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25W Wk 04 Supply Organization and SAP PO & GR2

MGT2372 Course Overview

  • Course Code: MGT2372

  • Institution: ALGONQUIN COLLEGE

  • Week: 2025 Week 4

Agenda Overview

  • Topic 1: Supply Organization

    • Relevant Materials: SAP

  • Topic 2: Supply Organization

    • Source: Chapter 3 from the textbook

    • Objective: Understand purchasing and supply organizational management structures to enable purchasing and supply chain success.

Goals of Supply Management

  1. Improve Competitive Position

  2. Provide Continuous Flow

    • Ensure uninterrupted access to materials, supplies, and services.

  3. Minimize Inventory Investment

    • Keep stock levels low to minimize losses.

  4. Maintain Quality

  5. Develop Best-in-Class Suppliers

  6. Standardize Purchases

    • Standardize items, services, and procurement processes.

  7. Purchase at Lowest Total Cost

  8. Achieve Internal Harmony

    • Foster productive internal relationships.

  9. Accomplish Objectives at Low Operating Costs

Organizational Chart

  • Definition: A diagram visually conveying a company's internal structure.

    • Source: Investopedia

Supply Management Organizational Structure Example

  • Medium-Sized Business:

    • Positions:

      • Commodity Manager

      • Purchasing & Materials Analyst

      • Buyers (multiple positions)

      • Director of Procurement

      • Administration & Processes Manager

      • Scheduling and Planning

      • Logistics

      • Inventory Coordinator

      • Shipping & Receiving

      • Transportation & Customs Management

Supply Organizational Structures Options

  • Centralized Organization

  • Decentralized Organization

  • Hybrid Structure

Advantages of Centralization

  • Leverage purchasing volumes

  • Reduce duplication in purchasing efforts

  • Coordination of purchasing strategies

  • Develop specialized expertise

  • Manage company-wide changes effectively

Advantages of Decentralization

  • Enhances speed and responsiveness

  • Better understanding of unique operational requirements

  • Supports new product development

  • Involves ownership of purchasing decisions

SAP Organizational Structure

  • Client:

    • Highest organizational structure with multiple company codes.

  • Company Code:

    • Records economic impacts of logistics processes.

    • Smallest unit for comprehensive financial reporting.

  • Plant:

    • Organizes production and can include distribution centers or service delivery centers.

    • Must belong to one company code.

  • Storage Locations:

    • Plants can be subdivided for better inventory management.

In-Class Activity

  • Suppliers List: Review of suppliers and their offerings.

  • Purchase Orders & Reports: Focus on tracking orders and historical data.

  • Completion Deadline: Tasks must be submitted by the end of the class or by 11:59 PM the night before the next class.

Closing Remarks

  • Thank you for participating!