CSCP Sample Question 1 - Demand Management

Source: APICS CSCP Learning System

Which one of the following functional areas is primarily responsible for demand forecasting?

* Purchasing

* Executive team

* Sales and marketing

* IT

Guess anyone who's working on APO DP for a while knows the answers very well.





Correct: it's Sales and marketing
 Explanation:
Demand management relies on marketing because marketing is must provide input to the demand plan. This input is necessary because marketing and sales are the people who are closest to prospects and customers. At some organizations, marketing and sales are considered to “own” the demand plan, while at others, this is the role of the demand manager. At the very least, marketing and sales are typically considered responsible and accountable for forecasting.

SCOR (Supply Chain Operations Reference) Model

Source: Supply Chain Council


The SCOR® model defines five process types


Plan
 

Source
 

Make

Deliver
Return



at four hierarchical levels. At the uppermost level, the process types are defined as shown in Table 2.6. According to the SCC, level 1 of the SCOR® model aims to support companies in making basic strategic decisions regarding its operations in the following, sometimes vaguely formulated areas:


1. Delivery performance,
2. Order fulfillment performance,
3. Fill rate (make-to-stock),
4. Order fulfillment lead time,
5. Perfect order fulfillment,
6. Supply chain response time,
7. Production flexibility,
8. Total SCM cost,
9. Value-added productivity,
10. Warranty cost or returns processing cost,
11. Cash-to-cash cycle time,
12. Inventory days of supply, and 
        13. Asset turns.

Maintenance Planning, Scheduling & Coordination

Excerpted by permission from Maintenance Planning, Scheduling & Coordination by Don Nyman and Joel Levitt (Courtesy of Industrial Press)
Computerized Maintenance Management Information System (CMMIS) In Support of Planning, Scheduling, and Coordination
Excerpted by permission from Maintenance Planning, Scheduling & Coordination by Don Nyman and Joel Levitt (Courtesy of Industrial Press)
Effective planning, coordination, and scheduling of the maintenance function can be, and for many years was, accomplished without computer support. However, in these days of high technology and rapid, economical data communication, job preparation is accomplished far more efficiently with the support of a sound Computerized Maintenance Information Management System (CMMIS).
Note to maintenance professionals who follow the field: The generally accepted term for maintenance computer systems is Computerized Maintenance Management Systems (CMMS). Computerized Maintenance Management Information Systems (CMMIS) is preferred because current systems by design and by use are not, for the most part, used to manage maintenance but rather to inform about maintenance. Both acronyms are used in this text.
The “I” is inserted into the CMMIS acronym to emphasize that a computerized support system is only an informational tool and is only one building block of an integrated maintenance excellence process. A CMMIS accomplishes nothing in isolation, but must be integrated with the other twenty building blocks of the “Maintenance Arch” (see Introduction). Bottom-line impact results from actions taken on the basis of information provided by the system, not directly from the system itself.
Fast, flexible access to reliable, current, and comprehensive information is vital if planners and managers are to control the maintenance function on the basis of knowledge rather than intuition. Simply put, it is no longer an economically sound decision to manage a function as critical as maintenance without on-line informational support. Computer support is essential if the full potential of the maintenance control system is to be realized. Only on-line transaction processing systems and networks—people and programs simultaneously retrieving and updating information—satisfy the immediacy required by today’s environment.
Integration of the entire Maintenance Arch (Introduction), including the CMMIS, supports and fosters the following:

• Efficiency of maintenance resources (both hourly and salaried), thereby lowering unit cost
  
• Improvement of responsiveness and service to internal customers
  
• Improvement of asset reliability, capacity assurance, and equipment up time
  
• Better delivery performance and product quality to external customers
  
• Lower unit costs and increased profitability
  Computerization of the work order system allows easier access to large amounts of data enabling
  analyses too time consuming to perform manually.
  A popular phrase regarding many CMMIS’s on the market is that they “are not user-friendly.” The statement is true. It is also true that the functions and persons to which the systems are least user-friendly are the planner-schedulers.
  The maintenance planning system is generally part of a much larger maintenance information system. It is not the intention in this book to discuss all features and characteristics essential to an effective CMMIS, but to concentrate on those capabilities pertinent to work identification, backlog management, job planning, material procurement, logistical coordination, and weekly scheduling. Of course, planner-schedulers are not the only parties interested in maintenance- associated information.
  

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Excerpted by permission from Maintenance Planning, Scheduling & Coordination by Don Nyman and Joel Levitt (Courtesy of Industrial Press)
To effectively support the functions discussed throughout this book, the chosen CMMIS (hardware and software) must offer the following characteristics.
The selected CMMIS must be a sound, comprehensive, on-line, real-time, user-friendly, computerized work order control system. If it is not real time, the maintenance staff (planners and clerks) must perform all administrative input and output. A preferable strategy is for all parties to do their own share of informational input and retrieval.
If these responsibilities are not shared, all too often, planners become little more than clerks. It is a sound investment to take a skilled mechanic off the tools to become a planner but it is a poor investment indeed to take a planner off planning and relegate that person to clerical data entry. It is also a problem for skilled mechanics to take excessive time from being on tools to perform data entry. The design of the system should take advantage of all available technology to minimize the time required for input and retrieval. Remember, if a clerk is doing the entry, the mechanic must first write everything down, make sure it is readable, and ensure that the clerk knows what is being referred to or garbage will get into the system.
There is nothing new in this distribution of responsibility. When work order systems first came into use, well over 50 years ago, people requesting maintenance support were expected to submit a written work order. A Work Order Request now only requires filling in requestor-required fields on a form or a computer screen.
Good backlog management features that enable the quantification, by craft and type, of all open work orders, are essential. These features relate essentially to effective coding regarding:

• “Job Status” to facilitate the planner’s efforts to keep all work orders moving to completion rather than allowing them to bog down in a state of limbo.
  
• “Assigned Team” to facilitate the preparation of a weekly schedule fully deploying the resources reporting to each given supervisor.
  
• “Asset/Equipment” to facilitate the assembly of all ready-to-go backlog that might be performed during access to a given asset.
  
• “Requestor” to keep internal customers appraised as to the current status of their requests. Ideally, requestors should be able to access this information themselves, on- line.
  
• “Planner” so that each planner is able to separate his or her work load from the complete backlog.
  
• “Condition required” because there is regularly a need to separate work that is doable at any time versus that requiring asset down time, of various duration (a few hours, a weekend, periodic programmed access, annual shutdown, etc.)
  Features in CMMIS that support effective planning and estimating include:
  
  • Macro-planning to keep resources in balance with the workload. That is, screens to allow calculation of available hours, and deductions for projected PMs and provide an estimate for break down hours. The macro-plan then calculates capacity available for backlog relief. This is called the Work Program process (Chapter 6).
    
  • System capability to store, retrieve, modify, and copy previously developed job plans and estimates from history or planner libraries.
    
  • When planning a job on a specific asset, ready access to related information without backing out of the planning module. Being able to cut and paste is useful. The information in question includes previously cataloged:
    
    • –  Job Steps
      
    • –  Bills of Material cataloged by machine and major component
      
    • –  Current available inventory with capability to reserve same
      
    • –  Job Estimates
      
    • –  Pertinent safety and environmental procedures, instructions,
      

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Excerpted by permission from Maintenance Planning, Scheduling & Coordination by Don Nyman and Joel Levitt (Courtesy of Industrial Press)
– permits and authorization (hot work, isolation, lockout/tag out, pre- and post- maintenance valve and switch lineups, etc.)
• System linkage to current drawings and other reference documents with provision for automatic attachment to planned job packages.
Effective materials management features are essential. Problems in this area are common and constantly threaten mechanic’s productivity.

• Cross references
  
  • –  Bill Of Materials (BOM) of components by asset.
    
  • –  Conversions between manufacturer’s part numbers,
    
• vendor’s part numbers and storeroom item numbers
  
• Reservation (allocation) of inventory item units to specific planned jobs and release (de-
  allocation) of same as needed
  
• Reliable replenishment of authorized stock
  
• Prompt processing of purchase order requests for direct purchases
  
• Prompt and reliable notification of receipts
  In addition to system capabilities there are practices that make the system work effectively. Below are some effective scheduling procedures:
  
  • Annualized leveling of PM/PdM’s with notification as they come due
    
  • Ability to call forward approaching PM’s to take advantage of known asset access
    
  • Weekly scheduling for each crew by job, day of the week, and individual to
    whom job is aligned
    
  • Linkage to project management software
    
  • Good reporting features including Backlog Status, Work Programs, Schedule
    Compliance, Crew Efficiency, and Age of Reserved Inventory
    

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Procure to Pay

http://www50.sap.com/businessmaps/3E2D2915149F48889859F93E3E46C7A8.htm

Business Scenario

Key Performance Indicators

Raw Material & WIP Inventory Turnover (Quantity)

Source Cycle Time

Supplier Quality Engineering Costs as a % of Material Acquisition Costs

Partner Opportunities

Partner Opportunities in Pharmaceuticals

See also

SAP NetWeaver Benefits

SRM

Procure to Pay is the process of obtaining and managing all raw materials needed for manufacturing. This cycle starts with the source selection, auditing followed by procurement of goods and services. The contracts with the suppliers are managed and can also include supplier managed inventories or direct inventory visibility. It also comprises direct procurement requirements through conversion from demands to purchase orders and confirmation of goods receipt. The incoming materials are then inspected and posted into inventory as part of managing the warehouse. The last activity in this cycle is payment of the suppliers which consists of receiving, entering and checking vendor's invoice for correctness.

Business Goals & Objectives

Lowering Working Capital

Lower work-in-process inventory

Reducing Operating Costs & Increasing Efficiency

Improve procurement processes
Integrate processes across divisions and functions

Processes

Sourcing & Planning	Improving the product quality and lower the costs for material acquisition by qualifying a supplier is mandatory for companies in a regulated environment. A supplier qualification that is compliant to regulatory requirements (e.g. 21CFR Part211) includes the inspection of incoming goods, an audit of the vendor and contractual agreements about product quality and financial conditions. These preconditions enable a pharmaceutical manufacturer to plan the procurement of the demands that results out of an MRP run or manually created purchase requisitions. Supplier Qualification Procurement Planning
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Supplier Collaboration	Supplier collaboration provides a cost-effective way for companies to improve replenishment cycles and quality of materials delivered by a trusted supplier. Order collaboration capabilities provide suppliers and buyers with a streamlined order management system, a user friendly interface and comprehensive search options. The collaboration with suppliers can be extended to a vendor managed inventory, where the manufacturer grants authorization to manage his inventory. Design Collaboration Inventory Collaboration
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Procurement	Improving procurement processes and integrate them across divisions will lower the costs of procured good and the work-in-process inventory. The procurement process consists of the administrative functions, such as contract management and the creation of purchase requisitions. Requisitions have to be converted to purchase orders or delivery schedules for a scheduling agreement and the fulfillment of the documents after electronic transfer to business partners has be to monitored.. After successful delivery of the purchased goods, the follow-up operational tasks such as supplier payment, warranty issues have to be performed. Contract Management Purchase Requisitions Purchase Orders Accounts Payable Supplier Payment
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Receiving and Inspection	Deliveries to the Pharmaceutical companies are subjected to stringent quality procedures to improve the product quality. Warehouse personnel receive the goods, followed by incoming inspection by quality control. The inspection costs can be reduced by use of quality certificates send by qualified suppliers. The stock is moved to quarantine inventory and after the lot disposition they are moved to the appropriate warehouse location. The integration of warehousing and quality control will the operating costs. Receive Materials Material Inspection
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Inventory Management	The inventory management comprises control of the stock transfers within the warehouse or intercompany distribution centers, display correct quality status and the accuracy of the physical inventory. Stock status has an impact on production scheduling i.e. a not released material lot must not be used or reserved for production. Automated warehousing and reduction in inventory carrying cost are key strategic goals pursued by the Pharmaceutical companies. Inventory Control Stock Transfers Physical Inventory
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Reporting	The reporting provides accurate real time visibility into the inventory and status of the purchasing documents during various stages of procurement. Proactive monitoring enables a correct supplier scorecard by accessing historical data about the reliance on the delivery schedule and the quality of the delivered materials. The reporting enable pharmaceutical companies to focus on suppliers with a reliable product quality and low supplier lead time. Inventory Visibility Supplier Scorecard Proactive Monitoring
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
SAP Product Available Partner Product Available SAP Product Available with Future Releases Partner Product Available with Future Releases Future Focus

Order to Cash

http://help.sap.com/bp_bblibrary/500/html/W40_EN_DE.htm

Order to Cash

Purpose

 

The SAP Best Practices scenario for Order to Cash supports the entire process chain for a typical sales process with a customer. The business process encompasses all steps from creating an order, and optionally, based on a quotation, creation of a delivery, to the billing procedure. During the sales order generation a credit check for the customer is executed and subsequent handling of blocked sales documents is demonstrated. An availability check is done followed by product allocation. Product allocations represent an ordered allocation of production for certain periods, so that a partial quantity can be delivered if not enough stock is available for further orders. Additionally, Service Charges are entered manually in the sales order, depending on the quantity of goods ordered. In delivery processing the delivery is created, the goods are picked, kitted, packed, shipped and the goods issue is posted. In the billing process that follows, an invoice is created and released to financial accounting. To complete the process, the customer payment is posted to clear the accounts receivable.
This scenario also includes additional presales support activities in addition to sales order processing, delivery, billing and payment. The process begins with a sales inquiry captured in a sales activity document in sales support. The inquiry results in a sale and the process shows how the initial sales activity can be linked to a sales document that is created in the subsequent order processing. At the time of order creation, dynamic product proposals, material substitutions, free goods and material exclusions are demonstrated. At delivery processing the delivery is created, then picked, and goods issue is posted. In the billing process that follows, an invoice is created and released to financial accounting. Incoming payments are documented in payment processing and then posted in financials.

Process Flow

• Sales Quotation
• Standard Order
• Shipping
• Delivery
• Picking
• Posting Goods Issue
• Warehouse Picking Execution
• Packing
• Posting Goods Issue
• Billing
• Payment of Customer

Typical S&OP process in APO

Source: SupplyChain Council

Scheduling Agreements with Supplier in SNP

Source from SAP.