1. Parts Disposition on Service Orders - a custom solution Pieter de Bruyn Session: 4005

2. Topics to Cover Company Background The Service Order Life Cycle @ Heidelberg Completion Confirmation and Parts Disposition Special Cases when using Customer Consignment Orders Summary and Questions

3. Company Background Our Mission: To be the world market leader in solutions for the printing and publishing business. The Heidelberg Group

4. Heidelberg is the world's leading solutions provider for the print media industry with nearly 25,000 employees in 170 countries. Heidelberg manufactures sheetfed, digital and web press systems as well as prepress and postpress components, software and consumables for all printing applications. Heidelberg has the largest manufacturing and support network in the industry with 18 manufacturing sites and 250 support centers worldwide providing 240,000 customers with service and knowledge.

5. Heidelberg Market Center North America is made up of 2 companies, i.e. Heidelberg USA and Heidelberg Canada Main Business Process focus areas = Sales, Service, Marketing (Consumables, Service Parts, Equipment) Live with SAP since 1998 (started on 3.0F, now on 4.6C + BW) – Approx. 800 SAP users Market Center North America

6. Corporate headquarters: Atlanta, GA Technical Centers/Sales & service offices: located across North America Over 1,000 employees Market Center North America

7. The Service Order Life Cycle @ Heidelberg

8. The Service Order Life Cycle: Overview

9. The Service Order Life Cycle: Components Customer/ Equipment Overview Screen (Custom Solution) Service Notification 2 types: -Internal Requests -External Requests Service Order 3 types: -External jobs -Contract jobs -Internal jobs Advance Shipment Parts Order -Customer Consignment -Standard delivery and transfer order Call Completion: -Technical Reporting (Notification) -Time and Expense (custom solution) -Parts Disposition (custom solution) Other Components: -Service Contract -Warranty Contract -Maintenance Plan Preliminary Service Invoice (debit memo request) Service Invoice (debit memo)

10. The Service Order Life Cycle: Advance Shipment ADVANCE SHIPMENT CONSIGNMENT

11. The Service Order Life Cycle: Customer Consignment Notes: Consignment Movement: Inventory remains in Plant – moves from storage location to customer location (MT 631W – no financial implication) The Advance Shipment order is not relevant for billing

12. Completion Confirmation and Parts Disposition

13. A Custom Transaction is used as one point of entry for all confirmations 1. Technical Reporting 2. Time and Expense (Custom Solution) 3. Parts Disposition (Custom Solution) Three Components of Completion Confirmation

14. Completion Confirmation: Technical Reporting Note: Technical Reporting is carried out in the Notification General Comments Fault/Cause Codes Measurement Documents Completion Confirmation: Access to 3 components Status of Technical Reporting Status of Technical Reporting and Time & Expense Reporting per operation

15. Completion Confirmation: Time & Expense Reporting Note: Some features: Configurable per work center (normal time, overtime etc.) Travel Zones Modify Account indicator on line item Why a Custom solution? original 3.0F limitations expenses on Service Orders Automatic determination of overtime and more 1. Activity type used for cost determination and determination of service material used for charges. 2. Maintenance Activity type in combination with Account indicator is used for billing decisions (through RRB)

16. Completion Confirmation: Parts Disposition – a custom solution Why did we create a custom solution for Parts Disposition on Service Orders? Business Process: Service Parts on Service Orders are only billed to the customer when used on the job. Therefore Parts are shipped to customer locations on consignment Visibility of Consignment parts assigned to Service Order when performing completion confirmation Automate portions of the Service Parts process Consumption and Return of all Service Parts handled in one screen

17. Parts Disposition: Advance Ship Order Created Information relating to the Service Order Returnable Part? (warranty or repair- exchange) Quantity on the Advance Shipment Consignment Order Technician assigned to order operation Movement Type to be used for consumption – linked to Maintenance Activity type Delivery status of Parts Notes: When Parts have been Delivered (Goods Issue posted), parts become available for Consumption in Parts Disposition MT 261W for consumption from consignment; MT 261 for consumption from carstock

18. Parts Disposition: Parts Delivered Consumption Status Quantity Delivered: Visibility of partial deliveries Delivery Number Delivery Status of Parts (visibility of parts on back-order, partial delivery etc.)

19. Parts Disposition: Parts Consumption Notes: Consumption is posted on SAVE Possible to perform partial consumptions Service Order TECO only possible after full completion of Parts Disposition (ref. User Status) Consumption: 1.Consume 2 of item 1; return 3 2.Consume 1 of item 2; Repair exchange part to be returned; change Technician responsible 3.Consume 4 items from Carstock (Technician specific) Possible to assign "Reason for Movement", e.g. Repair or PM Consumption is linked to Operation Number for Reporting (Note: not supported by standard SAP It is possible to modify the Movement type to be used when posting consumption; typically used when different GL account required – can be done per item Delivery Status for Items: 1. Parts to be returned 2. Repair Exchange part to be returned 3. Carstock consumed

20. Parts Disposition: Consignment Pick-up Notes: Warehouse personnel create delivery when returned goods are received in the warehouse Return documentation include reference to original Consignment Order Automatic Creation of "Consignment Pick-up" at time of first posting of consumption in Parts Disposition Note: Created with reference to "Advance Shipment Consignment Order" Items not consumed being returned as "NEW" Repair Exchange Item – returned to repair plant/storage location (non-valuated stock) Note: these parts are not returned from consignment – treated as returns from customer

21. Parts Disposition: History Consumption and Returns history shown for Service Order Information relating to the Service Order

22. Special Cases when using Customer Consignment Orders  Drop-ship on Consignment Orders  Cross-company shipping and consumption

23. Drop-Ship on Customer Consignments: Overview Issue: Items ordered on drop-ship need to be received in inventory before it can be moved into customer consignment Solution: Perform Goods Receipt into a Drop-Ship storage location at time of receipt of shipping notification after which items are available for "delivery" to customer consignment

24. Drop-Ship on Customer Consignment: Detail Scenario: Service Order in Plant A, Advance Shipment Consignment Order in Sales Org A, parts not in stock or only available from Vendor Trigger drop-ship purchase requisition through schedule line in Consignment Order Note: Consignment order does not create consumption and is not relevant for billing – it only moves parts to a customer consignment location in inventory. Therefore, Consignment drop-ship parts need to be taken into inventory ( note: normal drop-ship parts are not relevant for deliveries in the system and therefore do not trigger any material movements ). Issue: Consumption on the service order cannot be confirmed until the drop-ship parts are reflected in the system in the specific customer consignment location. COMPANY A Service Order Advance Ship Consignment Order (Drop-ship) Vendor PQR Inventory Direct Delivery to Customer Invoice to Company A

25. Drop-Ship on Customer Consignments: Detail COMPANY A Service Order Advance Ship Consignment Order (Drop-ship) Vendor PQR Inventory Direct Delivery to Customer Invoice to Company A Possible solutions: 1. Do not use Drop-ship as a process when dealing with consignment orders (pre-requisite: another process is required for handling out-of-stock items when dealing with consignment) (advantage: normal controls for goods movements) (disadvantage: logistical issues, customer satisfaction issues due to multiple processes) 2. Trigger a virtual goods receipt for consignment drop-ship parts at time of shipment from vendor. (pre-requisite: need to be notified at time of shipment, process required for separation of virtual receipts from real receipts) (advantage: process can be automated, drop-ship can be used effectively in a customer consignment environment) (disadvantage: stricter control on goods movements because the concept of virtual receipts can be transferred into other areas)

26. Drop-Ship on Customer Consignments: Diagram Virtual delivery Note: The Shipping Notification can trigger an automatic goods movement and delivery if posted electronically

27. Cross-company Consumption on Consignment: Overview Issue: How to Consume and/or Return customer consignment parts when the parts are shipped from another company code Solution: Move items to customer consignment in ordering company at time of Consignment Delivery Goods issue

28. Cross-company Consumption on Consignment: Detail Scenario: Service Order in Plant A (company A), Advance Shipment Consignment Order in Sales Org A (Company A), parts available in Plant B (company B). NOTE: When parts are shipped from Company B the delivery is created in Company B. With Customer consignment the result is that the parts are moved to a customer consignment location in Plant B! Consumption of parts is onto a service order (CO object). Cross- company consumption is possible if cross-company configuration (clearing accounts) is in place. Issue: Returning unused parts directly to Plant A is not possible (Consignment parts are in plant B in a customer consignment location) COMPANY A Service Order Advance Ship Consignment Order COMPANY B Inventory Advance Ship Delivery

29. Cross-company Consumption on Consignment: Detail Possible solutions: 1. Return parts to plant B (pre-requisite: cross-company clearing account configuration needs to be in place) (advantage: no system changes required for processing returns) (disadvantage: logistical nightmare) 2. Perform cross-company goods movement before parts are returned to Plant A (pre-requisite: cross-company clearing account configuration needs to be in place) (advantage: additional goods movements only for new parts being returned) (disadvantage: parts remain in shipping plant's inventory until consumption/returns are processed) 3. Set up Company B as a drop-ship vendor * (pre-requisite: drop-ship and intercompany processes need to be defined and configured) (advantage: standard vendor/purchasing drop-ship process used; consumption from company B is to an intercompany customer and standard intercompany SD process can be used) (disadvantage: additional processing steps, inventory assignment can only be confirmed at time of receipt of shipping notification) 4. Perform cross-company goods movement at time of initial shipment (pre-requisite: cross-company clearing account configuration needs to be in place) (advantage: parts move into receiving company's inventory at time of shipment) (disadvantage: additional goods movements for all cross-company shipments) COMPANY A Service Order Advance Ship Consignment Order COMPANY B Inventory Advance Ship Delivery *Note: Heidelberg also uses this option

30. Cross-company Consumption on Consignment: Diagram Reference: Transaction OBYA: Automatic Posting - Clearing Accounts Note: You have to comply with IRS guidelines when managing these clearing accounts

31. Parts Disposition on Service Orders Summary Custom solution for Parts Disposition on Service Orders Visibility of advance shipment of Customer consignment items Automated processing of consignment pick-up Some limitations in SAP for handling customer consignments, e.g. drop-ship

32. Thank you for attending! Please remember to complete and return your evaluation form following this session. Session Code: 4005