Purchasing, Supply Chain Management

Purchasing supply chain management software is challenging as just like the supply chain, it includes a number of moving parts, departments and changing regions. When you migrate to a new software platform, all your stakeholders are affected. Why do we buy software in the first place? The purchasing decision is not really about the software itself. It’s about the issue that the software will solve, or at least, you hope it will solve.  In the context of a complex supply chain, here are some common goals which those in the position to purchase software wish to achieve:

 

  • Increased efficiency through the automation of a pre-existing manual business process
  • Offer new functionality, helping you do more or increase your organization’s quality of service
  • Compliment current software platform, so that well-functioning pre-existing systems can live-on
  • Futureproofing, ensuring the software spend down the line is minimized

 

Traditional supply chain ERP software is corporate organization outward focussed with a high emphasis on stakeholder integration and collaboration. You need to consider a product that will not only integrate into your organization’s business processes, but also those of your suppliers, vendors and other partners which you interact with on a regular basis. Some important considerations for a potential ERP implementation include:

 

  • How employees within your organization will use the software
  • How they do those activities and processes today
  • How your partners including vendors and logistics service providers interact with you today and if it will change their process. Will they have the desire to / do they possess the ability to interact with the software you are looking to procure.

 

Some organizations look at purchasing software from a procurement perspective. Their procurement teams might create an RFP and will have particular requirements. They will research potential providers and consult with different departments in a cross functional approach. Ultimately, a document will be created, outlining what they are looking for in a vendor, potentially in the form of a balanced scorecard. From there they will shop around for that software.

 

Another option is for the supply chain organization within the company to own the software purchasing decision. The organization is familiar with how they get products from purchasing to logistics to customer service to planning: all of those departments will be considered in some way. This organizational focus is in a better position to represent the specific needs of the various business functions. While the procurement approach is often more concerned with making the most feasible financial decision. Of course, the best approach to a major supply chain software procurement decision would be a combination of the two methodologies.

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Inventory Management, Purchasing

          Bankruptcy forced the DeLorean Motor Company (DMC) to shut down its Belfast, Northern Ireland production facility in 1982, with an inventory of over 1,700 brand new cars and millions of parts. During liquidation, Consolidated International acquired all of DMC’s remaining inventory. Meanwhile, Steven Wynne, a British mechanic specializing in DeLorean maintenance and restoration since 1982, opened a 40,000 square foot warehouse in Houston, Texas, meant to act as a centralized distribution centre for used DMC parts. In 1997, Wynne acquired all DMC inventory from Consolidated International, in addition to the DeLorean Motor Company name and logo.

          Initially, the acquisition was aimed to support Wayne’s maintenance, restoration and parts sales operations. He and his team have serviced a consistent stock of 35-45 DeLoreans belonging to owners from all around the world since 1987. They also sell parts to DeLorean owners and restorers. As those operations were still not considerably cutting into the new DMC’s parts stock, they began assembling brand new DeLoreans themselves.


         A DeLorean requires roughly 2,700 individual parts of which DMC has over 99%, with no opportunities for traditional inventory replenishment. To fill the holes in their inventory, the remaining less than 1% are rather easily reproduced, rebuilt or procured as used parts. As all original DMC technical specifications and drawings were also acquired, they are often able to reproduce parts using the original specs with CAD/CAM and 3D modeling. This, in combination with their current inventory, allows the modern DeLorean Motor Company to produce a maximum of 500 cars, while continuing its additional pursuit to be the most prominent facility for DeLorean service, parts and restoration.


     

        Since 2016, the new DMC has employed Acctivate as its inventory management software. Acctivate is utilized for inventory adjustments when parts are received in the distribution centre, whether reproduced or acquired as used parts. Those adjustments are then automatically integrated into DMC’s web store. Acctivate supports and is used to create assemblies (one part containing multiple parts) in addition to sales order management including open and closed sales order monitoring, the creation of pick tickets and sales order printing. Some service orders, such as full frame-off restorations, require 200-300 line items for labor codes and part codes.

We’re able to build a service order pretty quickly with Acctivate, especially with some of these big restorations– Sarah Heasty, Service Manager, DeLorean Motor Company.

         DMC uses Acctivate’s Business Activity Service Billing module to create service order quotes, where separate subtotals can be created for a customer’s engine, transmission, suspension, etc., providing increased transparency. The Business Activity Scheduling module is employed to track labour hours and parts used for each service order. Labour hour tracking helps with DMC’s capacity planning as parts are pulled prior to service, increasing efficiency.

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SAP, Supply Chain Management
This ASUG Roadshow provided SAP customers with a place to meet and learn about the road to SAP S/4HANA from experienced partners, customers, and SAP experts.




The December Toronto event featured:

  • The Art of the Possible with SAP S/4HANA presented by Kim Cybulski S/4HANA Solution Director from SAP who described Recent innovations, new business processes and S/4HANA advantages over ECC
  • Followed by: Charting the Course of Deployment Options: Which provided insight as to which conversion direction could be best for you, and what key considerations should be made: a collaboration between Curtis Gaska, Solutions Architect at Symmetry and Alan Rudolph EVP and General Manager at smartShift
  • Lorraine Howell, VP of Research and Development at Illumiti then explained the advantages of an S/4HANA implementation from both greenfield and system conversion perspectives
  • A Customer Story where Sharon Kaiser, CIO of New England Biolabs described her implementation process and a few words of advice: start gathering your data 1.5 years prior to implementation or conversion and don’t be afraid!
  • Kim Cybulski then returned to the stage to explain how to Chart our SAP S/4HANA Adventure: Considerations, prep work, dos and don’ts, along with methods, tools and services available from S/4HANA 1709


This has been SAP Certified Associate Adam Kwitko signing off from the ASUG roadshow: Your Journey to SAP S/4HANA in downtown Toronto. Visit my blog, adamkwitko.com/blog where I write and post videos on topics pertaining to supply chain and connect with me on LinkedIn.
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SAP, Supply Chain Management

I received my SAP TERP10 Associate certification in the mail this week. Actually, the full name of the distinction is C TERP10 67 SAP Certified Application Associate – Business Foundation & Integration with SAP ERP 6.07, which required an intensive two-week long course and three-hour exam. Pursuing this certification was important to me as I aimed to solidify the past 8 months of recently completed hands-on Supply Chain Management focused SAP training. In addition, I wanted to expand on my knowledge of the Purchase-To-Pay (purchasing/procurement), Plan-To-Produce (manufacturing), Order-To-Cash (selling), FICO (financial and management accounting) and Project Systems (project management) SAP proficiencies.


Supply Chain Management
Why ERP?


ERPs (Enterprise Resource Planning) software is used by large-scale organizations to aid them in communicating their flow of raw materials and finished goods from manufacturer to consumer. It provides full financial and inventory management integration at every stage of the buying, selling and logistics functions. The key factor with any ERP is integration. In an internal intranet type network, information is restricted to within the organization. Enterprise Resource Planning software allows for major time savings, and ultimately cost savings, derived from the real-time sharing of information between buyers, suppliers, warehouses as well as across internal departments. There are three major players in the Supply Chain Management ERP market: SAP, Oracle and JD Edwards, where SAP is considered by many to be the industry’s gold standard.

VMI 

An Advantage of ERPs in Supply Chain Management

 

One example of buyer-supplier integration at work relating to supply chain management is Vendor Managed Inventories (VMI).  In VMI systems, the supplier (vendor) is responsible for maintaining the buying organization’s inventory levels. The supplier has access to the buyer’s inventory levels and ships out inventory in accordance to agreed upon thresholds, creating purchase orders in the process. An ERP such as SAP is used to communicate the buyer’s inventory levels to the seller. It can be further integrated to both organizations’ supply chain through its incorporation with the buyer’s or seller’s private carrier, or a third-party logistics provider.

 

 

Supply Chain

An Advantage of Vendor Managed Inventories


VMI directly results in a reduction of the Bull-whip effect, where large fluctuations in demand from a consumer or industrial retailer oscillates up the supply chain through the wholesaler, distributor, manufacturer, and raw materials supplier. Real-time communication of inventories therefore leads to the cost savings associated with increased inventory management efficiency in addition to insurance against inaccurate forecasting of demand.

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SAP, Supply Chain Management

SAP Ontario CanadaASUG stands for America’s SAP User Group and holds chapter meetings throughout Canada and the United States. The November chapter meeting began with A Customer Journey to S/4HANA presented by SAP Value Engineer Laura Howard from Inventy, who showcased an example of an organization‘s upgrade to HANA and how they managed to optimize its Make to Order process. In addition to some tips on how to demonstrate the value of S/4HANA to your top management. Laura was followed by the Student Open Data Showcase where SAP students from Dalhousie University and University of Windsor showcased solutions developed using SAP tools against open data provided by the City of Mississauga. Then a short update on 2018 SAUG events.



ASUG OntarioStarting at 11am, the conference split into two separate tracks, including an Automotive & Manufacturing track and an ASUG Customer Stories track. The third originally planned Supply Chain Management track was incorporated into the Automotive & Manufacturing track and a two lecture SAP support half-track was added. I selected the Automotive & Manufacturing which commenced with the SAP Automotive & Manufacturing Panel – Leonardo & Beyond where panelists Stefan Ressing, Bill Newman and Anu Goel discussed the innovation opportunities that are available through Leonardo. Principal Enterprise Architect Stefan Ressing then walked us through the emerging SAP Leonardo Best Practices including solution technologies such as artificial intelligence (AI), machine learning, blockchain and other Internet of Things (IoT) related applications supported by the SAP Cloud Platform.



SAP Ontario Chapter MeetingThe Fast Digital for Discreet Industries lecture conducted by Process Lead of Capgemini Anu Goel discussed how the joint initiative between SAP and Capgemini aims to help clients in discrete manufacturing industries manage their digital transformation as they seek to adopt innovative concepts driven by Industry 4.0, the industrial Internet of Things, Cloud, Big Data, and Smart Automation. The Automotive & Manufacturing track concluded with an Integrated Business Planning lecture by SAP Senior Solutions Principal Thomas Wright described how SAP’s cloud based solution: Integrated Business Planning (IBP) simplifies the logistics and planning stages by bringing these elements together in a HANA powered environment where simulations and optimizations can take seconds rather than days of manual calculations.

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