The Customer Collaboration for the Supply Chain ES bundle offers a way for customers and suppliers (in the context of the customer collaboration this is the 'vendor') to connect and exchange data for customer replenishment business processes especially for responsive replenishment. As with vendor-managed inventory, responsive replenishment changes the traditional replenishment process from one in which customers generate orders to one in which vendors manage the orders instead, according to predefined parameters. Because the vendor manages replenishment, supply chains that incorporate responsive replenishment respond to demand information sent by customers to vendors rather than to purchase orders created by customers. In short, responsive replenishment allows vendors to automatically replenish customer sites, such as distribution centers, with inventory, based on a prior service agreement that specifies inventory levels.
Responsive replenishment addresses the need to gain better visibility into demand signals, to handle promotions with retailers more efficiently, and to realize a fully automated replenishment process, improving the ability of both customer and supplier to synchronize supply with demand.
Customer Collaboration for the Supply Chain (click to enlarge)
SAP Supply Network Collaboration (SNC, formerly know as Inventory Collaboration Hub or 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 providing connectivity between the customer's ERP system and the supplier's SNC system. In this way, the services in this ES bundle allow suppliers to collaborate with customers who have any type of ERP system.
This ES bundle can be deployed as a standalone composite application or it can be integrated with SAP or non-SAP backend solutions on either the customer or supplier side.
The Customer Collaboration for the Supply Chain ES bundle, when combined with SAP Supply Network Collaboration, supports responsive replenishment with the following use cases:
- Responsive replenishment with purchase order number assignment
- Responsive replenishment without purchase order number assignment
For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.
Collaboration with customers is a challenge for many suppliers. This ES bundle is of enormous value to businesses that may still be relying on modified, complicated or unscalable systems for message exchange in customer collaboration. 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. Consumer products, high-tech and mill industries are among the early beneficiaries of the functionality provided in this bundle, but the enterprise services can be of value to other industries as well.
How to Use This ES Bundle
The emergence of vendor-managed inventory systems has facilitated replenishment tasks in a variety of ways. The customer (a retailer or distributor for example) can periodically transmit inventory data, warehouse movements (or store sales), and other relevant transactional data from his backend systems to the supplier's backend ERP or advanced planning system. The supplier (a consumer products manufacturer of branded goods, for instance) could track this information on a daily or weekly basis using inventory monitors and use it to create replenishment proposals and sales orders. 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 Customer 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 the web-based interface or the integrated replenishment algorithms in SAP Supply Network Collaboration to calculate the replenishment quantities based on inventories, demands, and transport load rules. They can also maintain promotions for incremental demand uplift and additionally use replenishment order notification and advance shipping notifications (ASN) to inform customers about planned deliveries.
The interfaces to SAP Supply Network Collaboration enable customers to exchange inventory, sales, forecast and promotional and even order number information directly with suppliers in electronic format. Suppliers can use this information to generate accurate customer demand forecasts, plan optimal customer replenishment quantities using transport load rules and supply shortages using allocated quantities and generate sales orders and shipments. The supplier can inform the customer electronically of the shipment dates and quantities. Optionally, the customer can confirm the order proposal and attach a purchase order number.
The next section will explore typical use cases for the Customer Collaboration for the Supply Chain ES bundle. While these examples illustrates one 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 Customer Collaboration for the Supply Chain ES bundle.
Use Case 1: Responsive Replenishment (Standard, with PO Number Assignment)
This scenario shows how the enterprise services delivered in the Customer Collaboration for the Supply Chain ES bundle can be deployed to effectively shift the responsibilities of inventory management and replenishment to the supplier.
First, the customer sends the current inventory status and warehouse movements and other information to the supplier's SAP Supply Network Collaboration using EDI or XML messages. This is achieved by using the following business objects and service operations which create XML messages that are sent to SAP Supply Network Collaboration through SAP NetWeaver Process Integration:
- Collaboration Demand business object and the Product Activity Notification In service operation for baseline and promotion sales, forecast, stock-out, open orders information
- Collaboration Inventory business object and the Product Activity Notification In service for inventory
- Collaboration Product Demand Influencing Event business object and the Product Demand Influencing Event Notification In service operations for upcoming promotion and event information
- Collaboration Replenishment Order business object and the Order ID Assignment Notification In service operation for purchase order number range assignment
- Optional: Collaboration Product Forecast business object and Product Forecast Notification In and Product Forecast Revision Notification In service operations for forecast information
The incoming messages that are transferred from the customer to the supplier are checked and adjusted automatically using business rules. These checks can be for missing values or errors in master data or transaction data such as products that the customer is not allowed to order or registering a wrong inventory quantity. Additionally, alerts are generated to inform the planner of discrepancies in the messages due to mismatches in master and transaction data. The planner on the supplier side can view the results and adjust them manually on dedicated screens in SAP Supply Network Collaboration (for example, in the Product Activity screen for baseline sales and inventory). Overall, this allows you to overcome deficiencies that may arise when you receive data of poor quality. This is often the case when retailers send data to their suppliers because retailers have a huge number of location products and typically are not able to provide high quality data. Often, retailers do not have the right filtering mechanisms to send the right set of product information---they include too many products, too few products, or the wrong products in their messages. Additionally, it is much more difficult for retailers to check and adjust transactional figures such as stock and sales since their data is an order of magnitude larger than the supplier's data.
The supplier then carries out forecasting, replenishment, and transport load builder (TLB) functions to generate order proposal quantities on behalf of the customer. The planner can review and adjust the orders and order proposal in the TLB Overview Screen. Once all adjustments have been carried out, the planner can release and publish the orders to the supplier backend and the customer backend. This is achieved by using the following business objects and service operations to create XML messages that are sent to SAP Supply Network Collaboration through SAP NetWeaver Process Integration:
- Collaboration Replenishment Order business object and the Replenishment Order Notification Out and Replenishment Order Confirmation In service operations for sales orders transferred to and from the supplier backend as an IDOC.
- Collaboration Replenishment Order business object and Vendor Generated Order Notification Out and Vendor Generated Order Confirmation In service operations for purchase orders transferred to and from the customer backend.
These services generate a sales order on behalf of the customer in the supplier backend and the customer is informed of upcoming replenishment quantities in his backend.
In the supplier backend, the sales orders are processed with subsequent outbound delivery and goods issue.
Use Case 2: Responsive Replenishment without PO Number Assignment
This scenario is in the most parts the same as the standard Responsive Replenishment scenario. The main difference is that in the standard scenario the purchase order number assignment is carried out by the supplier. In this scenario, the supplier does not assign the PO number to the order and sends the order without an order number to the customer system. The customer subsequently assigns a PO number to the order and retransmits the order to the supplier system. This can be achieved by using the Collaboration Replenishment Order business object and Vendor Generated Order Notification Out and Vendor Generated Order Confirmation In service operations for purchase orders transferred to and from the customer backend.
Currently, direct enterprise service communication is used for communications from SAP Supply Network Collaboration to SAP ERP 6.0. However, communications from SAP ERP 6.0 is handled via IDocs. Replacing these IDocs with enterprise services is the foremost update for this ES bundle, and this process is currently underway. This includes replacing the IDocs used in responsive replenishment use case.
Other possible changes to this ES bundle include improved integration with the supplier backend by allowing the inclusion of in-transit stock from the supplier backend via the Advanced Shipping Notification message. Improvements to the transfer of results from the availability check in the supplier backend are also being considered. Improving collaborative forecasting capabilities is another direction that is being considered.
- SAP enhancement package 1 for SAP ERP 6.0
- SAP SCM 2005
- Optional: SAP ERP 6.0 or other ERP backend
- Client-specified UI or application (SAP NetWeaver Visual Composer, guided procedures, Composite Application Framework or other SAP NetWeaver 2004s parts may be used, depending upon needs and requirements)
For more information about how to configure SAP SNC, SAP NetWeaver XI and your ERP system to make the services run, see the configuration documentation in SAP Solution Manager. You can find the configuration documentation in the business process repository of SAP Solution Manager under > Solutions > SAP for Consumer Products > Scenarios > Responsive Replenishment.
For more information how to get and license SAP Solution Manager, see SAP Service Marketplace at http://service.sap.com/solutionmanager.