The best practices of the SAP supply chain emphasize the use of standard business processes, functionality, features, and tools to reduce the need for customized development, manual working, or third-party products usage. Furthermore, adhering to best practices increases the SAP implementation’s ROI. Organizations that are lamented by budget constraints that prohibit them from enforcing sophisticated SAP tools should initially look inward to assure that their current SAP implementation is delivering a reasonable return on investment. It’s perplexing to see firms stating a readiness to adapt their business processes to the best practices of SAP supply chains, but failing to invest the time, resources, or effort necessary to achieve higher ROI.
Although SAP implementation is frequently thought of as a one-time task, constant enhancements are the key to realizing SAP’s full potential. However, SAP optimization is only achievable if organizations avoid employing minimum functionality and rather take advantage of hidden tools in their current SAP systems. They should also update their systems with free improved packages that provide a host of new capabilities, allowing them to remain on the path of continuous and consistent SAP system optimization.
Consider the SAP ERP system, which serves as the foundation for firms that use a business application platform. According to a conservative estimate, firms aren’t properly utilizing up to 40% of SAP’s baseline features, tools, and functionality. As businesses have already paid for certain benefits, this results in a lower return on investment.
Let’s take a look at ten tools and capabilities in an SAP ERP system that is normally used for improving an SAP supply chain.
- Material requirements planning (MRP) — From procuring raw materials to outsourcing or in-house production, and eventually dispatching to clients, operations in the SAP supply chain are all about handling a tighter and more effective link to materials management. One of the major regrets of supply chain management in SAP is the fact that so few firms use MRP as a planning tool for materials.
- Safety stock planning — Some firms are aware that SAP can assist them by recommending material safety stock, which can prevent planners from running out of materials and scrambling to cooperate with vendors for immediate delivery.
- Sales and operations planning (S&OP) — What firm wouldn’t go through a rigorous S&OP process? Few companies, however, use S&OP tools, which could not only preserve the time it consumes to forecast accurate production or sales statistics but also improve the whole planning process’ confidence. A basic product is available to assist with complex and flexible planning essentials.
- Automation for efficient replenishment — Transitioning to RFID and barcode technology, which offers materials management and efficient replenishment, can help companies that still manually enter SAP supply chain data into the system. SAP provides many interface options. Kanban is a feasible replenishment option that is underused. The Kanban dashboard makes it more efficient and simple for a demand source to request materials replenishment from a supply source. Companies can later employ an IoT method to optimize the processes of business, which integrates supply chain procedures in SAP and logistics. The Internet of Things IoT connects systems, processes, and operations minimizing the need for human interaction.
- Forecasting — Planners frequently struggle to build a production or sales plan which not only represents historical material consumption values but also provides them to select the flexible forecasting model for their enterprise needs. Forecasting is a tool that plans to predict by using previous data to anticipate future sales or commodities consumption. It also aids in preventing disruptions in the SAP supply chain.
- Reports and analyses — SAP provides standard reports in thousands with real-time data and also flexible and standard analysis to aid decision-making, yet the majority of these reports are rarely used. Instead, firms turn to custom reports or analytics dashboards and tools like SAP BI.
- Classification and Document Management System (DMS) — SAP’s component cross-application optimizes the processes of supply chain and logistics. Classification offers preferences to record a wide range of data defined by the user, which is subsequently searchable and reportable. SAP DMS is more than just a document repository. Its integration with the SAP supply chain’s sales, production, and procurement activities gives users the ability to record extra data that doesn’t fit neatly into any SAP component but is necessary for improving business processes.
- Engineering Change Management (ECM) — SAP ECM provides powerful controls for mastering the data production process, reducing or eliminating redundant or inaccurate master data entries in the system. The SAP supply chain’s business activities run more smoothly when consolidated, accurate, and complete master data is available.
- Weaving quality into the SAP supply chain — Quality isn’t a business function or a procedure. It is the lifeline of a productive SAP supply chain. Weaving and Integrating quality checks, quality controls, and quality gates into supply chain functions and significant logistics preserves an immense amount of money. It also gives firms credibility by ensuring that raw materials free from defects are used in manufacturing or that the warehouse is free from defective products. By averting logistics, production, procurement, and disruptions in the supply chain via abnormal trends’ timely alerts, quality features like SPC bring great value to business processes.
- Early Warning System (EWS) — EWS is a hidden SAP treasure that allows business users to create prompts defined by users that alert them to potential disruptions to SAP supply chain processes and logistics.
We hope this article has provided you with the necessary insights about the available features which are used in enhancing supply chain productivity. Learn more about SAP EWM which makes you comprehend the concept of SAP EWM. It also explains how SAP EWM assists the enterprises in reaping the benefit of it along with opportunities to build your career.