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7 solutions for better component management

Blog written by Toon de Greef, Senior SAP EWM Consultant

A streamlined solution with SAP EWM and SAP ME
At many companies, the production environment is running at full speed. It is a challenge to keep the production running smoothly. Especially if there is a lack of space on the work floor. The cross-fertilization between SAP Extended Warehouse Management (EWM) and SAP Manufacturing Execution (ME) is yielding great results for such a production environment. The link not only regulates the management and supply of components down to the last detail.
The control of the intricate planning system has also been tuned in detail. This article covers seven struggles manufacturing companies face. With the link between EWM and ME, Aiden's SAP consultants have a solution for every struggle. A case at a multinational in the Eindhoven region serves as an illustration.

Struggle 1: space gap at the production sites

Component management is a complex task when production locations are faced with a lack of space. The Persistent Staging Area (PSA) is way too full when all components of a production order are delivered at once. The supply of components is arranged for two half-days. Thanks to the link between EWM and ME, component management is much smoother. How does this integration work in practice? From SAP ECC comes into SAP
ME within each production order separately. This system then puts together a very detailed planning. EWM then receives the enriched, fine-grained planning in return. This planning is one hundred percent time-based.

Struggle 2: Keeping stock on 3 levels

In order for the production process to run smoothly, it is crucial to accurately keep track of stocks on 3 levels: in the planning system (SAP ECC) of the multinational, in SAP EWM and in SAP ME. Updating the stocks ensures a constant flow of messages between the 3 systems. Both sending and returning components have an influence on stock management. The challenge is to keep stocks in all three
systems exactly the same, so that everyone has the same information: the planner in SAP ECC, the warehouse supervisor in SAP EWM and the production engineer in SAP ME. A built-in 'triangle' between the 3 systems ensures and streamlines accurate inventory management. Everyone looks in their own system, but has the same view of the stock.

Struggle 3: Changes in production schedule, without disruption

A production planning is not always watertight. Sometimes minor or major changes occur. How does a company deal with these production schedule changes without disrupting warehouse operations? At the multinational, we deliberately 'release' the production order a few days earlier. The order created in ME is immediately forwarded to EWM. Here we then create a Production Material Request (PMR). So after every shift we initiate a rescheduling, which we transfer to EWM. In the event of shifts – both forwards and backwards – we can adjust the planning immediately.

Production orders are released before production starts. If these orders are in EWM, we can do the staging well in time. After the staging, nothing will be adjusted in the PMR. In this way we prevent that we constantly disrupt the work in the warehouse. All three systems are aware of these rescheduling. On paper, this solution sounds very simple. In reality it is a lot
more complex. Especially with machines that consist of hundreds of thousands of parts, where there is only 2 to 4 hours of storage space at the production location.

Struggle 4: Closing Production Order and Tracking component consumption

It is crucial for companies to track the consumption of components very accurately. This consumption does not only affect the stock. These figures are important for the finance/product costing department to calculate the correct consumption of components and the associated costs. Again, the 'triangle relationship' between the 3 stock levels is decisive. A very complex interplay of messages about the cancellation of components arises between the 3 systems. The goal is unambiguous: the right stock level in all three systems. The production engineer gives the go-ahead for write-off in SAP ME. Subsequently, an automatic debit takes place in SAP EWM and eventually the planner in SAP ECC sees the messages. Thanks to this interaction, all three of them have the right information.

Struggle 5: reuse and store components and tools

For the production process of the multinational, not all planned and/or delivered components are consumed. This also applies to the use of tools at the production location. After use, it is important to return both the components and the tools to the storage warehouse. To make this process run smoothly, we create a task in SAP EWM to retrieve the components and tools. At the same time
we keep an accurate usage record. This registration is important for a timely check, recalibration or replacement of tools. And the registration provides insight into the location in the warehouse where everything is stored.

Struggle 6: exceptions  and by-products

Some components are delivered on schedule for a specific production order (order A). Due to a sudden change in the planning, an exchange takes place to another production order (order B). Obviously, this exchange of components must not disrupt the work at the production location. The communication between the 3 systems regulates the exchange in detail. In practice, this often concerns the exchange of generic products. Think of screws in all shapes and sizes or tie wraps. It's not just bulk stocks. There is also an exchange of very specific components to higher priority orders.

Struggle 7: Counting Stock in Work in Progress

Counting and keeping track of components and tools that are in stock is relatively easy. It is much more difficult if this stock is in Work in Progress, the so-called WIP stock. Thanks to a standard functionality in SAP EWM, the warehouse supervisor can see at a glance the exact stock of components in the Production Supply Area (shop floor), which is the space that precedes the work centers in the production process. This stock
changes when the production engineer unpacks and scans components and feeds this information back via SAP ME.

Want to receive more information or make an appointment?

For production processes with many challenges and struggles, a number of Aiden's consultants have extensive in-house knowledge of SAP EWM, SAP ME and SAP ECC and the interconnection between these 3 proven SAP solutions.

Do you recognize yourself in the struggles above or would you like more text and explanation about the link for your
warehouse and production location? Call us on tel. 088 060 5111 or contact us via the contact page.