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SAP SCM Customer & Vendor Management Features and Benefits

Updated May 18, 2018

The popular SAP enhancement package 4 that offers adequate support for SAP ERP 6.0’s support package 9 (relating to SCM), the ‘Customer and Vendor Master Data Integration’ sub module is a smart way of addressing various business functions. It allows users to extend the features of the outbound CIF interface to effectively transfer certain attributes of vendor and customer data from a pre-installed ERP system to related SAP Supply Chain Management (SCM) components.

Vendor Master Management - one of the most essential and critical parts of procurement as well as accounts payable function, often creates inefficiencies in business processes and makes the platform for a leaner supply chain. Failures in system controls, because of unclean, ambiguous or redundant data in the vendor master, often results in erroneous and duplicate payments, delays in check realization, missed potential discounts, un-applied/ misapplied credits, and the reporting of errors for tax as well as fraud. This makes it important to maintain a robust vendor master so that the presence of a lean supply chain comes into force in an organization.

This SAP enabled business function is helpful in implementing an integrated and result-oriented vendor-managed inventory system in SAP APO and SAP ERP environments, or standard/ consigned processes. Vendor-managed inventory allows vendors to assess replenishment requirements for customers and offers adequate information on the replenishing of stock/ materials at customers’ site. If at all VMI is linked with customer consignment, then the concerned vendor manages and owns the said stock until a customer withdraws materials for consumption. SAP Customer & Vendor Management tools also allow the parallel use of a non-consigned/consigned scenario with newer functions.

Features of SAP Customer & Vendor Management

These new functions and features form an integral part of Customer & Vendor Management:

For parallel usage of a consigned as well as non-consigned VMI processes, a group of TLB shipments (in the SAP APO) needs to be executed before publishing the same to SAP ERP.

After activating this specific business function, users are able to automatically create reliable ship-to location products in the SAP APO (Advanced Planner and Optimizer); this is via CIF which is based on the customer master data details in SAP ERP.

If the stock partner (special), who is defined in customer master data, happens to be a third party logistics provider, then the system updates the data for consignment stock at the related customer location via CIF in SAP APO.

  • Shipment split:
  • Automatic ATP checks of TLB shipments:

    Automatic ATP checks of TLB shipments in the SAP ERP system can skillfully execute ATP checks after the TLB shipments have been published from SAP APO, and the relevant sales orders have been saved.

  • Improved integration of Master Data:
  • Third Party Scenario for Logistic Providers:

Significant Benefits of SAP Customer & Vendor Management

  • Improved visibility: Because of the centralized features of these ERP (Enterprise Resource Planning) systems, users can easily track inventory levels, inventory-in-transit, as well as future consignments that are yet to be received. Helping organizations to gain greater visibility and control their overall working capital requirements to greater degrees, this enhanced visibility empowers the management to make quick decisions for pursuing opportunities and framing their strategies in better ways.
  • Reduced operating costs: Along with lower operating costs, reduced inventory control and marketing costs, non-duplication of information, more value-added tasks and increased margins, ERP SCM Customer & Vendor Management tools pave the way for much lower production costs as well.
  • Standardized business processes: Herein, users get immediate and easy access to standardized processes that are dependent on best-business practices. This process consistency permits consolidated views across distributed enterprises and drives continuous improvements, streamlines operations, and generates a healthy synergy within departments and related functions.
  • Improved compliance: With this SAP sub-module in place, organizations can readily enforce compliance to diverse regulations like Sarbanes-Oxley or the more industry specific initiatives like 21 CFR part II.

Go for it - you will not be disappointed!