Order Change Management (OCM)

Order Change Management (OCM)

This Business Scenario Map is designed for all discrete industries. It shows how the customer can order a configurable product and afterwards trigger changes if they require a different configuration - even if production has already started. The Map illustrates the benefits of Order Change Management (OCM) as part of SAP PLM. The configurable product is defined via variant configuration, so that the customer can order a product by choosing the options they require. After production of the customer-specific product has started, OCM enables production to react to last minute changes in a controlled process. The result is increased customer satisfaction because the customer can influence the product they are to receive for a much longer time span than was previously possible.
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Value Potentials Business Benefits
Product structure management and variant configuration can be used to set up configurable product structures
Up to 100% reduced integration costs* Customer-specific product structure is directly used for planning and production
Up to 100% reduced costs for order creation* New order can be created directly by the customer via the web
Up to 100% reduced time for BOM creation* Customer-specific product structure is determined automatically
Customer-specific product structure can be extended or modified if necessary
Up to 20% increased revenues due to increased customer satisfaction and competitive advantage* Increased customer satisfaction since OCM allows the flexible incorporation of last minute changes
Engineering
Customer
Production
Set up configurable product structure
Receive product variant as required
Select new features and required changes
Order configurable product
Change production order according to rules
Simulate changes in production order
Start produciton of selected variant
.
Source:
* Discussions with Customers
The value potentials shown in this table have been reported by selected SAP customers or independent third parties as referenced herein. However, there is no guarantee that such value potentials can be realized in any particular customer-specific business processes, and SAP does not make any representations and disclaims any liability as to the appropriateness of the referenced value potentials for any specific customer situation.
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Business Benefits Value Potentials
OCM process can be done in the background as long as no user decision is needed Up to 50% reduction in order change cycle time*
OCM allows the simulation and checking of changes against rules before the production orders are created Up to 50% reduced rework in orders*
Company-specific rules for OCM can be set up
Goods movements according to changes can be done automatically
 

Order Change Management (OCM)

Traditional change management processes can influence only planned procurement elements such as planned orders. As soon as production is released and really started it cant be influenced any longer, so that necessary changes result in manual modifications of running production orders.

 

This is true for:

  1. Neutral or customer-specific products that have to be changed for technical reasons and
  2. Customer-specific products that have to be changed because the customer changes his mind

With Order Change Management these error-prone and time-consuming manual modifications can be substituted by a smart and secure process, which reduces effort to a minimum. The idea is to support the change process based on rules that take into account both the current status of the affected production orders and the company-specific type of production.

 

Therefore rules are set up to define which kind of changes are allowed, allowed with warning or disallowed for a specific status of the production order. For example, the change of a component might be allowed as long as the corresponding operation is released, but disallowed as soon as it is confirmed. All these rules are finally combined in a profile and assigned to the products.

 

If changes to the product structure or to the sales order of a configurable product occur, the OCM process can be triggered and the affected production orders can be determined. Now the actual change process is started, which is processed in different steps:

 

  1. Simulation of changes
  2. Check of changes against company-specific rules
  3. Real change of production order if allowed
  4. Goods movements according to changes can be done automatically

Since all steps can be done in the background, manual work is reduced to a minimum. Only if warnings or errors come up during the check is a manual decision required about the next steps. In addition to the reduced work, the time required for the change process and the rework is reduced via this controlled and efficient mechanism.

 

Nevertheless, the major benefit of OCM is increased customer satisfaction because companies can fulfill the wishes of their customers for an extended period of time, without increasing the delivery period.