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The Supplier Collaboration for the Supply Chain ES bundle offers a way for suppliers to connect with a customer using a web browser to trigger and update replenishment and invoice data in the back-end system. Along with replacing the need for fax or email communications between the customer and supplier, this solution effectively shifts the responsibility for replenishment upkeep to the supplier by providing seamless access to supply chain information, thus improving the ability for both customer and supplier to synchronize supply with demand.

SAP Supply Network Collaboration (formerly ICH) is a component of SAP Supply Chain Management (SAP SCM). The enterprise service operations described in this ES bundle enhance the functionality of the existing solution by enabling the connectivity between the supplier and the customer's ERP system. The supplier does not require a specialized electronic data interchange (EDI) infrastructure to integrate the supply network, which makes this solution usable by companies of all sizes. All that is required on the supplier side is Internet access and a web browser.

This ES bundle can be deployed as a standalone composite application or it can be integrated with SAP or non-SAP back-end solutions on either the customer or supplier side. This ES bundle may also be operated in a hosted environment where it serves as a joint-use platform for all business partners involved in the inventory collaboration process.

SAP Supply Network Collaboration with the addition of enterprise SOA supports several processes, on the supplier collaboration side including:

  • Supplier Managed Inventory (SMI) Process
  • Release Processing
  • Purchase Order Process
  • Dynamic Replenishment Process
  • Web-based Supplier Kanban Process
  • Delivery Control Monitor Process (Signal Level-Driven Replenishment)
  • Contract Manufacturing Procurement Process
  • Supply Network Inventory Process

Supplier Collaboration for the Supply Chain (click to enlarge)


The Supplier Collaboration for the Supply Chain ES bundle leverages enterprise SOA through SAP ERP, SAP SCM, and SAP NetWeaver Process Integration (formerly XI).

Audience

Collaboration with suppliers is a challenge for many SAP customers, especially small- and medium-size suppliers. This ES bundle is of enormous value to businesses that may still be relying on phone, fax, or paper-based mechanisms for collaboration with suppliers. Customers who are already using SAP Supply Network Collaboration may not realize that they are already benefiting from the enterprise SOA capabilities that exist in this solution. High-tech, automotive, and consumer goods industries are among the early beneficiaries of the functionality provided in this bundle, but the enterprise services can be of value to many other industries as well.

Large suppliers already using SAP ERP can benefit from the end-to-end collaboration planning solution provided by SAP ERP, SAP Supply Network Collaboration, and the enterprise services in this ES bundle.

For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.


How to Use This ES Bundle

The emergence of supplier-managed inventory systems has facilitated replenishment tasks in a variety of ways. The customer (a retailer who sells MP3 music players, for example) can periodically transmit current inventory data, gross demands, and goods-receipt references from the back-end systems to SAP Supply Network Collaboration. Suppliers of the component parts required to manufacture the product (memory chips, for instance) would track this information on a daily or weekly basis using inventory monitors. This solution worked well, but there was room for improvement. The interfaces could be brittle, and the systems inflexible. Implementing, changing, or updating the system functionality could be costly and time-consuming.

The Supplier Collaboration for the Supply Chain ES bundle delivers the benefits of enterprise SOA through the existing functionality of SAP Supply Network Collaboration. Suppliers who are responsible for replenishment can use a web-based interface to calculate the replenishment quantities based on inventories, demands, and minimum or maximum stock levels. They can also maintain Advance Shipping Notifications (ASNs) to inform customers about planned deliveries.

Web-based interfaces to SAP Supply Network Collaboration enable customers to submit purchase orders (POs) directly to suppliers in electronic format. Suppliers can view POs according to their status, view and enter comments related to them, then download or print the orders. They can also respond to orders and confirm shipment dates and quantities. Prior to shipment, suppliers can create ASN messages and submit them to their customers' back-end systems along with shipment confirmations.

This section will explore a series of use cases for the Supplier Collaboration for the Supply Chain ES bundle. Each use case will show how different outcomes can be achieved by using the enterprise services in different combinations. While these examples illustrate a few of the ways that this ES bundle could be used, the intention is to show the flexibility and reusability of these business objects and enterprise service operations so that you will have a clearer understanding of how to best deploy them in your own environment. This wiki is also a space for you to share knowledge and collaborate with others who are implementing the bundle.

Use Case 1: Supplier-Managed Inventory Process

This use case shows how the enterprise services delivered in the Supplier Collaboration for the Supply Chain ES bundle can be deployed to effectively shift the responsibilities of inventory management to the supplier side.

First, the customer publishes the current inventory status and gross demands using a special report in SAP ERP. This report creates demand or inventory data that the system sends from an SAP R/3, SAP R/3 Enterprise, and SAP ERP (in the following referred to as SAP ERP)  back-end system to SAP Supply Network Collaboration using collaboration demand data and the Product Activity Notification In service operation. This is achieved by creating IDocs that are sent to SAP Supply Network Collaboration through SAP NetWeaver Process Integration. If the customer is not using SAP ERP, the Product Activity Notification In service can be called directly.

The SMI Monitor (formerly Inventory Monitor) in SAP Supply Network Collaboration displays the current inventory status. The person in the supplier's organization who is responsible for the replenishment task for the customer's location should also monitor SAP Supply Network Collaboration to check whether the stock level is kept in the range defined by minimum/maximum stock levels. An Alert Monitor in SAP Supply Network Collaboration alerts the supplier (as well as the customer) when exceptional situations occur, such as stock on hand dropping under the defined minimum level. For example, if the defined maximum stock level is 500 memory chips, the minimum is 100 memory chips, and the current stock level is 99 memory chips, the supplier is informed about this critical understock situation with an alert.

For the SMI process, the supplier receives inventory alerts, which the system generates when the minimum or maximum stock levels are exceeded. Depending on the settings, this alert can take the form of an email or fax. Each alert includes a date on which the over- or understock is calculated to occur, depending on the planning situation (replenishment, stock balance and demand updates, planned receipts update, or shipments in transit). If no alerts are triggered and shown on the Alert Overview screen, the planning situation is deemed OK.

The supplier can also search for alerts pertaining to a particular location or plant or product combination through the Alert Monitor web screen.

The replenishment task is made even easier for the supplier by the simulation option offered by SAP Supply Network Collaboration. The supplier can simulate which quantities have to be shipped to the customer's location to keep the stock in the defined quantity range. After having simulated possible shipping options, the supplier can inform the customer about the planned shipping quantities by using a planned receipt, which can be viewed by the customer through the web-based interface. He can also directly carry out the next step: shipping the product.

The system will now display a list of planned receipts. The supplier can navigate to the Due List for Planned Receipts screen, and search by a particular parameter, for example, location-product. The planned receipt (shipping schedule) created in the previous step is now visible on the screen. This represents the due list of quantities that need to be shipped so that the stock at the customer's site is adequately replenished. The supplier can select one or several of the planned receipts and copy them to the ASN Create screen to create an ASN for the customer.

After having calculated the right quantity for replenishment, the supplier ships the product to the customer's location. The supplier also sends an ASN to the customer to inform him about the quantity of the product shipped and the exact date of arrival. In addition, the supplier can maintain all necessary entries for packaging the goods and creating handling units. It is even possible to print delivery documents and labels as a function of this process.

The supplier can either create an ASN in his own ERP back-end system or he can create the ASN in SAP Supply Network Collaboration. The SMI Monitor in SAP Supply Network Collaboration now shows the ASN quantity as stock in transit.

The customer receives the supplier's ASN with data about the quantity of material that will be shipped and the shipping date. This information is updated in the back-end system and is a function of the Collaboration Delivery business object and the Despatched Delivery Notification Out service operation.

At any time, the customer and the supplier can monitor the inventory in the SMI Monitor and note possible exceptions in the Alert Monitor.

When the customer receives the shipment, he posts a goods receipt that removes the stock in transit notification. The customer can post the goods receipt either in the SAP ERP back-end system or he can confirm the goods receipt manually in SAP Supply Network Collaboration or this can be achieved through the Received Delivery Notification In service operation, which also uses the Collaboration Delivery business object.

The system updates the inventory level of the product at the location. The SMI Monitor visualizes the updated status. If the shipment was not sufficient to fill up the inventory to the minimum level defined, the customer is informed through an alert.

For suppliers using SAP enhancement package 4 for SAP ERP 6.0 (release currently scheduled for year end 2008), inventory status and gross demands sent from the customer to SAP Supply Network Collaboration can be forwarded to the supplier's ERP system by invoking the Maintain Activity based on Product Activity Notification enterprise service operation. This information will be used in the new supplier-managed inventory component to calculate net demand and delivery schedule proposals as well as automated forecast delivery schedules of a scheduling agreement. The forecast delivery schedules represent the optimal plan based on the customer's constraints (minimum and maximum stock levels as well as time series) and the supplier's product availability figures. The Notify of Supplier Collaboration Delivery Forecast enterprise service operation transmits the results back to SAP Supply Network Collaboration to update the SMI Monitor.

The following table summarizes these steps and the associated enterprise services:

Step

Enterprise Service Invoked

Step 1: The customer publishes current inventory status and gross demands in SAP ERP using the SMI backend report

(no enterprise service is invoked during this step)

Step 2: The report creates demand or inventory data that the system automatically sends from SAP ERP to SAP SNC using collaboration demand data

Product Activity Notification In

Step 3a: (with EhP4) Gross demands and inventory status are automatically replicated to the supplier's ERP system

Maintain Activity Based on Product Activity Notification

Step 3b: A net demand and delivery schedule proposal is calculated and forecast delivery schedules are created and replicated to the customer's SAP SNC system, which updates the SMI Monitor

Notify Supplier Collaboration Delivery Forecast

Step 4a: (Without EhP4) The SMI Monitor in SAP SNC displays the current inventory status in the customer systems

(no enterprise service is invoked during this step)

Step 4b: The supplier can monitor inventory levels to ensure they are within predefined ranges and replenish as needed

(no enterprise service is invoked during this step)

Step 4c: The SMI Monitor will also issue alerts when inventory levels exceed preset minimum or maximum levels

(no enterprise service is invoked during this step)

Step 4d: The supplier can also search for alerts pertaining to a particular location or plant or product combination through the Alert Monitor web screen

(no enterprise service is invoked during this step)

Step 5: The need for replenishment is determined by the supplier and creates a simulation of quantities and shipping options

(no enterprise service is invoked during this step)

Step 6: The supplier produces the products or prepares them for shipping

(no enterprise service is invoked during this step)

Step 7: The supplier creates and publishes an ASN and sends it to the customer

(no enterprise service is invoked during this step)

Step 8: The supplier then ships the product to the customer and updates the SMI Monitor in SAP SNC to show the ASN quantity as stock in transit

(no enterprise service is invoked during this step)

Step 9: The customer receives the supplier's ASN and the information is replicated to the backend system

Despatched Delivery Notification Out

Step 10: The customer receives the shipment and posts a goods receipt in the SAP ERP backend as an automatic operation or manually via the SAP SNC system

Received Delivery Notification In

Step 11: The inventory level is updated by the SAP SNC system

(no enterprise service is invoked during this step)

Use Case 2: Purchase Order Process

This use case shows how a manufacturer (or customer) can use the enterprise services in this bundle to submit POs directly to suppliers through web-based interfaces that communicate with SAP Supply Network Collaboration. Suppliers can view POs according to their status, view and enter comments, and then print and/or download the orders. Suppliers can also respond to orders and confirm shipment dates and quantities. Prior to shipment, suppliers can create ASN messages and submit them to their customers' back-end systems along with shipment confirmations.

The customer first creates one or more POs in SAP ERP for the procurement of required components or raw materials (direct materials). The POs can be generated automatically through MRP, manually created, or converted from Purchase Requisitions. The POs are communicated to the respective suppliers using the Collaboration Replenishment Order business object and the Replenishment Order Notification In service operation. Outbound messaging is achieved using standard IDocs, which are sent to, and stored in, the SAP Supply Network Collaboration application.

The supplier is alerted to the new PO from the customer through an email notification or by logging in to the SAP Supply Network Collaboration system to view the PO alerts in the Alert Monitor screen. Once a new PO alert has been found, the supplier can display the details of the alert, including date, time, location, PO number and even see what product is contained in the new PO.

The supplier can navigate to the PO screen in SAP Supply Network Collaboration directly from the Alert Monitor screen itself or using the regular menu tree. Using the regular menu, the supplier can either go to the PO Overview screen, which lists several POs, select a PO, and go to the PO Details screen, or go directly to the PO Details screen. Once the supplier navigates to the PO Details screen, the entire PO is visible including the header and the different line items with product numbers, quantities, unit of measure, price, and shipping information. SAP Supply Network Collaboration also displays the schedule lines of each item in the PO, "subline items" that contain information on delivery and shipping dates. One PO item can have several underlying schedule lines, each with different dates and quantities.

The supplier can then create order confirmations for the POs sent by the customer. The confirmations are a reflection of the supplier's capability to deliver the requested product, meaning changes to the dates and/or quantities requested by the customer in the POs. The supplier can create these confirmations using the web user interface of SAP Supply Network Collaboration. The confirmations are sent back from SAP Supply Network Collaboration to the customer's SAP ERP using the Replenishment Order Confirmation Out enterprise service operation (SAP ERP gets the message using a standard IDOC to which the enterprise service is mapped in SAP NetWeaver Process Integration). This indicates to the customer, and to SAP ERP, which dates and quantities the supplier is confirming. Subsequent MRP and planning functions in SAP ERP utilize this information accordingly. The confirmation can be done on an item or schedule line level, which are called confirmed schedule lines. Only the date and quantity can be changed by the supplier. The supplier can create many confirmed schedule lines against one requested schedule line, sometimes referred to as a "line item split." Once the supplier has completed the confirmation step for PO items/schedule lines, the confirmation can be published from SAP Supply Network Collaboration to the customer's SAP ERP system.

Let's say that the internal planning situation causes the customer to change the existing PO in SAP ERP (for example, the delivery date and quantity needed for one or many items changes). The alterations to the PO are sent out from SAP ERP as a Change PO using the Collaboration Replenishment Order business object and the Replenishment Order Notification In service operation. The supplier receives the Change PO in SAP Supply Network Collaboration. The customer can send multiple Change POs as the situation changes. A Change PO has the same PO number as the original PO.

The supplier will be alerted to the Change PO by an email notification or by using the Alert Monitor screen in the SAP Supply Network Collaboration application. Alerts can be searched using multiple criteria, such as product, location, and alert type, among others. The Alert Monitor screen also offers a statistical view in which the user can sort and list grouped alerts based on alert group, type, product, and location. Once sorted, the user can click on the grouped number of alerts (a hyperlinked number, such as 12 Change PO alerts for a certain selection) and, when clicked, the 12 individual alerts will be listed in the details section. Once a new alert has been found, the supplier can display the details of the alert, including the date, time, location, PO number, and product of the Change PO.

The supplier would then create a new confirmation for the Change PO, indicating the delivery capabilities for the Change PO requirements. Again, the supplier can change delivery date and quantity for the items and schedule lines and send this back to the customer's SAP ERP system for update of the confirmation data. This is achieved using the Collaboration Replenishment Order business object and the Replenishment Order Confirmation In service operation.

It is also possible to configure SAP Supply Network Collaboration to allow multiple confirmation messages to be created and sent without having to receive Change POs from the customer first. The configuration can be done on at the product and location level.

The purpose of the Due List for Purchasing Documents screen in SAP Supply Network Collaboration is to search for the POs that are due for shipment in order to create the ASN and perform the goods issue/delivery on time. The supplier can alternatively use the Create ASN functionality inside individual POs when shipping/creating ASNs, or directly access the Create ASN screen and manually reference or assign the correct PO and item number to each item. The Due List for Purchasing Documents screen allows selection of PO items from different POs (also from Releases or POs created as part of the SMI process) when creating an ASN, as long as the ship-from and ship-to locations are the same in the various order documents (POs). The Due List for Purchasing Documents screen keeps track of already created ASNs so that only the outstanding quantities are displayed here. Partial shipments are possible in general in SAP Supply Network Collaboration. The supplier can search for outstanding purchasing documents using several criteria like product, location and goods recipient. Once the search results are displayed in the list, the supplier can select one or many items for inclusion in the ASN.

Once the supplier has selected the items for the ASN (in the results list for the Due List for Purchasing Documents), the Create ASN button will copy the items into the Create ASN screen` in SAP Supply Network Collaboration. The supplier can complete the ASN with additional header data, such as Grouping ID, Bill of Lading ID, Freight Invoice No., Means of Transport, Incoterms, Carrier Party, Weight and Volume, Batch No. and Unloading Point data. Additional item data, including Manufacturing Date, Best Before Date, and Country of Origin, are supported by SNC, but can only be utilized with the ERP2005 SPM solution. There is also packaging capability as optional functionality in the ASN. Using this functionality (which requires added configuration and master data setup not covered in this process description), the supplier can organize the ASN items into handling units that describe the hierarchy of how the products are to be packaged for the physical shipment (for example, 10 products in a box, 20 boxes in a crate, and 4 crates in a pallet). This functionality includes label printing with bar codes.

Once the ASN is created, it can first be saved as a draft, meaning it is not yet sent to the customer. While it is a draft, the supplier can change, or delete, anything in the ASN. To send, or publish, the ASN message from SAP Supply Network Collaboration to the customer's SAP ERP system, press the "save/publish" button. This triggers the Despatched Delivery Notification Out service operation attached to the Collaboration Delivery business object. This action sends the ASN message to SAP ERP, where it is stored using standard confirmation functionality in ERP (confirmation of type "shipping notification" on the PO item). See the SCM business process "Inbound Processing and Receipt Confirmation" for further details on ASN handling and the subsequent goods receipt process in SAP ERP.

Once the goods receipt processing has taken place in SAP ERP, the customer sends a message to SAP Supply Network Collaboration indicating this fact. The message is called "Proof of Delivery" and is a standard IDoc in SAP ERP. This also uses the Collaboration Delivery business object and the Received Delivery Notification In service operation. The Proof of Delivery message changes the status of the ASN from "published" to "goods receipt complete" in SAP Supply Network Collaboration, indicating to the supplier that the shipment has arrived at the customer's site.

The customer can alternatively set the goods receipt status on the ASN in SAP Supply Network Collaboration manually using the web user interface of SAP Supply Network Collaboration; this is intended for ad hoc situations. This does not update the customer's SAP ERP system; it is a setting in SAP Supply Network Collaboration only. Partial goods receipts on ASNs are also possible in SAP Supply Network Collaboration.

The following table summarizes these steps and the associated enterprise services:

Step

Enterprise Service Invoked

Step 1: Customer creates one or more POs in SAP ERP

(no enterprise service is invoked during this step)

Step 2: The user can then submit the POs to the respective suppliers

Replenishment Order Notification In

Step 3: The supplier is notified of the new POs via Web-based interface to SAP SNC Alert Monitor screen

(no enterprise service is invoked during this step)

Step 4: The supplier navigates to the PO screen in SAP SNC and selects a PO in order to read its contents

(no enterprise service is invoked during this step)

Step 5: The supplier then creates order confirmations for the POs, which are automatically sent to the customer's SAP ERP system via SAP SNC

Replenishment Order Confirmation Out

Step 6: The customer can then make changes to the PO in SAP ERP, which can be sent to the supplier via the Web-based interface

Replenishment Order Notification In

Step 7: The supplier creates a new confirmation for the changed PO

Replenishment Order Confirmation (Outound)

Step 8: The supplier produces the product and/or assembles an the order and creates an ASN, which is replicated to the customer's ERP system

Despatched Delivery Notification In

Step 9: A goods receipt is created and processed in the customer's ERP system and a message is sent to the supplier

Received Delivery Notification In

Future Directions

Replacing IDocs with direct enterprise service communication into the SAP ERP system, and not just out of ICH 5.0, is the foremost update for this ES bundle, and this process is currently underway. This includes replacing IDocs used in the existing purchase order processing steps.

Increased collaboration for the invoicing process to include the exchange of invoices and payment data is another direction that is being considered. Adding collaboration for manufacturing work orders, or more detailed production orders, is also a possibility.

Connectivity

The Supplier Collaboration for the Supply Chain ES bundle achieves connectivity between a web-based UI and SAP SCM using SAP NetWeaver Process Integration (formerly XI) using IDocs or enterprise services.

System Requirements

Related ES Bundles

End-to-end Processes Where This ES Bundle Is Used