Reference Report
SAP-integrated VMI processing
TDK Electronics automates calculation of replenishment quantities with SPEEDI VMI
TDK Electronics ensures the consistently high quality of its products and services through its comprehensive quality management system, a zero-defect strategy, but also through the continuous improvement of business processes in all areas. For years, the company has mapped its operating processes in two SAP ERP systems: In TDK Electronics' SAP software and in an SAP system used by the TDK Group in Japan for the European sales company TDK Europe, among others.
TDK Electronics
TDK Electronics is part of the Japanese TDK Group, a leading global supplier of electronic solutions. Its product range includes capacitors, ferrites and inductors (coils, chokes, transformers), piezo and protective components, as well as sensors and sensor systems. In fiscal 2021 (ending in March), TDK Electronics generated sales of around EUR 1.4 billion with 23,600 employees at around 20 development and manufacturing sites worldwide and a tight-knit sales network.
Advantages of SPEEDI compared to SAP in the VMI process
The SAP release or standard used by TDK Electronics does not cover all the necessary facets of certain processes such as Vendor Managed Inventory (VMI) as part of order processing.
"VMI processing is quite demanding. For customers whose warehouses we regularly stock with our products, the demand situation changes frequently, often even daily. As a result, subsequent deliveries and therefore shipping quantities have to be constantly adjusted and recalculated", says Sabine Trost, Manager Sales SAP Coordination Team, TDK Electronics.
Automated calculation
VMI processing used to be largely manual. The current stock level of a customer had to be researched in tables, replenishment quantities had to be calculated using a pocket calculator. Since the introduction of the SAP-based solution package SPEEDI VMI from WSW Software, which is installed on both SAP systems and extends the SAP standard without modifications, puts an end to this.
With SPEEDI VMI, the component manufacturer controls the replenishment of customer warehouses in an IT-supported and automated manner. The solution calculates the optimum replenishment quantities based on the stock quantities currently stored in SAP and the customer's requirement quantities, and schedules them directly in the SAP delivery plan. It takes into account all previously defined parameters, such as minimum and maximum stock levels, range of coverage and defined replenishment strategy.
More time for customer service
Since the commissioning of SPEEDI VMI, the quality of the calculations has increased significantly and they also run much faster. A further time saving is achieved as the parameters for replenishment control only need to be set once for each customer and each material in the solution and can be easily changed if necessary.
"Our 50 or so Customer Service colleagues around the world who look after the VMI special process can focus more on order processing activities and customer communication", explains Lydia Wirth, Commercial Sales Manager at TDK Electronics.
The volume of calculation processes, which has risen steadily over the years - currently around 1,000 per week - is handled by an almost unchanged number of employees.
SPEEDI Convincing right from the start
The geographical proximity of the IT service provider based in Gauting near Munich also ensures short distances and simplified coordination.
Supply VMI customers more evenly
But that's not all: the SPEEDI-solution also enables a more even, i.e. "smoothed" filling of the customer warehouse within the framework of the permitted minimum and maximum stock levels and the agreed range.
This allows seasonal fluctuations in demand to be balanced out and supply peaks to be avoided.
WSW Software developed the functions required for this individually for TDK Electronics and then integrated them as a standard function in SPEEDI VMI so that all customers can benefit from this in future.
And this is how a smoothed delivery works in practice:
If the replenishment is calculated for a range of ten weeks, the result is divided by ten and this figure is multiplied by two. This gives the average requirement instead of the pure two-week requirement.
If the customer requires 100 units of a component in each of the first two weeks, but 400 units in each of the following eight weeks, he receives 340 units per week from the first delivery onwards.
Mapping special process features
Other special features of TDK Electronics' VMI processes are also described with SPEEDI-functions (routines/tables) that the WSW experts have created especially for the company have been consistently mapped in SAP: for example, the calculation of customer requirements and the management of VMI-related consignment stocks on the customer number instead of the SAP material number.
This increases the transparency of customer inventories and improves process reliability.
"With SPEEDI VMI, supplemented by special SPEEDI functions, we increase the quality of calculations for stocking customer warehouses as well as the efficiency of replenishment control with all its special features. This is a real added value, especially with regard to demanding VMI customers, for example from the automotive industry.",
emphasizes Jens Scholtz.
More SPEEDI-solutions introduced
The positive experiences with SPEEDI VMI were also the trigger for TDK Electronics to implement further processes within order processing with SPEEDI-solutions: The SPEEDI Delivery Schedule Copier SD automates the rejection of existing SAP scheduling agreements and the creation of new ones. This minimizes manual copying procedures and entries, the process is simplified, streamlined and therefore more secure.
And material inbound and outbound control in the SD scheduling agreement process - previously controlled by an in-house development - has recently been implemented with the SPEEDI Start-up and shut-down control without modifications in the SAP standard. The fact that SPEEDI-According to Jens Scholtz, the fact that SAP S/4HANA solutions can also be used in conjunction with SAP S/4HANA without any problems and are therefore future-proof and investment-proof is another major plus point with regard to the end of mainstream maintenance for SAP ERP.
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