cat logistics on extended warehouse management_2010.12.2-11.38.55
DESCRIPTION
Stern School of Business ChemturaTRANSCRIPT
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Cat Logistics EWM JourneyCat Logistics EWM Journey
Overview
Mark TeegardinDate: Nov. 2010
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The Challenge:Cat Logistics wanted to make a bold move:
Dramatic returns required a bold move
Incremental growth not acceptable
Internal development was becoming a costly alternative
Desire to stay ahead of technology changes
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 2
Committed to Customer Success
In 2002 Steve Wunning, President, Caterpillar Logistics Services:
We believe that we can do more. By integrating supply chain activities with a comprehensive IT solution, we canreduce development costs 40%, implementation costs 30%, and ongoing operations 20%, all while shortening
start-up durations. The net effect will benefit both the bottom line and the end customer.
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Approach Alternatives Upgrade existing / develop new systems
Lacks true integration
Incremental improvements, incremental benefits
Increased capital expense, longer development cycles
Purchase off the shelf solutions and adapt Lower investment
Improved integration
Lar e roviders historicall underfunded SPM functionalit
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 3
Committed to Customer Success
No commercially available off the shelf solutions that met the current and futurerequirements
Change the rules: a new approach Cooperative approach to share development costs
Input to new commercial software vs. adapting what was available Leverage similarities in requirements
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Service Parts Solution
Intellectual Property
Know-how
Capability
Scalability
Service Parts Logistics Software Alliance
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 4
Committed to Customer Success
BestBest--InIn--ClassClass Logistics Performance forCustomer Satisfaction and Cost
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Concept: ~ 80% common processes/ technology
Leverage Ford and Cat Logistics volumes
Commercialize system software
Exit development
Become implementers and integrators (Cat
Logistics)
Intellectual Property
Know-how
Capability
Scalability
Strategy: Fully Integrated Solution
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 5
Best-In-Class Logistics Performance
Increased Customer Satisfaction
Dramatic Cost Reduction
The Result:The Result:
State of the Art Service PartsManagement Solution Across Multiple
Industries
Benefits: Lower development costs
International capabilities
Natural (planned) technology upgrade path
Increase 3PL market opportunities (Cat
Logistics)
Shared Risks between Cat Logistics, Ford, and
SAP
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Delivering Enterprise Value Through Supply Chain Excellence
Cat Distribution Services Manufacturing Logistics
PIRACICABAJOHANNESBURG
MELBOURNE
SINGAPORE
GRIMBERGEN MORTON
MOSCOW
SHANGHAI
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 6
Transportation External Client Business
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Cat Logistics Today
EAME (Europe, Africa, Middle East & CIS)Americas
Asia-Pacific
6 Continents
23 Countries20 Languages
108 Facilities & OfficesShipping to 190+ Countries
11 900+ Em lo ees
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 7
29M+ Sq. Ft.160M+ Orders/Yr
21B lbs. Of Freight/Yr$2.4B Transportation Purchased/Yr
20M SKUs Serviced/Yr
616200
LocationsEmployees
334,450
LocationsEmployees
121250
LocationsEmployees
Committed to Customer Success
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Why SAP?
Global Capability & Focus on the Customer Needs
Committed to the Ford-Cat Alliance Vision of Industry Leading Service Parts
Logistics Solution
Modular Development and State-Of-The-Art Technology Now and Into the Future
Commitment to the SPM space
Best fit of existing SPM offerings
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 8
Industry strength, financial strength and proven expertise Development capability
SAP is Caterpillars SPM strategicdirection for internal use as well
as for external clients.
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80%Unique
Solutions
Aligning Our Strategy
5%
Client
Unique
15%Industry
Specific
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 9
80%Standard Solution
20%Std.
Solution
Current Future
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80%Unique
Solutions
Aligning Our Strategy
5%
Client
Unique
15%Industry
Specific
Standard Solution is based onCommon Processes
utilized
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 10
80%Standard Solution
20%Std.
Solution
Current Future
Globally
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Definition: A configured SAP system, incorporating common,standardized processes and data definitions that can be rolled out to
multiple locations
Target 80 / 20% global vs. local
Aligning Our Strategy Global Template
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 11
Reduced implementation risk
Quick repeatable roll-outs
Lower implementation costs
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Change Management is crucial (awareness at all levels)
Transformational thoughts and actions required early
Fully understand current process and rational
Team willing to accept and advocate change Follow your Methodology & Implementation Processes
Leverage standard functionality
Aligning Our Strategy - Lessons Learned
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 12
Enhance for strategic advantage Do not over engineer your enhancements
Master Data
Repeatable Templates for everything Stay current with SAP service packs
Committed to Customer Success
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Time
ONETS
UPGRADES/SP
EWM
MMCRM
al
TM?
Aligning Our Strategy - Implement , Evolve, Rollout
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 13
CO
M
GLOBALCAT LOGISTICS
LANDSCAPE
PRODUCT EVOLUTION
SAP R&D New EWM Functionalities
ROLL - OUTS
ProductionSupport
GlobalCOE
EndG
METHODS
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Implementation Approach
Continued Investment in Global Template
Continued Global Business Process Transformation
Component Installation Approach
Facility by Facility Go-Live SCM Extended Warehouse Mana ement
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 14
Worldwide Network Install of Component SCM Service Parts Planning
Regional Go-Live
CRM & Billing
Committed to Customer Success
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Current Progress
EWM Pilot Facility (St. Paul, MN) installed in November 2007
Waco Distribution Center installed March 2009
Clayton DC scheduled for early 2011, IPC 3rd
QTR 2011 MEDC scheduled for 2012
SCM Service Parts Planning
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 15
DRPR scheduled for mid year 2011
CRM CRM active through interfaces
BCR MEDC scheduled for 2012 (1st & regional)
Committed to Customer Success
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Extended Warehouse ManagementExtended Warehouse Management
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EWM Highlights
Increased Process Functionality
Inbound Processes
Outbound Processes
Internal Processes
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 17
Integrated Yard Management Solution
System Directed Routing
Exception Driven Processing
Pick Bin Determination
Packaging Execution
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SAP ERP-WM vs. SCM-EWM
TransportationTransportation
WarehousingWarehousing
Visibility
Visibility
Analytics
Analytics
CoreOperations
CoreOperations
Transportation
Warehousing
Visibility
Analytics
CoreOperations
EWM offers
Monitor as central tool and central starting point
Use of partial goods receipt in inbound processing (GR per HU)
System guided put away with deconsolidation/fanning
Complex wave planning and outbound route structure
High volume picking and shipping and Warehouse Order Creation
Broad stock/inventory view (pre-picked HUs, staging zones, etc.)
Slotting & Better integration to Yard Management Functionality
Warehouse Rearrangement and Goods Receipt Optimization
BI Integration
Conveyor automation and pick-to-light integration
Put-away Strategies
Removal Strategies
Wave Management pick-logig
Replenishment
Handling / Storage Unit Management
Yard Management
Enhanced configurable RF-technology
Task & Ressource Management
Expected goods receipt
Value Added Services / Kitting
LES EWMInternal Routing
Distribution Center
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 18
Committed to Customer Success
Pallet managed inventories using Handling Units
ePedigree/serialization with RFID integration Integrated labor management functionality
EWM simplifies HUs by only defining them at Storage type level,instead of Storage Location level
Shipment and Transportation units fully supported
Each, case and bulk picks
Replenishment of forward picking areas
Double-checking inspection and packing
Process-oriented storage control
Assignment of Serial Number to HU possible
Cross-Docking
Dynamic cycle counting
Unloading of transport units
Deconsolidation
Slotting / Rearrangement
Labor Management
Multi Client Warehousing
Flexible Process Modelling
Layout Modelling
Warehouse Automation (MFS)
Decentral Quality Inspection
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INBOUND
Slotting
Receive ASN Data
ASN Validation & Correction
Transport Unit Arrival Manage Transport Unit
Goods Receipt
Base Receiving
INTERNAL WH
Yard Management
Quality Inspection Engine
Inventory Counts /
Records Accuracy
Kitting (to Stock/ to Order)
Replenishment
GREEN Implemented in production
BLUE Current implementation
YELLOW Not yet implemented
EWM Available Functionality
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 19
u away n e erm na on
Unload Transport Unit
Deconsolidation
Internal Routing
Putaway
Inbound Back Order Expediting
Push Deployment
Transportation X-Dock
Returns / Reverse Logistics
Packaging Engineering
OUTBOUND Route Determination
Wave Management
Picking Bin Determination
Warehouse Orders
Work Assignment (labor mgt)
Picking
Packing
Shipping / Staging
Loading & Goods Issue
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EWM Pilot - St. Paul, MN (Brownfield)
Facility Info:
90,000 sq ft. 600 inbound lines/1,200 outbound lines
Emergency customer facing for North Central US and Central Canada
Ship to Customers around the world
Testing:
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 20
Committed to Customer Success
n egra on - ~ es s, wee s
UAT - ~200 tests, 8 weeks
Go-Live:
1-2 IT people on-site the first 2 months & Command Center Concept
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Challenges & Lessons Learned St. Paul
Performance Issues:
SCM 5.0 Service Pack 8
Custom and CDP code
Data archiving and database reorgs
RF dead spots, access point failure
Lessons:
Make sure to test usin Production real life sized volumes.
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 21
Do not push the work into the next milestone. It creates a snowball effect. Global Template works. It takes some work to get agreement from all parties on
standard practices. But it is worth it.
SAP is willing to help. When you log OSS messages include all relevantinformation and example data.
BCSets work well to transfer configuration and lock down settings when needed.
Committed to Customer Success
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1st DC Waco, TX (Greenfield)Facility Info:
750,000 sq ft. 2,500 inbound lines/9,500 outbound lines
Emergency & Stock for customer facing dealers plus network search
~200 associates / 3 shifts over 100,000 parts numbers stocked Ship to Customers around the world
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 22
Committed to Customer Success
Integration - ~350 tests, 9 weeks (Regression & FRICE) Business Simulation volume & number of users, 6 weeks (Auto)
UAT - ~400 tests, 6 weeks (Blended solution-more business scenarios)
Go-Live: (phased approach)
2-4 IT people on-site the first 2 months & Command Center Concept
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Challenges & Lessons Learned Waco
General Warehousing Issues:
Some RF process and performance
Few storage concepts
PGI performance and common process
Transportation cross dock process flow
Lessons:
Stron SAP su ort for roduct and challen es
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 23
Scope Control PTAM process Leverage auto testing tools for regression testing - Velocity
Methodology Adherence High Quality Delivery
Global Template grows as new functionality is implemented. Impact Analysis onexisting facilities.
Committed to Customer Success
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Continued Investment in Global Template
Additions to Caterpillar Global Template for Waco implementation
Transportation Cross Dock functionality
Multiple RF Screen sizes
STO shipping and receiving
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 24
ITS (Internet Transaction Server) RF Screens
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DC & IPC Clayton, OH (Greenfield)Facility Info:
~1.5M sq ft. ~3,100 inbound lines/~18,300 outbound lines
Emergency & Stock for customer facing dealers plus network search
~500 associates / 3 shifts ~200,000 parts numbers stocked
Ship to Customers around the world
Testing: (Impacts of BP)
Integration DC ~115 tests, 12 weeks (completed in 8 weeks)
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 25
Committed to Customer Success
*Integration IPC ~775 tests, ~16 weeks Business Simulation volume & number of users, 4-6 weeks (Auto)
UAT - ~175 tests, 16 weeks
*UAT - ~ 1100 tests, 20 weeks (script writing in process)
Go-Live: (phased approach) 2-4 IT people on-site the first 2 months & Command Center Concept
* = new process
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Current Status & Lessons to Follow Clayton
Current Status DC & IPC:
DC UAT IPC Integration Test
Focusing on New functionality/process testing and Business Simulation Testing
Growing Auto Testing capabilities and UAT Realistic Production scenarios
Lessons:
Strong SAP support for product and challenges around new functionality
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 26
Scope Control PTAM process Leverage auto testing tools for regression testing - Velocity
Methodology Adherence High Quality Delivery
GT grows as new functionality is implemented. Impact Analysis on existingfacilities. Scheduled tuning and review of solution execution.
Leverage and grow Global team for continued implementation and support
Committed to Customer Success
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Additions to Caterpillar Global Template for Clayton DC & IPC
EH&S
Custom Table Archiving
Extended Cross Docking
Continued Investment in Global Template
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 27
Base Receiving VAS & Pack Specs
QIE/QM Scrap improvement
GL & FI integration
Slotting improvements
Auto triggers for IPC PGI/Load/GR
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Whats Next MEDC Project beginning (EWM & BCR)
Execution Framework Rollouts & Releases
Rollouts - EWM Brownfield, Greenfield & Retrofits
Releases EWM Brownfield, Greenfield, New Functionality, SP/EP, SCM modules
EWM Functonality
Voice Technology
Labor Management
Kitting
Supply Chain reporting extensions
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 28
Extension of SCM products and integration
BCR North America, Asia Pacific, Latin America
GATP
Push/Pull Deployment
Order Management
Regional implementations
Additional SPP functionality
Committed to Customer Success
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Thank You!
2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 29
Committed to Customer Success
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2010 Caterpillar Logistics Services, Inc.
Caterpillar Confidential: Green 30
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Customer Relationship Management Supply Chain Management
SAP SCM 7.0
SAP APO SAP ICH
Service Parts Planning
SAP Extended Warehouse Management
globalATP
Service Parts Management: Architecture (2010)
SAP Event Management
SAP Internet Pricing Configurator
CRM Server:Sales, Service, Billing,
Marketing andInteraction Center
CRMMiddleware
SAP Global Trade Service 7.2
ComplianceManagement
CustomsManagement
SAP Transportation Management System
SAP CRM 7.0
RFC*XI
SAP SCM Basis
Master Data Transactional Data
SAP NetWeaver 7.01
Business WarehousePortal Exchange Infrastructure
RFC*XI
CRM MiddlewareRFC*
ECC 6.0 (EP 3)
Materials Management
Quality Management
Logistics Execution
Financials/Controlling
Web Application Server
Environment, Health and Safety
PlugIn 2005
* tRFC, qRFC or RFC
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Application Architecture: Warehouse Management
EWM
WMEExecutionusing RF Exception
Management
WM Service
Front-end Application
InboundPlanning
OutboundPlanning
Monitoring
ERPERP
Transactional Data
(I/O Orders,Execution Orders,
Delivery...)
KPIs
(BW)
Master Data /
Parameter
Cross Docking Wave Planning Slotting
Picking Strategies Putaway StrategiesPacking / Packaging
LeanInventory
Management
APO