Article by Kevin Wilson of ERPGenie LLC - Optimizing your Supply Chain.
Extended Supply Chains have the following characteristics:
- Multiple geographies – Where do your customers and partners reside?
- Multiple languages and currencies
- Multiple systems – SAP, EDI, Web site, ...
- Multiple partners – Carriers, freight forwarders, suppliers, manufacturers, distributors
- Varying regulations and compliance requirements – What’s needed to ensure we conduct business legally across the globe?
Various physical events occur, for a product, as it flows through the extended supply chain. Best practices for this process could be listed as follows:
- Standard SAP transactions are used to capture transactions across the supply chain. E.g. Purchase Orders, confirmations, ASNs, Invoice receipts, Goods Receipts, …
- All events pertinent to our Supply Chain are received from all our partners. E.g. Carrier status notifications, vendor Advanced Ship Notices, Manufacturer’s manufactured event, …
- All exception events affecting the Supply Chain are received from all our partners. A reason for the exception is to be captured.
- Planned events are planned from a timing, location and partner perspective. E.g. We expect the delivery to be shipped at Warehouse ABC by Plant 1000 on 2/3/2017 @ 4pm.
- These plans should be based on actual SAP transaction schedules (E.g. Sales Order schedule line) – These dates are determined based on master data (lead times)
- The execution of events (when and where they actually occur) are compared with their corresponding plan to determine if there was a discrepancy. Any discrepancies can lead to follow-on activities to take corrective action.
- Monitoring of the Supply Chain plan for events that have not yet occurred, when they should have occurred, can lead to follow-on activities to take corrective action.
- Events that span multiple processes should be correlated across all of them to ensure complete end-to-end visibility. E.g. Proof of delivery relates to Outbound Delivery, Shipment and Sales Order
- System messages that communicate the event to us are also planned for and need to be measured. E.g. The EDI X12 856 is the message that tells us a supplier has shipped the product to us (ASN). We would set a plan together to receive the ASN within 4 hours of the physical shipping of the goods, to ensure that we get the ASN prior to receipt of the goods. I.e. The goods are expected to ship at 2PM and we expect to receive the message at 6PM telling us that the goods have shipped.
- Manage the Supply Chain by exception – With complete end-to-end visibility in to the supply chain, as and when it is executing, you are able to proactively identify and react to issues
- Time to Insight – Time from the issue to when we realize that an issue has occurred
- Time to Action – Time from the realization that an issue has occurred to when the resolution is actioned
- All data flows from SAP to an analytics tool (SAP HANA Analytics) for aggregation and further “opportunity discovery”. I.e. Where can we find ways to improve the future process, by analyzing the effectiveness of past performance