Optimize SAP-based configuration processes

Henry Ford once said:

"Any customer can have a car in any color they want, as long as it's black."

This saying of the industrial pioneer seems anachronistic today. Whether in the B2C or B2B sector: More than ever, the requirements and wishes of the customer determine what manufacturing companies such as gearbox, injection molding, lighting, furniture or hazardous material container manufacturers align their product and model range to.

Configure almost limitless

And the number of possible variants is constantly increasing. Limits to configuration are generally only set where a particular variant is not possible for technical or sales reasons.

Even with standard designs, such as hazardous material containers, truck trailers, wind turbines, pumps, gearboxes or furniture, there are a large number of configuration options and thus variants that have to be managed and maintained in the ERP system.

For medium-sized industrial companies, this represents an enormous challenge. Even with a simple chair that can be put together "only" from four upholstery colors, three frames, three seat heights, and with and without armrests, 72 different combinations are possible.

If you add three backrests to the selection, there are already 216 configuration options. Despite the large number of variants, each product must be manufactured as cost-effectively as possible, because in global competition, more and more competitors are entering the market and putting pressure on prices and profit margins.

Core process with optimization potential

Manufacturing companies are therefore turning many screws to enable them to respond flexibly to market and customer requirements and to develop new products in ever shorter cycles and bring them to market maturity, always with a view to reducing costs in the process:

Lean methods streamline manufacturing and business processes are made more consistent and efficient with the help of integrated business software such as SAP ERP.

Experience shows that there is still a lot of potential for optimization and savings, especially in the area of product configuration, one of the core processes within SAP ERP, and in the sales process in SAP CRM.

Configuration data is required for almost all processes in the company, in sales as well as in purchasing, in production or in financial accounting and controlling.

However, the requirements for efficient and practical product configuration cannot always be satisfactorily met with standard SAP tools such as the Variant Configurator (LO-VC), the Configuration Engine (formerly SAP IPC) or the SAP Configure, Price and Quote (SAP CPQ) solution.

Simple configuration directly in SAP

Applications such as Treorbis Variant provided a remedy here. The modular variant solution is flexible because it supports Abap and Java-based configuration scenarios in the SAP environment.

Manufacturing companies of all industries and sizes that use SAP software thus receive end-to-end IT support for product configuration, enabling them to complete it efficiently, quickly, flexibly, and in high quality.

As an Abap-based add-on that is 100 percent NetWeaver technology-based and certified, the solution is fully and seamlessly integrated with SAP ERP and has unrestricted release capability.

It is also optimized for operation on the Hana in-memory database. At the same time, the variant solution for product configuration can be used in conjunction with the Configuration Engine (SAP IPC) in SAP CRM or with SAP CPQ in the Hybris Commerce Suite, thus supporting the sustainable optimization of processes in sales.

In SAP ERP, Treorbis Variant is closely interwoven with the processes for sales, purchasing, and production planning and control. This ensures a high level of process reliability and the rapid processing of an order from the creation of the quotation to the on-time delivery of the finished product.

Structured project processing via networks with the SAP project system is also supported. Each individual component of the variant solution can be combined with the standard SAP functions in LO-VC.

With in-depth consulting and process expertise based on more than 15 years of experience and a multi-stage implementation methodology, the experts at Treorbis support their customers very efficiently in introducing the add-on and optimizing the configuration processes. (Read about the experiences of Treorbis customer Denios with the variant solution on page 61).

Data maintenance effort: minus 60 percent

Managing and maintaining SAP relationship knowledge in the Variant Configurator (LO-VC) is often confusing and, because it is done in a special syntax, also requires specialized knowledge that the employees in the responsible department, such as design, sales, or purchasing, do not have.

These tasks are therefore often handed over to the IT department or to a team of specialists. Often, there is a problem with the exchange of information and coordination between the specialist department, which knows exactly the configuration and combination options of the products, and the employees who carry out the regular maintenance in SAP.

This is time-consuming and the customer switches to the competition because it takes too long to receive a quotation. The timely preparation of a technically verified and correctly priced offer in high quality is therefore a competitive factor.

This is exactly where Treorbis Variant comes in, because no special syntax knowledge is required for model maintenance. The process can thus be completely transferred back to the specialist area and is considerably streamlined.

The effort required to support the configuration can be reduced by up to 80 percent, and that required for master data maintenance by up to 60 percent. The purchase of the add-on also pays for itself very quickly.

This is possible because the characteristics and characteristic value assignments of the individual variants of a product with their mutual relationships are stored centrally in so-called decision tables.

You replace the material-dependent object dependencies with a value-neutral one. This reduces the number of these objects in the SAP system, and the data structure becomes simpler and clearer.

This means that even a very large number of sets of rules can be maintained with little effort, and new data models can be built up quickly. The decision tables enable the construction of sets of rules for both interactive high-level and low-level configuration of product structures such as bills of materials and routings.

Thanks to the user-friendly interface of the variant solution, which provides copy, filter and sort functions, among other things, the end user can create and edit the configuration data conveniently and quickly.

Powerful search algorithms help to detect and correct errors. The quality of the data also increases, because logical check routines support data entry and automatically compare the input values with the SAP master data as well as with BOM information such as material number or BOM item.

In addition, there is the option to edit the table entries on a Microsoft Excel interface outside of SAP ERP. An upload program from Treorbis checks them for consistency and loads them into the SAP software.

Even when used in conjunction with the Configuration Engine or with SAP CPQ, the data maintenance effort remains low. Here, too, the configuration data is managed directly in the Treorbis decision tables and does not have to be replicated. In addition, the add-on enables the connection of external solutions, for example sales tools and CAD systems.

Production planning with production packages

Since the variant solution closely integrates configurable data with operational processes, it increases the flexibility and efficiency of processes such as production planning for in-house manufacturing.

If you also want to manufacture single pieces with optimized setup times, you have to combine different work processes into sensible batch sizes.

With Treorbis Variant, similar SAP production orders, such as an identical surface color or identical dimensions for products, can be selected according to freely definable characteristic values and bundled and processed in a process-oriented production package according to these selection criteria. This significantly reduces the document flow and - especially in the case of changes - the number of process steps.

The information for production bundled in a package can be printed out on the operator's own production papers or transmitted electronically to connected machines on the store floor, enabling paperless production control. The orders bundled in a production package can be flexibly scheduled, released, confirmed or deleted as required.

Determine the exact sales price for each variant

Other modules support the end user in completing special tasks. Sales can calculate the manufacturing costs and the contribution margin for each individual product variant largely automatically and very accurately, and thus determine the sales price precisely.

The sales conditions for sometimes very many product variants can be created quickly and easily as master data using freely definable keys.

With Treorbis header configuration, products with identical characteristic values for individual order items can be configured directly at order header level, and the effort required to create orders is significantly reduced.

For this purpose, the characteristic values are entered once - and not for each item - in the order header and transferred directly from there to the relevant sales document items.

In a "cockpit", purchasing can carry out the complete procurement process with external suppliers quickly and efficiently. The necessary data for configured products is brought together and visualized clearly and transparently for this purpose - from the conversion of the purchase requisition to goods receipt and invoice verification.

In the cockpit, Purchasing can also individually define which information is to be displayed for each individual configurable purchasing material.

Check availabilities automatically

When a customer order is entered, Treorbis Variant also enables the automated and cross-plant availability check (ATP check) of all materials and components required to manufacture or assemble the end product.

This enables the sales department to reliably agree delivery dates with customers and react promptly to bottlenecks by rescheduling the delivery if necessary.

Among other things, the ATP check includes the stock level, the production capacity of all components in the generated, multi-level BOM structure and compares this data with the requirements.

The result is clearly visualized, with a traffic light function showing the user the critical path, i.e. missing material or very low stock.

Analyze in detail

The "Treorbis Variant Analytics" module provides comprehensive analysis functions for evaluating configuration data and thus enables effective controlling of product variants.

The end user defines in advance in SAP ERP which configuration key figures are to be analyzed, such as characteristics or valuations. With the analysis tool, sales evaluations of a product variant can then be performed reliably and in detail directly in the SAP Business Warehouse (SAP BW) and visualized in a graphically appealing way - a real highlight.

This data is then extracted and loaded into the business warehouse, where it is stored in a special table structure and can be evaluated according to a wide range of criteria - according to particularly frequent, rare, profitable or cost-intensive configurations.

If the configuration data has been supplemented or extended by new characteristics and variants, the changes are transferred directly to the structure of the BW table with the help of the analysis tool, thus reducing the effort to a minimum.

Queries are performed using SAP Business Explorer (SAP BEx) or SAP BusinessObjects reporting tools. Treorbis Variant Analytics can also be used in conjunction with an SAP BW system installed on the SAP Hana database. This means that even evaluations of very large volumes of configuration data can be completed in no time at all.

Forms and 3-D models

New, practice-oriented process requirements are also promptly incorporated into the add-on solution, because Treorbis always has its finger on the pulse of the customer and is a member of the Configuration Workgroup (CWG) (see text box).

Particularly noteworthy in this context is the optimization of form-based processes in quotation management with an interactive print control based on the SAP solution extension Interactive Forms by Adobe.

This gives the sales department the option of including individual texts as well as photos, graphics or drawings in the sales documents, depending on the configuration information.

In order to simplify inspection processes and make order processing in the field sales force more efficient, the product configuration will also be displayed in a 3D model in the future.

Since the 3-D model and the configuration data in the SAP system are linked via a bidirectional interface, any change to the 3-D configuration is immediately transferred to the SAP data and, in turn, any change in SAP is immediately displayed in the 3-D model.

Using the 3-D model, the field sales force can configure the desired product on a mobile device together with the B2B customer. In this way, the customer has the same convenient shopping experience in the business sector as in private online shopping.

Once the order has been placed, the data is automatically transferred to the SAP system, where it is immediately processed and the subsequent processes in purchasing and production are triggered directly.

This approach speeds up order processing, it shortens delivery times, and it increases customer satisfaction. That's what matters in the end.