Table of Contents
Overview
This case study pertains to the New Product Introduction (NPI) process of a leading Food and Beverage industry organization based in California. From an operations perspective, the organizational footprint includes the entire span, including Marketing, R&D, Manufacturing, and Sales/Retail Channel fulfillment processes.
New Product Introduction (NPI) is one of the most crucial business processes. The NPI process incorporates several materials-related Master Data Management processes, including the creation of core master data (Material numbers, Descriptions, UPC/GTIN, Units of Measure…, etc.) and information related to Sales and planning, Finance, Purchasing, R&D, Production Planning, and Transportation.
Highlights
Industry: Food and Beverage
Geography (Global): HQ in North America, Plants/DCs in North America, Sold Globally
Scope: New SKU/Product Introduction, Materials Management
Cross-functional Teams: Finance, Supply Chain, Purchasing, Inventory Management, Sales, Planning, R&D, PLM, Packaging, Transportation, and Master Data Management
Systems Supported: SAP S/4HANA
Total number of stakeholders involved in Master Data workflows: 100+
Key Master Data Issues before ZMDM adoption
- Very complex SKU request spreadsheet for collecting information from cross-functional stakeholders
- Lack of clear visibility of the completion status of various tasks
- Lack of governance in the spreadsheet
- It took a long time and effort to coordinate multiple meetings to gather the required Material information for NPI and Supply Chain Readiness
- It took significant effort to use the collected information to create complete master data in SAP (Material information for the primary plant, extension to different DCs, contract manufacturer plants, storage locations, quality information, BOM, Routing, Supplier Info, etc.)
- Incomplete and errors in Master Data
Results
| Before ZMDM | After ZMDM |
|---|---|
| Complex spreadsheet and related process that required coordination between teams | Simple and guided cross-functional request process. Right people and involved at the right time. |
| No visibility into the status of completion | Granular workflow activity visibility, where, who, timeline, reminders |
| No Governance in the spreadsheet | Full governance to minimize data required and eliminate errors |
| 20-30 day cycle time | 2-3 day cycle time |
| $500-800 Process Cost | $100-200 Process Cost |
Case Study Details
The primary and essential Master Data challenge concerns the new SKU(s) introduction (Finished Goods in Materials Management parlance) process. The process is quite cross-functional and starts with the request to initiate ideas for new SKU(s) by the marketing/brand management team.
New SKU(s) Request Process
Creating new SKUs begins with the Brand Management team’s marketing research, which may lead to minor variations of existing products or entirely new product lines. Using this research, the Brand team initiates the process by establishing the basic structure (Basic View in SAP) for the new material. This allows various departments to commence parallel tasks, including artwork design, recipe development, packaging, and supply chain planning.
After cross-functional team members contribute their input, comprehensive material master data for all SKUs is generated and implemented across SAP, Marketing, and other Supply Chain planning systems.
The overall process in ZMDM is designed as a Main Process–>Subprocess design, as shown below.
The New SKU(s) Request Process is the primary process that the Brand Management team initiates, and the cross-functional teams join to provide input. In this process, the Material Master (Basic View) stubs are automatically created so that cross-functional teams can give input and get started on various concurrent tasks (packaging development, recipe, etc.).
The SKU Material Master data is created and extended to various plants, sales areas, and storage locations in the New SKY Master Data Creation subprocess, which is primarily a set of automated activities in the workflow.
New SKU Request Workflow
The picture below shows the cross-functional workflow that was designed.
The picture below shows the request form that Brand Marketing uses to kick off the process
Parallel input
One key activity of the SKU request process is gathering input from cross-functional stakeholders. Due to the coordination required, this activity is usually the most time-consuming. To improve the current process, the Request incorporated a parallel activity that allows cross-functional stakeholders to provide input to relevant parts of the request form simultaneously so that what used to take ten days and multiple emails/meetings is not down in 1 or 2 days.
SKU Master Data Creation Sub-process
Once the request process is completed, the SKU Master Data creation sub-process to create relevant master data in SAP is initiated. This is primarily an automated workflow that creates the complete master data for the SKU(s) using multiple automated (integration) workflow activities, as shown below.
The automated workflow activities use the information from the SKU request process, default values, and calculated values based on governance rules to create all the master data, including for the primary manufacturing plant, extending it to different organizational levels (plants, sales areas, storage locations), quality data, and data for Bill of Material, Routing, and Production Version. Automated workflow activities rely on standard APIs (BAPIs in SAP). What used to take several hours to create all the master data for SKU(s) in SAP now happens instantly with zero effort.
