Inventory Optimization with SAP
SAP ERP, SAP SCM, and SAP APO
2nd Edition
Published on 25. June 2008
Book
Hardback
705 pages
978-1-59229-205-9 (ISBN)
Description
This new edition provides a completely up-to-date reference to teach users how to manage inventory to increase profitability and operational efficiency using SAP ERP 6.0 and/or SAP SCM 5.1. New and updated topics include additional sections on Material Requirements Planning, Controlling with SAP NetWeaver BI, Vendor Managed Inventory and Supplier Managed Inventory, and much more. This is the one-stop, must-have reference for anyone who needs to improve and maximize inventory management with SAP.
More details
Other editions
Previous edition
Marc Hoppe
Inventory Optimization with SAP
Effective Inventory Management with MySAP ERP and MySAP SCM
Book
06/2006
1st Edition
SAP PRESS
€69.95
Article exhausted; check for reprint
Person
Author
After finishing his studies in business administration at Fachhochschule Nordostniedersachsen in Lüneburg, Germany, and at John Moores University in Liverpool, England, Marc Hoppe joined CAS AG, Germany as an SAP developer in the logistics and production planning areas. Later, he became a logistics consultant and was responsible for implementing national and international SAP R/3 projects. Since 1998, he has worked as a Supply Chain Management (SCM) consultant at SAP SI AG. Marc Hoppe is responsible for the business-relevant and IT-based implementation and optimization of SCM processes, as well as the re-engineering of entire supply chain processes. In 2001, he became Consulting Director for SCM, and since 2003, he has managed additionally the Supplier Relationship Management (SRM) unit. Marc Hoppe consults for large corporations such as Siemens, Unilever, Gillette, Philips, Deutsche Telekom, and Philip Morris, as well as medium-sized companies like G+H Isover or Fertiva. He has published numerous works on inventory optimization.
Content
1 ... Why Inventory is Necessary ... 25
... 1.1 ... Inventory Concepts ... 26
... 1.2 ... How to Deal With Uncertainties ... 38
2 ... Factors Influencing Inventory ... 43
... 2.1 ... Five Instruments ............................................................................. 43
... 2.2 ... Controlling by Inventory Monitoring ............................................... 50
3 ... Inventory Analysis ... 51
... 3.1 ... Inventory Analysis Options ... 51
... 3.2 ... ABC Analysis with SAP ... 60
... 3.3 ... XYZ Analysis in the SAP System ... 81
... 3.4 ... Combining ABC and XYZ Analyses ... 83
... 3.5 ... Summary ... 98
4 Demand Planning and Forecasting ... 99
... 4.1 ... The Influence of Demand Planning on Inventories ... 99
... 4.2 ... The Bullwhip Effect ... 102
... 4.3 ... Optimization Potentials for the Forecast ... 104
... 4.4 ... Selecting the Forecast Method ... 140
... 4.5 ... Details of the Individual Forecast Methods ... 157
... 4.6 ... Running a Forecast ... 189
... 4.7 ... Forecast Accuracy and Alert Functions ... 206
... 4.8 ... Summary ... 231
5 Material Requirements Planning ... 233
... 5.1 ... Objectives of MRP ... 233
... 5.2 ... Requirements Calculation ... 235
... 5.3 ... Accumulated Balances ... 239
... 5.4 ... Order Calculation ... 241
... 5.5 ... Impact of MRP on Inventory ... 249
... 5.6 ... Tools for Selecting the Optimal MRP Parameter ... 258
... 5.7 ... Strategic vs. Operative MRP ... 260
... 5.8 ... Strategies for Make-to-Stock Production in SAP ERP ... 266
... 5.10 ... Strategies for Make-to-Order Production in SAP ERP ... 289
... 5.11 ... Consumption-Based Material Requirements Planning
Using SAP ERP ... 294
... 5.12 ... Requirements Strategies in SAP APO ... 303
... 5.13 ... VMI and SMI MRP Procedures ... 305
... 5.14 ... Potential for Optimization in Material Requirements Planning ... 327
... 5.15 ... Summary ... 334
6 Service Level and Safety Stocks ... 335
... 6.1 ... Relationship Between Stock and Service Level ... 335
... 6.2 ... Service Level ... 338
... 6.3 ... Replenishment Lead Time ... 366
... 6.4 ... Forecast Quality ... 373
... 6.5 ... Safety Stock ... 378
... 6.6 ... Safety Stock Planning in SAP APO SNP ... 404
... 6.7 ... Safety Stock Planning Using SAP APO CTM ... 436
... 6.8 ... Safety and Target Stock Planning in SAP APO PP/DS ... 440
... 6.9 ... Parameter-Dependent Safety Stock in SAP APO DP and GATP ... 446
... 6.10 ... Summary ... 449
7 Lot Sizes ... 451
... 7.1 ... How Do Lot Sizes Affect Stocks? ... 451
... 7.2 ... Stochastic (Static) Lot-Sizing Procedures in SAP ERP and
SAP APO ... 453
... 7.3 ... Deterministic (Periodic) Lot-Sizing Procedures in SAP ERP
and SAP APO ... 463
... 7.4 ... Optimal Lot-Sizing Procedures in SAP ERP and SAP APO ... 481
... 7.5 ... Restrictions in the Lot-Size Calculation ... 501
... 7.6 ... Selecting Lot-Sizing Procedures ... 503
... 7.7 ... Summary ... 506
8 Production ... 507
... 8.1 ... How Do Backlogs in Production Affect Stocks? ... 508
... 8.2 ... Why Do Backlogs Occur in Production Planning? ... 514
... 8.3 ... Reducing of Backlogs ... 519
... 8.4 ... Missing Parts Management in Production ... 535
... 8.5 ... Finite Planning and Optimization in SAP APO ... 547
... 8.6 ... Heuristics for Inventory Optimization ... 596
... 8.7 ... Alerts and Their Processing ... 607
... 8.8 ... Simulation and Comparison of Planning Results ... 610
... 8.9 ... Capable to Promise (CTP) ... 616
... 8.10 ... Embedding Superordinate and Subordinate Planning Levels ... 618
... 8.11 ... Best Practices for Using SAP APO PP/DS ... 622
... 8.12 ... Summary ... 623
9 Inventory Controlling ... 625
... 9.1 ... Why Inventory Monitoring? ... 625
... 9.2 ... Introduction to Logistics Controlling ... 626
... 9.3 ... The Information System According to Ehrmann ... 628
... 9.4 ... The Information System of the SCC ... 632
... 9.5 ... Problems with Data Collection ... 637
... 9.6 ... Important Inventory Key Figures ... 638
... 9.7 ... Tools for Inventory Analysis ... 652
... 9.8 ... Inventory Monitoring in SAP ERP ... 656
... 9.9 ... Inventory Controlling with SAP APO and SAP NetWeaver BI ... 660
... 9.10 ... Summary ... 678
Appendix ... 681
... A ... Literature ... 683
... B ... Author ... 691
... C ... SAP ERP Add-ons ... 693
... C.1 ... Forecast Monitor ... 693
... C.2 ... MRP Monitor ... 693
... C.3 ... Replenishment Lead Time Monitor ... 693
... C.4 ... Backlog Monitor ... 693
... C.5 ... Service Level Monitor ... 693
... C.6 ... Missing Parts Monitor ... 694
... 1.1 ... Inventory Concepts ... 26
... 1.2 ... How to Deal With Uncertainties ... 38
2 ... Factors Influencing Inventory ... 43
... 2.1 ... Five Instruments ............................................................................. 43
... 2.2 ... Controlling by Inventory Monitoring ............................................... 50
3 ... Inventory Analysis ... 51
... 3.1 ... Inventory Analysis Options ... 51
... 3.2 ... ABC Analysis with SAP ... 60
... 3.3 ... XYZ Analysis in the SAP System ... 81
... 3.4 ... Combining ABC and XYZ Analyses ... 83
... 3.5 ... Summary ... 98
4 Demand Planning and Forecasting ... 99
... 4.1 ... The Influence of Demand Planning on Inventories ... 99
... 4.2 ... The Bullwhip Effect ... 102
... 4.3 ... Optimization Potentials for the Forecast ... 104
... 4.4 ... Selecting the Forecast Method ... 140
... 4.5 ... Details of the Individual Forecast Methods ... 157
... 4.6 ... Running a Forecast ... 189
... 4.7 ... Forecast Accuracy and Alert Functions ... 206
... 4.8 ... Summary ... 231
5 Material Requirements Planning ... 233
... 5.1 ... Objectives of MRP ... 233
... 5.2 ... Requirements Calculation ... 235
... 5.3 ... Accumulated Balances ... 239
... 5.4 ... Order Calculation ... 241
... 5.5 ... Impact of MRP on Inventory ... 249
... 5.6 ... Tools for Selecting the Optimal MRP Parameter ... 258
... 5.7 ... Strategic vs. Operative MRP ... 260
... 5.8 ... Strategies for Make-to-Stock Production in SAP ERP ... 266
... 5.10 ... Strategies for Make-to-Order Production in SAP ERP ... 289
... 5.11 ... Consumption-Based Material Requirements Planning
Using SAP ERP ... 294
... 5.12 ... Requirements Strategies in SAP APO ... 303
... 5.13 ... VMI and SMI MRP Procedures ... 305
... 5.14 ... Potential for Optimization in Material Requirements Planning ... 327
... 5.15 ... Summary ... 334
6 Service Level and Safety Stocks ... 335
... 6.1 ... Relationship Between Stock and Service Level ... 335
... 6.2 ... Service Level ... 338
... 6.3 ... Replenishment Lead Time ... 366
... 6.4 ... Forecast Quality ... 373
... 6.5 ... Safety Stock ... 378
... 6.6 ... Safety Stock Planning in SAP APO SNP ... 404
... 6.7 ... Safety Stock Planning Using SAP APO CTM ... 436
... 6.8 ... Safety and Target Stock Planning in SAP APO PP/DS ... 440
... 6.9 ... Parameter-Dependent Safety Stock in SAP APO DP and GATP ... 446
... 6.10 ... Summary ... 449
7 Lot Sizes ... 451
... 7.1 ... How Do Lot Sizes Affect Stocks? ... 451
... 7.2 ... Stochastic (Static) Lot-Sizing Procedures in SAP ERP and
SAP APO ... 453
... 7.3 ... Deterministic (Periodic) Lot-Sizing Procedures in SAP ERP
and SAP APO ... 463
... 7.4 ... Optimal Lot-Sizing Procedures in SAP ERP and SAP APO ... 481
... 7.5 ... Restrictions in the Lot-Size Calculation ... 501
... 7.6 ... Selecting Lot-Sizing Procedures ... 503
... 7.7 ... Summary ... 506
8 Production ... 507
... 8.1 ... How Do Backlogs in Production Affect Stocks? ... 508
... 8.2 ... Why Do Backlogs Occur in Production Planning? ... 514
... 8.3 ... Reducing of Backlogs ... 519
... 8.4 ... Missing Parts Management in Production ... 535
... 8.5 ... Finite Planning and Optimization in SAP APO ... 547
... 8.6 ... Heuristics for Inventory Optimization ... 596
... 8.7 ... Alerts and Their Processing ... 607
... 8.8 ... Simulation and Comparison of Planning Results ... 610
... 8.9 ... Capable to Promise (CTP) ... 616
... 8.10 ... Embedding Superordinate and Subordinate Planning Levels ... 618
... 8.11 ... Best Practices for Using SAP APO PP/DS ... 622
... 8.12 ... Summary ... 623
9 Inventory Controlling ... 625
... 9.1 ... Why Inventory Monitoring? ... 625
... 9.2 ... Introduction to Logistics Controlling ... 626
... 9.3 ... The Information System According to Ehrmann ... 628
... 9.4 ... The Information System of the SCC ... 632
... 9.5 ... Problems with Data Collection ... 637
... 9.6 ... Important Inventory Key Figures ... 638
... 9.7 ... Tools for Inventory Analysis ... 652
... 9.8 ... Inventory Monitoring in SAP ERP ... 656
... 9.9 ... Inventory Controlling with SAP APO and SAP NetWeaver BI ... 660
... 9.10 ... Summary ... 678
Appendix ... 681
... A ... Literature ... 683
... B ... Author ... 691
... C ... SAP ERP Add-ons ... 693
... C.1 ... Forecast Monitor ... 693
... C.2 ... MRP Monitor ... 693
... C.3 ... Replenishment Lead Time Monitor ... 693
... C.4 ... Backlog Monitor ... 693
... C.5 ... Service Level Monitor ... 693
... C.6 ... Missing Parts Monitor ... 694