Terms in this set (103)

In this case there were several different components that we were responsible for completing. First, we needed to establish the material master data for our business. Many times this data needs to be entered several times for it to be utilized properly. To do this we needed to establish our raw materials, semi-finished goods, and finished goods. From this point we then were required to create vendors for our items in the system. After we created our vendors we were then able to create purchasing info records. This transaction created a relationship between our material and vendors. It enables SAP to continuously update the information for these relationships. Next, we were able to create purchase orders for our materials needed. This required us to make two separate purchase orders because we were buying our materials from two separate vendors. In this same part of the lab, we recorded a goods receipt in order to identify that the materials were delivered and then verified that the materials were delivered. At this point we then were able to create production data through MRP tabs and the work scheduling tab. Next we set up sales views and pricing for the materials. After setting the prices we were able to create sales orders. Finally we processed our production orders and confirmed our goods receipts from production in order to finish the lab.

MD07 is used to access the stock requirements list. More specifically, you are able to look up information about specific materials. This transaction is useful when identifying the type of stock that is available as well as need for an order. In this transaction you are able to see planned orders as well as production order. Additionally you are able to see the amount of stock that is available. This is an extremely useful resource for planning.
Two important terms in this lab were purchase requisition and purchase order. A purchase requisition is used to notify what the purchasing department needs to buy, in what quantity, and when. A purchase order is a document generated by the buyer and is then sent to the seller in order to create a binding contract. The main difference between these two terms is that one is used to notify a buyer when to purchase materials and the purchase order is the piece of paper that makes it a contractual agreement.
Additionally it is important to distinguish between a purchase requisition and a planned order. A planned order is an MRP request for procurement of a certain quantity at a certain time. The main difference between these two terms is that the planned order utilized MRP and a purchase requisition goes directly to the purchasing department.
Geneva regrettably made a few blunders during Phase I. The Director of Supply Chain Management was selected to be the project manager, despite having literally no prior experience with R/3. When it came time to bring in a team of outside consultants, Geneva hired a firm called Whitman-Hart that neglected to send any personnel with experience on the business aspect; their technical knowledge was exceptionally good but their business sense was lacking. Additionally, despite Geneva's need for extensive customization, the Phase I project manager chose to use an accelerated implementation method (fittingly called ASAP) that was simply too rigid and too cookie-cutter.
In early 1998, Geneva hired a new CIO named Randy Weldon, who had extensive experience with R/3. Weldon gutted the project management team and appointed personnel from all three stakeholder groups: users, IS staff, and consultants. However, Weldon found that certain solutions would not be easy to apply because he had come along too late in the implementation phase to start making drastic changes. He and his IS team leader decided to finish Phase I with Whitman-Hart and ASAP because they had crossed the point of no return.
The new project management team found at the end of Phase I that R/3 had improved the performance of some of their business metrics, which allowed them to streamline and consolidate job roles—they were able to free up a considerable amount of manpower that had traditionally been used for data rekeying and validation, and reemploy it elsewhere in Geneva.
It wasn't until 1998, four years after the originally planned start date, that Phase three actually took off. Verne Evans, director of Supply Chain Management was to be in charge of the R/3 initiative to integrate both the supply and demand side of their business into the SAP system. The problem with their SOP for demand and supply was essentially there lack of any formal one. Most of Geneva's operations were separated from each other and acted independently. There number one goal was remove this independence and integrate all operations together. Once they had created a formal SAP process, which included manual entry of data and teams to analyze that data, they ran into somewhat of a problem. The production planning team occasionally was able to determine the production schedule of the next month one month prior, which essentially made their SOP redundant and time consuming.
SAP is an excellent database system, but that is all that the Geneva team saw it as. The goal of phase three was to integrate phase one (demand) and phase two (supply) in order to forecast an approximate production schedule based on that demand. Geneva's team didn't think SAP as it was had the capability of analyzing this data to create production schedules. SAP was used for data storage, not analysis. However, SAP eventually added the Advanced Purchase Optimizer module, otherwise known as APO. The APO added analytic functions to eh SAP software. This new module, combined with SAP's already existing SOP module, was believed to finally be able to meet Geneva's SOP needs.
A big part of phase 3 was Geneva's ATP, or available to promise. This referred to whether or not Geneva would be able to fulfill customer orders as was originally told to the customer. (citation.) With an accurate production schedule planner using SAP's SOP and APO modules, Geneva believed they would be in better position to inform their customers when to expect their orders, which would vastly improve their ATP business metric.
There were several difficulties of providing services with the existing supply chain model. First, the manufacturers/suppliers/distributors ranged from small to large companies. AirCo at this time was buying goods from hundreds of different suppliers in order to support their needs. Distributors were responsible for being the intermediary for supplying the goods from the manufactures/suppliers to AirCo for both small and large items, which was unnecessary. With the large number of manufacturers/suppliers/distributors there came a large number of contracts to support the wide range of supplies items were needed which had extremely high dollar values. Second, a global catering industry controlled about 50% of the market share. In the regional areas these companies held about 40% of the catering industry. AirCo would be responsible for the additional production cost for each of the meals in addition to the fixed costs they had to pay. There were also cabin clearers that were from a separate company that cleaned the catering items, incurring further costs. Finally, the airlines themselves ranged with dozens of different commercial carriers. There was poor visibility and poor information sharing throughout the supply chain. The only way for them to provide their demand signals was through flight schedules. There was not a single concrete way for these flight schedules to be shared throughout the supply chain. At the time electronic means were relatively expensive so very few companies would receive schedules electronically. These could also range from as little as 15 days to several months to receive, which was difficult in regards to forecasting and determining demand. In order to fill the orders the vendors would often have to carry more inventories in order to meet the schedules with less time. This negatively affected the entire supply chain and the time needed to manufacture goods and their service levels.
Outsourcing involves contracting a certain business process out to a third party who specializes in that particular process. There are both pros and cons to outsourcing, as well as important considerations to take into account before deciding whether or not to outsource. One advantage involves receiving expertise and guidance in a business process you may not be familiar with. By outsourcing, you are delegating a specific business process to third party who specialized in that process, whereas you may not have enough time to deal with it (Benefits of outsourcing). This allows you to focus on your core business processes while you delegate the support processes to some other company. Risk sharing is also another advantage. Outsourcing and delegating business responsibilities allows you to decrease your risk by handing some of it over to the third party; they are just as responsible for that business process as you are (unless your contract specifies otherwise). Other advantages include reducing operational and recruitment costs due to the fact you won't need to hire in house for your business process anymore; that responsibility now belongs to the third party. Finally, one interesting advantage is the time zone advantage. If you outsource overseas, you potentially can have a business functioning twenty-four seven (Benefits of outsourcing).
There are disadvantages as well, though. For example, there could be a lack of customer focus. Third parties outsource companies may be helping many other businesses, so your company may not be its top priority. This increases the risk of hurting your company's service level. Also, it could potentially increase your risk of exposing data to a third party such as payroll.
Outsourcing is an important decision and requires a lot of consideration before executing. Progressive entrepreneurs realize the unstoppable power of outsourcing to handle aspects of their business that are essential but simply don't make sense for them to deal with personally," says David Walsh, entrepreneur and author of Source Control, (Jackson, N). If you are struggling meeting your core business goals, it may be a good time to consider outsourcing. A company must also decide what to outsource Sometimes there are things you don't want to do but they are important to your core business (Jackson, N). Also it is important to find the right contractor and do plenty of research to make sure your third party is aligned with your business goals as well.
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