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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Logistics, Supply Chain Management, Transportation

Hyperloop pod transportation has gathered plenty of attention in recent years where magnate propelled capsules are pushed upwards of 1,200 km/h with an average speed of 700km/h. Additionally, Hyperloop transportation is completely automated, which promises to eliminate delays and overbooking. While consumers are quick to fantasize of the benefits of high speed Hyperloop travel, the ramifications of Hyperloop freight cargo will be felt throughout the supply chain, and in consumer’s wallets.












There are currently 10,000 trucks en route from Toronto to Montreal every day, with delivery lead time totaling half a day. A similar Hyperloop will take half an hour, while contributing to a reduction in highway traffic in the process.

 

Benefits:

Inventory

Hyperloop’s fast speed and promised reliability will support lean and Just-In-Time inventory practices. Organizations will have the ability to hold less inventory, therefore decreasing their required warehouse footprint, payroll, operational and overhead costs.

 

Lower product costs for consumers and businesses

With the decrease in inventory costs highlighted above, consumer and industrial goods prices will decrease. These cost savings will ripple down the supply chain, all the way to the wallets and budgets of consumers and businesses.

A decrease in traffic along the 401, 7 and 417 highways

If high-speed TransPod travel becomes widely adopted, a decrease in commuter and freight traffic on the highways commuting between Toronto and Montreal or between Toronto and Montreal, Toronto and Ottawa, and Ottawa and Montreal (depending on whether TransPod Hyperloop or Transpod One meet the required Transport Canada regulations). This will directly lead to a decrease in highway transportation between those destinations. Transpod travel will subsequently force traditional trucking and rail companies to lower their rates and lead to shorter delivery lead time throughout all modes.

Increase in Tourism

A decrease in travel time will benefit the domestic tourism industry. Time savings resulting from the alleviation of airport security, the elimination of delays and of course, the significantly faster speed of Transpod travel, will motivate business and domestic tourists to displace themselves for more business, weekend and holiday trips.

 

Environmental Benefits

Mass-transit Transpod pods are propelled electronically at low speeds: during arrival and departure, then magnetically for the majority of the time. Resistance (air) is continuously vacuumed out of the tube using a passive system, leading to ultra-low aerodynamic drag. This results in a highly efficient and environmentally friendly mode of long-range transportation.

Truck Drivers Should Not Be Affected

As the proposed Canadian Hyperloop route is unlikely to be completed prior to 2025, truck drivers are most likely to already have been disrupted by driverless trucks in the form of platooning.


In Canada, two Hyperloop start-ups are competing for regulatory rights from Transport Canada to construct the first domestic route.

TransPod Hyperloop has proposed an eastern Canadian route, back-and fourth from Toronto to Montreal. The trip is estimated to take 30 minutes.

Hyperloop One’s proposed Canadian route runs from Toronto, through Ottawa, ending in Montreal. Time estimates are as follows:

  • Toronto to Ottawa in 27 minutes
  • Ottawa to Montreal in 12 minutes
  • Toronto to Montreal in 39 minutes

Photo Credit: Hyperloop One, TransPod Hyperloop

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