 52
Matthias Mekschrat
Thank you very much for your participation
…… and see you on Friday, 18th of November
h_DA WS 2011
Logistical applications and optimizations
slide 53