1. Material Creation Process Optimization

2. Senior Process Architect
Material Master Setup in SAP
Tom Walker
Senior Process Architect
Optura
Phone

3. Material Master Setup in SAP
Common Problems
Data is regularly missing, inaccurate, or outside SAP
800 input fields / 200 populated on average
Process is dependent upon human communication:
difficult to coordinate
unclear who really owns the process
Spreadsheets / word documents / s are passed around to gather data
Slow – serial processing takes too long to setup a new material
no easy follow-up process for deadline monitoring
miss effective dates for shipping
process stops with errors – can’t buy parts, produce, inspect, schedule, etc.
Lack of process visibility within multiple plants, depts., etc.
Lots of paper / filing
Data has to be re-keyed into the system after collection
Process / training is not standardized
No audit trail

4. An “unmanaged” collection of steps looking something like this…
Material Master Setup in SAP
Without workflow, most companies have an unintegrated business process:
An “unmanaged” collection of steps looking something like this…
Typical processes evolve over time as a result of:
Increasing Volume
User Training
Old & New tools
Individual Judgment
Ability to Communicate
Management Desires
Skill Levels
Customer Demand 3 1 8 2 4 9 5 6 7

5. Chase justification memo
Material Master Setup in SAP
…an unintegrated business process: ?
Wait for
Chase justification memo
Follow up on approval
Wait for approval
These processes are usually:
Inefficient
Error-Prone
Paper-driven
Time-Consuming
$$$ Costly
Common Solutions (bandages):
Hire More People
Work Longer Hours
Create a work-around outside SAP

6. A Streamlined Process With Business Workflow
Material Master Setup in SAP
Workflow Integrates Business Processes, Eliminating Many Inefficiencies: 1 2 3 4 5 6 7 8 9
A Streamlined Process With Business Workflow
The function of business workflow:
Intelligently route the…
right information
to the right people
at the right time.
All Process Steps are Predefined

7. Material Master Setup in SAP
Workflow-Based Process 1 2 3
approve
Cycle time savings
wait
correct errors
Unintegrated Process
100
Benefits of a workflow-driven process:
Here is where you meet delivery deadlines and increase sales, customer service, inventory turns, etc.
$$$
Improve Cycle-times
Increase Production
Insure Data Accuracy
Maximize Efficiency

8. Optimize Secret to Success before you Automate
Material Master Setup in SAP
Secret to Success
Optimize
before you
Automate

9. Material Setup Challenges
Material Master Setup in SAP
Material Setup Challenges
Process Obstacles
Business Impact
Setup steps are complex, coordination is difficult
Data custodians are widespread
Inaccurate Data
Setup is sometimes rushed, without proper process control
Synchronization
No consistently available metrics
Ability to:
Sell Product
Build Product
Ship Product
Inaccurate Financials
(inventory valuations)
Cost of fixing data
No basis for continual improvement (becomes the norm)

10. Global Material Setup Challenges
Material Master Setup in SAP
Global Material Setup Challenges
Strategic Challenges
Business Impact
Global Consistency of databases
Global vs. Local definition and control
Consistency of Global Process
ROI from SAP investment (cost justification)
Customer Responsiveness
“One Company”
Cost of coordination, travel, training, etc.
Global reporting
Global data management and integrity

11. Global Material Coordination Issues
Material Master Setup in SAP
Global Material Coordination Issues
Currency
Unit of measure
Classification
Packaging
Regulatory data
Transportation
Commodity codes
Manual duplication of data
Synchronization of instances
Tracking and reporting
Extensive cycle time
Global business rules
Consistency of data
Language

12. Possible Departmental Business Impacts
Material Master Setup in SAP
Possible Departmental Business Impacts
Incorrect Materials Shipped – EH&S (fines), Customer Service & Sales, (satisfaction levels), Manufacturing (rework) etc.
No formal auditing process, process visibility, maverick setup – Accounting (incorrect valuations), Process stewardship (ability to recognize trouble areas for continuous improvement)etc.
Overall operating costs, COGS and SG&A.
FTE costs for Master Data Coordinators, training costs, re-work, knowledge based workers focus on tracking down materials instead of core competencies, etc.

13. Monitor Status / Reports
Material Master Setup in SAP
Common Solution:
Monitor Status / Reports
Additional
Data
Collection & Approval
Initiation
Validation
Activation

14. Overview of an Example Process
Material Master Setup in SAP
Overview of an Example Process
new product setup
Warehouse
Purchasing
Engineer
Accounting
Master Data
Coordinator
Planner
Quality

15. Manufacturing Health & Safety Purchasing Other Material Master Data
Routing
Manufacturing
BOM
EH&S
Health & Safety
Recipe
Material
Master Data
Solution
Additional
Requirements
MSDS
Vendor
Master
Sourcing
Transportation
Info
Record
Purchasing
Other

16. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

17. Material Creation Request –
SAP or Web based

18. Real-time validation
SAP GUI or Web Based

19. Centralized view
and organization
control

20. Real time status

21. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

23. The submitted MCR
is routed for review
and possible changes

24. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

26. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

28. Data is pre-populated

29. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

30. Dependency between view setup is enforced
Overdue Views are flagged and escalated

31. Role Based

33. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

34. Workitem takes user
directly to required screen

35. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

37. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

38. Note change in status
User ID instead of role

40. Example Material Master Workflow
Review
& Create
BD Views
Review
Planned
Views
Review
Completed
Views
Activate
Master
Data
Coord.
Create
MRP
View
Planning
Create
Accounting
View
Finance
Customer Service
Create
Sales
View
Review
& Approve
Request
Create
Purchasing
View
Purchasing
validate and clone views
Supply Chain
Review
& Update
Request
Region/Other
Request
New
Material

42. Email sent to Requester showing MCR and Material Number

43. Material Master Setup in SAP
Reporting and Metrics

44. Management Reporting Issues
Material Master Setup in SAP
Management Reporting Issues
How many materials have been created
Status of materials being created
Productivity of organizational units
Cycle time for creation (wait / working / total)
Process visibility for bottlenecks
Graphics related to process & processors
Graphics related to process frequency and cycle time

45. Automated reporting metrics give insight into activities for each step of the process:
Wait time / Work Time / Total Process Time

46. Reporting metrics for each person involved in the process, and for each item they worked on during a given day:
Wait time / Work Time / Total Process Time

47. Occurrences with detailed selection criteria
“At-a-glance” graphics for reports of monthly or daily activity

50. Drill Down:
Optura Material Request Form
Material Master in SAP
Optura Dashboard
Sort / Filter / Print / Export / Send

52. Best-Practice Learnings
Material Master Setup in SAP
Best-Practice Learnings
1. Centralized control
Process owners, accountability, monitoring
2. Decentralized entry
Provide for SAP GUI or Web Based input form
Complex information, domain knowledge, faster data entry
3. Reduce manual entry – no paper or excel spreadsheets
Faster process, accurate data, process control
4. Collect data in SAP in real-time
Strategic ERP vision, central control point, reporting
5. Auto-fill Known Values
Eliminate re-keying, increase data accuracy, faster data-entry
Allow regionalization of data – I.e. global data is defaulted and local data is entered

53. Best-Practice Learnings
Material Master Setup in SAP
Best-Practice Learnings
6. Validate Entries in Real-Time
Ensure that the required views and fields are entered
Increase data accuracy, eliminate rework
7. Instill Process Control
Utilize the system to drive and control the process
8. Requests for material creation are simple
Requests contain the minimum fields required for the downstream process
Medium used depends on requesting person – e.g. SAP GUI, or web form
9. Utilize parallel processing when possible
Compress cycle-time, new material is available sooner
Possibly make certain material views optional

54. Best-Practice Learnings
Material Master Setup in SAP
Best-Practice Learnings
10. Ensure that process steps are performed within a pre-defined timeframe
Compress cycle-time, hold accountable
11. Audit trail
Provide historical account of who did what, and when
12. Continuous process improvement
Provide metrics on the process to identify areas for improvement, such as bottlenecks
13. Infrequent users participate in process via regular client. Power users participate via SAP GUI.
14. Coordinate the setup of individual materials with the setup of material hierarchy, along with BOM’s and Routings

55. Business Benefit Material Master Setup in SAP
Reduced cycle time of material creation
Increased accuracy of data
Process visibility / ownership
Standard material creation process / Reduced training
Controls “mavericks”, SAP controls processes
Flexibility to adapt to changing processes
Scaleable solution that leverage your R/3 investment
No interfaces / No modifications to SAP system
Provides performance metrics for process improvement

56. Thank you for attending!
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