Logistics technology: SAP rolls out new SCM release

Jeff Berman, Senior Editor -- Logistics Management, 2/27/2008

ORLANDO, Fla.—Enterprise resource planning vendor SAP announced this week it has rolled out the upcoming release of its supply chain management application, SAP SCM.

SAP said this application, which is part of the SAP Business Suite line and based on the SAP Netweaver platform, was developed in close collaboration with its customers to focus on things like supply chain responsiveness and integration with partner ecosystems.

It added that this version of SAP SCM, which will be made generally available to all customers by the middle of this year, will offer augmented functionality for things like supply network collaboration, extended warehouse management, and enhanced planning, with various benefits for shippers such as closer collaboration with business partners to improve visibility, maximized workforce planning to increase productivity, and enhanced planning to improve efficiency.

“We are in continuous contact with all of our customers of all sizes that are bringing us their specific requests and requirements,” said Stefan Theis, SAP vice president Suite Solution Management, SCM, in an interview with LM earlier today. “These things are geared towards helping our customers make improvements to their supply chains.”

In terms of the specific benefits this updated version of SAP SCM will provide for its 14,500 customers (many of whom are shippers), Theis outlined how shippers will see specific improvements.

“For warehousing, it was key for our customers to better plan and measure and optimize the labor involved in warehouses, because it is a major cost-driver,” said Theis. “We focused on building labor management processes [for shippers] that we can monitor the abilities of each warehouse worker, plan better…and better connect them to a company’s HR system.”

Theis also cited the benefits of SAP SCM for supply chain work order collaboration efforts. The new enhancements in this area, he said, will enable shippers that outsource manufacturing to gain visibility for contract manufacturer processes.

“SAP SCM provides access to work orders that show the capacity loads, what is confirmation status within the production schedule, and when a product is coming out of production, and when it will arrive at a new location to continue work on it,” said Theis.

SAP said this enhanced planning module also has a feature for capacity reservations, which it said helps shorten delivery times to strategic customers.

From a competitive standpoint, Theis commented that this rollout helps SAP “bring more to the table” through an integration of different components.

“It is not enough to just optimize the inside of a warehouse,” said Theis. “We are seeing more and more possibilities to integrate the warehouse with a material flow system with a high degree of automation. And the other part is integrating transportation processes.” 

These new upgrades represent a continued commitment by SAP to remain a key player in the supply chain technology space, according to AMR Research Senior Vice President and Research Director of Supply Chain Services John Fontanella.

 “This puts everyone one in the supply chain technology industry on notice that SAP is not willing to cede this market,” said Fontanella. SAP is moving very assertively with Supply Chain. With Netweaver and the business process platformm they are and will offer in the future the ability to integrate internally to the company and with the trading community. The idea of a network sharing applications, data, performance, and measuring collaboratively is the next big thing in supply chain.”

Fontanella also noted that this version of SAP SCM will provide shippers with closer collaboration with business partners to improve visibility and continue to add functionality to their supply network collaboration offering to allow customers to electronically connect with more of their partners, regardless of size.