Currently there is a great focus on the topic of lean. For those unfamiliar with the topic, Wikipedia has a very nice history of lean which you can read here.
http://en.wikipedia.org/wiki/Lean_manufacturing
Interestingly, while “lean manufacturing” has a listing on Wikipedia, any other type of lean related to supply chain does not. This is surprising given how many lean supply chain planning projects are currently underway.
Applying Lean to the Supply Chain
Lean, as applied to supply chain, as near as can gather really boils down to two specific functionalities.
- The ability to collaborate with suppliers, thus increasing pipeline visibility in order to reduce the disintegration of order sequence that continues to mar supply chain.
- The ability apply reorder pointmethodsin the software that are simplified planning methods and harken back to the methods used back in the 1970s and 1980s when computers were really just getting started in inventory management.
SNP has the ability to incorporate information from suppliers (as does pretty much any supply network software) so there is no gap with the first requirement. However, the second requirement (the ability to apply reorder point methods) is more problematic. First, this is really just consumption based planning, which is also known as “pull.”
Where lean is simply consumption based planning, this is really just the same old candy in a new wrapper.
The Product Location Master
The reorder point controls sit primarily on the Product Location Master. I have placed a screen shot of the Lot Size Tab below.
As can be seen, there are not a lot of alternatives provided here. Just the basics. The reason for this is rather easy to explain, these reorder points are not designed to actually control the planning (that is supposed to be performed by heuristics, an optimizer or CTM), but rather these order points are used to moderate the output. On most SCM implementations, the products which are not consideredcriticalare pushed to SAP ERP, where the reorder point methods areactuallymore build out.
Maintenance Issues with Lean and SCM
Now that we have stated that one of the main issues with lean planning in SCM is setting master data parameters that control things like the reorder point and the lot size, we can then make the relatively obvious statement that the ability to change these parameters is critical to implementing andmaintaining”lean” in SCM. However, SCM has one of the lower capabilities to change master data that we have seen in a planning software package. Pick any other planning system, and it is highly likely that it is easier to maintain and change master data than in SCM. Sometimes this is because it is easier to change through the user interface. However, for mass changes, almost every other planning package can have its underlying tables readily changed directly. SAP is unique among vendors that it does not allow the direct changing of underlying tables, and instead provides the rather troubleprone MASSD, or massmaintenancetransaction. (this is a reason that SCM is such a clumsy simulation environment that almost nothing is written on SCM simulation, and few companies are able to fund SCM simulation groups, despite the fact that this is a stated (if unfunded) requirement of mostimplementations.) The topic of simulation is covered in this post.
http://sapplanning.org/2009/11/08/scm-simulation-archival-blog/
Conclusion
For the reasons listed above, SCM is not a very good solution for “lean” products. Secondly, the use lean in supply chain planning should not be accepted uncritically. Items placed on a reorder point methodology should be placed there for the right reason….they are not critical, their supply is unconstrained and they are essentially not worth the effort to plan with more advanced methods. Products should not be placed on lean because of other reasons. However, if lean is truly a requirement, some thought should be given as to whether SCM is the correct place for them.
