Diploma Work

Case study on the logistics structure of a production organization, presented through the material management and warehousing modules of SAP

1. Introduction

From my childhood, I grew up in an environment that, in one way or another, included the transmission of the ideas of economics. Among other things, this idea emphasizes rationality, predictability and continuous adaptation as priority values. Not consciously, of course, but from our conversations I quickly learned the three things that my father keeps in mind in order to achieve professional success.

The first, value creation, there is no business - not even a family or other community - that can stay afloat in the long term without the work invested in order to achieve the goal; and from this point of view it does not matter whether it is a family dinner prepared at home or a product produced in a shoe factory, for example.

The second is proper management of costs. Optimizing costs, including the correct definition of fixed and variable costs, is essential for operation. We are also faced with this when we are young, since it does not matter how much money we have left for sweets - the always changing amount - from our pocket money, after choosing the sandwich we regularly eat as lunch in the school cafeteria. Of course, a much more important decision is whether a company dealing with seasonal production will work with a fixed number of employees or hired labor necessary for the duration of production.

And the third is risk management, finding and eliminating, possibly exploiting, the hindering factors - if you like: bottlenecks. I don't have statistics, but I'm sure that the most talked about bottleneck in the world is the lack of time and limited memory capacity of students, because how could we do homework if we didn't have time or forgot to do it. For the former, reducing the amount of homework, and for the latter, completely abandoning it, is the only acceptable remedy. On the other hand, it is already a much more multifaceted problem if a company cannot satisfy the absorption capacity of its market due to the bottleneck of production equipment or the lack of human resources, or the poorly organized operation of logistics processes.

Logistics is a part of the science of economics that requires consideration of all three factors and is also essential for connecting to the processes of company operation. Furthermore, it is a multifaceted process that in one way or another has fundamentally influenced the operation of the very first manufactories and guilds, but at the same time it forces economic bodies to constantly renew and constantly rethink corporate processes. As an economics IT student, I was very happy to find a practical position - at HostLogic Kft. - whose profile includes, among other things, modeling and optimizing the logistics processes of companies. In my opinion, using and developing one of the most versatile and customizable SAP systems on the market today.

In my thesis, after describing the project and the necessary theoretical definitions, I present the structural points of the company - related to the topic - as a case study, their role, as well as redefined and/or optimized processes. Later, my critical comments regarding the companies that are the subject of the thesis and responsible for the implementation of the project will be included, followed by the conclusion as a conclusion.

2. Description of the project

Today's crisis-resistant sectors include the production and sale of nutritional supplements, vitamins and other complementary foods related to a healthy lifestyle. In the past five years, the Scitec group of companies has nearly doubled its sales, production and EBITDA every year. The Scitec group has the most modern plant in Central Europe, where the finished goods warehouse is also located. Due to the rapid growth, the bottleneck was caused by the logistics of handling finished goods. In 2011, the group switched to the use of the SAP ERP company management system, whose MM (Material Management) module was able to handle the logistics tasks at that time with a utility outside of SAP. However, the increased production volume and number of orders exceeded the possibilities provided by the MM module and the developed program. With the help of these, they could not solve the storage register, the monitoring of the expiration of warranty periods, and the performance of picking tasks became extremely labor-intensive.

Scitec Kft. carries out production activities in its own factory. The finished products are stored and sold from the same location. Scitec Kft sells its stock for export. Domestic sales are handled by All Nutrition Kft. carried out by Scitec Kft. from its stock, and then Scitec Kft. and All Nutrition Kft. a so-called "intercompany internal settlement process" takes place between

The manufactured finished products arrive packed on pallets from production to the finished goods warehouse. The warehouse is a high-rise warehouse with storage space, which, on the one hand, stores the products in identified locations, and on the other hand serves the picking process. In addition to manufactured products, commercial goods are also stored and sold in this warehouse.

Given that the demand, customer needs and expectations are growing drastically, the company is forced to constantly develop products and to constantly increase the related production. They try to increase production by increasing efficiency, which means increasing the utilization of production lines and optimizing work organization. In both areas, the basic source of information is SAP, where they try to ensure adaptation to changing conditions by adjusting the operation of the system and continuous development. Changes in processes mean more and more pressure on the finished goods warehouse, where customers are the actors of direct, daily contact. The quantitative increase in service tasks for the finished goods warehouse required, on the one hand, the expansion of the capacity of the storage area and, on the other hand, the development of the applied technology. Therefore, the company management decided to link the technological development of the finished goods warehouse to the introduction of the SAP WM (Warehouse Management) module. The management set an extremely short deadline for the "relocation" of the finished goods warehouse. At the same time, he set the expectation for the SAP system that the storage and movement of materials and the operation of related processes should be smooth. After the transfer of the information, about a month and a half was available to provide the IT background. Customer service and the necessary system downtime were limited to a long weekend. The ultimate goal of management is to apply the SAP WM module at a level that encompasses all related elements of procurement, production and sales. Due to the development of circumstances, the management expected the consulting company to achieve this by completing several implementation phases.

HostLogic Kft., which implements and maintains the SAP system. for him, the introduction of the WM module in such a short time was an increased challenge. The introduction of the SAP WM module, the construction and parameterization of the structure are not only consulting tasks, but also a series of continuous discussions and joint decisions with the client. We also had to take into account the features that ensure continuous operation in the current SAP system. One of the company's specialties is the production number application, which means that in production, according to an earlier technology and records, a unique identifier is engraved on each product. In the SAP system, batch management is used for manufactured finished products, but they were forced to improve the registration of production numbers. The also developed commission procedure was based on this register. In order to ensure the continuous sustainability of customer service, the WM introduction had to be phased in such a way that there would be no interruption in both production and delivery activities. That is why the parties agreed on the objectives and course of the two implementation phases described below.

The basic principle in developing the model of the first phase was that a functional WM basic warehouse structure be created by August 18, 2012. The start-up and commissioning of the system is scheduled for August 18, 2012. The shutdown of production is planned for a minimum period of time, during which the starting state of the system must be established.

The task of the consultant and the developers was made more difficult by the fact that instead of the usual 5-6 months, the aforementioned month and a half was needed to develop the concept, test it and launch the system. On the one hand, this was a disadvantage from the point of view of the project, since the system had to be set up while temporarily leaving the picking process intact, which meant that programs had to be developed that enabled the old picking software to be temporarily able to supply the goods with unchanged efficiency when connected to the WM module task. At the same time, precisely because of the tight schedule, these developments - already largely unnecessary in the second phase - had to be made in such a way that the project would not slip past the deadline.

On the other hand, it served as an advantage because the introduction became possible within a few days of the production shutdown. In addition, the fact that they did not have to learn the changes resulting from the progress of the project, which was therefore divided into two phases, made it easier for the employees of the Scitec group. In this way, ensuring a kind of continuity between the changes caused by the transition and the performance of everyday job tasks, which due to the rapid growth of the company group and the resulting temporary lack of human resources, still put quite a heavy burden on them. As a result, the training provided at the end of the phases usually took place during working hours, temporarily setting aside employee tasks, without interrupting production and company operations, and was divided into several groups.

The condition for starting the first phase was that the system construction tasks could be completed by the start date and that the system was reliable. In the phase model, the goods are received and stored already in the WM structure, by creating a connection between the MM and WM warehouses.

In the second phase, WM was expanded in the picking processes. It was also in this phase that the automatisms that enable the automation of WM processes were developed. In the phase, the warehouse functions were supported with barcode scanners. By applying the bar code, the execution of material movements became faster and more accurate. Since the system already indicates incorrect loading and unloading at the start of the operation, the register can thus show the real situation. When developing the phase, it was a fundamental aspect that the identification of products with a unique production number could remain traceable and that automation could be introduced without stopping the warehouse processes.

2.1. Scheduling of project tasks

HostLogic Kft. has been working on the All Nutrition project for two years, the results of which so far are the implementation and customization of the sales, production planning and financial module, and the goal is to finalize the design of the material management module, which also includes the connection of the storage module. As an intern, I joined the process on 07/02/2012, right before the development of the storage module concept plan. My job consisted of project secretarial tasks, I checked and coordinated the observance of deadlines for the tasks to be performed, and monitored the progress of the project.

The deadlines for the project tasks are described in Table 1 of the Appendices.

In the next section, I would like to present the theoretical definitions and basic concepts necessary to understand the storage module and the project.

3. Defining logistics

Logistics is a series of company activities that ensure the smooth running of company processes.

According to the so-called 7M principle, the task of logistics is to:

• the right thing;

• in the right quality;

• in the right condition (quantity);

• in the right place;

• at the right time;

• with the appropriate information and documents;

• be available at the right price (costs).

Logistics is also a strategic process that fundamentally influences the design and organization of all the company's activities. Based on this, internal and external, downward and upward material and information flows must be determined and managed.

Its purpose:with the help of system-based materials management, working capital management and, through it, serving the efficiency of the entire company management, the coordination of the company's supply and demand.

Logistic purposes:

a.) performance goals: achieving profit, providing a high level of service in the market, meeting deadlines, meeting the expected quality and quantity, etc.

b.) cost objectives: cost reductions, optimization of material and general costs, reduction of lead times, capacity utilization and warehouse stock optimization.

Logistics functions: (functional sub-strategy)

• strengthening the business policy, increasing competitiveness,

• satisfying customers with better quality, service,

• achieving significant cost savings.

3.1. The logistics supply chain

Figure 1: The model of logistics functions

Source: Imre Knoll: Logistics in the 21st century, Budapest, Képzőművészeti Kiadó és Nyomda Kft., 1999. 10 p.m.

“The supply chain includes all activities that are the product related to its production and delivery, from the supplier's supplier to the final up to and including the consumer. The four main processes – design, procurement, production, a delivery − which defines the supply chain, includes supply and demand management, procurement of raw materials and components, production, assembly, inventory, order processing, distribution and delivery to the final consumer."

3.2. Warehousing as a logistics function

In addition to disposition activities and material handling, warehousing can be classified as one of the main logistics functions.

Nowadays, it has already become obvious that although one of the main objectives of logistics developments is to reduce warehouse stocks, warehouse systems still play an important balancing role in logistics supply chains.

The contact points where the continuous movement of the system is interrupted for some reason play an important role between the individual elements of the logistics supply chain. In other words, in some logistics processes, the material flow stops for a longer or shorter time in certain places. Placement, storage, handling and protection of materials must be ensured at these points. So they should be provided with a suitable place. These places are called warehouses.

In the warehouses, they ensure the loading and unloading of goods, classification, preparation of orders,often its packaging,as well as the warehouse registration of goods and the preparation of accounts with a computerized, radio-frequency, barcode registration system.

Warehouses play an important role in the logistics process, as part of the company's logistics costs are generated here. Increased attention must therefore be paid to the economy of storage activities.

3.2.1. Definition of warehousing and warehouse

Storage plays a special role in the complex process system from extraction to use. The warehouses are the connecting elements of the sub-processes, which collect stocks of goods in order to balance the change in intensity of the material flow of the preceding and following sub-processes, and then pass them on.

Warehousing is therefore a subsystem of a process system with specific technology, technical and labor-intensive, which balances the process system according to needs with its equipment.

From the concept of warehousing, warehouses are facilities that preserve the quality and quantity of goods without loss. Warehouses are not buildings, but complex facilities that have a specific system of connections and internal processes.

3.2.2. Advantageous and disadvantageous factors of the warehouse

The beneficial factors of the warehouse can be the following:

• the warehouse ensures the continuity of production with its availability;

• it has a balancing role in the event that the operating speed of the production and distribution process is different;

• it enhances domestic and even international trade mobility;

• preserves the quality of raw, semi-finished or finished products with the help of appropriate architectural and other conditions.

Disadvantages of the warehouse can be:

• the warehouse usually requires significant investment and operating costs;

• stopping the logistics process in this area may increase the lead time;

• adequate utilization of the building and storage space cannot be ensured in all periods.

3.3. Grouping of warehouses

In the logistics process, warehouses can be connected to various subsystems, so their location and nature are determined by their specific function. Based on this, the main warehouse types are the following:

• raw material, spare parts, sub-assemblies warehouse, which is usually located on the input side of the production or assembly plant, and can therefore also be considered part of procurement logistics

• intermediate (semi-finished goods) warehouse: between the operations of a production process, which therefore closely belongs to production logistics

• finished goods warehouse after the end of production or assembly, which can be established in the area of ​​the production plant, but can be a completely independent facility, even a company

• if the finished goods warehouse has a direct connection with the points of sale, it can also be considered a distribution warehouse, in which case it is an integral part of distribution logistics

Warehouses can be grouped according to their design as follows:

• block storage

• shelf storage

• high warehouse storage

3.4. High storage systems

Concept

Rack storage systems for piece goods, in which the storage height exceeds the average storage height available with general-purpose forklifts, and goods are placed in and removed from racks by loading machines or forklift trucks moving in the aisles between the racks.

3.4.1. Reasons for its spread

• development of modern distribution systems

• automation of production processes

• development of warehouse technology

• efforts to increase area utilization

3.4.2. Its components

• storage space

• goods collection and distribution area (preparation area)

• administrative and management network

• and the related technical elements and areas

Grouping

1. Based on the purpose of the warehouse:

• suitable for storing full loads

• order picker

• combined

2. According to the height of the racks:

• medium-height warehouses (with racks 6...10 meters high)

• high-rise warehouses (with a rack height greater than 10 meters)

3. From the point of view of the architectural design of the storage space:

• hall warehouse operating with stacker or stacker

• rack-supported (self-supporting) high-rise warehouse operating with stacker

4. Based on the level of automation:

• mechanized

• partially automated

• fully automated

3.4.3. Advantages of establishing high-rise warehouses

They provide all the advantages offered by warehouse types based on traditional row rack storage technology, eliminating the disadvantage of traditional row rack storage with a relatively high specific area utilization in the case of a small storage height.

• large storage capacity in a relatively small area

• they enable quick loading and unloading, handling a very large turnover of goods during the unit of time

• enable the mechanization and automation of warehouse material handling work with the following tools:

• -reduction in food intake

• decrease in the proportion of manual work

• elimination of heavy physical work

• reduction of accident hazards

• creation of favorable working conditions

• facilitate:

• the mechanization and automation of management work

• the use of opportunities provided by computer technology

• up-to-date stock register

• implementation of optimal inventory management strategies

• maintaining a stock selection strategy

• fast and reliable data and information flow

• exclusion of error possibilities

3.4.4. Areas of application of high-rise warehouses

Terms and conditions

• stock to be stored:

• consists of types of goods that can be combined into homogeneous unit loads

• polystructured

• the turnover of the warehouse is relatively high

• the area available for the establishment of the warehouse is small

• land prices or land use fees are high

3.4.5. Inventory concepts

Safety stock: (master stock, minimum stock) the stock color, below which the stock cannot permanently decrease, is used to prevent disruptions in the supply of the stock.

Calculation: daily consumption * with days of supply delay (estimate)

Current stock: a stock that ensures material supply between two replenishment dates.

Calculation:

Average stock: constantly available stock

Calculation:

Maximum inventory: the inventory level above which the inventory cannot rise or is uneconomical.

Calculation: current stock + safety stock

Indicator stock: the stock level at which the order must be placed.

Calculation: daily use replenishment time + core stock

3.4.6. Stock standard

Defines the allowable level of stocks.

1.) According to their expression:

• It can be specified in time units: it shows the period for which the use of the given set must be ensured.

• It can be specified in quantity: the stock is sufficient for the volume of production in quantitative units.

• It can be entered in value: it shows the amount of money tied up in stocks.

2.) In terms of use, the stock standards can be:

• River standards: determines the stock level for river management.

• Plan standards: define the stock level during the planning period.

3.) From the point of view of developing stock standards:

• Individual standards: define the stock level for a specific stock item.

• Group norms: defines the stock level for stock types.

3.4.7. Operation of the inventory system

In large companies, decisions regarding stocking are made at all three levels.

• senior management level: company-level working capital needs, total inventory value, financing methods,

• middle management level: decisions that directly and indirectly modify the stock formation, which can be financial or in-kind,

• lower management level: movement, purchase, release of stock items, routine decisions.

Applicants' needs can be met in the following order:

• FIFO system: incoming requests are met in order of arrival. The simplest and most effective solution.

• LIFO system: demands are met in the reverse order of receipt. The opposite of the FIFO principle, it is strongly recommended to avoid the application of the principle in the food industry.

• RND system: incoming requests are satisfied randomly, the order is irrelevant. In the case of domestic stores of the Scitec group, the principle is sometimes applied, but only if the order is for non-batch goods.

• PRI system: incoming requests are met in order of importance. It is used in case of limited stocks. It is used by the company group in case of large foreign orders.

• LOFO system: (Abbreviation of Lowest In-First Out method). The essence of the method is that the inventory purchased at the lowest price is sold first. I will also mention it in my critical comments on the inventory of purchased finished products.

• HIFO system: (Abbreviation for Highest In-First Out method). The essence of the method is that the inventory purchased at the highest price is sold first. Unlike the LOFO system, it can be used to temporarily reduce EBITDA.

• FEFO system (abbreviation of First Expire First Out method). The method does not primarily sell based on economic considerations, it is based on the expiration date of the product made from the raw material. The Scitec group applies this to the manufactured products. The batchproducts, the corporate management system is listed as the FIFO principle, and although the two differ by definition, the two principles can be combined with optimization. Hence, in the sections related to system setup, I will refer to the principle as FIFO.

4.1. Introduction to SAP ERP

SAP is the world's leading integrated enterprise management system (ERP). By integrated corporate management system, we mean a program package covering all corporate processes of a given company. SAP's sector-specific solutions are used by approximately 32,000 companies in more than 120 countries, both small and medium-sized enterprises and large enterprises.

SAP AG was founded in Germany in 1972, its original name was "Systemanalyse und Programmentwicklung", which means "system analysis and program development". Its abbreviation was later reinterpreted, the new name "Systeme, Anwendungen und Produkte in der Datenverarbeitung" meaning: Systems, applications and products in data processing. On the American continent, the Oracle system is the most widespread, but still 12 million users use the SAP system in total, which is an outstanding number in the field of business management solutions.

4.2. SAP logistics modules and their relationship

SAP interprets the concept of logistics in a very broad way: logistics is the quantity, value, time, capacity, cost, etc. of material goods and services. according to the following. So this includes all processes of the system, which are not only related to the movement of value, but rather to the movement of materials. The logistics modules of the SAP system: sales and distribution (SD: Sales and Distribution), material management (MM), including storage (WM), production planning and management (PP: Production Planning). These modules form the backbone of the integrated logistics system, which, supplemented by the functions of the quality control (QM: Quality Management), maintenance (PM: Plant Maintenance) and human resource (HR: Human Resource) modules, include all inventory management, production and sales tasks.

Figure 2: Connection of logistics modules

Source: SAP Logistics Tutorial (translated and edited)

4.2.1. The MM module

The MM material management module is used to manage the entire process of procurement, material receipt, inventory management and invoice control. It provides up-to-date information on stocks and supports the selection of the most economical source of purchase.

To get to know the logistics side of SAP in more detail, I will explain in more detail some of the most important services of the MM module:

4.2.1.1. Material requirements calculation (MRP)

The procedure for calculating the need for individual materials can be defined in a plant (factory) breakdown, but as an alternative, it can also be specified in a table for a group of materials. It can be determined whether the calculation of needs is based on usage or planned needs. If the MRP is based on a plan, then the calculation is based on the sales plan or already received orders in such a way that the system also calculates all related requirements based on the related parts lists. MRP creates purchase requisitions for material procurement and planned production orders for production planning. If, in the case of certain articles, the needs of a factory are met by another factory or a center, the MRP run creates transfer orders, which are taken into account by the MRP calculation run for the other factory.

Acquisition

MRP starts the procurement process by generating purchase requisitions. Purchasing organizations can also be structured in such a way that they are responsible for several factories, which may even belong to different companies within the company group. If an agreement has been reached on a scheduled delivery for a material, then the MRP enters a batch breakdown purchase request with deadlines in the schedule. Based on the purchase requisitions, the system automatically generates calls if a framework contract has been concluded, and creates the order if the item has a fixed supplier. If there is none, then an information system helps to select the supplier. The system stores detailed data on all previous suppliers of the article and supports the evaluation of individual suppliers with statistical data. Shipping costs known at the time of ordering are stored as part of the purchase order.

Material income

The receipt of materials is done with reference to the purchase order, the system can monitor all previous partial deliveries, and can check whether the over- or under-delivery permitted in the order has been exceeded. The system automatically records the revenue in the order, and in addition to updating the quantity data of the warehouse stock, it also performs the ledger accounting of the item. The planned delivery cost is distributed on the arrival of the stock based on quantity or value, depending on the program settings.

Account verification

Automatic invoice verification greatly reduces manual work. The data in the MM system can be easily compared in terms of quantity and value with the received invoice. Thanks to the integration of material procurement and revenue generation, all the necessary information is present in the system, and basic receipts can be called up in their entirety with a few clicks of a button.

Stock register

The quantitative stock register covers all warehouses. The system supports all existing stock movements for delivery, cost center, production, and transfer between factories and within factories. The inventory can be organized on a continuous or daily basis. Several special sets (e.g. for payroll processing, consignment sets, etc.) can also be registered.

Storage system

The warehousing system is capable of supporting the mixed use of different types of warehouses (automated, block, random access, etc.), managing fixed storage locations, removing, entering, and transferring storage from, to, and between storage locations. Receipts and labels (including barcodes) can be generated at different levels, from receipt to exception. The storage system has its own inventory procedure, which ensures that every storage location is inventoried at least once a year. Appropriate tools are also used to handle pallets of different sizes, special sets and dangerous goods. The warehouse management component can also be built as a subsystem that can perform the most important functions even in the event of a malfunction of the server managing the central database.

• The accounting of all inventory movements in the WM module affects material management, i.e. the MM module thanks to the online connection

• Materials with quality problems are related to the QM i.e. Quality Assurance module

• The supply of materials or the supply of production affects the PP, i.e. the Production module

• Customer deliveries are created in the SD i.e. Sales module

4.2.2. MM warehouse

Inventory management at the MM level is the basic solution for warehousing. Inventory is recorded based on the quantity and value of the inventory. That is, I can only check in the system whether I have a stock of the certain material, but not where I can find the desired material in the warehouse. Material movements, i.e. receipt/delivery, can only be tracked in SAP based on the so-called Material Document. After the material receipt is created, the quantity and value of the goods in stock are also updated.

Structure of the MM warehouse

Several factories can be connected to a company, but a certain factory can belong to only one company.

A factory is a physical or logical place where materials/goods are stored and/or manufactured.

The warehouse separates the materials based on whether they use MM or WM warehouse. If only inventory management takes place in a warehouse, in that case, at the MM level in the SAP system, the warehouse itself is called a storage location.

Figure 3: the structure of the MM module

Source: Inotay, Thu 2008

4.2.3. WM warehouse

The management of the stock at the WM level ensures full traceability of the storage. It determines the quantity and exact location of the stock within the warehouse. Examines and documents all inventory movements using the Transfer Order. Examples of such inventory movements include storage after receipt, storage before delivery, and transfer from one storage location to another. After the transport order is created, the material moves virtually, which means, for example, that it is currently being delivered. This virtual movement lasts until the transport order is acknowledged. During the "open" (not yet acknowledged) transport order, the material is blocked, i.e. it is unavailable in the system until the acknowledgment is made. The structure of the WM warehouse consists of the following units:

4.2.3.1. The warehouse

Usually the organizational unit of a factory where materials/goods are physically stored. In the SAP system, we define, for example, the weight and unit of measurement of materials at the warehouse number level.

4.2.3.2. The warehouse type

Divide the warehouse physically or logically. For example, a receiving area, a delivery area, with fixed storage areas or a high-rise warehouse. We can also define warehouse types in the system where materials can be stored at both MM and WM levels, but at the same time, the MM and WM warehouses must always be connected to each other. MM can be without WM, but not vice versa. Due to the identity of the inventory of the two warehouses, these are called interface / temporary warehouse areas. This could be, for example, the receipt / delivery area, a temporary area created to handle discrepancies, or a transfer zone. At the warehouse type level, the most important control parameters that affect the storage and retrieval process of the material must be defined, and the inventory method must also be defined according to the warehouse type (e.g. cyclic or continuous inventory).

4.2.3.3. The warehouse area

The logical or physical division of the warehouse type into smaller areas in order to maximize space utilization. 5.7.2. is presented in more detail in chapter

4.2.3.4. The storage space

The smallest unit that can be defined in the system. It is advisable to enter the names of the storage areas in such a way that they clearly indicate where the materials are located within the warehouse. We can create different types of storage on the storage, such as high storage, wide storage; we can set the maximum weight limit and total capacity of the storage space. If mixed storage is allowed in the storage area, we can store different materials / goods in the same storage area.

4.2.3.5. The quant

The smallest storage unit with which the material can be identified at the storage level. When a material is stored in an empty storage space, the system automatically creates a quantum for that storage space. When the material is delivered, the quantum is deleted from the system. So the fundamental difference between the MM and WM warehouses is that, while at the MM level we "only" receive, store and issue the materials, at the WM level we document their movement within the warehouse and can also specify their exact location in the warehouse.

Below is the definition of the individual organizational structures, as well as All Nutrition Kft. and SciTec Kft. I will detail the content to be implemented in this case.

4.3. The concept of the material management module

4.3.1. Factory

The factory is the central organizational unit of logistics activities, aFrom the point of view of material management, the organizational level of procurement and inventory planning. The organizational unit that further divides the company from the point of view of logistics, inventory management, procurement and material requirements planning.

From the factory's accounting point of view, the level of material evaluation is also the same, i.e. the stock registration price applies equally to all warehouses within a factory.

4.3.1.1. Scitec Kft.

Scitec Kft. carries out production activities in a factory. The products manufactured by Scitec Kft. are owned. Scitec Kft. acquires and stores the production base and auxiliary materials, as well as the manufactured finished product. The products are stored and sold from the site. Scitec Kft. sells for export from its inventory. Domestic sales are handled by All Nutrition Kft. carried out by Scitec Kft. from its stock, and then Scitec Kft. and All Nutrition Kft. a so-called "internal settlement process between companies" takes place between

4.3.1.2. All Nutrition Kft.

All Nutrition Kft. primarily Scitec Kft. sells the stock it owns to domestic customers, within the framework of a so-called "business-to-business sales process". Contact with customers is handled by All Nutrition Kft. holds, accepts customer orders and settles accounts with customers (invoicing to customers), but delivery and distribution are carried out by Scitec Kft. from the premises of Scitec Kft. from his stock. Based on the completed deliveries, Scitec Kft. and All Nutrition Kft. accounts among themselves.

All Nutrition Kft. it supplies domestic customers not only from its premises, but also has a wholesale warehouse (wholesale warehouse in Budapest) and serves retail customers from its own store network.

All Nutrition Kft. stocks in the wholesale warehouse and stores. constitute its inventory, which it acquires in a significant part from Scitec Kft. All Nutrition Kft. acquires a certain range of products, mainly commercial goods, from other external suppliers. These products and commercial goods are stored in the warehouse on the factory site, separated by Scitec Kft. from your stocks.

To model the above activities, the locations in Table 2 of the annexes were mapped. Three factories were defined for All Nutrition Kft. and one for Scitec Kft.

4.3.2. Purchasing organization

The procurement organization divides the company according to the procurement requirements. Responsible for supplying the given factory with raw materials, commercial goods, services, and tangible assets. Maintains contact with delivery partners and is responsible for procurement contracts and other delivery conditions.

All Nutrition Kft. procurement processes supported by logistics, primarily the procurement of commercial goods from external suppliers, and Scitec Kft. the procurement of its products for the purpose of supplying the wholesale warehouse and stores.

Scitec Kft. in the case of the acquisitions belonging to the core activity represent the determining procurement activity. This includes the acquisition of basic and auxiliary production materials, packaging materials, and commercial goods. The same organizational unit is responsible for the execution of these procurement tasks.

Based on the surveys, it is justified to create a procurement organization for each company to manage procurement processes.

Purchasing organization

Its designation

0100

All Nutrition purchasing organization

0200

Scitec purchasing organization

4.3.2.1. Purchasing group

The purchasing organization is further divided into purchasing groups.The purchasing groups are part of the purchasing organization, whose organization at the factory level is illustrated in tables 3 and 4 of the appendices.

Purchasing group means a purchaser or purchasing group responsible for a specific procurement activity. It has a separate authorization object. All procurement documents (request for quotation, purchase order request, framework contract, purchase order) are provided with a procurement group code, on the basis of which they serve as a selection element for all procurement document lists and evaluations.

At All Nutrition Kft. and SciTec Kft., the purchasing group code means the individual purchasers, to which personal contact data can also be assigned, such as phone number, e-mail address, fax number.

4.3.2.2. Warehouse

The warehouse is a unit for keeping records of stocks within the factory, which is subdivided into the storage location and the level of actual physical stock management. A warehouse can be a separate warehouse building or a part of it, where stocks of different types or intended for different purposes are stored. It is also advisable to register a physically uniform location or even a storage area as a separate warehouse, if the responsibility for the warehouse stock inventory is also shared. The physical inventory can also be carried out with warehouse restrictions, this also means that the inventory is carried out at the warehouse level.

The warehouse also has a separate view in the material master. Therefore, a given material has as many warehouse views as it occurs or may occur in the warehouse.

In SAP, when recording individual inventory movements (e.g. goods receipt referring to a purchase order), it can be set so that the material warehouse view is created automatically. If necessary, individual movements can also serve as warehouse limiting elements (in SAP, movement no) during execution. In this way, we can exclude a material without a specific warehouse view from a specific warehouse. For example, only those materials that have a manually created scrap warehouse view can be entered into the scrap warehouse.

Based on the surveys, All Nutrition Kft. and Scitec Kft. it is not necessary in the evening.

Since warehouses are organizational units subordinated to factories, based on Figure 4 presented in the chapter on the material management module - similarly to purchasing units - they must also be assigned to factories so that the movement of materials can be tracked. This is illustrated in Table 5 of the annexes.

4.3.3. Master data

4.3.3.1. Material body (article body)

The material master is the central master data of the logistics modules. In the material master, the system also stores the basic data and characteristics of the materials and the control parameters required for the operation of individual processes.

The article master has views integrated in SAP and structured for organizational units.

Since the data of the article master is needed by all logistics modules (MM, SD, PP, QM), the data is grouped into specialized units according to the economic process they are involved in, and this data is accessible to all the modules involved.

Material type

A group of substances with identical properties. The type of material controls: the data screens to be filled in, field selection, the method of number allocation when maintaining the article master.

In the program, material types are used to distinguish different types of materials. The material type is a general organizing principle for dividing materials into different groups, which is always the first thing the system asks when creating a new material in the system. Each material can only belong to one material type.

The type of material determines the

• views, fields to be maintained,

• the numerical range of the article numbers,

• price control (moving average price, standard price), and

• the possible valuation classes, which determine to which general ledger accounts the automatic postings should be made in case of movements of the given material.

Regarding services, we can also manage services to be purchased and sold.

Material group

A grouping code for grouping together several materials or services with similar properties, its role is as follows:

• support for evaluations and analyses

• automatic account assignment control when purchasing non-stocked items

Since the material group is a grouping element typical of the stock registered in the entire article master, materials that are not related to the core activity (e.g. office supplies), range of technical materials, other materials, etc. must also be classified in the material group during the design. and all services (purchased or sold) that will be part of the article body.

Quantity units

In the master data, primarily in the article body, the quantity units used in the logistics movements of the article must be specified. The basic and minimum mandatory quantity unit is the base quantity unit, which cannot be changed after the receipt or inventory has been recorded for the item. As a base unit of quantity, we recommend the smallest quantity in which we want to see the movements of the article and the stock evaluation of the article. The base quantity unit is also the quantity unit of stock management, in this quantity unit you can request warehouse stocks.

Maintenance of material master

Centrally creating the material body ensures that the material body remains uniform and that the different language names are structured according to the same logic.

During the introduction, central material master management is recommended for purchased and self-produced materials: basic data, sales, procurement, disposition, inventory management, accounting and calculation data.

The request process is independent of SAP, and can originate from individual areas of expertise (for technological reasons, technical area, etc.).

4.3.3.2. Delivery trunk

The supplier master contains the information that is used to record the economic events of a company related to suppliers. These data control the bookkeeping process and the ledger processing of economic events, and in the case of procurement processes, the determination of procurement-specific data.

The system centrally registers the suppliers that are needed for procurement and invoice verification, invoice registration and the payment processing house. As a result, data can be without redundancy, e.g. to implement existing connections between material management and financial accounting.

The delivery master also contains data structured by organizational units. In terms of organizational levels, we can separate general data (supplier's name, address, phone number, etc.), company-specific data (for example: payment terms) and purchasing organization data (for example: order currency, etc.)

4.3.3.3. Purchase info record

The procurement info record contains procurement-specific data for a given article in relation to a given supplier and a given procurement organization. These data are typically the item number used by the supplier, purchase price, additional shipping costs, discounts, allowances, tax code used, freight parity, etc. Additional information and expectations can be recorded as text information. (The info record contains the purchase price history, the number of the last purchase receipt, as well as the statistical data of the given item, such as the quantity and value data of the item - supplier per period, and the number of purchase receipts.)

4.3.3.4. Order book

The task of the order book is to regulate procurement processes for a given period, so we can prescribe a list of suppliers or specific framework contracts that can be used in a given period. The basic condition for using the order book in this way is to turn on the order book obligation in the article master for the given factory.

In the order book, you can specify which supplier of a material is the so-called fixed (permanent) supplier. During the calculation of material requirements, the fixed supplier is included in the receipts of the purchase proposals, which facilitates further processing, and it is also possible to list purchase requests for the fixed supplier.

The main IT data relating to master data can be viewed in Table 6 of the appendices.

4.3.4. Procurement processes

4.3.4.1. Procurement planning - Basic and auxiliary materials

Procurement planning is carried out using past data, with the help of a developed report. With the help of this report, the stock planner determines the quantity of materials to be procured and can display and print out the quantities to be procured by recording this as a list. Purchase orders are created manually based on this list.

4.3.4.2. The determination of the monthly weight loss value of raw materials

Among the basic design data, one of the most important parameters is the expected monthly loss of raw materials. This amount of weight loss is determined manually, and the statistical data required to set the manual weight loss data is derived based on past finished product sales data, with the help of a developed report and database. The expected monthly raw material consumption field can be edited manually, and the amount entered here is stored in a developed database. This quantity does not depend on the time axis, but is valid as long as this quantity is not reviewed by the designer during a new analysis and planning. The historical weight loss statistics of the raw materials are determined using the following procedure:

• The basis of the calculation is the past sales data of the finished products, the sales data of the last 12 months must always be taken into account during the calculation.

• Taking past product sales data into account, the current parts list of the products must be broken down to the raw materials, and the raw material quantity incorporated according to the recipe for the sold finished product volume must be determined by summing up the raw materials, aggregated per raw material, but broken down by month

• The amount of material used, calculated in this way in a monthly breakdown per raw material, must be stored in a developed database in this monthly breakdown.

• In order to support the determination of the monthly average loss data to be used during planning, the usage values ​​of the last 12 months must be listed in a monthly breakdown by raw material, grouped by product category (according to stock code), to which the planning staff determines the monthly average loss value to be used during procurement planning.

• The monthly average weight loss value determined manually in this way must also be saved in this database.

4.3.4.3. Counted fields

Future inventory coverage time (taking planned deliveries into account):

The future stock coverage time (in a weekly grid) is calculated taking into account the orders already in progress (open purchase orders), the current stock and the expected losses

4.3.4.4. Calculation method

Future inventory coverage period =

Future Expected Inventory = Current Available Inventory + Amount of Open Purchase Orders - Expected Loss

Expected weight loss =

4.3.5. Batches

Batches are used to separately register inventory segments with the same characteristics and quality within a material (manufacturing conditions, warranty expiration, etc.) and to track related inventory movements. The batch can be used for both purchased and manufactured items.

Batch series sizes are determined individually for each material. In the case of purchased materials, either materials from one delivery or stock quantities with the same expiration date are considered a batch. In the case of manufactured items, a batch is the quantity that was produced in a series under the same conditions. This quantity can be several shifts of production. The production date and expiration date can be entered in the batch, the supplier's ID and the supplier's batch number can be recorded in the commercial data. The system automatically records the date of the last inventory, which helps to comply with the FEFO principle.

4.3.5.1. Creating a batch number

Batch identification can be assigned automatically (generated by the system) or manually (maximum length 10 characters). Batch search strategies can be set for individual economic events (for example: material consumption, sales).

4.3.5.2. Batch formation for manufactured items

In the case of manufactured items, a batch means the quantity of products produced at the same time in one process for one production order. This rule applies to both semi-finished and finished products. The batch number will match the production order number that Smart Enterprise automatically assigns to the production order during production order authorization. If the product is taken into stock, this batch number will be applied automatically.

4.3.5.3. Create a batch for purchased items

Smart Enterprise automatically assigns the batch number from a closed range of numbers to the purchased items during receipt. However, if the purchased ready-made goods are not perishable, they are not subject to batching and the company often does not even monitor it.

The batch also provides an opportunity for post-sale monitoring, as the product's batch number remains in the system during sales, indicating that the product has already been removed from the accounting. The ten-character length ensures that, given the current production volume, the batch number will not be repeated for a long time to come.

This is how it could have happened, that when a shop owner based in Eastern Europe filed a complaint because, in his opinion, he was sold at a higher price than others, contrary to the company strategy - that they sell to everyone at the same price - it turned out that the product he brought in as evidence the company originally sold it to another Eastern European country, and it was also able to determine to which contractor. This revealed a fraud, which could have caused serious problems for some salespeople later on.

It is also possible to investigate a quality complaint about the sold goods, because by identifying the batch number, they can carry out a subsequent quality control with the products still in stock - manufactured at the same time as the defective product - so it becomes easier to recall series with quality problems, thereby further reducing the quality standards the possibility of possibly selling an improperly manufactured product.

The use of the batch number can therefore have many advantages even for a company with a large volume of production, however, precisely because of the large quantity produced, problems such as the identification of incorrectly picked return goods during sales can often occur. To this end, it is advisable to clarify and simplify the picking strategy and processes, as well as to provide the products with other identifiers in addition to using the batch number, or to preserve as much data as possible regarding the purchases.

5. The concept of the high warehouse module

5.1. The first phase

5.1.1. The method of introduction

The manufactured finished products arrive packed on pallets from production to the finished goods warehouse. The warehouse is a high-rise warehouse with storage space, which, on the one hand, stores the products in identified locations, and on the other hand serves the picking process. In addition to manufactured products, commercial goods are also stored and sold in this warehouse.

The warehouse technology is supported by a utility outside of SAP, which contains the data of the storage space and stored stacks. The high-rise warehouse is not created in SAP, the stock of the finished goods warehouse is registered in a logical warehouse (0010) in MM.

As production continues to grow, there is an ever-increasing need for faster service and improved quality. Further operation of the warehouse is planned by activating the SAP WM module. It is clear that the complete construction of WM for the given functionality requires more time than the available 1 month, therefore the introduction of the full functionality was divided into several phases.

When developing the model of the first phase, the basic principle was that a functional WM basic warehouse structure would be created for the finished goods warehouse by August 18, 2012. The start-up and commissioning of the system is scheduled for this day. The shutdown of production is planned for a minimum period of time, during which the starting state of the system must be established.

The condition for starting the phase is that the system construction tasks can be completed by the start date, and the system must be operational. In the phase model, goods are received and stored in a WM structure.

5.1.2. The structure of the model

0010 Finished goods warehouse in SAP MM is 0200 Scitec Kft. company 0200 SCITEC Kft. is created for the named factory. The identifier of the WM warehouse will be defined in the system with the identifier WM1, the name Finished goods warehouse, and it will be connected to the logical warehouse 0010.

Figure 5: The concept of the high warehouse module in the first phase

Material receiving interface zones:

921 Receipt zone - finished product: the receiving area of ​​stock coming from production

902 ÁB zone external reception: reception area for purchased and sold commercial goods

Pallet storage:

• one storage space one storage device (pallet), one article number and one batch on one pallet, movement with the entire pallet quantity

Miscellaneous storage:

• one storage space is a storage device (pallet), one storage space can have several article numbers, additional storage is possible

Shelf storage:

• storage device not identified, one storage location can have several article numbers, additional storage is possible, except for partial quantities

5.2. The operation

The finished goods are received by two-step transfer, between logical warehouses 0023 and 0011. 0011 is the finished goods warehouse in Budapest. The transfer of the goods between the locations also takes place between warehouses in two steps, from logical warehouse 0011 to logical warehouse 0012. The logical warehouse 0012 is connected to the high warehouse WM1. The product is placed in the receiving zone of the WM warehouse (921), the receiving zone is part of WM and has one storage location.

The material is moved from the receiving zone to the RAZ stack identification point by means of a transport order. In this operation, the system creates a storage unit for which a unique identification label is printed. In addition to the text information, the label also includes a barcode, type PDF 147 (this is also used in production). The label is added to the stack.

The material is placed in the pallet storage by reading the identification of the storage unit and entering the destination storage location. The system generates a transport order for the movement.

The system stores the item number, batch, batch quantity, and batch identifier in each storage location. Up-to-date information on stocks and storage locations can be queried. The movement within the warehouse is carried out by a transport order, in which we specify the storage unit identifier and the destination storage location.

According to the current method, commercial goods are placed in stock with reference to a purchase order and with warehouse receipts. The MM receipt is done with the MIGO transaction, but to the logical warehouse 0012 (it is connected to the WM warehouse). When the receipt is recorded in WM, the system automatically generates a transport request, and the inventory is posted to zone 902.

Storage of commercial goods is carried out by processing the generated transport request, a standard transaction. Storage can be done in several ways:

• The first step of pallet storage takes place in the RAZ warehouse type. Here, the rakat label is printed and affixed to the package. The final storage location is determined manually in the mixed storage, similarly to the finished product. The storage is recorded in the transport order (destination storage location).

• Storage in the shelf storage is done by processing the transport request. Selecting and specifying the target storage location is manual. The storage is recorded in the transport order (destination storage).

If the goods are moved directly to picking, one of the above storage procedures must also be carried out first, and from there in a next step we move the goods to the picking area (warehouse 0010) - this is done by a developed program that automatically generates the MM and WM receipts.

The WM functions to be introduced in phase 1 do not affect the commission method and tool system. However, the supply of material to the buffer storage (lower shelf row) designed for the preparation of picking must be switched on. When to refill from which product is determined using the current method. SAP supports the selection of the warehouse unit to be moved with inventory and storage queries.

After the physical transfer, a developed program automatically transfers the data in the SAP system. The program generates a transport order and a MM movement receipt. The transport order moves between the storage area of ​​the storage unit and a technical zone, and the MM movement carries out stock transfer between logical warehouses 0012 and 0010 with movement code 311. The user only needs to read or record the batch ID (bar code) for the program.

5.3. Warehouse structure

In the SAP system, the WM warehouse must always be created linked to a logical warehouse (several logical warehouses can belong to one WM, but not the other way around). The logical warehouse code is 0012 (must be created for factory 0200), the associated high warehouse code will be 012.

The high-rise warehouse is made up of physical areas identified by the warehouse type code. One part of the warehouse types is the local register of the warehouse. The other part is called interface areas (zones) that ensure the identity of the MM and WM sets. Every movement that changes the stock quantity starts in the MM, the change is registered in the interface zone. Movement within WM is between the interface zone and the actual storage.   

The 012 WM warehouse is built with the following warehouse types:

H01 Homogeneous storage warehouse

V01 Mixed pallet storage

P01 Piece shelf storage

RAZ Cargo unit identification zone

902 External goods receipt receiving zone

911 Klotsélyi kivet pass-through zone

921 Transfer receiving zone

923 Repacking

999 Deviations

5.4. Warehouse movements

5.4.1. Finished product monetization

The arrival is recorded in MM with the 315 movement code. In WM, the inventory appears in receiving zone 921. The unit training is carried out with a developed program. The program generates a transport order, with which the stock moves from zone 921 to the RAZ warehouse type. The items of the transport order are determined by referring to the MM receipt. For the selected item of the reference document, the system calculates the whole quantity pallet number and 1 fractional quantity pallet from the article master data. The calculated data can be rewritten and modified per palette. The program prints the package label in 2 copies. A bar code with a unique serial number identification is also added to the label, this is the batch unit identifier (this is required if there is a bar code reader at the workplace). The storage location is currently defined manually.

After physical storage, copy 1 of the stack label remains attached to the stack unit in the storage area. The forklift driver writes the storage location identifier on the 2nd copy and takes it to the SAP data recording workplace. The transport is created using a standard transaction. At the SAP workplace, the storage unit identifier is read with the barcode reader attached to the keyboard, and then the storage location identifier written on the label is recorded. If there is no barcode reader at the workplace, the batch unit identifier can be entered manually. As a result of the transaction, the storage unit and the set are moved to the given storage location in the system.

5.4.2. Transfer within the warehouse

During storage, the storage unit is moved from one storage location to another. For this, a batch label is printed (developed program). When moving, the label is attached to the stack. The function is performed by a standard transaction.

5.4.3. Unit repackaging

The repackaging task must be performed if there is a change in the contents of the storage unit (quantity changes). The transfer is performed by the developed program, which moves the inventory to the 923 zone. To form the new stock unit (repackaged), we move the articles to the RAZ identification zone using a standard transaction.

5.4.4. Pick-up for picking

The picking area is filled with a one-step transfer between warehouse locations. The storekeeper currently decides to fill the preparation shelves based on a physical indication or through the experience of losing weight. Until the implementation of the 2nd phase, the method will remain unchanged, IT support will be provided by the accurate registration and queryability of the stocks. The storekeeper selects the source storage location, moves the storage unit, or in the case of piece storage, the given quantity, and hands the storage unit label to the SAP workplace. Here, the storage unit is identified by barcode reading, and the development automatically generates the movement receipts (transport order and transfer MM material receipt). The material is thus removed from the WM register and appears in warehouse 010 (this includes the entire picking area). Picking continues with the previous method until the end of phase 2.

The developed uploading program must be designed in such a way that the external logical warehouse connection of the WM storage is suitable for handling other, similar movements (disposal, production warehouse).

5.5. Picking strategies

We can distinguish three basic picking strategies, which are as follows:

• order-by-line, one-step strategy;

• parallel strategy per order;

• two-step strategy per zone (per department).

In the case of the one-step, per-order strategy, the picking worker collects the goods of an entire order, regardless of which part of the storage space the goods are located in.

If a specific customer demand has been satisfied, another product according to demand is collected. The order form can therefore also be a collection list, only the order of collection must be indicated separately.

5.5.1. The serial, one-step strategy

The advantages of the one-step strategy per order are as follows:

• it requires simple organizational and management work

• urgent needs can be easily met

• the goods of an order can be collected quickly

• errors that occur can be corrected quickly and easily

Disadvantages of the strategy:

• relatively low picking performance is achieved

• human work gives the activity the possibility of error

5.5.2. The parallel strategy

In the case of the parallel strategy per order, several user picking requests are handled at the same time. During its application, orders are processed in such a way that the items of each demand are grouped according to storage zones.

Warehouse collections for individual needs are carried out based on the grouping of warehouse zones. Products coming from different zones of the storage area, but belonging to a specific customer demand, are collected in the order assembly area.

The advantages of this picking strategy are:

• the tools and machines used in picking are used better

• higher picking performance

Disadvantages of the strategy:

• the compilation of orders requires separate organizational work

• urgent (extraordinary) demands are difficult to enforce

This method is also used by the Scitec group, and according to the definition, it has indeed happened that there have been disruptions in the fulfillment of out-of-order orders. This problem has hopefully been solved once and for all by the immediate automatic accounting resulting from the use of radio frequency devices, according to which goods that have already been picked cannot be mistakenly reserved for picking again. (The bar code scanning machine warns with sound and image that the goods on the pallet are no longer allowed.)

5.5.3. The two-stage picking strategy per zone (per department).

In the case of the two-stage picking strategy per zone (per department), several user picking requests are handled simultaneously. In the case of the implementation of the strategy, orders are processed in such a way that identical goods included in different orders are aggregated in a master list, grouped by storage zone.

The quantities listed in the collection list are transported from the storage zones to the collection point (first step). At the collection point, the delivery units are sorted by order (second step).

The advantage of the two-stage picking strategy per zone (per department):

• With its implementation, the highest picking performance can be achieved, i.e. larger units can be moved between the storage space and the collection point at the same time.

Disadvantage of the strategy:

• Due to the subsequent grouping, the organization of the process is more complicated (compilation of a collection list, compilation of delivery units according to orders).

5.6. The second phase

5.6.1. Expansion of the main warehouse process and warehouse structure

Figure 6: the processes of the high storage module in the second phase

5.6.2. Storage of finished goods

0010 Finished goods warehouse in SAP MM is 0200 Scitec Kft. company 0200 SCITEC Kft. was created for his factory named The identifier of the WM warehouse was defined in the system with the identifier WM1, the name Finished goods warehouse, and it is connected to the logical warehouse 0012.

Elements of the warehouse structure created in phase 1:

Material receiving interface zones:

• 921 Receipt zone - finished product: the receiving area of ​​stock coming from production

• 902 ÁB zone external reception: reception area for purchased and sold commercial goods

H01 Homogeneous pallet storage:

• a storage space a storage device (pallet)

• one item number and one batch on a pallet

• can be moved with partial quantities

V01 Mixed pallet storage:

• a storage space a storage device (pallet)

• one storage location can have several article numbers

• additional storage is possible

• can be moved with partial quantities

Monetization of manufactured products (remains according to phase 1):

The finished goods are received by two-step transfer, between logical warehouses 0023 and 0011. 0011, the finished goods warehouse, is the site of the Budapest factory. The transfer of the goods between the locations also takes place by two-step movement between warehouses, from logical warehouse 0011 to logical warehouse 0012. Logical warehouse 0012 is connected to high warehouse WM1. The product is placed in the receiving zone of the WM warehouse (921), the receiving zone is part of WM and has one storage location.

The material is moved from the receiving zone to the RAZ stack identification point by means of a transport order. In this operation, the system creates a stack unit for which a unique identification label is printed, which is placed on the stack. In addition to the text information, the label also includes a barcode, type PDF 147.

In phase 2, the first step in storing the finished product is to record the MM receipt (315 movement type). A transport request (TI) is generated in WM, the material is transferred to zone 921. When processing the TI, the system automatically determines the storage location based on the built-in storage strategy, prints the storage unit label and the movement instruction (TR = transport order). In this way, moving through the RAZ warehouse type is omitted. TR items are barcoded and open for processing. When physical storage is carried out, the worker reads the barcodes of the TR item, storage unit and storage location. The system checks the correctness of the operation and acknowledges the TR item (closed status).

5.6.3. Storage of purchased products

Commercial goods are put into stock with reference to a purchase order and warehouse receipt. MM monetization is MIGOtransaction, but to the logical warehouse 0012 (this is connected to the WM warehouse). When the receipt is recorded in WM, the system automatically generates a transport request, and the inventory is posted to zone 902.

Storage of commercial goods is carried out by processing the generated transport request, a standard transaction. Storage can be done in several ways:

- The first step of pallet storage takes place in the RAZ warehouse type. Here, the rakat label is printed and affixed to the package. The final storage location is determined manually in the mixed storage, similarly to the finished product. The storage is recorded in the transport order (destination storage location).

- Storage in the shelf storage is done by processing the transport request. Selecting and specifying the target storage location is manual. The storage is recorded in the transport order (destination storage location).

  In phase 2, when processing the TI, the system automatically determines the storage location based on the built-in storage strategy, prints the storage unit label and the movement instruction (TR = transport order). The storage location is determined automatically by the system and can be modified by the user. It is possible to add storage to an already existing warehouse. TR items are barcoded and open for processing. When physical storage is carried out, the worker reads the barcodes of the TR item, storage unit and storage location. The system checks the correctness of the operation and acknowledges the TR item (closed status).

5.6.4. Pick-up in commission buffer

In phase 1 of the introduction, picking remained unchanged in logical warehouse 0010. Thus, the buffer storage spaces (bottom shelf row) preparing the picking were not created in the WM structure either. In phase 2, the D01 warehouse type was created, which consists of fixed storage spaces, and mixed storage and additional storage are allowed. The replenishment of the material is initiated by the user, the activity is supported by a developed monitor program, the program provides information on the individual buffer storage sets, the delivery requests already created in the system, the warehouse sets (including the 0023 and 0011 sets), and the products in production about quantities. The dispatcher marks on the screen the storage locations where replacement is required. If not an entire stack needs to be moved, the required quantity can be rewritten manually. Based on the built-in picking strategy, the system automatically selects a storage location for the selected items and prints the transport order. TR items are barcoded and open for processing. When physical picking is performed, the worker reads the bar codes of the TR item and the stack unit label. The system checks the correctness of the operation and acknowledges the TR item (closed status) - the set is transferred to the buffer storage.

5.6.5. Commission

Picking is done with a developed program. For the items of the opened delivery receipt, the factory number is read one by one. The program checks the item number, batch, and then transfers the collected data to the delivery receipt for the upload instruction. This whole process takes place in warehouse 0010.

In the 2nd phase, the picking is also sent to logical warehouse 0012, i.e. to WM. In WM, we use the 916 interface zone for this, which works with dynamic storage. This means that a storage location identified by the number of the delivery receipt (8...) is created for a delivery, which is deleted from the system after the material is issued. Picking in WM means that with a TR order, the material is transferred from the D01 buffer to the corresponding 916 storage. Since the factory numbers must be entered, picking is carried out in the same way as before, with a developed program. The existing program had to be modified so that after reading the bar code, the generation of the transport order had to be included in the processing.

Further processing of the delivery receipt (material issue) remained unchanged.

5.6.6. Handling of entire pallets at the commission

The development of the function is planned in the future, when the handling units made in production are integrated into the WM. At the request of the management of All Nutrition, HostLogic Kft. created a temporary solution in which the contents of each batch (the serial number per product) will be known to the system even without the use of handling units. In this way, the picking program can automatically carry out the picking after the stack has been identified. Dismantling the storage unit may only be necessary for labeling purposes.

5.7. The operation of the finished goods warehouse during the handover of phase 2

5.7.1. Warehouse types

The WM warehouse is connected to logical warehouse 0012 and is made up of the following warehouse types:

H01 Homogeneous storage warehouse in use

V01 Mixed pallet storage in use

P01 Piece shelf storage built but not used

D01 Comisio buffer in use

RAZ Cargo unit identification zone in use

Interface zones:

902 External goods receipt receiving zone

911 Klotsélyi kivet pass-through zone

921 Transfer receiving zone

922 Transfer zone

999 Deviations

916 Commission zone

Warehouse types H01 and V01 are already in use. Storage locations for P01 have been created but are not in use. The RAZ warehouse type currently plays an active role in warehouse unit training. After creating the storage strategies, it will be left out of the main process, but if necessary, it will still be used to create individual storage units.

The 999 interface zone has already been commissioned in the WM inventory. The 916 zone is necessary due to the operation of the commission in WM. It uses dynamic storage locations, i.e. the storage location identifier is the same as the serial number of the delivery receipt. After the material has been checked out, the storage space ceases.

5.7.2. Warehouse areas

In WM, different storage areas can be defined within the warehouse type, the aspects of the design are arbitrary. In phase 1 of the introduction, each warehouse type received an area with the code number 001 (an area must exist). There is a need for applications in several areas, the aspects that have arisen so far for their design are:

• product group

• size

Since specific storage locations must be assigned to the area, they are still being defined.

5.7.3. Strategies controlling WM operation

In the following, we discuss the elements and method of automatically determining storage locations. In both the storage and retrieval operations, the system determines the destination and source storage location. The condition for correct operation is, on the one hand, the setting of the system's control parameters, and on the other hand, the correct filling in of the master data.

To determine the storage space, the system takes into account the selection criteria of the building elements of the warehouse structure, starting from the warehouse type.

The storage location determination strategies are developed for the H01 and V01 warehouse types. Warehouse type P01 is managed manually. The D01 commission buffer has a fixed storage location, that is, the storage location identifier is fixed for each article in the article master.

5.7.4. Definition of warehouse type

The selection rule is to arrange the warehouse types in order. This means that the type codes for a given condition are specified in a row, and the selection starts from the first element. If there is no available storage space in the first warehouse type, the system searches in the next type.

The search rule for the warehouse type can be specified for each article in the article body. The search rule can also be set in the system when there is no data recorded in the article body. The control data of the article master are the storage and retrieval type codes.

The suggested type codes and selection rules:

Storage

type code

Selection order

1

2

3

4

empty

H01

V01

P01

H01

Homogeneous container

H01

V01

V01

Mixed storage

V01

P01

The picking strategy must include the fact that the warranty period must also be taken into account for batch materials.

Pick-up

type code

Selection order

1

2

3

4

empty

H01

V01

P01

H01

Homogeneous container

***

V01

Mixed storage

V01

P01

*** indicates that the search should be performed in all warehouse types that are not excluded from this strategy - these are D01 and interface warehouse types.

5.7.5. Definition of warehouse area

The warehouse area definition is active in the storage operation if there are several areas in the warehouse type in question. The selection rule is to list the warehouse area codes in order of priority for each warehouse type. This means that the selection starts from the first element, if there is no available storage space in the first area, the system searches in the next area.

The search rule for the warehouse area can be specified for each article in the article body.

We will create a warehouse area selection rule for warehouse types H01 and V01, after defining the areas.

5.7.6. Storage type and storage unit type

If the storage areas and storage units are classified into types based on size and capacity, the system can check storage. The check can be set per warehouse type. It is also possible to create storage space types per warehouse type. The storage unit types must be matched with the storage devices used in the warehouse.

The storage unit types that can be stored in the storage types must be recorded in the system for those warehouse types where the storage location control is activated. The arrangement must be specified by warehouse type.

The condition for applying the check is that the type code is entered in the storage master data.

During receipt, the batch unit type must either be entered manually, or it is fixed in advance on the WM2 view of the item master.

5.7.7. Storage strategy in warehouse type H01

In warehouse type H01, finished products are stored, one batch number of an article is placed in the storage areas.

For storage, we use the L – empty space strategy in warehouse type H01. The principle of the strategy is that when the transport order is created, the system chooses the next empty storage location according to the numbering.

To select the storage space, the system takes into account the rules of the warehouse type, then the warehouse area, and then selects the next empty space here. If checking the storage space type and storage unit type does not allow storage, the next empty space is checked.

5.7.8. Storage strategy in warehouse type V01

Commercial goods are placed in warehouse type V01. Some of the goods are stored in one storage location, but several articles can be placed in the storage location. In these cases, storage is preferably done in the storage space already used for this article, checking the storage space capacity is unnecessary.

For the other part of the goods (purchased goods), the storage capacity limit is the stored quantity. To examine this, a unit volume must be formed, and the capacity of the storage spaces is given in this amount. For each article number, the indicator of the maximum quantity is expressed in unit quantities. The system also checks the capacity limit for mixed storage.

For V01 storage, we recommend the I additional storage strategy. If additional storage is not possible, the system searches for storage space according to the L – empty space strategy.

5.7.9. Picking strategy in warehouse type H01

There are lots of finished products and a warranty period is set in the article body. When picking out, you must choose a storage location based on the nearest expiration date. This task is performed by the system if the warranty time management function is activated in the warehouse and the "strict FIFO" strategy is activated for the warehouse type, which in this case means enforcing the FEFO principle. This means that the system examines all warehouse types according to the earliest expiration date, which are not excluded from this.

5.7.10. Picking strategy in warehouse type V01

Commercial goods are not batch-managed, WM nevertheless enables the use of the FIFO principle. This is made possible by the "quantum" identification number generated for warehouse movements. The system assigns and stores the most important characteristics to the quantum number of a movement, including the arrival date. This is the basic data for FIFO usage.

6.1. A critical observation on corporate strategies

The company's primary source of income comes from formulas and dietary supplements sold in the food supplement market. For this, it is almost essential to sell the manufactured products as soon as possible after production, so that they reach the stores with the latest possible warranty expiration date. This, in addition to the production processes, also determines the pick-in and pick-out strategy, so the company was forced to use the FEFO strategy.

6.1.1. Raw material stocking strategy

The stocking strategy of the Scitec group currently consists of ordering raw materials based on the weight loss list. This practically means that when they notice that one of the ingredients is out of stock or in short supply, they order it again.

In my opinion, the use of the indicator set would be more appropriate. To do this, a master stock must first be determined based on the forecasted annual consumption. Then, knowing the daily usage quantity and the replenishment time of the raw material, the stock level can be calculated, when the purchase order must be placed when it is reached. In this way, the company can be prepared for the arrival of an unforecasted order, so that the planned sales do not suffer a disadvantage in the meantime. This is a daily problem at the company and often leads to shortages and overstocking of raw materials and finished products, which in turn results in delays in production or the fulfillment of customer orders.

In my opinion, due to the explosive growth of the group, in some cases it was not possible to follow the development of company processes. Therefore, it is strongly recommended that the automatic calculation of material requirements be switched on over time, for which several possible models can serve as a basis. When stocking raw materials, the purchasing time of the material is the determining factor, therefore after determining the basic stock, the initiation of the purchase order request (BMIg) must be adjusted accordingly.

6.1.2. Finished goods inventory strategy

In the case of the finished product to be sold, this could be reduced by eliminating consignment contracts, however, this would mean rethinking the entire sales strategy, which was one of the company's great advantages at the start and greatly helped its rapid growth, but now due to the number of stores, the committed amount may increase too much size of capital. I recommend optimizing them with an individual review, if this has been done, then similarly to stocking the raw material, the automation responsible for optimizing the stock in relation to the loss can be turned on by generating planned production orders for the dispatcher. During the disposition, the system breaks down the bill of materials to the material requirement and production planning takes place at the level of the purchased raw materials. As a result of material requirements planning, the system generates planning orders for the material to be produced.

6.1.3. Inventory strategy for purchased inventory

The purchased finished goods are usually non-perishable products in the warehouse, in light of this, the company does not even provide them with a batch number, since in most cases they are products for marketing purposes or clothing. The WM module, on the other hand, is able to handle them with a different strategy from perishable finished products, so turning on the LOFO strategy has an EBITDA-increasing effect for the company.

It is the task of the managers running the company to decide whether this amount is such that it justifies the use of the strategy. I recommend introducing this method, because it is possible to increase revenue with practically minimal or no development costs, as long as you do not run into any special accounting or legislative obstacles specific to the company.

In order to use this method, the purchased finished products must also be provided with a unique identifier so that they can be evaluated at a unique price instead of the current variable average price method, however, the framework for this has already been created due to the identification of manufactured products.

6.1.4. The technology of identification of storage units

Identification is currently carried out using the PDF 147 standard, which consists of a barcode and other legible identifiers of the batch unit (product name, batch number). Assuming that the data in the accounting are the same as the specified product, it would be a cost-effective solution to switch to QR code radio frequency identification. On the one hand, it takes up less space than the identifier printed on an A4-sized sheet, since the code can even fit on a surface the size of a paper stamp, on the other hand, being a two-dimensional code, it provides a smaller possibility of error than the bar code, and thirdly, it is suitable for storing more information. Saving auxiliary materials is essential for a high-volume manufacturing organization like the Scitec group, so it is always recommended to look for more cost-effective solutions.

6.2. Critical comment on project progression

6.2.1. Hostlogic Kft.

6.2.1.1. Strategic structure

Hostlogic Kft. the weekly project meeting for its employees serves the purpose of the project managers assigned to the various modules giving an official status report to the project manager and the management of Hostlogic Kft. As usual, we proceed in chronological order by module by counting the tasks, discussing the ones already completed and determining the priority of the planned and unplanned tasks and their logical connection.

After the meetings, Hostlogic Kft holds a formal briefing for All Nutrition Kft. officials, who can exercise the right of veto regarding the sequence and content of the previously defined tasks. After approval, there is a development and then a testing phase, while the two companies continuously communicate about possible errors and optimization tasks.

The approved test phase is followed by the sharpening, part of which is the training held by a specific consultant at All Nutrition Kft. for its competent employees. It is then the project manager's task to assign the freed human resources to new or already running tasks, if they were not previously committed during the resource allocation of the tasks defined in the project meetings.

In my opinion, this structure provides fluidity and at the same time a transparent, good structure for the implementation and support of the program. At the same time, I found that the employees of the Scitec group often deviated from the use of the officially designated communication channels, and the information lost in this way sometimes made the progress of the project difficult, which meant that HostLogic Kft. its employees sometimes had to deviate from the strategy defined in the meetings. In order to maintain efficiency and controllability, HostLogic Kft. its employees should perhaps have acted less leniently in this area.

6.2.1.2. Operational structure

In two phases of the project, Hostlogic Kft. worked under a time and materials contract for All Nutrition Kft. This provides both companies with relatively large room for maneuver and fluidity. In addition, a mailing list was created in Hostlogic's internal e-mail system, the members of which are the employees of both companies, but practically anyone who has questions or comments can write to the list. The employees of All Nutrition notify the officials of Hostlogic of the errors that arise in an official form, by sending a so-called 'ticket'.

Due to the size of the project and other circumstances, as a result of new and new tasks appearing every day, it became justified to diversify according to the size of the tasks and the priority aspect. Thus, minor tasks are performed on a daily basis by the internal mail system ‚It is recorded by the project manager in the 'Tasks' section, from which the project managers can update their list of tasks at any time.

Critical comments also include expressing a positive opinion, so I consider it essential to note that when theThe All Nutrition project became so complex due to the accumulation of daily tasks that it threatened transparency, the project team was able to adapt and started using the Microsoft Project software to list the more complex tasks. According to my experience, this is an extremely useful program, since the user can parameterize the tasks and their logical, resource and temporal relationship practically without restrictions. In addition, to ensure transparency, all changes are immediately displayed on a freely editable Gantt chart. Thus, I would definitely consider it beneficial if the program were to be used for all projects that aim to introduce two or more modules.

6.2.2. All Nutrition Kft.

When I joined the project, that isAll Nutrition Kft. due to its rapid growth, the structural restructuring of the company took place - and continues to this day. Part of this is the implementation of the discussed modules of SAP. As a result, it happened several times that the scarce labor resources were one of the bottlenecks in the progress of the project. This is to be understood as the fact that the company's employees have to simultaneously cope with their constantly expanding job roles - due to growth - they had to train the newly hired employees, and added to this was the fact that quite a few of the managers were appointed as project managers in the implementation-related project groups.

It is therefore clear that, in addition to the high workload, the workers have to deal with the difficulties caused by the immature corporate structure, one of the consequences of which is the need to adapt to rapidly changing management expectations. However, this is probably the case with all companies undergoing transformation, and all things considered, I think that All Nutrition Kft. and HostLogic Kft. can successfully complete this large-scale project in terms of its operational structures. For this, however, it is also essential that the employees receive appropriate training and that HostLogic Kft. provides all the help for this, I have found that All Nutrition Kft does not always use the support offered or often does not do so through the -and efficient- channels designed for this purpose. It would definitely be beneficial if the workers not only took part in the mandatory training before each phase, even if they could receive and study the training material in both electronic and printed form.

The same is true for testing developed programs. These programs are usually requested by the customer because the SAP modules do not or do not model the business processes in the way that the company does. In this case, some of the developed programs were created to ensure the transition between the phases of the project, so careful testing of these programs would have been even more important.

7. Summary

During my professional practice, I was lucky enough to be part of a project that can only be called partially conventional. I know from my own experience that, just as for the success of the project, it is absolutely necessary to understand the basic theoretical concepts for processing the topic.

My goal was to briefly introduce logistics as a science, and then to work on more and more specific sub-fields, breaking down the important segments from the point of view of the thesis. Accordingly, I divided the thesis into several parts.

In the first part, theoretical knowledge plays a role after the topic is raised. I define logistics as a concept, illustrate the logistics supply chain, and then detail warehousing as a sub-point of logistics, explaining in more detail the theoretical material necessary to learn about the topic. The topic is aI narrow it further with the reasons for the spread of high-bay storage systems, their components and areas of application, then I go into the definition of stock standards and present the most common stock management principles used in storage systems.

In the next part, related to the practical part, after a brief presentation of the SAP company management system, the logistics module of the system is represented and briefly explained. In the following, I will write in more detail about the material management and storage modules of SAP, illustrating their structure and highlighting the difference between the storage methods of the two modules.

After the tour, I presented the company group that is the subject of my thesis, as it is structured in the company management system described above, limiting myself to information related to material management. I present the purchasing organization, the types of materials used in production and the structure of supplier data. As part of the procurement processes, I discuss the procurement strategy of the basic and auxiliary materials used by the group and its calculation method. A separate subsection is devoted to the discussion of the creation and importance of the batch number, which is characteristic of the industry and determines the production process of the company group.

In the next part, I discuss the concept of introducing a high-bay module for improving the efficiency of storage processes. I will explain the purpose and method of the first phase of the project, and then I will depict the structure of the model. After describing the structure of the warehouse, I will detail the movements in the warehouse. Since one of the main goals of the second phase of the project is to increase the efficiency of the picking processesand its high degree of automation, I thought it important to describe the three most common picking strategies, their advantages and disadvantages. If only because when picking processes are changed, the picking strategy may need to be re-evaluated. This happened and, in my opinion, the people in charge made the right decision not to change the parallel strategy that had been operating until now, so this topic is not even included in the chapters on critical comments.

In the second part of the high-rise module design concept, I discuss the finalization of the warehouse structure. There is space for the representation of the simplified warehouse model and the description of the main processes. I will detail the operation of the warehouse type with code D01 (picking buffer), and then the picking process introduced in the warehousing module.

At the beginning of the last chapter on the finished goods warehouse, I summarize the types of warehouses created by the end of the second phase and also briefly touch on the possibility of specifying the warehouse areas. This function is currently not ready and will probably only be available if All Nutrition Kft. He gives a separate order, since the handover of the second phase of the introduction has also taken place ahead of time. However, the need for design has been expressed, and although all storage areas are typically built from warehouse areas of the same size, it still happens that goods of different sizes intended for different types of storage are stored in a place where they cannot physically fit. In the last part of the chapter, I describe warehouse processes that now operate automatically, detailing the selection rules that operate them both in the case of homogeneous and mixed pallet storage.

I also divided the last chapter on my critical comments into two. In the first part, on the one hand, I describe my insights regarding the corporate operation of the Scitec group, and on the other hand, I make a proposal to modify the warehouse identification. In the second part, I wrote about the project and HostLogic Kft. as well as my comments regarding the cooperation of the Scitec company group.

All in all, I gained very good experiences during my internship. I saw an excellent project team perform well in an environment where it is not always easy to do high-quality work due to company development; and I can honestly only hope that after the end of my internship I can become a worthy member of this team, which represents great value both professionally and personally.

8. Bibliography

Zoltán Szegedi−József Prezenszki: Logistics Management, Budapest,

Kossuth Publishing House, 2003.

Imre Knoll: Logistics in the 21st century, Budapest,

Fine Arts Publishing and Printing Ltd., 1999

dr. József Prezenszki: Logistics (Introductory chapters), Budapest,

Budapest University of Technology, Engineering Institute, 1995.

Management techniques

Procurement management small and medium-sized business practice

He put it together:Dr. Alexander Philip

Manuscript,Budapest, 2003.

http://www.euro-oktaeder.hu/tananyog/Vallalatialapok/Logisztika_keszletgazd..doc

Download date: 12/08/2012 11:23

web.kvif.bgf.hu/upload/student_regulation/doc/

20060124123019C_magasraktar.doc Download date: 2012. 10. 08. 14:46

http://www.sap.com/hungary/about/index.epx Download date: 09/12/2012 21:03

Downloaded from http://www.tudasmorzsak.hu/erp-cikkek/131-bevezetes-a-warehouse-management-azaz-a-raktargazdalkodas-rejtelmei 2012 08.16. 09:47

http://www.mfor.hu/cikkek/8284.html?page=4 downloaded 2012.08.16 10:11

HostLogic Kft. documents:

Smart Enterprise Procurement and Material Management Concept Plan by ALL Nutrition Kft. and Scitec Kft. for

Smart Enterprise Sales Concept Plan isAll Nutrition Kft. and Scitec Kft. for

Smart Enterprise High Storage Concept Plan isAll Nutrition Kft. and Scitec Kft. for

9. Figures

Figure 1: The model of logistics functions Source: Imre Knoll: Logistics in the 21st century, Budapest, Képzőművészeti Kiadó és Nyomda Kft., 1999. 10 p.m.

Figure 2: Connection of logistics modules

Source: SAP Logistics Tutorial (translated and edited)

Figure 3: the structure of the MM module Source: Inotay,Thu 2008 http://www.tudasmorzsak.hu/erp-cikkek/131-bevezetes-a-warehouse-management-azaz-a-raktargazdalkodas-rejtelmei downloaded 08.16.2012 09:47

Figure 4: the structure of the WM module Source: Inotay,Thu 2008 http://www.tudasmorzsak.hu/erp-cikkek/131-bevezetes-a-warehouse-management-azaz-a-raktargazdalkodas-rejtelmei downloaded 08.16.2012 09:47

Figure 5: The concept of the high warehouse module in the first phase

Source:Smart Enterprise High Storage Concept Plan by All Nutrition Kft. and Scitec Kft. for

Figure 6: the processes of the high storage module in the second phase

Source:Smart Enterprise High Storage Concept Plan by All Nutrition Kft. and Scitec Kft. for

10. Attachments

Table 1

The deadlines for the project tasks were as follows:

Phase 1

Serial number

Task description

Deadline

1

Concept plan development

14/07/2012

2

Specification of improvements

20/07/2012

3

System setting

30/07/2012

4

Transfer of improvements

07/08/2012

5

Prototype testing

10/08/2012

6

Education

15/08/2012

7

Uploading your master data

08/17/2012

8

Inventory storage

19/08/2012

Phase 2

Serial number

Task description

Deadline

1

Development of a concept plan

10/10/2012

2

System setup, improvements

30/11/2012

3

System article body upload

30/11/2012

4

Filling buffer commission zone

30/11/2012

5

Changing system settings (commission storage location, form)

2012 11.30.

6

Test

10/12/2012

7

Preparation of a live system

28/12/2012

8

Education

22/12/2012

9

System conversion, inventory migration

28/12/2012

10

A sharp start

01/02/2013

Table 2

Company

Company name

Factory

Factory name

0100

All Nutrition Kft.

0100

All Nutrition

0120

All Nutrition Wholesale

0130

All Nutrition Store Network

0200

Scitec Kft.

0200

Scitec Kft.

Table 3

Coordinating purchasing organizations:

Company arrangement:

This assignment determines which company a given purchasing organization belongs to

Company

Company name

Purchasing organization

Purchasing organization name

0100

All Nutrition Kft.

0100

All Nutrition purchasing organization

0200

Scitec Kft.

0200

Scitec purchasing organization

Table 4

Coordinating purchasing organizations and factories:

This assignment determines which factories a given purchasing organization is responsible for supplying

Purchasing organization

Purchasing organization name

Factory

Factory name

0100

All Nutrition purchasing organization

0100

All Nutrition

0120

All Nutrition Wholesale

0130

All Nutrition Store Network

0200

Scitec purchasing organization

0200

Scitec Kft.

Table 5

The following table shows the coding and grouping of warehouses:

Factory code

Factory designation

Warehouse code

Warehouse name

0100

All Nutrition

0010

Dist. goods warehouse

0120

All Nutrition Wholesale

0010

Budapest

0130

All Nutrition Store Network

0011

Own shop 1

0012

Own shop 2

0013

Own shop 3

0200

Scitec Kft.

0001

Raw material warehouse

0005

Auxiliary material warehouse

0006

Vitamin base

0010

Finished goods warehouse

0011

Receiving logical warehouse at the plant site

0012

Finished goods warehouse

0017

"C" warehouse

0018

Returns warehouse

0019

Unengraved circle. goods

0021

Factory warehouse incoming

0022

Factory warehouse is semi-finished

0023

Factory warehouse outgoing

0030

Scrap warehouse

Table 6

In MM, we use the following main master data:

Family name

Length and type of identifier

Affected SAP modules

Comment

Material body

Max 18. long

numerical

Material management

Sale

Acquisition

Production

Storage

Quality control

Accounting

Controlling

The purchased and/or sold services will also be stored in the material master.

Delivery trunk

6 long

numerical

Material management

Finance/Accounting

Info record

10 long

Material management

Master data of supplier and material specific purchase prices and other conditions

Order book

Material management

Procurement master data for determining procurement sources.

Figure 8: The structure of the MM module in terms of the movement of the raw material and the finished product.

The figure simply illustrates that warehouses 0023 and 0011 were needed due to the accounting of finished products from production. Real movement only took place during the transfer from the site to the high-rise warehouse.