Project Title: Reduction in fluctuation in Raw Material requirement (SAP

versus actual consumption)

Executive Summary

AKZONOBEL is one of the largest paint companies in the world. The planning department at
AKZONOBEL makes sure that supply meets demand at all times.

Plan
Alignment
& Control

Figure 1: Role of Supply Chain planning at Akzonobel

Figure 1 describes the complete role of Supply chain planning department. It is all encompassing
which starts right from Forecasting and Demand management. As the first spoke of the figure 1
describes Supply chain planning team creates estimates of customer demand from end markets using
statistical forecast coupled with sales team input. Second spoke in the wheel of figure 1 connects
supply with demand forecast which initiates the supply process where in the requirement for meeting
the demand is generated. Rest all part of the responsibility are:

Balancing production requirements against factory capacities which is done in form of capacity
planning by the site planner. This is discussed once every month in Supply review meeting.
 Fourth spoke of supply chain wheel of figure 1 shows material planning. This represents Raw
material procurement and primary manufacturing to ensure readiness for production. The project
delves into detail for this. This is where Material requirement planning comes to picture and so
does issue at hand.

In Material Planning section this project delves upon. There is a variation in raw material requirement
(SAP versus actual consumption). The actual amount of raw material that should come out of system is
different. In some cases excess amount of raw material is estimated at times really less or zero material is
planned for even though there is huge requirement for the same. The inaccurate raw material plans can
lead to situation of excess inventory or stock out. This project gives clarity into the process which
undergoes to produce the final Raw Material requirement and also responsibility of all the stakeholders at
Plant as well as central planning level in producing the accurate Raw material requirement.

The accuracy level of Raw Material requirement SAP against actual consumption should improve. The
requirement for finished goods is correctly uploaded in SAP but output in form of BoM explosion is not
matching with what the actual consumption is.

The problem has been there since the past few years. The problem is occurring for AKZONOBEL plants
whose material requirement plan is managed by central planning team.

Submitted By: Group 3

Ishan Atri 22A

Angsuman Bhanjdeo 12A

Shadan Mehtab 48A

Abhishek Deshpande 4A

Abhay Singh 3A