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Supply Chain Visibility: You Can't Steer When You Can't See!

by Oswald Wieser | SAPinsider

October 1, 2002

by Oswald Wieser, SAP AG SAPinsider - 2002 (Volume 3), October (Issue 4)

Originally, the bridge of a ship was the image associated with an operative command center. The bridge had two distinguishing features: it provided an overview of what is happening and the ability to steer. In the last century, first the (airplane) cockpit and then the (NASA) command center also became synonyms for this. Can this image be transferred to the management requirements for a company? For a company, "overview" or "transparency" refers to achieving business goals, and timely tracking of business processes and assets. These three are closely related.

A company's highest priorities include setting business goals and checking that these goals have been achieved through the use of key performance indicators. In companies that manufacture and distribute goods, these priorities are based upon a number of operative priorities that require process transparency in production, storage, and shipping. As work is increasingly divided between the owners of brand names, producers, and logistics service providers, these processes are not just spread across the different plants of one company; they now involve all business partners in a network of suppliers and customers. The partners need transparency of their investments such as means of transport, production plants, and material inventory at many points along this business process. Up-to-date information about location, status, and quantity is just as important for an available-to-promise check during sales order creation as it is when checking whether a machine has been cleaned before production begins. How do you achieve this kind of visibility into the performance of business processes and assets with such a complex supply chain network?

With mySAP SCM, we offer solutions to help achieve transparency in business processes, assets, and the attainment of company goals. Supply Chain Performance Management provides the key performance indicators, while Supply Chain Event Management enables process transparency (see "SAP Event Manager 1.1"). Visibility scenarios, SAP's pre-defined settings for particular business processes (see "Visibility Scenarios"), are used to provide a connection between these two. These scenarios link an overview of business processes with the key performance indicators that are used to evaluate the process steps.

Tracking Events to Gain Higher Visibility of Business Processes

The status and progress of business processes are represented as a sequence of events. It is especially useful to keep track of events that:

  • Contain information about the process status and progress:
    Are all products for a customer's order ready for pick-up, and has the truck arrived?

  • Are required for documenting the process for contractual (service level agreement) or legal (FDA, dangerous goods shipments) purposes:
    When were the sales data provided to the supplier for replenishment according to the service level agreement?

    Where are the electronic batch records from manufacturing required by the FDA, and was the material safety data sheet printed?

  • Need to be proactively monitored as milestones:
    Will the carrier arrive as scheduled given the current traffic?

    How late will the delivery possibly be?

    Does this have any carry-over effect on material availability?

  • Are used to send messages to those involved:
    During regular business hours, the service technician will be informed by email about any equipment breakdowns, then, after 6 pm, by SMS text messages to his pager.

  • Require further action or trigger it:
    The system will trigger automatic billing after customer's proof of delivery has arrived.

SAP Event Manager 1.1

In August 2002, the release of SAP Event Manager (EM) 1.1 as a new component of the mySAP SCM solution signifies SAP's delivery of the backbone of its suite of applications for supply chain event management.

Based on the Web Application Sever 6.20 with its exchange infrastructure, the SAP Event Manager offers a broad range of functions for tracking, proactive notification, and alert creation, the latter by tight integration to the Alert Framework. The Event Manager is able to track and control business processes along the entire supply chain by integrating with supply chain planning, supply chain execution, customer relationship management, and product lifecycle management in both SAP and non-SAP applications.

It has these main features:

  • The Event Processor receives incoming messages with one or several events, logs and validates events, decodes data using mapping definitions, and correlates the messages with active event handlers representing supply chain objects.

  • The Event Controller creates changes, activates and deactivates event handlers, processes events, and forwards events to the Rule Processor and the Expected Events Processor.

  • The Expected Events Processor monitors expected and unexpected events, checks that the events match with stored rules and dates, recognizes a delay of events, for example, and provides profiles for the production of expected events.

  • The Rule Processor applies sets of rules to an event, coordinates the reaction to a message, calls up downstream monitoring functions if necessary, and transfers alerts and responses to target systems or users via the Alert Framework. For statistical evaluation, the performance figures are transferred to the SAP Business Information Warehouse.

mySAP SCM Supply Chain Event Management lets you define and manage events, which are the significant milestones of all supply chain processes, such as purchasing, manufacturing, and shipping.

This information may come from SAP systems or systems created by other software manufacturers. Changes in status for orders, batches, handling units, serial numbers, and so on can be useful information for process transparency, and they are transferred to the SAP Event Manager.

On the basis of this data, the system identifies the objects to be tracked and derives a schedule of expected events within their lifecycle. Actual events, whether expected or unexpected, often originate in technical systems such as geo-positioning, warehouse control, production, or process control systems. Confirmations made over the Internet or using mobile devices are also of significant importance.

These sources of information are identified in each visibility scenario. Assessment and processing rules are specified for the events that occur, and the way in which the people or systems involved are to be notified is also defined. This creates transparency for processes that are currently running and allows operative intervention - the two most important properties embodied by the command bridge of a ship.

What's more, the integration of key performance indicators and status overviews in a portal that is relevant to both people and orders means that these features can be accessed wherever an Internet browser is available (see Figure 1).

Visibility Scenarios

With SAP Event Manager 1.1, SAP provides predefined visibility scenarios that include expected events, status, follow-up activities, and web layouts for reporting event data and enabling the global visibility of supply chain processes among business partners.

Visibility scenarios include:

  • Connections to mySAP SCM components, such as SAP APO, SAP R/3, and SAP BW, as well other solutions.

  • All customizing settings in SAP Event Manager for the particular business process like expected events profiles, rule sets, alerts, and responses.

  • Preconfigured user interfaces for web access to SAP Event Manager.

  • Data extraction routines to transfer data to the business information warehouse for performance analysis.


Figure 1 mySAP SCM Supply Chain Event Management with the Transportation Planner Portal Role

To Get Started...

Visibility scenarios are ready-to-go, so you can put the solution to work right away. SAP will ship the first scenarios for order fulfillment, purchasing, manufacturing, asset tracking, and logistics services along with Event Manager 1.1.

For more on Event Manager 1.1, registered SAP users can visit and look for "Coordination."

After graduating in sociology and ethnology at the Universities of Heidelberg and Freiburg, Oswald Wieser went on to study information technology at the Institute for Information Technology, Business Management and Electronics in Karlsruhe (Germany). In 1980 he joined Nixdorf Computer AG. From 1987 he was appointed head of the Competence Center for Chemicals. From 1990 to 1991, he supervised the Chemical Manufacturing Team at Hewlett-Packard GmbH, and joined SAP AG in 1991. His current position is product manager for Supply Chain Management.

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