sce summit ewm cat logistics.ppt - sapfm.sap.com/data/upload/files/cat logistics on extended...

Cat Logistics EWM JourneyCat Logistics EWM Journey

Overview

Mark TeegardinDate: Nov. 2010

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 can reduce 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.”

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

• Large providers historically underfunded SPM functionality




• Large providers historically underfunded SPM functionality

• No commercially available off the shelf solutions that met the current and future requirements

• 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

Service Parts Solution

� Intellectual Property

� Know-how

� Capability

� Scalability

Service Parts Logistics Software Alliance




BestBest--InIn--ClassClass Logistics Performance for Customer Satisfaction and Cost

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



Best-In-Class Logistics Performance

Increased Customer Satisfaction

Dramatic Cost Reduction

The Result:The Result:

State of the Art Service Parts

Management 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

Delivering Enterprise Value Through Supply Chain Excellence

Cat Distribution Services Manufacturing Logistics

PIRACICABAJOHANNESBURG

MELBOURNE

SINGAPORE

� GRIMBERGEN � MORTON

MOSCOW

SHANGHAI



Transportation External Client Business

Cat Logistics Today

EAME (Europe, Africa, Middle East & CIS)Americas

Asia-Pacific

6 Continents 23 Countries

20 Languages108 Facilities & Offices

Shipping to 190+ Countries 11,900+ Employees



11,900+ Employees29M+ Sq. Ft.

160M+ Orders/Yr21B lbs. Of Freight/Yr

$2.4B Transportation Purchased/Yr20M SKU’s Serviced/Yr

616200

LocationsEmployees

334,450

LocationsEmployees

121250

LocationsEmployees


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



• Industry strength, financial strength and proven expertise

• Development capability

SAP is Caterpillar’s SPM strategic direction – for internal use as well

as for external clients.

80%Unique

Solutions

Aligning Our Strategy

5%

Client

Unique

15%

Industry

Specific



80% Standard Solution

20%Std.

Solution

Current Future

80%Unique

Solutions

Aligning Our Strategy

5%

Client

Unique

15%

Industry

Specific

Standard Solution is based on

Common Processes

utilized

Globally



80% Standard Solution

20%Std.

Solution

Current Future

Globally

• 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

– Common business processes

Aligning Our Strategy – Global Template



– Common business processes

– Reduced implementation risk

– Quick repeatable roll-outs

– Lower implementation costs

• 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



• Enhance for strategic advantage

• Do not over engineer your enhancements

• Master Data

• Repeatable Templates for everything

• Stay current with SAP service packs


Time

CO

MP

ON

ET

S

UPGRADES/SP

EWM

MM CRM

End Goal

TM?

Aligning Our Strategy - Implement , Evolve, Rollout



CO

MP

ON

ET

S

GLOBAL

CAT LOGISTICS

LANDSCAPE

PRODUCT EVOLUTION

SAP R&D – New EWM Functionalities

ROLL - OUTS

ProductionSupport

Global COE

End Goal

METHODS

Implementation Approach

• Continued Investment in Global Template

• Continued Global Business Process Transformation

• Component Installation Approach

– Facility by Facility Go-Live• SCM Extended Warehouse Management



• SCM Extended Warehouse Management

– Worldwide Network Install of Component• SCM Service Parts Planning

– Regional Go-Live• CRM & Billing


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– DFIP installed in June 2009



– DFIP installed in June 2009

– DRPR scheduled for mid year 2011

• CRM– CRM active through interfaces

– BCR MEDC scheduled for 2012 (1st & regional)


Extended Warehouse ManagementExtended Warehouse Management

EWM Highlights

Increased Process Functionality

• Inbound Processes

• Outbound Processes

• Internal Processes

Key Benefits:



Key Benefits:

• Integrated Yard Management Solution

• System Directed Routing

• Exception Driven Processing

• Pick Bin Determination

• Packaging Execution

SAP ERP-WM vs. SCM-EWM

TransportationTransportation

WarehousingWarehousing

Vis

ibil

ity

Vis

ibil

ity

An

aly

tics

An

aly

tics

CoreOperations

CoreOperations

Transportation

Warehousing

Vis

ibil

ity

An

aly

tics

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

Pallet managed inventories using Handling Units

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 EWM

Internal Routing

Distribution Center




� 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

INBOUND

• Slotting

• Receive ASN Data

• ASN Validation & Correction

• Transport Unit Arrival

• Manage Transport Unit

• Goods Receipt

• Base Receiving

• Putaway Bin Determination

INTERNAL WH

• Yard Management

• Quality Inspection Engine

• Inventory Counts /

Records Accuracy

• Kitting (to Stock/ to Order)

• Replenishment

• Rearrangement

GREEN – Implemented in production

BLUE – Current implementation

YELLOW – Not yet implemented EWM Available Functionality



• Putaway Bin Determination

• Unload Transport Unit

• Deconsolidation

• Internal Routing

• Putaway

• Inbound Back Order Expediting

• Push Deployment

• Transportation X-Dock

• Returns / Reverse Logistics

• Packaging Engineering

• Rearrangement

OUTBOUND

• Route Determination

• Wave Management

• Picking Bin Determination

• Warehouse Orders

• Work Assignment (labor mgt)

• Picking

• Packing

• Shipping / Staging

• Loading & Goods Issue

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:

• Integration - ~300 tests, 16 weeks




• Integration - ~300 tests, 16 weeks

• UAT - ~200 tests, 8 weeks

Go-Live:

• 1-2 IT people on-site the first 2 months & Command Center Concept

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 using Production (real life) sized volumes.



• Make sure to test using Production (real life) sized volumes.

• 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 relevant information and example data.

• BCSets work well to transfer configuration and lock down settings when needed.


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


Testing:




Testing:

• 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)


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:

• Strong SAP support for product and challenges



• Strong SAP support for product and challenges

• 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 on existing facilities.


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



– STO shipping and receiving

– ITS (Internet Transaction Server) RF Screens

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


Testing: (Impacts of BP)

• Integration – DC ~115 tests, 12 weeks (completed in 8 weeks)




• *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)


* = new process

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

• Leverage SAP Max Attention services



• Leverage SAP Max Attention services

• 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 existing facilities. Scheduled tuning and review of solution execution.

• Leverage and grow Global team for continued implementation and support


• Additions to Caterpillar Global Template for Clayton DC & IPC

– EH&S

– Custom Table Archiving

– Extended Cross Docking

Continued Investment in Global Template



– Extended Cross Docking

– Base Receiving

– VAS & Pack Specs

– QIE/QM – Scrap improvement

– GL & FI integration

– Slotting improvements

– Auto triggers for IPC PGI/Load/GR

What’s 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



• Extension of SCM products and integration

– BCR North America, Asia Pacific, Latin America

– GATP

– Push/Pull Deployment

– Order Management

– Regional implementations

– Additional SPP functionality


Questions

Thank You!



Questions


Back-up Slides



Back-up Slides

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

CRM Middleware

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

Management Management

PlugIn 2005

* tRFC, qRFC or RFC

Application Architecture: Warehouse Management

EWM

WMEExecution using RF Exception

Management

WM Service

Front-end Application

InboundPlanning

Outbound Planning

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

Lean Inventory

Management

APO

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