Supply chain management is a process to control, plan, and execute the product or service flow, the network of business and people from acquiring raw material to production through distribution to end users. The supply chain management is applicable to all kinds of production process from smaller food production to larger machinery production. Sap software makes these SCM process easy to manage and implement in any type of industries.
One simple example the end product you get when you go for food shop, no matter which is the food they move from their original raw state into packaged product you buy, they have to go along a supply chain management.
How supply chain management works
Supply chain management process or work will be same for all kinds of products and follows some essential key elements.
Movement of product – SCM model will be basically designed on the basis of the product movement. CSM model manages the timely movement of product from one unit to another, with quality check at each point and timely delivery.
Information sharing and communication – It is very important to maintain the flow of information in an appropriate way, where CSM plays a major role.
Timely delivery – SCM models maintains the timely delivery of the product from order to till it reaches the end customer. If Quality of the end product satisfies the customer need then it is SCM success in tern business success.
Service after delivery – SCM also involves performance and quality check after delivery, which ensures the long term success of product or service.
Finance – supply chain management also manages finance system of organization or stake holders. Inventory management, billing, accounts payable are comes under SCM.
Role of Sap in Supply chain management system.
Sap plays a major role in supply chain management system, because this is the process where data handling takes the first priority to business success.
An organization’s success relies on the information shared on SCM system, when these data are passed on to their suppliers, distributors across different location with accuracy the business can grow rapidly and exponentially with better customer feedback. This is where the ERP System Sap business one software play an important role. Through Sap SCM Module you can provide Crystal Reports and dashboards, more intuitive reports across the business based on accurate and timely data.
Advantages of Sap in supply chain management.
- Optimize the process to provide high quality service or product to end users with adequate information.
- Automate the process like order processing, invoicing and shipment tracking, and make data handling easy.
- Reduces the risk handled in managing the warehouse data. Provide access to real time information directly from distributors about stock on hand, incoming orders, and stock awaiting delivery.
- Track end users data about the products selling and which products as got more sales. Which helps to concentrate more on end user intent products.
- Handles the manufacturing and distribution process based on the stock available and market intent.
- Reduce the time consumed to handle the data management and data transfer process from one process to another process.
- Provide management Reporting and data analysis details at fingertip.
- Access to real- time customer consumption data which helps to respond customer queries more quickly and effectively.
- Increases the collaboration and communication between partners, suppliers, distributors
Logistic is a part of supply chain management which handles the storage of goods in and out of the firm. As explained before SCM is a series of interconnected activities related to the transformation and movement from raw material to the finished goods till it reaches to the end user including logistic process.
Even Logistics is the part of supply chain management even though the goals of SCM and logistics may differ.
Top 3 Differences between SCM and Logistics.
- Goal of SCM is to ensure that the company have achieved competitive and comparative benefit with efficiency. Goal of logistics is ensure the satisfaction of end users with quality and quantity of product or service delivered.
- Process or departments involved in supply chain management is greater than logistics. Logistics management includes section like inventory, warehousing, and transportation. While SCM includes product development, testing, customer satisfaction, information sharing, finance, invoice management with logistics activities.
- SCM will be having significant relationship with internal and other external departments. But logistics will be having minimum relationship with other departments.
Talk to Sap SCM experts at skysurge one of the sap software partners India Bangalore to install sap for your business to streamline your business process with Sap supply chain management and logistics process and archive business success with great customer satisfaction.