What are the Different Functions of the SAP SCM Module

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By Shruti Mahendru


The SAP SCM module is one of the key modules from the SAP ERP (Enterprise Resource Planning) software. SCM or Supply Chain Management (SCM) is responsible for looking after the flow of goods or services for the delivery of a product to its end customer. The flow starts with the sourcing of raw materials till the delivery of the final product. This module also integrates the supply chain operations with the organization’s business processes. Lately, there is an increasing demand for SAP SCM professionals who easily implement this module. You can learn about the fundamentals of this module at SAP SCM Training in Gurgaon. Indeed, this training opportunity will open doors to a lot of career options for an exciting future in this area.

Different Functions of SAP SCM Module

The SAP SCM has the following 4 functions. These functions help supply chain process optimization.

  • Collaboration

The SAP SCM module allows collaboration between suppliers, manufacturers, and customers in real-time. This further helps to align the supply/demand parameters and manages inventory. The collaboration ensures that customers are well-informed of the entire process and thus can effectively plan their deliveries. This results in complete customer satisfaction.

  • Planning

With the implementation of the SAP SCM module, there will be a huge amount of data available in the system related to supply chain processes. This data is utilized for preparing operational plans within the system. This will further help in improving the raw material flow and efficiency of resource procurement as well as its proper usage.

  • Coordination

There are different stakeholders in a supply chain process. It is important to coordinate the flow of data between the various business units represented by these stakeholders. SAP Event Management (SAP EM) manages coordination within the SAP SCM module. Events generation takes place due to the execution of business processes across the organization. These events are further available to all business units.

  • Execution

Supply chain execution focuses on everyday operations as per the supply chain planning. It also deals with activities like inventory tracking, order capture, order execution, and scheduling a delivery. If any issues come during execution like a change in order demand or an issue in the chain, you can modify the plan in this function.

List of SAP SCM modules

Advanced Planning and Optimization (SAP APO)

SAP APO provides fully integrated solutions for the planning and execution of supply chain management. It lies at the core position of the supply chain link. It consists of the planning and optimization functions for various business processes. Like Demand Planning, detailed scheduling in Production Planning, Supply Demand Balancing, and Transportation management.

This component includes the following sub-components:

Demand Planning – Develops forecast and market research for products

Supply Network Planning – Make plans for procurement, production, distribution, and replenishment

Production Planning and Detailed Scheduling – Detail Planning for Manufacturing

Forecasting and Replenishment (SAP F&R)

This component allows planning and executing strategies for optimizing inventories with the supply chain. This further results in lower overall inventory levels and hence associated costs.

This component offers the following capabilities:

Demand forecast – Allows causal-based forecast

Replenishment calculation – Look for replenishment levels and plan for connecting stores and distribution centres

Inventory optimization – Check inventory supplier restrictions, safety stock, etc.

Event Management (SAP EM)

SAP Event Management component allows information exchange between supply chain stakeholders in the form of events. The events generation takes place during planning and execution activities. Various business units can monitor these events and further analyze them against their plans. Monitoring of the events and generation of alerts based on event processing allows business units to react quickly in case of issues. Hence, the Event Management (EM) component allows visibility of the entire supply chain process to its constituents.

The SAP EM module allows you to:

Monitor and evaluate business processes by checking for occurring or not occurring events. E.g. Goods issuing event, Product manufactured event, or missing event for Product delivery, etc.

Check for events to inform stakeholders or take corrective actions. Like informing the supplier and business process owner about delays in raw material delivery. Also, trigger a new process for correctly handling the delay.


Today businesses need to improve their supply chain process efficiency to lower costs and increase profitability. Additionally, it also helps to transform the supply chain processes of the business into an automated and effective system. This results in large demand for SAP SCM professionals with lucrative salaries. Obtain SAP SCM Certification to embark on an exciting journey toward becoming a certified SAP professional.

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