Cat Logistics on Extended Warehouse Management_2010.12.2-11.38.55

5/18/2018 Cat Logistics on Extended Warehouse Management_2010.12.2-11.38.55

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Cat Logistics EWM JourneyCat Logistics EWM Journey

Overview

Mark TeegardinDate: Nov. 2010


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The Challenge:Cat Logistics wanted to make a bold move:

Dramatic returns required a bold move

Incremental growth not acceptable

Internal development was becoming a costly alternative

Desire to stay ahead of technology changes

2010 Caterpillar Logistics Services, Inc.

Caterpillar Confidential: Green 2

Committed to Customer Success

In 2002 Steve Wunning, President, Caterpillar Logistics Services:

We believe that we can do more. By integrating supply chain activities with a comprehensive IT solution, we canreduce development costs 40%, implementation costs 30%, and ongoing operations 20%, all while shortening

start-up durations. The net effect will benefit both the bottom line and the end customer.


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Approach Alternatives Upgrade existing / develop new systems

Lacks true integration

Incremental improvements, incremental benefits

Increased capital expense, longer development cycles

Purchase off the shelf solutions and adapt Lower investment

Improved integration

Lar e roviders historicall underfunded SPM functionalit




No commercially available off the shelf solutions that met the current and futurerequirements

Change the rules: a new approach Cooperative approach to share development costs

Input to new commercial software vs. adapting what was available Leverage similarities in requirements


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Service Parts Solution

Intellectual Property

Know-how

Capability

Scalability

Service Parts Logistics Software Alliance




BestBest--InIn--ClassClass Logistics Performance forCustomer Satisfaction and Cost


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Concept: ~ 80% common processes/ technology

Leverage Ford and Cat Logistics volumes

Commercialize system software

Exit development

Become implementers and integrators (Cat

Logistics)

Intellectual Property

Know-how

Capability

Scalability

Strategy: Fully Integrated Solution



Best-In-Class Logistics Performance

Increased Customer Satisfaction

Dramatic Cost Reduction

The Result:The Result:

State of the Art Service PartsManagement Solution Across Multiple

Industries

Benefits: Lower development costs

International capabilities

Natural (planned) technology upgrade path

Increase 3PL market opportunities (Cat

Logistics)

Shared Risks between Cat Logistics, Ford, and

SAP


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Delivering Enterprise Value Through Supply Chain Excellence

Cat Distribution Services Manufacturing Logistics

PIRACICABAJOHANNESBURG

MELBOURNE

SINGAPORE

GRIMBERGEN MORTON

MOSCOW

SHANGHAI



Transportation External Client Business


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Cat Logistics Today

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

Asia-Pacific

6 Continents

23 Countries20 Languages

108 Facilities & OfficesShipping to 190+ Countries

11 900+ Em lo ees



29M+ Sq. Ft.160M+ Orders/Yr

21B lbs. Of Freight/Yr$2.4B Transportation Purchased/Yr

20M SKUs Serviced/Yr

616200

LocationsEmployees

334,450

LocationsEmployees

121250

LocationsEmployees



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Why SAP?

Global Capability & Focus on the Customer Needs

Committed to the Ford-Cat Alliance Vision of Industry Leading Service Parts

Logistics Solution

Modular Development and State-Of-The-Art Technology Now and Into the Future

Commitment to the SPM space

Best fit of existing SPM offerings



Industry strength, financial strength and proven expertise Development capability

SAP is Caterpillars SPM strategicdirection for internal use as well

as for external clients.


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80%Unique

Solutions

Aligning Our Strategy

5%

Client

Unique

15%Industry

Specific



80%Standard Solution

20%Std.

Solution

Current Future


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80%Unique

Solutions

Aligning Our Strategy

5%

Client

Unique

15%Industry

Specific

Standard Solution is based onCommon Processes

utilized



80%Standard Solution

20%Std.

Solution

Current Future

Globally


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Definition: A configured SAP system, incorporating common,standardized processes and data definitions that can be rolled out to

multiple locations

Target 80 / 20% global vs. local

Aligning Our Strategy Global Template



Reduced implementation risk

Quick repeatable roll-outs

Lower implementation costs


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Change Management is crucial (awareness at all levels)

Transformational thoughts and actions required early

Fully understand current process and rational

Team willing to accept and advocate change Follow your Methodology & Implementation Processes

Leverage standard functionality

Aligning Our Strategy - Lessons Learned



Enhance for strategic advantage Do not over engineer your enhancements

Master Data

Repeatable Templates for everything Stay current with SAP service packs



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Time

ONETS

UPGRADES/SP

EWM

MMCRM

al

TM?

Aligning Our Strategy - Implement , Evolve, Rollout



CO

M

GLOBALCAT LOGISTICS

LANDSCAPE

PRODUCT EVOLUTION

SAP R&D New EWM Functionalities

ROLL - OUTS

ProductionSupport

GlobalCOE

EndG

METHODS


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Implementation Approach

Continued Investment in Global Template

Continued Global Business Process Transformation

Component Installation Approach

Facility by Facility Go-Live SCM Extended Warehouse Mana ement



Worldwide Network Install of Component SCM Service Parts Planning

Regional Go-Live

CRM & Billing



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Current Progress

EWM Pilot Facility (St. Paul, MN) installed in November 2007

Waco Distribution Center installed March 2009

Clayton DC scheduled for early 2011, IPC 3rd

QTR 2011 MEDC scheduled for 2012

SCM Service Parts Planning



DRPR scheduled for mid year 2011

CRM CRM active through interfaces

BCR MEDC scheduled for 2012 (1st & regional)



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Extended Warehouse ManagementExtended Warehouse Management


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EWM Highlights

Increased Process Functionality

Inbound Processes

Outbound Processes

Internal Processes



Integrated Yard Management Solution

System Directed Routing

Exception Driven Processing

Pick Bin Determination

Packaging Execution


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SAP ERP-WM vs. SCM-EWM

TransportationTransportation

WarehousingWarehousing

Visibility

Visibility

Analytics

Analytics

CoreOperations

CoreOperations

Transportation

Warehousing

Visibility

Analytics

CoreOperations

EWM offers

Monitor as central tool and central starting point

Use of partial goods receipt in inbound processing (GR per HU)

System guided put away with deconsolidation/fanning

Complex wave planning and outbound route structure

High volume picking and shipping and Warehouse Order Creation

Broad stock/inventory view (pre-picked HUs, staging zones, etc.)

Slotting & Better integration to Yard Management Functionality

Warehouse Rearrangement and Goods Receipt Optimization

BI Integration

Conveyor automation and pick-to-light integration

Put-away Strategies

Removal Strategies

Wave Management pick-logig

Replenishment

Handling / Storage Unit Management

Yard Management

Enhanced configurable RF-technology

Task & Ressource Management

Expected goods receipt

Value Added Services / Kitting

LES EWMInternal Routing

Distribution Center




Pallet managed inventories using Handling Units

ePedigree/serialization with RFID integration Integrated labor management functionality

EWM simplifies HUs by only defining them at Storage type level,instead of Storage Location level

Shipment and Transportation units fully supported

Each, case and bulk picks

Replenishment of forward picking areas

Double-checking inspection and packing

Process-oriented storage control

Assignment of Serial Number to HU possible

Cross-Docking

Dynamic cycle counting

Unloading of transport units

Deconsolidation

Slotting / Rearrangement

Labor Management

Multi Client Warehousing

Flexible Process Modelling

Layout Modelling

Warehouse Automation (MFS)

Decentral Quality Inspection


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INBOUND

Slotting

Receive ASN Data

ASN Validation & Correction

Transport Unit Arrival Manage Transport Unit

Goods Receipt

Base Receiving

INTERNAL WH

Yard Management

Quality Inspection Engine

Inventory Counts /

Records Accuracy

Kitting (to Stock/ to Order)

Replenishment

GREEN Implemented in production

BLUE Current implementation

YELLOW Not yet implemented

EWM Available Functionality



u away n e erm na on

Unload Transport Unit

Deconsolidation

Internal Routing

Putaway

Inbound Back Order Expediting

Push Deployment

Transportation X-Dock

Returns / Reverse Logistics

Packaging Engineering

OUTBOUND Route Determination

Wave Management

Picking Bin Determination

Warehouse Orders

Work Assignment (labor mgt)

Picking

Packing

Shipping / Staging

Loading & Goods Issue


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EWM Pilot - St. Paul, MN (Brownfield)

Facility Info:

90,000 sq ft. 600 inbound lines/1,200 outbound lines

Emergency customer facing for North Central US and Central Canada

Ship to Customers around the world

Testing:




n egra on - ~ es s, wee s

UAT - ~200 tests, 8 weeks

Go-Live:

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


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Challenges & Lessons Learned St. Paul

Performance Issues:

SCM 5.0 Service Pack 8

Custom and CDP code

Data archiving and database reorgs

RF dead spots, access point failure

Lessons:

Make sure to test usin Production real life sized volumes.



Do not push the work into the next milestone. It creates a snowball effect. Global Template works. It takes some work to get agreement from all parties on

standard practices. But it is worth it.

SAP is willing to help. When you log OSS messages include all relevantinformation and example data.

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



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1st DC Waco, TX (Greenfield)Facility Info:

750,000 sq ft. 2,500 inbound lines/9,500 outbound lines

Emergency & Stock for customer facing dealers plus network search

~200 associates / 3 shifts over 100,000 parts numbers stocked Ship to Customers around the world




Integration - ~350 tests, 9 weeks (Regression & FRICE) Business Simulation volume & number of users, 6 weeks (Auto)

UAT - ~400 tests, 6 weeks (Blended solution-more business scenarios)

Go-Live: (phased approach)

2-4 IT people on-site the first 2 months & Command Center Concept


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Challenges & Lessons Learned Waco

General Warehousing Issues:

Some RF process and performance

Few storage concepts

PGI performance and common process

Transportation cross dock process flow

Lessons:

Stron SAP su ort for roduct and challen es



Scope Control PTAM process Leverage auto testing tools for regression testing - Velocity

Methodology Adherence High Quality Delivery

Global Template grows as new functionality is implemented. Impact Analysis onexisting facilities.



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Additions to Caterpillar Global Template for Waco implementation

Transportation Cross Dock functionality

Multiple RF Screen sizes

STO shipping and receiving



ITS (Internet Transaction Server) RF Screens


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DC & IPC Clayton, OH (Greenfield)Facility Info:

~1.5M sq ft. ~3,100 inbound lines/~18,300 outbound lines

Emergency & Stock for customer facing dealers plus network search

~500 associates / 3 shifts ~200,000 parts numbers stocked

Ship to Customers around the world

Testing: (Impacts of BP)

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




*Integration IPC ~775 tests, ~16 weeks Business Simulation volume & number of users, 4-6 weeks (Auto)

UAT - ~175 tests, 16 weeks

*UAT - ~ 1100 tests, 20 weeks (script writing in process)

Go-Live: (phased approach) 2-4 IT people on-site the first 2 months & Command Center Concept

* = new process


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Current Status & Lessons to Follow Clayton

Current Status DC & IPC:

DC UAT IPC Integration Test

Focusing on New functionality/process testing and Business Simulation Testing

Growing Auto Testing capabilities and UAT Realistic Production scenarios

Lessons:

Strong SAP support for product and challenges around new functionality



Scope Control PTAM process Leverage auto testing tools for regression testing - Velocity

Methodology Adherence High Quality Delivery

GT grows as new functionality is implemented. Impact Analysis on existingfacilities. Scheduled tuning and review of solution execution.

Leverage and grow Global team for continued implementation and support



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Additions to Caterpillar Global Template for Clayton DC & IPC

EH&S

Custom Table Archiving

Extended Cross Docking




Base Receiving VAS & Pack Specs

QIE/QM Scrap improvement

GL & FI integration

Slotting improvements

Auto triggers for IPC PGI/Load/GR


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Whats Next MEDC Project beginning (EWM & BCR)

Execution Framework Rollouts & Releases

Rollouts - EWM Brownfield, Greenfield & Retrofits

Releases EWM Brownfield, Greenfield, New Functionality, SP/EP, SCM modules

EWM Functonality

Voice Technology

Labor Management

Kitting

Supply Chain reporting extensions



Extension of SCM products and integration

BCR North America, Asia Pacific, Latin America

GATP

Push/Pull Deployment

Order Management

Regional implementations

Additional SPP functionality



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Thank You!





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Customer Relationship Management Supply Chain Management

SAP SCM 7.0

SAP APO SAP ICH

Service Parts Planning

SAP Extended Warehouse Management

globalATP

Service Parts Management: Architecture (2010)

SAP Event Management

SAP Internet Pricing Configurator

CRM Server:Sales, Service, Billing,

Marketing andInteraction Center

CRMMiddleware

SAP Global Trade Service 7.2

ComplianceManagement

CustomsManagement

SAP Transportation Management System

SAP CRM 7.0

RFC*XI

SAP SCM Basis

Master Data Transactional Data

SAP NetWeaver 7.01

Business WarehousePortal Exchange Infrastructure

RFC*XI

CRM MiddlewareRFC*

ECC 6.0 (EP 3)

Materials Management

Quality Management

Logistics Execution

Financials/Controlling

Web Application Server

Environment, Health and Safety

PlugIn 2005

* tRFC, qRFC or RFC


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Application Architecture: Warehouse Management

EWM

WMEExecutionusing RF Exception

Management

WM Service

Front-end Application

InboundPlanning

OutboundPlanning

Monitoring

ERPERP

Transactional Data

(I/O Orders,Execution Orders,

Delivery...)

KPIs

(BW)

Master Data /

Parameter

Cross Docking Wave Planning Slotting

Picking Strategies Putaway StrategiesPacking / Packaging

LeanInventory

Management

APO

Cat Logistics on Extended Warehouse Management_2010.12.2-11.38.55

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