SAP SCM expands supply chain management options for manufacturers

In this expert product review, learn about the modules and implementation options offered by SAP Supply Chain Management.

SAP covers one of the largest footprints in the enterprise software market. Its SAP SCM (supply chain management)

modules are tightly integrated to the base SAP Enterprise Suite foundation ERP.

The range of target customers for SAP encompasses anywhere from SMBs to enterprises, and its products are available both on-premises and in the cloud. SAP's products cover the specific needs of the following manufacturing industries: aerospace and defense, automotive, chemicals, consumer products, high tech, industrial machinery components, life sciences, utilities, oil and gas and many nonmanufacturing lines of business.

Often criticized for being too expensive, SAP has created quick deployment services to mitigate this perception. The services are designed to reduce the implementation times and costs of an SAP implementation.

Modules

SAP SCM offers an entire range of supply chain modules that may be deployed individually or in conjunction with organizational needs. The modules contain sub-modules that further extend the functionality of the system.

Modules within the SCM suite are:

  • APO -- Advanced Planning & Optimization
  • SAP Extended Warehouse Management (EWM)
  • SAP FM -- Fleet Management
  • SAP FSCM module -- Financial Supply Chain Management
  • SAP MM module: -- Materials Management
  • SAP PLM module -- Product Lifecycle Management
  • SAP PM module -- Plant Maintenance
  • SAP PP module -- Production Planning and Control
  • SAP QM module -- Quality Management
  • SAP LES -- Logistics Execution Suite
  • SAP SD -- Sales and Distribution
  • SAP PDM -- Product Data Management
  • SAP SM -- Service Management
  • SAP PS -- Project Systems
  • SAP SRM -- Supplier Relationship Management
  • SAP OCH -- SAP Inventory Collaboration Hub
  • SAP EM -- SAP Event Management

Product overview

SAP is currently switching its product portfolio to run on HANA in-memory architecture. HANA speeds processing and convergences upon cloud, mobile, social and big data technologies. Additionally, it provides a real-time data processing platform, which speeds database response time, provides real-time analytics for proper decision support, and makes integration to third-party applications and data aggregations easier.

Customers should thoroughly understand what functionalities and industry expertise they require from SAP and their partners. The partners will play a significant role in matching the solution to organizational requirements.

SAP knows it has a usability problem and is addressing this issue by easing integration from extraneous applications and unifying the look and feel of all of the SAP applications. The objective is a uniform interface among all SAP products and interoperability of back- and front-end processes. Although the products are very rich in depth of features and functions, users may find SAP still rather siloed when creating a workflow or trying to complete a transaction.

To execute workflows in SAP, use the business process workflow tool. The Workflow Builder is for displaying and making changes to workflows and can be used for a variety of purposes, including automation of approval and repetitive tasks.

The depth of SAP SCM functionality may be customized to create nearly any combination of supply chain processes and functions. Where specific functions are required, third-party applications can easily integrate with SAP.

Pricing

Pricing can be rather complex because of the many options that SAP offers. Each SAP product has its own pricing structure based on company size, the number of users, deployment model, database and extra middleware used. SAP partners do a good job in reducing the number of licenses that organizations require and offer options to scale up or down quickly. Some modules have multiple user options that enable different levels of functionality for various tasks; this directly influences the total cost of ownership for the package.

Alternatives

SAP mainly competes with QAD, Oracle, JD Edwards and many Tier II and Tier III ERP products. SAP tends to offer deeper functionality and a greater breadth of modules that cover more of the enterprise. Organizations will have to be weary of implementation, integration and customization costs, however. Heavy implementation and project management costs may prove to be too expensive for smaller organizations if not managed efficiently.

Next Steps

Understand SCM software choices

Learn about global supply chain risks

This was first published in June 2014

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