sap supply network collaboration overview.pdf

8/17/2019 SAP Supply Network Collaboration Overview.pdf

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Today, increasing your prof-itability often means estab-lishing and maintaining col-laborative relationships. Andthe SAP® Supply NetworkCollaboration applicationcan help you deal with thechallenges that are inherentin these relationships. It

gives you what you needto collaborate with partners,suppliers, contract manu-facturers, and customersthrough features and func-tionality that support supply,demand, and inventoryreplenishment processes.

With SAP Supply NetworkCollaboration you can elimi-nate supply chain inefficien-cies and risks while increas-ing visibility and profits.

SAP® SUPPLY NETWORKCOLLABORATIONBRING CLARITY BY EXTENDING YOURENTERPRISE TO YOUR NETWORK

SAP Solution in DetailSAP Supply Network Collaboration


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4 Collaborative Relationships

7 Supplier Collaboration 7 Release

7 Purchase Order8 Kanban

8 Dynamic Replenishment9 Supplier-Managed Inventory9 Delivery Control Monitor

9 Delivery10 Invoice10 Case Study with Ritter Sport

11 Outsourced Manufacturing 11 Contract Manufacturing

Procurement11 Supply Network Inventory11 Work Order

13 Customer Collaboration13 Demand Forecast Collaboration 13 Min/Max Replenishment 14 Responsive Replenishment14 Case Study with

Colgate-Palmolive

15 User Efficiency−EnhancingFunctions

17 Integrated and SOA Enabled 17 Integration with Other SAP

Software

17 SOA Enabled

18 Architecture and Landscape 18 Stable Core 19 Supporting Value19 Other Information Sources 19 Powered by SAP NetWeaver19 Find Out More

CONTENT


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For supplier collaboration, SAP SupplyNetwork Collaboration provides sup-port for upstream business processessuch as supplier-managed inventory,discrete purchase order managementcollaboration, scheduling agreementrelease handling, and Web-based kan-ban signals. For outsourced manufac-

turing, SAP Supply Network Collabora-tion offers you cross-tier visibility ofinventory and supply and demand, andsupport for a collaborative work orderprocess that provides insight into pro-duction demands and progress at thecontract manufacturer’s location. Forcustomer collaboration, SAP SupplyNetwork Collaboration provides supportfor downstream business processessuch as responsive replenishment, acomprehensive state-of-the-art vendor-

managed inventory system, forecast

In a challenging economic environment,companies must reduce cost and risk while increasing innovation, customerservice, and responsiveness. To meetthese challenges, you can do business where costs are lower, develop relation-

ships with global suppliers, and out-source nonstrategic activities. All theseactions require collaborative relation-ships with suppliers, contract manufac-turers, and customers.

Developing collaborative relationshipsis not always easy. Connecting to asupplier with limited technical capabil-ities can be costly, complicated, andtime-consuming. Telephone, fax, ande-mail remain the most common meth-

ods of communication. Although elec-tronic data interchange (EDI) may bemore reliable, it is cost-effective onlyin high-volume situations. How, then,can you extend the benefits of collabo-ration to your entire ecosystem? Howcan you get all your partners to con-nect automatically, efficiently, and cost-effectively to your internal processes?

The answer lies in the Web-basedSAP® Supply Network Collaborationapplication, part of the SAP SupplyChain Management (SAP SCM) appli-cation. Built on the SAP NetWeaver®technology platform, SAP Supply Net-

work Collaboration helps partnersoperating SAP or non-SAP softwareto collaborate through a range of sup-ply, demand, and inventory replenish-ment processes. SAP Supply NetworkCollaboration was previously calledthe SAP Inventory Collaboration Hubapplication.

Through SAP Supply Network Collab-oration, you can simultaneously elimi-nate inefficiencies in your supply chain

by synchronizing the flow of informa-tion with your partners. SAP SupplyNetwork Collaboration offers a 360--degree view of supply chain collabo-ration, giving you ways to effectivelycollaborate with your customers, sup-pliers, third-party logistics providers,and outsourced manufacturers (seeFigure 1).

COLLABORATIVE RELATIONSHIPS A 360-DEGREE VIEW OF YOURSUPPLY CHAIN COLLABORATION

With SAP Supply Net- work Collaboration, you can increase visi-

bility beyond the four walls, allowing you totreat suppliers, con-tract manufacturers,customers, and service providers as anextension of your or-ganization. This leads

to increased innova-tions and profits.

Figure 1: 360-Degree View of Collaboration with SAP® Supply Network Collaboration

3 6 0 - d e g r e e c o l l a

b o r a t i o

n Suppliers

Contractmanufacturers

CustomersMy company

4 SAP Solution in Detail – SAP Supply Network Collaboration


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collaboration, and stock-level-basedreplenishment. See Figure 2 for anoverview of supported supply networkcollaboration processes.

Besides deep functionality and full

integration, SAP Supply NetworkCollaboration also offers you powerfulflexibility in choosing a method of col-laboration to bring your entire network,from large partners to very small part-ners, onto the application. Smallerpartners without EDI infrastructureonly need Internet access and a Webbrowser to perform tasks via the appli-cation’s user-friendly Web screens. Alternatively, they can simply use e-mailto receive and respond to purchase

orders and forecasts. Midsize partnersthat deal with higher volumes of datacan download data spreadsheets con-taining requests and upload spread-sheets containing responses directlyinto the SAP Supply Network Collabo-ration upload/download center. Largerpartners with sophisticated IT infrastruc-tures can leverage the application’s EDIfunctionalities. Figure 3 shows the differ-ent collaboration methods the applicationoffers.

SAP Supply Network Collaborationcustomers have successfully leveragedthe connectivity flexibility to onboardlarge number of partners in short timeframes. Some companies have man-aged to efficiently onboard thousandsof supplier locations and hundreds ofthousands of products onto SAP SupplyNetwork Collaboration in a matter ofmonths, enabling them to process hun-dreds of thousands of transactions per week across multiple countries using

the application.

Figure 2: Processes Supported by SAP® Supply Network Collaboration

Figure 3: Collaboration Methods Offered by SAP Supply Network Collaboration (SAP SNC)

Finished goods flows

Demand collaboration

Min/max vendor-managed inventory

Responsive replenishment

Raw material/component flows

Kanban

Release

Purchase order

Dynamic replenishment (forecast)

Delivery control monitor (reorder)

Supplier-managed inventory

Contract manufacturing flows

Supply network inventory

Work order

Contract manufacturing

Customer

SAP® SNC SAP NetWeaver®technology platform

Low volume – Web browser

Web browser

Mid volume – file uploads/downloads

Upload/download files

High volume – business-to-businessintegrated

Back-end system

Business partners:suppliers and contract manufacturers

SAP ERPback-endsoftwaresystems

SAP NetWeaverProcess Integration

My company

Browser XML File upload/download

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SAP Supply Network Collaborationserves all discrete industry sectors, with special requirements met forthe following industries: consumerproducts, high tech, automotive, millproducts, chemicals, life sciences,

aerospace and defense, and industrialmachinery and components.

Overall, SAP Supply Network Collabo-ration has several different dimensions:• It acts as the collaboration and visu-

alization layer to external partners.SAP Supply Network Collaborationextends processes running in internalsystems by showing external partners’forecasts and inventory, allows externalpartners to update information and

respond back to internal systems (forexample, forecast responses andadvanced shipping notifications, or ASNs), and consolidates data frommany internal systems into one com-prehensive and simplified view to theoutside world.

• It enables new business processeson top of internal systems and addsadditional value. New processes sup-ported include responsive replenish-ment on the customer collaborationside and work order collaboration and

supply network inventory on the con-tract manufacturing side.

• It provides a multimode communicationlayer to external partners. Message-based communication, like XML(business-to-business), file sharing(file up/downloads), e-mail exchange with attachments, and Web userinterface (UI), allows a menu-basedapproach to reach a full range ofexternal partners. The fully service-oriented architecture–enabled inter-

faces offer options for extensions.

Increasing your profit-ability often meansestablishing and main-taining collaborativerelationships. SAPSupply Network Col-

laboration helps part-ners using SAP ornon-SAP software tocollaborate with youthrough a range ofsupply, demand, andinventory replenish-ment processes.



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SUPPLIER COLLABORATIONSTEP-BY-STEP COVERAGE FOR BOTHSTRATEGIC AND TACTICAL EFFORTS

Supplier collaboration allows even yoursmallest suppliers to join in your strategicand tactical supply chain efforts. Thiscooperation helps reduce transactionalcosts because it replaces fax and e-mailas primary modes of communication. As

a result, most of the errors that tend tocreep into the cumbersome manualprocesses are eliminated.

The SAP Supply Network Collaborationsupplier collaboration area offers func-tionalities that support six business pro-cesses covering interactions between you and your suppliers step by step.The functionalities are targeted mainlytoward companies in manufacturingindustries and, as such, support capa-

bilities for direct materials planning andprocurement. Three of the processesare mainly execution oriented and extend your enterprise resource planning (ERP)replenishment triggers to suppliers.Those three are the release process,the purchase order (PO) process, andthe kanban process. One, the dynamicreplenishment (DR) process, is a plan-ning visibility and collaboration processthat allows you to share forecast andforecast commitment information. Lastly,there are two processes that shift the

replenishment responsibility from youto the supplier − the supplier-managedinventory (SMI) process and the deliv-ery control monitor (DCM) process.

Additional functionality includes supplierinvoice creation, ASN with packagingand label-printing functionality (includ-ing bar codes), and contextual integra-tion to the SAP Product Lifecycle Man-agement (SAP PLM) application andthe Collaboration Folders (cFolders)

application for document sharing andcollaboration.

Release

The release functionality allows you tosend out scheduling agreement release(SA release) updates to the supplierusing SAP Supply Network Collabora-

tion. The SA releases are typically gen-erated as part of your material require-ments planning (MRP) run. The supplierscan view the various “release updates,”compare the differences between olderand newer updates, and print or down-load them as well. To inform you aboutprobable delivery dates and quantities,the supplier can create scheduling agree-ment confirmations, and you can usethis to plan in greater detail. You cansee the supplier’s scheduling agree-

ment confirmations on the SAP SupplyNetwork Collaboration Web UI. At thetime of shipment, the supplier can cre-ate ASN messages as well, which inturn update your ERP system.

The main business value is that you cancommunicate requirements accuratelyand in real time, replacing older methodslike phone, fax, and e-mail. The supplier

can quickly find his or her requirementsthrough a Web browser and is proac-tively alerted to exception situations,like an updated release, on screen orby e-mail. The supplier can respond tothe requirements quickly and accurately

with confirmations and ASNs.

Purchase Order

The PO functionality allows you to sendout POs to the supplier using SAP Sup-ply Network Collaboration. The POs aretypically generated as part of your MRPrun or are manually created by you. Thesupplier can view the POs by status,enter free text notes, and print or down-load as well. The supplier can use the

Purchase Order Worklist Web screenas part of SAP Supply Network Collab-oration to work effectively with an intui-tive user interface for processing POs,confirmations, and rejections (see Fig-ure 4). The Purchase Order Worklist screen is also an effective collaborationarea for you to manage the PO-relatedprogress with suppliers (for example,listing purchase order items rejected by

Figure 4: PO Worklist Allowing User to Confirm/Reject Multiple Items with Minimal Clicks



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suppliers). The supplier can enter con-firmations and order responses indicat-ing which date, quantity, manufacturerpart number, and price that he or shecan commit to. The PO approval func-tionality allows suppliers to deviate

quantity, date, and price confirmed within specified tolerances. At the timeof shipment, the supplier can create ASN messages as well, which, together with the confirmations, update your ERPsystem.

Alternatively, suppliers that use EDI donot have to use the manual functions.Instead, they can send POs with confir-mation schedule lines and ASNs fromtheir ERP system to SAP Supply Net-

work Collaboration, which then validatesthe messages and forwards valid mes-sages to your ERP system.

The main business value is that you cancommunicate requirements accuratelyand in real time, replacing older methodslike phone, fax, and e-mail. The suppliercan find his or her requirements using aWeb browser and is proactively alertedto exception situations, like a changedPO, on screen or by e-mail. The suppliercan respond to the requirements quickly

and accurately via confirmations and ASNs.

Kanban

The kanban functionality allows you tosend out kanban replenishment signalsto the supplier using SAP Supply Net- work Collaboration. Kanban signals aretypically generated as part of your MRPrun or are created manually by you. Thesuppliers can view kanbans by status,

control cycle ID, kanban ID, and prod-

uct number and can print kanban cardsor download the details as well. Thesupplier has access to a kanban pro-cessing dashboard from which, at thetime of shipment, the supplier can cre-ate ASN messages that update your

ERP system.

The main business value is that you cancommunicate kanban requirements accu-rately and in real time, replacing oldermethods like phone, fax, and e-mail. Thesupplier can find his or her requirementsusing a Web browser and is proactivelyalerted to exception situations (for exam-ple, a new empty kanban) on screen orby e-mail. The supplier can respond tothe requirements quickly and accurately

with ASNs.

Dynamic Replenishment

The DR functionality lets you compare your planning data and the supplier’splanning data in a one-screen environ-ment, where deviations between yourplan and the supplier’s plan are shownas absolute numbers and percentages.There are also color-coded thresholdsthat visualize the deviations on screen.Your ERP system is used to extract data

such as planned orders and purchaserequisitions that are shown as “custom-er plan” values in SAP Supply NetworkCollaboration. Existing POs are shownas “customer order” values. The suppliercan send in or enter the correspondingresponses by means of the Web for the“supplier plan” and “supplier order” values.

The main business value is that both you and the supplier can get a mid- to

long-term awareness of deviations in

Through SAP SupplyNetwork Collaboration,

you can simultaneouslyeliminate inefficienciesand risk in your supplychain by synchronizingthe flow of information

with your partners. It

offers a 360-degree view of supply chaincollaboration, giving

you ways to effectivelycollaborate with yourcustomers, suppliers,third-party logisticspro viders, and out-

sourced manufacturers.



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supply and demand and take appropri-ate action early to avoid delayed ship-ments or situations of overproduction.

Supplier-Managed Inventory

The SMI functionality lets you shift netreplenishment planning and executionfrom you to the supplier. The supplieruses gross demand (dependent require-ments) and stock balance to calculate areplenishment plan based on min/maxlogic and subsequently converts the planinto POs and ASNs at time of shipment.The POs and ASNs are sent back to yourERP system to indicate the supplier’scommitment. POs are optional in the SMIprocess; the replenishment plan can be

converted directly into ASNs if needed.

The main business value is that you nolonger have to perform the MRP netplanning and replenishment activitiesand that the supplier can better utilizehis or her capacity by doing both theplanning and execution pieces. Thesupplier can quickly assess the stocksituation through the color-coded SMIWeb browser and is proactively alertedto exception situations, like an expectedout-of-stock situation in the future. See

Figure 5 for a screen shot of the SMImonitor.

Alternatively, it is possible for suppliersto automate the replenishment task byconnecting the supplier ERP systemto SAP Supply Network Collaboration.In this case, there is no need for thesupplier to log into your software sys-tem. Nevertheless, the supplier stillhas the option to do so, to controlthe SMI process and make sure all

data is received and displayed properly.

The business value is that suppliersdo not need to enter the data twice

and that the calculation of the shippingforecast is now fully integrated into thesupplier’s planning and production.

Delivery Control Monitor

The DCM functionality lets you shift netreplenishment planning and executionfrom you to the supplier. The supplieruses stock balance updates and presetsignal levels (reorder points) to under-stand when replenishment needs totake place. The replenishment is based

on min/max inventory limits, and theDCM functionality calculates the sug-gested replenishment quantities usingthe maximum level as the upper limit.DCM is a one-screen environment in which the supplier has access to stockon hand, signal levels, min/max limits,and in-transits as well as the calculatedreplenishment quantities. In addition,alerts are triggered and shown by dedi-cated colors on the Web screen (forexample, representing a breach of the

signal level or the minimum stock level).

From the DCM replenishment screen,the supplier can select the productsthat need replenishing and with one

click convert the data into the ASNWeb screen of SAP Supply NetworkCollaboration. The software systemprefills all data, such as delivery dateand quantity. The ASNs are sent back your ERP system to indicate a suppliercommitment to deliver goods. YourERP system has a scheduling agree-ment set up that acts as a blanketorder for the ASNs and the physicalgoods receipts.

The main business value is that you no

longer have to perform the MRP netplanning and replenishment activitiesfor the purchased components or rawmaterials and that the supplier can bet-ter utilize his or her own capacity bybeing able to manage the replenish-ment process.

Delivery

The delivery functionality allows the sup-plier to create ASNs manually in ASN

processing and send them to you. Due

Figure 5: Supplier-Managed Inventory (SMI) Monitor



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lists are available as a starting point fortargeted processing of open deliveries− for example, the Duelist for Purchas- ing Documents Web screen shows pur-chasing documents (POs and schedulingagreement releases) with due schedule

lines. Alternatively, suppliers can create ASNs in their back-end system and sendthem to SAP Supply Network Collabo-ration. The application forwards ASNsto your ERP system.

The main business value is that you gainan overview of the deliveries the supplierhas planned or has already sent, and when you can expect these deliveriesto arrive. You can send messages fordelivery receipt and for goods receipts

from your ERP system to SAP SupplyNetwork Collaboration.

In addition, suppliers can use ASNpackaging functionality to create andprint labels containing multilevel pack-aging − hierarchy, handling-unit, andbar code data. This data is sent to yourback-end systems via the ASN messageand enables a more accurate and fastergoods-receiving process.

Invoice

The invoice functionality allows suppli-ers to create invoices for orders andshipments that have been processedthrough SAP Supply Network Collabo-ration. As such, the functionality is anadditional feature that extends the othersupplier collaboration functionalitiesin the application. A supplier can, forexample, respond to a PO and createan ASN using the PO functionality inSAP Supply Network Collaboration

and, in addition, use the invoice func-

tionality to create the resulting invoiceand send that back to your ERP sys-tem. In your ERP system, the invoiceis automatically created and ready forfurther processing by the accountspayable functionality. Once the invoice

is processed for payment in your ERPsystem, the supplier gets notified viathe invoice functionality. It is also pos-sible to create subsequent debits orcredits using the invoice functionality,meaning you can make additionalcharges or discounts to an existinginvoice. The suppliers can monitor thestatus of payments through the WebUI. Overall, the invoice functionalitycloses the loop from order to paymentin the supplier collaboration processes

supported by SAP Supply NetworkCollaboration.

SAP Supply Network Collaborationalso supports evaluated receipt set-tlement (ERS). With this feature, your

ERP system recognizes periodic useof the supplier’s raw materials or com-ponents and utilizes ERP functionalityto create the invoice for the supplierdirectly within the ERP system itself, without the supplier creating or sending

the invoice to you. In ERS handling, afterthe invoice is created in your ERP system,it is sent as a notification to the supplierindicating which products, amounts,and dates are to be paid.

The main business value is that suppli-ers can reduce time and human errorsin the invoicing process by automatingit via the supply chain flow already man-aged in SAP Supply Network Collabo-ration, as well as getting notified about

payment status without having to con-tact you directly. You no longer haveto manually enter supplier invoices and will be able to reduce the resourcesspent answering payment-related inqui-ries from suppliers.

Case Study with Ritter Sport

Alfred Ritter GmbH & Co. KG (RitterSport) is a chocolate company based

in Waldenbuch, Germany, with reve-nues of €290 million. Ritter Sport suc-cessfully implemented the SAP® SupplyNetwork Collaboration application in2007. The company implemented thesupplier-managed inventory (SMI) func-tionality, giving its suppliers the respon-sibility of planning and delivering rawmaterials and packaging materials.

After implementing SAP Supply Net- work Collaboration, Ritter Sport

found that its stock levels lowered,

that it could do dynamic adjustmentsto safety stock based on seasonal

requirements, and that its planning workload was reduced, freeing upplanning and development capacity.

Steffen Kindler, production plannerfor Ritter Sport, says that as a resultof using the SMI functionality thecompany reduced the lead timebetween goods receipt and produc-tion. “This enables us to supply ourcustomers with freshly made choc-olate – and that, of course, tastes

much better,” he says.

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Supply Network Inventory

The supply network inventory (SNI)functionality allows you to have visibilityof inventory (with batch numbers) andsupply and demand information across

multiple tiers, including componentsupplier, contract manufacturer, andthird-party logistics provider, usingthe SNI monitor. The SNI monitor alsocalculates and displays the projectedstock along with the planned replenish-ments (for example, incoming POs)and planned outtakes (for example,production orders) with min/max stocklimits and associated on-screen colorchanges and alerts. Furthermore, SAPSupply Network Collaboration has a

sophisticated visibility filter that allows your multi-tier partners to also have visibility to information based on theirassigned authorization. This ensuresthat all parties are sharing the actualstatus at all times and helps to proac-tively monitor changes in supply anddemand.

The main business value is that you canmanage the liability on finished-goodslevels through the monitoring of thecomponent inventory situation at the

contract manufacturer’s locations, sup-porting early discovery and action inexception situations.

Work Order

The work order functionality allows youto collaborate on and track productionactivities at your contract manufacturer’sfacility. SAP Supply Network Collabo-ration can be configured to automaticallycreate work orders from purchase orders

sent from your ERP system. An optional

report on how much of each compo-nent has been used. At the time ofshipment, the contract manufacturercan create ASN messages. Thesechanges update your ERP system,allowing internal planning to run using

the latest supply commitments fromthe contract manufacturer.

The main business value is that youcan communicate requirements accu-rately and in real time, replacing oldermethods like phone, fax, and e-mail.The contract manufacturer can findhis or her requirements and respondto them quickly and accurately via con-

firmations and ASNs.

SAP Supply Network Collaborationhelps you connect to and collaborate with contract manufacturers. By givingcontract manufacturers straightforwardand full access to supply chain informa-tion, it extends visibility and collabora-

tion to their manufacturing processes.

SAP Supply Network Collaborationoffers functionalities that supportthree business processes for out-sourced manufacturing. The first is thecontract manufacturing procurementfunctionality, which enables a purchaseorder−based process that allows thecontract manufacturer to access thesubcontracting PO and collaborate with you on both the finished-goods and

component level. The second is thesupply network inventory functionality, which offers you “N-tier” visibility andmonitoring of inventory, supply, anddemand information. The third is the work order functionality, which offersthe most sophisticated and granular way for you to collaborate and trackcontract manufacturer activities.

Contract ManufacturingProcurement

The contract manufacturing procure-ment functionality allows you to sendout subcontracting purchase orders tothe contract manufacturer using SAPSupply Network Collaboration. Thecontract manufacturer can view, print,and download the purchase order data, which includes the components thatmake up the finished good. As partof the approval process, the contractmanufacturer can request changes tothe finished-goods quantities, dates,

and components. He or she can also

OUTSOURCED MANUFACTURINGEXTENDING VISIBILITY BEYOND THEFOUR WALLS

In addition to deep func-tionality and full integration,SAP Supply Network Col-laboration offers powerfulflexibility in choosing a meth-od of collaboration to on-board your entire network,from large partners to verysmall partners. Smallerpartners without electronicdata interchange (EDI) infra-structure only need Internetaccess and a Web browserto perform tasks via the

application’s user-friendlyWeb screens.



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negotiation phase allows you to negotiateand agree on quantities for deliveries,

dates and times of deliveries, and con-sumption quantities of the components with your suppliers. The next phase isexecution. During this phase, the sup-plier produces the ordered product andregularly updates the work order withactual data. The work order tracks high-level production progress using mile-stones and has the capabilities to projectthe finished-goods date and quantitybased on current production progress.

It also tracks consumption of compo-nents and raw materials down to batch

level, something that is useful in cases when the components are owned by you but physically available at the con-tract manufacturer’s facility. Contractmanufacturers can report productionprogress, component consumption, andbatch usage data for multiple orders andphases simultaneously by using the user-efficient worklist. This data from thecontract manufacturer can automaticallyupdate your ERP system, adjustinginventory levels and cost accounting.

The main business value is that you have visibility over the production activities

at the contract manufacturer’s locationand are able to get early insights aboutchanges that affect the finished-goodsshipping date and final quantity, some-thing that helps you manage your cus-tomer’s expectations and increase cus-tomer satisfaction. You can also getmore up-to-date adjustments to inven-tory and work in progress relating to your own components being used bythe contract manufacturer – updates thatare reflected in the your ERP system.

Figure 6: Outsourced Manufacturer Feature to Record Batch Usage and Update SAP® ERP

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SAP Supply Network Collaborationoffers comprehensive functionalitiesin the customer collaboration area,allowing companies to share informa-tion and collaborate effectively withtheir customers on the finished-goods

level. Customer collaboration process-es are seen mainly in consumer prod-ucts and other industries that operatedownstream distribution structures thatextend to retailers.

Two functionalities in SAP Supply Net- work Collaboration – demand forecastand min/max replenishment – supporttraditional vendor-managed inventoryprocesses, while the third – responsivereplenishment – provides you with even

more sophisticated and advancedfunctionality.

Demand Forecast Collaboration

The demand forecast collaboration func-tionality allows you to compare and estab-lish consensus between consumption-based forecast and customer-transmittedforecast. Close collaboration with yourcustomer can be promoted by visualizingabsolute and percentage differences as well as by applying rules to calculate a

consensus forecast. Baseline forecastand promotion forecast can be handledseparately. The consensus forecastcan then be taken and used to drivethe downstream demand and replenish-ment processes. All process steps arealigned to be automated and use alert-ing for exceptions as a basis for yourplanner’s manual decision input. Youcan integrate this forecast into youroverall forecasting process using thedemand planning functionality in the

SAP Advanced Planning & Optimization(SAP APO) component or use the fore-cast functionality within SAP SupplyNetwork Collaboration to help ensurereplenishment accuracy.

The main business value is that you canrespond to and collaborate very quicklyon changes on the demand side.

Min/Max Replenishment

The min/max replenishment functionalityallows for traditional vendor-managedinventory replenishment scenarios usingmaximum and minimum stock limits asdrivers. During this process, all datareceived from the customer is validatedand mapped. Short-term projected salesforecasting is also available for the sta-tistical forecasting step. With this func-

tionality, you can plan the replenishmentbased on minimum and maximum stocklevels of a particular product, maintainedat the ship-to location of the customer. All process steps are aligned to be auto-mated, and alerting is used as a basisfor notifying exceptions that require yourplanner’s manual input.

The main business value is that you canbetter utilize your capacity by having thesame person do both the planning andexecution pieces. Your planner can quick-ly assess the stock situation through thecolor-coded min/max Web browser andis proactively alerted to exception situa-tions, like an expected out-of-stock sit-uation in the future.

CUSTOMER COLLABORATIONSENSE AND RESPOND TO REAL-TIMESUPPLY-AND-DEMAND SIGNALS

Figure 7: Responsive Replenishment Overview



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Responsive Replenishment

The responsive replenishment function-ality allows you to gain state-of-the-art vendor-managed inventory capabilities.You receive sales, stock, and promotion

data from the customer periodically. Alldata received is validated and cleansed,and corrected data is used to generate astatistical forecast for baseline demand.Next you carry out replenishment plan-ning fulfilling the days’ supply targetand group the replenishment quantitiesinto economically optimal transportloads. Several loading methods, suchas straight loading or load balancing,can be used to build the transport load.Transport load builder (TLB) shipments

with the replenishment order numbersare automatically transferred to yourERP system and to the customer ERPsystem, generating sales orders andpurchase orders respectively. Promo-

tion demand can be handled separatelythroughout the forecast, replenishment,and load-building steps. All processsteps can be automated with yourplanner being proactively alerted whenexceptions occur so he or she can pro-

vide manual input.

The main business value is that you cangain better visibility into demand signals,handle promotions with retailers moreefficiently, and realize a fully automatedreplenishment process. Furthermore,short-term changes in demand can beincorporated by automatically adjustingorders and shipments up or down with-in days or even hours depending on up-dates. This process results in increased

sales, reduced costs, and loweredinventory levels throughout the supplychain.

Case Study withColgate-Palmolive

Colgate-Palmolive Company is aconsumer products company basedin New York, with revenues of

US$15.3 billion. Colgate-Palmolivesuccessfully implemented the SAP®Supply Network Collaboration appli-cation in 2007. The main challenge was that the company wanted toshift planner focus to near-termdemand signals and have the abilityto respond quickly to unexpecteddemand. It implemented the respon-sive replenishment functionality withthe goal of basing replenishment andordering on downstream demand

rather than on high-level forecast.

Colgate-Palmolive found that itreduced manual order handlingand processing, enabled planners

to spend more time analyzing busi-ness impact and less time cleansingdata, and enabled the company tokeep more products in stock duringkey promotions. Nicholas Daddetto,senior manager for Colgate-Palmolive,says, “By the time the analysts starttheir workday, forecast and replen-ishment plans have been updated,based on information about retaileractivity that happened the previousday.”

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SAP Supply Network Collaborationprovides various tools to help userproductivity by providing access to keyinformation quickly and in a personal-ized way. Web UI screens can be per-sonalized by removing fields and tablecolumns that are not relevant for theuser; time-bucket views of monitorscan be set based on user preference;preselections for the location and

products and other master data thatthe user works with can be saved; andusers can view and search for datausing personalized, partner-specificnaming for products and locations.

Other key features include:• Quick view – Suppliers and customers

can use this graphical in-context keyperformance indicator (KPI) dashboardas their entry screen to SAP SupplyNetwork Collaboration. The Quick

View screen gives an “at-a-glance”

view of the work tasks, prioritized bylevel of urgency, such as how manyshipments are due to be shippedtoday or how many new POs justcame in and need to be processed.The user can drill down directly fromthe charts to relevant screens toperform the tasks. See Figure 8 fora sample of a supplier Quick View screen. The Quick View screen can

be customized extensively to showonly data relevant to the user’s tasks,to modify key figures according to acompany’s needs, and even to changethe “look and feel” by adjusting colors,sizes, and texts.

Figure 8 shows the Quick View screenfor a supplier user that takes care ofPO collaboration. The supplier usercan see that there were two new POitems that were sent by the customer

in the last 24 hours. The supplier can

USER EFFICIENCY−ENHANCING FUNCTIONSQUICK ACCESS TO PERSONALIZED INFORMATION

click on the “2” and drill down directlyto the Purchase Order Worklist screen.The two new PO items are preselectedon this screen.

• Worklists – Suppliers and customerscan use intuitive worklist screens toquickly and efficiently process every-day tasks with minimal mouse clicks(for example, confirm/reject multiplepurchase orders on a single screen).

Delivered queries preselect orders with certain statuses, taking away theneed for the user to search manuallyand toggle between various overviewand detail screens. Additionally, theuser can personalize queries basedon his or her needs.

• Alert monitor/notifications – Suppliersand customers can view exceptionsin SAP Supply Network Collaboration with the use of alerts – such as out-of-stock situation, past-due ASNs, or PO

overdue for confirmation. Users can

Figure 8: Supplier Quick View



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are greatly reduced. Furthermore,suppliers can also choose to receivedownload files as e-mail attachmentsand send back the responses to SAPSupply Network Collaboration viae-mail. This completely removes the

need for the supplier to log onto theapplication.

In the AMR Research Inc. article “SAP Aiding Collaboration with SNC,” pub-lished on October 30, 2008, NohaTohamy comments that SAP customersare satisfied with functionality and inte-gration and expects “SAP to continueto gain more traction with [SAP SupplyNetwork Collaboration], with additionalenhancements to reporting, file transfer

and alert monitoring.”

view these alerts in the alert monitor,or the user can chose to receive thealerts as e-mail, fax, or Short MessageService (SMS) notifications. This helpsthe user “manage with exceptions,”logging onto SAP Supply Network

Collaboration when needed.

• Notes – Suppliers and customers canuse the convenience of exchangingfree text notes with each other toimprove communication details.

• Partner self-service – Suppliers andcustomers can manage their own busi-ness users in SAP Supply NetworkCollaboration, off-loading the heavyuser creation and maintenance taskfrom customers. This includes creat-

ing users, assigning roles, resettingpasswords, and defining user-basedsettings such as date formats anddecimal formats.

• File transfer – Suppliers can leveragefile transfer features to downloaddata that they would otherwise seeon the given SAP Supply NetworkCollaboration Web screens, edit thedownloaded file locally on their PCs,and then update the application withthe latest changes by uploading themodified file. For example, a supplier

can download PO items to be con-firmed, mark the confirmations, andupload the confirmations to SAPSupply Network Collaboration. Manysuppliers are already used to usingspreadsheets for collaboration, sothe training costs of this deployment

SAP Supply NetworkCollaboration can beintegrated with differentERP systems, such asBAAN or Oracle, sincethe application is back-end agnostic. Standardinterfaces can be usedto upload master data,

and SAP NetWeaverProcess Integration canbe used to exchangetransactional data.



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• The SAP NetWeaver Identity Man-agement component – SAP SupplyNetwork Collaboration users andbusiness partners can be automati-cally generated from SAP NetWeaverIdentity Management. This includes

creation, change, and deletion of usersand business partners for employeesand external users.

SOA Enabled

The standard SAP Supply NetworkCollaboration shipment can be inte-grated with SAP ERP releases level4.6C or higher. The master datarequired can be copied over fromSAP ERP using core interface func-

tionality, and the up-to-date trans-action data can be exchanged usingSAP NetWeaver PI.

Alternatively, SAP Supply NetworkCollaboration can be integrated withdifferent ERP systems, such as BAANor Oracle, since the SAP application isback-end agnostic. Standard interfacescan be used to upload master data (forexample, business add-ins, or BADIs),and SAP NetWeaver PI can be used toexchange transactional data.

All back-end communication interfacesof SAP Supply Network Collaborationare SOA enabled with well-defined inter-faces compliant with industry standardsthat use the XML format and can becalled using SAP NetWeaver PI.

readily customize reports related tosupplier performance measurementKPIs. Reporting tools from the SAPBusinessObjects™ portfolio can beleveraged for this.

• The SAP Event Management appli-

cation – SAP Supply Network Col-laboration provides several standardintegration points with SAP EventManagement to trigger alerts whenan expected event does not occur(for example, it enables the ability totrigger an alert if the expected eventof a PO confirmation does not takeplace for more than 24 hours).

• The SAP NetWeaver Portal compo-nent – SAP Supply Network Col-laboration can be added to SAP

NetWeaver Portal if you want toallow the supplier to access othersoftware systems besides SAPSupply Network Collaboration. Thisallows you to group together processsteps that are required for the com-plete process flow but are usuallycarried out in different systems.

• SAP APO – SAP Supply NetworkCollaboration provides severalintegration points with SAP APO.In supplier collaboration, integrationof scheduling agreement releases

can be done with SAP APO insteadof SAP ERP. In customer collabora-tion, replenishment planning fea-tures such as deployment, productallocation, and global availability topromise (GATP) can be done withSAP APO.

Integration with OtherSAP Software

SAP Supply Network Collaborationstandard business functionality needsto be integrated with SAP NetWeaver

Process Integration (SAP NetWeaver PI)technology and the SAP ERP applica-tion. SAP NetWeaver PI content mapsmessages from SAP ERP to XML for-mat and vice versa and routes themcorrectly between start and destinationlocations.

The optional integration of SAP SupplyNetwork Collaboration with other SAPsolutions supports other business pro-cess areas:

• cFolders − SAP Supply Network Col-laboration is closely integrated withcFolders (part of SAP PLM), allowing you to navigate directly to cFoldersfrom different screens (for example,the Purchase Order Worklist Webscreen) and thereby gain access torelated documents and files such asdrawings or technical specifications.The supplier can also upload addi-tional documents to cFolders for thecustomer’s benefit. This helps to tiedesign and product lifecycle manage-

ment together with procurementplanning.

• The SAP NetWeaver Business Ware-house (SAP NetWeaver BW) com-ponent – SAP Supply Network Col-laboration is closely integrated withSAP NetWeaver BW, allowing you to

INTEGRATED AND SOA ENABLEDBRINGING IT ALL TOGETHER FORGREATER BENEFITS



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new releases of the software. The sameapproach has been in place for SAP ERPsince some time ago. Through enhance-ments in software architecture and afocus on SOA services that enable theenhancement packages concept, cus-

tomers can take advantage of newfunctionality in an easier and more pin-pointed way by applying enhancementpackages and activating selected func-tionalities that are required at a giventime. The aim is to reduce the custom-er’s cost of upgrades and provide morefunctionality, more frequently.

SAP Supply Network Collaboration isbuilt on the ABAP™ programming lan-guage stack and does not require run-ning the Java stack. Stable Core

SAP Supply Network Collaboration 7.0represents the so-called “core release,”a concept adopted for all applications inSAP Business Suite 7 software, whichmeans that future functionality will bedelivered to customers via SAP enhance-ment packages and no longer via entire

SAP Supply Network Collaborationcan be installed and operated in theform of:• A lean supply network collaboration

(SNC) version that only containsfunctions relevant for supply network

collaboration• A full SCM version that includes com-

ponents of SAP APO, SAP EventManagement, and the SAP ExtendedWarehouse Management (SAP EWM)application

The lean SNC version is not availableto support customer collaborationcapabilities.

The full SCM version is suited to cus-

tomers who already use SAP APO,SAP Event Management, SAP EWM,or customer collaboration functionality,or plan to do so in the future. The leanSNC version is suited to customers who do not want to operate any moreSCM components on the same serveror do not want customer collaborationfunctionality. Note that it is not possibleto upgrade from the lean SNC versionto the full SCM version and vice versa.

The most popular installation among

customers is the full SCM version withonly the SNC functionality switched on.This keeps your options open for usingmore functionality in the future, avoidssupport package dependencies amongcomponents, and helps to improve sys-tem performance and peak memoryrequirements.

ARCHITECTURE AND LANDSCAPECHOOSING WHAT FITS YOUR BUSINESS BEST

Figure 9: Installation Options for SAP Supply Network Collaboration

SAP SNC server SAP SCM server

SAP SNC 7.0 SAP SCM 7.0 Server SAP SCM

SAP Extended Warehouse ManagementSAP SNCSAP Event Management

SAP SCM 7.0 SAP SCM 7.0

SAP NetWeaver® SAP NetWeaver

SAP® Supply Network Collaboration(SAP SNC) as add-on

SAP Supply Network Collaboration aspart of SAP Supply Chain Management(SAP SCM)

Application/database server

Advantages• Less support package implication• Smaller system and hardware requirements• Separation of SAP SNC versus SAP SCM

planning functionalities for a demilitarized zone

Risks• No supported upgrade path to a full

SAP SCM server • No full functionality

Advantages• Possible to use other SAP SCM components

on the instance• Mandatory for some functionalities (that is,

extended planning features)

• Supported upgrade from an existing SAPInventory Collaboration Hub/SAP SNC5.0/4.1

Application/database server

Relationaldatabasemanage-

mentsystem

Relationaldatabasemanage-

mentsystem

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Powered by SAP NetWeaver

SAP Supply Network Collaborationis powered by the SAP NetWeavertechnology platform. SAP NetWeaverunifies technology components into a

single platform, allowing organizationsto reduce IT complexity and obtain morebusiness value from their IT investments.It provides the best way to integrateall systems running SAP or non-SAPsoftware.

SAP NetWeaver also helps organiza-tions align IT with their business. WithSAP NetWeaver, organizations cancompose and enhance business appli-cations rapidly using enterprise services.

As the foundation for service-orientedarchitecture, SAP NetWeaver allowsorganizations to evolve their current ITlandscapes into a strategic environmentthat drives business change.

Find Out More

For more information about how SAPSupply Network Collaboration can help you, call your SAP representative or visit us online at www.sap.com/scm.

Supporting Value

SAP Supply Network Collaborationsupports value scenarios for collabor-ative demand and supply planning andfor manufacturing network planning

and execution. For more details, seeResponsive Supply Networks.

Other Information Sources

More information about SAP Supply Net- work Collaboration can be found here:• For general information on SAP Sup-

ply Network Collaboration, see theSAP Service Marketplace extranetat service.sap.com/scm SupplyNetwork Collaboration . (New users

to SAP Service Marketplace mustfirst register here to receive a pass- word and access:https://websmp101.sap-ag.de /~SAPIDP /002006825000000234912001E.)

• For SAP documentation, see theSAP help portal at help.sap.com SAP Business Suite SAP SupplyNetwork Collaboration .

• For release notes, see SAP ServiceMarketplace at service.sap.com /releasenotes SAP Solutions

SAP Supply Chain Management(SAP SCM) . (New users to SAPService Marketplace must firstregister here to receive a pass- word and access:https://websmp101.sap-ag.de /~SAPIDP /002006825000000234912001E.)

SAP Supply NetworkCollaboration provides

various tools to helpuser productivity byproviding access to keyinformation quickly andin a personalized way.Web UI screens can be

personalized by remov-ing fields and table col-umns that are not rele-

vant, and users canuse worklist screens toquickly and efficientlyprocess everyday tasks

with minimal mouse

clicks, taking away theneed for the user totoggle between variousoverview and detailscreens.


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SummaryOptimizing visibility, control, and efficiency in supplier and customer interactions, theSAP® Supply Network Collaboration application enables Web-based cooperation andknowledge sharing across your supply chain. It delivers a consistent view of supply-and-demand information to manufacturers, suppliers, and customers.

Business Challenges

• Poor cooperation, communication, and collaboration among your supply chain partners• Unreliable supply and demand information, creating an out-of-sync supply chain• Rising costs due to inefficient procurement, sales, and inventory processes

Key Features• Collaboration with suppliers – Synchronize supply with demand by facilitating the

release, purchase order, kanban, replenishment, inventory, delivery control, packaging,and invoicing processes

• Collaboration with contract manufacturers – Connect and communicate with contractmanufacturers, providing access to supply chain information and extending your visibilityto their manufacturing processes

• Collaboration with customers – Gain support for state-of-the-art, vendor-managedinventory capabilities, including demand-driven replenishment and the ability to controlinventory at each customer location based on inventory, demand, and minimum or

maximum stock balance limits

Business Benefits• Increase the speed, accuracy, and adaptability of your supply network by streamlining

and automating collaboration between you and your suppliers, contract manufacturers,and customers

• Decrease the cost of your procurement, sales, and inventory processes by improvingcommunications and efficiency

• Optimize supply chain visibility by providing a clear, accurate view of supply anddemand information to all supply chain participants

For More InformationCall your SAP representative or visit us online at www.sap.com/scm.
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