SERVICE LEVEL

[former_member188332]

Hallo SAP Profis,

I am new to SCN here and this is my first question in relation to SAP SCM.. I am in need of help in defining the  serice level as a KPI in SCM.

In my case, I would like to report my management team on a regular basis the KPI's and now I have a situation where I need the Service Level as my KPI and I don't know exactly how could I report it on a regular basis.

Q) Should be the Service level calculated on a material level or an order level or Product Group level. what would be a better option?

Q) Could you please provide me a suggestion w.r.t SCOR model ?

Q) HOw can i use the following dates in calculating service level either at Header level or Item level?

  REquested Delivery Date , Schedule Line Date, Delivery Date, Goods Issue Date and apprx. arrival Date of the goods shipped from my place

Thanks alot in advance

Best Regards

santosh

[SatishWaghmare · Accepted solution]

Hello Santosh,

As per my understanding, Maximum Service level should set at Line of Business(or Business Division or Business Group) and Plant level. Optimum Service Level should be calculated for every Product / Location combination within LoB.  Maximum Service Level can be 100% also, typically it is set to 95%-99%.  and Optimum Service level(50% upto MSL) can be calculated based on various factors. Pearson table(search on Google) can be helpful.

All of these are key factors -  Cost of Lost Sales, Demand Variability, Lead Time, Contribution Margin, Statistical Safety Stock, Average Order Volume.

1. Line of Business can be your Product Group.

2. Service Level is important in all phases of SCOR Model.  As Service Level comes between Service provider and the Customer. Hence it is very critical in Deliver phase in which goods or services are delivered to end customer on agreed date, quality and quantity.

3. As per my understanding Service Level should be based on Delivery Date.(When was the order delivered to customer (On time or after RDD), that tells the Service Level.

Hope this will help.

Thank you

Satish Waghmare

[former_member188332 · Accepted solution]

HI Satish,

Thanks a lot for your answer.  As of you said Delivery Date is the basis for defining SERVICE LEVEL, I assume you meant the Delivery date as the date when the material is  planned for delivery  which exactly doesn't indicate that the material planned for Delivery is physically issued( Goods Issue is done). It can be possible that the Dispatch Team planned it before and packed the material but carried out the Goods Issue after 1 week. Does it not make sense to take the Goods Issue date as the basis???.....

One more question related to this, If customer sends an order, it has a lot of positions with different material (under different Product Groups) but this order has a only one requested delivery date. So,  for all positions the Requested Delivery Date would be the same. Can you also please let me know exactly the way with an example how to prognose the Service level to management Team. on  weekly or  monthly basis

Thanks a lot , Appreciate a lot your help

Santosh

[SatishWaghmare · Accepted solution]

Hello Santosh,

Following are definitions from SAP Help -
1) Delivery Date is the date on which goods are to arrive at the customer's premises. So delivery date can be the delivery date requested by the customer (desired delivery date) or the date confirmed in the vendor's order acknowledgment or shipping confirmation (confirmed or acknowledged delivery date).

2) Whereas Goods issue date is the date on which the goods must leave the vendor company to arrive at the customer location in time.

By considering above definitions, I think Delivery date is more appropriate while calculating Service Level. However that does not mean use of Goods issue date is incorrect here. It will solely depend on nature of business and what business wants. Please check with Business folks.

Hope this will help.

Thank you

Satish Waghmare

[Former Member · Accepted solution]

Santosh,

In my experience, there are three 'types' of dates that seem to be useful for such KPIs.

1.  'Customer request date' (I like to call this CRD) - the date that the customer wanted the parts

2.  'Customer Scheduled date' (I like to call this CSD) - the date that the seller confirmed, which is typically the date that the factory considers as a 'deadline'..

3.  'Actual date' - (I  like to call this 'Actual') - the date the order was actually executed.

For KPIs, I have seen CSD vs CRD (how well did the seller's confirmation match with the customer's desire) and CSD vs Actual (how well did the seller's confirmation match with the actual execution of the order).

Within CRD and CSD, SAP can automagically calculate and store a suite of dates:  For example, the (projected) Material availability date of CRD, the (projected) Goods Issue Date of CRD, and the (projected) Delivery date of the CRD.  It also maintains these same dates for CSD.  For 'Actual', SAP natively maintains the Actual Goods issue date, and it would be possible to calculate a MAD and a Delivery date to be associated with the Actual Goods Isue date.  I have also seen companies which obtain actual delivery info from their logistics providers via EDI, and post that into SAP, for the purpose of tracking Service Level performance.

Rather than make limiting decisions about how the service level data should be grouped and reported, why not put all the data into and infocube, with MULTIPLE characteristics, and then liet the users slice and dice it any way they want, with queries?

Best Regards,

DB49

[former_member188332 · Accepted solution]

HI DB,

You plucked the right thorn which was making me suffer. Thanks for the answer

But I would like to bother you with sthg more, please answer it too. 🙂

You said the CRD and CSD relation and CSD and Actual Date (Goods Issue Date)..

My question is, the order has lot of positions and

If I would like to have a Service Level definition for each position( so that later on I create a query or use Tcode MCTA w.r.t CSD or Actual Date w.r.t material on a monthly or a quarterly basis and categorize under Product Group) and then i have for each material on a period base a service level

And thanks for your suggestion for using Infocube, by gathering all the data inside it. I  have not much idea of Infocube , Please just let me know a little about which infocube and which data has to be grouped under the infocube.

Thanks a lot Mr. DB

Santosh

[Former Member · Accepted solution]

Santosh,

There are many ways to design this solution, and this depends upon exactly what you want to report, what platform you intend to use, how you will collect the data, how you will present the results, etc etc..

You have posted this discussion in an APO space (SAP APO - Demand and Supply Network Planning)"  I suggest that collecting such information from APO or SCM is not a common solution.  Most of the data can more easily be extracted out of ECC (or whatever other OnLine Transaction Processing system you happen to be using).  Many companies keep a Business Warehouse  (BW) solution which is designed just for such types of data management and reporting.

Before you begin your design, you first need to collect the business requirements; typically from the user community who need to see the outputs of these reports (and not from us, the SCN community).  Then, you need to speak to your IT group to determine the best platform for these types of reports for your company (through BW, or through information structures in ECC, through direct ABAP reports, or through 'none of the above').

FYI 'Infocubes' in SAP are typically managed in a SAP BW environment.  Your company may or may not have one; you need to find out.  "MCTA" executes a Sales Information System report.  I seriously doubt MCTA would be suitable for your requirement, but certainly SIS in general can probably be made to report such information.  SIS reports are based upon Information Structures, which are similar in functionality to BW infocubes, but exist directly in ECC (not BW).  Both Infocubes and Information Structures are created via configuration, and such creation is typically done by IT experts in these two areas, not by a Key User.

Best Regards,

DB49

[former_member188332 · Accepted solution]

HI DB,

Thanks for your prompt and good answer.I have contacted my Team regarding the requirements and the Business Objects Team in my company.

I would like to measure the efficiency w.r.t Service Level on different stands as mentioned by you(e.g. on the basis of Customer Requested Date, supply Date and GOOds Issue Date etc.) and find the bottlenecks to optimize the Supply Chain. WE have present BI, but we are not using the Infocubes for SD and PP in BI yet. Hence Iwould be using S999, s998 (infosets)..

I need to ask the BI people here in IT about the InfoCUBES . BUt I dont know what exactly i need to request them for. I think I have to mention the charecteristics which i need for the evalutaion I suppose.

But anyways thanks alot.....

Have a Great DAy.....:)

SAntosh

[Former Member · Accepted solution]

San,

...and find the bottlenecks to optimize the Supply Chain.

????  Bottlenecks in the supply chain are totally unrelated to the KPIs you mentioned earlier.  When creating reporting requirements, it is important to be very specific about what the business requirements are.  You will probably end up with several KPI reports, each of which will have a different purpose and a different audience.  Don't fall into the trap of trying to create one report that fills all requirements, in the end it will not fill any requirements well.

BUt I dont know what exactly i need to request them for. I think I have to mention the charecteristics which i need for the evalutaion I suppose.

Unless you have already collected the business requirements from the business community, then it is difficult to know how to create the solution report.  First get the requirements from the intended audience; and invite the BI people to participate in this process of gathering requirements.  A competent BI person with experience in collecting SD info should be at your shoulder every step of the way if the ultimate report will be executed in BI.

If you intend to use SIS infostructures as a the initial report source of data, that means you first have to store the data there.  Is this happening now?  Do you know what the system is currently storing there, the frequency, the actual data that is being used for updates?  Do any of the existing infostructures contain the data you want?  Will the current update methods be satisfactory?  Are you going to be the person who actually creates this solution?

Forgive me if I have misunderstood, but it does not sound to me that you have a lot of experience in creating such report solutions.  If this is the case, your first step will be to enlist the aid of the expert who will assist you.  This is not a trivial task; don't assume that you will be easily be able to create a satisfactory KPI report on your own unless you have done this before.

Best Regards & good luck,

DB49

[former_member188332 · Accepted solution]

Hi DB,

Thanks alot for your answers.

Query relating to your answer as stated above.

Yes, The Data is stored in SIS info structures and I have the possibility of analyzing the data in excel but
I would like to optimize it and analyze the data through BW.

I have queried the BW Guys and they told me that they can fetch the data for the SIS Infostructures.

My question is ,

Does it make it sense directly to fetch the data from application tables (VBAK, VBEP.....) or S tables?

And Do I Need to deactivate
the S tables while extracting the data from application Tables or SIS Tables into BW?

Thanks in advance

Best Regards

SAntosh

[michael_goddard2 · Accepted solution]

Any example formulas on how this works?