CenterPoint Energy’s EWM Implementation on HANA

Miriam Montross – CenterPoint Energy Kevin Gandy – CenterPoint Energy

TOPICS OF DISCUSSION

CenterPoint Energy Background EWM Project EWM Functionality Implemented Illustrations of Enhancements Challenges at Go Live Lessons Learned Recommendations Looking Ahead Questions

CENTERPOINT ENERGY, INC. (NYSE: CNP) REGULATED ELECTRIC AND NATURAL GAS UTILITY SERVING MORE THAN 5.5 MILLION CUSTOMERS

Electric transmission & distribution: • Electric utility operation with ~2.3 million

metered customers

• ~5,000 square mile service territory in and around Houston

• 18th largest U.S. investor-owned electric utility by customer base1

• Over 81,000,000 MWh delivered in 2014

Gas operations • 10 gas distribution jurisdictions in six

states with ~3.4 million customers

• 5th largest U.S. gas distribution company by customer base1

• Recently ranked 1st among the largest Midwest region natural gas utilities in the U.S. for operational satisfaction in a 2014 Cogent energy study

• Gas distribution company and energy services company delivered ~1.1 Tcf of natural gas in 2014

Electric transmission & distribution

Natural gas distribution

Energy services

1. As of Dec. 31, 2013 per AGA and EEI

CENTERPOINT ENERGY SAP FUNCTIONALITY MAP

ESS & HR portal Health & safety

tracking

Employee qualifications

Medical surveillance

Organization management

CATS time entry SAP / intranet

Leave entitlement tracking

W4 changes on intranet

Paycheck / direct deposit

Third party remittance process

Expense reimbursement

Driver system Volunteer

system Exben

Employee data warehouse

Extended Warehouse Management

Finance / controlling / investment management (FI, CO, IM)

Customer relationship & billing (CR&B/CCS, CRM)

Material management / purchasing (MM)

Sales and distribution (SD)

Bu

sin

ess

War

eho

use

(B

W)

– P

M, P

S, M

M, F

I, C

O, C

CS,

SD

, HR

(D

ate

TBD

)

Work order mgmt Notifications Capacity planning Equipment

maintenance Maintenance

planning

Purchasing Material

requirements planning (MRP)

Inventory management

Physical inventory

Project management

General ledger Accounts payable open text - VIM

Fixed assets Consolidation Controlling -

general

Planning/budgeting Profit center accounting

Capital investment FERC /

special ledger

Internal orders

Install service New customer set up / move In

Meter reading Invoicing /

billing process Account credit management

Collections

External services management

(ESM)

Marketing, sales and service

ARO sales orders HSP parts orders

HSP sales orders

Shopping carts

Supplier registration

Sourcing Contract

management

Supplier relationship management (SRM)

E-sourcing (Sourcing and CLM)

Inbound processing

Internal process Labor

management Outbound processing

Spend performance management (SPM) Spend analysis

reporting

Online customer self-service

HR master data management

Human resources (HR)

Payroll (HR)

Work Management / Equipment Management / Project Management(PM, PS)

CENTERPOINT ENERGY SUPPLY CHAIN SYSTEMS DIAGRAM

SAP ECC SRM

SRM-MDM

catalog

Content server

(Filenet)

Supplier self-

service portal

Sourcing / CLM

Documents created in backend system (ECC)

Doc #’s passed back to SRM to update Shopping Cart

Internal catalog item searches/retrieval

RFx w/attachments passed to ESO

PO or contract created in ECC

Contractor website – CNP custom web front

end to ECC

PI

Custom solution designed by CNP for assigning work to 3rd party contractors and facilitate their ability to invoice for services

performed.

BW

SPM

EWM

Data passed to standard BW cubes for basic reporting

Sabrix tax

engine

7 Battery repair stations

CENTERPOINT ENERGY DISTRIBUTION CENTERS

HOUSTON

• Number of bins: 19,825 bins • Annual lines rcvd = 38,061 • Annual lines picked = 278,424 • Trucks receipt/ship = 75/wk • Warehouse employees = 13 • Sq ft = 50,000 • # of SKU’s = 10,900

MINNEAPOLIS

• Number of bins : 3106 • Annual lines rcvd = 45,920 • Annual lines picked = 112,262 • Trucks receipt/ship = 100/wk • Warehouse employees = 40 • Sq ft = 140,000 • # of SKU’s = 14,409

HOUSTON ELECTRIC

• Number of bins : in process • Annual lines rcvd = 58,507 • Annual lines picked = 72,526 • Trucks receipt/ship = 130/wk • Warehouse employees = 16 • Sq ft = 50,000 • # of SKU’s = 10,156

SOUTHERN GAS-HOUSTON

PROJECT BACKGROUND

• CenterPoint Energy’s Minneapolis’ Distribution Center (MNG) had an aging WM application that was fast approaching sunset status

ISSUE

• Standardize common processes and technology across distribution centers (Minnesota, Houston Electric and Southern Gas)

• Implement a core technology for all three DC’s to enable/support their business processes and would increase warehouse efficiency and accuracy

OPPORTUNITY

• Develop and implement a global EWM template for all three sites with the participation of subject matter experts from each business

OBJECTIVE

Met all core requirements needed by CenterPoint

Energy Logistics

Supported CenterPoint Energy’s technology roadmap to

replace legacy applications with core technologies

EWM <-> ECC Integration – standard SAP

Enables CenterPoint Energy to leverage their existing

SAP support team for on-going support and

development

SAP’s on-going investment in EWM

EWM capabilities

– Route Guide Engine

– Labor Management

– Radio Frequency

– Replenishment

– Wave Management

– Two-Step Picking

WHY SAP’S EWM?

PROJECT TIMELINE

2012 • Bids/Evaluation of WM Best of Breeds

• EWM software selected

2013

• Bids/Evaluation for Integration Partner

• Logistar/EY selected as partner

• Q4 – Blueprint Phase Begins

2014 • Blueprint phase completed in April

• Realization phase begins in June

2015

• Realization phase continues (slight pause due to internal budget issues)

• Migrated to HANA data base in project landscape

• Migration from project landscape to production landscape

2016 • Delayed EWM implementation to February to synchronize with move to new Golden Valley Facility

PROJECT METHODOLOGY

CenterPoint Energy has a long-standing tradition of co-implementing SAP functionality with their consulting partners.

The end goal is for the CenterPoint Energy SAP Support Team to be able to provide product support for the company after the product has been implemented.

CenterPoint followed this methodology with our partnered consultants through blueprint, EWM configuration, development, testing, training, and technical environment cutover to production.

BLUE PRINT PHASE

•Usage of story cards

•Whiteboard flow charts

•Focus on how it “needs to be done”

Interactive workshop sessions

•Consulting team prototyped processes in a sandbox system.

Rapid Prototyping •Show and Tell

•Consulting team demo’d prototypes to CNP team to validate design based on workshop sessions

Playback Sessions

•Consulting team developed the Business Process Design Documents to be used during Realization Phase

Develop BPDD •Consulting team developed list of customizations that would be required based on workshop sessions

Develop RICEF List

•A session was held with SAP MaxAttention group to review proposed list of customizations and confirm they were valid and necessary.

MaxAttention Review

Pros : Very interactive and fast paced. Participation from both CenterPoint Energy business and Technology Operations team members

REALIZATION PHASE

Pros : High quality of delivery and knowledge transfer.

Cons : Can take longer so it is important to be mindful of milestone dates

Consultants configured in Sandbox

to document configuration guides

for each process.

Interactive KT sessions led by consultant

team to review config for each process

CNP team replicates configuration in

sandbox and dev environments. This

allows multiple people to do hands-on

config

All config and development is tested

in multiple environments

User validation of system conducted in

Minnesota.

Confirmation nothing was missed in design.

Also gets SME’s in system prior to final

UAT

EWD 810 (coding) EWD 820 (config) EWD 850 (transactional) EWD 830 (transactional)

EWQ 901(transactional) EWQ 900(transactional)

EWM Hana landscape ECC project landscape ECC prod landscape

EWP 900

Development

QA (production size)

Production

Sandbox

PRE 810 (coding) PRE 820 (config) PRE 830 (transactional) PRE 840 (transactional)

DV3 810 (coding) DV3 820 (config) DV3 830 (transactional)

Development

DV9 810 (coding) DV9 820 (config) DV9 830 (transactional)

Development

MA6 900 (transactional)

(Production size)

PRM 900 (transactional)

(Production size)

PRD 900

Production

Sandbox non-Hana

SCD 810 (coding) SCD 820 (config) SCD 850 (transactional) SCD 830 (transactional)

EWQ 901(transactional)

SCS 810 (coding) SCS 820 (config) SCS 830 (transactional) SCS 840 (transactional)

Development

QA (production size)

EWM landscape

Converted to Hana

SYSTEM LANDSCAPE

KEY FUNCTIONALITY IMPLEMENTED

Inbound processing

• Receiving

• Vendor PO receiving

• Auto receipt into hold bins for 311 moves from tech

• Customer returns receiving

• Plant/sloc returned to EWM plant/sloc

• Quality inspection

• System-guided putaway

Internal processing

• Cycle counting/physical inventory

• Automatic replenishment

• Labor management enabled for all internal processes

Outbound processing

• Order processing

• Standard customer orders

• Emergency part pickups

• Stock transfer orders

• Return to vendor

• Subcontracting

• Wave management

• Multiple order/batch picking

• Multi-zone picking

• Enhanced two step picking process

• Labor management

• Shipping

• Parcel carrier integration via XPS

PROJECT ACCOMPLISHMENTS

High Level of Integration between Applications/Devices

• Replication of master data from ECC to EWM

• Two way interfaces for transactions between ECC and EWM

• Security roles/authorizations

• RF real time integration to application

• XPS integration to scales

Ease of Use

• Customizations were made to the RF to streamline activities

• Custom solution was developed for consolidated picks of materials

• Custom programs developed to streamline master data activities for mass creations

• All physical moves can be scanned which fosters efficiency and accuracy and eliminates key strokes

Facilitated Standardized Processes for Logistics

• Customizations were made in EWM/RF to facilitate goods receipt by PO number

• Custom program developed to close STO items to avoid backorders so MRP could re-plan

• Customizations were developed to support work order reservations

Receiving users receive by PO. If there is no Inbound delivery in EWM they are unable to proceed. If there are multiple inbound delivery per PO they will all be taken into account but the user does not need to know about them.

ENHANCEMENT FOR INBOUND PROCESS ALLOW RECEIPT BY PURCHASE ORDER

RECEIPT BY PURCHASE ORDER

ENHANCEMENT AUTOMATING REPACKING TO CARTHU FOR PUTAWAY

Custom development was made on the RF to repack the Dummy HU into a “cart” HU. This allows the receivers to add multiple PO received onto a single CartHU until full. When the CARTHU is “closed” standard putaway warehouse tasks are created and material is put-away by HU to the appropriate bin location.

PUTAWAY MATERIAL BY CARTHU

ENHANCEMENT FOR OUTBOUND PROCESS AUTOMATES CREATION OF TU AND LOADING OF HU(S) ONTO TU

An enhancement was made to create the TU by scanning the pre-printed TU label and then load Pick Hu's onto the TU. Materials will remain “staged” on the TU until carrier arrives. NOTE: Both the Pick HU and the TU have barcoded tags for logistics to scan.

ENHANCEMENT TO PGI THE TU

Multiple HU’s can be assigned to a single TU. When the carrier arrives and picks up the materials, logistics will scan the TU label. A single button is pushed on the handheld and all HU’s/materials will be PGI’d against the EWM delivery and the appropriate goods movement is posted in ECC.

CHALLENGES AT GO LIVE

Move to new facility in addition to software

implementation

•Reduced amount of time available for training

•Everything was new and different

•Floor layout of bins

•Software

•New RF devices

System Performance Issues

•Network bandwidth issues at the new facility

•RF latency issues

•Screen size on the actual handheld was problematic

•Database stability

•Load balancing across the servers had not been set up

Security Roles/Authorizations

•Communication settings between ECC and EWM as a “trusted system” were a bit troublesome

•The integration between ECC and EWM used different movement types that needed to be added to the Logistics role in ECC .

•Fire fighter roles needed to be set up correctly to talk between systems

Shipping Issues

•XPS development lagged behind causing issues at shipping station

LESSONS LEARNED

• Resource commitment and flexibility during the implementation

• Teams ability to identify and resolve issues quickly

• Level of communication and visibility into progress made and upcoming milestones

• Well defined requirements

• Project was managed within the approved EC budget

• The project was able to manage to and deliver the baseline scope

• Integration partner’s knowledge base and expertise in support of the project

What went well?

LESSONS LEARNED

• Post go live issues and defects

• Plan additional time/effort for defect mitigation post go live

• Hyper care time line

• Should have planned for four vs. two weeks of hyper care support

• Hand held device and printer config issues

• Coordination of security roles testing

• Environment migration

• Make sure corrective actions are documented in lower level environments to ensure they are completed as migration occurs.

• Vendor cutover and go live support overruns due to incomplete development (RF/XPS)

• Clarity on who will oversee and perform master data conversions

• Training/testing timeline

What could have gone better ?

RECOMMENDATIONS

• Make sure you have someone with strong ECC business and system knowledge to pair with the EWM resources

• Have a resource that can focus on the master data components for both ECC and EWM

• Have a resource that can focus on the RF and printer elements of the project

Project resources

• Make sure to include integration with production like batch job variants and scheduling and XPS

• UAT should be more encompassing and threaded to ensure transactions post correctly between ECC and EWM

• Provide adequate time for end user training

• Properly plan for security roles testing per SAP security guidelines. Formalize role testing and ensure that’s it’s a part of UAT.

Testing

• Look for opportunities to streamline transactions and/or processes

• Automate transactional and master data activities

• Conduct knowledge transfer and training of system to both clients and internal SAP Support Team

Continuing Improvements

• Review the blueprint document to ensure documented processes and still valid for Southern Gas and Houston Electric DC’s

• Update blueprint with any changes needed in preparation for the subsequent implementations

Subsequent Implementations

LOOKING AHEAD

QUESTIONS?

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