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What Does Innovations 2010 Mean for Your Operations? Insights for the Supply Chain, Procurement, Product Development, and Manufacturing Lines of Business

by Richard Howells | SAPinsider

July 1, 2010

As SAP rolls out compelling new SAP Business Suite enhancements this year, deemed "Innovations 2010," SAP customers involved in operations will want to know what these innovations mean across four functional areas: supply chain, procurement, product development, and manufacturing. Hear directly from four SAP executives, as they explain the business objectives and supporting innovations available in each area.


Line of business

Key goal


Supply chain management  

Responsive supply network
  • Improved performance in supply chain planning for third-party orders
  • Increased planning security and visibility in supplier collaboration
  • Ability to plan supply chain execution activities within the warehouse and optimize transportation processes with preconfigured integration
  • Increased end-user productivity and compliance through shipment collaboration
  • Improved supplier on-boarding and ease of use
  • Improved reverse logistics flow throughout the entire logistics network


Extended source-to-pay process
  • Improved spend visibility and management
  • Centralized supplier on-boarding, management, and performance
  • Integrated sourcing and increased speed-to-value
  • Management of the complete contract life cycle
  • Abili ty to centralize all goods and services procurement operations

Product development

Product and service leadership
  • Continuous product innovation through SAP Idea Management and SAP Portfolio and Project Management 5.0
  • Integrated product development for process and discrete industries, synchronized with manufacturing execution
  • Embedded product compliance to support sustainable development


Integrated and coordinated manufacturing

  • Unified performance management across the plant and the enterprise
  • Integration of product development into manufacturing execution
  • Streamlined outsourced manufacturing
Figure 1 Examples of the easy-to-deploy SAP Business Suite enhancements that enable operations lines of business to achieve their goals without business process disruption


What Does Innovations 2010 Mean to a Supply Chain Executive?

By developing enhancements across all areas of the supply chain solution set, we at SAP are continuing to deliver on our vision of enabling organizations to develop or participate in a responsive supply network.1 With this vision in mind, the enhancements — which center on collaboration, visibility, and supporting complex networks — are designed to:

  • Improve demand visibility and collaborative planning with channel par tners
  • Manage and optimize distribution and logistics networks for cost and service efficiencies
  • Improve collaboration across trading partners and increase visibility and responsiveness
  • Enhance visibility and reduce costs across the service network

Let’s explore some examples.

Cut Out the Middle Man with Third-Party Order Planning

Led by the fashion, high tech, and consumer products industries, the offshore vendor and offshore manufacturing model has grown significantly over the last few years. To save time and reduce transportation and distribution center handling costs, more supply chain executives are now shipping products directly from offshore vendors and factories to end customers.

To support this business shift, Third-Party Order Planning functionality has been added to the supply chain solution set as part of Innovations 2010. This process enables companies to better perform mid-term supply chain planning for third-party orders. Supply chain executives can now consider forecasting capabilities, transportation time, and finite capacities at the supplier level.

In the third-party purchase-to-order process, a salesperson decides if a direct shipment order is appropriate based on, for example, the product type or order size. If a direct shipment is appropriate, SAP ERP looks for a suitable vendor and calculates the delivery date. SAP Advanced Planning & Optimization (SAP APO) then checks whether the vendor has the capacity to supply the requested quantity. If the vendor can supply it on time, the process is initiated.

Improve Collaboration and Visibility Across the Network

As today’s supply chain network becomes global and, as a result, more complex, improving collaboration across all the constituents of your network is critical. In response to this need, Innovations 2010 enhances many collaborative processes. For example:

Enhanced supplier collaboration enables increased planning security and visibility through the use of supplier confirmation data in planning runs. Demand and inventory data created in SAP APO can now be transferred to SAP Supply Network Collaboration (SAP SNC), where suppliers can create planned receipts that are then communicated back to SAP APO. Capable-to-Match logic then uses the planned receipts for constraint-based planning.

Improved shipment collaboration processes increase end-user productivity and compliance with customer transportation requirements via ASN-based shipment creation. For suppliers, this includes the steps involved in preparing a shipment, such as weighing the shipment and posting goods issues. For customers, this includes monitoring the estimated time of shipment arrivals and posting goods receipts.

Enhanced outsourced manufacturing processes boost end-user productivity and increase visibility into supply chain dependencies and disruptions. Brand owners can define relationships between purchase order items and work orders for increased visibility into outsourced manufacturing operations.

Simplified supplier on-boarding enables efficient user administration by a hosting partner to help support alternate deployment methods. There is also improved support for simplified mass processing of data through offline features; this support promotes faster user adoption.

Integrate Logistics Processes Across a Distributed Network

Ensuring integrated, end-to-end logistics and fulfillment processes allows companies to effectively and profitably source, store, and move goods to deliver the right product in the right quantity at the right time. To this end, new enhancements help you better plan and execute across the logistics network. For example:

  • Preconfigured integration with scenarios for warehouse and transportation processes and returns processing helps plan supply chain execution activities within the warehouse and optimize transportation processes. Transportation management planning functionality can now drive warehouse functionality within SAP Extended Warehouse Management (SAP EWM). The design also allows external transportation planning systems to integrate with SAP systems.
  • Enhancements in SAP Event Management improve transparency within collaborative supply chain processes. A company will see improved search-saving capabilities, enhanced archiving, and logic specifically tailored to support high-volume processes — all of which enhance usability while significantly reducing implementation efforts.
  • Enhanced claims and returns processing improves the reverse logistics flow throughout the entire logistics network by enabling internal and external returns processing.

With these enhancements, supply chain executives are better equipped to participate in a responsive supply network.

Richard Howells ( is responsible for driving the market direction of the SAP Supply Chain Management (SAP SCM) solution set at SAP. He has worked in the SCM space for over 20 years. Prior to joining SAP, Richard spent 15 years with Marcam Solutions.

What Does Innovations 2010 Mean to a Procurement Executive?

For a procurement executive to effect change — that is, to reduce costs and manage demand — it is imperative that he or she negotiates the best possible deals and then controls the procure-to-pay process for all goods and services, enforcing both internal and external compliance with established agreements and practices.

With this level of process and category coverage in mind, SAP has been forging ahead on solution capabilities that span the portfolio of procurement solutions, including enhancements to the following offerings.

SAP BusinessObjects Spend Performance Management

This application is a natively developed tool that delivers superior spend analysis and supports the aggregation, cleansing, classification, and reporting of this critical data, which then feeds into opportunities for sourcing and demand management initiatives.

  • For Innovations 2010, SAP has developed SAP Business­Objects Spend Performance Management 2.1, which offers:
  • Support for global deployment, including more multi-currency and unit of measure (UOM) features
  • Stronger content management tools, such as report sharing and foldering
  • A data model and reporting for supplier risk management
  • SAP E-Sourcing and SAP CLM

SAP E-Sourcing and SAP Contract Lifecycle Management (SAP CLM) are integrated sourcing and contracting solutions that are available in multiple deployment models (on-demand, hosted, or on-premise). Their capabilities include strategic sourcing activities, such as project development, RFX, auctions, and contract management.

Innovations 2010 includes SAP E-Sourcing and SAP CLM Wave 7. The on-demand versions will be available in Q3 2010, and the on-premise versions are expected to enter ramp-up in the second half of 2010. The enhanced offerings bring:

  • Improved line item management and total cost calculations for better sourcing decisions
  • Support for Dutch auctions
  • Simplified accessibility of contract documents
  • Numerous usability updates in Web 2.0 style, such as favorites, saved searches, and auto-fill capabilities
  • Several new reports and dashboards that leverage SAP BusinessObjects Xcelsius reporting
  • SAP’s procure-to-pay solution, which includes elements of both SAP ERP and SAP Supplier Relationship Management (SAP SRM), supports plan-driven procurement and employee-based requisitioning, operational sourcing and contract management, purchase order management, and transaction-based collaboration with suppliers.

New enhancements, which are available in SAP ERP 6.0 enhancement package 5 and SAP SRM 7.0 enhancement package 1, offer:

  • A new shopping cart capability for the employee self-service role in SAP ERP
  • Extended capabilities for service procurement, including invoicing against a contract
  • Enhanced supplier registration and collaboration features
  • Increased usability features focused on the shopping process
  • Lower TCO through fewer required components for implementation

These procurement solutions are also available in on-demand, hosted, and on-premise deployment modes, along with services packages to help organizations gain rapid time-to-value at a time when speedy results are more critical than ever.

The new features, which are scheduled for ramp-up in Q3 2010, will enable a procurement executive to find more opportunities to save, negotiate those savings faster and more effectively, and capture those savings by helping employees and suppliers be more compliant.

Paige Leidig ( is Vice President at SAP, responsible for solution marketing of the procurement portfolio. He has over 15 years of experience in bringing compelling new technologies to market.

What Does Innovations 2010 Mean to the Head of Product Development?

In its commitment to product excellence, SAP continues to invest in solutions that support differentiating product development across discrete, process, and consumer packaged goods industries. New enhancements available from SAP in 2010 drive innovation while helping manufacturers become efficient product and service leaders that deliver competitive, sustainable products.

Enhancements from Innovations 2010 offer a unique user interface (UI) and user experience throughout the product life cycle. What follows are some functions and associated benefits pertinent to product development.

SAP Idea Management

Brainstorming sessions are an important aspect of product development, but it can be difficult to keep track of the various ideas that are shared and explored. With SAP Idea Management, a new web-oriented tool, a product development manager can solicit input from internal and external sources and collect, categorize, and manage innovative ideas in one central system. The tool enables an organization to foster creativity and drive purposeful innovation from strategy through execution.

SAP Portfolio and Project Management 5.0

SAP Portfolio and Project Management is vital for manufacturers to plan their product portfolio and investments more precisely; it allows them to link their product portfolio strategy and execution. With the release of SAP Portfolio and Project Management 5.0, SAP has merged project and portfolio capabilities into one application — all in one UI that is in synch with SAP Product Lifecycle Management (SAP PLM). This system is embedded in a portfolio application that is seamlessly connected with SAP PLM and SAP ERP. SAP Portfolio and Project Management 5.0 also offers new features, like a project editor, that offer visibility into project performance.

SAP Enterprise Project Connection

This new solution enables project information to be exchanged, in context, between portfolio and project management applications. It integrates and harmonizes heterogeneous project landscapes with SAP Portfolio and Project Management

and the project system embedded in SAP ERP. Optimized synchronization of project information ensures that the information is timely, accurate, and complete, thereby reducing the risks attributable to schedule and cost variance.

Enhancements to SAP PLM

SAP PLM now offers advanced functions for process manufacturers, such as a process-oriented work center, advanced cross-object searching, and efficient object navigation. New change management capabilities provide open and flexible change processes across organizational boundaries.

Within SAP PLM, new Product Structure and Assembly Management capabilities enable manufacturers to easily manage and configure complex product structures. Manufacturers can define different types  of structures, such as high-level product definitions representing a concept bill of materials (BOM). The Guided Structure Synchronization feature allows the guided transition of engineering data structures to manufacturing production processes, enabling faster time-to-market. This unique approach to synchronized engineering and manufacturing frees up time for more creativity during development.

In addition, the SAP Recipe Management application within SAP PLM offers enhanced product labeling for process and consumer packaged goods industries, enabling increased quality and compliance.2

With these enhancements, product development line of business managers are better equipped to develop innovative strategies to differentiate their organization from the competition and become product and service leaders.

Thomas Ohnemus ( is Senior Director of Solution Marketing for SAP PLM and product and service leadership (PSL) at SAP AG. He has over 20 years of experience as a PLM expert. Thomas is responsible for SAP PLM and PSL marketing strategy and analyses.

What Does Innovations 2010 Mean to a Manufacturing Executive?

Through our dedication to the perfect plant initiative, SAP is continuing to help manufacturers effectively execute on their overall manufacturing strategy. With Innovations 2010, SAP has made continued investments across the manufacturing solution portfolio to enhance both global coordination and local execution.

Functional enhancements within Innovations 2010 focus on integrated and coordinated manufacturing. To help organizations achieve this goal, all phases of manufacturing operations have been improved. The enhancements bring:

  • Faster time-to-market as a result of tighter integration of manufacturing execution with product lifecycle management and product design
  • Streamlined processes for outsourced manufacturing to orchestrate supply networks efficiently
  • Increased visibility into relevant plant processes at the plant, enterprise, and operations levels
  • Effective and integrated production and quality planning to ensure data consistency, transparency, and compliance
  • More efficient maintenance by managing equipment repairs by exception in order to sustain operations

Keeping these benefits in mind, let’s look at some functional enhancements across various manufacturing areas.

Find more operations insights at

Improved Handover from Engineering to Manufacturing

Promoting closer integration with product development, Innovations 2010 enables high flexibility for engineering and manufacturing through the separate but aligned management of complex design and manufacturing processes. Guided transitions of engineering data structures to manufacturing production processes allow organizations to deliver products to market faster; for example, the transition of an engineering BOM to a manufacturing BOM is memorized, requiring less effort for change management.

Manufacturing Network Planning and Execution

This end-to-end process orchestrates a complex network of internal and outsourced manufacturing plants and component suppliers to reduce lead time and inventories while still maintaining a high degree of responsiveness and flexibility. Delivered through Innovations 2010, enhancements to this manufacturing network planning and execution process simplify existing processes, offer better automation for collaboration scenarios, and enable batch traceability across the supply network. With this enhanced process, in-time information is available for the entire supply network.

Manufacturing Integration and Performance Management

Unified performance management and better integration between enterprise and plant floor data and events enable clear insight into manufacturing operations. New enhancements provide faster time-to-value for composite application development with programming abstraction, as well as persistence, flexibility structures, and error handling found in standard programming languages.

Manufacturers can also experience improved governance of SAP Manufacturing Integration and Intelligence (SAP MII) content, particularly in distributed environments across multiple plants.

Integrated Production and Quality Planning for Enterprise-Level Manufacturing Operations

In this area, Innovations 2010 offers transparency in work-in-process (WIP) tracking and the documentation of shop floor events. For example, shift handovers can be documented in shift notes and signed with electronic signatures, ensuring consistent, safe, and reliable operations. In addition, quality management specifications can now be synchronized with environmental, health, and safety specifications for enhanced product and process compliance. Innovations 2010 enhancements also support detailed lean planning processes, increase the poka-yoke approach within lean execution, and improve the usability of Kanban loop maintenance, helping manufacturers execute deliveries accurately, on time, and less expensively.

SAP Manufacturing Execution 6.0

The latest release of this application promotes increased efficiency through workflow automation, reduced TCO through the harmonization of technologies, and faster time-to-value with process integration. Support of new integration scenarios between SAP Manufacturing Execution and SAP ERP, along with the incorporation of a unified plant connectivity framework, reduces integration costs and increases the shop floor’s integration with enterprise processes.

Asset Visibility and Performance

This end-to-end process provides manufacturers with a clear overview of asset performance through effective KPI management. And by connecting the process directly to the shop floor, equipment issues can be identified through timely alerts. With full visibility into asset operations, exceptions are managed quickly.

This is just an overview of the new functionalities that manufacturers can use in their pursuit of the perfect plant.3 By providing consistent manufacturing execution coordinated by actionable intelligence and integrated with the enterprise, SAP supports organizations on their perfect plant journey.

Chuck Pharris ( is Director of Manufacturing Solutions Marketing at SAP. He has over 15 years of experience in the manufacturing industries. Chuck has worked in all areas of plant automation, including process control, energy management, and production management.

1 See “Is Your Supply Network Positioned for a Rebound? 5 Strategies to Optimize Your Supply Chain” by Richard Howells and Dr. Krish Mantripragada in the April-June 2010 issue of SAPinsider. [back]

2 See “Innovative Product Development: New SAP Functionalities Promote Consumer-Driven, Sustainable Innovation” by Thomas Ohnemus in the April-June 2010 issue of SAPinsider. [back]

3 See “Why Recovery Is 3 Times More Challenging for Manufacturers” by Chuck Pharris in the April-June 2010 issue of SAPinsider. [back]


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