I am a CPA but I was wondering if SAP Business One would be helpful in running my own online business of Supply Chain Management services.
Dear SCM User,
With SAP SCM if you know how it works, you could rise customer expectations, run increasingly complex supply networks, and achieve faster-than-fast responsiveness . The solution cover everything from demand planning to inventory management and use technologies such as the Internet of Things, RFID, and advanced analytics to help you run a real-time supply chain.
If you are a noob in supply chain and mainly order I recommend you to do some crash courses provided my Udemy/Quora or stackoverflow e.g with focus in supply chain. With SCM software you can run a real-time supply chain but consider that the licences service is pretty expensive if you are consider running an individual business.
Interesting for you could be also combining Sap capabilities with Hybris that is helping a lot for a new e-commerce platform an enhancing your supply chain capabilities services.
Furthermore you can think on a CRM solution too. It depends on your budgeting strategy and how you prioritise your tasks.
Also Business One is a full ERP solution so which package do you really want and need?
Let me know if you need something more. Worked a lot in Product Management i have a deep focus on this matter. Best francesco
To understand whether SAP Business One will be helpful in Supply Chain Management, you must understand the supply chain management.
A supply chain is a collection of suppliers to create one specific product for a company. The chain is made up of ‘links’ which can include:
a) Multiple manufacturers for parts.
b) Completed product.
c) Warehouse for storing the product.
d) Distribution centres; and
e) Store where a consumer can purchase the product.
The supply chain not only includes the manufacturer and its suppliers, but also – depending on the logistic flows – encompasses:
i. Transporters.
ii. Warehouses.
iii. Retailers.
iv. Consumers.
v. Also includes:
a. New product development,
b. Marketing,
c. Operations,
d. Distribution,
e. Finance,
f. Customer service.
The concept of chain is important because each link is connected in a specific direction and order, and the next link cannot be reached without going through the previous one. Each link adds time and costs and can involve labour, parts, and transportation. Every product a company carries may have its own supply chain; they may use certain suppliers for multiple products. That’s why this gets so complicated, especially for international supply chains.
The process described above is that of a typical retail supply chain. However, there are many different types in practice. Here are three examples from well-known supply chains:
a) Big Box supply chain – Walmart
b) E-commerce platform supply chain – Amazon
c) Specialised own supply chain – Tesla
Big Box Supply Chain: This model – e.g. Walmart – thrives on size and well-planned supply chains to drive out the competition. This is how it does so:
1) Buys more generic goods directly from manufacturers, and not from suppliers.
2) Uses ‘Vendor Managed Inventory’ which ensures that manufacturers are responsible for managing products in Walmart’s warehouses.
3) Deals only with those suppliers who can meet:
a. The quantity,
b. Frequency desired,
c. Low prices, and
d. Location that limits transportation needs.
Thus, they manage their supply chain like one firm, with all partners operating on the same communication network. The result is that this system reduces links in the supply chain and cost per item, translating to low prices for consumers.
E-Commerce Platforms: E-commerce online shops – e.g. Amazon, Alibaba, and innumerable others in various countries – are a perfect example of unique supply chains. They ship from distribution centre to consumer’s home directly, thus cutting the retail store out. Where online stores like Amazon innovate is both in their supplier-side and the final supply chain link delivery.
Let us take the example of Amazon. Just about anyone can sell things on Amazon because it is a platform, not just a shop. It differentiates itself because:
1) It probably has more things than any other online store.
2) It offers everyday goods cheaply.
3) It underbids suppliers.
4) Its warehouses make serious use of automation to store items going to similar destinations together, ready for immediate transport.
5) Its investments in delivery staff and technology make 2-day shipping a basic exception, and even same-day delivery a possibility.
6) It ditches third-party logistics and fulfils orders itself.
Specialised Own Supply Chain:
Automotive manufacturers – e.g. Tesla – are making innovative, popular and luxurious cars in a location – California, USA – with incredibly costly real estate. Rather than having a long supply chain of cheap part makers, they have arranged the following:
1) A vertically integrated supply chain – full-service auto plant near its corporate headquarters.
2) Plans for a supplier park.
3) A massive battery factory.
4) Digital supply chain – pushing new firmware and algorithm updates to existing car owners over the cloud.
Concept of SCM: Supply Chain Management (SCM) is the active management of supply chain activities to maximise customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain to develop and run supply chains in the most effective and efficient ways possible. Supply chain activities cover:
1) Product development.
2) Sourcing.
3) Production.
4) Logistics; and
5) Information systems for coordination.
The concept of SCM is based on two core ideas:
1. Every product represents the cumulative effort of multiple organisations i.e. supply chain;
2. Organisations in the supply chain are linked together through:
a. Physical flows: They involve the transformation, movement, and storage of goods and materials.
b. Information flows: They allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and materials up and down the supply chain.
Definition of SCM: Supply Chain Management is handling and optimizing all the complicated facets of a supply chain, involving goods and services. It can be defined as the management of flow of products and services, which begins from the origin of products and ends at the product’s consumption. It also comprises movement and storage of raw materials that are involved in work in progress, inventory, and fully finished goods. According to Jack Van der Vorst (2004): “SCM is the integrated planning, coordination and control of all business processes and activities in the supply chain to deliver superior consumer value at less cost to the supply chain as a whole whilst satisfying requirements of other stakeholders in the supply chain (e.g. government and NGOs)”.
Advantages of SCM: In modern times SCM is particularly important because commerce exists in a networked global economy. All the companies are highly dependent on effective supply chain process. The main advantages of SCM are these:
i. Develops better customer relationship and service.
ii. Creates better delivery mechanisms.
iii. Improves business functions.
iv. Minimizes warehouse and transportation costs.
v. Helps in shipping right products to the right place at the right time.
vi. Assists in minimizing waste; and
vii. Achieves efficiencies throughout the supply chain process.
Characteristics of SCM: Value is the amount consumers are willing to pay for what a company provides, and it is measured by total revenue. The concept value-added activity originates from Porter’s ‘value chain’ framework and characterises the value created by an activity in relation to the cost of executing it (Porter, 1985). Moving in the same vein, Cooper and Ellram (1993) have specified the following characteristics of SCM:
a) Joint reduction in channel inventories.
b) Channel-wide cost efficiencies.
c) Long-term time horizon.
d) Amount of information sharing and monitoring as required for planning and monitoring purposes.
e) Multiple contacts between levels in firms and levels of channel.
f) On-going joint planning.
g) Compatibility of corporate philosophies at least for key relationships.
h) Small to large supplier base.
i) Channel leadership for coordination focus.
j) Risks and rewards shared over longer term.
k) Quick response across the channel.
Objectives of SCM: The main objective of SCM is to monitor and relate production, distribution and shipment of products and services. This can be done by companies with a good hold over:
• Internal inventories.
• Production.
• Distribution.
• Internal production; and
• Sales.
Supply chain management basically merges the supply and demand management. Every firm strives to do so with the most efficient use of resources.
Here are some of the important objectives of supply chain management:
1. Supply chain partners coordinate at different levels to:
i. Maximize resource productivity,
ii. Construct standardised processes,
iii. Remove duplicate efforts, and
iv. Minimize inventory levels.
2. Minimize supply chain expenses.
3. Coordinate on value creation for their customers.
4. Meet the customers’ expectations on a regular basis.
5. Match expectations of higher product variety, customized goods, and off-season availability of inventory.
6. Leverage inventory as a shared resource.
7. Utilise the distributed order management technology to complete orders.
8. Contribute to the financial success of the organisation.
9. Drive competitive benefit and shareholder value by using the supply chain to:
i. Improve differentiation,
ii. Increase sales, and
iii. Penetrate new markets.
The Supply Chain concept is central in SAP S/4HANA: the chain from the original supplier to the final consumer must be managed. By bringing optimum co-ordination to the flow of information, the flow of goods and the cash flow, a maximum customer response is achieved at minimum cost according to SAP. It is possible for a customer, to gain information from the Internet regarding the products of a company, to adapt your own products accordingly and to place an order. This order then automatically ends up in SAP S/4HANA; where necessary, this package automatically generates orders to suppliers (multi-company planning) and even initiates the necessary processes within the organization of a company. In this way, open systems can be linked to each other and transactions extended over various individual companies. The Supply Chain comprises all activities that have to do with the flow of goods and the transformations they may undergo, all the way from raw materials through to the end user, complete with the associated information flows. Supply Chain Management (SCM) is therefore the control and integration of these activities by making use of all kinds of cross connections and networks to achieve a significant competitive advantage. The chain goes upstream in a supplier network and downstream in a distribution network (customers). The supplier network consists of all the companies that provide an input in any way whatsoever; these inputs could be physical raw materials, but they could also be information, for instance. In the case of the automobile industry, this chain would represent a supplier network of thousands of companies supplying goods ranging from steel and plastics, but also including complete gearboxes, brake systems, car radios and similar. Even the production of these gearboxes etc. is part of the supply chain. Some authors say that when looking for the start of a supply chain you always come back to Mother Earth. The main point, however, is that each supply chain consists of a (generally large) series of linked suppliers and customers; each customer becomes a supplier in the next link of the supply chain until the product reaches the end user.
SAP Business One is business management software (ERP) designed for small and medium-sized enterprises, sold by the German company SAP SE. As an ERP solution, it aims to automate key business functions in financials, operations, and human resources. SAP Business One is arranged into 15 functional modules, covering the typical functions in a business organization. The most widely used modules are Financials, Sales Opportunities, Sales – A/R, Purchasing A/P, Business Partners, Banking and Inventory:
1. Administration, where setup of the various core settings in the application are done
2. CRM, where common sales employee tasks link to the other modules (NB: The module is purely here for usability and offer no new features of its own) (only SAP 9.3 and higher)
3. Financials, where definition of Chart of Account are set up and the core Journal Entries can be created
4. Opportunities, where Lead generation are used to keep track of potential Sales and Purchases
5. Sales - A/R, where the sales flow (Quotation > Order > Delivery > AR Invoice) are managed
6. Purchasing - A/P, where the purchase flow (Quotation > Order > GRPO > AP Invoice) are managed
7. Business Partners, where master data of Leads, Customer and Supplier are maintained
8. Banking, where payment of Incoming (sales) and Outgoing (purchase) payments are created
9. Inventory, where master data of goods to be sold/purchased are maintained and their quantity/value in warehouses are tracked
10. Resources, where master data of resources (machines and people) to be used in production are defined (capacity and planning) (only SAP 9.1 and higher)
11. Production, where Bill of Materials master data are maintained, and Production orders are created
12. Project Management, where you define projects (what you do when) (only SAP 9.2 and higher)
13. Material Requirements Planning (MRP), where forecasts of needed items in sales/production are defined in order to make purchase order recommendations
14. Service, where management of service contracts are maintained, and service calls are created
15. Human Resources, where employee master data (names, contract information, roles, etc.) are maintained
Each module handled specific business tasks on its own but is linked to the other modules where applicable.
It can thus be said that SAP Business One may not be of a significant help when it comes to SCM.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
