Matthias Mekschrat Logistical applications and optimizations h_DA WS

Matthias Mekschrat Logistical applications and optimizations h_DA WS 2011 Logistical applications and optimizations 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 2

Matthias Mekschrat Review on the last session You have learned about the main functionality of production processes 1. Sales and operations planning 2. MRP 3. Planned orders 4. Production orders 5. Confirmation of production 6. Delivery to stock You have seen the main functionality of production optimization processes 1. Supply network planning 2. Detailed scheduling 3. Deployment 4. Transport planning You have developed a production plan You have learned about the vertical integration (MES) h_DA WS 2011 Logistical applications and optimizations 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 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 5

Matthias Mekschrat Functionality of sales and distribution processes Part 1 Sales and distribution Customer relationship management Short break Part 2 Demand planning h_DA WS 2011 Logistical applications and optimizations 6

Matthias Mekschrat Functionality of sales and distribution processes Part 1 Sales and distribution Customer relationship management Short break Part 2 Demand planning h_DA WS 2011 Logistical applications and optimizations 7

Matthias Mekschrat Functionality of sales and distribution processes, Part 1 Problems and potentials Sales and distribution processes handle all activities dealing with the customers. Therefore a well designed sales and distribution IT process is a basic need to fullfill customers orders. The coordination of sales and distribution processes with other core logistical processes such as purchase, disposition, and production is essential for a lean supply chain organisation. The customer relationship management discribes all activities to prepare sales and distribution activities and therefore is essential to assure future revenues. h_DA WS 2011 Logistical applications and optimizations 8

Matthias Mekschrat Functionality of sales and distribution processes, Part 1 Learning targets Understand the main functionality of sales and distribution system Understand the main functionality of customer relationship management Understand the interaction with other 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 9

Matthias Mekschrat 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 10

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 11

Matthias Mekschrat Functionality of sales and distribution processes Part 1 Sales and distribution Customer relationship management Short break Part 2 Demand planning h_DA WS 2011 Logistical applications and optimizations 12

Matthias Mekschrat Sales and distribution Availability checks Customer order yes no Approved customer order Unapproved customer order Object determination Re-Disposition Customer order checks Delivery Proceeding activities h_DA WS 2011 Logistical applications and optimizations 13

Matthias Mekschrat Sales and distribution Order types Standard order with due date Immediate order Cash Sales Free delivery Sample order consignment Returnable packing h_DA WS 2011 Logistical applications and optimizations 14

Matthias Mekschrat Sales and distribution Object determination Partners Shipping points Routs Delivery scheduling pricing Account determination h_DA WS 2011 Logistical applications and optimizations 15

Matthias Mekschrat Sales and distribution Customer order checks Credit limits Export controls Documents completeness h_DA WS 2011 Logistical applications and optimizations 16

Matthias Mekschrat Sales and distribution Proceeding activities Interfaces to billing systems Interfaces to continuous controlling Demand transfer to disposition h_DA WS 2011 Logistical applications and optimizations 17

Matthias Mekschrat Sales and distribution Special orders Variant configuration Assembly order Provision of material by the customer Make-to-order production Intercompany sales Third-party order h_DA WS 2011 Logistical applications and optimizations 18

Matthias Mekschrat Sales and distribution Availability checks Delivery schedule Availability rules (consideration of disposition items) Check on stock Check on disposition list Alternative products Global ATP Reservation of defined lots h_DA WS 2011 Logistical applications and optimizations 19

Matthias Mekschrat Sales and distribution Delivery Transforming customer order to delivery order Shipping order to carrier Shipping documents Picking Hazardous goods Packing QM check on outgoing material h_DA WS 2011 Goods issue Logistical applications and optimizations 20

Matthias Mekschrat Sales and distribution Transforming customer order to delivery order Change of status Scheduling h_DA WS 2011 Logistical applications and optimizations 21

Matthias Mekschrat Sales and distribution Picking and packing Selecting materila or lot out of stock Transfer to picking area for delivery preparation Assemble to delivery unit Multiple order delivery Transportation package Loading space optimization h_DA WS 2011 Logistical applications and optimizations 22

Matthias Mekschrat Sales and distribution QM check on outgoing material QM check on site Quality certificate QM check on Transportation h_DA WS 2011 Logistical applications and optimizations 23

Matthias Mekschrat Sales and distribution Shipping order to carrier Selecting the carrier type Selecting the carrier Routing Notification of arrival to customer h_DA WS 2011 Logistical applications and optimizations 24

Matthias Mekschrat Sales and distribution Shipping documents and hazardous goods Selecting the needed documents and print Send documents to requested partners or authorities Print badges for hazardous goods h_DA WS 2011 Logistical applications and optimizations 25

Matthias Mekschrat Sales and distribution Goods issue Goods leaving stock Transfer stock Basis for invoicing h_DA WS 2011 Logistical applications and optimizations 26

Matthias Mekschrat Functionality of sales and distribution processes Part 1 Sales and distribution Customer relationship management Short break Part 2 Demand planning h_DA WS 2011 Logistical applications and optimizations 27

Matthias Mekschrat Customer relationship management CRM functionality Customer & Market Insight Price Management Sales Management Cost & Profit Allocation Sample Management Lead & Opportunity Product Launch Reporting & Analysis Activity Management Campaign Management Budgeting Service Usage Tracking Complaint Management Dynamic Service Delivery Rolling Forecast Customer Segmentation h_DA WS 2011 Logistical applications and optimizations 28

Matthias Mekschrat Summary and key messages, Part 1 Sales and distribution optimization deals with loading capacity optimization and with transportation and routing optimization Sales and distribution handling are complex IT processes due to many legal needs Distribution is done by delivery departments CRM is indespensable as support for future revenue h_DA WS 2011 Logistical applications and optimizations 29

Matthias Mekschrat Functionality of sales and distribution processes Part 1 Sales and distribution Customer relationship management Short break Part 2 Demand planning h_DA WS 2011 Logistical applications and optimizations 30

Matthias Mekschrat Functionality of sales and distribution processes Part 1 Sales and distribution Customer relationship management Short break Part 2 Demand planning h_DA WS 2011 Logistical applications and optimizations 31

Matthias Mekschrat Functionality of sales and distribution processes, Part 2 Problems and potentials Demand planning is the important entry to forecast future needs to produce or to purchase (except for make-to-order business) Demand planning needs data as close to reality as possible. Therefore Demand planning is done in collaborative processes with at least the key customers Demand planning also needs to analyse the historie of demand derives future demand on the assumption of continuity h_DA WS 2011 Logistical applications and optimizations 32

Matthias Mekschrat Functionality of sales and distribution processes, Part 2 Learning targets Understand the needed components for a demand planning system Understand the importance of standard interfaces to the ERP system Understand the important inputs and outputs of each component Understand the involved acting logical business units h_DA WS 2011 Logistical applications and optimizations 33

Matthias Mekschrat Demand planning Targets ? today Support of sales departments in planning their future demands Increasing quality of forcast Integration of customers via collaborative planning Control of marketing targets Control of marketing activities h_DA WS 2011 Logistical applications and optimizations 34

Matthias Mekschrat Demand planning Advantages Easy Aggregation of data Detailing as needed by the planning departments Konsistent planing Flexible changes on forecasts h_DA WS 2011 Logistical applications and optimizations 35

Matthias Mekschrat Demand planning Getting the data Historical data Medium term planning Show forecast Quarterly plenning Show forecast Continuous planning 2003 2004 2005 2006 2007 heute h_DA WS 2011 Logistical applications and optimizations 36

Matthias Mekschrat Demand planning functions BW Excel And more …. . Ø Statistical Prognosen Is-Data Ø Macros Planned data Ø Promotions Ø Aggregation and Disaggregation SNP PP/DS ERP h_DA WS 2011 Logistical applications and optimizations 37

Matthias Mekschrat Demand planning Proceedings Consistent planing Top-Down, Middle-Out, Bottom-Up Drill-down and drill-up Automatical Aggregation und Disaggregation according to factors Simulation Analysis of accuracy of forecast Tools to compare is-data and planned data. h_DA WS 2011 Logistical applications and optimizations 38

Matthias Mekschrat Demand planning Planning cicle Demand planning Porecast Promotion Alerts Release of production plans Production margins Sales planning realistic Plans Production planning Primary requirements Capazitie planing h_DA WS 2011 Release of demand volumes to production (SNP, PP/DS) Logistical applications and optimizations 39

Matthias Mekschrat Summary and key messages, Part 2 DP is the mayor challenge to integrate forcast data into ERP systems The functionality of calculating the demand may vary according to the customers h_DA WS 2011 Logistical applications and optimizations 40

Matthias Mekschrat Thank you very much for your participation …… and see you on Friday, 20 th of January Mary Christmas and a happy new year h_DA WS 2011 Logistical applications and optimizations 41