Supply Chain Management Blogs by Members
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My most recent assignment was blueprinting Supply Chain Planning processes for a Scandinavian mineral fertiliser major. It was great learning opportunity working directly with business, learning about the industry, its nuances and peculiarities compared to other clients and industries I had consulted for. Last time I had similar opportunity (working directly with business instead through client IT) was during my very first SAP project assignment back in 2002. I was newbie to SAP world back then and simply focused in building solution to meet business requirements in SAP's Advanced Planning & Optimisation application. But this time it was different, being Planning Track Lead and part SCM Solution Architect overseeing the whole Supply Chain big picture. My focus was to review, validate business requirements and challenge some based on best practices that SAP has built based on. But in the end my responsibility was to craft an end to end IT solution integrating various SAP applications & components in SCM space. Thanks to multiple Supply Chain Planning project experiences in past I am now reasonably experienced with SAP SCM applications, its gray areas and white spaces, integration challenges across legacy, non-SAP applications.

Coming back to the challenge at hand - I knew there is no single application to meet all the client requirements. The challenge was especially around Operations Planning business requirements that are localised, site-specific business processes compared to more global / regional processes in Demand Planning and Replenishment / Network Planning. Even considering the most advanced / process savvy production plant has come up with the requirements, no single SAP SCM applications could meet it all. Of course enhancements can be done but there is associated cost and especially when the client sponsor had dictated 80:20 (maximum 20% custom development) principle.

The first thing I did was review in detail the Operations Planning business requirements, clarify with business SMEs and Power Users to understand exactly how they are operating. Trying to fit that in SAP SCM application's so-called best practices turned out tortuous path difficult to tread. The next logical approach was to group the Operations Planning requirements into logical components like Logistics Planning comprising mainly bulk movement in marine vessels from Production Planning focusing on production order scheduling. This means a mix of SCM APO and ECC PP functionality for Production Planning but for Logistics Planning there were lot of gaps especially around planning for ships and further berth (harbour / quay-side) planning.

Anyway SAP TM was in scope for detailed transport planning, tracking, execution and charge calculation of all modes including maritime vessels like ships. But TM integrates with ECC only through Order or Delivery based Transport Requests. That meant having Stock Transfer Orders created in ECC for bulk products from Production Plant to downstream Terminals in different markets (countries). But from Logistics Planner standpoint they do not want to cut Stock Transfer Order till they know vessel size and availability (in terms of dates) because accordingly they plan for bulk material movement.  

The hunt began looking for suitable SAP applications and came down to a solution used in Oil & Gas Industry (I knew it from a previous project) called TSW (Trader's and Scheduler Workbench). Even though TSW is primarily Oil & Gas industry solution application, SAP had "decoupled" it and made it as an independent (from IS-Oil) Add-On to SAP ERP. TSW uses an object called Nomination that is highly flexible and allows creation of Planned Shipping Requests linking different Purchase Requisitions (not yet converted to Order) having same source and destination locations. The Nomination object can be interfaced (custom) to SAP TM for creating Shipment Booking for Carrier Selection. Once vessel is identified in TM, the capacity and arrival schedule information is interfaced back to TSW Nomination object. The Logistics Planner can then review, update and accept (in exception case reject) the updated nomination. This also triggers consolidation of Purchase Requisitions (may have underwent quantity change to consider filling in vessel capacity) in Nomination Lines into single Stock Transfer Order in ECC MM module. The Stock Transfer Order from ECC automatically gets interfaced to SAP TM using standard Process Integration (PI) as Order based Transfer Request to initiate maritime planning processes in TM.

So this took care of the first problem and then the next major requirement around harbour / quay-side planning was to be tackled. Once marine vessel / ship is booked suitable berthing space is to be made available when it arrives so as not to incur demurrage charges. Unlike other means of transport, planning for Marine Vessels is critical due to the cost and bulk volumes (few thousand tons) involved. For this requirement TSW provided Berth Scheduling functionality that provided graphical overview of harbour to plan for vessels arriving, laying on for discharging / loading material and finally departing. Each individual lines in the Nomination object allows assignment of berth with from and to date/time allowing detailed level planning. Of course any changes of vessel arrival (also known as ETA Estimated Time of Arrival) has to be interfaced from SAP TM (where Transport Monitoring & Tracking is done) to TSW as events. This events information can be used by Logistics Planner to reschedule vessel assignment to berths reducing chance of demurrage charges and potential "traffic jams" just off the harbour for docking.

Thus overall an integrated Logistics Planning solution was conceived as part of Blueprint - starting with SAP APO for Purchase Requisition creation based on Demand at Terminals, Production Order creation & scheduling at Plant to meet these requirements, plan for shipments based on Stock and Transport Vessel availability meeting requirement dates (3 way pegging) in SAP TSW, conversion of Purchase Requisitions to Purchase Order (proposed small custom development in ECC MM for automated conversion based on Nomination line entries), Berth Planning and Scheduling in SAP TSW and subsequent execution of Transport Order in SAP TM and ECC MM / IM (Goods Receipt and Issue against Delivery). No doubt complex with integrating three different SAP applications (APO, ECC and TM) with add-ons (TSW) and multiple modules (APO PPDS, ECC MM, IM, LE) coupled with few enhancements but overall an integrated solution meeting business needs.

Time will tell how the conceptualised solution works out practically during Integration Testing after the developments and configurations are setup along with suitable master data. But keeping in mind the big picture, exploring to identify potential SAP applications (some less known) to architect an integrated solution indeed was an achievement and tremendous learning experience. It not only gave the chance to explore different SAP applications but also to understand and decouple complex yet much needed business requirements in order to architect SAP based solution as much standard as possible with minimal enhancements to bridge solution gaps.

You may like to read my earlier blog Evolution of SAP SCM Applications

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