Get the Basics Right Industrial Performance

Actual Consumption

Objective
Actual Consumption
High Value, Critical and Measurable Materials should not be back flushed Enable Inventory accuracy Minimize deviation of physical stocks and SAP stocks Minimize efforts for Stock Reconciliation

Areas of Impact
FG Production Planning & Scheduling SFG Production Planning & Scheduling Planning Procured Material Planning

Inventory

Inventory Accuracy

Manufacturing

Material Availability for Manufacturing

Costing

Actual Costs

Process Flow

Business Benefits

Stock Accuracy Minimizes efforts for reconciliation process Actual costs on the manufacturing orders

Dependencies and Requirements

Stock accuracy On time updation of goods receipts On time updation of goods issues On time updation of stock transfers Quality accuracy On time Clearance of Inspection Ensuring re-tests completion for shelf life expiration Master Data accuracy Classify Backflush and Non-Backflush Components BOM Shelf life expiration periods in Material Master Issue Storage Location in Material Master Production Supply Area in Resources/Work Centers

Key Process Indicators (KPIs)

Percentage of deviation from planned quantities with actual

Process Compliance KPIs

Operational KPIs

Number of reconciliations of nonback flush components Number of cancellations of manufacturing confirmations

Benefit Tracking KPIs

Percentage difference of value because of actual consumption

Expected Challenges and Mitigation support required

Challenges
Correct BOMs Correct Production Versions Correct Shelf Life Periods Storage Locations for Staging

Mitigations
Remove invalid BOMs Remove invalid Production Versions Update Shelf Life periods in the Material Masters Correct Production Supply Areas in Material Master and Resources/Work Centers for Material Staging

Availability of real time stock in the System Availability of actual costs in the SAP system

Training on adhering to policy guidelines for receipts or issues or transfers or quality clearance Training for Actual Consumption declaration

Key Implementations Steps

Configuration

Not Applicable
Master Data Correct Backflush indicators in Material Master Remove invalid Bills of Material Remove invalid Production Versions Correct Issue Storage Locations in Material Master Correct Product Supply Area in Work Center/Resource

Training: Actual Consumption Activity Plan

Detailed activity plan is prepared to carry out the steps for Material Staging

T
hank You