Bob Trebilcock

SAP's new take on supply chain execution

ERP or best-of-breed?

In the supply chain execution world, them are fightin’ words.

The IT department would love everyone in the corporation to be singing Kumbaya from a digital hymnal, with financials, sales, manufacturing, distribution and transportation all working on the same ERP platform. Who, after all, really needs real-time slotting to move boxes?

To the operations guys and gals who run manufacturing plants, distribution centers and transportation departments this is heresy. They could care less about what it costs to maintain the integration points between a WMS and SAP or Oracle. They don’t want to give up any tool that might make them more efficient or help them deliver on all the new promises the sales department is making.

It’s not quite the Hatfields and McCoys, but the pendulum has been swinging back and forth for the last decade. With its latest release, SAP, No. 1 on Modern’s list of the top 20 providers of supply chain management solutions, hopes the pendulum will swing back in its favor when it comes to supply chain execution (SCE), according to Stefan Theis, SAP’s vice president for suite solution management, supply chain management. Last year, SAP ranked No. 3 on our top 10 list of SCE providers.

“Our customers know that we have functionality in ERP,” Theis says. “What we want them to know now is that we’ve made investments in both our WMS and TMS products that are comparable to the best of breed providers.”

Last November, SAP released a new version of its TMS that was well received by analysts. According to Theis, SAP’s latest supply chain management release builds on that success in three areas:

1. Supply chain planning: SAP has made some industry-specific improvements.

2. Supply chain collaboration: The news here is enhancements to rapidly onboard suppliers, especially contract manufacturers in a global supply chain. The solution provides visibility into your partners’ production schedules and manufacturing capacities.

3. Warehouse management solution: According to Theis, SAP has made significant improvements in the extended warehouse management arena, especially around labor management and RFID enablement. In addition, the solution will build on SAP’s success managing service parts distribution centers, one of the verticals where it is an acknowledged industry leader. “Ten years ago, the facilities we worked with were focused on holding material,” he says. “Now, we recognize that they need to manage dynamic processes, like yard management, cross-docking, slotting and value-added services in the warehouse. While our sweet spot used to be small warehouses attached to manufacturing plants, we’re now addressing the more complex warehouses and distribution centers.”

Theis acknowledges that a functionality gap still remains between best-of-breed providers and SAP, “but we believe the investments we’ve made over the last few years are bearing fruit and the functionality gap is narrowing.”

The IT department has believed in that message for some time. Now, we’ll see if the operations folks are ready to listen as well.

If your company is looking for a new WMS, let us know whether you’ve considered a solution from SAP, Oracle or another ERP provider.

Posted by Bob Trebilcock on March 27, 2008 | Comments (0)