Supply Chain Segmentation: Superior decision and implementation with SAP - Part 2

[kaushik_choudhury2]

In this part I will discuss on how SAP can provide data points based on which business can segment customer/product and will touch very briefly on SAP’s capability to support segmented supply chain. You can find the first part of the series Supply Chain Segmentation: Superior decision and implementation with SAP - Part 1.

Coming straight to the point on what  data sets can be provided by SAP , on few mouse clicks, which can help business to take apt decision of supply chain segmentation.  SAP applications are the cornerstone of the organizations’ supply chain where every transaction is been recoded in the most microscopic level. In such a scenario analysis of the data recoded in these applications is the most rational way to perform supply chain segmentation.

SAP provide reports, which are available on  few mouse clicks , loaded with information to classify the product portfolios , customers, demand /supply patterns etc .

I would discuss two of the standard reports available in SAP ERP package to showcase the prowess and usability of standard reports

Report for Customer Sales Analysis:  Transaction code – MCTA

This report shows the incoming sales order from different customers (based on the selection screen) over a period of time and also invoiced sales per customer.

Further, it can provide tons of information on incoming order qty, credit memos, open orders etc on just one mouse click. 

The information can also be displayed and analyzed on different levels viz Distribution channel, Division, Material, Sales Organization and period for each customer.

Based on this report business can get instant information on multiple aspects like customers with high sales volume/qty, top customers for a particular product over period of time, and/or major distribution channel of particular product-customer combination etc .

Report for Material lead time Analysis:  Transaction code – MCPW

Material lead time analysis reports provide the target lead time (On the order level it is the time period between the scheduled start and the scheduled finish.) and actual lead time on  plant , material , and MRP controller level .  Same information can be seen for each period for any or range of plants, material and/or MRP controller.

Based lead time and/or lead time variance (target vs actual) for a material or material plant combination business can classify its product range and then design the supply chain which is best suited for it .

These are just two of the many more standard SAP reports available, which can help business to take decision on Supply chain segmentation.

Now coming to the part: Implementing segmented supply chain within the same business through SAP.   SAP is all capable to support various planning philosophies. Whether business decides Make to Stock (MTS) or Make to Order (MTO) or Engineer to Order (ETO), or Just In Time (JIT) appropriate for a particular product line, implementing that in SAP is fairly simple. The rich capability of SAP doesn’t end there but with in MTS one can implement Gross/Net requirement planning, Planning with./ without  final assembly etc. This is just an example of the rich functionality to support various planning principles.

As an another example suppose business decides to adopt supply chain operation where the raw materials is not required to be inspected and automatic invoicing will be done if it is only delivered by pre-approved set of vendor but for other vendors the invoice will be cleared if only stock is released by quality department .Such diverse requirements  to build segmented supply chain at the level of product , customer , vendor , and/or supply/demand pattern etc can be covered by SAP using standard functionalities.