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Supply Chain Management (SAP SCM)

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What happen, if your supply chain planning is cutting edge, but your are still not able to quickly and efficiently react to changes in demand and supply or to ensure resources are prioritized to meet business needs.

 

No doubt, changing consumer demand, supply and economic uncertainty are key challenges in business. Being intimate with customers to understand them to the point of predicting  their needs is crucial for success.


Demand Driven Business Planning, where ‘Multi Dimensional planning’ prepares a flexible supply chain based on expected customer and market forecast across time horizons, operations and finance. However plans are only a start, and industry benchmarks have forecast accuracies typically <70% (depending how measured), therefore Demand Networks need the agility to adapt to real customer and market demands in the shorter term.

 

The challenges of operating a global supply chain in a world of increasing demand volatility, channels and complex supply networks are on the increase. Success depends on the ability to plan in faster cycles and re-plan supply across the network quickly and responsively. An increasing supply chain strategy is to not only improve the planning over longer time horizons, but also mitigate inevitable exceptions and volatility through fast and intelligent response and supply orchestration. The focus is in the shorter time horizon, and enabling a real time data driven supply chain.


SAP offers end-to-end solutions enabling advanced business processes for  Response and Supply Orchestration, with proven business value like reduced lead time and improved service levels at lower cost,  enabling higher quote / order conversion rate, as well as reduced stocks levels and work in progress.

  • Response and Supply Management
    SAP Solutions in Response and Supply Management enable companies to re-plan supply, and match supply to demand across the network quickly and responsively. Including the ability to prioritise different demand streams and customers in constrained Omni-channel supply chains
  • Production Planning and Scheduling
    With SAP customers can integrate  planning with scheduling and execution having a consistent view on inventory, capacity, and product data. Schedule resources optimally considering finite capacity and material availability constraints. Gain real time visibility into production and resource status available for alerts and responsive rescheduling.
  • Response Network
    SAP Solutions provide an end-to-end cloud-based offering helping companies to connect with their partners effectively through a shared Network. Companies can engage in innovative joint supply chain initiatives to improve service levels, cycle times and reduce inventories.

 

The bottom line? Supply chains need to be differentiated and offer increasingly high service levels, yet cost is still critical and  it is not competitive to carry excessive inventory, lead time and capacity buffers to protect all risks and exceptions. To manage risk fast responsive agility is needed.

 

 

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Because every second counts and that is true for Supply Chain, too

 

 

 

 

 

 

 

 

 


See you, Volker Wilhelm

Follow us on twitter SCMatSAP


In 1913, Henry Ford introduced our country to a mass production moving assembly line to increase efficiency in the manufacturing of The Model-T, which was an affordable car that offered no personalization, not even a choice of color.  However, contrary to the early 1900’s, in today’s world customization is necessary.  How else would people live without their 20 inch rims, chrome door handles, oversized sun roof, heated steering wheel, and hand painted initials on the side of their cars?


3D printing can take customization to a whole new level, in fact an instantaneous level. Although common customization today is unique to your preferences like picking colors for your sneakers online, you are still limited with your options, not to mention having a higher lead-time for them to be made and then shipped. Imagine getting exactly what you want from the shade of a certain color, all the way down to an extra supported insole for your right foot that is less arched than your left. Or think about automotive manufacturers using 3D printing to provide a cup holder that fits your favorite extra wide coffee mug.


The more materials the more possibilities


With the array of materials being used such as plastic, nylon, stones, metals, wood, and bamboo, the future of 3D printing will be able to produce virtually anything. Homes and buildings will be the creations of 3D printing, which will drastically change manufacturing plants that are currently producing materials to build them. The future of shopping will be going to a department store where a 3D printer will allow you to design your own product from the available material instead of picking from finished products. Medicine is even being created with precise amounts of pill ingredients into colors, shapes, and sizes unique to the patient.

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Another material that 3D printing is capable of using is food. Barilla conducted a contest that called for the best design shape for pasta, which was a rosebud made possible by a 3D printer. Endless marketing opportunities running through your head? In addition, Hershey’s chocolate factory has its very own custom chocolate printer where you can make whatever your sweet tooth desires. Will the massive amount of heart shaped boxed chocolates produced for Valentine’s Day suddenly not make the cut? Richard Howells expands on the possibilities of food being printed in his blog What Can I Print for You Off the Menu Today? 3D Food Printing Could Soon be a Reality.

 

 

 

The impact on supply chains


More supply chains will be make-to-order versus make-to-stock because customers will be picking out exactly what they want. This will result in less inventory required which will therefore translate to less holding costs and lower total cycle times. However, there will be pressures on costs since economies of scale will fade. Another factor that will be effected is the factories because they will most likely have to be smaller and located closer to the end user to keep up with the demand of the customer. In conclusion, we are going to start to see massive changes in the way products are made, sourced, and delivered whether it’s on a large scale such as an office building or as simple as a lollipop.

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At SAP Insider Prague I listened into a session delivered by Tandeep Sandhu from Bombardier, he was talking to us about how Bombardier used SAP PLM and SNC to enable them to release a new line of aircraft for the 100-149 seat market and increase their market share in the process.

 

To give some background, Tandeep began by painting the picture of the company. Bombardier are the 3rd largest aerospace company, they design, build and support both business and commercial aircraft. As expected for a company in this position, they operate on a global scale and employ over 35,000 people.

 

Before embarking on this project, Bombardier outlined the key challenges that would have to be overcome in order to be successful in their bid to enter a new segment of the aircraft market.

  • There was no cross communication between the existing systems.
  • Whatever solution they picked had to run using ECC to fit alongside their current set up
  • A system was needed that could enable the engineering department to trigger a BOM change and manage the knock-on effect that this causes
  • A necessity was to create a seamless process to integrate with their tier 1 supplies, this would enable them to be a ‘paperless’ organisation and be able to manage a JIT delivery process
  • Due to the set-up of the particular industry, engineering own the change management process and the BOM is extremely large

 

After discussions with SAP, a comprehensive solution of PLM and SNC was chosen. Each solution covered all the challenging areas that Bombardier had outlined using various capabilities.

  • Supplier collaboration was possible and a communication platform was created using SNC
  • Paperless document exchange using PLM C folders alongside SNC
  • Visibility of shipments using SNC advanced shipping notification functionality
  • Enhanced inbound process and reduced manual entry of data through goods receipt with barcode scanning

 

Tandeep wrapped the session up nicely by providing us with the key things that should be taken away from his presentation.

  • Trends such as increased global sites and suppliers, more competition and higher customer expectations are driving supply chains to be more efficient
  • Prototyping is crucial in projects introducing new technologies
  • Get hands-on experience as soon as possible
  • Do extensive testing to discover where the issues are with your process and technology as early as possible
  • Avoid customizing the system to a point where it cannot accommodate the future roadmaps
  • Ensure there is enough support from the business and IT to resolve possible integration issues
  • There are significant advantages to a well-tested integrated solution

 

It was great to hear yet another customer talk so positively about how SAP have enabled their business to achieve targets that were previously beyond their reach. Many attendees went up to Tandeep after the session to thank him for providing an insight into the Bombardier journey, I would like to express my gratitude too for the fascinating story of his experience with SAP.

 

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Hi,

 

We have arequirement to extract data (Live Cache orders) from Live Cache (RRP3 Screen ) to (Infocube) SAP APO BW.

Is there any standard process to extract the data please let me know.

 

Thanks in Advance.

 

Thanks & Regards,

Murali

Transforming Supply Chain into a Demand Network

 

 

Join us for the much-awaited International SAP Conference on Supply Chain on 1-2 October 2015 in Darmstadt, Germany.

This is a business-focused, customer-centric event where you will learn supply chain best practices on how to drive greater ROI. This year the conference is going to be co-located with two other events: SAP for Manufacturing and SAP for Product Lifecycle Management.

Also being part of our International SAP Conferences on Extended Supply Chain, this event is packed with exciting new customer case studies, latest news, networking opportunities, and workshops.

 

 

Gaining greater transparency and control over your complex supply chain through the use of innovative technological solutions and applications – for better decision making and results – is essential to ensure that growth objectives are met.

 

 

Take this valuable opportunity and join us to hear from senior executives in leading companies on how they transformed their supply chains to demand networks, and benefited from implementing SAP SCM solutions to improve customer service, facilitate collaboration, and lower costs.

 

Visit the conference web site: http://goo.gl/JOFK1h

Last week at Sapphire I had the chance to listen to Ron Gilson the CIO and Paul Townsend, a BI Manager at Johnsonville Sausage talk about his company’s deployment of SAP Demand Signal Management.

First Ron gave a brief overview of Johnsonville Sausage who are a family owned company who have been in business since 1945. They consist of about 1,500 members and have six manufacturing facilities in the United Sates, one in Singapore and sales offices in Mexico, Canada, Japan, and China.

A few facts Ron shared highlighted the dominance Johnsonville have in their market:

  • 3 out of 4
  • 1 out of 3 Italian sausages sold in the U.S. are Johnsonville
  • 2 out of 5 fresh breakfast links are Johnsonville
  • Leading brand in U.S. – Bratwurst, smoked-cooked links, fresh breakfast links and patties, Italian sausage

 

Ron explained the broad SAP application landscape that spans ERP, Sales and Distribution, Planning, VMI, PLM, HR, Plant Maintenance, Production Planning & Detailed Scheduling, Trade Promotions and the topic of this presentation, Demand Signal Management.


Using Point-of-Sale Data for Real-Time Consumer Demand Visibility

Ron explained that “Demand Signal Managements primary roll is the be common data repository for all demand signal data, social, weather, POS , and Neilson syndicated data”. Ron continued. “This is important to Johnsonville as part of a larger trade promotion optimization initiative” to better anticipate consumer demand, improve forecast accuracy, help ensure on-shelf availability, mitigate risk of lost sales, and improve trade promotion.

 

Business Value Drivers

Ron walked through some of the business drivers of this initiative:

  • Trade Promotions Optimization - Creating 3 years of demand data from POS and Nielson history to create a solid foundation of statistical results.
  • Trade Promotions Execution and post promotion analysis – Moving from being currently based on shipment data to being driven based on POS data.
  • Supply Chain Visibility – Johnsonville were losing visibility to inventory in the supply chain once the product leaves our DC/3PL and were looking to achieve “Plant to Store Supply Chain Visibility” by capturing “retailer data that includes store and retailer DC inventory”.
  • New Product Launch Execution – The current Nielsen Data was “11,12 130 days old” , so capturing POS information means you can see yesterdays (or worst case, last week) actual demand. As Ron highlighted, “We know what scanned at the retailer yesterday AND what current inventory levels are at Store and DC”.
  • Simplified Reporting and Analytics – The goal was to eliminate the current effort required to harmonizing customer POS, Nielsen, shipment and other internal data and to simplify end user experience and increase user adoption by dramatically reducing the number of tools used to report and analyze data.

Paul explained the “current state of the project” where they are currently capturing all internal shipments and finished goods inventory as well as daily POS data from Walmart, SamsClub, FoodLion and Hannafords.

As Paul stated, “the benefit of this master data harmonization is to talk to the Walmart people in Walmart terms, and to talk to internal sales people in their terms. We can also do cross retailer reporting to initiate cost savings”. 

Paul continued, ”some key reporting that we are looking at is ship vs scan as well as the full supply chain visibility to see a full inventory picture and understand what days of supply looks like at a customer’s DC, and giving greater visibility into what we should be forecasting to reduce forecast error, and helping us with new product launches” .

This was a great overview, so thanks to Ron and Paul for sharing the Johnsonville Sausage journey.

To watch the complete presentation click here.


Carl Sandburg's Chicago was

 

Hog Butcher for the World,

Tool Maker, Stacker of Wheat,

Player with Railroads and the Nation's Freight Handler;

Stormy, husky, brawling,

City of the Big Shoulders:

 

Chicago may be a slightly different place now, but no one can deny that the manufacturing and maker spirit still runs strong in Chicago. So what better place to hold the SAP Manufacturing Industries Forum than Chicago to kickoff the Summer of 2015 (June 23-25).

 

SAP Manufacturing Industries Forum is one of the premier events in the country for business and technology leaders and practitioners from manufacturing organizations, including automotive, consumer products, high-tech, medical devices, life sciences, industrial machinery, building materials and chemical companies.

 

SAP Manufacturing Industry Forum is bringing together thought leaders and practitioners from industry, analyst community and academia to share best practices, analyses and case studies on innovation, supply chain and operational excellence in manufacturing industries. The event includes engaging and educational workshops, keynote sessions and customer case studies related to

 

  • Innovation and New Product Development in Discrete and Process Industries
  • Connected and Agile Manufacturing
  • Integrated Business Planning for Supply Chain Excellence
  • Logistics Excellence
  • Internet of Things for Connected Assets and Operational Excellence

 

Don't miss the opportunity to learn, share, network and to take away new insights as well as practical knowledge that you can apply to help your organization grow.

 

Register now and get invited.

On June 1 - 3 there are 3 events, running in parallel in Prague that all supply chain, manufacturing, R&D and Procurement executives should attend to meet and share experiences with peers and experts.


Logistics & SCM, PLM, Manufacturing, and Procurement 2015

 

 

So why should you attend?

 

  • Keynote and  spotlight sessions from SAP Executives from the respective areas
  • 70+ individual sessions over 3 days from companies such as SAP, Adidas, Bose, Bombardier, Dansk, Goodyear, Intel, Weir Minerals and more.
  • Get clarity on SAP’s solution roadmap and an exclusive look at products and functionality that can drastically improve your day-to-day operations
  • Learn how to optimize the SAP functionality you already own with tips and tricks from seasoned experts
  • Expand your network by engaging with other SAP users in your industry all under the same roof
  • Discover the practical applications of SAP HANA in the SCM solution suite
  • Hear project pitfalls and lessons learned from your peers as you prepare for your next implementation
  • Interact with leading product and service vendors to evaluate third-party solutions and extensions that could help take your SAP solution to the next level

 

So, will you be in Prague in June? Lots of your piers will be! If so, I will see you there.


If you have not registered yet, it is not too late. Just click on this link to learn more.

 

Logistics & SCM, PLM, Manufacturing, and Procurement 2015

aaa.JPGToday at SAPPHIRENOW I listened to a great overview of the Transportation Management implementation at United Sugar Corporation by Roger Parala, the Director of Business Systems at United Sugar.


United Sugar is a marketing co-operative owned by sugar producers and have Total annual sales of about $1.5 - $2.0 billion, which represents a Market share of 15% of total consumer sugar and Market share of 30% of total industrial sugar. In total The company manages about USD $300M freight spend and mostly ship via rail and truck with a small amount of multi-modal. 


Challenges

Rodger explained that United sugar faced a number of challenges that drove the need for a new solution:


  • The system being used had been through a series of ownership changes  (McHugh, Red Prairie, JDA).
  • Rail functionality was no longer supported by the vendor
  • The solution had no proper track and trace functionality or freight payment capabilities, and United Sugar track $75M of in-transit inventory
  • System needed "bolt-on” functionality, thereby increasing the solution landscape
  • Human resource challenges (Lean Organization to support and use the system (manage 4000 rail carts with 3 people)


Evaluation process

Several criteria were identified as part of the evaluation of a next generation solution:

  • Ability to work and integrate well with ERP
  • Flexibility to configure high level of automation to be able to run the business
  • Flexible and automated carrier contract management
  • Integrated Track & Trace environment \Carrier communications via edi
  • Portal functionality for smaller partners


Why SAP Transportation Management on HANA?

Roger explained that SAP was selected for numerous reasons:

  • Very flexible integration with SAP ERP
  • Ability to optimize business processes based on operational data
  • Strategic outlook on solution landscape
  • Ability to gain valuable insights based on variety of data sources to "manage by exception"
  • Data warehousing on "Hana was a perfect solution to have analytics on the operational database".
  • Real time Operational intelligence was available by leveraging event management for real time visibility.
  • Decision support and automation is "better than anything out there on the market"


Lessons Learnt

Roger stressed a few key points:

  • Build SAP TM knowledge upfront
  • Identify the right partner for both Training & Implementation in Westernacher. This was a critical success factor in learning how TM works and how to leverage it best.
  • Understand and adjust the implementation steps as necessary to understand the system and deploy correctly for United Sugar.
  • Build the core team and identify the work stream leaders upfront


As Roger concluded "Sap Transportation Management was the best tool on the market. We have not found anything that we can't do.".

Today at Sapphire, I listened in on a great session from Mark Vollrath, the Worldwide Director for Colgate-Palmolive’s Global Supply Chain,  responsible for strategy and systems.

Mark started by providing a brief history of the company, explaining that Colgate-Palmolive originated in the US in 1806 and are now $17+ Billion in global sales. Colgate employ 35,000+ people worldwide, operations in over 80 countries and sell products across 4 four categories in 223 countries.  Colgate are famous for brands such as Colgate, Palmolive, Sanex, Ajax and Hill’s.

Mark then focused on the companies supply chain and provided some very illuminating facts about the Colgate supply chain over the past 5 years:

  • Provided over $4B in savings
  • ROA consistently far exceeds peer group
  • Strategically consolidated network by 25%
  • Invested in people capabilities and technology
  • Increased Gartner Top 25 ranking year over year

 

To enable the global supply chain strategy Colgate have collaborated with SAP and are leverage a broad SAP footprint:

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Colgate supply chain business needs

 

Col2.JPGMark explained that when “Colgate think about planning, they see the S&OP process at the center. It is the intersection of Supply, demand and integrated business planning.”

 

At Colgate, S&OP and Integrated Business Planning help improve planning and operational visibility, reduce information latency and smooth out the “bullwhip effect” of variable demand signals.

 

Mark described the 6 work streams that are running in parallel for control tower, S&OP, demand sensing, inventory planning and supply planning. He explained that “all of these processes are interdependent, and complement each other”. He also pointed out the importance of integration to APO which also compliments the IBP solutions.


Benefits of Integrated Business Planning

Mark discussed how “deploying Integrated Business Planning processes have driven “near real-time what-if simulation with end-to-end visibility”. This in turn has enabled a more predictable end to end demand signal for responsiveness, resulting in:

  • Increased Service Levels
  • Reduced Inventory
  • Providing Growth Contributions
  • Uncovering New Savings Opportunities

 

This was a great overview of Colgate’s continued deployment and roll out of SAP’s Integrated Business Planning suite.  Thanks to Mark and the Colgate team for taking part in SAPPHIRENOW.

For over 70 years the fantastic world of Marvel, has created female super-heroes, like the amazing Black Widow in the recent Avengers 2 movie, but these female characters have been few and far between.  Similarly, over the past decades, there has been a dearth of women in supply chain.  But change is happening NOW! 


Women came together today for a breakfast event at Sapphire NOW, to build a force of women in supply chain as they networked, collaborated and celebrated the successes of women, forging ahead to change this traditionally male dominated field. According to a SCM World study, only 5% of top-level supply chain positions at Fortune 500 companies are filled by women.   These few women are the true business super-heroes today as they lead major transformation of their companies with new innovation and strategy.


The Sapphire NOW breakfast was attended by executive women in supply chain representing various industries and Fortune 500 companies.  EY, the event sponsor, has a long and commendable history of commitment to global initiatives, focused on the progression of women into leadership. 

 

Jamie Larsen, EY Principal, commented “When our economy is facing unparalleled challenges, there is a clear imperative to help women succeed in the economy at all levels, as business owners of multinational organizations, as leaders in business, and at grass roots levels in local communities, and for Ernst & Young, this includes supporting our own women in fulfilling their potential.”

 

Hala Zeine, Senior Vice President and Head of SAP Portfolio, delivered a very enjoyable and inspiring address, discussing how supply chains are transforming into business networks and how women are uniquely poised to excel in this area.  “Women naturally think in terms of networks, are masters at multi-tasking, are adept at problem-solving in fast-paced environments and are exceptional at collaboration and nurturing relationships.”


It was indeed a wonderful event for Wonder Women who share a common goal - run business better, and make a better world!

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In a Panel discussion at SAPPHIRENOW today, Dustin Demmin, the Director of Business Solutions for North American from Nature's Way Brands discussed their journey with integrated business planning processes.

 

Nature’s Way have been America’s leader in herbal medicine for over 40 years with brands such as Nature’s Way, Enzymatic Therapy and Integrative Therapeutics. As one of the most technologically advanced dietary supplement manufacturers in the U.S., Nature’s Way focuses on product innovation, pushing the boundaries on quality research and testing. As of today, they offer over 500 premium nutritional products, including single herbs and herbal extracts, homeopathic remedies, vitamins, minerals and specialty formulas.

 

The Nature’s Way Journey

In November of 2013 the company kicked off an S&OP project by

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defining the planning cycle and process, the key players and the level of detail they planned to model. This resulted in an initial pilot that focused on the “demand side”, which went live for a subset of products in the consumer business in May of 2014. The pilot was “very successful” and was quickly followed with a roll out to all products and business units in July of 2014.   The next phase was to attack the supply side of the business. This was kicked off in September of 2014 with a focus on defining the supply network and the rules and roll out of the Heuristic model. This phase went live in December, delivering heuristic, unconstrained planning across the supply network.

 

Dustin discussed some of the highlights of the implementation being:

  • Process Management & Collaboration enabling clear visibility to monthly planning process and collaboration utilizing SAP JAM.
  • Harmonized Data Model for Demand and Supply enabling the company to quickly react to changes in demand while balancing inventory, rough cut capacity, and revenue.
  • Multi-Level Supply Planning for internal and external production and procurement enabling planners to view demand and sourcing changes and their impact on costs, inventory and capacity in real time.
  • Real time updates to plan

Dustin went on to explain some of the benefits that Nature’s Way have achieved due to the implementation:

  • Acceleration of Nature’s Way’s S&OP Process Maturity through defined collaboration and process cadence with measurable tasks.
  • Visibility to Demand & Supply in a single solution incorporating sales, marketing, operations and finance working from a single plan.
  • Real Time Scenarios anywhere in Supply Network through real time what-if scenarios in Supply Planning enabling quick insight to adjustments required to meet demand.
  • Real time analytics support key decisions gives management access to key decision making data with defined & add-hoc analytics and planning views

 

It was grate to hear about the success of the S&OP roll out at Natures Way and was appreciated by the “standing room only” audience.

 

Today at SAPPHIRENOW as part of the Demand Network Panel Discussion, Will medtronic.JPGFoster, IT Director in Enterprise Application at Medtronic discussed the benefits of Enterprise Inventory Optimization to his company. Will explained his role as the “global process owner for everything in the PLAN process area, which includes Demand & Supply Planning along with production planning”.   From an applications approach he is responsible for SAP ECC, SAP APO and Enterprise Inventory Optimization (EIO) applications.


Will gave an overview of Medtronic, who are a global healthcare solutions company committed to alleviating pain, restoring health and extending lives of people through medical technologies, services, and solutions. They create meaningful innovations for hospitals, health systems, and health care providers so they can deliver the best care possible to patients and their families around the world.

 


Implemented SAP Enterprise Inventory Optimization globally across multiple business units

Will discussed the highlights of implementing “multi-echelon inventory planning” across the company and how it:

  • Enables total supply chain view for all items at all stages
  • Considers desired service levels and captures variability within network
  • Synchronizes operations within enterprise systems
  • Provides insight to supply chain performance and process improvements
  • Provides significant safety stock reduction
  • Enables reporting  to assist with Input and Output accuracy

 

Will also touched upon the business benefit achieved to date:

  • Reduced overall weekly planning cycle duration by >50%
  • Finished Good & Semi-Finished Good safety stock reduction across Supply Chain
  • Service Level Agreement monitoring through weekly optimization monitoring metric
  • Improved forecast accuracy and bias improvements
  • In-depth visibility to entire Supply Chain
  • Improved master data control and accuracy for data input elements
  • Integrated alignment between Demand and Supply
  • Drives process design continuous improvement

 

This was a great discussion and was well attended by a “standing room only” audience.

My most recent assignment was blueprinting Supply Chain Planning processes for a Scandinavian mineral fertiliser major. It was great learning opportunity working directly with business, learning about the industry, its nuances and peculiarities compared to other clients and industries I had consulted for. Last time I had similar opportunity (working directly with business instead through client IT) was during my very first SAP project assignment back in 2002. I was newbie to SAP world back then and simply focused in building solution to meet business requirements in SAP's Advanced Planning & Optimisation application. But this time it was different, being Planning Track Lead and part SCM Solution Architect overseeing the whole Supply Chain big picture. My focus was to review, validate business requirements and challenge some based on best practices that SAP has built based on. But in the end my responsibility was to craft an end to end IT solution integrating various SAP applications & components in SCM space. Thanks to multiple Supply Chain Planning project experiences in past I am now reasonably experienced with SAP SCM applications, its gray areas and white spaces, integration challenges across legacy, non-SAP applications.

 

Coming back to the challenge at hand - I knew there is no single application to meet all the client requirements. The challenge was especially around Operations Planning business requirements that are localised, site-specific business processes compared to more global / regional processes in Demand Planning and Replenishment / Network Planning. Even considering the most advanced / process savvy production plant has come up with the requirements, no single SAP SCM applications could meet it all. Of course enhancements can be done but there is associated cost and especially when the client sponsor had dictated 80:20 (maximum 20% custom development) principle.

 

The first thing I did was review in detail the Operations Planning business requirements, clarify with business SMEs and Power Users to understand exactly how they are operating. Trying to fit that in SAP SCM application's so-called best practices turned out tortuous path difficult to tread. The next logical approach was to group the Operations Planning requirements into logical components like Logistics Planning comprising mainly bulk movement in marine vessels from Production Planning focusing on production order scheduling. This means a mix of SCM APO and ECC PP functionality for Production Planning but for Logistics Planning there were lot of gaps especially around planning for ships and further berth (harbour / quay-side) planning.


Anyway SAP TM was in scope for detailed transport planning, tracking, execution and charge calculation of all modes including maritime vessels like ships. But TM integrates with ECC only through Order or Delivery based Transport Requests. That meant having Stock Transfer Orders created in ECC for bulk products from Production Plant to downstream Terminals in different markets (countries). But from Logistics Planner standpoint they do not want to cut Stock Transfer Order till they know vessel size and availability (in terms of dates) because accordingly they plan for bulk material movement.  


The hunt began looking for suitable SAP applications and came down to a solution used in Oil & Gas Industry (I knew it from a previous project) called TSW (Trader's and Scheduler Workbench). Even though TSW is primarily Oil & Gas industry solution application, SAP had "decoupled" it and made it as an independent (from IS-Oil) Add-On to SAP ERP. TSW uses an object called Nomination that is highly flexible and allows creation of Planned Shipping Requests linking different Purchase Requisitions (not yet converted to Order) having same source and destination locations. The Nomination object can be interfaced (custom) to SAP TM for creating Shipment Booking for Carrier Selection. Once vessel is identified in TM, the capacity and arrival schedule information is interfaced back to TSW Nomination object. The Logistics Planner can then review, update and accept (in exception case reject) the updated nomination. This also triggers consolidation of Purchase Requisitions (may have underwent quantity change to consider filling in vessel capacity) in Nomination Lines into single Stock Transfer Order in ECC MM module. The Stock Transfer Order from ECC automatically gets interfaced to SAP TM using standard Process Integration (PI) as Order based Transfer Request to initiate maritime planning processes in TM.


So this took care of the first problem and then the next major requirement around harbour / quay-side planning was to be tackled. Once marine vessel / ship is booked suitable berthing space is to be made available when it arrives so as not to incur demurrage charges. Unlike other means of transport, planning for Marine Vessels is critical due to the cost and bulk volumes (few thousand tons) involved. For this requirement TSW provided Berth Scheduling functionality that provided graphical overview of harbour to plan for vessels arriving, laying on for discharging / loading material and finally departing. Each individual lines in the Nomination object allows assignment of berth with from and to date/time allowing detailed level planning. Of course any changes of vessel arrival (also known as ETA Estimated Time of Arrival) has to be interfaced from SAP TM (where Transport Monitoring & Tracking is done) to TSW as events. This events information can be used by Logistics Planner to reschedule vessel assignment to berths reducing chance of demurrage charges and potential "traffic jams" just off the harbour for docking.


Thus overall an integrated Logistics Planning solution was conceived as part of Blueprint - starting with SAP APO for Purchase Requisition creation based on Demand at Terminals, Production Order creation & scheduling at Plant to meet these requirements, plan for shipments based on Stock and Transport Vessel availability meeting requirement dates (3 way pegging) in SAP TSW, conversion of Purchase Requisitions to Purchase Order (proposed small custom development in ECC MM for automated conversion based on Nomination line entries), Berth Planning and Scheduling in SAP TSW and subsequent execution of Transport Order in SAP TM and ECC MM / IM (Goods Receipt and Issue against Delivery). No doubt complex with integrating three different SAP applications (APO, ECC and TM) with add-ons (TSW) and multiple modules (APO PPDS, ECC MM, IM, LE) coupled with few enhancements but overall an integrated solution meeting business needs.


Time will tell how the conceptualised solution works out practically during Integration Testing after the developments and configurations are setup along with suitable master data. But keeping in mind the big picture, exploring to identify potential SAP applications (some less known) to architect an integrated solution indeed was an achievement and tremendous learning experience. It not only gave the chance to explore different SAP applications but also to understand and decouple complex yet much needed business requirements in order to architect SAP based solution as much standard as possible with minimal enhancements to bridge solution gaps.


You may like to read my earlier blog Evolution of SAP SCM Applicationshttp://scn.sap.com/community/scm/blog/2015/04/28/evolution-of-sap-scm-applications.

In my professional life as SAP Consultant I have explored and worked extensively with SAP's Advanced Planning and Optimisation or APO (rechristened as SAP SCM with APO being main application component) modules and related SAP ERP modules apart from few other applications in supply chain space. This blog is to pen down my thoughts on how SAP SCM applications have evolved over time and is cross-posted in LinkedIn. In early 2000 life as a functional supply chain consultant was simple, you had SAP R/3 as main ERP application providing supply chain execution with some planning capabilities and newly introduced SAP APO focused on supply chain planning.

Since then SAP invested, developed and came out with multiple supply chain applications like Supply Network Collaboration (SNC), Transport Management (TM), Extended Warehouse Management (EWM) to name a few. Most of these started out as extensions / improvement of core SAP ERP or even APO application but became full-fledged stand-alone applications. One interesting aspect when APO was rebranded as SAP SCM (version 4.0) two other application components were added Inventory Collaboration Hub (pre-cursor of SNC) and Event Management (EM). In fact as SAP Product Management commented here on consolidated platform for easier installation and maintenance. In the next version two more application components were introduced - Forecast & Replenishment (mainly to target Retail clients) and Extended Warehouse Management. Note basic Transport Management functionality was already present in SAP APO as Transport Planning Vehicle Scheduling module. Then in SCM 2007 (also known as 5.1 or is it other way round) Service Parts Planning was introduced and Inventory Collaboration Hub (ICH) got rechristened as Supply Network Collaboration owing to added functionality. Thus SAP SCM application version 5.1 in 2007 kind of consolidated Supply Chain Management application components APO, SNC, SPP, EWM, TM, EM other than what SAP ECC had to offer.

Then came the era of Service Oriented Architecture and SAP joined the bus touting ESA - Enterprise Service Architecture in mid 2007 enabled by SAP Netweaver platform. Around 2005-2006 time frame SAP introduced Business Process Platform concept as unified Netweaver based platform having components of SCM, ERP, CRM, SRM etc. that customers can pick and choose to meet their business process requirements. Even a new IT role was created - Business Process Expert (BPX) with a flair or functional, business process knowledge coupled with technical experience to compose a solution by mashing up from large number of enterprise services. If you are interested then look at this and this in SAP Community Network Wiki. In hindsight this grand vision of BPP turned out to be futuristic and really did not see light of day.

Coming back to the main topic after consolidation in SAP SCM 2007 things started changing quite a bit. First of all there was no formal SAP SCM 6 version but went directly to SAP SCM 7. This is the time when decoupling also started with Transportation Management moving out of SAP SCM. Although EWM was an application component SAP suggested it to be deployed in separate SCM box. Essentially SAP SCM 7 would be APO and SNC application components with SPP brought inside of APO. The trend continued with TM and EWM coming out with subsequent versions 8.0, 9.0, 9.1 and 9.2 (latest). Version 9.1 unified into Supply Chain Execution (SCE) application TM and EWM as application components and some transaction level integration without the need for transaction routing via SAP ERP system. Another application EM though part of SAP SCM becomes stand-alone component that can be deployed and used independent or with SAP SCM, SCE or even ECC applications.

On the other hand some edge applications were getting developed like Sales & Operations Planning (S&OP), Demand Signal Management (DSiM), Supply Chain Performance Management (SCPM) and more technology enabler like Auto ID Infrastructure (AII) and Object Event Repository (OER) to support RFID revolution & EPCGlobal. Safety Stock Planning was one major area where SAP did not invest but had SmartOps as their preferred partner who eventually got bought out by SAP in February 2013. So now erstwhile SmartOps applications like Enterprise Inventory & Service Level Optimisation (EIS) and Enterprise Demand Sensing (EDS) join SAP SCM application list. To see the long list check out SAP Solution Explorer Line of Business Supply Chain.

Now with the advent Suite 4 HANA (S4/HANA) things are becoming interesting, starting with core ERP application where Simple Logistics will be introduced before this year ends. On the other hand SAP is pushing ahead with Integrated Business Platform for Supply Chain Planning processes mostly based on Sales & Operations Planning on HANA and adding EIS capabilities as IBP S&OP, Demand , Supply, Inventory modules. But there is a fundamental difference between IBP applications vis-a-vis SCM, EWM, TM applications. IBP are Cloud-first applications developed as native HANA applications i.e. with no ABAP layer. The code line is mostly SQL Script with some level of customisation possible through proprietary (?) L-script and using SAP UI5 for web browser based user interface. While SCM, EWM, TM are on premise applications running on ABAP AS that can have HANA as DB and can be deployed on SAP Cloud too. The user interface is still SAP GUI or Netweaver Business Client based though some Fiori apps are possible when backend HANA DB is used.

However in the midst of all core Supply Chain Planning & Execution application components like APO, SNC, TM and EWM coupled with SAP ECC Logistics (SD, MM, IM, PP) still rules and will remain as foundation for enterprises going into 2020s. Hopefully by then SAP can materialse the original grand vision of Business Process Platform this time powered by HANA Cloud. Remember SAP has extended support for Business Suite applications till 2025 giving it more time and breathing space to fully develop and get customers adopt to next generation cloud-based business process platform.

PS: You may like to review this presentation I did during Networking Session at TechEd Bangalore 2013.

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