Integrated Sales & Operations Planning Process at voestalpine Krems

Increasing customer convenience through a transparent planning and allocation process

The development of customised solutions for specific customer needs and the early recognition of industry trends make voestalpine Krems the European market leader for cold-rolled steel tubes and steel sections, whose products are used in applications ranging from vehicle construction to solar technology.
Goals

In order to improve mid-term corporate planning and the quality of service to its customers, voestalpine Krems decided to introduce a Sales & Operations Planning (SO&P) process. Until now, the company had mainly worked with budget and order planning, including detailed planning.

An overview of which quantities could be produced when and offered to the customers was therefore not available. The allocation of quantities and capacities now enables transparency in quantity coordination for sales and thus improved communication with the customers.

At the same time, agreed delivery dates can be met on time, stocks reduced and overbooking of capacities prevented.

Solution
The increased transparency in goods availability for sales was achieved by implementing an integrated S&OP process in SAP APO and included the following modules in addition to allocation:  
    • SAP APO Demand Planning (DP) 
    • SAP Global Available to Promise (GATP) 
    • SAP Production Planning and Detailed Scheduling (PP/DS)  
    • SAP Sales and Distribution (SD)
Challenge
Due to a large number of stakeholders in the sales and production processes, change management within the organisation was a major challenge. Since the entire company works with the new solution, the training period for all employees was correspondingly long. The situation was aggravated by the fact that due to the pandemic, employees were increasingly working from their home offices. During the technical implementation, it was important to think through the process well in advance and to determine how the process should work in the future. The result is a two-step process that is run through before confirming customer orders and delivery schedules:  
    1. Capacity check in production
    2. Planability of an additional production order due to existing campaigns, set-up time, optimisation etc.
Benefits
Through the introduction of the S&OP process, voestalpine Krems was able to reduce its inventory in the finished goods warehouse (FWL) by approx. 20%. Furthermore, the rolling forecast process and the allocation of quantities and capacities enable targeted sales management based on the available resources. This is a great advantage, especially in volatile times like the present. In addition to improving communication and the service level to customers, the new process offers increased planning reliability and increased utilisation of the available machine capacities. Overall, the implementation results in fewer short-term planning changes and all processes have gained stability.

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