At the same time, you also need the ability
to initiate corrective actions, when and where they become necessary.
And since supply chains don't start and stop within the boundaries of
your company - they extend across multiple vendors and enterprises - you
need notifications and corrections up and down the entire length of your
supply chain, from the supplier's supplier all the way down to the customer's
customer, and anywhere in between.
Supply chain event management, in this
way, becomes the critical intermediary between planning and execution.
Toward this end, mySAP SCM Supply Chain Event Management (SCEM) delivers
functionality designed to increase the speed of reaction to variances
and enable better evaluation of supply chain performance, including: 1
Provides continuous information about supply chain objects and events,
including the detailed current status of orders, supply, production, shipments,
inventories, and assets.
Supports alerts and exception handling in real time, including exception
messages, sent to the appropriate parties, to preventively indicate the
decisions that need to be made.
Supports decision-making by evaluating the conse-quences of proposed
actions, or by recommending actions based on optimization methods.
Allows a decision-maker to correct a previous decision (e.g., diversion
Provides evaluations, often Key Performance Indicators (KPIs) and
metrics, so that the responsible decision-maker can estimate the past
or current performance of the supply chain.
Two essential elements of SCEM are supply
chain objects (SCOs) and events. Within the context of event
management, there is obviously a huge number of objects to be considered
from the distribution, procurement, production, and asset perspectives.
But no matter what the tracking object
- whether it is a batch, truckload shipment, production order, inventory,
or purchase order - the monitoring and follow-up of the SCO must support
the primary goals of event management. Supply chain event management functions
need to span a wide range - from tracking a single item to correcting
supply chain-wide problems - and include:
- Early recognition of malfunctions in the supply chain
- Compliance with legal requirements for documentation of material flows
- Determination of the current status and location of a container
SCEM Engine: Enhanced Support for Event Management
The release of SAP's SCEM Engine in the
second quarter of 2001 creates a new link between mySAP.com solutions
for the monitoring and notification needed for supply chain event
management, by evaluating the supply chain and providing comprehensive
The SCEM Engine was developed within the
framework of a strategic customer project that uses mySAP Supply Chain
Management (mySAP SCM) for transportation planning and tendering, SAP
R/3 Enterprise2 for organizing the transport
execution, and mySAP Business Intelligence (mySAP BI) for analyzing key
performance indicators. It was first implemented and tested in early 2001.
The SCEM Engine has three core components:
- The Engine Kernel performs the actual event management process.
For each process or inventory to be managed, it provides a supply chain
object that guarantees that incoming events are processed.
- The Interface for Applications is a generic add-on for SAP
systems. It allows business processes implemented in SAP systems to
manage supply chain objects (i.e., create, change, and delete). For
non-SAP applications, information on supply chain objects and events
can be transferred with XML using Business Connectors.
- The KPI Component contains several mySAP BI InfoCubes that
allow evaluations of logistical execution, along with quality, on-time
delivery performance, and confirmation reliability, to be created for
mySAP SCM's transportation planning functions.
Although the future functions of the SCEM
Engine will likely be even broader (see "Potential of SCEM and the SCEM
Engine"), it currently performs three main tasks in the context of supply
chain event management. The SCEM Engine:
1. Monitors shipment tendering to the carrier.
2. Checks logistics execution by the carrier.
3. Evaluates the quality of the carrier.
Figure 1 provides an example of the paths a planned shipment could
take with the SCEM Engine.
Once a sales order is received, deliveries
and planned shipments are created in mySAP SCM. Then the planned shipments
are transferred to the SCEM Engine, which monitors the tendering process.
In the scenario in Figure 1, the carrier
either accepts or declines the tendered shipments, and confirms the delivery
date with the customer. If the carrier does not respond, the SCEM Engine
issues an alert in the SAP Advanced Planner and Optimizer (SAP APO) alert
monitor. If the shipment is fully planned and confirmed by the carrier,
it is transferred to the SAP R/3 Enterprise system for execution.
||Example of an Event Management Process Using the SCEM Engine
From that point on, the SCEM Engine controls
the execution of the individual steps of the shipment, such as arrival
and departure at distribution centers and customer locations. The carrier
can then report on these events via EDI or a web connection (see Figure
The SCEM Engine updates the reported dates
with the events in the LE shipment document, which allows employees to
easily access the current status of the shipment at any time, as in Figure
3, for example. Via this screen, employees can view information on
the pickup arrival and departure for LTL Shipment 1960.
||Status Report on Shipment with the Supply Chain Event Management
When the shipment process is complete,
the event data is processed in the SCEM Engine and also transferred to
mySAP BI for further evaluation. With these two steps, the system evaluates
both the actual execution of scheduled steps and the quality
and accuracy of the confirmations (events) based on previously negotiated
standards for report quality. This facilitates prompt and accurate execution
of the shipment and complete event reporting, and ensures that all reporting
is in the right order and within acceptable time periods. When delivery
to the customer is complete, invoicing then takes place.
Potential of SCEM and the SCEM Engine
This event management scenario hints at
the enormous possibilities of the mySAP SCM solution and the SCEM Engine.
In the future, the logistics-relevant objects found in different SAP systems
could also be displayed in the SCEM Engine, forming the backbone of an
open solution - an alternative to using separate systems to provide information
on supply chain objects and events or to create alerts. This technology
could also allow you to trace a supply chain object's maintenance history
in public and private supply chain exchanges. What's more, this server
has great potential for a variety of clients - including auto PCs or mobile
devices with GPS - to keep up with ever-changing client technology.
With the addition of the SCEM Engine to
SAP's business process experience, combined with its Internet-based mySAP.com
solutions, SAP now provides a complete set of event management tools to
monitor and evaluate the success of your supply chain.
Dr. Bernd Lauterbach is Project Manager for the mySAP SCM Supply Chain
Event Management solution. He joined the SAP Logistic Execution development
team in 1995. Prior to joining SAP, he worked as Project Manager and Developer
for GIS products focused on transportation. During his university career
(1987-1993), his research focus was on automatic data extraction from
scanned maps using image processing techniques to provide vector and symbolic
data for GIS databases.
After graduating in sociology and ethnology at the Universities of Heidelbeg
and Freiburg, Oswald Wieser went on to study information Technology at
the Institute for Information Technology, Business Management and Electronics
in Karlsbad, Germany. In 1980, he joined Nixdorf Computers AG, and from
1987 was head of the Competence Center for Chemical Manufacturing Team
at Hewlett-Packard GmbH. He joined SAP AG in 1991, and is now Product
Manager for mySAP Supply Chain Management.
1 The supply chain event management functions
listed here are based on information from AMR Research, Inc.
2 SAP R/3 Enterprise is the successor to the
R/3 ERP solution.