An insight into SAP’s Silo/Tank Management (IS-OIL) solution

Today, many terminal operators are either using offline tools or manual conversions to calculate their tank levels (volume measurement) to be entered into their supply chain systems (inventory quantity).  By implementing SAP’s Silo/Tank Management, these additional steps and time delays can be removed and the business can have an accurate and common view of inventory.  Additionally, elimination of third-party tools, interfaces, or custom code currently used to record and normalize inventory measurements can better position your system for transition to S/4HANA.

What is Silo/Tank Management in SAP?

As part of SAP’s Oil-and-Gas Industry Solution (IS-Oil), Silo/Tank management is introduced to the supply chain transactional process to address several issues with materials that are physically managed in storage silos or tanks.

  1. Physical measurement of the silo or tank contents (a “tank dip”) is a volume reading, but this can be variable across a temperature range due to thermal expansion/contraction for the same amount of material.
  2. In the receiving and shipping process, material stored in silos or tanks may be transacted based on the weight of material moved to determine the amount of material transacted.

SAP’s Silo/Tank Management introduces the ability to enter tank volume measurements and convert that to a temperature normalized inventory quantity and to convert weights into an inventory quantity for use by the ERP system.

How are these issues handled in SAP?

Tank readings are entered into SAP’s Silo/Tank Management by the height of material in the tank and the temperature of the material at the time of measurement.

This measurement is then compared to a tank master record (the “tank strapping”) which converts this height of material in the tank to a volume of material for the dimensions of the given tank.

This volume (for example unit of measure “GAL” [US gallon]) is then normalized to a quantity at a standard temperature (for example, unit of measure “UG6” [US Gallon at 60 degrees Fahrenheit]) to adjust for expansion or contraction. The conversion is performed either by standard calculations delivered as part of IS-OIL, for example ones using the American Petroleum Institute (API)/ASTM industry standard tables or through custom routines for materials not covered by the industry standard calculations.

In the example below, a tank measurement of 10 FT is entered for material at 130 degrees Fahrenheit.

SAP’s Silo/Tank Management translates that as:

            Volume in the tank = 50,000 GAL

            Amount of material when normalized to 60 degrees Fahrenheit = 48,625 UG6.

At this point, this normalized value can be compared to the SAP inventory quantity and determine if a gain/loss adjustment should be made.  In many cases, a significant difference is an indicator that system transactions have not been posted (Goods Receipts or Goods Issues) to match the volume physically measured in the tank.

For a transaction by weight, a Density Factor is maintained for the material that is relative to the weight of water to convert from weight to volume.  In this case, a receipt or issue may be entered in a unit of weight and Silo/Tank Management will convert that to a volume quantity. 

For example, a rail car is filled at a terminal from a tank.

            Weight of rail car in = 65,000 lb

            Weight of rail car out = 185,000 lb

            Therefore, 120,000 lb of material was loaded into the rail car.

            Using a Relative Density for the product of 0.812 (meaning this material weighs 81.2% the weight of water, which is 8.34 lb per gallon at 62F) would be:

            (120,000 lb shipped x 0.812 Relative Density) ÷ 8.34 lb/gal = 11,683 gallons shipped

This is the quantity that SAP’s Silo/Tank Management would then use to post the Goods Issue, entered by weight, into SAP inventory where the Base Unit of Measure is “UG6” (Gallon normalized at 60F).  In this case, temperature is not a factor since the material was measured by weight and not volume.

Conclusion

Products managed in Silos or Tanks do not equate well to the standard warehousing world of “each”.  SAP’s Silo/Tank Management allows terminal operators to manage their business in ways that work for them while seamlessly translating these activities into your ERP supply chain processes.

Tenthpin has the people that understand these operations and how to make this happen.

Contact our industry experts at Tenthpin Management Consultants if you would like to learn more.

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About the Author

Gary Bear

Advisor – USA

Gary has over 20 years of SAP supply chain experience