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SCM Subsystem

Posted on November 15th, 2007 by Sanjit Anand ||Email This Post Email This Post

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In last post we have understood SCM flow. Let’s talk in term of SCM IT requirement. SCM subsystems are important because this is required to support manufacturing managers in making their decisions so that they can optimize the trade off between capital tied up in stocks and inventories, versus the ability to deliver goods at prices and delivery dates agreed with customers.

A typical flow and SCM cycle can be understood as fig below:SCMFlowinERP

Typically A SCM consists of these sub-systems can be categorize and consist of:

f1Demand Management

This is basically co-ordination sales forecasts from all the players, including sales representatives at the point of sale through production to raw material suppliers, so that everyone is working to the same plan, rather than creating unnecessary safety stocks.

f2Distribution Resources Planning (DRP)

This will Keep track of the status of production and procurement of materials for each order, where the goods are located, what transport and warehousing is in use, what stock to keep and when to re-order.

f3Transport Management Systems (TMS)

This kind of subsystem normally keep the information such as :what modes of transport at what cost are available to the shipper; what costs and timings are associated with each route; the order in which to load transport; optimization of multi-segment deliveries; compliance with documentation required for customs and shippers.

f4Warehouse Management Systems (WMS)

These are the systems which are used to optimize the storage and picking of goods in a warehouse, also includes compliance with carrier and customer documentation standards.

f5 Supplier Relationship Management (SRM)

This kind of subsystem keeps the information about suppliers of direct and indirect materials, such as agreed terms of trade, records of status, records of contacts between the enterprise and the various points of contact in suppliers.

f6 Component Supplier Management (CSM)

Management of lists of preferred suppliers and preferred parts; terms of trade such as delivery and price associated with them; rationalization of existing parts to minimize costs by substituting equivalent parts.

I guess, the next question in mind would what are applications which are going to enable if anyone is going to roll out SCM functionality in Oracle EBS. Keep watching this space.

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