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Balance the art and science of materials planning! Learn how to use SAP ERP to calculate what, when, and how many items are required for production with this comprehensive guide. From portfolio management and policy setting to exception monitoring and inventory optimization, you'll see the complete manufacturing picture that materials planning paints. Once implemented, evaluate your materials planning to make improvements, and move your materials planning from routine to strategic!

Highlights include:

• Supply chain management
• Portfolio management
• Automatic and periodic policies
• Exception monitoring
• Inventory optimization
• SAP ERP
• Inefficiencies
• Key performance indicators
• Value streams

Materials Planning with SAP: Implement, customize, and use SAP ERP for materials planning. Evaluate and monitor your materials planning process. Model your materials planning calculation using simulat

PART I ... Materials Planning Basics ... 15



1 ... Materials Planning Basics ... 17



1.1 ... The Process of Materials Planning ... 18

1.2 ... The Materials Controller ... 21

1.3 ... Strategic and Tactical Materials Planning ... 23

1.4 ... Portfolio Segmentation for Decision Making ... 29

1.5 ... Lean and Agile Supply Chains ... 37

1.6 ... Summary ... 43



2 ... The Past and the Future of Materials Planning ... 45



2.1 ... Past Problems with Materials Requirements Planning ... 45

2.2 ... Today's Problems with Material Requirements Planning ... 52

2.3 ... A Word on Customizing ... 53

2.4 ... The Old Paradigm and the New ... 55

2.5 ... Future Potential in Operations, Supply Chain, and Materials Management ... 60

2.6 ... Planning the Future with an Unconstrained Supply Plan ... 64

2.7 ... Summary ... 71



3 ... Building Blocks of Materials Planning ... 73



3.1 ... Modeling ... 74

3.2 ... Strategic and Tactical Materials Planning ... 90

3.3 ... Scientific Theories and Global Integration ... 94

3.4 ... Summary ... 99



PART II ... Materials Planning in SAP ERP ... 101



4 ... Principles of Effective Materials Planning ... 103



4.1 ... Supply Chain Strategy and Performance Boundaries ... 105

4.2 ... Developing User Guidelines and a Policy Playbook ... 115

4.3 ... Setting Control Limits ... 117

4.4 ... The Competent Materials Controller ... 120

4.5 ... Summary ... 124



5 ... Prioritized Portfolio Management ... 125



5.1 ... Portfolio Basics in SAP ... 125

5.2 ... Responsibilities and Accountability ... 132

5.3 ... Using Buckets ... 137

5.4 ... Monitoring Your Portfolio ... 138

5.5 ... Summary ... 149



6 ... Automated and Periodic Policy Setting ... 151



6.1 ... Employing Strategies and Policies in an Enterprise ... 152

6.2 ... Segmenting a Materials Portfolio ... 154

6.3 ... Replenishment Policies ... 161

6.4 ... Planning Policies ... 208

6.5 ... Setting Policy ... 243

6.6 ... Using the SAP Add-On Tools for Segmentation and Policy Setting ... 245

6.7 ... Summary ... 251



7 ... Intelligent Exception Monitoring ... 253



7.1 ... Exception Monitoring in SAP ERP ... 254

7.2 ... Building a Monitoring System for Exceptional Situations ... 274

7.3 ... Using the SAP Add-On Tool MRP Exception Monitor ... 295

7.4 ... Summary ... 302



8 ... Sustainable Inventory Optimization ... 305



8.1 ... Performing Inventory Analysis ... 308

8.2 ... Employing Inventory Strategies with Meaningful Key Performance Indicators ... 351

8.3 ... Making Inventory Optimization Sustainable ... 360

8.4 ... SAP Add-On Tools for Inventory Optimization ... 365

8.5 ... Summary ... 372



PART III ... Evaluating, Measuring, and Improving Materials Planning ... 375



9 ... Key Performance and Supply Chain Indicators ... 377



9.1 ... The Balanced Scorecard ... 378

9.2 ... The Supply Chain Performance Index Framework ... 381

9.3 ... Putting It All Together ... 399

9.4 ... SAP Add-On Tools for Performance Measurement ... 402

9.5 ... Summary ... 406



10 ... Traditional Inefficiencies ... 409



10.1 ... Dealing with an Unmanageable Amount of Exception Messages ... 411

10.2 ... An Isolated Sales Department ... 414

10.3 ... A Buyer without a Cause ... 421

10.4 ... Fiddling with Policy ... 421

10.5 ... Capacity Planning ... 422

10.6 ... Using Sales Orders for Intercompany Stock Transfers ... 423

10.7 ... Chasing Demand ... 426

10.8 ... Hiding the Buffer ... 427

10.9 ... The Reorder Point Dilemma When Sourcing from Another Plant ... 428

10.10 ... The Hang-from-the-Ceiling Strategy ... 429

10.11 ... Summary ... 430



11 ... Improvement and Optimization Programs ... 433



11.1 ... Benchmarking the Current State ... 434

11.2 ... Developing Improvement Initiatives ... 443

11.3 ... Measuring Progress ... 446

11.4 ... Summary ... 449



PART IV ... Modeling Materials Planning ... 451



12 ... Scientific Modeling of the SAP Supply Chain ... 453



12.1 ... Operations Management and Science ... 455

12.2 ... Systems Thinking ... 460

12.3 ... Factory Physics ... 469

12.4 ... SAP Value Stream Mapping ... 477

12.5 ... Summary ... 484



13 ... Examples from Industry ... 487



13.1 ... Continuous and Sustainable Optimization at Tennant Company ... 487

13.2 ... Plant Transformation at ASEA Brown Boveri ... 496

13.3 ... A Model for the Process Industry from Bellisio Foods ... 501

13.4 ... Lean Materials Planning with SAP at Kraft Foods ... 504

13.5 ... Summary ... 505



14 ... Conclusion and Outlook ... 507



... Appendices ... 509



A ... Bibliography ... 509

B ... The Author ... 511



... Index ... 513