SCM Projects with SAP APO

For a long time the focus in logistics projects has been on the optimisation of certain logistic functions – e.g. the optimisation of the transportation and distribution structure – usually with small concern to the adjacent processes and to the complete product portfolio. The supply chain man agement approach differs from this by grouping products with similar properties (from a logistics point of view) to a supply chain and taking all the processes – in SCOR terminology: plan, source, make, deliver – per supply chain into account. Figure 1.1 visualises the different approaches to structure the logistics processes within a company.

The main differentiator for supply chains is the production strategy, that is if a product is created according to a specific customer demand (make to order) or anonymously (make to stock). Other criteria for separate supply chains might be different customer groups or product properties as the shelf life or the value.

The advantage of the supply chain approach is that the processes are examined from the point of view how they contribute to the targets of the supply chain management (e.g. low operating costs, flexibility and responsiveness or delivery performance). Therefore the integration between different logistical functions, for instance sales planning and production planning, is stronger within the focus of the supply chain management approach. In many cases the transparency between different logistical functions and between planning and execution offers already a significant potential for optimisation. The next step is to extend the supply chain approach beyond the limits of a single company and regard the entire value chain from the raw material to the finished product for the consumer. In this area the collaborative processes gain increasing importance.