SAP Mental Notes

Openbravo ERP : Moving into Open Source ERP

2010-08-28T07:25:30Z

Openbravo ERP instead of SAP? The past six years I worked with much pleasure in the SAP arena. I had the opportunity to work together with some of the larger corporations to help them achieve their ambitions. Part of my experiences is written down in this blog. Many people visit this blog on a daily basis and some of them leave me some wonderful messages. My contributions in last few months diminished, and will come to a total stop as of today.

The last two years my interest in the open source movement increased when I learned of the existing ERP alternatives at that time. As an ERP professional I was interested in to what extent these “free” software alternatives could actually fulfill commercial cutomers’ needs. Out of the ERP alternatives available I quickly focused on Openbravo ERP. Barcelona based Openbravo is the commercial organisation behind Openbravo ERP and Openbravo POS. In comparison with their open source ERP competitors Openbravo’s partner driven business model, heavy financing and marketing efforts instinctively won me over as the most professional alternative available. But what about the functionality of the software? According to some sites open source ERP is weak and I was admittedly a bit sceptical. As the English say: “the proof of the pudding is in the eating”. Hence I needed to give it a try.

Through documentation and experimenting I learned that installation of the Openbravo ERP stack is child’s play (i.e. if you take at least some pleasure from tweaking and fiddling your system). The application supports all fundamental processes in a business: Procurement, Sales, Production, Warehouse, Project/Service Management and off course Finance is integrated into the main processes. I was impressed by the basic functionality. Coming from SAP you do have to adjust expectations. In my opinion SAP is the Porsche when it comes to all integrated functionality and its price. Openbravo ERP is more like a Honda: tuned into a specific market need and way more affordable. That is why Openbravo aims at Small and Midsize Enterprises.

Openbravo ERP Sales Order entry

I was considering making a change and move into this new business opportunity. At that time I just moved my career to being a free-lance SAP Logistics consultant. Moving towards open source ERP, I had to have a good feel about the people behind the organisation. Early 2008 I visited an Openbravo partner event in Barcelona. There I learned a lot about Openbravo’s capabilities as a professional organisation and its management. These people definitely take the opportunity serious, and at the same time they are very approachable. I left Barcelona with an excited feeling of “opportunity”. I couldn’t do this by myself: I needed to find a suitable business partner.

Openbravo Team

While exploring Dutch networks for potential partners, in the meantime I kept on doing my SAP tricks with great pleasure: ERP and process improvement, the combination of social interaction and technical configuration, is just what I do best. Only this summer I ran into the suitable partner I felt I needed to start this business. GlobalOrange in Amsterdam is offering application development and outsourcing service to SME. An extension of these services to ERP business is a perfect match. So did my partners think. Hence from now on I will be focused on making Openbravo ERP a success in the Netherlands and Belgium.

My break-up with SAP is not a dirty one. We had a great time together and who knows where we meet again. But as it is the times they are a-changing.

…this blog will be up for as long people will end up here and find the content useful…

No related posts.

Distribution of Planned Independent Requirements in MRP

2009-07-23T07:33:42Z

Distribution of planned independent requirements can be key in getting your MRP results exactly right. This post is about how to break down your Sales and Operations Plan and schedule it for MRP. E.g. Assume your SOP is planned in monthly buckets, but you plan your production in weekly buckets and you use forward scheduling for your production orders. In this case you want independent requirement quantities show on the first day of the week. Another example: since you plan production on a daily basis you want your monthly forecast spread out on a daily basis throughout the month. Distribution of planned independent requirements can help you achieve this.

First you define the distribution function itself.

Production > Production Planning > Demand Management > Planned Independent Requirements > Automatic Split > Distribution Function for Automatic Split > Define Distribution Function

Distribution function

Here you specify the percentage of the quantity that needs to be available or released after a certain percentage of time. You can e.g. determine that total quantity should be available at the beginning, at the end or spread over 5 time points (like work days). To reach the goal of the first example you determine that after 0% of time has passed, 100% of quantity should be available (see below function S10).

Next step is to define the distribution strategy.

Production > Production Planning > Demand Management > Planned Idnependent Requirements > Automatic Split > Distribution Function for Automatic Split > Define Distribution Strategy

Distribution strategy

This let’s you determine either of two things:

1. spread the quantities exactly over the points in time defined in the previous step, or;

2. smooth the quantities along the time axis according to your function.

Imagine 2 time points in a month (20 working days) where 80% is available after 20% of production time and 100% after 100%. Using the second strategy you can spread the 80% over the first 4 days of production. Using the first strategy the total 80% will become available only after four days. To achieve this you also need to determine the period split for the strategy.

Production > Production Planning > Demand Management > Planned Independent Requirements > Automatic Split > Define period split for automatic split

Automatic split

Here you define how many of the first few weeks need to be split into daily quantities and/or how many of the first few months need to be split into weekly quantities. You then decide how you are going to spread your quantities. You decide whether your distribution strategy applies to the weeks and/or to the months by assigning the strategy two the last two columns.

The only thing that is required as a last step is to assign the period split to an MRP group or independent requirement version. When you opt for the last the periods will be split at the time of copying the demand plan from SOP or Flexible Planning to the Demand Management tables (MD61).

IMG paths for assigning split

You may need to try different settings in order to achieve what you need, especially if your require more complex distributions.

Kowboyz BV / CC BY-ND 3.0

MC44 – Inventory Turnover (2)

2009-07-23T07:17:51Z

In MC44 – Inventory Turnover (1) I explained the concept of Inventory Turnover and how it can be used. In this post I will explain the transaction itself. The transaction is mostly self-explanatory, but there is one option of particular importance.

When you go to transaction MC44 you will see the below screen:

Transaction MC44 - Inventory Turnover

Like I said, most settings are easy to understand since they mostly concern filters on organisational unit (Sales Organisation, Purchasing Organisation, etc.) or filters on materials (material group, material type, etc). Of specifc importance is the setting “Daily usage” in the section Analysis period.

Daily usage unchecked: the report will use consumption quantitiesper period as registered in the material master. This means that if you use period Month for a material you can not analyze in shorter period intervals than Month. This should be no issue since Inventory Turover should be calculated over longer periods of time (minimum 6 – 12 months).

Daily usage checked: instead of the consumption values in the previous option the daily consumption values are used as you see them in report MB51 – Material Documents. I recommend this setting if you want to analyze the calculation of SAP and to find out what movement type are included. The runtime of the report is increased.

So what movement types are included? You can find the included movement types in the movement type configuration in MBJJ. Here you can toggle the consumption parameter. This is a fundamental setting that also influences forecasting. Forecasting will use consumption values of a material. When you decide you do want to use goods issue to production order for forecasting, but not for calculation of inventory turnover, you have a problem. This cannot be done. You should calculate either value manually.

Conclusion: calculate Inventory Turnover over a longer period of time 6 to 12 months. Daily values are not relevant, unless you want to analyze results for your understanding.

Kowboyz BV / CC BY-ND 3.0

Forecasting – Copy history

2009-04-06T12:51:50Z

In forecasting it is fair to say that most forecast models only sensibly apply to high volume materials and that for low volume materials (although specific models exist)more manual intensive forecasting practices apply. A lot of customers prefer to use historical data one on one for the future predictions: May 2008 – 120 boxes sold hence May 2009 -120 boxes sold, June 2008 – nothing sold hence June 2009 also nothing sold, and so on. In a lot of situations it is desirable to manually adjust some of the forecast values. So if you wish to use last year’s actuals as your forecast for the upcoming year you can do the following:

This method can be applied in SOP/Flexible Planning and Material Forecasting. Take the following steps:

1. Choose (Winter’s) Seasonal Model.

2. Use one season as your history (e.g. season = 12 months, historical periods = 12 months)

3. No further initialization periods

Using these settings the last year’s pattern will be copied to the next year.

In SOP/Flexible Planning there is also the option ‘Copy history’. This will copy the consumption values (goods issues that are consumption relevant) to the future. However, when you are using a custom forecast field in Flexible Planning like e.g. ‘Invoiced quantities’ you are not interested in goods issues. You want to copy the ‘Invoiced quantities’ actuals. The method above then fits your requirement.

Find below how you can set the parameters in Flexible Planning in your forecast profile (MC35):

Forecast profile settings in MC35

Kowboyz BV / CC BY-ND 3.0

Consumption-based planning and MRP

MC44 – Inventory Turnover (1)

2009-07-20T15:55:15Z

Inventory Turnover is a prominent KPI in a lot of businesses. This post will give you some understanding on the concept. In another post I will give details on how the SAP report MC44 can be used to measure inventory turns and what data is used to calculate this ratio.

Formula

Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory at value

If you are not familiar with the term Cost of Goods Sold, this is the cost of your revenues.

Average Inventory is measured in value and not in volume.

If you divide both elements you know how often you sold you’re average inventory. “So what?” you ask. I will explain next.

Concept and use

I will present you with two business scenario’s to point out the significance of the Inventory Turnover ratio.

Scenario 1

You sell one product. You invest 10.000 EUR as starting stock. You run your business for one year and at then end of the year you are completely sold out. Your revenue accumulates to 12.500 EUR. For simplicity sake your gross profit is 2.500 EUR (12.500 – 10.000).

Revenue = 12.500

COGS = 10.000

Average Inventory = 5.000 (10.000 starting stock + 0 end stock / 2 = 5.000 average stock)

Inventory Turnover = 2 (10.000 / 5.000)

ROI = 50% > 2.500 (R-C) earned out of 5.000 (A)

Scenario 2

Again you sell one product. But this time you invest 5.000 EUR in starting stock. After 6 months you sold your stock and you replenish your stock again for 5.000 EUR. After another 6 months you’re sold out. Your revenue is again 12.500 EUR. Your gross profit is 2.500 EUR (12.500 – 5000 – 5000).

Revenue = 12.500

COGS = 10.000

Average Inventory = 2.500 (5.000 starting stock + 0 end stock / 2 = 2.500 average stock)

Inventory Turnover = 4 (10.000 / 2.500)

ROI = 100% > 2.500 (R-C) earned out of 2.500 (A)

Conclusion

Looking at the two scenarios the increased inventory turnover means increased operating efficiency: your ROI increased from 50% to 100%! Obviously you invested half the money in scenario 2 to achieve the same profits.

This doesn’t mean businesses should try to achieve a maximum inventory turnover per se. Achievable ratios differ per material type (finished goods, semi or raw), but also per moving speed (ABC class). Last but not least the type of industry very much determines what ratio you can achieve: process industries typically have higher inventory turns than, say, heavy equipment manufacturers.

You can find out what the industry standards are by purchasing metrics from data suppliers like Reuters or Gartner. This will give you an idea how well you are doing compared to your competitors. Or you can just use inventory turnover as an internal benchmark. In this case you periodically review the inventory turnover for different sets of materials and set targets that you wish to achieve.

Inventory turnover is typically a financial measurement (see relation to ROI). In order to improve the ratio, close cooperation with procurement/production planning is required, since they directly influence the stock levels.

Again, as with many KPIs and reports don’t judge based on this value alone, but use other stock controlling reports to minimize your inventory and still have a sound service level.

Finally you can read an interesting business case on how inventory turns made Dell a leader in it’s business.

Kowboyz BV / CC BY-ND 3.0

MD04 – Export planning to Excel

2010-08-20T09:19:20Z

Sometimes a planner wishes to share the planning status of a particular material with colleagues or partners that are not SAP users. In this case it is useful to export the planning overview to Excel and perhaps pimp the lay-out with some colorful headers.

To do this -from within MD04 or MD07- go to Menu > List > Variable Print.

MD04 - Variable Print

Immediately a new overview opens up that may look less attractive than the overview you are used to. On the screen ‘Print list – variable’ you can change the lay-out and save it as a variant like you are used to in standard SAP reporting.

MD04 printlist lay-out

To get the best Excel results export the report directly to an Excel table, as opposed to first store it as a local file and then open it in Excel. This way the lay-out is optimized for direct filtering and sorting.

This is all there is to it. Sometimes SAP life is that easy.

Kowboyz BV / CC BY-ND 3.0

Batch determination for IM

2009-02-07T11:37:26Z

This blog offers a quick guide on how to use standard SAP Batch Determination for a material transfer. For an internal goods movement we need SAP to pick the batch from stock with the earliest Shelf Life Expiration Date (SLED). We don’t want our fresh products terminate themselves from stock…

1. For this we will be using standard IM search strategy ME001 – Standard Search Procedure.

IMG > Logistics > Batch Management > Batch Determination and Batch Check > Batch Search Procedure Definition > Define Inventory Management Search Procedure

IM Search Procedure

The search procedure consists of three condition types that is plenty to us. We want the determination rule to be activated when we use Movement type 311 (Mvt from SLoc to SLoc) in Plant X for only a specific material. ME01 condition seems to fit this purpose.

2. Now we need to activate the search procedure for the movement type, otherwise it will not even begin to look for a determination procedure in the first place.

IMG > Logistics > Batch Management > Batch Determination and Batch Check > Batch Search Procedure Activation and Check Activation > Allocate IM Search Procedure/Activate Check

Activate procedure

We add the Search procedure to movement type 311 and check the check box so that manually entered batch codes are validated as well.

3. Next we need a sort rule to be able to sort batches on SLED.

IMG > Logistics > Batch Management > Batch Determination and Batch Check > Define Sort Rule

Sort rule

For the rule we use standard Batch Characteristic LOBM_VFDAT. This is the SLED. We need earliest batches first so we choose ‘Ascending’.

Now we did all necessary customizing. It may be necessary to create batch classes with classifications if you are not already using this. If your products are batch managed already, your materials should already be assigned a batch class in the material master. This class we will also be using in the batch determination.

4. The last step is to create a search strategy, much like message determination for document output (if you never did this, then never mind this comparison).

SAP Menu > Logistics > Central Functions > Batch Management > Batch Determination > Batch Search Strategy > For Inventory Management > MBC1 – Create

We will use strategy type ME01 and key combination Movement Type/ Plant and Material. Remember that we want the search procedure only to work for one material at time of goods transfer in one plant. If you want you can extend the procedure to all materials for movement type 311. In this case choose key combination: Movement Type/Plant. It’s that easy.

MBC1 - Create Search Strategy

Here we actually enter the criteria when the batch determination should be activated: movement 311, material MRP and plant 3000. You can choose settings with regards to batch splits and whether determination should occur in dialogue mode or background. For details F1 your way through these options.

Last but not least: enter Selection criteria and Sort rule by pressing the buttons in the task bar. For selection criteria you can e.g. say SLED > 01.01.2009. It is a minimum requirement that the procedure needs. Be selecting a SLED date in the past I’m assuming that all batches are in scope (at the same I assume that expired products are taken off the shelf in time so I will not use it in my delivery process).

I will use the sort rule I created in the previous step: sort by SLED.

That should do it.

Kowboyz BV / CC BY-ND 3.0

Dead stock report – MC50

Unblock SD Documents

2009-02-04T20:52:57Z

This post is an extension to a previous post on Credit Checks exceeded. When you are in a testing environment it is common that it’s difficult to quickly process sales orders and/or deliveries because the credit check is exceeded for a customer. Credit is building up, since so many sales orders and deliveries are entered but are usually not going through the whole process including payment processing. To quickly clear a blocked order got to transaction VKM1.

VKM1 - Blocked SD Documents

In the main screen enter a common criterion like Credit account (usually sold-to) and hit the execute button (F8). In the report screen that follows, select the document to be unblocked and press the green flag button followed by saving the approval. Now you can continue processing the order or delivery.

Kowboyz BV / CC BY-ND 3.0

SQVI – Create quick report

2009-03-01T07:07:26Z

In an earlier post I promised to give a quickguide to creating a query in SAP based in transaction SQVI. I’m going to show you how you can quickly build a custom report for reporting Sales Schedule Lines based on different filter criteria and multiple tables (VBAK, VBAP and VBEP: header, item and schedule line data resp.):

1) Go to transaction SQVI: In the section ‘Quickviews for …’ you may see some prepared reports already. Since you are new to this it is likely to be empty. Since we are going to create a new report enter a name for the report in the Quickview name field and press < Create>.

SQVI - Main screen

2) In the selection window enter descriptions and choose ‘Table join’ as ‘Data source’. This means we are going to connect and use multiple tables. Press <Enter> to continue.

3) In the screen ‘Choose data source’ press the ‘Insert table’ button. In the window that pops up enter the name of the table that you need.

SQVI - Add table

4) Repeat the previous step for all required tables. Your screen will now look like below:

SQVI - Tables

5) Press ‘F3′ to go to the configuration screen. In the left side of the screen you can select per table which fields are for selection and/or list purpose. E.g. if you only select a field as ‘List field’ it will show up in the report results, but will not appear in the selection screen of the report as a filter criterium. For the header I choose: document number, doc date, sales organization, distribution channel and sold-to party (all list and selection). On item level I select: Material Number and Reason for rejection (to be able to exclude rejected lines). Both List and Selection. For Schedule I pick: Item, Schedule Line, Schedule line category, Schedule line date and Confirmed qty. Only Schedule line category and date both List and Selection. The others only List. Now your screen will look like below.

SQVI - Fields selected

6) Now it’s time to test drive your report! Press <Execute>. It takes a short time for SAP to build te report. You are taken to the selection screen of the report. Now it is important that you have an idea of what data you are going to find. Enter filter criteria based on this idea. I mention this because you need to validate the data you will be presented in the report. Do not just accept the quantities. Analyze the results and if the numbers are off find out why and adjust your report’s filter criteria and/or add extra filters to remove redundant data.

SQVI - Report

7) If you are satisfied with the quality of the report save it for future use. It is possible to link it to a transaction code and make it accesible for users through authorization. I will post a guide on this in the future.

Kowboyz BV / CC BY-ND 3.0

Test standard LIS analyses with different source versions

2009-01-14T14:39:22Z

There are wonderful reports available in standard SAP’s Information Structures (E.g. MCxx reports). It can be so cruel though when data gets corrupted. You usually end up comparing report figures with whatever reasonable value you find elsewhere in SAP. If you want to be sure about the Information Structure’s reliability it is worthwhile to update an infostructure (say S021 – Production Order), store it under a temporary version ‘&(1′, and finally call this test version in a report that default uses version ’000′.

To call up another version than ’000′ go to System > User profile > User parameters and enter the parameter ID ‘MCR’ with the value ‘X’.

Parameter MCR

Now if you call up a standard analysis like MCP3 – Production Order Analysis a new field is visible for version selection. See picture below.

MCP3 - New version field

The major benefit of this procedure is that you don’t have to backup/delete current production data in version ’000′.

It is also possible to compare the current version ’000′ with the new test version going to Menu > Edit > Comparisons > Planned/Actual…

Kowboyz BV / CC BY-ND 3.0

No related posts.