SAP Solution in Detail

SAP Supply Network Collaboration

SAP Supply Network

Collaboration

Bring Clarity by Extending Your

Enterprise to YOUR NETWORK
Today, increasing your prof
itability often means estab
lishing and maintaining col
laborative relationships. And
the SAP Supply Network
Collaboration application
can help you deal with the
challenges that are inherent
in these relationships. It
gives you what you need
to collaborate with partners,
suppliers, contract manu
facturers, and customers
through features and func
tionality that support supply,
demand, and inventory
replenishment p
rocesses.
With SAP Supply Network
Collaboration you can elimi
nate supply chain inefficien
cies and risks while increas
ing visibility and profits.

CONTENT

4 Collaborative Relationships
7 Supplier Collaboration
7 Release
7 Purchase Order
8 Kanban
8 Dynamic Replenishment
9 Supplier-Managed Inventory
9 Delivery Control Monitor
9 Delivery
10 Invoice
10 Case Study with Ritter Sport
11 Outsourced Manufacturing
11 Contract Manufacturing
Procurement
11 Supply Network Inventory
11 Work Order
13 Customer Collaboration
13 Demand Forecast Collaboration
13 Min/Max Replenishment
14 Responsive Replenishment
14 Case Study with
Colgate-Palmolive

15 User EfficiencyEnhancing
Functions
17 Integrated and SOA Enabled
17 Integration with Other SAP
Software
17 SOA Enabled
18 Architecture and Landscape
18 Stable Core
19 Supporting Value
19 Other Information Sources
19 Powered by SAP NetWeaver
19 Find Out More

Collaborative Relationships
A 360-Degree View of Your
Supply Chain Collaboration

In a challenging economic environment,

companies must reduce cost and risk
while increasing innovation, customer
service, and responsiveness. To meet
these challenges, you can do business
where costs are lower, develop relation
ships with global suppliers, and out
source nonstrategic activities. All these
actions require collaborative relation
ships with suppliers, contract manufac
turers, and customers.
Developing collaborative relationships
is not always easy. Connecting to a
supplier with limited technical capabil
ities can be costly, complicated, and
time-consuming. Telephone, fax, and
e-mail remain the most common meth
ods of communication. Although elec
tronic data interchange (EDI) may be
more reliable, it is cost-effective only
in high-volume situations. How, then,
can you extend the benefits of collabo
ration to your entire ecosystem? How
can you get all your partners to con
nect automatically, efficiently, and costeffectively to your internal processes?

The answer lies in the Web-based

SAP Supply Network Collaboration
application, part of the SAP Supply
Chain Management (SAP SCM) appli
cation. Built on the SAP NetWeaver
technology platform, SAP Supply Net
work Collaboration helps partners
operating SAP or non-SAP software
to collaborate through a range of sup
ply, demand, and inventory replenish
ment processes. SAP Supply Network
Collaboration was previously called
the SAP Inventory Collaboration Hub
application.
Through SAP Supply Network Collab
oration, you can simultaneously elimi
nate inefficiencies in your supply chain
by synchronizing the flow of informa
tion with your partners. SAP Supply
Network Collaboration offers a 360-
degree view of supply chain collabo
ration, giving you ways to effectively
collaborate with your customers, sup
pliers, third-party logistics providers,
and outsourced manufacturers (see
Figure 1).
36 0-

deg

ree

c ol

or

at

on

Suppliers

My company

Customers

Contract
manufacturers

Figure 1: 360-Degree View of Collaboration with SAP Supply Network Collaboration

la b

SAP Solution in Detail SAP Supply Network Collaboration

With SAP Supply Net

work Collaboration,
you can increase visi
bility beyond the four
walls, allowing you to
treat suppliers, con
tract manufacturers,
customers, and ser
vice providers as an
extension of your or
ganization. This leads
to increased innova
tions and profits.
For supplier collaboration, SAP Supply
Network Collaboration provides sup
port for upstream business processes
such as supplier-managed inventory,
discrete purchase order management
collaboration, scheduling agreement
release handling, and Web-based kan
ban signals. For outsourced manufac
turing, SAP Supply Network Collabora
tion offers you cross-tier visibility of
inventory and supply and demand, and
support for a collaborative work order
process that provides insight into pro
duction demands and progress at the
contract manufacturers location. For
customer collaboration, SAP Supply
Network Collaboration provides support
for downstream business processes
such as responsive replenishment, a
comprehensive state-of-the-art vendormanaged inventory system, forecast

collaboration, and stock-level-based

replenishment. See Figure 2 for an
overview of supported supply network
collaboration processes.
Besides deep functionality and full
integration, SAP Supply Network
Collaboration also offers you powerful
flexibility in choosing a method of col
laboration to bring your entire network,
from large partners to very small part
ners, onto the application. Smaller
partners without EDI infrastructure
only need Internet access and a Web
browser to perform tasks via the appli
cations user-friendly Web screens.
Alternatively, they can simply use e-mail
to receive and respond to purchase
orders and forecasts. Midsize partners
that deal with higher volumes of data
can download data spreadsheets con
taining requests and upload spread
sheets containing responses directly
into the SAP Supply Network Collabo
ration upload/download center. Larger
partners with sophisticated IT infrastruc
tures can leverage the applications EDI
functionalities. Figure 3 shows the differ
ent collaboration methods the application
offers.
SAP Supply Network Collaboration
customers have successfully leveraged
the connectivity flexibility to onboard
large number of partners in short time
frames. Some companies have man
aged to efficiently onboard thousands
of supplier locations and hundreds of
thousands of products onto SAP Supply
Network Collaboration in a matter of
months, enabling them to process hun
dreds of thousands of transactions per
week across multiple countries using
the application.

Finished goods flows

Responsive replenishment
Min/max vendor-managed inventory
Demand collaboration
My company
Raw material/component flows

Contract manufacturing flows

Purchase order

Contract manufacturing

Release

Work order

Kanban

Supply network inventory

Supplier-managed inventory
Delivery control monitor (reorder)
Dynamic replenishment (forecast)
Figure 2: Processes Supported by SAP Supply Network Collaboration

Business partners:
suppliers and contract manufacturers
Customer

Low volume Web browser

Web browser
Mid volume file uploads/downloads

SAP SNC SAP NetWeaver

technology platform
SAP ERP
back-end
software
systems

Upload/download files
High volume business-to-business
integrated
SAP NetWeaver
Process Integration

Back-end system
Browser

XML

File upload/download

Figure 3: Collaboration Methods Offered by SAP Supply Network Collaboration (SAP SNC)

SAP Solution in Detail SAP Supply Network Collaboration

SAP Supply Network Collaboration

serves all discrete industry sectors,
with special requirements met for
the following industries: consumer
products, high tech, automotive, mill
products, chemicals, life sciences,
aerospace and defense, and industrial
machinery and components.
Overall, SAP Supply Network Collabo
ration has several different dimensions:
It acts as the collaboration and visu
alization layer to external partners.
SAP Supply Network Collaboration
extends processes running in internal
systems by showing external partners
forecasts and inventory, allows external
partners to update information and
respond back to internal systems (for
example, forecast responses and
advanced shipping notifications, or
ASNs), and consolidates data from
many internal systems into one com
prehensive and simplified view to the
outside world.
It enables new business processes
on top of internal systems and adds
additional value. New processes sup
ported include responsive replenish
ment on the customer collaboration
side and work order collaboration and
supply network inventory on the con
tract manufacturing side.
It provides a multimode communication
layer to external partners. Messagebased communication, like XML
(business-to-business), file sharing
(file up/downloads), e-mail exchange
with attachments, and Web user
interface (UI), allows a menu-based
approach to reach a full range of
external partners. The fully serviceoriented architectureenabled inter
faces offer options for extensions.

Increasing your profit

ability often means
establishing and main
taining collaborative
relationships. SAP
Supply Network Col
laboration helps part
ners using SAP or
non-SAP software to
collaborate with you
through a range of
supply, demand, and
inventory replenish
ment processes.

SAP Solution in Detail SAP Supply Network Collaboration

Supplier Collaboration

Step-by-Step Coverage for Both

Strategic and Tactical Efforts

Supplier collaboration allows even your

smallest suppliers to join in your strategic
and tactical supply chain efforts. This
cooperation helps reduce transactional
costs because it replaces fax and e-mail
as primary modes of communication. As
a result, most of the errors that tend to
creep into the cumbersome manual
processes are eliminated.
The SAP Supply Network Collaboration
supplier collaboration area offers func
tionalities that support six business pro
cesses covering interactions between
you and your suppliers step by step.
The functionalities are targeted mainly
toward companies in manufacturing
industries and, as such, support capa
bilities for direct materials planning and
procurement. Three of the processes
are mainly execution oriented and extend
your enterprise resource planning (ERP)
replenishment triggers to suppliers.
Those three are the release process,
the purchase order (PO) process, and
the kanban process. One, the dynamic
replenishment (DR) process, is a plan
ning visibility and collaboration process
that allows you to share forecast and
forecast commitment information. Lastly,
there are two processes that shift the
replenishment responsibility from you
to the supplier the supplier-managed
inventory (SMI) process and the deliv
ery control monitor (DCM) process.
Additional functionality includes supplier
invoice creation, ASN with packaging
and label-printing functionality (includ
ing bar codes), and contextual integra
tion to the SAP Product Lifecycle Man
agement (SAP PLM) application and
the Collaboration Folders (cFolders)
application for document sharing and
collaboration.

Release
The release functionality allows you to
send out scheduling agreement release
(SA release) updates to the supplier
using SAP Supply Network Collabora
tion. The SA releases are typically gen
erated as part of your material require
ments planning (MRP) run. The suppliers
can view the various release updates,
compare the differences between older
and newer updates, and print or down
load them as well. To inform you about
probable delivery dates and quantities,
the supplier can create scheduling agree
ment confirmations, and you can use
this to plan in greater detail. You can
see the suppliers scheduling agree
ment confirmations on the SAP Supply
Network Collaboration Web UI. At the
time of shipment, the supplier can cre
ate ASN messages as well, which in
turn update your ERP system.
The main business value is that you can
communicate requirements accurately
and in real time, replacing older methods
like phone, fax, and e-mail. The supplier

can quickly find his or her requirements

through a Web browser and is proac
tively alerted to exception situations,
like an updated release, on screen or
by e-mail. The supplier can respond to
the requirements quickly and accurately
with confirmations and ASNs.

Purchase Order
The PO functionality allows you to send
out POs to the supplier using SAP Sup
ply Network Collaboration. The POs are
typically generated as part of your MRP
run or are manually created by you. The
supplier can view the POs by status,
enter free text notes, and print or down
load as well. The supplier can use the
Purchase Order Worklist Web screen
as part of SAP Supply Network Collab
oration to work effectively with an intui
tive user interface for processing POs,
confirmations, and rejections (see Fig
ure 4). The Purchase Order Worklist
screen is also an effective collaboration
area for you to manage the PO-related
progress with suppliers (for example,
listing purchase order items rejected by

Figure 4: PO Worklist Allowing User to Confirm/Reject Multiple Items with Minimal Clicks

SAP Solution in Detail SAP Supply Network Collaboration

Through SAP Supply

Network Collaboration,
you can simultaneously
eliminate inefficiencies
and risk in your supply
chain by synchronizing
the flow of information
with your partners. It
offers a 360-degree
view of supply chain
collaboration, giving
you ways to effectively
collaborate with your
customers, suppliers,
third-party logistics
providers, and out
sourced manufacturers.

suppliers). The supplier can enter con

firmations and order responses indicat
ing which date, quantity, manufacturer
part number, and price that he or she
can commit to. The PO approval func
tionality allows suppliers to deviate
quantity, date, and price confirmed
within specified tolerances. At the time
of shipment, the supplier can create
ASN messages as well, which, together
with the confirmations, update your ERP
system.
Alternatively, suppliers that use EDI do
not have to use the manual functions.
Instead, they can send POs with confir
mation schedule lines and ASNs from
their ERP system to SAP Supply Net
work Collaboration, which then validates
the messages and forwards valid mes
sages to your ERP system.
The main business value is that you can
communicate requirements accurately
and in real time, replacing older methods
like phone, fax, and e-mail. The supplier
can find his or her requirements using a
Web browser and is proactively alerted
to exception situations, like a changed
PO, on screen or by e-mail. The supplier
can respond to the requirements quickly
and accurately via confirmations and
ASNs.

Kanban
The kanban functionality allows you to
send out kanban replenishment signals
to the supplier using SAP Supply Net
work Collaboration. Kanban signals are
typically generated as part of your MRP
run or are created manually by you. The
suppliers can view kanbans by status,
control cycle ID, kanban ID, and prod

SAP Solution in Detail SAP Supply Network Collaboration

uct number and can print kanban cards

or download the details as well. The
supplier has access to a kanban pro
cessing dashboard from which, at the
time of shipment, the supplier can cre
ate ASN messages that update your
ERP system.
The main business value is that you can
communicate kanban requirements accu
rately and in real time, replacing older
methods like phone, fax, and e-mail. The
supplier can find his or her requirements
using a Web browser and is proactively
alerted to exception situations (for exam
ple, a new empty kanban) on screen or
by e-mail. The supplier can respond to
the requirements quickly and accurately
with ASNs.

Dynamic Replenishment
The DR functionality lets you compare
your planning data and the suppliers
planning data in a one-screen environ
ment, where deviations between your
plan and the suppliers plan are shown
as absolute numbers and percentages.
There are also color-coded thresholds
that visualize the deviations on screen.
Your ERP system is used to extract data
such as planned orders and purchase
requisitions that are shown as custom
er plan values in SAP Supply Network
Collaboration. Existing POs are shown
as customer order values. The supplier
can send in or enter the corresponding
responses by means of the Web for the
supplier plan and supplier order
values.
The main business value is that both
you and the supplier can get a mid- to
long-term awareness of deviations in

supply and demand and take appropri

ate action early to avoid delayed ship
ments or situations of overproduction.

Supplier-Managed Inventory
The SMI functionality lets you shift net
replenishment planning and execution
from you to the supplier. The supplier
uses gross demand (dependent require
ments) and stock balance to calculate a
replenishment plan based on min/max
logic and subsequently converts the plan
into POs and ASNs at time of shipment.
The POs and ASNs are sent back to your
ERP system to indicate the suppliers
commitment. POs are optional in the SMI
process; the replenishment plan can be
converted directly into ASNs if needed.
The main business value is that you no
longer have to perform the MRP net
planning and replenishment activities
and that the supplier can better utilize
his or her capacity by doing both the
planning and execution pieces. The
supplier can quickly assess the stock
situation through the color-coded SMI
Web browser and is proactively alerted
to exception situations, like an expected
out-of-stock situation in the future. See
Figure 5 for a screen shot of the SMI
monitor.
Alternatively, it is possible for suppliers
to automate the replenishment task by
connecting the supplier ERP system
to SAP Supply Network Collaboration.
In this case, there is no need for the
supplier to log into your software sys
tem. Nevertheless, the supplier still
has the option to do so, to control
the SMI process and make sure all
data is received and displayed properly.

Figure 5: Supplier-Managed Inventory (SMI) Monitor

The business value is that suppliers

do not need to enter the data twice
and that the calculation of the shipping
forecast is now fully integrated into the
suppliers planning and production.

Delivery Control Monitor

The DCM functionality lets you shift net
replenishment planning and execution
from you to the supplier. The supplier
uses stock balance updates and preset
signal levels (reorder points) to under
stand when replenishment needs to
take place. The replenishment is based
on min/max inventory limits, and the
DCM functionality calculates the sug
gested replenishment quantities using
the maximum level as the upper limit.
DCM is a one-screen environment in
which the supplier has access to stock
on hand, signal levels, min/max limits,
and in-transits as well as the calculated
replenishment quantities. In addition,
alerts are triggered and shown by dedi
cated colors on the Web screen (for
example, representing a breach of the
signal level or the minimum stock level).

From the DCM replenishment screen,

the supplier can select the products
that need replenishing and with one
click convert the data into the ASN
Web screen of SAP Supply Network
Collaboration. The software system
prefills all data, such as delivery date
and quantity. The ASNs are sent back
your ERP system to indicate a supplier
commitment to deliver goods. Your
ERP system has a scheduling agree
ment set up that acts as a blanket
order for the ASNs and the physical
goods receipts.
The main business value is that you no
longer have to perform the MRP net
planning and replenishment activities
for the purchased components or raw
materials and that the supplier can bet
ter utilize his or her own capacity by
being able to manage the replenish
ment process.

Delivery
The delivery functionality allows the sup
plier to create ASNs manually in ASN
processing and send them to you. Due

SAP Solution in Detail SAP Supply Network Collaboration

lists are available as a starting point for

targeted processing of open deliveries
for example, the Duelist for Purchas
ing Documents Web screen shows pur
chasing documents (POs and scheduling
agreement releases) with due schedule
lines. Alternatively, suppliers can create
ASNs in their back-end system and send
them to SAP Supply Network Collabo
ration. The application forwards ASNs
to your ERP system.
The main business value is that you gain
an overview of the deliveries the supplier
has planned or has already sent, and
when you can expect these deliveries
to arrive. You can send messages for
delivery receipt and for goods receipts
from your ERP system to SAP Supply
Network Collaboration.
In addition, suppliers can use ASN
packaging functionality to create and
print labels containing multilevel pack
aging hierarchy, handling-unit, and
bar code data. This data is sent to your
back-end systems via the ASN message
and enables a more accurate and faster
goods-receiving process.

Invoice
The invoice functionality allows suppli
ers to create invoices for orders and
shipments that have been processed
through SAP Supply Network Collabo
ration. As such, the functionality is an
additional feature that extends the other
supplier collaboration functionalities
in the application. A supplier can, for
example, respond to a PO and create
an ASN using the PO functionality in
SAP Supply Network Collaboration
and, in addition, use the invoice func

10

tionality to create the resulting invoice

and send that back to your ERP sys
tem. In your ERP system, the invoice
is automatically created and ready for
further processing by the accounts
payable functionality. Once the invoice
is processed for payment in your ERP
system, the supplier gets notified via
the invoice functionality. It is also pos
sible to create subsequent debits or
credits using the invoice functionality,
meaning you can make additional
charges or discounts to an existing
invoice. The suppliers can monitor the
status of payments through the Web
UI. Overall, the invoice functionality
closes the loop from order to payment
in the supplier collaboration processes
supported by SAP Supply Network
Collaboration.
SAP Supply Network Collaboration
also supports evaluated receipt set
tlement (ERS). With this feature, your

ERP system recognizes periodic use

of the suppliers raw materials or com
ponents and utilizes ERP functionality
to create the invoice for the supplier
directly within the ERP system itself,
without the supplier creating or sending
the invoice to you. In ERS handling, after
the invoice is created in your ERP system,
it is sent as a notification to the supplier
indicating which products, amounts,
and dates are to be paid.
The main business value is that suppli
ers can reduce time and human errors
in the invoicing process by automating
it via the supply chain flow already man
aged in SAP Supply Network Collabo
ration, as well as getting notified about
payment status without having to con
tact you directly. You no longer have
to manually enter supplier invoices and
will be able to reduce the resources
spent answering payment-related inqui
ries from suppliers.

Case Study with Ritter Sport

Alfred Ritter GmbH & Co. KG (Ritter
Sport) is a chocolate company based
in Waldenbuch, Germany, with reve
nues of 290 million. Ritter Sport suc
cessfully implemented the SAP Supply
Network Collaboration application in
2007. The company implemented the
supplier-managed inventory (SMI) func
tionality, giving its suppliers the respon
sibility of planning and delivering raw
materials and packaging materials.
After implementing SAP Supply Net
work Collaboration, Ritter Sport
found that its stock levels lowered,

that it could do dynamic adjustments

to safety stock based on seasonal
requirements, and that its planning
workload was reduced, freeing up
planning and development capacity.
Steffen Kindler, production planner
for Ritter Sport, says that as a result
of using the SMI functionality the
company reduced the lead time
between goods receipt and produc
tion. This enables us to supply our
customers with freshly made choc
olate and that, of course, tastes
much better, he says.

Outsourced Manufacturing

Extending Visibility Beyond the

Four Walls

SAP Supply Network Collaboration

helps you connect to and collaborate
with contract manufacturers. By giving
contract manufacturers straightforward
and full access to supply chain informa
tion, it extends visibility and collabora
tion to their manufacturing processes.
SAP Supply Network Collaboration
offers functionalities that support
three business processes for out
sourced manufacturing. The first is the
contract manufacturing procurement
functionality, which enables a purchase
orderbased process that allows the
contract manufacturer to access the
subcontracting PO and collaborate with
you on both the finished-goods and
component level. The second is the
supply network inventory functionality,
which offers you N-tier visibility and
monitoring of inventory, supply, and
demand information. The third is the
work order functionality, which offers
the most sophisticated and granular
way for you to collaborate and track
contract manufacturer activities.

Contract Manufacturing
Procurement
The contract manufacturing procure
ment functionality allows you to send
out subcontracting purchase orders to
the contract manufacturer using SAP
Supply Network Collaboration. The
contract manufacturer can view, print,
and download the purchase order data,
which includes the components that
make up the finished good. As part
of the approval process, the contract
manufacturer can request changes to
the finished-goods quantities, dates,
and components. He or she can also

report on how much of each compo

nent has been used. At the time of
shipment, the contract manufacturer
can create ASN messages. These
changes update your ERP system,
allowing internal planning to run using
the latest supply commitments from
the contract manufacturer.

In addition to deep func

tionality and full integration,
SAP Supply Network Col
laboration offers powerful
flexibility in choosing a meth
od of collaboration to on
board your entire network,
from large partners to very
small partners. Smaller
partners without electronic
data interchange (EDI) infra
structure only need Internet
access and a Web browser
to perform tasks via the
applications user-friendly
Web screens.
The main business value is that you
can communicate requirements accu
rately and in real time, replacing older
methods like phone, fax, and e-mail.
The contract manufacturer can find
his or her requirements and respond
to them quickly and accurately via con
firmations and ASNs.

Supply Network Inventory

The supply network inventory (SNI)
functionality allows you to have visibility
of inventory (with batch numbers) and
supply and demand information across
multiple tiers, including component
supplier, contract manufacturer, and
third-party logistics provider, using
the SNI monitor. The SNI monitor also
calculates and displays the projected
stock along with the planned replenish
ments (for example, incoming POs)
and planned outtakes (for example,
production orders) with min/max stock
limits and associated on-screen color
changes and alerts. Furthermore, SAP
Supply Network Collaboration has a
sophisticated visibility filter that allows
your multi-tier partners to also have
visibility to information based on their
assigned authorization. This ensures
that all parties are sharing the actual
status at all times and helps to proac
tively monitor changes in supply and
demand.
The main business value is that you can
manage the liability on finished-goods
levels through the monitoring of the
component inventory situation at the
contract manufacturers locations, sup
porting early discovery and action in
exception situations.

Work Order
The work order functionality allows you
to collaborate on and track production
activities at your contract manufacturers
facility. SAP Supply Network Collabo
ration can be configured to automatically
create work orders from purchase orders
sent from your ERP system. An optional

SAP Solution in Detail SAP Supply Network Collaboration

11

Figure 6: Outsourced Manufacturer Feature to Record Batch Usage and Update SAP ERP

negotiation phase allows you to negotiate

and agree on quantities for deliveries,
dates and times of deliveries, and con
sumption quantities of the components
with your suppliers. The next phase is
execution. During this phase, the sup
plier produces the ordered product and
regularly updates the work order with
actual data. The work order tracks highlevel production progress using mile
stones and has the capabilities to project
the finished-goods date and quantity
based on current production progress.

12

It also tracks consumption of compo

nents and raw materials down to batch
level, something that is useful in cases
when the components are owned by
you but physically available at the con
tract manufacturers facility. Contract
manufacturers can report production
progress, component consumption, and
batch usage data for multiple orders and
phases simultaneously by using the userefficient worklist. This data from the
contract manufacturer can automatically
update your ERP system, adjusting
inventory levels and cost accounting.

SAP Solution in Detail SAP Supply Network Collaboration

The main business value is that you have

visibility over the production activities
at the contract manufacturers location
and are able to get early insights about
changes that affect the finished-goods
shipping date and final quantity, some
thing that helps you manage your cus
tomers expectations and increase cus
tomer satisfaction. You can also get
more up-to-date adjustments to inven
tory and work in progress relating to
your own components being used by
the contract manufacturer updates that
are reflected in the your ERP system.

Customer Collaboration

Sense and Respond to Real-Time

Supply-and-Demand Signals

SAP Supply Network Collaboration

offers comprehensive functionalities
in the customer collaboration area,
allowing companies to share informa
tion and collaborate effectively with
their customers on the finished-goods
level. Customer collaboration process
es are seen mainly in consumer prod
ucts and other industries that operate
downstream distribution structures that
extend to retailers.
Two functionalities in SAP Supply Net
work Collaboration demand forecast
and min/max replenishment support
traditional vendor-managed inventory
processes, while the third responsive
replenishment provides you with even
more sophisticated and advanced
functionality.

Demand Forecast Collaboration

The demand forecast collaboration func
tionality allows you to compare and estab
lish consensus between consumptionbased forecast and customer-transmitted
forecast. Close collaboration with your
customer can be promoted by visualizing
absolute and percentage differences as
well as by applying rules to calculate a
consensus forecast. Baseline forecast
and promotion forecast can be handled
separately. The consensus forecast
can then be taken and used to drive
the downstream demand and replenish
ment processes. All process steps are
aligned to be automated and use alert
ing for exceptions as a basis for your
planners manual decision input. You
can integrate this forecast into your
overall forecasting process using the
demand planning functionality in the

Figure 7: Responsive Replenishment Overview

SAP Advanced Planning & Optimization

(SAP APO) component or use the fore
cast functionality within SAP Supply
Network Collaboration to help ensure
replenishment accuracy.
The main business value is that you can
respond to and collaborate very quickly
on changes on the demand side.

Min/Max Replenishment
The min/max replenishment functionality
allows for traditional vendor-managed
inventory replenishment scenarios using
maximum and minimum stock limits as
drivers. During this process, all data
received from the customer is validated
and mapped. Short-term projected sales
forecasting is also available for the sta
tistical forecasting step. With this func

tionality, you can plan the replenishment

based on minimum and maximum stock
levels of a particular product, maintained
at the ship-to location of the customer.
All process steps are aligned to be auto
mated, and alerting is used as a basis
for notifying exceptions that require your
planners manual input.
The main business value is that you can
better utilize your capacity by having the
same person do both the planning and
execution pieces. Your planner can quick
ly assess the stock situation through the
color-coded min/max Web browser and
is proactively alerted to exception situa
tions, like an expected out-of-stock sit
uation in the future.

SAP Solution in Detail SAP Supply Network Collaboration

13

Responsive Replenishment
The responsive replenishment function
ality allows you to gain state-of-the-art
vendor-managed inventory capabilities.
You receive sales, stock, and promotion
data from the customer periodically. All
data received is validated and cleansed,
and corrected data is used to generate a
statistical forecast for baseline demand.
Next you carry out replenishment plan
ning fulfilling the days supply target
and group the replenishment quantities
into economically optimal transport
loads. Several loading methods, such
as straight loading or load balancing,
can be used to build the transport load.
Transport load builder (TLB) shipments
with the replenishment order numbers
are automatically transferred to your
ERP system and to the customer ERP
system, generating sales orders and
purchase orders respectively. Promo

tion demand can be handled separately

throughout the forecast, replenishment,
and load-building steps. All process
steps can be automated with your
planner being proactively alerted when
exceptions occur so he or she can pro
vide manual input.
The main business value is that you can
gain better visibility into demand signals,
handle promotions with retailers more
efficiently, and realize a fully automated
replenishment process. Furthermore,
short-term changes in demand can be
incorporated by automatically adjusting
orders and shipments up or down with
in days or even hours depending on updates. This process results in increased
sales, reduced costs, and lowered
inventory levels throughout the supply
chain.

Case Study with

Colgate-Palmolive
Colgate-Palmolive Company is a
consumer products company based
in New York, with revenues of
US$15.3 billion. Colgate-Palmolive
successfully implemented the SAP
Supply Network Collaboration appli
cation in 2007. The main challenge
was that the company wanted to
shift planner focus to near-term
demand signals and have the ability
to respond quickly to unexpected
demand. It implemented the respon
sive replenishment functionality with
the goal of basing replenishment and
ordering on downstream demand
rather than on high-level forecast.

14

Colgate-Palmolive found that it

reduced manual order handling
and processing, enabled planners
to spend more time analyzing busi
ness impact and less time cleansing
data, and enabled the company to
keep more products in stock during
key promotions. Nicholas Daddetto,
senior manager for Colgate-Palmolive,
says, By the time the analysts start
their workday, forecast and replen
ishment plans have been updated,
based on information about retailer
activity that happened the previous
day.

User EfficiencyEnhancing Functions

Quick Access to Personalized Information

Figure 8: Supplier Quick View

SAP Supply Network Collaboration

provides various tools to help user
productivity by providing access to key
information quickly and in a personal
ized way. Web UI screens can be per
sonalized by removing fields and table
columns that are not relevant for the
user; time-bucket views of monitors
can be set based on user preference;
preselections for the location and
products and other master data that
the user works with can be saved; and
users can view and search for data
using personalized, partner-specific
naming for products and locations.
Other key features include:
Quick view Suppliers and customers
can use this graphical in-context key
performance indicator (KPI) dashboard
as their entry screen to SAP Supply
Network Collaboration. The Quick
View screen gives an at-a-glance

view of the work tasks, prioritized by

level of urgency, such as how many
shipments are due to be shipped
today or how many new POs just
came in and need to be processed.
The user can drill down directly from
the charts to relevant screens to
perform the tasks. See Figure 8 for
a sample of a supplier Quick View
screen. The Quick View screen can
be customized extensively to show
only data relevant to the users tasks,
to modify key figures according to a
companys needs, and even to change
the look and feel by adjusting colors,
sizes, and texts.
Figure 8 shows the Quick View screen
for a supplier user that takes care of
PO collaboration. The supplier user
can see that there were two new PO
items that were sent by the customer
in the last 24 hours. The supplier can

click on the 2 and drill down directly

to the Purchase Order Worklist screen.
The two new PO items are preselected
on this screen.
Worklists Suppliers and customers
can use intuitive worklist screens to
quickly and efficiently process every
day tasks with minimal mouse clicks
(for example, confirm/reject multiple
purchase orders on a single screen).
Delivered queries preselect orders
with certain statuses, taking away the
need for the user to search manually
and toggle between various overview
and detail screens. Additionally, the
user can personalize queries based
on his or her needs.
Alert monitor/notifications Suppliers
and customers can view exceptions
in SAP Supply Network Collaboration
with the use of alerts such as out-ofstock situation, past-due ASNs, or PO
overdue for confirmation. Users can

SAP Solution in Detail SAP Supply Network Collaboration

15

view these alerts in the alert monitor,

or the user can chose to receive the
alerts as e-mail, fax, or Short Message
Service (SMS) notifications. This helps
the user manage with exceptions,
logging onto SAP Supply Network
Collaboration when needed.

SAP Supply Network

Collaboration can be
integrated with different
ERP systems, such as
BAAN or Oracle, since
the application is backend agnostic. Standard
interfaces can be used
to upload master data,
and SAP NetWeaver
Process Integration can
be used to exchange
transactional data.

16

Notes Suppliers and customers can

use the convenience of exchanging
free text notes with each other to
improve communication details.
Partner self-service Suppliers and
customers can manage their own busi
ness users in SAP Supply Network
Collaboration, off-loading the heavy
user creation and maintenance task
from customers. This includes creat
ing users, assigning roles, resetting
passwords, and defining user-based
settings such as date formats and
decimal formats.
File transfer Suppliers can leverage
file transfer features to download
data that they would otherwise see
on the given SAP Supply Network
Collaboration Web screens, edit the
downloaded file locally on their PCs,
and then update the application with
the latest changes by uploading the
modified file. For example, a supplier
can download PO items to be con
firmed, mark the confirmations, and
upload the confirmations to SAP
Supply Network Collaboration. Many
suppliers are already used to using
spreadsheets for collaboration, so
the training costs of this deployment

SAP Solution in Detail SAP Supply Network Collaboration

are greatly reduced. Furthermore,

suppliers can also choose to receive
download files as e-mail attachments
and send back the responses to SAP
Supply Network Collaboration via
e-mail. This completely removes the
need for the supplier to log onto the
application.
In the AMR Research Inc. article SAP
Aiding Collaboration with SNC, pub
lished on October 30, 2008, Noha
Tohamy comments that SAP customers
are satisfied with functionality and inte
gration and expects SAP to continue
to gain more traction with [SAP Supply
Network Collaboration], with additional
enhancements to reporting, file transfer
and alert monitoring.

Integrated and SOA Enabled

Bringing It All Together for
Greater Benefits

Integration with Other

SAP Software
SAP Supply Network Collaboration
standard business functionality needs
to be integrated with SAP NetWeaver
Process Integration (SAP NetWeaver PI)
technology and the SAP ERP applica
tion. SAP NetWeaver PI content maps
messages from SAP ERP to XML for
mat and vice versa and routes them
correctly between start and destination
locations.
The optional integration of SAP Supply
Network Collaboration with other SAP
solutions supports other business pro
cess areas:
cFolders SAP Supply Network Col
laboration is closely integrated with
cFolders (part of SAP PLM), allowing
you to navigate directly to cFolders
from different screens (for example,
the Purchase Order Worklist Web
screen) and thereby gain access to
related documents and files such as
drawings or technical specifications.
The supplier can also upload addi
tional documents to cFolders for the
customers benefit. This helps to tie
design and product lifecycle manage
ment together with procurement
planning.
The SAP NetWeaver Business Ware
house (SAP NetWeaver BW) com
ponent SAP Supply Network Col
laboration is closely integrated with
SAP NetWeaver BW, allowing you to

readily customize reports related to

supplier performance measurement
KPIs. Reporting tools from the SAP
BusinessObjects portfolio can be
leveraged for this.
The SAP Event Management appli
cation SAP Supply Network Col
laboration provides several standard
integration points with SAP Event
Management to trigger alerts when
an expected event does not occur
(for example, it enables the ability to
trigger an alert if the expected event
of a PO confirmation does not take
place for more than 24 hours).
The SAP NetWeaver Portal compo
nent SAP Supply Network Col
laboration can be added to SAP
NetWeaver Portal if you want to
allow the supplier to access other
software systems besides SAP
Supply Network Collaboration. This
allows you to group together process
steps that are required for the com
plete process flow but are usually
carried out in different systems.
SAP APO SAP Supply Network
Collaboration provides several
integration points with SAP APO.
In supplier collaboration, integration
of scheduling agreement releases
can be done with SAP APO instead
of SAP ERP. In customer collabora
tion, replenishment planning features such as deployment, product
allocation, and global availability to
promise (GATP) can be done with
SAP APO.

The SAP NetWeaver Identity Man

agement component SAP Supply
Network Collaboration users and
business partners can be automati
cally generated from SAP NetWeaver
Identity Management. This includes
creation, change, and deletion of users
and business partners for employees
and external users.

SOA Enabled
The standard SAP Supply Network
Collaboration shipment can be inte
grated with SAP ERP releases level
4.6C or higher. The master data
required can be copied over from
SAP ERP using core interface func
tionality, and the u
p-to-date transaction data can be exchanged using
SAP NetWeaver PI.
Alternatively, SAP Supply Network
Collaboration can be integrated with
different ERP systems, such as BAAN
or Oracle, since the SAP application is
back-end agnostic. Standard interfaces
can be used to upload master data (for
example, business add-ins, or BADIs),
and SAP NetWeaver PI can be used to
exchange transactional data.
All back-end communication interfaces
of SAP Supply Network Collaboration
are SOA enabled with well-defined inter
faces compliant with industry standards
that use the XML format and can be
called using SAP NetWeaver PI.

SAP Solution in Detail SAP Supply Network Collaboration

17

Architecture and Landscape

Choosing What Fits Your Business Best

SAP Supply Network Collaboration

can be installed and operated in the
form of:
A lean supply network collaboration
(SNC) version that only contains
functions relevant for supply network
collaboration
A full SCM version that includes com
ponents of SAP APO, SAP Event
Management, and the SAP Extended
Warehouse Management (SAP EWM)
application
The lean SNC version is not available
to support customer collaboration
capabilities.
The full SCM version is suited to cus
tomers who already use SAP APO,
SAP Event Management, SAP EWM,
or customer collaboration functionality,
or plan to do so in the future. The lean
SNC version is suited to customers
who do not want to operate any more
SCM components on the same server
or do not want customer collaboration
functionality. Note that it is not possible
to upgrade from the lean SNC version
to the full SCM version and vice versa.
The most popular installation among
customers is the full SCM version with
only the SNC functionality switched on.
This keeps your options open for using
more functionality in the future, avoids
support package dependencies among
components, and helps to improve sys
tem performance and peak memory
requirements.

18

SAP Supply Network Collaboration

(SAP SNC) as add-on
SAP SNC server

SAP Supply Network Collaboration as

part of SAP Supply Chain M
anagement
(SAP SCM)
SAP SCM server

SAP SNC 7.0

SAP SCM 7.0 Server

SAP SCM
SAP Extended Warehouse Management
SAP SNC
SAP Event Management
Live cache

SAP SCM 7.0

SAP SCM 7.0

SAP NetWeaver
Application/database server

Relational
database
manage
ment
system

SAP NetWeaver
Application/database server

Relational
database
manage
ment
system

Advantages
Advantages
Less support package implication
Possible to use other SAP SCM components
Smaller system and hardware requirements
on the instance
Separation of SAP SNC versus SAP SCM
Mandatory for some functionalities (that is,
planning functionalities for a demilitarized zone
extended planning features)
Supported upgrade from an existing SAP
Risks
Inventory Collaboration Hub/SAP SNC
No supported upgrade path to a full
5.0/4.1
SAP SCM server
No full functionality
Figure 9: Installation Options for SAP Supply Network Collaboration

SAP Supply Network Collaboration is

built on the ABAP programming lan
guage stack and does not require run
ning the Java stack.

Stable Core
SAP Supply Network Collaboration 7.0
represents the so-called core release,
a concept adopted for all applications in
SAP Business Suite 7 software, which
means that future functionality will be
delivered to customers via SAP enhance
ment packages and no longer via entire

SAP Solution in Detail SAP Supply Network Collaboration

new releases of the software. The same

approach has been in place for SAP ERP
since some time ago. Through enhance
ments in software architecture and a
focus on SOA services that enable the
enhancement packages concept, cus
tomers can take advantage of new
functionality in an easier and more pin
pointed way by applying enhancement
packages and activating selected func
tionalities that are required at a given
time. The aim is to reduce the custom
ers cost of upgrades and provide more
functionality, more frequently.

Supporting Value

Powered by SAP NetWeaver

SAP Supply Network Collaboration

supports value scenarios for collabor
ative demand and supply planning and
for manufacturing network planning
and execution. For more details, see
Responsive Supply Networks.

SAP Supply Network Collaboration

is powered by the SAP NetWeaver
technology platform. SAP NetWeaver
unifies technology components into a
single platform, allowing organizations
to reduce IT complexity and obtain more
business value from their IT investments.
It provides the best way to integrate
all systems running SAP or non-SAP
software.

Other Information Sources

More information about SAP Supply Net
work Collaboration can be found here:
For general information on SAP Sup
ply Network Collaboration, see the
SAP Service Marketplace extranet
at service.sap.com/scm
Supply
Network Collaboration. (New users
to SAP Service Marketplace must
first register here to receive a pass
word and access:
https://websmp101.sap-ag.de
/~SAPIDP
/002006825000000234912001E.)
For SAP documentation, see the
SAP help portal at help.sap.com
SAP Business Suite
SAP Supply
Network Collaboration.
For release notes, see SAP Service
Marketplace at service.sap.com
/releasenotes
SAP Solutions
SAP Supply Chain Management
(SAP SCM). (New users to SAP
Service Marketplace must first
register here to receive a password and access:
https://websmp101.sap-ag.de
/~SAPIDP
/002006825000000234912001E.)

SAP NetWeaver also helps organiza

tions align IT with their business. With
SAP NetWeaver, organizations can
compose and enhance business appli
cations rapidly using enterprise services.
As the foundation for service-oriented
architecture, SAP NetWeaver allows
organizations to evolve their current IT
landscapes into a strategic environment
that drives business change.

Find Out More

For more information about how SAP
Supply Network Collaboration can help
you, call your SAP representative or
visit us online at www.sap.com/scm.

SAP Supply Network

Collaboration provides
various tools to help
user productivity by
providing access to key
information quickly and
in a personalized way.
Web UI screens can be
personalized by remov
ing fields and table col
umns that are not rele
vant, and users can
use worklist screens to
quickly and efficiently
process everyday tasks
with minimal mouse
clicks, taking away the
need for the user to
toggle between various
overview and detail
screens.

SAP Solution in Detail SAP Supply Network Collaboration

19

Quick facts

www.sap.com /contactsap

Summary
Optimizing visibility, control, and efficiency in supplier and customer interactions, the
SAP Supply Network Collaboration application enables Web-based cooperation and
knowledge sharing across your supply chain. It delivers a consistent view of supply-and-
demand information to manufacturers, suppliers, and customers.
Business Challenges
Poor cooperation, communication, and collaboration among your supply chain partners
Unreliable supply and demand information, creating an out-of-sync supply chain
Rising costs due to inefficient procurement, sales, and inventory processes
Key Features
Collaboration with suppliers Synchronize supply with demand by facilitating the
release, purchase order, kanban, replenishment, inventory, delivery control, packaging,
and invoicing processes
Collaboration with contract manufacturers Connect and communicate with contract
manufacturers, providing access to supply chain information and extending your visibility
to their manufacturing processes
Collaboration with customers Gain support for state-of-the-art, vendor-managed
inventory capabilities, including demand-driven replenishment and the ability to control
inventory at each customer location based on inventory, demand, and minimum or
maximum stock balance limits
Business Benefits
Increase the speed, accuracy, and adaptability of your supply network by streamlining
and automating collaboration between you and your suppliers, contract manufacturers,
and customers
Decrease the cost of your procurement, sales, and inventory processes by improving
communications and efficiency
Optimize supply chain visibility by providing a clear, accurate view of supply and
demand information to all supply chain participants
For More Information
Call your SAP representative or visit us online at www.sap.com/scm.

50 096 788 (09/08)

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