Absoft sap oil & gas supply chain forum feb 2012

Supply Chain ForumSupply Chain ForumThursday 9Thursday 9thth February 2012 February 2012

Agenda

Introduction

Presentation 1 – Returns, Repairs & Rentals

Presentation 2 – Material Traceability

Future Sessions

Agenda

Time Item

1300 Buffet Lunch

1330

Introduction to Forum Context Aims Previous Forums

1340

Session Presentation Optimising the Management of Repairs, Rentals and Returns. Ade Adewuyi, Senior SAP Supply Chain Specialist, Absoft

1410 Questions

1420 Coffee Break

1430 Session Presentation

Material Traceability in SAP. Farooq Durrani, Senior SAP Supply Chain Specialist, Absoft

1500 Questions

1510 Future Sessions

Topic Suggestions AOB

1520 Coffee and Networking

Agenda

Introduction

Future Sessions



Health and Safety Information

Fire Alarm

Assembly Point

Fire Exits

Restrooms

Mobile Phones

Please put on silent/vibrate

About Absoft

Over 20 years in business

SAP consultancy practice – Oil & Gas

SAP experience since initial release of R/3

80+ permanent employees

High Staff Retention / Low Staff Turnover (7.4%)

Significant investment made to on-going training (12 days per annum)

Why Absoft?

SAP Oil and Gas Partner

SAP Business Objects Partner

Unrivalled track record

Global turnkey project capability

39 countries

Optimisation of Requirements Gathering – right people, right questions

Accelerated implementation via purpose-built Templates

Resource augmentation and change management

Continuity of service beyond go-live

Absoft has deployed SAP into 39 countries worldwide…

• EUROPE

• MIDDLE EAST

• AMERICAS

• AFRICA

• ASIA

Products and Services

SAP Implementation

SAP Consulting

SAP Training

SAP Support (Front & Back-office)

SAP Infrastructure

Data Migration

Winshuttle

ReadSoft

Business Objects

Aims

Informal network for Oil and Gas organisations using SAP

Share best practice use of SAP in the Supply Chain arena

Foster discussion around potential solutions for common pain points

........?

Context

Forum not recognised or sponsored by SAP

Forum is not intended to in any way compete SAP User Group

http://www.sapusers.org/members/sigs.php?sig

Calum Davidson – [email protected] for more info

Keen to extend reach of forum: Open to all SAP using companies in Oil and Gas sector

Maintenance and Operations Forum alternating with Supply Chain

Absoft happy to act as co-ordinator – agenda/topics to be driven by participants

Questions

Agenda

Introduction



Future Sessions

Repairs, Rentals & Returns - Agenda

Scope & Focus

Key Issues in the Industry

Overview of SAP Solution

• Returns

• Repairs

• Rentals

Demo (using screenshots)

• PM order

• Networks

Tips for Implementation

Key Benefits

Questions & Comments

DefinitionsDefinitions

Key documentsKey documents

Process flowProcess flow

Business scenarioBusiness scenario

ProcessesProcesses

ResultsResults

RRR – Scope & Focus

Oil & Gas (upstream) industry

• Asset Maintenance activities (using PM orders)

• Well Operations (using PS WBS & networks)

SAP best practice – use of RLM functionality integrated with:

• SAP PM

• SAP PS

• SAP MM – PUR/IM/SRV

• SAP LE

Highlights of a simple but robust solution which could be further enhanced by various clients

RRR – Key Issues in the Industry

Extensive use of multiple spreadsheets & applications to manage returns, repairs & rentals processes

High level of manual input for generation of process documentations & reports

High inventory of repairable materials as a result of ineffective repairs process

High maintenance costs due to use of new items where repairable materials could have been utilised

Ineffective monitoring of rentals resulting in unnecessary demurrage & higher operational costs

Avoidable delays in rental returns probably leading to higher costs & stressed relationship with suppliers

RRR – Overview of SAP Solutions

Returns

Sub-module of the SAP Remote Logistics Management (RLM) solution

Developed for handling the returns of materials and containers from offshore location to base plant

Serves as a trigger for subsequent actions at the base plant

Processing options include:

• Decoupled – returns document not related to subsequent documents

• Loosely Coupled – subsequent documents x-ref to returns document

• Tightly Coupled – facilities within returns doc to generate sub. docs

• Full Workflow – automated creation & processing of all sub docs

Returns


Returns Document

The returns process is initiated with the creation of a returns document (with reference to an appropriate SAP object) specifying:

• Returns item, description & quantity

• Receiving plant (and storage location where necessary)

• Reason for return (recommended action), etc.


Recommended Actions

An indication of the reason for return such as:

• Returns to stock, vendor, etc

• Return for temporary storage

• Return for scrap or waste

• Returns for repairs

• Rental returns, etc.

Each recommended action consists of processing steps & allowed processes for each step

Steps are pre-configured for each recommended action to achieve a smooth flow in operational sequence


Recommended Actions

Rec. Action

Description

01

02

03

04

05

06

07

08

Return to Vendor

Return to Stock

Return for Waste Handling

Repair and Ship Offshore

Repair and Keep in Stock

Return for Temporary Storage

Plant to Plant transfer

Rental returns

Define Rec. Actions

Define Steps for each Rec.

Action

Specify allowed

processes for each Step


Returns Processing – offshore:

Create Returns Document

(tx O3O_RT01)

Create Return Delivery for item(s) on

Returns Doc(tx O3O_RT02)

Create Shipment for

the returns(tx VT01N)

Assign available Containers to

Shipment(tx O3O_PACK02)

Pack Return Deliveries into

Shipment Containers

(tx O3O_PACK04)

Process Shipment for

dispatch(tx VT02N)

Commonly designated as:

Step 10 - Ship onshoreStep 10 - Ship onshore


Returns Processing – onshore:

Post Shipment Receipt

(onshore)

Rec. Action:

Return to Vendor?

other returns

scenarios

No

Create Consignment

returns PO

Create Despatch Note for Vendor

Post ‘GR’ for Consignmen

t PO

Close Returns

Document (item)

Create Buy-back

(returns) PO


Post ‘GR’ for Buy-back PO

Close Returns

Document (item)

Create Return

Delivery for Vendor


Close Returns

Document (item)

Create Service

(scrap) PO


Post SES for Service PO

Close Returns

Document (item)

-- Consignment Returns --

-- Returns for Quality Issues --

-- Return for Buy-back --

-- Return for Waste Handling --

Offshore

processes

Yes


Repairs

A subset of the RLM Returns functionality

Possible to use any of the processing options highlighted for returns (decoupled, loosely coupled, etc.)

Designed to be used for repairable materials installed (or stocked) at offshore locations

Repair scenario is indicated as a recommended action on returns document when handling a repairable material

Triggers subsequent actions on the material – see various repair scenarios

Repair Scenarios

Repairs


RFQ / RFQ / Subcon. Subcon.

POPO

demobilisedemobilise

mobilisemobilise

2

34

67

8

Repair ShopRepair Shop

Transit StoreTransit Store

Onshore WarehouseOnshore Warehouse

Typical Repairs ScenarioTypical Repairs Scenario

Offshore Buffer Offshore Buffer Spares (non-stock)Spares (non-stock)

Swap Swap equipment & equipment &

continue continue productionproduction

5

6

1Call - offCall - off

*

* stock type in warehouse: unrestricted use

Integrate into (special) stock after activity 7Integrate into (special) stock after activity 7

Transfer to subcontractor stock on dispatch to vendorTransfer to subcontractor stock on dispatch to vendor


Repairs – decision tree:

Repairable Material?

Repair Immediately

?

Repair & Ship Offshore

Repair & Keep in Stock

Yes

Yes

No

Other Returns Streams:

1. General returns2. Rental returns3. Waste handling

No Return for Surplus /

Clarification


Repairs Processing – offshore:


(tx O3O_RT01)



Create Shipment for





Shipment Containers

(tx O3O_PACK04)


dispatch(tx VT02N)




Repairs Processing – onshore:

Post Shipment Receipt

(onshore)

Rec. Action:

Return for Repairs?

other returns scenarios

No

Create purchasing

requisition / RFQ

Dispatch to

Vendor

Goods receipt from

Vendor

Shipment receipt

offshore

-- Repair & Ship Offshore --

-- Repair & Keep in Stock --

Offshore

processes Yes

Ship onshore

Dispatch to warehouse &

place in (transit) stock

Create purchasing requisition

/ RFQ

Stock goods movements / dispatch to

Vendor

Place in stock

(2-step transfer)

Goods receipt from

Vendor

BER? Create repair PO

Investment Recovery Process

Yes

No


Rentals

A subset of the RLM functionality, designed for managing the end-to-end rental (logistics) process

Key requirements:

• maintaining rentals as a planned service in the demand object (PM or network order)

• Returns document created with reference to demand object

Major processing stages:

• Planning, demand management & procurement

• Mobilisation – goods receipt & outbound logistics

• Demobilisation – including inbound logistics & rental returns

• Service validation & invoice processing


Shipment Receipt (base)

Rec. Action: Rental

Returns?


No

Demobilise rental

equipment

Dispatch to vendor

Offshore returns

processes

YesVendor receipt

confirmation

Create network / PM order

Maintain service line

with mobilised material

Approve /release Service

Requisition

Convert service

requisition to rental PO

Goods receipt for mobilised material

Cross-dock delivery for mobilised material

Ship (mobilised material) offshore

Shipment receipt

offshore

Equipment utilised & prepared for return

Create service entry sheet (SES)

for rental PO

Accept SES

Line 1: Service

Line 2 (FOC): Mobilised material

Changes status of mobilised material to “Waiting”

Changes status of mobilised material to “Mobilised”

Changes status of mobilised material to “Demobilised”

LIV / Payment

Rentals Processing:


Rental Returns Processing – offshore:


(tx O3O_RT01)



Create Shipment for





Shipment Containers

(tx O3O_PACK04)


dispatch(tx VT02N)




Rental Returns Processing – onshore:

Shipment Receipt (base)

Rec. Action: Rental

Returns?


No

Demobilise rental

equipment

Dispatch to vendor

Offshore

processes

YesVendor receipt confirmation

Demo

PM order

Business Scenario: A planned maintenance activity is to be carried out on

a remote platform. The work requires a critical equipment to be replaced.

A (rental) lifting equipment would also be required for carrying out the task. On completion of the task, the old equipment, which is a repairable item, would be returned onshore for repairs and the rental equipment would be demobilised and returned to the vendor.

• Work stages:

• Plan maintenance activity

• Mobilise ‘new’ equipment to the platform

• Mobilise rental equipment to the platform

• Carry out maintenance activity

• Demobilise rental equipment & return old equipment for repairs

Demo – RRR with PM order

PM order for maintenance activity:


PM order – operation 20 (rental):


Purchase Requisitions for PM Order:


PM order – op. 20 showing updated mobilisation status:


Rental PO showing Mobilisation (FOC) line:


PM order (material tracking) before returns processes:


Creating returns document with reference to PM order:


Creating returns document with reference to PM order:


Returns document showing items with relevant details:

Step 10: Ship Step 10: Ship onshoreonshore

Shipment Shipment receipt onshorereceipt onshore


Returns Worklist with items at different processing steps:


Repairs processing option 1 – debit to inventory account:


Repairs processing option 2 – debit to PM order:


Rental returns – demobilise rental item:


PM order (material tracking) after returns processes:


PM order (material tracking) after returns processes:

Demo

Network

Business Scenario: As part of a Well Ops project, procured materials and

rental equipment were mobilised to the drilling rig. Due to a change in the drilling schedule, some of the components needed to be returned onshore for temporary storage. These would be remobilised for use at a later date.

On completion of the drilling phase of the project, equipment used for this phase were demobilised and returned to the base for subsequent delivery to the vendor. Also, unused (surplus) components were returned to the onshore warehouse for probable use in future projects.

• Returns

• Temporary storage

• Stock

• Rentals

Demo – RRR with Networks








Tips for Implementation

Push principle

Simplified Repair Scenarios

• Repair & ship offshore

• Repair & keep in stock

Process Automation

• Use of SAP standard processes

• Development to combine multiple processes

Reporting & Analytics

• Standard SAP reports

• Bespoke reports possible Push Principle

Key Benefits of Using SAP RLM for RRR

Directly addresses the key issues earlier identified

Integration with other SAP modules

Possible to maintain visibility of items (in process) with vendors using the holding functionality

Material tracking reports

Automation of returns processing

Returns worklist for monitoring purposes

Real time logistics information to all stakeholders (without losing authorisation control)

Effective monitoring & control

Financial benefits of implementation (up to 15% reduction in operational costs)


Agenda

Introduction



Future Sessions

Traceability – Scope & Focus

Oil & Gas Manufacturing industry

• Manufacturing Complex Equipment

• Servicing and Warranty

Oil & Gas Operators

• Custom Status

SAP best practice – use of traceability functionality with:

• SAP MM-PUR

• SAP MM-IM/WM

• SAP PM/CS

• SAP LE

Areas to Examine

Batch Management

Serial Number Management

Example of how batches and serial numbers improve traceability – Installed Base

Batch Management

Definition of a Batch

• Batch is a subset of the total quantity of a material held in stock.

• The subset could have unique specifications.

Typical Examples

Plugs – Coatings – Welding Wire – Bonding – Screws/Nuts/Bolts – Tubulars etc

e.g a plug used in a Subsea Control Module: The batch used needs to be traceable in case of any fault/defect – to see where else may be affected and enable you to trace where purchased from

Batch Management usage

Traceability

• Batch ‘Where-used’ list - MB56

− Top down analysis – Where did you buy it from?

− Bottom up analysis – Where did you use it?

Batch Where-Used List

Where Used• Production Orders• Work Orders• Repair orders• Networks• ..........


Batch classification

• Custom status

• Certification requirements

• Dangerous goods

• Shelf Life/Expiration Date

Batch valuation

• Ownership

Documented and Available to customer in “MRB” – Manufacturer Record Book. Typically Operators will require access to this level of detail.

Batch determination

• Where is it used?

• In Inventory Management

• In Production

• In Sales and Distribution

• In the Warehouse Management System

• How is it used?

• First in, First Out (FIFO)

• Shelf Life Expiration Date (SLED)

• Use Duty Suspended stock before Duty Paid

• Use Own Stock before JV Stock

• .........


Batch Determination

How it works?

• On the Receipt side

• Create a goods receipt and specify the Date of Manufacture

– SLED = Production Date + Total Shelf Life

Batch Determination

Batch Determination (based on shelf life)

How it works?

• On the Issue side

• Create a delivery

Batch Management Tips

External number range

• Not SAP best practice way since it does not offer:

• Traceability

• Shelf life functionality

• Batch determination

Internal number range (with classification)

• SAP best practice way since it offers:

• Traceability

• Shelf life functionality

• Batch determination

Batches can improve Traceability only if...

Clear understanding of which materials will be batch managed

Consistent approach for creating batches, e.g.

• Let SAP generate batches at goods receipt

• Use SAP internal number range

• Specify vendor batch number as an attribute of your own batch

• Specify date of manufacturing, SLED & BBD as attributes of your own batch

• Record batches at every stage

• Make adjustments if necessary

Batch Management - Recap

Standard SAP Functionality

Reporting Facilities (Where bought from, Where Used)

Enforces compliance with

• Picking rules (Batch Determination)

• Statutory Requirements e.g. customs

• Business Rules

Provides detailed records available to End Customer

Visibility of as-built for Returns/Repairs

Serial Number Management

Definition of a serial number

Serial number is a unique identifier for a specific item

Serial number management distinguishes between individual items of a material

Typical example

Electronic Circuit Board within a Subsea Control Module – the electronic circuit board needs to be fully traceable, as does all it’s sub-components

Material Traceability (MM Object) as opposed to Equipment Traceability (PM Object)

Serial Number Features

Serial Number History

Full Visibility through all Supply Chain Activities

Serial Number Features

Status Management

System Status – automatically updated through GR/GI• Available – New • Store – In Warehouse• Installed – Serial Number in “Installed Base”

Search for serial numbers

Serial Number Management Usage

Inventory Management• Good Receipt/Goods Issue/Warehousing

Quality Management• Certification

Production• Production Orders

Sales and Distribution• Sales Orders• Inbound/Outbound Deliveries

Plant Maintenance/Customer Service• Repair Orders• Returns

Serialisation can improve Traceability only if...

Clear understanding of which materials will be serialised

Consistent approach for creating serial numbers, e.g.

• Let the buyers create serial numbers during PO creation or

• Let SAP generate serial numbers at goods receipt

• Use SAP internal number range

• Specify vendor and vendor serial number as attributes of your serial number

• Specify serial numbers at every stage

• Make adjustments if necessary

Serialisation - Recap

Standard SAP Functionality to deliver full end to end traceability

Reporting Facilities

• See not just the material – but which specific (unique) material

− Stock List

− Goods Movement

− Finished Product

Provides detailed records available to End Customer

Visibility of as-built for Returns/Repair

Installed Base - Operators

Multi-level structure of components for managing products

IB51/52/53 (for Operators)

Installed Base – Manufacturer / Service Co.

COIB (for Manufacturers or Service companies).

Provides Full detail and visibility over the “as built” assembly – as delivered to the customer.

Installed Base

Installed Base - Advantages

Multi-level representation of components

Audit trail of installing and dismantling times for components

Components do not have to be represented as equipment master records

You can record additional data for the components (for example, batch, revision level)


Agenda

Introduction



Future Sessions

Ideas?

Topic Suggestions

Handhelds

SRM – how does it fit with SAP

Quality Management within SAP

…

Contact

Tim Galloway Kim Shand

[email protected] [email protected]

Thank You

Technology

Absoft sap oil & gas supply chain forum feb 2012