MRP Improvement in distribution center: to jump on

dynamic driven planning rulesIurii Moiseenko, system project manager, SAPDistribution center, FMCG+ supermarket retail chain12/10/16

What we need is 3 KPIs improvement Availability ->

Maximization of inventory turnover ->

Increasing of assortment - >Qwertyuiopo[asdfghjkl;’zxcvbnm,,.qwqwwertryuiopop[p[Adfghjkkll;L;zzxxccvvbnnmm,,../qwertyuiuioop[p[]’;lkjhgfdsazxcvbnm,.

DemandStock

How to reach thisIncreasing order regularity• increasing cross dock assortment• Increasing overall DC assortment • Increasing stock service level with decreasing

minimum order qty.

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Master data settings on Regular qualification ABC + XYX : • operation management strategy should depend

on dynamic characteristic rather than static and continuous update

From:

To:

KPI weekly monitoring From: - -- ----- - ------- ---------- - - - - - -To: ---- ---- ---- ---- ---- ---- ---- ---- ---- ----

IT project: Application improvement regarding users expectation

From: To:

Main change

Current (not past) article behavior should start to dictate planning settings in SAP

Derived KPI – Weekly monitoring1st level 2n level for weekly control Responsible (business

or service)

Availability Zero stock items qty. registration Business

Availability Availability itself by category Business

Availability Qty. incorrect order with wrong time order Service

Inventory turnover Deviation from target turnover Business

Inventory turnover Qty. change/deletion of orders Service

Inventory turnover Master data change request Service

Increasing assortment Average basket increasing Business

Increasing assortment Present DC assortment in chain assortment Business

Increasing assortment Auto order assortment coverage Service

Mosaic of settings Maximum target

stockMinimum target

stock Safety stock

Allocation table recalculation Demand planning Minimum order

calculation

Calendars re assignments

Cross-dock lead and release timing

assignmentsSafe lead time

Mosaic of articles ABC - by qty. revenue in full

assortment

ABC - by qty. revenue in sub category

XYZ - by qty in full

assortment

CPAR - Distribution method (cross, push, article driven,

recipient driven)

HML-Expired write-off risk

qualification

A/B/C A/B/C X/Y/Z H/M/L C/P/A

Matching article and setting mosaicsArticle characteristics (ABC, XYS, write-off risks) and settings option should be matched with usage stock management policy, as example:

Max Min Safety Demand AllocationMin order Safe lead Calendars Time releaseA A X L C x x x x x x x x

A A X L P x x x x x xA A X L A x x x x x x x

A A X L C x x x x x

A A X L P x x x x

A A X L A x x x x x

A A Y L C x x x xA A Y L P x xA A Y L A x x x x xB A Y L C x xB A Y L P x x xB A Y L A x x xB A Z L C x

B A Z L P x x x

High level plan of deploymentWork Responsible Support Accountable Deadline

Qualification matching and settings Business Service Business In PM plan

Master data update Service Business Service In PM plan

BI reports deployment for KPI Service Business Service In PM plan

Application settings: new order, MRP type, distribution indicators

Service Business Service In PM plan

Testing (test script and testing) Business Service Business In PM plan

Go-live deployment Service Service Service In PM plan

Initial support Service Business Service In PM plan

KPI monitoring Business Service Business In PM plan

Continuality MD update Service Business Business monthly

Project management Service Business Iurii M. In PM plan

Next stepsBusiness case validation and project plan authorization.