Refer to James pages
SIPOC for a Supply Chain Director:
Supplier: Raw material providers, equipment vendors
Input: Raw materials, equipment, production schedules, quality standards
Process: Procurement, production planning, logistics, quality control, maintenance, modernization
Output: Finished goods, waste, reports on supplier performance, equipment maintenance records
Customer: Internal customers (e.g. production department), external customers, stakeholders (e.g. shareholders, regulatory bodies)
Note that the SIPOC for a Supply Chain Director may vary depending on the specific company and industry. This is just an example to illustrate how a SIPOC can be created for a supply chain director.
Supply Chain KPI
The main Key Performance Indicators (KPIs) for a supply chain director include:
- Inventory Turnover: A measure of the efficiency of inventory management.
- Lead Time: The time it takes from when an order is placed to when the product is received.
- Order Fulfillment Accuracy: A measure of the accuracy of order fulfillment, including the accuracy of product and quantity.
- Cost of Goods Sold (COGS): The cost of the products sold during a specific period.
- On-Time Delivery: The percentage of deliveries made on the promised delivery date.
- Stock Out Rate: The percentage of orders that cannot be fulfilled because of stock shortages.
- Perfect Order Percentage: The percentage of orders delivered correctly, on time, and with complete documentation.
- Carrier Performance: The performance of carriers in terms of delivery accuracy, delivery speed, and delivery cost.
- Freight Cost as a Percentage of Sales: The cost of freight as a percentage of sales.
- Supplier Performance: The performance of suppliers in terms of delivery accuracy, delivery speed, and quality.
Data in SCM
In supply chain management and optimization, data plays a crucial role in decision-making processes and overall performance improvement. Data helps organizations to identify bottlenecks and inefficiencies in the supply chain, to track the flow of goods and materials, and to monitor key performance indicators (KPIs). This information is used to identify areas for improvement and make informed decisions that can increase efficiency, reduce costs, and improve customer satisfaction.
Data can be used to analyze trends, forecast demand, and optimize inventory levels. It also allows companies to better understand their suppliers, customers, and the overall market conditions that impact the supply chain. Additionally, data can be used to monitor the performance of logistics and transportation providers, and to track the progress of supplier improvement initiatives.
The effective use of data in supply chain management and optimization requires the implementation of technology and systems that can collect, store, and analyze large amounts of information. This may include enterprise resource planning (ERP) systems, transportation management systems (TMS), and supply chain management software. The data gathered through these systems is then used to generate reports and insights that inform strategic decision-making and drive continuous improvement in the supply chain.
What files does the MRP approach consist of?
Material Requirements Planning (MRP) is a vital tool for production management in the industry. It aims to ensure that materials are available for production and that products are ready for delivery to customers. To implement an MRP approach, certain files are essential. Here are the 5 priority files to consider:
Bill of Materials (BOM):
- Contains the list of components needed to produce a finished product.
- Details the quantity of each required component and their hierarchical relationship.
- It’s often structured as a tree, showing the various assembly or mounting steps.
Item File (or master item file):
- Contains information about each item, whether it’s a component, raw material, or finished product.
- Typically includes details such as description, unit cost, size, weight, required storage type, suppliers, etc.
Stock File (or stock registry):
- Contains the current stock quantity for each item or component.
- May also include storage location, desired minimum and maximum stock levels, and reorder point.
Sales Forecast File:
- Contains sales forecasts for each product, often broken down by month or week.
- Forecasts are crucial for determining future production and procurement needs.
Orders File (for production and purchase):
- Contains the ongoing or planned production orders for the plant.
- Details the quantity of each product to produce, start and end production dates, and other relevant information.
- May also include purchase orders for components or raw materials that are not in stock but are necessary for production.
It’s crucial to ensure that these files are regularly updated and synchronized with each other to guarantee the MRP system’s efficiency. Data accuracy and relevance are key to prevent stockouts or overstocks and to ensure resources are used optimally. Effective integration of ERP (Enterprise Resource Planning) systems can greatly facilitate this synchronization.
SAP has several modules that are relevant to Supply Chain Management (SCM) including:
- SAP Material Management (MM)
- SAP Production Planning (PP)
- SAP Sales and Distribution (SD)
- SAP Extended Warehouse Management (EWM)
- SAP Transportation Management (TM)
- SAP Supply Chain Planning (SCP)
- SAP Event Management (EM)
- SAP Global Batch Traceability (GBT)
- SAP Global Available-to-Promise (GATP)
In SAP, several tables are involved in supply chain management (SCM). Some of the main tables include:
- Material Master (MAR)
- Purchase Order (EKKO, EKPO)
- Sales Order (VA01, VBAK, VBAP)
- Stock Overview (MARD, MBEW)
- Delivery (LIKP, LIPS)
- Billing (VBRK, VBRP)
- Production Planning (Routing, Work Center) (AFVC, AFKO, AFVP)
- Material Requirements Planning (MRP) (MD04, MD05, MD07)
- Warehouse Management (LT03, LT06)
- Shipping (VL06O, VL06G)
Roles of Data for a Supply Chain Director
As a Supply Chain Director, data plays a critical role in ensuring the efficient operation of the supply chain. Data provides valuable insights into various aspects of the supply chain, such as inventory levels, production rates, lead times, transportation costs, and supplier performance.
By analyzing this data, a Supply Chain Director can identify opportunities to improve the supply chain’s efficiency, reduce costs, and enhance overall performance. For example, data can help identify the root cause of production delays, allowing the director to implement solutions to minimize them.
Data can also enable better decision-making by providing accurate and timely information. For instance, data on inventory levels can help a Supply Chain Director make informed decisions about when to reorder materials or products, and in what quantities.
Moreover, data can facilitate collaboration with suppliers and customers, enabling a Supply Chain Director to build stronger relationships and negotiate better terms. By sharing data with suppliers, for instance, the director can work together to improve quality and delivery times.
In summary, data is a critical tool for a Supply Chain Director, helping to improve efficiency, reduce costs, enhance collaboration, and support better decision-making.