Ideal Combination for Manufacturing SMEs

Feature Article | November 30, 2005 by admin

The SME-dominated mechanical engineering sector is heavily export-oriented and the dynamics of globalized markets have long been an important factor for companies in the industry. “These companies need to succeed in the face of national and international competition and respond quickly and flexibly to changing market, organization and production requirements,” says Emil Bertschi, Managing Director of Swiss SAP Business partner CP CIM-POOL.

Integrated all-in-one solution

The key challenges facing these companies include processing production orders within a specified timeframe, complying precisely with delivery times, and having an accurate picture of manufacturing costs so they can calculate profit margins with complete precision. “This makes transparent and efficient production planning and control (PPS) processes and precise knowledge of business-management KPIs a strategic competitive factor in the SME manufacturing sector,” says Emil Bertschi.
That’s why SAP business partner CP CIM-POOL, based in Baar, developed PPS One, an add-on solution for SAP Business One perfectly tailored to the needs of the industry. Its aim was to provide companies in the discrete manufacturing sector with an integrated all-in-one solution that incorporates industry-specific and business-management processes as fully as possible. CP CIM-POOL is therefore primarily targeted at companies in the plant construction, mechanical engineering, apparatus construction, metal and sheet metal processing, plastics processing, and mold construction sectors. However, the solution is also suitable for smaller manufacturers of electronic components.

Straightforward recording and opening of orders

Production orders can be opened directly from the customer order or the Material Requirements Planning (MRP) component of SAP Business One. To record a new production order, existing orders can be selected and copied in PPS One. If required, existing actual values can be adopted as target values for a new order. A production order can be assigned to e.g. a project, a customer – for instance, via direct access to the address management system, including customer’s required delivery date and sales price – or to an expense account with direct access to the account plan in SAP Business One. “Potential orders can initially be stored as a ‘simulated order’,” explains Managing Director Emil Bertschi. “Once orders have been officially awarded, they can easily be converted into an actual order at any time.”

Graphical control center creates transparency

Because SMEs often have to budget with absolute precision, they need a transparent overview of all order-related costs and profits before the start of production. Batch precosting in PPS One delivers all the relevant information. This includes – depending on the process – the calculated manufacturing costs and possible profit margins. The work plan for a particular product can be calculated with a total of five batch sizes in parallel and output with the corresponding data, e.g. for material costs, internal and external production costs, manufacturing costs, cost of sales and sales price. “This enables efficient production planning and later ensures optimum processes in the actual production stage,” says Bertschi.
The graphical control center and the shortfall function (=material availability overview) are then used to calculate and check whether a product can be produced for a customer by the required deadline and whether the necessary resources in the form of materials, machine capacity and labor capacity are available. By also providing a clear graphical representation of the throughput times for the production orders and of the individual stages in the relevant PPS cost centers, the control center makes it easier to check them. Depending on the pre-specified selection criteria, the control center enables work processes that have been started or have not yet been finalized to be displayed for one or more cost centers over a particular time period on the basis of date, PPS cost center, PPS cost center group and project. The question of whether the work processes shown should be confined to the actual production orders or should include the simulated orders too is defined on an individual basis.

Optimized production logistics

Changes to the original production planning (e.g. deadlines or production quantities) are also represented in graphic form in PPS One and can be tracked at any time. Any backlogs in production are output in days. To ensure smooth production, however, a detailed overview of all available parts lists and material items, right down to the lowest resolution (structure parts list), is required. These are shown in PPS One using the shortfall function. Parts such as standard parts or raw materials that are still missing for the production are highlighted in color and the corresponding purchase orders are created directly in SAP Business One.
Further key functions in PPS One are ongoing actual costing and a report generator for large evaluations. This enables e.g. target/actual comparisons (costs) per project or a list of the actual and target costs of all live production orders, including work in progress based on manufacturing costs. “PPS One optimizes the whole production logistics process and ensures an end-to-end information, material and value flow. This reduces throughput times and stock levels and brings production closer to the customer,” says Emil Bertschi.

Fully integrated and user friendly

According to Bertschi, PPS One was designed, developed and built as an integrated module so as to utilize all the necessary functions of SAP Business One. These include article and warehouse management, address management (customer/supplier base), job management, ordering, Material Requirements Planning (MRP), accounting and user management. The add-on solution from CP CIM-POOL can be fully integrated in the SAP SME solution via the SDK (Software Development Kit) using UI (User Interface) and DI (Data Interface) API. “PPS One and SAP Business One share a single database which prevents redundant data storage,” explains Bertschi. “Thanks to the standardized user interface, the user is not aware which system he currently finds himself in.”
Employees and managers have direct access to all relevant information and data. Production orders can be located and displayed according to criteria such as customer order, project, article number or drawing number. Live production orders can be selected directly and if necessary rapidly rescheduled or added to. Because it is fully integrated into SAP Business One, PPS can only be used in conjunction with the SAP SME solution. The advantage of this is that it eliminates the need for time-consuming batch processing, since data exchange and processing take place directly between the systems, enabling real-time processing.

Fast introduction, international usage

According to CP CIM-POOL, SAP Business One is the only system requirement needed to introduce PPS One. In line with the increasing internationalization of the industry, the add-on solution is currently available in German, English, Italian, French, Spanish and Dutch, “which means we can cite numerous international reference installations,” says Emil Bertschi. The license costs for SAP Business One with PPS One start at CHF 12,750 (Euro 8,250). Introduction and training cost extra. Based on experiences with previous customer installations, the training for the add-on solution lasts two to three days. “PPS One and SAP Business One together represent an all-in-one solution for SMEs in the manufacturing industry that optimizes production planning and control and provides up-to-date company information,” concludes Bertschi. “This optimizes value added chains and cuts process costs.”

For further information:

www.sap.com/swiss/solutions/kmu/businessOne/komplementaer/cpcimpool/info.epx

Dr. Andreas Schaffry

Dr. Andreas Schaffry

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