Pervez Ibrahim – SAP Principal Consultant

Why not take your career to the next level, invest a few days, and reap dividend for life? SAP SCM education with a globally recognized certification is a career worth pursuing!

“Only a decade ago, supply chain (SCM) was in its infancy. Today it is a professional field that is responsible for linking multiple tiers of customers and suppliers in an integrated supply chain that has become the lifeblood of corporations.”

-Robert Hanfield, PHD Bank of America Distinguished University Professor Director, Supply Chain Resources Consortium.

Supply Chain Activities – Begin and end with a customer and cover everything from product development, sourcing, production, and logistics, as well as theinformation systems needed to coordinate these activities. Supply Chain Management (SCM) functions are common for many industries with slight variations, depending on the type of industries. For example, the Engineer to Order (ETO) processes would be different than the Oil and Gas Upstream, Downstream and Midstream processes.

SAP SCM is not a single process, nor is it a single module. It will provide you with a broad based education that is common to many industries. It will also provide you with touch points in all the core modules of the SAP system.

Let’s take a walk through each of the components of SCM. We are all familiar with the role as a customer. Before we go any further, let’s familiarize ourselves with the individual components that make up the global supply chain.

  1. Marketing
  2. Product Design
  3. Suppliers / Procurement
  4. Make / Manufacture
  5. Logistics
  6. Customer / sales and distribution
  7. Reverse Logistics

Marketing (Forecast/Planning/Demand Planning): You will discover that supply chain is a cycle and if you had to pick the logical starting point, it would be marketing. Prior to anything being produced, it is in company’s best interest to predict the level of demand. This is achieved by conducting research which helps identify potential markets and forecast projected sales. Once markets are identified and demand is established, the product design phase begins.

Product Design Phase: At this time, the specification and material required for efficient and cost effective production are elected upon. After a prototype is designed and tested, it will be time to secure suppliers who will provide the raw material and components that will be used to create the product.

Purchasing/Sourcing: The Sourcing Plan is the result of all planning efforts on Strategic Sourcing. Purchasing refers to a business or organization attempting to acquire goods or services to accomplish the goals of the enterprise.

Manufacturing/Make: Manufacturing is the next process. Production lines are developed to transform the raw materials and assemble the components into finished goods that can be sold to customers. Manufacturers then get their product to the market with the help of logistics.

Logistics: Logistics entails the planning, coordination and execution required for distribution to the customer.

Customer: Depending on the product, the customer could be a whole-seller, retailer or a consumer like you and me. But the supply chain does not end there.

Reverse Logistics: Sometimes it is necessary for the product to flow back up the supply chain as is the case with returns, repairs and recycling. This process is known as Reverse Logistics. Reverse Logistics also provides data and feedback that manufacturers can use to make improvements in their products. This brings us back to the beginning of the supply chain.

Choosing Supply Chain as a Career – The supply chain management (SCM) touches so many facets of business that the field is a natural opportunity for understanding the big picture. From incoming materials through the planning and manufacturing process, to the outbound finished product, supply chain touches every part of this entire process. This multifaceted field helps an individual to learn ‘how a company thinks.’

Now that you know the basics, can you identify the SAP modules and the missing module related to the functions above?

Pervez Ibrahim

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