@ Supply Chain Management


Taking a peek at mySAP (Strategic Supply Chain Design area)

What is the scope of mySAP’s solution space? While dealing with SCM, one has to meddle with the ERP system that one finds within a firm. mySAP is one of those leading ERP providers that is making inroads into the SCM space as well. Here is the solution space of mySAP as outlined on their website.
The main solution function areas are captured in the figure below (which I shamelessly copied from their site – I wonder where the jury of copyright matters rests on the matter?).

Each of the solution areas has its own mini-web site which explains some of the capabilities ensconced therein. So let’s go one by one starting bottoms up:

1. Strategic Supply Chain Design: Three areas under this category.

  • Supply Chain Definition : You can model every part of the supply chain (such as locations, transportation lanes, resources, products, and so on.) using the Supply Chain Engineer in SAP APO. The Supply Chain Engineer allows you to place locations on a map and link them with the corresponding transportation lanes and product flows. Furthermore, you can drill down to all elements belonging to the supply network, or request information about single or combined elements in the network. For example, you have the ability to see which products belong to a particular location. You can also add products to this location or modify the location’s master data. Master data can also be transferred from SAP R/3 bzw. SAP ERP using the Core Interface (CIF). Materials are limited in their validity and availability. This has to be taken into consideration throughout the entire supply chain management solution. A central maintenance instance for interchangeability relations is offered that provides information for all planning applications. This secures consistent planning of discontinued material stock before using follow-up material stock. For a service parts supply chain, the supply chain definition is extended with the Bill of Distribution, which not only describes a location hierarchy but also allows the modeling of virtual locations (which are physically the same locations as aggregation locations in the location hierarchy, but are logically only used to model the direct customer facing demand of those aggregation locations), virtual consolidation regions (to consolidate the demand of several locations for slow moving parts) and inventory balancing regions.

The Supply Chain Engineer in SAP APO sounds a lot like the tool that I developed (based on the transshipment model) that allows for strategic level planning for supply chain components. The great thing about the Supply Chain Engineer is the integration that it provides with the ERP system which is how it should be ideally.

  • Supply Chain Monitoring : The Supply Chain Cockpit (SCC) consists of a highly intuitive, graphical interface that acts as the top enterprise planning layer covering all planning areas such as manufacturing, demand, distribution, and transportation. All employees in the Plan -> Source -> Make -> Deliver cycle of supply chain management can use it to their advantage. As the gateway to SAP APO, the SCC makes dealing with a vast supply chain easier and more manageable. SCC allows you to:

Supply Chain Assessment isn’t child’s play. You need a true specialist.

So advises Jane Lee, a director of supply chain solutions at SupplyChain Consultants in the June edition of GLCS. She begins her article by saying what may seem as obvious but in a fad fed world, it may not be first on your agenda.

The first step to improving your supply chain is very basic: you have to understand what is working and what is not./blockquote>
And that’s the segue for introducing supply chain assessment as one of the key competencies that a supply chain consulting firm should possess. Therefore, how does a firm evaluate which supply chain consulting firm to employ to fo the assessment?

Many consulting firms will claim an expertise in almost anything. A firm that does consulting on finance management, corporate strategy, shareholder value and oh-by-the-way supply chain effectiveness is frequently a “jack of all trades, master of none”.

The number of qualifications in the above statement ought to give one pause. Why doesn’t she just say what needs to be said – that a jack of all traders is a master of none.

Firms which focus entirely on analyzing and improving supply chains have a large institutional knowledge base of what has and has not worked in scores of other companies, enabling you business to leverage other companies’ mistakes.

Couldn’t have put it better myself though I might have added a qualifier here where it is necessary – was another consulting company involved in that failure or not? Then again, maybe not – another commandment to savor – Thou shall not put a gun to your own foot.
Jane’s distilled recommendations on supply chain qualifications:
1. Choose practise over theory when it comes to knowledge
2. Choose consultants with domain/industry specific knowledge
3. Choose a listener over spouter
4. Choose consultants with an ear for red flags
All of the above are great tips for choosing a supply chain consultant. I would add the following:
5. Choose someone who can adapt their recommendations to you existing systems/be prepared to change a lot of things
6. Choose someone who can base his recommendations on hard quantitative analysis (like a decision support system) rather than soft fluffy feel good terminologies. Of course, I wouldn’t consider LEAN or Best Practices as soft fluffy feel good terminology – that goes without saying.
The latter half of the article deals with how a typical supply chain assessment looks like:

1. The level of coordination between different operations from forecasting to manufacturing to order fulfillment as well as effectiveness of the current supply chain planning operations
2. A comparison of the operations with best-in-class operations to determine areas of improvement
3. An assessment of the IT system being used to support the supply chain, to identify specific gaps and improvement potential
4. Business process changes and organizational needs to support a best-in-class supply chain operation

Jane warns about the following which I think is important to know:

Studies show that implementations of even the best information systems tools, without accompanying business process changes have not produced the expected results.

Jane expands on what a firm should expect from a supply chain assessment:

1. A map of the current state of the supply chain
2. A map of the desired future state of the supply chain
3. A list of “low-hanging fruit” improvements that can be made at little/no cost
4. A detailed, prioritized, step-by-step path forward to move from current state to intermediate states to future states and the associated organization, business process and tool changes in order to make the progress
5. A database of the firm’s historical supply chain for internal analysis and improvement
6. (Three points collaspsed into one) Customer analysis and segmentation using lead times, pareto analysis and customer service criteria
7. Identifying trends within the firm’s supply chain operations and execution

About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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June 2006