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MTU Aero Engines

MTU Aero Engines | Coordinated Planning Processes with SAP APO

An integrated SAP APO and SAP ERP solution for optimized production planning

A fundamental success factor for the aviation industry is the ability to optimally coordinate procurement and production plans as well as capacity offers in the face of strongly fluctuating market requirements. This requires planning and simulation functionalities that support the centralised coordination of purchasing, production and sales processes. In this context, an integrated SAP APO and SAP ERP solution for optimised production planning was successfully put into operation at the MTU Aero Engines GmbH. Significant potential for improvement was realised via a new planning table, among other things, which enables coordinated coordination and stabilisation of production programmes. CONSILIO supported the implementation project with the design of the business blueprint, the creation of the IT concept and the programming of the extended planning functionality.

85
Years of innovative solutions
14
Locations
10000
Employees

Implementation Highlights

  • Integrated planning and simulation functionalities for central coordination of purchasing, production and sales processes
  • Planning table for planning the requirements of the production program, the resource utilization and the production quantities to be started
  • Company-wide coordinated, smoothed and feasible production programs
  • Traffic light control in production control to ensure material availability of components
  • Extensive reporting regarding logistic key figures in SAP BW

MTU AERO ENGINES

The MTU Aero Engines GmbH is the leading German engine manufacturer and a global player. The company develops, manufactures, sells and supports civil and military aircraft engines in all thrust and power classes as well as stationary industrial gas turbines. The German industry leader employs around 10,000 people and is present in all important regions and markets with subsidiaries and associated companies. Over the next few years, the company intends to focus on its core business, participate in new engine programmes and expand its service portfolio.

Initial situation of the planning processes

In recent years, the MTU Aero Engines GmbH has seen increasing fluctuations in market demand for individual engine products of over 50% within a few months. At the same time, lead times in production and procurement are totalling up to twenty-four months. Due to the limited possibilities of forecasting sales volumes, strongly fluctuating requirements for components in purchasing and strongly fluctuating capacity demand in production and assembly were also unavoidable.

This was exacerbated by the fact that flexibility with regard to short-term adjustments to procurement volumes is limited due to long-term replenishment periods of up to eighteen months. Flexible adjustment of the available capacity is also only possible to a limited extent in the short term, as centralised facilities are used by different product lines. In production planning, this led to a reciprocal cyclical build-up, as adjustments in purchasing implicitly influenced the capacity utilisation situation in production and assembly. Conversely, the adaptation of available capacity, for example through additional or fewer shifts, changed the requirement dates for procured components.

The implemented SAP SCM APO solution enables us for the first time to comprehensively coordinate the production plan with market requirements, purchasing restrictions and production capacities through a smoothed and feasible production programme.

Dr. Peter Druska und Simon Claussen MTU Aero Engines GmbH

As a result of this initial situation, the company wanted a ‘calmed production’ with smoothed and feasible production programmes and fixed planning horizons. This meant that additional planning functionality was required for a planning horizon of up to thirty-six months, with which market requirements, procurement quantities and capacities could be optimally coordinated. As a result, potential for improvement was identified with regard to the following corporate objectives:

  • High adherence to delivery dates
  • Optimum and constant utilisation of production resources
  • Minimised inventories
  • Limited planning and control effort
  • Short throughput times
  • Flexibility to react to disruptions in production
  • Flexibility to respond to changes in customer requirements

As these corporate objectives generally run counter to each other to some extent, e.g. minimum stock levels and high adherence to delivery dates, it was only possible to improve individual target criteria without compromising other target criteria at the same time by using extended planning functionality within the existing SAP system landscape and harmonised production planning and control processes.

Implemented Solution Concept

The solution concept is based on the SAP landscape with ERP and APO systems and an integrated PP/DS optimiser that has been in production for several years. The existing SAP systems support the planning processes with functionalities such as automatic, cross-plant material requirements planning and scheduling of planned and production orders based on customer requirements, material and capacity availability. Scheduling takes into account subcontracting, third-party processing and stock transfer processes. In the procurement process, needs-based scheduling of delivery schedules and purchase requisitions is planned. In addition, components are automatically selected from a set of alternative parts list items for individual engine products in order to ensure adherence to delivery dates.

Furthermore, planning functions are used to determine the critical path of delayed customer orders. The material requirements that are primarily responsible for the delay are determined from a large number of planning levels and components. In addition, the required date for punctual delivery is calculated and displayed so that planners and purchasers can take targeted measures to increase on-time delivery.

Logistics key figures and reports were realised in SAP BW in line with requirements to ensure that the company's objectives were met.

Gerhard Rösler MTU Aero Engines GmbH

Production planning was expanded to include a release process for a production programme with around 240 assembly components, which have regular customer and high capacity requirements. This means that planning is largely decoupled from fluctuations in market requirements. This means that changes in market requirements for selected products no longer have a direct impact on the production and procurement plan or capacity utilisation.

The response to market fluctuations is now coordinated by first simulating and analysing the changes and then smoothing them over the production programme. Before the requirements of the production programme are released, the availability of the necessary materials and capacities is checked in a simulation version. The procurement quantities and the production plan are approved in coordination rounds based on the simulation results. Subsequently, planned orders are scheduled on time based on the approved production programme and the available capacities using the PP/ DS optimiser. By subsequently converting the planned orders into production orders, production control assumes responsibility for their execution. The confirmation of completed work processes in turn automatically triggers the rescheduling of subsequent work processes in order to make possible delays or earlier completion dates transparent in a timely manner.

Extensive requirements for coordinated production planning were implemented using a planning table within existing SAP APO and ERP systems.

Bernhard Wetzstein MTU Aero Engines GmbH

A new transaction for an interactive planning table was developed as a planning tool and made available to dispatchers, production planners and sales staff. The requirement quantities of the production programme are defined in the tableau. The effect on capacity utilisation, start dates of production orders and adherence to schedules are simulated and displayed to the planners in weekly and monthly grids.

The planning table comprises three views for planning the requirements of the production programme, resource utilisation and the production quantities to be started:

  • In the requirements view, the production programme requirements and market requirements are compared with the requirements cover.
  • The resource view shows the capacity utilisation, supply and demand in the quantity units hours and units and enables a simulated switch to alternative production lines.
  • The start view shows the planned start quantities of planned orders that are required to fulfil the production programme on time. In addition, a traffic light system has been implemented to ensure the availability of components and raw materials when planned orders are converted into open production orders: If planned orders are marked green, the required quantities are available in the warehouse; if they are yellow, quantities are not in the warehouse but are available as QM inspection lots or shipping notifications. The red traffic light indicates a lack of material availability in the production plant.

The SAP systems are operated with a high-performance server landscape, as the quantity structure of the master and transaction data generates a high level of planning complexity in the daily planning and simulation run:

  • Work processes: approx. 1,000,000
  • Planned and production orders: approx. 54,000 
  • approx. 20 operations per production order
  • Resources: approx. 19,000
  • Products: approx. 11,000
  • Planning horizon: 5 years

Production control is supported by automated rescheduling of backlogged and confirmed production orders. Scheduling is based on throughput times agreed with production for sequences of work processes. Compliance with the agreed throughput times is regularly analysed using monitoring functions with the aim of gradually reducing the buffer times contained therein.

For needs-based capacity planning, capacity utilisation curves are calculated over a period of five years in SAP APO and SAP ERP and prepared in SAP BW broken down by engine programmes, products, cost centres and organisational units. On the one hand, this allows capacity utilisation to be smoothed in the short to medium term by adjusting shift schedules. On the other hand, necessary long-term (dis)investments in production capacities can be determined and secured.

Realised Benefit Potential

Several aspects were identified as direct potential benefits: With the help of the extended planning and simulation functionality, transparency regarding feasible production, procurement and delivery dates could be improved. As a result, the safety stocks and safety times that were no longer required could be reduced. In addition, average throughput times could be reduced in conjunction with smoothed capacity utilisation.

The result

  • DLZ reduction
  • Better planning results
  • More even capacity utilisation
  • Greater adherence to delivery dates