s55 scpm20 bpp en xx

SAP BO SCPM 2.0

January 2012

English

Supply Chain Performance Management Primary Process (S55)

SAP AGDietmar-Hopp-Allee 1669190 WalldorfGermany

Business Process Documentation

SAP Best Practices Supply Chain Performance Management Primary Process (S55): BPD

Copyright

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Content

1 Purpose.................................................................................................................................. 5

Business Challenges:................................................................................................................. 5

Key Product Features:...............................................................................................................5

Components of the Solution:......................................................................................................5

Business Benefits....................................................................................................................... 6

Adoption of SCOR...................................................................................................................... 6

SCPM Data Model.....................................................................................................................7

2 Prerequisites.......................................................................................................................... 8

2.1 Master Data and Organizational Data.............................................................................8

2.2 Roles............................................................................................................................... 8

3 Process Steps........................................................................................................................ 9

3.1 Scenario Overview..........................................................................................................9

3.2 Evaluate Performance of the supply chain, gain visibility into supply chain data and to take action................................................................................................................................ 13

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Supply Chain Performance Management Primary Process

1 PurposeThe SAP® BusinessObjects™ Supply Chain Performance Management rapid-deployment solution helps companies make their supply chain more effective and responsive in the face of complex and fast changing market conditions. By focusing on the right process metrics, companies can track performance, diagnose bottlenecks, and uncover opportunities. This way, companies can take informed action towards improved supply chain performance. Enhanced supply chain performance will in turn improve financial performance by reducing costs, increasing working capital, and strengthening customer loyalty.

SAP BusinessObjects Supply Chain Performance Management is part of SAP BusinessObjects Enterprise Performance Management solutions – a comprehensive set of solutions that help your company capitalize on the value of your existing data assets. The solution can make your enterprise more agile – with the greater organizational alignment, visibility, and confidence you need for optimal control and competitive advantage. The solution is built on a proven intelligence platform, and is designed to integrate smoothly with SAP Business Suite software. This lets you maximize business profitability, manage risk and compliance, and optimize your corporate systems, people and processes.

Supply Chain Performance Management provides supply chain executives with a holistic view of their entire supply chain, including, planning, sourcing, manufacturing, operations and logistics. The application allows organizations not only to measure and monitor various supply chain metrics, but more importantly, allow them to understand the co-relation between these metrics and how changing one metric impacts the others in a positive\negative way.

Business Challenges:

Misaligned targets due to lack of understanding of the impact of supply chain activities on enterprise performance

Lack of timely visibility into end-to-end operational processes such as order to cash

Daily surprises and firefighting due to lack of proactive insights

Key Product Features:

Business content – Comply with leading frameworks such as the supply chain operations reference (SCOR) model.

Data extraction and transformation – Access data and gain insight more quickly, thanks to pre integration with transactional systems and pre calculation of metrics.

Root cause analysis and reporting – Produce more useful reports with semantically consistent navigation across information.

Impact analysis – Qualify relationships between supply chain metrics.

Metrics management – React quickly to changing market conditions by readily defining or refining metrics and threshold values.

Closed loop collaboration - Allows users in the problem resolution process by creating various supply chain improvement initiatives, assign owners, assign activities to various stake holders and monitor the developments.

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Components of the Solution:

Strategy Management is used to define supply chain strategy, create metrics models, and manage metrics. It enables users to:

Define supply chain strategy and align it with corporate strategy using scorecards.

Define flexible, hierarchical supply chain metrics models with out-of-the-box support for SCOR®-based models

Set and cascade metrics targets

Assign accountability for metrics

Manage metrics using an integrated metrics management framework

Impact Analysis is used to define and view relationships between metrics. It enables users to:

Define relationships between metrics

Visualize relationship between metrics

Understand impact of supply chain metrics on financial and other supply chain metrics

Operational Analysis is used to view the entire supply chain as scorecards, dashboards, and reports. It enables users to

Gain visibility across the supply chain network

Perform ad-hoc analysis – drill down, slice & dice, cause & effect capabilities

Perform root-cause analysis to uncover issues

Access out-of-the-box, role-based content – scorecards, metrics, dashboards, reports

Create flexible and customizable analytical scenarios

Take advantage of end-user authoring capabilities – report, dashboard creation

Business BenefitsSAP BusinessObjects Supply Chain Performance Management is a best-in-class supply chain solution that focuses on both effectiveness and efficiency. As a result, you can:

Identify and handle bottlenecks proactively

Streamline supply chain operations

Reduce supply chain risk

Improve financial compliance and control

Reduce supply chain costs and optimize cash flow

Gain full visibility into business processes

Adoption of SCORSCPM adopted SCOR (Supply Chain Operations Reference) model as its base to prepare its hierarchical relationships of various KPIs of Supply Chain. The SCOR model provides a unique framework that links business process, metrics, best practices and technology features into a unified structure to support communication among supply chain partners and to improve the effectiveness of supply chain management and related supply chain improvement activities. Based on SCOR model SAP SCPM delivers eight scenarios, they are:

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C2C (Cash to Cash cycle time) COGS (Cost of Goods Sold) POF (Perfect Order Fulfillment) SCMC (Supply Chain Management Costs) OFCT (Order Fulfillment Cycle time) VOF(Vendor Order Fulfillment) ODM (Other Diagnostic Metrics)

All these scenarios are discussed in detail in the subsequent sections. Apart from all these scenarios, ODM (Other Diagnostic Metrics) is another scenario which consists of all the diagnostic metrics of supply chain management which helps the user to get an excellent insight into the supply chain performance management.

SAP SCPM loads relevant data from heterogeneous data sources and aggregates it in a SAP NetWeaver BI-based data model. The data can then be analyzed via a rich internet application style Web client.

SCPM Data ModelSCPM Data Model is based on NetWeaver BI which consists of six layers as follows.

Data source layer: In this layer, required raw data is extracted from transactional systems (OLTP) and stored in the form of flat files.

Inbound data source: In this layer, the raw data from data source layer is processed for currency conversion, unit conversion and intermediate measures required for the calculation of final metrics, and the resultant data is stored in the form of a table in DSOs (Data Store Objects). The granularity of data is at operational level.

Integrated data store: In this layer, the final metrics or measures required for transactional/operational reporting are calculated and stored in the form of a table in DSOs (Data Store Objects).

Data Mart Layer: This layer contains aggregated data for analytical reporting. The final metrics or measures required for calculating KPIs (Key Performance Indicators) are calculated and stored in the form on Star Schema in Info Cubes and aggregated based on various dimensions.

Multi Provider Layer: This layer is a logical view or combination or two or more info providers of previous layer which acts as a single info provider and provides the flexibility of calculating the final metric from two or more info providers.

BI Layer: This layer consists of queries for reporting. All the queries are based on any of the info providers of the previous layers. The KPIs can be calculated at this level too, but, calculation happens at runtime i.e. no storage of calculated values.

In SCPM, Each KPI (Key Performance Indicator) can be analyzed with respect to its target and benchmarks. Hence, technically each KPI consists of three metrics, namely actual, target and benchmark.

Actual:OLTP (Online Transaction Processing) data after passing through the rich ETL layer of SCPM becomes handy to the analyst. This data which is loaded into the regular key figures is known as the actual data.

Targets:SCPM uses SAP NetWeaver BI planning framework for setting targets to the various

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SCOR KPIs. Hence the targets can be set using a BEx Analyzer using the workbooks supplied by SCPM and then they are stored in Planning Cubes (Real-time Cubes) in the BI system.

Benchmarks:The industry level benchmark can be set for the KPI using SAP NetWeaver BI platform. The actual, target and benchmark data can be compared with each other to better understand the organization’s performance.

2 Prerequisites

2.1 Master Data and Organizational Data

2.2 Roles

UseYou need to assign the following roles to test the scenario in the SCPM system.

Prerequisites

1. Ensure the following roles have been assigned under your user name in transaction SU01 in SCPM ABAP BW system. For more information about the delivered roles, see SAP Note 1556649

/POASCPM/SAP_SCPM_ADMIN

/POASCPM/SAP_SCPM_DM

/POASCPM/SAP_SCPM_RUNTIME

/POASCPM/SAP_SCPM_SUPER_ADMIN

/POASCPM/SAP_SCPM_USER

SAP_XA_SCPM_TECH

SAP_XSA_DATA_MANAGER

2. Set the user language in BI Java with the following steps

Logon BI Java http:< BI Java server>:<BI Java Port>, for example http://vmw4650.wdf.sap.corp:50000.

Choose User Management.

Enter you user name and choose Go.

Select the item for your user and choose Modify to switch to change mode.

Under General Information tab page, you can enter the language key accordingly.

3. Enter the user Preference in SCPM App with following steps:

Logon to SCPM App link with SSO:

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http://vmw4650.wdf.sap.corp:50000/


http://<Netweaver Java Host Name>:<web disptacher http port>/sap/fcprt?app-config=scpm.For example http://vmw4675.wdf.sap.corp:50000/sap/fcprt?app-config=scpm (It requires input for user name and password.

After you login SCPM, choose Preference on the right hand top corner.

In the User Preference screen, choose General Language and Region, enter your language, time, date and number format.

Check also other folders for your preference settings, choose OK.

3 Process Steps

3.1 Scenario Overview

3.1.1 Cash to Cash Cycle Time: (C2C)Functional Overview:

The time it takes for an investment made to flow back into a company after it has been spent for raw materials. In other words, number of days between payment of raw material and payment flowing back to company against the finished product. It is an indicator that how long your working capital is tied up to manage your supply chain. For services, this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services.

Cash to Cash cycle time enables the finance executives to monitor and track the performance of the operational cash flow. The Cash to Cash Cycle Time KPI covers three functional areas which include Sales, Purchase and Inventory.

Cash to Cash Cycle Time is a continuous measure that is defined by adding the number of days of inventory to the number of days of receivables outstanding and then subtracting the number of days of payables outstanding. The result is the number of days of working capital your organization has tied up in managing your supply chain.

“Days receivables” is calculated as the ratio of outstanding receivables (from customers) against the sales per day. Similarly for “Days Payables” which is calculated as a ratio between outstanding payables (towards vendors) to the purchases per day. “Days Inventory” is calculated as the ratio of inventory value against cost of goods sold per day. Sales per day can be calculated either based on annualized sales or year to date sales, similarly, purchases per day and cost of goods sold per day are calculated.

Technical Overview:

The data for Cash to Cash Cycle Time is taken from three functional areas - Sales, Purchases and Inventory. Sales data is extracted into three files which includes customer invoice file consisting the details of sales invoices, Customer Receipts file consisting the details of sales receipts and Customer Discounts/Adjustment/Bad debts file consisting the details of discounts, adjustments and bad debts at invoice level. The data is similar for purchases whose data is also extracted in the form of three files which include vendor invoice, vendor payment and vendor discounts file. Data for inventory is extracted in the form of a single file which has the closing balance of inventory on a daily basis. These files are stored in data source layer.

Outstanding receivables/outstanding payables is calculated at invoice level in the reporting currency (invoices/receipts in other currencies will be converted into reporting currency at this level) and maintained in inbound layer for further calculations. Inventory details which are in transaction units are converted into reporting currency and stored in inbound layer.

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The outstanding receivables/payables is calculated as the sum of outstanding receivables/payables of all the invoices happened till that point and the Sales/Purchases per Day value is calculated as the ratio of the sum of all the Sales/Purchase invoices happened in that period against the number of days in that period. Inventory value is extracted from inbound layer and aggregated to store in the Info Cube. Similarly, Cost of Goods Sold per day is calculated as the ratio of Cost of Goods sold over a period which is again extracted from an InfoCube against the number of days in that period.

Hence, the Days Receivables/Payables is calculated as the ratio of outstanding sales/purchases against the sales/purchase per day. The Days Inventory is calculated as the ratio against the Cost of Goods Sold per day which is again extracted from an InfoCube. These final calculations are done in the BI query level.

3.1.2 Cost Of Goods Sold (COGS)Functional Overview:

Cost of goods sold, COGS, or "cost of sales", includes the direct costs attributable to the production of the goods sold by a company. This amount includes the materials cost used in creating the goods along with the direct labor costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs. COGS appear on the income statement and can be deducted from revenue to calculate a company's gross margin.

COGS is the costs that go into creating the products that a company sells; therefore, the only costs included in the measure are those that are directly tied to the production of the products. For example, the COGS for an automaker would include the material costs for the parts that go into making the car along with the labor costs used to put the car together.

COGS can be defined as the sum of direct material cost, direct labour cost, and production overhead cost. Cost of Goods Sold helps the finance analyst to monitor and track the cost associated with buying raw materials and producing finished goods.

Technical Overview:

The data for Cost of Goods Sold is taken from three functional areas such as customer invoice, forecast and vendor invoice (costs). Customer invoice data is extracted from the cash to cash cycle time data store object and forecast data is extracted from the forecast data store object. Vendor invoice data based on vendor invoice types are extracted and kept in the form of a flat file. All these files are stored in the data source layer.

As mentioned in the functional overview COGS is defined as the sum of direct material costs, direct labor costs, and production overhead costs. The total supply chain revenue is calculated based on the customer invoice data which in turn used to calculate COGS as a percentage of total supply chain revenue. Forecast data provides the data for the total number units sold and helps calculate the per unit costs such as direct labor costs per unit, direct material costs per unit and production overhead cost per unit.

3.1.3 Perfect Order Fulfillment (POF)Functional Overview:

Perfect Order Fulfillment (POF) helps the sales executive to monitor and track the performance of Sales Order fulfillment. This KPI can be viewed at two levels – one at order level and the other by order line item. The order level metrics are calculated from the result of the corresponding line item metrics. POF metrics can be calculated either based on customer requested date or based on order committed date. Based on which option is used, the calculation of POF may vary.

Perfect order fulfillment can be viewed as the percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. This includes all items and quantities on-time in acceptable condition with reference to customer commitment and correct related documents.

To break it down further for understanding, POF is a combined view of orders delivered in full, orders delivered on time, perfect condition and documentation accuracy. Orders delivered in full can be viewed as delivery item accuracy and delivery quantity accuracy. Orders delivered on time deals with the delivery date accuracy and delivery location accuracy. The perfect condition of an ordered item demands orders delivered with defect free conformance, damage free

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conformance, faultless installation, and orders delivered with warranty and returns. Documentation accuracy concentrates on measures such as shipping documentation accuracy, payment documentation accuracy, other documentation accuracy, and compliance documentation accuracy.

Technical Overview:

The data source layer of POF requires data from all the four areas as mentioned in the above section. These areas talk about orders delivered in full, orders delivered on time, perfect condition of the order and the documentation accuracy.

SO Item Details:

This data source provides details of sales line items. It includes details like Sales Order, Sales Item Number, Company Code, Customer Details, Plant, Material, Ship to party, Transportation Carrier, Date at which the document was created, over / under delivery tolerance range, Sales Organization, Sales Group, Sales Office, Division, Distribution Channel, Sales representative, Ordered Quantity. All these details will be captured at the Sales Item level.

SO Schedule Details:

This data source provides details relating to sales schedule information. In includes details like Sales Document, Sales Order Item, Sales Order Schedule Line, Delivery Document Number, Delivery Item Number, Company Code, Planned Goods Issue Date, Actual Goods Issue Date, Actual Delivery Location, Requested Date, Confirmed Cases, Actual Cases Delivered, Confirmed Quantity, and Actual Quantity Delivered.

Warranty, Faultless Installations:

This data source provides like Warranty, Faultless Installation file includes Order Delivery Damage Free Conformance Indicator, Order Delivery Defect Free Conformance Indicator, Order Delivery Faultless Installation Indicator and Order Delivery with Warranty & Returns Indicator corresponding to a Sales line item.

SO Details:

This data source provides information relating to documentation accuracy which includes Shipping Documentation Accuracy Indicator, Payment Documentation Accuracy Indicator, Others Documentation Accuracy Indicator, and Compliance Documentation Accuracy Indicators for every sales order.

Note: This information is not captured in SAP R/3 system.

All the data from these data sources flow through the rich SCPM data model and gets transformed into information to help the end user measure Perfect order fulfillment.

3.1.4 Supply Chain Management Costs (SCMC)Functional Overview:

Total Supply Chain Management Cost is a discrete measurement defined as the fixed and operational costs associated with the Plan, Source, Make, Deliver and Return supply chain processes. This view of supply chain costs takes into account order management (Deliver), material acquisition (Source), inventory carrying (Indirect Plan), planning/finance (Plan), information technology costs (Indirect Enable) and Returned Product Management Costs.

SCMC = Cost to Plan + Source + Make + Deliver + Return

In other words, the TSCMC can be defined as:

TSCMC = Sales – Profits – Cost to Serve (e.g., marketing, selling, administrative)

Technical Overview:

The Data for SCMC is uploaded from two files. The first file consist data that is required for the calculation of Material Acquisition Cost, Inventory Carrying Cost, Planning/Finance Cost, Information Technology Cost and Returned Products' Management Cost. The second file consists of the data required for Order Management Costs related KPIS.

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Data from these files is collected into two DSOs and then processed for currency conversion and stored for Transaction level availability. The Data is then moved to Cube for aggregating it with respect to various dimensions.

The KPIs, order management (Deliver), material acquisition (Source), inventory carrying (Indirect Plan), planning/finance (Plan), information technology costs (Indirect Enable) and Returned Product Management Costs are calculated by using Calculated Kef Figures at BI Query Level and hence the total SCMC (Supply Chain Management Costs) KPI is calculated as sum of the above five KPIs.

3.1.5 Order Fulfillment Cycle Time (OFCT)Functional Overview:

Order Fulfillment Cycle Time is defined as the average actual cycle time consistently achieved to fulfill customer orders. For each individual order, this cycle time starts from the order receipt and ends with customer acceptance of the order.

Gross Cycle Time is a continuous measurement defined as the amount of time from customer authorization of a sales order to the customer receipt of the product. This time involve all the cycle time related to the customer order fulfillment as well as the “Dwell Time”. Dwell Time is the duration for which no activity has been done because of the customer requirement e.g. Customer places the order six months in advance to ensure delivery. Dwell Time should not be included while calculating the OFCT, hence:

Order Fulfillment Cycle Time = Gross Cycle Time – Dwell Time.

The major segments of time include order entry, dwell time for future dated orders, manufacturing, distribution, and transportation.

Technical Overview:

The Data for OFCT is uploaded from one single file which consists, the start and end times of different processes in OFCT (Starting of Customer authorization to Customer installation) at the Line Item level.

All the KPIs are calculated in the integrated data store layer as the difference between the end times and start times of the process involved in that.

Then the above results are aggregated in the Data Mart layer for various dimensions like company code, plant etc and made available for reporting.

3.1.6 Vendor Order Fulfillment (VOF)Functional Overview:

Vendor Order Fulfillment (VOF) helps the procurement executive to monitor and track the performance of vendor on the delivery perspective. This KPI can be viewed at order level only. VOF metrics can be calculated either based on customer requested date or based on order committed date. Based on which option is used, the calculation of VOF may vary.

VOF is a combined view of orders delivered in full and orders delivered on time. Orders delivered in full can be viewed as delivery item accuracy and delivery quantity accuracy. Orders delivered on time deals with the delivery date accuracy.

Technical Overview:

The data source layer of VOF requires data from the purchase orders

PO Item Details:

This data source provides details of purchase line items. It includes details like Purchase Order, Purchase Item Number, Company Code, Supplier/Vendor, Plant, Material, Date at which the document was created, over / under delivery tolerance range, Purchase Organization, Ordered Quantity. All these details will be captured at the purchase Item level.

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PO Schedule Details:

This data source provides details relating to purchase schedule information. It includes details like Purchase Order, Purchase Order Item, Purchase Order Schedule Line, Company Code, Confirmed Date, Requested Date, Confirmed Quantity and Requested Quantity

PO Delivery Details: This data source provides information relating to delivery. It includes details like Purchase Order, Purchase Order Item, Purchase Order Schedule Line, Delivery Document Number, Delivery Item Number, Company Code, Actual Goods Receipt Date and Actual Quantity Delivered.

All the data from these data sources flow through the rich SCPM data model and gets transformed into information to help the end user measure Vendor order fulfillment.

3.1.7 ODM (Other Diagnostic Metrics)

ODM (Other Diagnostic Metrics) is a scenario which consists of all the diagnostic metrics of supply chain management which helps the user to get an excellent insight into the supply chain performance management.

3.2 Evaluate Performance of the supply chain, gain visibility into supply chain data and to take action

Supply Chain Performance Management is an analytical application with no pre-defined workflows or process steps.

Some of the important aspects of SCPM are:

The analysis of supply chain data based on SCOR scenarios and diagnostic KPIs. Process Steps to gain visibility into supply chain data and to take action

Prerequisite :Uploading Data either via flat files using Data Management or ERP (Source System) Data using extractors.o Insights into data via reports, dashboards, scorecards, workspaces, briefing

books and alerts.o Closing the loop via simulation using What-If-Analysis and initiatives via Closed

Loop Collaboration.

3.2.1 Insights into Supply Chain Data

Once data is loaded in the SCPM Data Model customers can gain valuable insight into their Supply Chain via out of the box or custom reports, dashboards, scorecards, workspaces, briefing books and alerts.

For details on out of the box content and how to create custom analytical content follow the details below:

Out of the box analytical content (Reports, dashboards and workspaces, KPIs) - Application help > Analysis and Reporting > Content Analysis > Predefined Content

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http://help.sap.com/saphelp_scpm20/helpdata/en/4B/1AA5BE1C234B2E9C7B97C1967627A1/frameset.htm



How to create analytical content - Reports, dashboards and workspaces, KPIs) - Application help > Analysis and Reporting > Content Analysis

3.2.2 Closing the loop

Once customers have insights on performance and the root cause of issues in their supply chain they can then run simulations to understand the impact of causal parameters by using What-If-Analysis and take action by using Closed Loop Collaboration features in the application.

For details on how to use What-If-Analysis and Closed Loop Collaboration please follow the details below:

Close Loop Collaboration - Application help > Analysis and Reporting > Closed Loop Analysis.What If Analysis - Application help > Analysis and Reporting > Content Analysis > What-If Analysis.

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s55 scpm20 bpp en xx

Documents

delivery tolerance range

closed loop collaboration

entire supply chain

delivery item accuracy

direct labor costs

bi query level

perfect order fulfillment

vendor order fulfillment