My recent article SAP SCM – Stepping Out of (Relative) Obscurity analyzed SAP’s revamped comprehensive supply chain management (SCM) suite, its major components, and its supply chain process bundles. In addition to receiving a number of public comments and ratings by TEC’s readers, I was recently roasted privately during a lunch meeting with a couple of peers.
Namely, they expressed their surprise at the quite positive tone of the article, and at the lack of my typical skepticism (and sometimes sarcasm). Well, perhaps I am a sucker for a good “big picture” vision, and it seemed to me that SAP had created a compelling strategic story. The ideas such as the “Visual Enterprise” sounded refreshing to me, especially after several years of SAP being quiet on the Line of Business (LOB) applications delivery front. At the end of the day, it was important to highlight that the solutions that SAP is offering for supply chain executives expand across the traditional TLA (three letter acronym) boundaries of SCM, product lifecycle management (PLM), customer relationship management (CRM), enterprise resource planning (ERP), manufacturing execution system (MES), etc.
But while I might have drunk SAP’s “bigger SCM picture” Kool-Aid, I am aware that the devil is always in the details (and that the proof of the pudding is in the eating). Time will only tell whether and how SAP will deliver on its ambitious vision and product roadmaps as well as how its customers will accept these still unproven solutions and concepts whenever they become generally available. I agree with Lora Cecere’s recent Supply Chain Shaman’s blog post that it is not yet clear, for either the SAP team members or the customer, how these solutions will fit together to solve industry-specific problems.
There is also a growing anxiety within the SAP client base on total cost of ownership (TCO), as the original promise and premise was that the selection (and standardization) of SAP solutions corporate-wide would reduce TCO. But many CIOs will say that they have not received many industry-specific user enhancements for their hefty maintenance dollars. Needless to say, the pricing details are still sketchy. Along similar lines was Lora’s even more recent blog post on the upcoming SAP Sales and Operations Planning (S&OP) product.
SAP SCM Product Marketing Team Gets the Last Word
Therefore, as a follow up on the aforementioned article and to further discuss some SCM issues and topics, here is my recent candid discussion with SAP’s SCM product marketing team. My questions and SAP SCM’s answers are as follows:
PJ: What makes you confident that the SAP Enterprise Warehouse Management (SAP EWM) 7.0 and SAP Transportation Management (SAP TM) 8.0 products are finally on par (if not even better) than best-of-breed (BoB) warehouse management system (WMS) and transportation management system (TMS) products?
SAP SCM: With SAP EWM release 7.0, our customers have been telling us that our solution is on par in functionality with BoB solutions. The solution offers advantages as part of the SAP Business Suite, and that makes our WMS a top choice for those users.
For its part, SAP TM 8.0 is a broad departure from the other BoB TMS solutions. We offer a solution for all transport modes and are delivering a solution to meet the needs of all industries. In addition, we have created a solution that links all of the logistics processes together, from taking an order to settling that order. We believe that these differentiators are going to allow us to differentiate ourselves going forward.
PJ: What do you say to some BoB players claiming a staying power with their WMS products due to stronger Slotting, Engineered Labor Standards, Yard Management, and Task Interleaving capabilities? Along similar lines, they are claiming a staying power with their TMS products functionality to support a broad area of transportation processes including core carrier, fleet, and parcel, for both shippers and logistics services providers? Some also claim that SAP is in the process of releasing its TMS 8.0 in a controlled manner; is this correct?
SAP SCM: We believe that a lot of this is just misrepresentation and fear, uncertainty & doubt (FUD) tactics. We need to do a better job of showcasing these capabilities. SAP TM 8.0 is now generally available. We exceeded all ramp up targets and expectations for this release. See the official June 22, 2011 announcement for more details here.
In addition to general availability, SAP TM 8.0 is doing well in the market. We have many live customers and over 30 implementations underway. For more details on the capabilities and references of the product, take a look here. We are sure that you (and anyone else for that matter) will see that SAP is now as competitive as any niche player.
PJ: Is your currently available sales and operations planning (S&OP) solution based on SAP Budgeting, Planning & Consolidation (SAP BPC, formerly Outlooksoft) and aimed mainly at financial folks?
SAP SCM: The current Rapid Deployment Solution (RDS) for SAP BusinessObjects S&OP helps organizations to develop a single unified plan for driving business operations. In using this solution, you can gain an easy-to-implement offering for leveraging your existing landscape to consolidate data. To accomplish this, our solution provides you with the pre-defined analytics and expert support you need to manage your organization’s enterprise-wide sales and operations planning processes. It is not “aimed mainly at financial folks”. For more info take a look at the SAP.com page here.
Having said that, our new upcoming SAP HANA-based S&OP solution will leverage data from numerous sources including ERP and SCM applications (see image below).
PJ: SAP RFID is apparently no longer part of the SAP NetWeaver platform per se, but rather a SCM module (or feature). What is the install base there and for what typical use cases?
SAP SCM: SAP AII (Auto ID Infrastructure) and SAP OER (Object Event Repository) are being used in a broad range of industries. We are seeing a significant amount of interest in item traceability scenarios. We have broad interest in industries such as life sciences, food/beverage, aerospace, automotive, chemicals, and retail.
PJ: Given JDA Software and RedPrairie’s success in marrying upstream consumer packaged goods (CPG) manufacturers’ supply chains with those of retailers (see the related article here), why hasn’t there been much cooperation between SAP’s SCM and Retail teams? What is planned in the future to remedy this situation?
SAP SCM: We are addressing this right now. With the appointment of Lori Mitchell-Keller as head of the Retail Industry Business Unit (IBU), we are seeing an increase in collaboration and joint initiatives. There is an active project in development around SAP Demand Signal Management, which is collaboration between the two teams. More information will be available on this solution in the near future.
CPG and Retail are key industries for our supply chain execution (SCE) solutions. Our global trade management (GTM) solutions team is set up to coordinate cross-industry requirements and as we adopt Lean Principles, we will accelerate the delivery of solutions across industries and package existing ones to meet such needs.
PJ: Why do many SAP customers still opt for BoB forecasting and demand planning solutions (e.g., Logility, Demantra/Oracle, Smart Software, etc.)?
SAP SCM: We can only point out that we have many happy and successful customers leveraging the SAP planning solutions. Demand Planning is the highest area deployed in this space.
PJ: What is your view on Manhattan Associates’ attempt to marry planning and execution within its SCOPE (supply chain optimization-based planning & execution) suite and based on its SCPP (Suply Chain Process Platform)? What is SAP’s equivalent to a BPM-based platform a la Manhattan SCPP (see the related blog series here)?
SAP SCM: SAP has an underlying platform (being NetWeaver) that is a data-, event-, and process-based platform across the entire business suite, not just the supply chain solutions. This allows us to deliver truly end-to-end processes including the marriage of planning and execution.
PJ: Would you please elaborate on your alliances with SmartOps and Llamasoft, i.e., what white spaces do they fill?
SAP SCM: The partnership with the two companies are different in the following manner:
- SAP Enterprise Inventory Optimization by SmartOps is a “Solution Extension,” which means it is an SAP branded product, sold on SAP corporate paper, and SAP provides Level 1 and 2 support
- The relationship with Llamasoft is that of an “Endorsed Business Solution” for strategic network design, which means that we work together as complementary solutions.
PJ: Why was Crossgate acquired recently, and how and where will it fit within SAP SCM? What is the relationship between SAP Global Trade Services (GTS) and Crossgate?
SAP SCM: As the press release pointed out, SAP acquired Crossgate to “Instantly Connect SAP Customers and Their Business Partners for Networking at Enterprise Level; Will Link Enterprises for Smoother Interoperability, Faster Information Flows, More Productivity, Smarter Decisions.” As a leading provider of hosted business to business (B2B) integration services, Crossgate enables companies to fully integrate and network with trading partners, clients, and suppliers, allowing electronic data exchange (EDI) with any business partner regardless of their technical capability.
As a result of this acquisition, SAP will enable networking at the enterprise level, providing an easy way for trading partners to collaborate, share data and automate processes that link customers and suppliers for streamlined B2B e-commerce. As part of our historical relationship with Crossgate, for example we have available B2B packages for TM 8.0 that include Request for Quote (RFQ) Tendering, Direct Tendering, and Carrier Booking. Along that scope, we are currently finalizing roadmap items for similar network enablement of our Supply Chain LOB applications.
Dear readers, what are your views, comments, opinions, etc. about SAP’s undeniably ambitious SCM approach? Will that work for your region/industry? What are your best practices as well as experiences with particular SCM applications? If you are a SAP SCM user, I would appreciate hearing about your experiences with the product, the company, and its partner ecosystem.
as a wholesaler i have received form SAP very similar answers to my questions about seamles follow up of the bought goods to the defined customer.