Fitter Snacker


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Fitter Snacker- low crab dilemma for NRG-C bars

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Fitter Snacker

  1. 1. FITTER SNACKER <br />CASE STUDY <br />PRODUCT LAUNCHING OF NRG-C BARS <br />- Low-Carb Dilemma<br />SUBIMMITED BY <br />KAMLESH PATEL<br />Low Carb Dilemma<br />Hi I am Kamlesh Patel, a Fitter Snacker organization user FS- 47 to brief about Business Process for producing NRG-C bars in SAP system.<br />Introduction:<br />A Fitter Snacker Inc. is a small manufactures of snack bars. The Fitter Snacker (FS) core business is to manufacture and sells mainly 2 types of healthy, nutritious snack bars namely NRG-A and NRG-B bar. The NRG-A touts “Advance energy”, NRG-B boasts “Body building proteins”. This company has continuous growing market demand for low-carb snack bars, driving current sales have been taken a hit. However sales have not yet declined, but have been flat over the last year. To remain in competition within product range by developing and putting new low-carb snack bars in the market. <br />The FS’s research and development (R&D) Lab team has been working on the development of new type of nutritious bar and In preliminary research proposal stage. They conclude that they have potential capacity to develop new snack bars to increase market shares and profits. With the continuing their current series of NRG-A, NRG-B bars, FS decided to this product name as NRG-C bars.<br />In order to manufacture the new product NRG-C bars which are healthy low crab (carbohydrate) snack bars with much low carbohydrate and more proteins, It is required modification like<br /><ul><li>Replace of half (50%) of oats content with Soy Protein
  2. 2. Replace of honey with Splenda and additional Canola Oil</li></ul>It is necessary to Identifies related information with final data to implement the NRG-C bars. The required changes in product parameters gives rise to fewer other changes in the SAP system those are:<br /><ul><li>Find a supplier for Soy Protein and Splenda (who can supply give FS at competitive rates)
  3. 3. Change in existing SAP system parameters to include the above product changes and incorporate the supplier related information within the system.</li></ul>All the systems internal activities related to planning, scheduling and supporting manufacturing operations, executions as well as shipments, FS SAP system required to incorporate additional data in the system.<br />Create new master data SAP system which will support the functions related to NRG-C bars.<br />Material Types:<br />The FS uses following pre-defined materials to manufacture. The Material master data for the new product NRG-C bars requires following additional of currently available in FS’s SAP system for NRG-A bars and NRG-B bars.<br /><ul><li>Raw Materials: Soy Protein and Splenda are purchased and used in manufacture of Semi finished products.
  4. 4. Semi Finished Products: Dough for NRG-C
  5. 5. Finished Goods: NRG-C bars
  6. 6. Respective groupings are defined to facilitate the production scheduling and various execution activities within SAP R/3 system.
  7. 7. Vendor Master Data:
  8. 8. Raw material Splenda need to add in system. Also Adrian Additives was identified as a new supplier (vendor) who can supply Splenda. Now, we need to create Adrian Additives into our supplier base and include all its information as both purchasing and accounting data to execute purchase orders. While creating we would also enter following information about vendor.
  9. 9. General Information: Vendor Name, Vendor Address, Country, Jurisdiction code, financial accounting information which is agreed terms by Adrian Additives and
  10. 10. Accounting Information: Reconciliation account, cash management group, payment term
  11. 11. Purchasing Information Records:
  12. 12. It is import to note that all the above purchasing and finance related information along and terms are very much essential as well as critical. Purchasing of product needs money and money must need to controlled and governed by finance and account department of FS. So to facilitate, need to have precise data for Adrian Addititives.
  13. 13. MaterialVendorPurchasingInfo Record</li></ul>Source: “Concepts in Enterprise resource planning (3rd Edition) by Ellen Monk-Bret Wanger” 1<br />Purchasing information records contains current and total delivery (logistic) costs for purchasing particular product, last purchase order number, order history and planned delivery time for material.<br /><ul><li>Now, we have to define vendor and material master, and relation. To know exact which vendor is going to supply what material at what price needs to be well defined. The new product NRG-C bars need to relate the below information:
  14. 14. Vendor Adrian Additivies Splenda ($20/lb)
  15. 15. Grand Rapid Grains Soy Protein ($ 0.50/lb)</li></ul>Master Production Data:<br />To make NRG-C bars as finished product, semi-finished product called dough for NRG-C and subsequently to create dough we need raw materials. To get final product NRG-C bars requirement comes in two parts:<br /> (1) Raw material level. From Bill of Material (BOM) we know how much qty of which raw material at what time are needed to make a batch of 500 lbs of dough for NRG-C. <br />(2) Number of batches of 500 lbs of for NRG-C dough required in order to make one batch of 7 cases of NRG-C bar as finished product.<br />We need to define routing file which can tell us which material and what work centers (mixing and backing) process sequence needed to carry out to make finished product. These will help us for production planning and production scheduling.<br />As, NRG-C bars will be manufacture under Make-to-Stock (MTO), we also need to define sales distributions channels and price conditions definition based on customer or distribution channel. <br />Fitter Snacker Manufacturing Process:<br />Raw Material WarehouseMixerMixerMixerMixerFormBakePackFinished Goods WarehouseSnack Bar Line<br />Source: “Concepts in Enterprise resource planning (3rd Edition) by Ellen Monk-Bret Wanger” <br />Transactional Data and Functional Department’s Responsible:<br />Now, FS’s SAP systems master data will facilitate for making all necessary transactions related to new product NRG-C bars:<br />FS`s marketing department can creates sales order of 10 qty of NRG-C bars for the customer Houghton Health Club.<br />Marketing Department have to perform necessary checks availability of resources like raw material here in our case study, manufacturing process is MTO, that means for making of NRG-C bars, we planned the MRP to buy raw materials and schedule production. <br />Procure-to-Pay: Purchase Requisition(PR) issued from Production department to Purchase Department. Next, Purchase Department makes Purchase Order and Notify to Vendor then Vendor ships the material Goods Receipt and material verifications Invoice Receipt from Vender Payment to Vendor according to payment terms by Finance and Accounting Department<br />Next, MRP Planned orders appears two ways (1) PO release tell us when the order should be placed with the suppler and (2) PO receipt shows when the supplier should deliver the order<br />The receipt of above raw material then will be issued to production department according to production planning schedule based upon production order. <br />Next, production department execute production process as per routings defined (from the Production proposal Production capacity planning Schedule and release of Production Order Shop Floor Documents Goods Issue Completion Confirmation Goods Receipt Order settlement with Accounts department. It is important to understand that by using accurate and effectively BOM and routings defined ensure that planning and scheduling the right qty and resources (also machine time and men power) at right time. It is also defined as the operations required for manufacture a part of a product.<br />Conclusion:<br />As we learned that SAP R/3 is fully integrated manufacturing process and manufacturing to enables the integration of various business processes in order to successfully execute and achieve the business objectives. If proper well planned systematic efforts undertaken at the initial stage of implementation. Sure to say that SAP ERP has potential power to give an effective decision making information to its system users which ease the day-to-day operations as well it also helps to take organization strategic decision. <br />Integration of business processes also facilitates the integration of various functional departments within the FS to carry out the operation hassle free end-to-end information flow. This timely ready and accurate information is available to us at all times which is highly consistent improve throughout the end-to-end operation cycles. FS`s SAP system allows to execute and communicate with all the concerned effectively and in timely manner to control and reduce bull whips effects.<br />These will be definitely advantage to FS edge over competitors in the market share. In competitive market FS can easily monitor and manage customer service levels (CSLs) like perfect order, fill rate and cash-to-cash cycle. The SAP system can improve the efficiency of the production and purchasing processes. Efficiency begins with marketing department by sharing accurate sales information with production department, which shares its production plans with purchasing department which leads ultimately to effective supply chain management. <br />To conclude, FS launch of new NRG-C bars in the market will be successful since we are relying on highly integrated SAP R/3 system.<br /><ul><li>Screen Shorts form SAP system
  16. 16. Display Vender Master
  17. 17. Displaying the Stock Requirements List
  18. 18. Stock Overview: Basic List for –Soy Protein
  19. 19. Stock Overview: Basic List for – Splenda TM
  20. 20. Stock Requirements List
  21. 21. Individual access view of the Stock Requirements List (with planned order list)
  22. 22. Stock Requirement list(green light for all Material except NRG-C bars and NRG-C dough
  23. 23. Stock Requirement List for NRG-C