by Kevin Wilson
Keeping demand aligned with supply in the modern extended supply chain is growing more and more challenging. Globalization, increasing freight rates, capacity constraints, regulatory pressure and partner collaboration are just a few challenges that need to be constantly addressed to maximize the effectiveness of the supply chain.
In this series, we’ll describe the six P’s that make up the modern extended supply chain and highlight how we leverage the Reveal oVo® Methodology to help companies, using SAP to run their supply chains, transform their supply chains in the most optimal manner.
In this article, we’ll focus on the Procure and Produce supply chain processes. In the next article, we’ll deal with Provide and Product return, followed by Perform and Process in detail.
It all starts with procurement: Sourcing product that will either be consumed in a production process or stocked in the warehouse for sale to a customer. As part of our oVo® Methodology, we follow best practices for the process in question. That is, we leverage the power of SAP to drive the system activities, and we focus our efforts on educating the applicable resources around the related master data and business rules that apply. In many cases, an extensive change management exercise is needed in order to effectively match the technology (SAP) with the process (execution within SAP) and with the people (get the organization aligned).
The key sub-process for the Procure process can be described as follows:
In accordance with our oVo® Methodology, and with reference to the Procure process diagram shown above, you can see that the process has three distinct major sub-processes:
Continuing on down the supply chain, we get to production. We can either make product against an order that we already have or we can make product that will be consumed in a subsequent process, either by being sold or reused in another production process. Engineer to Order is another variant applicable in this space if a level of engineering/design is needed prior to commencement of production activities.
As part of our oVo® Methodology, we again follow best practices for the supply chain process in question. Once again, we focus our efforts on matching the technology (SAP) with the process (execution within SAP) with the people (get the organization aligned) in order to achieve the desired business goals.
The key sub-process for the Produce process can be described as follows:
In accordance with our oVo® Methodology, and with reference to the Produce process diagram shown above, you can see that the process, once again, has three distinct major sub-processes:
To sum up, in order to effectively execute your SAP-based supply chain, you will need the following to work together:
In the next article, we’ll deal with the Provide and Product return processes in more detail.
Make to Order, Make to Stock, ovo, Procure to Pay, Procurement, Supply chain, supply chain management