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Do You have a Reactive or Proactive SAP Driven Supply Chain?

513209389Using your SAP system to its full potential is a daunting challenge for any company. SAP offers an almost infinite amount of tools to use and it is a challenge to choose the best ones for your company. An even greater challenge is to have users embrace these new tools, understand them and use them effectively. In other words, implementing a new IT tool is one thing; it’s another challenge to create a culture that uses innovation, creativity and discipline to use these new tools effectively. It’s like my IPhone. I have downloaded many apps of which I estimate 70% I have deleted because they did not make me proactive, more productive, more Zen or whatever I was searching for.  Too many choices! And hence the question – How are you continuously improving your Supply Chain?

When I spoke at Supply Chain conferences in Las Vegas and Orlando I was as much interested in learning from the participants as I was presenting ideas. A few recurring themes came out of speaking to the participants.

  • In some fortune 500 companies, each time a new VP was hired within the Supply Chain ecosystem they brought their own technology ideas. This created a spaghetti mess of intertwined different IT systems which only created huge inefficiencies across the company.
  • Many executives did not have a clue on how to monitor an entire Supply Chain using standard SAP tools and were happy to learn how.

Those are only two examples of why people, business processes, and IT need to merge together and create a better and more proactive method to monitor and improve a SAP driven supply chain. There are many more.

One of my biggest clients was the United States Navy and they needed advice on how to reduce their Supply Chain costs, especially on big ticket items that remained in Inventory and went obsolete. I reviewed a government audit that detailed supply chain costs and included recommendations to the Secretary of Defense. I reviewed the entire planning cycle of the Navy. The United States Navy is an interesting client as they made it clear to me that they needed to be “war time ready” and that the Pentagon would not accept a few of my recommendations. Each industry or client has their own supply chain challenges and the Navy certainly had theirs.

After multiple recommendations the one recommendation the Navy took and ran with was to monitor their Supply Chain exception messages more closely using MD04 and to have ALL Buyers and Planners use this tool in a disciplined manner. MD04 is your best SAP Supply Chain monitoring tool, yet over and over I see clients not using it to its greatest potential. I’ve written about it extensively so let me give you a refresher.

MD04 supplies Supply chain alerts to ALL your buyers and planners on;

  1. Master data issues
  2. BOM (Bill of Material) alerts
  3. Lead time alerts
  4. Shortages
  5. Safety Stock shortages
  6. Overages
  7. Excess stock
  8. Cancelations
  9. Stock coverage
  10. And about 30 more!

MD04 gives your planners and buyers the tools to make informed decisions (the best companies drive decision making down to the lowest levels). You don’t want your executives to have to constantly make decisions on day to day problems or activities.

So, there you have it. The best tool to proactively monitor your SAP driven Supply Chain is MD04. Are you using it effectively?

Combine MD04 with using Standard SAP reporting across the Supply chain and you will have clear data and a real time Supply Chain tool to continuously monitor and improve critical supply chain areas.

For more information on MD04 and how to extract clean data from across your SAP supply chain see the article

“A Simple Method To Efficiently Improve a SAP Driven Supply Chain”

Terry Vermeylen is hell bent on rapidly transforming your business into a World Class Operation by major transformation or by eliminating one bad habit at a time.

Terry Vermeylen brings 30+ years of experience in SAP and Supply Chain Process improvement. As an SAP professional and Supply Chain Architect he has worked and consulted for some of the world’s largest and most successful manufacturing companies focusing primarily on the Aerospace and Pharmaceutical industries as well as the US Military.

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