Provide Visibility of Your Company’s Assets in a Changing Business Model

  • by Lynn Fair, Principal Consultant, SAP America — Western Region
  • April 7, 2010
Some SAP professionals assume Supply Network Collaboration, Collaboration Folders, and Supply Chain Event Manager are products better suited for a repetitive manufacturing environment. However, you can use them effectively in a make-to-order, configure-to-order environment.
Key Concept

Supply Chain Event Manager (SCEM) provides visibility of your business processes outside the four walls of your company. It provides this capability by allowing a company to track a material from the time it leaves the supplier, crosses international borders, clears customs, and arrives at the customer site. When using SCEM with Supplier Network Collaboration and Collaboration Folders (cFolders), users are better informed because of the visibility through SCEM and can make better collaborative decisions with their suppliers. Additionally, you can expand the use of cFolders not just for purchasing but also for collaboration with third-party carriers.

During an SAP implementation, I had a customer who needed help streamlining the sourcing of equipment used to manufacture commercial-grade solar panels. The model was to purchase the materials from the supplier and drop ship the materials to the end customer. All materials were shipped across international borders. At the customer location, a team of specialists installed these materials in a pre-readied facility. The process of installing the materials and getting the production to the agreed-upon performance level took 18 months. As the equipment arrived from the suppliers during the first six to nine months of the project, specialists installed the materials at the plant where the commercial-grade solar panels would be manufactured 

Since the company shipped sensitive technology to non-US based sites, the customer needed to use SAP BusinessObjects Global Trade Services for every shipment. Because of long lead times getting the part from the supplier to the customer, companies have to keep on top of new trade agreements or protectionism placed in different countries around the world. The ability to perform an automatic SAP BusinessObjects Global Trade Services check just before entering customs reduces the lead times getting the tool from supplier to customer.   

My objective was to provide a repeatable process for tracking project costs for each customer order. Tracking the costs would allow the company to determine the profitability of each sales order. Each sales order became a contract to install the equipment at the plant site of the end customer. Prior to the SAP implementation, the company lacked visibility to the planned versus actual costs, project progress, and accurate timetables of deliverables for project managers. As a result, they had little confidence in their carriers, especially when the company had to dynamically change the planned routing to meet the downstream timetables of the installations. Using Project System allows management to track costs on an on-going basis. This methodology provided feedback to sales on how profitable this new business venture was. It also gave the business a good baseline of how to negotiate the next contract and provide better predictability on profits.

The purpose of this article is to provide an example of how Supply Network Collaboration (SNC) and Supply Chain Event Manager (SCEM) software were used to improve the business practices for a new division of the company. In addition to the SAP SCM components, several SAP ERP Central Component (SAP ECC) software products contributed to the process and are mentioned only to round out the overall solution. The standard SAP ECC modules coupled with the SAP SCM products SNC and SCEM provided a powerful solution for accounting and asset tracking, put discipline into the business process, provided tools for externals users that were language and technology challenged, and gave a growth path to provide further traceability for the business unit’s projected growth.

Lynn Fair

Lynn Fair started with SAP in 1990 as an R/2 RM-MAT, RM-PPC consultant. She left in 1998 and returned in 2005 as an SCEM and SNC consultant. Lynn has been working with SNC since the 5.0 release and with SCEM since the 4.1 release.

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