What is SCM/SAP SCM ?
Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service.
Supply chain management flows can be divided into three main flows:
The product flow
The information flow
The finances flow
The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting ordersand updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.
The SAP® Supply Chain Management (SAP SCM) application offers companies not only planning and execution solutions to manage operations but also helps boost visibility and collaboration to extend their operations beyond corporate boundaries. SAP SCM empowers companies to adapt their supply chain processes to an ever-changing competitive environment, transforming traditional supply chains from linear, sequential processes into an adaptive supply chain network in which communities of customer-centric, demand-driven companies share knowledge, intelligently adapt to market changes and proactively respond to shorter, less predictable life cycles.
SAP SCM provides three cornerstones that form the foundation of the adaptive supply chain network:
Synchronize supply and demand. The deployment of front-end demand and back-end supply gateways support demand-driven manufacturing and fulfillment processes to keep goods flowing smoothly and profitably to the end customer.
Sense and respond with an adaptive fulfillment network. Distribution, transportation and logistics processes are integrated with real-time planning. Additionally, sense-and-respond capabilities enabled by radio frequency identification (RFID) capabilities deployed in the warehouse and throughout the distribution and transportation network improve order tracking and elevate customer service.
Network-wide visibility, collaboration and analytics. Event management capabilities enable
companies to effectively monitor critical activities, resulting in greater transparency, while built-in analytics provide real-time performance management.