SAP SCM : the Why, What and How..

So there is/are new term going on in the SAP world which is picking up very fast. These 'New Dimension products' falls in the category of what SAP introduced as Business Suite/ SAP Business Suite. Today I am going to be giving in a brief intro on this new world.

Before moving on to discuss about the SAP Business Suite, let us look at the outline of SAP from R/3-ECC to Business Suite

The R/3 is a 3 tier which represents the
  1. Presentation
  2. Application/Process
  3. Database
The next was the birth of Enterprise edition and ECC ( Enterprise Central Components). Although the functional and Technical components remained the same, there were very few changes between the 3 releases.

The Functional modules includes:
The Technical includes

The above R/3 system is an Execution system or an OLTP system (Online Transaction Processing).

The new dimension products or the Business suite consist of the same Functional and Technical division but the components/modules are completely different

The Functional modules are:

SCM (Supply Chain Module)
SRM (Supply Relationship Management)
CRM (Customer Relationship Management)
PLM (Product Lifecycle Management)
SEM (Strategic Enterprise Management) <4.0

BW/BI (Business Warehouse/Business Intelligence)

As a logistics consultant, my focus will be more on SCM and SRM.

So why SCM?

The ERP/R3 system is an execution system. It is an OLTP system so mostly only processing is carried out there. What this means: In the R/3 system, the Purchase orders are created and Material data is maintained but when it comes to planning and reporting very few activities can be carried out.
To provide a corporate reporting the organization has to implement BW so that the data can be drawn from the infocubes.
To overcome this problem of planning system SAP provided a new solution, SCM.

One of the major limitation in R/3 that lead to SCM is that more amount of data (Many plants, sales org,etc) leads to low performance in the R/3

What does SCM consist of ?

SCM covers
  • APO ( Advanced Planner and Optimizer)
  • ICH/SNC (Inventory Collaboration Hub/Supply Network Collaboration)
  • EM (Event Management)
  • EWM (Extended Warehouse Management)
  • F&R (Forecast and Replenishment)
The technical part remains the same as
BASIS and ABAP ( although few moderation are there)

The APO by itself is subdivided into
  • DP(Demand Planning)
  • SNP (Supply Network Planning)
  • PPDS (Production Planning and Demand Scheduling)
  • GATP ( Global Available-to-Promise)
  • SPP (Service Parts Planning)
  • SPM (Service Parts Maintainence)
Can SCM be implemented without R3?

SCM is a technical planning system so to implement SCM we need is an Execution system to derive the data from for the planning part. The system can be an R/3 (or ECC) or any legacy system which is an OLTP.

Does SCM consist of BW?

Yes SCM comes with a BW (an OLAP/On line Application Processing) to extract data from the R/3 system but this BW is not a full 'implementation'. It cannot be used for corporate reporting purpose. It is only for APO reporting.

Again, this is my observation, if you have more info on SCM please feel free to e-mail or post here..


  1. Hey Vishnu,
    it was very informative and I really enjoyed reading this.
    Thanks for delivering this to us.

  2. Hi Vishnu,

    Thanks for your share.
    I'm interesting in SCM-APO could you update your site with any content of SCM-APO please!
    Any feedback will be appreciate it, thank you