SAP 101: Supply Chain Management (SCM)

What do you need to know about SAP Supply Chain Management? It’s a supply chain software within SAP that integrates business processes to efficiently manage your business supply chain operations. Learn more about what its four features can do for your organization, such as optimizing shipping processes.

As the saying goes, with great power comes great responsibilities. Having a powerful tool such as SAP Supply Chain Management (SCM) is not enough to fully utilize its functions for maximum benefits. The first step is to understand what it is.

SCM is an SAP-integrated, supply chain software that increases business agility to effectively respond to changes in market demands. It allows organizations to plan and execute logistics within supply networks and to perform workflow management. This system can vastly improve overall efficiency and productively streamlines network logistics.

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The Dynamic Features of SAP SCM

The components of SAP SCM are broken into four parts: collaboration, planning, coordination, and execution. These functions can fully optimize your business shipping process to maximize customer satisfaction with less costs to the organization.

  • Collaboration: Connect with suppliers, contract manufacturers, and customers in real time to better align supply and demand, optimize inventory management, improve customer relations, and more
  • Planning: Generates operational plans based on current and relevant data within the system to optimize resourcing efficiency, improve material flow, and supports business decisions at the strategic, tactical, and operational levels
  • Coordination: Synchronize data and information flow between different business units and to all stakeholders across the network to improve communication and production
  • Execution: Ensure the implementation of supply chain plans in the best possible manner to achieve the desired results for meeting customer demands and reducing production quality issues

The Benefits of SAP SCM

With a better understanding of SCM, your business can fully maximize the potential of the program.

  • Increase visibility of the shipping process to help reduce the day’s sales outstanding
  • Effectively manage forecasting and planning in demand and supply process
  • Optimize inventory, order fulfillment and shipping of goods
  • Distribute key information to all stakeholders across the network
  • Improve communication and increase collaboration between business lines to manage supply and demand process
  • Improve production efficiency and reduce production quality issues, therefore reducing cost of goods sold
  • Enforce contract compliance for supply-side and supplier-side requirements
  • Reduce transportation duties and taxes; and increases rebates and incentives

How To Improve Your Organization’s Use of SAP SCM

To fully realize the potential of SAP SCM, equip your employees with the right knowledge and skill sets with training. SAP offers certification and training in its software to increase the return on your SAP investment, such as:

  • Build internal skill sets to support your organization’s digital transformation
  • Ensure project alignment with your strategic goals
  • Greater employee engagement and satisfaction
  • Faster solution deployment
  • Maximize user productivity and streamline business process execution


Optimizing your supply chain process with SAP SCM can transform the way you do business. With functionalities such as production planning, business forecasting, and demand planning, your organization can manage your supply chain operations effectively and efficiently.

We provide ShipERP, the SAP-integrated shipping and compliance solutions for all of your shipping needs. We can assist with warehousing, freight auditing, shipment planning and transportation, compliance, and more. For more information about how ShipERP can help your business or to request a demo of our solutions, contact us here.