Viewing the Entire Process

Feature Article | March 1, 2004 by Harald Vogel

Machinery manufacturers and other industrial manufacturing companies that engineer and manufacture customer-individual products must coordinate highly complex processes. In manufacturing, in particular, it is difficult to maintain an overview of the current order flow. One department keeps to its schedule, while another lags hopelessly behind. Reasons for delays include delivery bottlenecks, machine breakdowns, or staff absences. Dependence on external suppliers and a decentralized organization with scattered production and assembly facilities also make planning problematic. The industry solution SAP for IM&C meets these special requirements.

Project Manufacturing enables the planning and integration of the entire order flow, end-to-end. This process includes activities in SAP R/3 PS that are not directly relevant to manufacturing, such as incoming orders, preliminary planning, construction, assembly, shipping, and start-up down to manufacturing in SAP R/3 Production Planning (PP). The advanced tools of SAP APO can now be used for this integrated project and manufacturing planning.

Pegging – the automatic assignment of requirements and receipts – provides transparency by synchronizing processes. Stock, purchase orders, and orders for units supplied by subsidiaries, external companies, or other manufacturing sites can also be incorporated. Those responsible can see an overview of the entire supply chain.

SAP APO’s early warning system sends alerts identifying bottlenecks and missing parts before they cause problems. The pegging structure can display the possible effects on planned completion date of the assembly or machine (bottom-up), and a change in project scheduling can be transferred to manufacturing planning (top-down).

“SAP APO with Project Manufacturing has helped us to implement a common supply chain planning system that harmonizes processes across all our sites and supports a tightly coordinated network that works together seamlessly and efficiently,” says Jean Pierre Albaret, IT director at Airbus, Europe’s leading aircraft manufacturer.

Simulating different courses of action

To avoid a delay in delivery caused by capacity bottlenecks or machine breakdowns, various courses of action can be simulated in SAP APO immediately. For example, which other workstations can carry out a particular manufacturing process? When is it worth doing overtime? Is external procurement or processing of a part possible? If so, which supplier, with what delivery times, and at what price? The various planning scenarios can be simulated, saved temporarily, and compared. Once a decision has been made, the operational planning data can be updated.

The traditional control station takes little account of dependencies on previous or subsequent orders, providing no synchronization of the complete order context. However, the scheduling and optimization tools within SAP APO check the complete order context. Beyond the interdependence of projects, orders and purchase orders, it also takes into account restrictions such as limited machine, staff, or material availability. The result is backlog-free planning with realistic deadlines, optimum use of machines, reduced lead time, and lower inventory.

MAN B&W Diesel – the worldwide leader in the manufacture of diesel engines for ships and stationary power supply – opted for SAP for IM&C with SAP R/3 PS and PP, as well as SAP APO and Project Manufacturing. By using multilevel integrated planning for projects and manufacturing, MAN can now plan and schedule the entire order environment. MAN also has the option of integrating company-specific scheduling logistics within the general planning procedure.

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