October 2015

Project:

Negative records in SAP - ERP

© 2014 IBM Corporation

 Project: Negative records in SAP System.
Business Challenge Objetive
Problem:
• Create a management system and avoid creation of negative records.
•Due to several mistakes when creating, cancelling or deconfiguring
POs negative records are being generated. •Processes & Procedures for POs type AP01 Creation, PO´s
Cancellation and PO´s Deconfiguration.
•Hours are spent analyzing and fixing this problems.

•Affects records accuracy Inversion/Costo

Financial Impact
N/A
Beneficios esperados
- Eliminate negative records 100%
- Avoid financial Impacts
Scope: Type of error Financial Impacts
Planning, Production Control, MFG, Inventory & Warehouse PO type incorrect $ 300,621.87
TOs unconfirmed $ 81,496.13
Mov. 999 in error $ 186,370.08
$ 568,488.08
Metric
Saving = $568,488.08

Negative records in SAP 0 Team

Financial Impact 0

Name (s) Role

Project Plan Juan Carlos Gonzalez Project Sponsor
Activity Owner Target Date Status Gabriel Lopez Process Owner
th
Kick Off Héctor Hernández July 1 , 2015 CLOSED
Luis Robles / Joel Garcia Key Stakeholders
Héctor Hernández & CLOSED
Proposal October 9th, 2015 Gilberto Rosas Coach / Team Lead
Project Managers
Analysis Héctor Hernández October 9th, 2015 CLOSED Héctor Hernández Project Leader
Noviembre 23th, CLOSED Edgar Jimenez / PMs Core Team
New process Business
2015
approval Transformation Team Ignacio Casas Master Black Belt
th
Noviembre 23 , CLOSED
Implementation PMs & Inventory Dpt
2 2015 © 2014 IBM Corporation
 Current Process - PO Creation Define Measure Analyze Improve Control

Warehouse Management (SAP)

Start Creates Technical

Production Order Complete (FG)
PM

Warehouse Confirms
Transfer Order

Parts Assembly
OP 10,20…n
MFG

Finished Good
Reserves material in Creates Transfer OP 10, 20 …n End
Warehouse BIN (Warehouse)
SAP Order (Backflush)
Locations

© 2014 IBM Corporation

 Current Process - PO Cancellation
Warehouse Management (SAP)

Start Cancells PO
PM

Removes material
Warehouse from PO and
assigns to the
corresponding BIN

MFG

SAP

© 2014 IBM Corporation

 Current Process - PO Deconfiguration
Warehouse Management (SAP)

Start Starts
Deconfiguration
PM

Warehouse

Reverses OPNS 10
and 20
MFG

SAP

© 2014 IBM Corporation

 Define Measure Analyze Improve Control

# of negative records
Negative records in SAP
Start Boundary End Boundary

Suppliers: Inputs: Outputs: Customers:

Procurement Pshysical Counting PO Creation Manufacturing

Project Managers Inventory Differences Negative Records

Inventory
Manufacturing System Transaction History Fix negative records

Warehouse CSC
Process Finance
DI Investigation
Warehouse
Inventory

Finance

Creates Reserves material Parts Assembly Technical

Production Creates Transfer Confirms
in Warehouse BIN OPNS 10,20…n Complete &
Order Order Transfer Order
Locations (Backflush) Mov. 101(FG)
6 © 2014 IBM Corporation
Voice of the Customer - CCRs

Define Measure Analyze Improve Control

CCRs selected for this project

Validated with
CCR-Critical Customer Requirement Metrics Requirement is - Must Be, Primary Satisfier or Delighter
Customer

Must be
New Management System Number of Negative Records = 0 Document

Management
System
Procedures for PO type AP01
0 Negative Records & $0.00 Procedure
Creation, PO Cancellation and Must be
financial impact
PO Deconfiguration Document
System Fix

7 © 2014 IBM Corporation

 Measure Definitions

Define Measure Analyze Improve Control

Indicator Definition Fórmula Target

Quantity of negative Is the output as result of Quantity of negative Negative records= 0

several errors in the current records and financial
Records & Financial Impact Financial Impact =$0
processes due to this records impact
accuracy is affected.

8 © 2014 IBM Corporation

 Baseline

Define Measure Analyze Improve Control

Errors observed during 2015

Goal Statement

 Our goal is to reduce the number of negative records and implement a new management system in 4Q 2015
 Represents a Soft financial benefit of $568,488.08 USD
 Key Success Measures (Metrics)
– # of negative records
– Financial Impact amount $ 0 USD

9 © 2014 IBM Corporation

Pareto chart related to all negative records categories

Define Measure Analyze Improve Control

$300,621.87

$186,370.08

$81,496.13

10 © 2014 IBM Corporation

 MSA Measurement System Analysis

Define Measure Analyze Improve Control

Reasons why we did not use Gage R & R?

We do not need to use the Gage R & R since a process is never replicable / repeatable in
a record.
We do not have a device that requires a calibration.

Validate Data Accuracy – Key Points to Consider

We consider these points with the Process Owner / Core Team

We are measuring the negative records created in SAP system
The data is obtained directly from the source (SAP)
The measurement was taken since April 2015 to December 2015.
Our team considers that Gage R & R is not needed due to lack of repeatable or replicable
processes.

11 © 2014 IBM Corporation

 Grafica P - Before
Define Measure Analyze Improve Control

There are two points out of the upper control limit, that was the reason to begin this Project.

12 © 2014 IBM Corporation

 Grafica P- After
Define Measure Analyze Improve Control

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Cause & Effect Analysis - Ishikawa
Define Measure Analyze Improve Control

Method
Material
Nobody validates if POs New Management System is required
Lack of materials in NSCT have been confirmed
Locations when creating POs Mov. 999 in error
There´s no oficial procedures
for PO Creation, PO´s Cancellation Misunderstanding
Wrong movement of MTMs and PO´s Deconfiguration between PMs & Warehouse Team
between slocs are performed who has to validate TOs confirmation

No material availability
is checked before PO creation Manufacturing Team moves opns
forward and TOs have not been
Lack of Training to Warehouse confirmed
Personnel to confirm TOs
Negative records in
Lack of a tool to validate if SAP System
material is available previous
Pressure when creating POs to create POs

Lack of a tool to confirm

TOs

SAP Transaction not known

to verify if TO has been confirmed

Environment Tools

© 2014 IBM Corporation

Hypothesis Test - Ho - Ha

Define Measure Analyze Improve Control

Ho < = 10 Negative Records in SAP
Ha > 10 Negative Records in SAP

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Hypothesis Test - Ho - Ha
Mes Tamaño Defecto Define Measure Analyze Improve Control

Noviembre 735 0
Diciembre 1100 0

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Failure Mode and Effect Analysis - FMEA
Define Measure Analyze Improve Control

Microsoft Excel
97-2003 Worksheet

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Implementation Plan

Define Measure Analyze Improve Control

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 New Process PO Creation Proposal - Management System Chart
Warehouse Management (SAP)

Define Measure Analyze Improve Control

No
Technical
Is there inventory Notifies to the MFG Team Complete (FG)
PM Start available for each to move opns forward Mov Type 101
part number.?

Yes

Creates
Production
Order type
AP01.

Confirms TO and
Warehouse Validates TOs have been
confirmed correctly

Parts Assembly
OP 10,20…n
MFG

Reserves material in Finished Good End

Creates Transfer OP 10, 20 …n (Warehouse)
Warehouse BIN
SAP Order (Backflush)
Locations

© 2014 IBM Corporation

 New Process - PO Cancellation
Warehouse Management (SAP)

Define Measure Analyze Improve Control

Was a Yes Request to the

Transfer warehouseTeam to
Start Order
created for do a Mov.999 to the
PM PO type corresponding BIN
AP01?

No

End Applies Mov.999 to

No Mov.999 is not
the corresponding
required BIN and validates in
Warehouse SAP system the
correct movement

Material is available
for new orders End

SAP

© 2014 IBM Corporation

 New Process – PO Deconfiguration Define Measure Analyze Improve Control

Warehouse Management (SAP)

Start TECO Technical

Complete (FG)
PM

Warehouse Confirms
Transfer Order

Parts Assembly
OP 10,20…n
MFG

Finished Good
Reserves material in Creates Transfer OP 10, 20 …n End
Warehouse BIN (Warehouse)
SAP Order (Backflush)
Locations

© 2014 IBM Corporation

 Control Plan

Define Measure Analyze Improve Control

22 © 2014 IBM Corporation

 Baseline
Trend after New Management System Define Measure Analyze Improve Control

Quarter Financial Impact

1Q 2015 $ 65,344.02
2Q 2015 $ 300,621.87
3Q 2015 $ 202,522.19
4Q 2015 $ -
1Q 2016 $ -

23 © 2014 IBM Corporation

 Define Measure Analyze Improve Control

Comparative

Function Current Proposal

No Yes
New Management System
Procedure for PO AP01 creation,
PO Deconfiguration and PO No Yes
Cancellation

Materials availability checked

No Yes
before PO Type AP01 creation

Mov. 999 in error Yes No

Transfer Order Validation No Yes

Unknown owner for TO

Yes No
Validation

Doubts about TO confirmation /

Yes No
Warehouse Personnel

24 © 2014 IBM Corporation