Posted by: ahmedashfaque | April 25, 2014

#SAP classification system: business scenarios part 2

Continuing from yesterday post let us discuss the requirement to define materials for the steel manufacturer so that needs of order management can be fulfilled.

For coils of rod or sheet, the batch should be defined where in the manufacturing process? One good guess is the heat number (batch formed when the liquid steel is tapped from one of the furnaces). This is a good bet. But what if all the material from one batch (heat number) do not go together on one rolling mill and the same finished material is produced from the same batch? In other words, what if some material is taken from this batch and one kind of finished material is produced while yet another finished material is produced from the same batch by taking some other part of the batch? One example, suppose the batch is of 100 tons and 50 tons from this batch are taken to produce 5.5 mm diameter rods while remaining 50 tons from this batch are taken to produce 6.5 mm rods.

In such cases, we can split the batch into 2 and make 2 batches from one batch of material. This arrangement is fine and works well. This same arrangement can be done for production of sheets.

Thus we can define all materials (raw materials, work in process materials and finished materials) for production of sheets and rods for this manufacturer like below:

Raw materials:

Iron ore:

iron ore_63, iron ore_55 etc. (iron ore in batches as per iron content in the ore)

Lime stone:

limestone_45, limestone_35 etc. (limestone in batches as per calcium content in the limestone)

Work in process materials:

billet_mild_steel_120, plate_mild_steel_2X5

Material billet_mild_steel_120 can have batches like billet_mild_steel_120_heatno3340, billet_mild_steel_120_heatno3341 and so on.

Finished materials:

ms_rod_5.5, ms_sheet_2X0.4

Material ms_rod_5.5 can have batches like ms_rod_5.5_heatno.3340, msrod_5.5_heatno3341 etc.

With this much information, it is possible to connect order management system to manufacturing and purchasing system. So when an order is booked in the order management system, the manufacturing system and purchasing system will get the requirement about work in process materials and raw materials through BOM (Bill of materials) and routing. This way, the entire system can be setup to work in make to order environment.

SAP has the capability to take care of all the aspects covered in this business scenario.

What about the third scenario of plates? We will discuss this topic in our next post. So stay tuned.


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