SAP supply chain update fills some gaps

SAP is adding new forecasting and replenishment features for retail operations and new supply chain network collaboration capabilities in the latest release of mySAP SCM.

SAP says it's getting closer to providing all of the tools that manufacturers and distributors need to create an adaptive supply chain with the latest release of mySAP SCM.

The new mySAP SCM, version 5.0, adds a host of new features, including collaboration capabilites to help manage the supply chain network, and includes updates to Advanced Planning and Optimization, Inventory Collaboration Hub, Event Management, and Warehouse Management modules.

"Companies are looking for strategies in how to become more demand driven and here SAP is addressing that," said Hans Thalbauer, vice president of application and solution management for mySAP SCM. "In supply chain management more than ever it's about managing the exceptions--everything that is not going as planned."

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New project-management capabilities were added to SAP Advanced Planning and Optimization (SAP APO) for industrial machinery and components and aerospace and defense industries. Also, new features enabling manufacturers to plan and schedule transactions and maintain the planning environment were added.

Many of the new features added to mySAP SCM were the result of a development partnership between SAP and Morton, Ill.-based Caterpillar Logistics Services Inc., which has been ongoing since 2002, according to Simon Bragg, European research director in Dedham, Mass.-based ARC Advisory Group's UK bureau.

SAP said it has more than 13,000 active mySAP SCM customers in different vertical markets. In addition, the software vendor said it has more than 1,800 customers that are using advanced planning, optimization and collaboration tools in conjunction with mySAP SCM. Bragg said about 800 customers are live with SAP APO.

SAP released APO in 2000, and it took several years before the product was considered feature rich enough to be competitive, Bragg said. Other areas where SAP is outflanked by specialty vendors, in the supply chain software market, is in transportation and warehouse management, he said.

"The leading companies are using SAP where they can, but where they need a competitive edge, they will be going to partners for expertise," Bragg said.

SAP relies on its partners to provide more sophisticated supply chain tools, Bragg said. Supply chain design and multi echelon optimization are niche areas where vendor partners fill the gaps, he said.

"SAP has become a lot clearer about where it's going to partner and what it's going to develop itself," Bragg said. "We've reached a level and place in the market where it isn't worth it for SAP to go after a unique area in supply chain. There's always going to be a vendor that comes out with a highly valuable warehouse management solution or other niche product."

SAP is also aiming its latest mySAP SCM enhancements at specific vertical industries. In the automotive industry, SAP added support for the Kanban methodology and distributed manufacturing to enable supplier-managed inventory, Thalbauer said.

SAP added demand driven synchronization of supply and demand, allowing users to plan and collaborate with partners based on customer demand. SAP also increased capabilities designed to let users to forecast, plan and respond to changes to the fulfillment network.

"Our solution now connects the shop floor with the top floor," Thalbauer said. "Our customers can get real data from machines and the plants to the plant manager and top executives."

New features link service and product supply chains in mySAP SCM, according to Thalbauer. The features enable companies to better forecast inventory and understand slow moving and fast moving products, improve inventory and supply planning processes and extend warehouse management in the retail industry, he said.

"It now includes the capabilities necessary for moving products and also slow moving products in this area, because it's really necessary to do it on an event driven basis," he said.

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