SAP® Supply Chain
Management
The Best Solution for Supply
Chain Managers in the
Manufacturing Field
Supply Chain Managers
● Tasks to perform include: Planning, design,
execution, and implementation of the supply
chain
● Components if the supply chain include:
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Inventory
Raw Materials
Manufacturing and Order Fulfillment
Transportation and Logistics
Information Processing Needs
Inventory
● Number of items left in inventory – The number of items that are left outstanding per week, per
month, per year.
● Dates of fabrication – The dates each item has been produced and introduced into inventory.
● FIFO, LIFO – The Company’s inventory policy can be either First in – First Out or Last in – First
Out, depending on the type of inventory.
● Average inventory count each year – The time and average count of inventory each year
according to the physical count realized periodically.
● Sales Figures – How each product sells based on the type of product, line, and how often they
sell.
● Chain of production – How much (in $) material is in raw materials, work in progress, and
finished goods.
● Inventory Obsolescence – The average time it takes inventory to become obsolete, depending on
the type of product.
● Cost of Goods Manufactured – Total costs of producing a product, including material costs, labor
costs, and factory overhead.
● Inventory Turnover – The days it takes to sell each line of products in inventory.
● Inventory Lines – The product lines the company has based on sales and outstanding inventory.
● New Productions – How often the company launch new products.
● Revision dates – How often each product in revised or replaced.
● Stolen or damaged items – How often and the percentage of items in inventory are damaged or
stolen.
Information Processing Needs
Raw Materials
● Pricing of materials – How much materials costs and how those costs fluctuate
throughout the year.
● Costs of shipping – How much it costs for materials to be delivered from the suppliers to
the company.
● Supplier contracts – Which suppliers the company does business with, how long the
contracts are due, and the specifications to meet the legal requirements of those contracts.
● Timing – The time raw materials arrive, how long they stay as raw materials, and how
long it takes for them to be converted into finished goods.
● Promotions – promotions on pricing of materials and new potential suppliers based on
costs.
Order fulfillment
● Retailers – Which retailers the company contracts with and how often they request new
orders.
● Wholesaling - Percentage of sales the company relies on wholesaling.
Information Processing Needs
Transportation
● Warehouse and retailer locations – Location of each warehouse and retailer by
state, city, zip code.
● Type of transportation – Types of transportation services the company utilizes for
delivery and companies that offer these services.
● Costs – Cost and fees of transportation services depending on type of
transportation and destination points.
● Timing – The time required for goods to reach the destination points.
● Insurance – Type of insurance needed to ensure the safety of goods being
transported.
● Packaging – Costs and materials used for packaging as well as the type of
identification and barcodes.
Information System Technology
Supply Chain Management
● The SAP® SCM application is a part of the SAP® Business Suite. It
functions with a technology platform called SAP® NetWeaver, which
enables a company to reduce costs in IT while joining technologies into a
single platform. This platform helps companies to process information and
data in an organizational leveling order to monitor processes and generate
coordination in the supply chain.
SAP
®
SCM Functions
SAP
®
SCM Solutions
SAP
®
SCM Solutions
SAP
®
SCM Solutions
Substitute Technologies
Supply Chain Management
● Oracle® SCM is an open integrated solution that ensures companies’
efficiency by predicting demand fluctuation, organizing and planning
operations on the supply chain, and providing industry-specific solutions.
Some of the solutions that this program offers are: Advanced procurement,
logistics and transportation management, order fulfillment, manufacturing
operations management, product life-cycle management, supply chain
planning, and optimization.
Oracle
®
SCM Benefits
Oracle
®
SCM vs. SAP
● Oracle
– Less features
– Reduced information on
products
– Certain services not
provided
– Less customized
®
SCM
● SAP
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Multiple benefits
More services in package
More technical support
More information
provided on products
Conclusion
The SAP® SCM suite provides the best optimal solution for
problems with the management of the supply chain. The
different information needs and technological advances in the
area of inventory, logistics, distribution, and manufacturing
make the job of a supply chain manager very difficult and there
are always different concerns that arise as well as possibilities
to enhance operations and make the supply chain more
efficient. The SAP® software provided is the best solution to all
these problems and it entails more tools and technology to
make all these possibilities come true.