Tag: SAP SCM

I received a lot of comments on my YouTube video about SAP SCM asking how one can learn SAP SCM or what modules should they choose among the so many different ones that are available.

SAP Supply Chain Management is not just one application that you can learn but it is a broad term. It is further divided into different categories and there are different types of SAP applications involved under those categories.

Those categories are Design, Plan, Procure, Manufacture, Sell, Deliver, Operate, & Project Management.

Let’s take a new car manufacturing company as an example and see how these categories and SAP applications will fit in with their business model.

In the design phase, the company can use S/4HANA Research & Development application to design their new car.

Once the car is designed, they can use SAP Integrated Business Planning to plan all the logistics that are needed to start their car manufacturing process.

Once the planning is complete, they can use applications like S/4HANA Procurement & SAP Ariba to procure the raw materials and manage the vendors that are required to manufacture the car.

Then the actual manufacturing and assembling of the car happen. For this purpose, they can use SAP applications like S/4HANA Manufacturing, S/4HANA Manufacturing Execution & SAP Digital Manufacturing Cloud.

Then comes the sales process. For that, they can use the S/4HANA Sales application.

Then the cars that have been sold need to be delivered to either the showrooms or to the customers directly. This is one of the trickiest parts of the end-to-end supply chain management process. For this purpose, the company can use SAP applications like SAP Extended Warehouse Management & SAP Transport Management.

The car manufacturing company will have a lot of movable and immovable assets that must be managed along with the people that provide services for the types of machinery and equipment. For that purpose, they can use SAP applications like S/4HANA Asset Management & Field Service Management.

And finally, running a car factory and manufacturing cars is no easy job. It requires highly skilled Project managers and project management tools. For this purpose, they can use SAP applications like SAP Portfolio & Project Management, SAP Product Lifecycle Costing, SAP Commercial Project Management & SAP Engineering Control Centre.

If you look at the SAP Training & Certification Centre, you will see training courses categorised into these eight categories that I just talked about. Depending on your interest, you can enrol in any of these courses, take the exam and get certified. If you ask me which of these are in high demand, my personal opinion is that S/4HANA Procurement, SAP Transport Management, SAP Extended Warehouse Management & SAP Supply Chain Planning are the highly in-demand areas.

Thank you and I will talk to you in another blog.

P.S. Check out my course on Udemy – “Introduction to SAP – The Complete Package for Beginners“

Before getting into the details of SAP’s SCM solution, let’s chat about what Supply Chain Management in general?

Supply Chain Management is the process of centrally managing the flow of goods from raw materials into finished products.

Let’s take a T-shirt manufacturing company as an example. On a high level, their supply chain would involve activities such as sourcing the cotton threads, buttons and labels from different vendors. Then combining those raw materials into making T-shirts in the factory and sending them to warehouses. From the warehouses, they are distributed to different wholesalers. The wholesalers then distribute them to retail shops before eventually reaching the end consumers. This is a simplistic example but supply chain processes of big organisations would be much more complicated than this. A software or a multiple set of software that helps an organisation manage these end to end supply chain processes in an efficient way is known as the supply chain software.

At SAP, SCM is not just one application but it is made up of a group of software applications that helps organisations perform operations such as supply chain networking, supply chain planning, supply chain coordination and supply chain execution.

Now let’s take a look at the different types of SAP applications that fall under the SCM umbrella.

• SAP PLM – Product Lifecycle Management. I have already written a blog about SAP PLM. Please check it out here. In a nutshell, SAP PLM is used by organisations around the world to manage development lifecycle of both physical and digital products. It has got capabilities to manage product development projects, product costing, product engineering, product development and much more.
• SAP IBP – IBP stands for Integrated Business Planning. It is a cloud-based solution which consists of functionalities such as sales & operations planning, forecasting and demand, response and supply, demand-driven replenishment and inventory planning. It incorporates technologies such as machine learning and artificial intelligence that enables capabilities such as what-if simulations, alerts and predictive planning.
• SAP Digital Manufacturing Cloud, SAP Manufacturing Execution and SAP S/4HANA Manufacturing – These bunch of applications are used for streamlining end to end manufacturing processes. They incorporate functionalities such as manufacturing operations management, comprehensive planning features, integrated scheduling, managing equipment effectiveness, etc.
• SAP WM and EWM – Warehouse Management and Extended Warehouse Management – These are used for warehouse management and contains functionalities such as logistics management, storage and operations, outbound logistics management, freight logistics collaboration, global track and trace and much more. The Extended Warehouse Management contains the same core functionalities of SAP Warehouse Management but with additional capabilities such as internal routing and labour management.
• SAP TM – Transport Management is used to manage the transportation aspects of goods between multiple locations. It contains functionalities such as strategic freight management, order management, transportation planning and transportation execution.
• SAP EAM – Enterprise Asset Management is used to maintain and manage the performance of an organisation’s physical assets. It contains functionalities such as asset information management, centralised asset data repository, automated equipment tracking, work order management and mobile asset management.

As you have seen, SAP’s SCM solution contains a variety of powerful applications that are more than capable of managing supply chain operations of any organisation. A lot of these applications contain predictive analytics and machine learning which helps organisations to predict consumer behaviour well in advance.

Walgreens, one of the biggest pharmaceutical company in the US, uses SAP’s SCM solution to manage their supply chain operations. It uses analytics to predict customer behaviour and works its way up to meet the expected demand. For example, they anticipate flu patterns based on location, which allows them to forecast the required inventory for over-the-counter flu medicines in certain locations during a certain time of the year. This process helps the company to reduce excess inventory and all the cost associated with transportation and storage in warehouses.

If you have any questions, please feel free to let me know in the comment section below.

P.S. Check out my course on Udemy – “Introduction to SAP – The Complete Package for Beginners“