SAP Systems Essay

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SAP Systems

On this paper, I’ll try to shed some light on SAP supply chain management suite software in how it helps companies to manage supply chain process. Last decades, we have seen dramatic changes in the way which businesses administer and manage supply chain process. Few years back, companies used to spend a lot of money and time just to place orders, but now, with the help of new software programs, these charges have been decreased. At the same time, the time needed to place order and to manage them has declined and that has been one of the many advantages from using supply chain software. This paper will focus on different areas that SAP covers in order to manage the supply chain processes. One of supply chain processes is the logistics costs which accounts for more than 20% of the total cost of an average manufacture company here in the United States. (Chopra) Not only have that, the grocery industry here in United States can save an estimated 10% of the operating costs by collaborating and enhancing the supply chain cycle.(Chopra) Companies need to replace the linear supply chain into a responsiveness network. A balance between available supply and market demand is needed. Furthermore, collaboration across all departments, partners, and business units is a must. A company needs to optimize its planning, warehousing, transportation, inventories, and service part operations in order to insure responsiveness and collaboration.

According to Michael Lipton, a Senior Director of Supply Chain at SAP, companies are squeezed between volatile demand side, and complex, difficult to change supply side. It’s becoming a big challenge for many companies to meet customer expectations. At the same time, it’s even harder to manage the supply chain that contains many global partners. Not addressing supply chain issues can increase lead time and costs, reduce responsiveness, and as a result impact customer service. SAP Supply Chain Response Management Application helps companies to manage and fulfill orders and forecasts using a rule-based to demand prioritization. Companies in different geographies, sizes can benefit from SAP solution.
SAP supply chain management SCM was introduced as SAP advanced planning and optimization (SAP APO) in 1998. SAP SCM is used as solution architecture for companies’ supply chain management. It also used as a repository for all advanced supply chain functionalities that aren’t covered by SAP ERP. One of the most advantages that a company can benefit from using SAP APO is to perform optimization. This can be achieved by using the software tools and processes to ensure the optimal operation of a supply chain, including optimal operation of inventory within supply chain and minimizing operating costs. For those companies which are looking to use SAP SCM software, one thing they need to keep in mind is this software doesn’t fix a broken supply chain processes. It’s a tool that helps companies to manage the supply chain management in robust way.

According to Snapp, SAP SCM software consists of the following applications:
Application Name Business Drivers
DP Demand Planning • Improving forecast accuracy
• Creating faster forecast analysis
SNP Supply Network Planning • Handling reduced inventory
• Needing more sophisticated safety stock management
• Construing the supply chain (realistic)
PP/DS Production Planning and Detailed scheduling • Enhancing production asset use
• Constraining the production plan
GATP Global Available to Promise • Providing an available-to-promise commitment on orders to customers
• Enabling more comprehensive searching for inventory to meet customers’ orders
TM Transpiration Management • Reducing transportation costs
• Improving carrier management
• Synchronizing transportation with factories and warehouses
SPP SAP Service Parts Planning • Obtaining planning capabilities customized for service parts
• Repositioning service parts
• Making improved buy
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