Resilient production logistics Fewer headaches through integrated production and logistics processes

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Many companies struggle with inefficient material logistics. The cause: unclear responsibilities and lack of system integration. Cross-departmental collaboration, standardized systems, and agile methods can significantly improve production logistics.

Even with global market leaders, we repeatedly see production personnel driving pallets back and forth instead of working on the production line. The reason is often that material wasn't placed where it is needed. This is annoying because it disrupts the production process. However, the material supply from logistics is also annoyed, because they often are not informed in time about which material is needed in what quantity, when and where. Why does this happen? Because the process usually is not supported systemically and responsibilities at these interfaces are usually more gray than clearly assigned. Each area works optimally in its logistics or production systems and, if things go well, minimal data is transferred at defined interfaces. But these many interfaces often cause problems and result in numerous open IT tickets. How can this be avoided? And what do efficient global market leaders do differently and better than others?

Important factors are:

• Cross-departmental collaboration

• Standards & integrated systems

• Programmatic agile approach

End-to-end processes

In order to overcome departmental silos, the end-to-end value creation process must first be placed at the center as a guideline. The current process is examined for duplicate tasks and duplicates. These include tasks that are performed in both production and logistics. Not infrequently, we encounter custom developments and extensions in the Manufacturing Execution System (short: MES) that replicate an Extended Warehouse Management (EWM) function and vice versa.

Afterwards, the ideal process is jointly defined and implemented where it belongs in the standard, i.e. in the manufacturing function in MES or in the logistics functions in EWM. Only in this way, from experience, can the most appropriately suited process be implemented in standard software most quickly. The consequence is that functions are not implemented according to departmental boundaries, but where the software can ideally implement them.

In standard

To implement the functions in the respective software that ideally fulfills them, some prerequisites need to be met. First, of course, the end-to-end process must be standardized across system boundaries. This enables projects and modifications to be realized more quickly, and the standardized approach leads to fewer interface problems. If the software components are available in the cloud, for example the SAP Digital Manufacturing (short: SAP DM) MES and the SAP EWM logistics software, then expensive custom developments are no longer necessary because the standard functions are further developed by the manufacturer SAP on a quarterly basis and made available in the cloud.

The following selection of processes are practical examples that are often still complex and individually implemented in the departments, so that each silo does not lose sovereignty over the process. However, these could be implemented as SAP DM-EWM use cases in standard, in order to realize a transparent end-to-end process.

Material Provision: The required material is provided in production based on an event and according to requirements. The event could, for example, be a defined production step in the manufacturing process. In this case, the material provision takes place at the workstation where the material is needed. This also includes the case where material is moved to the new machine as needed when jobs are transferred to other machines.

Shopfloor Logistics: The movement of WIP material on the shop floor is initialized and documented in real time by SAP DM. Automated transports can also be initiated by the SAP DM.

Material Consumption: The consumption of material is booked based on actual data per order or independent of the order. Goods consumption can be recorded manually or automatically by the systems in SAP DM and is then communicated to EWM.

Goods Receipt: The goods receipt from production to the warehouse is reported back at the last operation of production during packaging or good quantity reports.

Agile to the goal

Once the standard process is defined and it is determined where which tasks will be assumed, only the implementation is missing. Particularly with cross-departmental projects, such as between production and logistics, the agile project approach has established itself, as progress is made together on the project. This, in turn, ensures that users can test early, which leads to better results and more acceptance. In addition, change requests can be identified and adapted early, which generally leads to lower costs than correcting applications afterwards. And very importantly: In the agile approach, sub-functions can be put into operation during the project running time, this is a true acceptance booster.