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Supply Chain Management (SCM) :Techno-functional Guide

Posted on July 25th, 2008 by Sanjit Anand | Print This Post | Email This Post
SCM Certification Program Certified Supply Chain Professional Accelerate your career today. www.apics.org/cscp
Siemens answers: The digital factory Answers for industry. www.siemens.com/answers
JD Edwards Global Rollout Run a single JD Edwards instance across the world. www.systime.net/jdedwards
Read this:
KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An Overview

SCM Subsystem
This article is an easy guide for Techno-functional consultant to understand SCM from Implementation as well as
Oracle Application product Prospective.Lets start the topic with some of high points of earlier post .
As mention in earlier post a Supply Chain is a network of retailers, distributors, transporters, storage
facilities and suppliers that participate in the sale, delivery and production of a particular product.
Make a note a supply chain is product specific, not company specific
Supply chain management (SCM) is a systematic approach to manage the entire flow of information,
materials, and services from raw material suppliers through factories and warehouses to the end customer.
4 of 19 2/24/2011 11:44 AM
Moreover , SCM involves the flows of material, information and finance in a network consisting of
customers,suppliers, manufacturers, and distributors.
You should be clear with Flow that SCM can manage :
The flow of actual
materials, the top middle
bars
From suppliers :
flows of raw
materials,
intermediate
products, finished
goods
Reverse material
flows : returns,
repairs, servicing, recycling, disposal
and the information flows
From suppliers : manufacturing capacity, delivery schedules, promotions they have going
Reverse flows : sales, orders, inventory, quality, promotions
And finally, there are financial flows:
From suppliers: Credits, consignment, payment terms, invoice
Reverse Flows : payments, consignment
Supply Chain Management is the management of the entire value-added chain, from the supplier to
manufacturer right through to the retailer and the final customer.
SCM has three primary goals: Reduce inventory, increase the transaction speed by exchanging data in
real-time, and increase sales by implementing customer requirements more efficiently
The need for SCM is because effective Supply Chain Mgt. is the next logical step towards increased profits
and market share.
Supply Chain Management (SCM) in line manager prospective is "let's-keep-things-moving-efficiently".
Read the rest of this entry »
Inventory Optimization Multi-Echelon Optimization - Safety Stock, Cycle Stock and Pre-Build www.LLamasoft.com/Technology
Manufacturers From China Inquire for Lower Prices in China Contact Quality Manufacturers Now! www.GlobalMarket.com
Top 50 ERP & MRP Systems Get Free ERP Evaluation Reports for Software Selections & Comparisons! ERP.SoftwareResearchTools.c
Posted in Functional, Oracle Manufacturing | 2 Comments »
OPM API’s
Posted on February 14th, 2008 by Sanjit Anand | Print This Post | Email This Post
As usual APIs facilitate integration with complementary third party , in-house developed, or legacy applications.
These APIs are standard in Oracle Process Manufacturing in various releases.
The benefits of OPM APIs are same usual:
Automate data collection from plant devices

Reduce custom interface code
Provide easier software upgrades
Allow connection to legacy systems
Eliminate manual data entry and errors
5 of 19 2/24/2011 11:44 AM
So here are the List of APIs for Integration in OPM (Adopted)
Production / POC
Start Resource Usage
End Resource Usage
Close Batch
Cancel Batch
Release, Certify, and Close Step
Post Resource Transaction
Incremental Resource Transaction
Timed Resource Transaction
Costing
Item Cost
Resource Cost
Allocation Definition
Burden Details
Formula
Create Formula
Insert Ingredients, (By)Products
Create Formula Usage Rules
Inventory
Create Item
Create Lot
Create Item/Lot UOM Conversion
Create, Adjust, or Move Inventory
Change Lot Status or QC Grade
Quality
Assays
Specifications
Samples
Sample Labels
Results
You can see the more details for API's and underline API name either document Part No# A83748-01 or you can
check in the responsibility IREP
Posted in OPM | 1 Comment »
What are OPM Products ..

Obvious question was asked by yet another reader after this post?
"What are the modules that come under the umbrella of OPM ? "
Th answer is OPM includes OPM Process Planning, Product Development(which includes

Formula,Recipe,Quality), Production, Financials(Costing,MAC), Logistics, Regulatory Management etc. These are
products which come under this umbrella..
OPM Cost Management

OPM Formula Management
OPM Intelligence
6 of 19 2/24/2011 11:44 AM
OPM Inventory Management

OPM Laboratory Management
OPM Master Production Scheduling
OPM Material Requirements Planning
OPM Production Management
OPM Purchasing Management
OPM Quality Management
OPM Capacity
OPM Sales Management
Oracle Financial
Is there any difference from Oracle Discrete Manufacturing?
Yes, there is ..If you came from Discrete manufacturing background, these are one -to-one mapping between
modules.
.. OPM history
The history of Oracle OPM is one decade old, This is worth to know about OPM Life Cycle.
Next would like to provide some more information for OPM API's availability....
Posted in OPM | 1 Comment »
ERP Options for “Process Related Industries” -Aberdeen Report
7 of 19 2/24/2011 11:44 AM
Aberdeen Group, has recently published one report for "ERP Options for Process Related Industries ", Here is the
link for free report.
ERP Options for Process Related Industries by Cindy Jutras
What you should know about Oracle OPM products
Oracle OPM designed exclusively for catering the business need for process manufacturers industry
like:
Consumer Packaged Goods

Food, Beverage, Health and Beauty, Household Products
Industrial Products
Chemical, Pharmaceutical, Petroleum, Metals, Mining, Paper and Glass
The difference between Discrete and Process manufacturing can be best understood in my previous
post.
Oracle OPM product Strengths
For those who are very new or not aware to Oracle OPM product, here are some of high points of
Operational Functionality that product offered.Moreover there is significant changes has been seen in
age of internet that has re-defined the operation of the supply chain(SCM) thus Oracle OPM Products
too.
Please Check with Oracle OPM Page, to see what are the recent changes has been incorporated.
based out of my exposure very long time back, these are the functionlity that product had.
Lot Traceability :In this some features like Lot/Sub lot,Forward/Backward Genealogy,Status Control
,Grade Control,Lot Expiration,Allocation for Shelf Days
Multiple Formulas (Bills) :These are typically used for formulas for production, costing planning,
MSDS,Effectivities By Date for Seasonality,Effectivities by Quantity,Scaling,Alternate Routings,
Scrap factors and theoretical yield
Support for A and V type Formulas : All three kind of formula like well suited here:
V Bills are constructive- Multiple ingredients one product
A Bills are destructive- One ingredient, multiple products
A Bills support co-products and- by-products
Ingredient Substitutions
The features like mass ingredient substitutions for formulas
Designed for ingredient substitutions in manufacturing orders (batches)
Manufacturing variances for substitutions tracked and reported.
Dual UOMs functionlity
Item specific UOMs
Count to Mass
Count to Volume
Mass to Volume
User defined UOM types
Lot specific UOMs
Dual UOM Types
Fixed
Defaulted with tolerance
No relation
Uses
8 of 19 2/24/2011 11:44 AM
Sell by count, invoice by weight

Dry pounds, wet pounds
% solids, % moisture
Specification Matching Functionlity
Some of the great features like
QC Specs and Results : This may be based out of vendor,customer,plant or by lot
There was yet another feature for customer spec matching.
Regulatory Compliance
Material Safety Data Sheets (MSDS) are configurable, also formulas for MSDS
Other features are flexible Costing, which can be either processIf Costing (Standard,Actual) or
Organization Level basis (Warehouse,Item)
Related article
Discrete & Process manufacturing in ERP ?

KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An Overview
11i EBS and Food Industry
Posted in OPM | 2 Comments »
SCM Subsystem
Posted on November 15th, 2007 by Sanjit Anand | Print This Post | Email This Post
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:
Typically A SCM consists of these sub-systems can be categorize and consist of:
9 of 19 2/24/2011 11:44 AM
Demand 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.
Distribution 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.
Transport 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.
Warehouse 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.
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.
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.
Posted in EBS Suite, Functional, Oracle Manufacturing | No Comments »
KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An

Overview
This is one of the basic areas from management books. In fact lot of people have requested some more information
on SCM, OPM and other manufacturing area. therefore,I take this opportunity, as this is one of my favorite topic,
as I started my first job in PPC (Production Planning &Control) department of a big steel company a decades ago,
so I hope I will surly help in giving a clear picture of SCM. Let's start with basic and gradually will move into ERP
arena:
SCM is defined as combination of art and science that goes into improving the way your company find the raw
components that needs to make a product or services and deliver it to customer. In Business word this art and
science become functions that an organization undertake.
If you are IT guys you can understood SCM as:
10 of 19 2/24/2011 11:44 AM
Systems that support manufacturing managers in making decisions that 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.
In principle and reality, both inwards logistics operations to acquire materials to make products and outwards
logistics operations shipping finished goods to final customers are monitored.
WHAT EXACTLY IS SUPPLY CHAIN MANAGEMENT OR WHAT IS BASIC COMPONENT OF

SCM?
As per Supply-Chain Operations Reference-model (SCORÃ‚Ã‚ÂÂ®) which has been developed by Supply-Chain
Council. This model organized and focused on the five primary management
1. PLAN
2. SOURCE
3. MAKE
4. DELIVER
5. RETURN
1. Plan: This is vital part of SCM philosophy, where the companies normally need to make strategy
for managing all the resource that go towards fulfilling the customer demand for the product and
services that they offers. A big piece of planning is developing a set of matrices to monitor the Supply
chain so that it would be efficient, cost effective and deliver high quality and value to the customer.
2. Source: It means processes that procure goods and services to meet planned or actual demand. This
part of SCM consists of selecting right suppliers that will deliver the good and services that need to
create your product. Developing a set of pricing, delivery and payment process with supplier is
important. Also this will also take care of managing the inventory of goods, and services you receive
from your suppliers, including receiving shipping, verifying them, transferring them into various
facilities and authorizing supplier payment.
3. Make: This is basically a step where your company starts fulfilling the request or BUILT for
products into finished state to meet planned or actual demand. Schedule activity necessary for
production, testing, packaging and preparation for delivery.
4. Deliver: This is also called Logistic Process. This is the processes that provide finished goods and
services to meet planned or actual demand, typically including order management, transportation
management, and distribution management.
5. Return - This is real pain of SCM model, which defined as processes associated with returning or
receiving returned products for any reason.
Typical model can be best described as:
11 of 19 2/24/2011 11:44 AM
WHO IS THE STAKEHOLDER OF SUPPLY CHAIN
These are considered as stake holder of SCM:
Customers
Your Company
Design Partners
Material Suppliers
Contract Manufacturers
Logistic Providers
WHAT ARE DRIVERS OF THE SUPPLY CHAIN?
These are the main drivers :
Production
Inventory
Location
Transportation
Information
1. Production
This driver addressing these questions: what products does the market want? How much of which
products should be produced and by when?
This activity includes the creation of master production schedules that take into account plant
capacities, workload balancing, quality control, and equipment maintenance.
2. Inventory
This driver addressing these questions: What inventory should be stocked at each stage in a supply
chain? How much inventory should be held as raw materials, semi finished, or finished goods?
The primary purpose of inventory is to act as a buffer against uncertainty in the supply chain.
3. Location
This driver addressing these questions: Where should facilities for production and inventory storage be
located? Where are the most cost efficient locations for production and for storage of inventory?
Should existing facilities be used or new ones built?
Once these decisions are made they determine the possible paths available for product to flow through
for delivery to the final consumer.
12 of 19 2/24/2011 11:44 AM
4. Transportation
This driver addressing these questions: How should inventory be moved from one supply chain
location to another? Air freight and truck delivery are generally fast and reliable but they are
expensive. Shipping by sea or rail is much less expensive but usually involves longer transit times and
more uncertainty.
5. Information
This driver addressing these questions: How much data should be collected and how much information
should be shared?
Timely and accurate information holds the promise of better coordination and better decision making.
With good information, people can make effective decisions about what to produce and how much,
about where to locate inventory and how best to transport it.
GET FAMILIAR WITH TOP 10 TERMS, DEFINITIONS AND TERMINOLOGY IN SCM
Master Demand Schedule - MDS
The MDS is a consolidation of demand by product and time bucket
Master Production Schedule- MPS
The MPS is a statement of supply required to meet the demand for the items contained in the MDS.
The master production schedule defines the anticipated build schedule for all products. The master
production schedule also provides the basis for order promising (ATP) function
Material Requirements Plan-MRP
The Material requirements planning (MRP) calculates net requirements from gross requirements by
evaluating:
The master schedule

Bills of material
Scheduled receipts
On-hand inventory balances
Lead times
Order modifiers
Advanced Supply Chain Plan- ASCP
Constrained Based and optimized version of MRP
Planned Order
Automatically suggested action from planning engine
Consumption
The process of "relieving" the forecast to prevent double counting of demand
Drop Ship
Having an order ship directly from the vendor to the customer without physically being in your
inventory.
Vendor Managed Inventory- VMI
13 of 19 2/24/2011 11:44 AM
The process of giving the vendor the authority and visibility to determine what your inventory should
be
Customer Owned Inventory- COI
Where you are managing the customers inventory on your premises and supply as required
Work Order/Sales Order
The request that you received from the customer for fulfilling there demand.
SIMPLE PLANNING CYCLE WITHIN AN ORGANIZATION
A typical planning cycle would start by loading the sales orders, forecast and other demand such internal orders
into the master demand schedule (MDS). That demand statement would then be used as the schedule that drives
the Master Production Schedule (MPS) . Take a note in regular MRP implementations the MPS is used as the
schedule for ATP. Once the MPS is reviewed and updated is used as the schedule to drive the MRP process. The
result of the MRP process is planned orders and exception messages. When released from MRP the planned orders
for "buy" items become requisitions or purchase orders in the purchasing module and the "make" items become
discrete jobs in the Work In Process Module. Once the finished goods are received into inventory it is shipped to
satisfy customer orders.
Scenario I :Sales Order - Forecast Planning Cycle
This is the scenario where normally we are

building to stock and satisfying sales order
demand from stock. Here you will see the
difference as planned orders are released to
become purchase requisitions for components
and work orders for sub assemblies and
finished goods. The finished goods are then
shipped to satisfy the sales orders.
14 of 19 2/24/2011 11:44 AM
Scenario II : Planning - Procurement Cycle
In the Planning-Procurement cycle we normally

start where the first part of the planning cycle is
complete and we have a planned order for a buy
item from MRP. The planned order is released
and becomes a requisition or purchase order in
the purchasing module. A purchase order is then
created from the requisition and sent to the
vendor. The vendor would supply the materials.
The materials would be received into inventory
and the purchase order would be closed.
Scenario III :Planning - Drop Ship Cycle
In the Drop Ship cycle the process is as follows:
A sales order is received from the customer.

After the sales order is entered a process is run that creates a purchase order that matches the sales orders
The item, quantity and required date information on purchase order matches that information on the sales
order.
The ship to address on the purchase order is the ship to address of the customer.
The vendor ships the product directly to your customer. Once the vendor ships the product you receive" the
purchase order and that creates the shipping transaction to satisfy the sales order.
Matching accounting transactions complete the process
You can also see technical details for drop ship cycle in my earlier post.
Scenario IV :Planning - WIP Cycle
In the Work In Process cycle after the planning cycle is complete a planned order is released to create a discrete
job. Material/components is issued the job or back flushed from inventory. The job is completed from Work In
Process to Inventory.
15 of 19 2/24/2011 11:44 AM
Scenario V : Planning - Outside Processing Cycle
With Outside Processing you could be buying a service, an item or capacity from an outside vendor. The setup for
each of these scenarios will be described in the training sessions to follow, however they all follow a similar
process. A routing with an outside processing operation is setup.
After the planning cycle is complete a planned order is released to create a discrete job. Once the Discrete job is
moved to a outside processing operation, a purchase requisition is triggered. The requisition is imported to
Purchasing and a purchase order is created. The details of the discrete job such as job number, assembly number
and quantity is tied to the purchase order. The purchase order is sent to the vendor. When the purchase order is
received its destination will be shop floor and the assembly will be returned to the next operation on the work
order.
This make an end of this discussion. In Next post we will see what are the different subsystem SCM will have and
what are the modules which comes under SCM Implementation. Any comment is welcome
Posted in EBS Suite, Functional, Oracle Manufacturing | 27 Comments »
Flow ,Discrete & Process manufacturing in ERP ?

This is a very basic question for ERP consultants , what is basic difference into two manufacturing operation :
discrete manufacturing and process manufacturing . Lets redefined and understand in simple words:
As we know, in ERP prospective manufacturing operation can be broadly classified into two major category:
Flow manufacturing
Discrete manufacturing
Process manufacturing
Discrete Manufacturing
Discrete manufacturing is distinguished by the
16 of 19 2/24/2011 11:44 AM
production of distinct items that use bills of

material and routings to determine costs and
lead times.
Examples: Automobile manufacturing,

computer manufacturing, dishwasher and
washing machine manufacturing, etc .
Typically they follows either a Product, Process or a Combination Layout these layouts can be
understood like:
Product Layout - Processes come to the product . typical example are Ship Building, Car
Assembly Line, PC's, etc.
Process Layout - Products go to Process areas Typical Example are Cabinets and Casings,
Sub-assemblies, Rubber Mixing, etc.
Is normally a Product that is "Built Up" from components or sub-assemblies.
A note with Oracle Product

Discrete manufacturing is Oracle Applications method to handle the unique problems in manufacturing equipment,
like electronics, medical devices or a complicated assembly like the space shuttle as indicated above.
Discrete manufacturing is based on piece parts that are assembled or machined to make larger assemblies.
Oracle Discrete Manufacturing has a great deal of functionality to manage the Bills of Materials, Routings and
Engineering changes that are required to adequately track assembly and cost the finished product.
Flow Manufacturing
Flow manufacturing is also called Lean Manufacturing or JIT(Just-In-Time) and uses the principles of demand
flow manufacturing to produce product is required, for customer orders, quickly and to meet the demand exactly
on-time.
Usually, in order to use Flow a company needs to have production facilities that subscribe to the principals of Lean
Manufacturing. It is necessary to design production facilities so that production lines, resources, machines, and
labor are making only what is needed for immediate customer orders.
Process Manufacturing
Process manufacturing is distinguished by a production

approach that has minimal interruptions in actual processing
in any one production run, or between production runs of
similar products. This approach produces multiple unique
products in relatively small batches flowing through
different production operations throughout the factory.
They typically follows a Process Layout.
They are normally producing a Product that is

"Homogeneous" and equally divided for the convenience of packaging.
Typical examples are Food, pharmaceutical and other batched-based manufacturers such as refineries, wineries,
etc .
A Note with Oracle Process Manufacturing

The OPM capabilities allow for multiple units of measure because the flexibility in batch production is required in
process industries.
17 of 19 2/24/2011 11:44 AM
Process manufacturing is used at companies that make products that use formulas, receipts and/or have
co-products or by products. Typical users of OPM are manufactures of food products or chemicals that have
complex internal processes and need a high level of control.
The OPM capabilities allow for multiple units of measure because the flexibility in batch production is required in
process industries.
What makes process manufacturing different from discrete?
Process manufacturing uses formulations or recipes. A discrete manufacturer uses Bills of Materials
(BOMs). A discrete manufacturer assembles along a routing, whereas a process manufacturer blends
in a batch.Apart from these other difference with other factors are summurized as:
Which come under which category ?
Posted in Beginner, Oracle Manufacturing | 12 Comments »
18 of 19 2/24/2011 11:44 AM
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Odyssey of an OracleApps Consultant

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Understanding “GL Program Optimizer”

Total Page View

Supply Chain Management (SCM) :Techno-functional Guide

KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An Overview

Read the rest of this entry »

Posted in Functional, Oracle Manufacturing | 2 Comments »

The benefits of OPM APIs are same usual:

Automate data collection from plant devices

So here are the List of APIs for Integration in OPM (Adopted)

Posted in OPM | 1 Comment »

What are OPM Products ..

Th answer is OPM includes OPM Process Planning, Product Development(which includes

OPM Cost Management

OPM Inventory Management

Is there any difference from Oracle Discrete Manufacturing?

Posted in OPM | 1 Comment »

ERP Options for “Process Related Industries” -Aberdeen Report

ERP Options for Process Related Industries by Cindy Jutras

What you should know about Oracle OPM products

Consumer Packaged Goods

Oracle OPM product Strengths

Sell by count, invoice by weight

Discrete & Process manufacturing in ERP ?

Posted in OPM | 2 Comments »

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

Distribution Resources Planning (DRP)

Transport Management Systems (TMS)

Warehouse Management Systems (WMS)

Supplier Relationship Management (SRM)

Component Supplier Management (CSM)

Posted in EBS Suite, Functional, Oracle Manufacturing | No Comments »

KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An

If you are IT guys you can understood SCM as:

WHAT EXACTLY IS SUPPLY CHAIN MANAGEMENT OR WHAT IS BASIC COMPONENT OF

Typical model can be best described as:

WHO IS THE STAKEHOLDER OF SUPPLY CHAIN

These are considered as stake holder of SCM:

WHAT ARE DRIVERS OF THE SUPPLY CHAIN?

These are the main drivers :

GET FAMILIAR WITH TOP 10 TERMS, DEFINITIONS AND TERMINOLOGY IN SCM

Master Demand Schedule - MDS

The MDS is a consolidation of demand by product and time bucket

Master Production Schedule- MPS

Material Requirements Plan-MRP

The master schedule

Advanced Supply Chain Plan- ASCP

Constrained Based and optimized version of MRP

Automatically suggested action from planning engine

The process of "relieving" the forecast to prevent double counting of demand

Vendor Managed Inventory- VMI

Customer Owned Inventory- COI

Work Order/Sales Order

SIMPLE PLANNING CYCLE WITHIN AN ORGANIZATION

Scenario I :Sales Order - Forecast Planning Cycle

This is the scenario where normally we are

Scenario II : Planning - Procurement Cycle

In the Planning-Procurement cycle we normally

Scenario III :Planning - Drop Ship Cycle

In the Drop Ship cycle the process is as follows: