Operations Management in SAP: Value Change Coordination and Flows

This report provides an overview of operations management within the context of SAP, focusing on value chain coordination through the lens of material, information, and funds flows. It discusses the implementation of push and pull principles in the SAP value chain, highlighting how these principles are applied in anticipation of consumer orders and in response to specific customer demands. The report also addresses common operational issues faced by SAP, such as integration challenges, backup and disaster recovery concerns, and security risks, offering potential solutions like strategic IT planning and reliable backup mechanisms. Furthermore, it emphasizes the contribution of operations management to the overall business strategy, including enabling global expansion, enhancing customer service through core competencies, reducing costs by leveraging international locations, and improving the supply chain through better resource procurement.

OPERATIONS
MANAGEMENT

VALUE CHANGE COORDINATION IN
THE SENSE OF THREE FLOWS
 Material Flow: It includes flow of input services such
as software from the service provider to the customers
(Goehring,2015). In a supply chain, the flow of
services is downstream , from the origin to the point of
consumption.
 In the case of service returns , there is an upwards flow
of services from the point of consumption to the point
of origin.
 Information Flow: It comprises of flow of information
and communication amongst the various parties such
as software engineers , vendors and service providers
(Steinru¨cke & Albrecht, 2016).

VALUE CHANGE COORDINATION
IN THE SENSE OF THREE FLOWS
 Funds Flow: It has two aspects. Firstly , from the view
of cost and investments and secondly from the point of
view of flow of funds(Hofmann & Knébel, 2016).
 The funds flow back from the customer through the
other links in the supply chain(retailers, distributors
and service providers).

PUSH OR PULL PRINCIPLES ARE
IMPLEMENTED IN THE VALUE CHAIN
 In the context of SAP, the push principle is initiated with the
implementation in anticipation of the consumer’s order
(Hallam & Contreras,2016).
 With the help of Push system, SAP is able to predict its supply
chain. For example, with the apprehension of change in the
technology , SAP will introduce the changes in its
programming structure in advance.
 In the pull principle , the implementation is initiated due to
the order of the customer .
 While the pull principle is related to Just-In-Time technique ,
which minimizes the stock in hand targeting on last second
deliveries. In the context of SAP, the company creates
suitable software for the clients as and when the demand
arises.

OPERATIONAL ISSUES AND THEIR
POSSIBLE SOLUTIONS IN SAP
 The most common issue faced by SAP is the problem
of integration and back up and disaster recovery issues
(Katsioloudes & Abouhanian, 2016).
 The issue can be resolved through planning and by
having a reliable backup solution and disaster recovery
mechanism (SAP, 2017).
 For managing the security risks, the cost effective
solutions and procedures can prove to be of greater
help.
 For dealing with lack of strategic IT planning, different
infrastructure planning can be implemented.

CONTRIBUTION OF OPERATIONS
MANAGEMENT TO THE BUSINESS
STRATEGY
• It helps the organization to expand itself globally.
• It helps in providing better and efficient services to the
customers by enhancing core competencies(PWC,
2015).
• It helps in reducing the costs as moving to
international locations can save money and time (Koch
& Friis,2015).
• It assists in improving the supply chain. It helps the
managers to procure the inputs better through the
entire spectrum of resources.

REFERENCES
Goehring, U.(2015) Materials Planning with SAP.
Rheinwerk Publishing Incorporated.
Hallam, C.R.A. & Contreras, C.(2016) The Interrelation of
Lean and Green Manufacturing Practices: A Case of Push
or Pull in Implementation. 2016 Proceedings of PICMET
'16: Technology Management for Social Innovation
[online]. Available from:
http://www.picmet.org/db/member/proceedings/2016/dat
a/polopoly_fs/1.3251170.1472157241!/fileserver/file/680
743/filename/16R0187.pdf
on 18th February, 2018.
Hofmann , E. & Knébel , S.(2016) Supply Chain
Differentiation: Background, Concept and Examples.
Journal of Service Science and Management. 2016(9),pp.
160-174.
Katsioloudes, M. & Abouhanian, A. K.(2016) The
Strategic Planning Process: Understanding Strategy in
Global Markets. Taylor & Francis.

REFERENCES
 Koch, C. & Friis, O. (2015) Operations Strategy Development
in Project-based Production –A Political Process Perspective.
Journal of Manufacturing Technology Management. 26(4),
pp. 501 – 514.
 PWC (2015) Make it your business: Engaging with the
Sustainable Development Goals [online]. Available from:
https://www.pwc.com/gx/en/sustainability/SDG/SDG%20Rese
arch_FINAL.pdf
on 18th February, 2018.
 SAP (2017) SAP Quality Issue Management [online].
Available from:
https://help.sap.com/doc/b180fad7594f49758da83d07645c6
3fc/1.0/en-US/loio2574be8d64f44fe497bab0daaf3b9613_25
74be8d64f44fe497bab0daaf3b9613.pdf
on 18th February, 2018.
 Steinrucke, M. & Albrecht, W.(2016) A flow-to-equity
approach to coordinate supply chain network planning and
financial planning with annual cash outflows to an
institutional investor. Business Research. 2016(9),pp.297–