Phase I: Strategic Supply Chain Model Paper

Phase I: Strategic Supply Chain Model Paper

The Oklahoma Gas and Electric internal Supply Chain is an important part of the work process in order to keep OGE working efficiently. Inventory in the form of spare parts needed to maintain the internal infrastructure of OGE range from modular LAN jacks to 110 ft. wooden poles. Although in comparison of size of the size of the parts there is a dramatic range in size, each one is important. Supply Chain Management helps decide the need for locations to store the parts, along with the correct amount of inventory. This is the reason that Supply Chain Management is used, to ensure the timely repair of OGE infrastructure. Supply chain management is a critical part of maintaining the correct inventory, at the correct locations that OGE needs.

OGE uses supply chain management to oversee key issues like purchasing, inbound logistics, operations, warehouse management, outbound logistics, and demand management to oversee OGE inventory and stockpiles. Supply chain management defined as the oversight of materials, information, and finances as they move in a process from supplier to OGE and then issued to the technicians and electrical lineman to repair. Supply chain management at OGE involves coordinating and integrating these flows of materials and supplies both within the company and among the vendors that OGE uses. Very rarely does OGE sale inventory directly to the customer, instead uses the inventory of parts to ensure reliability of the delivery of power to the customer. Delivery of electric power is how OGE collects its revenue, this ensures that supply chain management techniques are used , ensuring that the lowest cost methodology is used and passed on to its customers.

OGE uses SAP software to track inventory, vendors, and purchase orders in real time. SAP is a major investment in computer software that OGE uses in supply chain management to track inventory and costs. SAP is a database solution that allows access to the work order information on a company wide basis. The first step in the process of SAP is the Work Order. Work Orders at OGE, at first glance are used to dispatch men and equipment to repair existing services, rebuild old equipment, or construction of new infrastructure. In terms of supply chain management the work, orders allow at an instant for managers to access and track costs. Inventory, checked in and out through the storm room, is tracked. Tracking of inventory in real-time allows managers and CEOs to understand cost of projects instantaneously. Corrective measures and procedures by the OGE management using the SAP database are often used to curtailcosts in the Work Order. SAP tracking of inventory and costs is also a requirement and necessary evil that allows us to report instantly to the State of Oklahoma Corporation Commission. The Oklahoma Corporation Commissions job is to regulate electric utilities in the public interest.

Purchase orders allow OGE to interface with the outside world. This allows the purchase and acquisition of equipment, material, and services that are external to the internal OGE infrastructure and parts system. Vendors often require credit information to ensure that payment for services or goods is guaranteed. The first step in the purchase order process is the vendor must be contacted for either a Return of Merchandise Authorization (RMA) or a quote for services or merchandise required to complete the work order. The next step in the Purchase Order process is to contact the purchasing department and request a purchase order. The purchase order department arranges for credit approvals for vendors as well as issuing the purchase order to the vendor. The requesting internal customer