Day in the life of a Material Buyer – 7 – Manage Engineering Changes

Purpose: The purpose of this blog post is to bring the real-life day-to-day scenarios of a material buyer based on my own domain experience as a material buyer. These blog posts are mainly for material buyers (end users), however, new MM consultants can also get benefited by knowing the buyer’s role better.

This is the fourth blog post of the series – Day in the  Life of a material buyer. Please go through the previous blog posts to understand other activities of the buyer.

This blog post will focus on how a material buyer manages Engineering changes.

High-level activities.

–Set up/Ensure the right planning parameter values for new material.

–Determine with engineering, the ECM implementation date If existing material

–Determine material disposition if ECM is mandatory immediately.

–Review workflow status for purchased material.

SAP Tcodes/Tools to assess change impact /inventory positions of the material.

S/4 HANA has a great app to find change impact analysis of the engineering change. The analysis should ultimately help engineers to when they can effect the changes, the impact on inventory cost when write-off is suggested, and how much it would affect the current transactions (production, purchase orders etc).

Inventory reporting for existing material:

–LIS Reports (see Excess/Obsolete)

    • MC42 – Analyze Range of Coverage by Past Usage (see Excess/Obsolete)
    • MC43 – Analyze Range of Coverage by Future Requirements (see Excess/Obsolete).MC43 shows coverage based on future dependent requirements (planned consumption)

–Standard Lists & Reports (see Excess/Obsolete)

    • MMBE – Display Stock Overview

The above reports help to analyze the excess/obsolete inventories and take appropriate action through ECM.

While analyzing the stock, it is very key to understand the range cover and excellent help is available online. Some help data text from standard SAP online help content is as below.

The key figure “range of coverage” provides information on the stock level in relation to demand. It informs you how long a stock amount will last given a specific average daily requirement.

A range of coverage analyses allows you to identify materials with excess coverage. You are then able to adjust the stock level to comply with the new usage rate.

The analysis according to the range of coverage can be executed for usage and requirements.

The range of coverage for usage is calculated as follows:

current stock/average usage/day

The range of coverage for requirements value is calculated as follows:

current stock/ average requirement/day

Buyer can give key insights to the engineering team on when an ECN should be mandated, how a new ECN would affect the stock in hand, range coverage, etc, and thus plays an important role.

If your organization uses any other SAP tool to manage ECN better, do put your valuable comments to make this blog post better.