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Aug 7, 2009
SRM (Supplier Relationship Management) and SAP AFS !!
Jun 10, 2009
SAP AFS Specials !!
- Ability to Handle Grids
- Seasonality in SAP AFS
- AFS Categories
Jul 13, 2008
Challenges in the Apparel Industry and SAP’s Solutions for them – Article 3:
Continuing from my previous posts, I shall in this article give you more insight into the challenges faced by companies in the Apparel & Footwear Industry and how SAP AFS Industry Solution caters to them.
• Poor on time delivery
This is a common problem in the AFS Manufacturing Environment, especially for those companies that have overseas operations and have a lengthy supply chain. Delivery dates of the final product is a crucial deadline given the ever so quickly changing fashion trends, and not to the mention the cost of alternative means of transport selected at the last minute to stick to delivering the product on time.
Given this condition SAP AFS has some useful functionality that caters to these needs:
Allocation Run – also known famously as ARUN, this allocation procedure helps determines the best usage of the existing stocks to meet the requirements of those sales orders that would deliver the best return in terms of customer satisfaction. This function is quite unique to the AFS Environment, as it provides many different built in rules and definable rules that are very much in line with the process built in and around the Sales & Distribution functions of the AFS Industry.
Order scheduling Strategy is an additional process in AFS SD processing that helps to optimize the delivery dates for each item. You can define rules to take account of special customer requests or general business requirements. This process also serves in allocating inventory to key customers in liaison with the Allocation Run procedure described above.
For more information visit: LINK
I shall keep posting more on this area in the future. Hope you found this post informative.
ssurenlk@msn.com
Have a nice day!!
Jun 11, 2008
Challenges in the Apparel Industry and SAP’s Solutions for them – Article 2
As promised in my previous posts I have posted this article to give you more insight into the challenges faced by companies in the Apparel & Footwear Industry and how SAP AFS Industry Solution caters to them.
Excess/redundant inventory or Stock shortages/out of stock
This is quite a familiar occurring scenario in the AFS Industry. It is understood that given the variations in demand patterns in this industry it is likely that the related functions of apparel manufacturers such as procurement and production will have to cater to these variations as much as possible in the most efficient manner.
Given this condition SAP AFS has some useful functionality that caters to these needs:
Material Substitution – This is a function in SAP Sales & Distribution that allows substitution of one material for another within a sales order. The importance of this functionality is that by allowing for substitutions during times of more than expected customer demands, the company can avoid lost sales and helps increase and maintain/or customer satisfaction with on time deliveries.
Availability Check – This is standard function in SAP which helps to identify if there is are available stocks to satisfy the schedule line’s requirements based on the delivery date. If there is not enough stocks it would then check when there will be enough stocks available and will confirm a new delivery date based on the availability.
Over/Under delivery tolerance levels is a standard functionality that SAP provides to avoid having shortages or excess stocks in your inventory. With SAP AFS this can be monitored at SKU level.
ATP Check with the AFS Component – With this function you can view whenever the item is either not available or not completely available in the system. With SAP AFS you can view this information from the system on an AFS Overview Screen that shows the availability status at the SKU levels. With the AFS component multiple schedule lines can be checked during ATP runs at SKU Levels.
Reservation in MM – This standard function allows you to make reservations on certain materials so that it can be used at a later date for a special purpose. This way you can avoid the stock outs that could occur in the future when demand is higher than expected and there is not enough specific stocks to meet the demand. With SAP AFS this processing of reservations can be done at SKU Level.
I shall keep posting more on this area in the future. Hope you found this posts informative.
ssurenlk@msn.com
Have a nice day !!
May 30, 2008
Challenges in the Apparel Industry and SAP’s Solutions for them – Article 1:
Challenges in the Apparel Industry and SAP's Solutions for them:
Optimizing service levels
Service levels with any industry is about servicing customer at a higher level than competitors to make them come back to you, and its no different with the apparel industry. Given the complexities of operating in a fashion conscious industry, with new fashion lines staying in stores for a week before they go out of fashion, it is only understandable on how much pressure the end retailers would have to go through, to service their customers and in turn the amount the pressure they would be passing on to their vendors to support them in maintaining a high service level.
Let’s look at how SAP AFS has been designed to help with this aspect:
Order scheduling Strategy is an additional process in AFS SD processing that helps to optimize the delivery dates for each item. You can define rules to take account of special customer requests or general business requirements.
Distribution Rules – This way you can decide on how to fulfill the multi store orders of your important customers.
Value-Added Services – Using this function in SAP AFS you can add those services or products to the final product that is being delivered to the customer as per the customer’s requirement. By having a clear cut strategy with the value additions made to the product, it helps identifying each operation that go into delivering the value added service and charging a identifiable price for it.
Multi-Store Order – Using this function you can satisfy the requirements of you large corporate customers who have multiple stores with individual requirements for different stores.
Streamlining operations for efficiency
It is a known fact that the logistics operation involved with the apparel industry is one of the most complex and longest sequence of networked operations, given this it is extremely important that valuable time, money and effort is not used in sorting out issues resulting from operating with a such a complicated chain. Hence it is important that you have the right tools and practices built in the chain to make sure issues are highlighted and sorted out at the earliest.
Lean Warehouse Management - Use of reduced functionality of the warehouse management (WM) in simply structured warehouses without inventory management in storage bins.
Source Allocation – This tool is to optimize your procurement activities. As a supplier/recipient relation it supports the control and organization of your business-related and interenterprise procurement structures.
Vendor Capacity Planning – its just so common in this industry where you work with vendors who are located far away from your operating plants. In this case every transaction with them is extremely important in relation to the time and cost involved in procurements reaching its destination. This is where vendor capacity planning really helps this industry.
More on this post to follow soon. Hope you found this informative and interesting. Your comments and suggestions are welcome at ssurenlk@msn.com.
Have a nice day !!
Apr 26, 2008
SRM and SAP AFS
In my previous post I listed out a few important things about SCM and the basics that need to be followed to build a efficient Supply Chain Management model. In relation to that post I would like to discuss the importance of SRM (Supplier Relationship Management).
This is not a very widely spoken about subject simply because CRM has taken the spotlight away from this since the golden rule “customers are king” is more prominent in any industry and thats why the sources of supply have not been given that much of attention than the receiving party, the customer.
However, the impact of a good SRM model would definitely help in providing world class customer service. So then, let’s look at SRM in a little more detail in the context of the Apparel Industry.
SRM is more likely to play a vital role in the manufacturing companies and especially those that have very complicated products, and this is exactly what the AFS Industry is all about. Given the unique fashion needs of each and every individual it’s only apparent that this leads to complex BOM Structures that go into producing the garments that caters to these needs.
Given that fact, it’s likely that there are many suppliers that the manufacturing company will need to work with in the most efficient manner to make sure that they receive the right materials at the right quantity and quality to be able to produce quality garments and deliver them to the market at the right time.
In the AFS Industry even a simple BOM (Bill of Material) Structure for a garment would have many different components in it, for example, the button, the thread, the elastic, the embroidery material, the fabric, the embellishments etc etc.
So then how does that SAP Standard R/3 and AFS Solution caters to these needs, below is a listing of some of them:
• Sorting and Vendor ranking criteria – This option in SAP AFS proposed the best vendor to assign the purchase requisition to , based on the criterias specified in here.
• AFS Specific Criteria for Vendor Ranking -These include criterias such as Factory Status, Complexity Factor and Lowest ‘FOB’.
• Ability to use Fixed Criterias (AFS Enhancement available) – Using this option you can also rank and maintain the best vendor to buy from taking into account criterias such as , vendor capacity, quotas the vendor is subject to and political restrictions placed on vendors that are from a particular region.
• Complexity Factors – using this option you can judge the extent to which the vendor has the ability to be able to produce a material that requires complex production steps.
• Route Determination (AFS Enhancement available) – Even the move time, lead time and shipping types can be maintained.
• Subcontracting – With the inclusion of being able to set preference sub. Indicator for those vendors who use provision components in the material that is supplied to you.
So there you go, these are just some of the functions available. It can be argued that the information from transactions done with suppliers can be retrieved and reported in tools available in modules such as BI and FI. Perhaps in my future posts I shall discuss on those aspects.
Hope you found this post informative. Feel free to contact me on ssurenlk@msn.com if you have any queries.
For more information of features available on supplier management, click here.
Have a nice day!!
Mar 22, 2008
Business Intelligence & Warehouse solutions with SAP AFS
Its fair enough that SAP AFS IS in mainly built into modules such as MM, SD and PP but what about the business intelligence modules, such as SAP SEM and SAP BW. It is arguable that these are standard modules and its relevance in the AFS Environment would be determined by the method in which it is used to access the relevant information and project it on a management dashboard; however given an AFS environment what would be the norms of generating such information from SAP SEM and SAP BW?
Let’s look at a few of the areas in which SAP Business Intelligence Modules could be in relevance with SAP AFS IS installations:
Manage Strategic Planning
Given a manufacturing environment SBUs are normally the factory (plants). Therefore critical strategic business level information can be set as KPIs of these plants and can be monitored, analyzed and controlled.
The KPIs measures that are devised can be turned into financial relevant information, such as SBUs Revenue/ Cost of Production of a particular sales order style etc. This information would form the base for calculating ROCE and making comparisons possible with target rates.
Based on the planning and forecast of possible sales order the user can use this projection to compare information such as SBUs ROCE, RM Efficiency Usage with targets and the future trends of the type of production activity that will take place for the next 10 years etc.
Since in AFS the inventory management function plays a key role, information on stock value and working capital management is crucial. Using information such as stock holding days, lead time in receipt of payments etc, and SAP BI tools could perhaps provide a clear guide on the current efficiency of these functions and help in analyzing problematic areas.
The SBU information can be analyzed together and therefore form company wide figures to make it possible to keep track of strategic goals set company wide. Keeping this in mind lets move on to the area of Analyzing operations.
Analyze operations against strategic goals
The operations in the relevant SBU need to be maintained. All issues such as supply of raw material to the plants can be monitored and strategic decisions can be made.
SAP BI tools could help to obtain a timely insight into making strategic decisions. This is brought to the attention of senior managers via dash boards etc. Using this output the top management have a snapshot view of how the strategic decisions made have contributed towards the results achieved.
Monitor KPI
As per the present needs in the AFS Industry, BI tools could serve the purpose of monitoring KPIs on a regular basis and project those using Management Dashboards.
KPIs from Production Floor Operations to lead times of receiving payments from customers can be monitored and projected using the Management Cockpit option. The definition of KPI’s, Performance Measures & Objectives is what would reflect the usefulness of the SAP BI solution.
Business critical information such as :
- Write off values occurring at SBUs.
- The Idle time of Raw Material and its relevant holding costs can be monitored and controlled.
- Quality Defects % or Numbers per cluster of garments produced can be analyzed in comparison to target rates.
- On time deliveries done at SBUs can be monitored and projected on management dashboards using speedometers, graphs and/or tables.
The main criteria that would determine the successful implementation of a proper SAP BI solution would be the ability to retrieve relevant data using the various data sources available in the organization.
Respond to business needs
If you are the seller you can identify the sales for the different regions and different product lines perhaps based on the type of style sold and the different stature groups. As in AFS the statures can be maintained in many age groups, this could also be used as a measure in determining the target market and identifying trends.
Hope this post gave you an introductory insight into the potential of a SAP BI solution in the context of a SAP AFS installation, however, more importantly as the KPI’s and Measures that could be setup in an AFS environment are in abundance, its all about identifying and prioritizing them accordingly.
Also note that this post is just to emphasis on the different potential areas SAP BIW could add value to the SAP AFS solution, the best approach and method to do it; I will leave it to the technical experts in the subject.
Your comments are welcome at ssurenlk@msn.com
Have a nice day!!
S.Suren
Mar 9, 2008
Fashion Conscious !!

Fashion is one thing that will never stop changing, there are designs being churned out just about everyday, a new design needs to go through the entire cycle from design to development to delivery at the shortest time possible to make sure the market is still there for it, that’s how fast paced this industry is.
What more, with the complexity of having different customer demands from different regions and to match and satisfy this, it just makes the whole process more cumbersome and to say the least, close to creating a chaotic situation.
The many demands of the AFS industry places a crushing strain on the IT system that is to support it, which is why it is very important that the right IT System that can withstand this pressure is selected for the job.
With the general perception that any IT system that would cater to this requirement is likely to be complex too, let look at what SAP has to offer with its unique Apparel & Footwear solution.
Enough of the pep talk I guess, lets get to the facts now!!
Take for example a NIKE T-Shirt which has 3 different fabrics, more than 3 colors, many NIKE swooshes (by the way this initially cost the NIKE Founders $35 to get it done) with an excellent finish to it, a cool hang tag, a stunning heat seal and of course, the price tag attached to it.
The SAP AFS Solution provides the right tools to manage your entire supply chain from the initial purchasing of raw material to the final delivery of the finished product.
It supports the large amount of transaction processing in the system that is only normal in this industry. The Bill of Material would have at least a 6 level hierarchy for a simple one piece garment with no designs or maybe even no buttons, I’ll let it to your imagination to guess the structure of a BOM for the Nike T-Shirt mentioned above.
SAP’s AFS Solution helps in maintaining the right on time coordination with suppliers and customers, the different agreements laid out with them and the most effective purchasing and payment integration.
References:
An analyst at Gartner Inc., said “no other major application vendor offers a packaged suite for the apparel industry.”
If you have any suggestions or comments, feel free to mail me on ssurenlk@msn.com.
Have a nice day!!
Mar 1, 2008
SAP AFS Industry Solution !!
By.S.Suren
It is well known that SAP had an integrated single solution to offer to all industries prior to the SAPPHIRE in 1994/95; it was during this event that SAP realized the importance of catering to each industry individually as all of them had their own unique way of doing business.
Let’s look at a few things that SAP AFS IS has to offer:
SUPPLY CHAIN MANAGEMENT
CUSTOMER MANAGEMENT
This term is more affiliated with the service industry environment and given that customers in this industry are among the most demanding, its only natural that there is a lot of attention given to activities contributing to generating customer satisfaction.
MASS DATA PROCESSING
SAP AFS takes this aspect into account by providing a flexible master data structure and helps to simplify the time-consuming mass data change that would take place in this industry.
I recommend that you also visit: http://help.sap.com/saphelp_afs50/helpdata/en/b2/53ae56cda511d2aca20000e829fbfe/frameset.htm
for more information on SAP AFS IS details.
Feb 16, 2008
Birth of SAP AFS !!
Upon request from some readers and being in the AFS Domain myself, I shall also update this site with relevant information on SAP AFS.
Starting off I will be posting a few articles I had already posted on some other AFS sites, so please bear with me if you have already read these.
Many people wonder how SAP AFS IS was conceptualized. There needed to be some sort of an activity that spurred the development of the SAP AFS Industry Solution.
Hope you found this post informative and interesting.
S.Suren
MSN : ssurenlk@msn.com