August 27, 2013

Material Master Design Workshop

2

Workshop Objectives

Current State

Material Master creation process

Material Type controls

Required Views by Material Type

Current ZSTK Data Issues

Future State

Field level discussion

Suggested Reports

POVs for Specific Fields

Next Steps

Agenda

3

Understand National Grid current material master processes for each material type

Discuss and document pain points and opportunities

Discuss field based requirements for each material type

Discuss future reporting needs

Identify and capture Governance, Security and Control requirements

Workshop Objectives

Current State

Material Master Creation Process

5

Material

Requestor

LOB Manager

IMWM Analyst

Buyer IMWM

Director Finance TDC

Receives automated notification of request

Performs review of request for fit and function

Provides additional information necessary for

record maintenance

User completes

Master

Data

Request

Form via

Communi-T

Receives forms for Create only

Performs reviews

according to

strategic

functions and

needs

Approval Workflow Form Request Data Entry

Receives a complete and

descriptive

Communi-T

Form and

loads into

SAP

Material Type Controls

6

Number assignment

Procurement Type

User departments

Field selection

Account determination

ZSTK (Inventory

Materials)

ZCAP (Pre-Capitalized

Materials)

ZBLS (Billing Services

Materials)

ZNST (Non Stock

Materials)

ZNBW (Non Valuated

Materials)

ZMPN (MPN Materials)

Control

7

Current State Required Views by Material Type

Data Level ZBLS ZCAP ZSTK ZNST ZNBW ZMPN

Basic Data and

Classification

Basic Data 1 X X X X X

Basic Data 2 X X X X X

Classification X X X

Sales Data

Sales org. data 1/2 X X X X

Sales/ General plant Data X X X X

Foreign Trade Export Data X X X X

Sales Text X X X X

Purchasing

Purchasing X X X X X

Foreign Trade Import data X X X X

Purchase order text X X X X X

MRP, forecasting

MRP1, 2,3,4 X X X

Forecasting X X X

IM/WM

General Plant Data1/2 X X X

WM view 1/2 X X

Accounting Accounting 1/2 X

ZSTK Design:

All views are maintained for ZSTK material type

There are several views which have no data maintained and are active for ZSTK material

type

Activating these views allows for incorrect data to be maintained in the material master

Recommendation:

Review which views in the material master should be active for ZSTK material creation

Current ZSTK Data Issues

8

Material Master Data Issue Business Impact

Material short text is incorrect/ incomplete Allows duplicates and data inconsistency in system

Materials with same MPN and MNFR Indication of duplicate materials in the system, unable to use material search functionality

Missing Purchasing Group Unable to determine which buyer group should process purchase order

MRP Type Relevant Missing Planned Delivery Time Delivery Date on Purchase Orders must be entered manually

Listed below are some of the critical material master data issues which were identified as part of the data remediation effort prior to project kick-off:

Future State

Field Level Discussion

10

Material Master View Field Category Discussion Points

Basic Data

Short Description Duplicate Short Description

Long Description Data Updates and Duplicate Check

Material Group Material Group Structure

Material Classification Classification Structure

Purchasing

MPN/MNFR Duplicate MPN/MNFR

MPN Profile MPN/MNFR search capability and CR

Purchase Value Key Tolerance Limit on GR

Purchasing Group Purchasing Group Structure

GR Processing Time Capture warehouse processing time

MRP 1

MRP Type Different MRP Types used

MRP Controller Required for relevant MRP Type

MRP ABC Indicator Ranking materials by MRP priority

Lot Size Matching lot size with contract amount

Safety Stock Inventory Stock outs

Planned Delivery Time Manual entry on PO if not required

Suggested Reports

11

Reports Description

Materials on Expired Contracts This report will list materials which exist on contracts with an end date in the

past or upcoming (within one month)

Materials Multiple Contracts List of materials which exist on more than one contract

Material Extension Report List of materials missing plant and/or storage location data

Duplicate Material Check List of possible duplicate materials based on key fields

Material Usage Report Shows whether material has been used in purchasing over the last six months

POVs for Specific Fields

ZSTK Material Short Description

13

Material Description Number of Occurrences

ORNG, 121

BRG, 110

BRG, BALL 88

PCKNG, VLV 82

BRD, PRNTD CIR 78

Impacts:

Buyers unsure of which material to select for purchasing

Search functionality for materials is significantly more difficult

Incorrect materials procured Potential for duplicate materials to exist in the

system

Recommendation:

Standardized material short description conventions need to be developed and loaded into SAP

Refer to legacy naming conventions to improve short description quality

Currently, there are 4000+ active ZSTK materials which have duplicate short descriptions in the system, the top 5 duplicated descriptions are shown below:

Material Long Description

14

Currently the Material Long Description is being used to store the most up to date purchasing information in the material master including:

Detailed description MPN MNFR

This field must be included in the process of checking for duplicate materials as the short description and the MPN number do not have the necessary data quality

However, the Long Description is not stored in an SAP table, making the duplicate material check extremely difficult

If data quality is improved in the short description and MPN fields, duplicate material checks can be carried out much more simply without the use of the Long Description

Material Classification

15

Classification of material aids in searching for materials, but there are 9 characteristics in generation class but only 3 of them are used

Impacts:

Material reporting based on material classification will not be complete

Search functionality for material will be restricted to the three classification values

Recommendation:

Review the current classification structure for opportunities to provide more characteristic data for

materials

Material Manufacturer/Part

Number

16

MPN Manufacturer Number of

Occurrences

136273 9100001944 262

134441 9100002703 136

136511 9100003799 119

136267 9100001777 105

1195678 9100003073 105

Impacts:

Search functionality for materials is significantly more difficult

Potential for confusion when communicating what material is needed on the PO

Recommendation:

Determine root cause for duplicates and cleanse data

Create validation to warn user of potential duplicate when creating new material

Currently, there are 6000+ active ZSTK materials which have duplicate Manufacturer/Part Number in the system, the top 5 duplicated descriptions are shown below:

Material Purchasing value key

17

Impacts:

No system control over how much warehouse can receive

Errors in warehouse receipt process are more likely Quantity received can differ from expected quantity,

negatively impacting planning process

Recommendation:

Agree to an acceptable over delivery tolerance and implement it in material master

Nearly all Materials have been created to allow unlimited over delivery. There are also no reminders or under/over delivery tolerance maintained.

Material Purchasing Groups

18

Issues with Purchasing Group Design and Use:

Currently, there are 117 Purchasing Groups configured, however only 104 have been used in purchasing

4 Purchasing Groups have a description of Buyer (see right)

Multiple users have created purchase orders using one purchasing group. This does not match the purchasing group design (one purchasing group per user)

Recommendations:

The unused purchasing groups should be deleted

Purchasing Group descriptions should be updated with more detail to ensure that incorrect purchasing group data is not used on POs

A standard policy needs to be set to determine what users are assigned to each purchasing group

MRP Type

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MRP Type MRP Description # of Materials

ND NO MRP 139,677

Z1 Auto ROP + ARQ Only 1

ZC Auto ROP + Demand in LT 2

ZH Manual ROP + Demand 2

ZI

Manual ROP + Demand in

LT 16,494

ZJ Min/Max Only 42,547

ZM Capacity Planning 295

ZN Demand Only 16,879

ZO Demand only in LT 24

There are 9 different MRP types configured in the system, three of these MRP types are used only for 1 or 2 materials (in plants):

Impacts:

The materials using these MRP types may be incorrectly planned

These MRP types may be used incorrectly for new materials created in the system

Recommendation:

These three MRP types should be evaluated for necessity and deleted if obsolete

Next Steps

Next Steps

21

Continue discussion on remaining material types

Review and align on future state design for material master

Identify and finalize design objects to achieve future state

Appendix

Material Classification Details

23

General Inventory Class Generation Class

25 Characteristics assigned to General

Inventory Class

9 Characteristics assigned to Generation

Class

Most of the characteristics have no values

assigned in the material master Need Clarity

6 Characteristics have not been used so far