In the multiple years that I have attended SAP’s combined ASUG/Sapphire Conferences, I often check-in on the progress and direction of SAP Supply Chain Management (SCM) applications portfolio.   If you were attending this combined conference as a casual SAP supply chain management customer, I’m not quite sure that you would get a deep sense of strategic direction for SCM, since the picture does not seem clear to me at this point, at least for public consumption. Yesterday I had the opportunity to chat with two very knowledgeable SAP supply chain management executives.

Within the SAP SCM Suite itself, Supply Network Collaboration (SNC) has gained customer adoption momentum and interest.  There are three main areas of collaboration process support: supplier facing; customer facing; and recently added contract manufacturing collaboration facing process support.  SAP reports over 500 customers utilizing SNC, and it was noted that SNC customer interest continued through this past period of economic recession.  Release 7 was a major release for SNC, and this new platform can now take advantage of the Enhancement Packs release cycle across the entire SCM suite.

The bread and butter Advanced Planning and Optimization (APO) supply chain planning application has also reached Release 7 status, and Enhancement Pack releases later in 2010 will help SAP customers to leverage more process support with SNC, to include a new “Clear to Build” process developed specifically for high tech and consumer electronics companies.  One area for discussion is helping APO customers solidify their longer term supply chain business analytics and intelligence information retrieval strategies.  Many SAP customers remain on earlier release versions of APO, where SAP Business Warehouse (BW) was encouraged as being the foundation for extracting and returning supply chain planning information, including that from APO.  With the newer additions of Business Objects and potentially Sybase analytical tools, along with partner solutions such as SmartOps or other inventory optimization applications, it is my feeling that SAP will need a broader proactive outreach to provide SCM customers a variety of automated supply chain business intelligence extract strategies.

On the organizational side, it was good to hear that SAP SCM is moving in the direction of Global Solution Management for combined SCM, manufacturing and PLM,  that is supposed to umbrella all lines-of-business and all SCM platforms.  SAP Vice President Laurie Mitchell Kellor will lead this segment.   The goal is to provide one end-to-end SCM perspective across all three of the delivery platforms (on-premise, on-demand, on-device). The not so good news is that in my view, this re-organization has been painfully slow in execution.  I was also disappointed to once again hear that elements of procurement and SRM have not been placed under the umbrella of SCM, manufacturing and PLM.  That will not help SAP in figuring out a multi-platform integration strategy for global supply chain processes. There is little strategic information being shared, which additionally does not help SAP SCM prospects and customers sort out longer term capability needs, such as dynamic Sales and Operations Planning (S&OP) business intelligence support. 

Finally, I did get the opportunity to view a demo of the SCM functionality within new and upcoming SAP Business By Design suite.  The application interface is clear and easy to follow.  Use of some Microsoft tools allows for flexibility in defining any user roles or information needs.  The SCM functionality itself is fairly basic, with forecasting, demand and supply planning, purchase order, warehouse and order execution functionality.  At this point, there is very little supplier collaboration interface but there are provisions for EDI transactional support.

Bob Ferrari