Integrating sap with supply chain management

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Introduction SAP provides in all its avatars the easiest way to integrate either with an external software or with in its own modules. SAP R/3 upwards as well as in its MySAP version, there is optimal methods that will ensure your streamlined operation for integrating with Supply chain or with Customer Relationship Modules. There are specific modules in the SAP supply chain that would allow for interfacing its own modules on Supply Chain management (SCM) with the rest of the modules in the software.

Once the product is integrated with the Supply Chain Module, your inventory and the production management systems run into a seamless operating path that would ensure your gain certainly. This makes the entire operation all the more important. In order to fully gain from the SAP system, the requirement flow from the production system should happen in to the supply management as and when the requirements arise. Let us take a quick look at how the software works when you are trying to integrate with its own supply chain and its very own modules.

We will also contrast it with the supply chain management software from a third party and integrating that with the SAP’s other modules. In either of the case, SAP is found to have a seamless operation. What is of interest will be the factor that there are a number of features in SAP that are not fully utilized by the users! It is, therefore, pertinent that the user spends considerable time in under standing the various features of the software and how they could maximize the efficiency of his or her work. Where does Supply Chain Management come in?

SCM is normally looked at when you are integrating the production planning and control module. You run into a requirement for material management which flows from the PPC module. The requirements from the production are taken in and decided upon by the PPC and is enabled through the implementation of the rest of the ERP system (Knolmayer G, Mertens P, Zeier A. 2002). This would let you know whether a particular material is needed; and if needed when and how it is needed. In the course of the work, this could turn out to be a major problem when there is no link existing between the production system and the material management.

In turn the material management should be connected to the supply chain to ensure that the flow of material is maintained. In this case, you will find that the material management identifies that there is no stock to take care of the requirements from the production planning and control system. The need for material is thus identified and passed on to the supply chain to source and obtain supply. This is where SCM comes in. However, the action of the SCM is to pick up the needs from the material management system and then set its ball rolling.

Now this SCM working with SAP can be either its own proprietary module that would easily link with the software or a third party module that has to go through the gateway. We will take a look at both of them in a short while after looking at what the Supply Chain Management is expected to do. What does the Supply Chain Management do? Supply chain management is the process by which required material is sourced by the materials department. Normally, the department will have a list of vendors who can supply the required materials.

There will be a matching list which will help in picking up the right vendor for the right product. The supply chain involves building good vendor relationship and in understanding the vendor problems. It also has to identify the lead time for supply and the economic order quantity of every product. Only with this understanding will it be possible for the SCM to select the right vendor. In addition, the SCM also should consider such management techniques as just-in-time and / or Kaizen for timely material availability.

The process of supply chain is also critical. Most of the companies face large expenses primarily arising out of material purchase. Therefore, it is very critical that the process of supply chain is not altered. Secondly, the supply chain is critical in ensuring that the production does not suffer at any point in time. The delivery expectations have shrunk from weeks to days (AT;T 2007, pp 1), pushing up the criticality of the work. It is, therefore, normally not accepted by any company for a change in SCM process.

In order to ensure the right implementation of supply chain and SAP is in place a clear understanding of the existing system is needed. SCM normally comprises of a trigger that starts off supply chain process. Following this there should be a process to do an open tender or a closed tender for the requirements of the company. There should be provision to send enquires to all those vendors who will be able to supply such material. The supply chain should be able to receive quotations from all these vendors and then if found fit should be able to place orders on any of them.

In addition to this the supply chain should be able to produce reminders and follow up on the delivery of the products. It is important for supply chain management to track the product and finally ensure timely supply. SCM’s responsibilities do not end with receipt of material. After the material is received it has to be inspected and the material should be identified. Only if the material is of acceptable quality and only if the materials and the quantity are supplied at specified given time and date, the Supply chain is supposed to be working in full shape.

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