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!