If your business involves selling product then inevitably you need to move that product, whether it be from your suppliers to you, or from you to your customers. If that is the case then you will also be interested in knowing how those movements, or shipments, are doing.
If they are experiencing a delay then it could potentially impact the promise you made to your customer... If the goods are delayed on route to your warehouse then you could potentially impact the plan for the warehouse folks who may have arranged a special shift to receive the goods in...
Wouldn't it be nice to know that the plan that was laid out up front was being followed? We can't force our suppliers to comply but there are ways to measure compliance and react to deviations to the plan just as soon as you are made aware of them. How can we accomplish that?
There are a couple of things that help with this situation. Consider the following:
- Standard SAP transactions to capture the plan - Sales Order to manage the promised delivery date made to your customer. Purchase Order to manage the schedule for the arriving shipments. The purchase order acknowledgement (or confirmation) is a critical document here as it informs us, in a timely manner, as to what schedule the supplier can deliver the goods to our locations.
- EDI (Electronic Data Interchange) - Take these above transactions and automate them so that you can get timely, accurate information from your suppliers.
- Outbound 850 (Purchase Order) - Send the PO to your supplier
- Inbound 855 (PO Acknowledgement) - Receiver the confirmed schedule, price from the supplier. If accepted, this will be the agreed planned schedule against which we will measure against
- Inbound 856 (ASN - Advance Ship Notice) - Supplier sends us a notice that the product has shipped and gives us the carrier tracking number
- Inbound 214 (Carrier Tracking Status) - The carrier tells us the shipment was picked up, delivered and any other key status changes in-between, including delays
If you do these things well, and in unison then you will see a marked improvement in customer satisfaction and a great deal of cost savings... The Supply Chain is a large part of the bottom line and any savings in this area leads to a much improved profit margin.
If you wish to learn more of SAP EM and leveraging it, together with EDI, to deliver a true DIFOT metric then ping me at email@example.com.
If it's not worth tracking then it's not worth doing!!!