Lessons Learned from an ICH 4.1 Implementation:
Purchase Order Processing Scenario

  • by Srinivas Gudipati, Director, SAP Solutions, Falcon Prime, Inc.
  • June 1, 2006
Learn how to harness the later releases of SAP Inventory Collaboration Hub to get your vendors up and running in your extended supply chain relationship program.
Key Concept
Purchase order processing is a new scenario in the 4.1 release of SAP Inventory Collaboration Hub (ICH). User modifications can take care of additional requirements and provide additional functionality such as purchase order pricing visibility, delivery address, and delivery terms. The ICH 5.0 release accommodates all these new add-on features. Vendors who communicate today with fax or email can see huge benefits with an ICH process implementation. Vendors who communicate through EDI can use ICH as a complementary collaborative tool rather than as a replacement for EDI. With SAP providing ICH out-of-the box scenarios, you can realize ICH implementation and immediate benefits in a very short time, sometimes mere weeks.
Any successful collaboration project requires that partners trust the system and each other. The collaboration solution should also be simple to manage and bring more visibility to the process. SAP addresses these collaboration challenges with SAP Inventory Collaboration Hub (ICH).

Let me share my recent experience implementing ICH for a client. A high-tech company and a world leader in digital television entertainment, it is trying to implement new supply chain solutions. It wants to bring Collaboration Planning, Forecasting, and Replenishment (CPFR) collaboration standards to its business partners. My team of five implemented ICH 4.1 purchase order processing as a first step in the company’s supplier collaboration. It enhances the traditional purchase order processing. Our experience proved that it is a robust process if you implement it in the standard format.

The customer’s ERP system, standard R/3 materials requirements planning (MRP), nets the requirements and creates purchase requisitions. The customer’s ERP system converts purchase requisitions to purchase orders that are published to the ICH system, to increase visibility and accessibility for the supplier. Suppliers log into the ICH Web portal and send the confirmations. ICH then updates the customer’s ERP system automatically.

At the time of goods shipping, the supplier logs in to the ICH Web portal again and creates an advance shipping notification (ASN) in the ICH system. This action results in the creation of an inbound delivery in the customer’s ERP back-end system. This process is suitable for short- to medium-term planning and for small- to medium-sized suppliers without an EDI connection. You could perform this process with multiple suppliers.

I’ll explain the ICH system integration architecture, ICH purchase order process configuration touchpoints, the lessons learned, and the surprises encountered during this ICH implementation. ICH uses two mechanisms, the SAP R/3 Plug-In and SAP Netweaver Exchange Infrastructure (XI) to integrate master data and transactional data respectively. In our implementation we used this SAP standard methodology.

Srinivas Gudipati

Srinivas Gudipati is director of SAP solutions at Falcon Prime Inc., at which he leads SAP SCM solutions (SAP ERP Logistics, SAP APO, and RFID).  He implements large scale corporate supply chain projects and deploys the end-to-end supply chain process solutions. Falcon Prime Inc. specializes in SAP products and solutions across the enterprise domain, and provides business and technology consulting services, software implementation, and development. Srinivas has 12 years of SAP experience and more than eight years of experience implementing SAP supply chain solutions.

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