Asian Companies Move up Manufacturing Value Chain through Improved Supply Chain Execution

July 17, 2002 by SAP News 0

Key Logistics Functionality of mySAP Supply Chain Management (mySAP™ SCM) Takes off in Asia Pacific with New Key Customer Wins including Major Engineering Supplier MTU Asia

SingaporeSAP Asia today announced that over 500 companies in Asia Pacific have selected Logistics Execution System (LES), a key component of mySAP Supply Chain Management (mySAP™ SCM). From July 2001 to July 2002, the customer base for SAP LES in Asia Pacific grew by 26 percent. According to a recent Datamonitor report, Asia Pacific contributed approximately 25% of the global logistics market in 2001 and it is expected to be the fastest growing market over the next four years with a CAGR of 10.5%.

This momentum demonstrates that a growing breed of businesses in Asia are recognising the real business value that can be derived from improved supply chain execution. Organizations in Asia Pacific are leveraging next-generation logistics solutions from SAP to build and execute adaptive supply chain networks to accelerate their move up the global manufacturing value chain.

The following companies have chosen the SAP solution to support the fulfillment cycle of their supply chains. Haier Logistics, Legend’s Digital China and Sony in China; Hansol CSN Korea; MTU Asia, Hewlett-Packard Far East in Singapore; and China Motor Corporation in Taiwan. The result is enhanced adaptability, visibility and collaboration, enabling organizations to respond efficiently to supply and demand movements and remain competitive in today’s challenging business environment.
An integral component of mySAP™ SCM, SAP’s LES enables companies to develop real-time collaborative interaction capabilities with customers, suppliers and partners, and provides the business visibility to track transactions such as orders and deliveries, and monitor system performance in a seamless supply chain ecosystem.

Logistics as a Strategic Priority for MTU Asia
“SAP’s logistics software will enable MTU Asia to integrate our warehouse operations to inventory control and material management to better meet customer needs,” said Rodney Chang, Manager, warehouse operations at MTU Asia. “We will have better stock visibility across the entire organization in over 20 countries in Asia Pacific. We see a reduction in stock discrepancies to a minimal 0.02 percent, improved throughput and enhanced efficiencies, such as minimization of time to delivery and an improvement in material availability. With SAP’s LES, we will now have proper tools to measure key performance indicators.”
“Being charged with the full regional responsibility for marketing, distribution, application engineering and sales support for the complete range of MTU and Detroit Diesel Corporation (DDC) products, our selection of SAP LES is a strategic one as we aim to remain a global, competitive player in today’s customer-centric environment,” continued Mr. Chang.

As the next phase of MTU Asia’s SCM execution, the organization will soon implement radio frequency and bar-coding technologies, which are integrated into mySAP™ SCM. This will leverage wireless communication technologies and data processing techniques to enable fast, reliable and precise processing of individual goods movement and superior inventory tracking. MTU Asia, part of the DaimlerChrysler Group of companies, is a leading supplier of drive systems for land, marine and rail applications as well as plants for electric power generation.

Asia’s Potential to Become Global eLogistics and Fulfillment Center

“More and more companies in Asia are targeting logistics as the sweet spot for value creation,” said Robert Vetter, Vice President, Business Development, SAP Asia Pacific. “Asia has the potential to become a global logistics center and our role is to enable the best run companies to drive this market trend. Traditionally, Asian companies are known to be competent in ‘back-end’ functions. But as China becomes the ultimate ‘back-end machine,’ Asian companies need to move up the global manufacturing value chain with new corporate strategies focused on collaborative supply chains that are driven by the customer.”
Datamonitor’s February 2002 report highlighted that Asia Pacific will be the highest growth market for fulfillment software with a CAGR of 20.8% over the next four years, surpassing North America and Europe. The report also indicated that the Asia Pacific market will benefit from the globalization of technology and efficiency demands resulting from burgeoning international trade.

“As trading partnerships evolve into more sophisticated, adaptive supply chain networks, there is a need to invest in fulfillment technology to provide customer-focused and optimized delivery,” continued Mr Vetter. “An increasing number of businesses in Asia are leveraging e-business solutions like SAP LES to leapfrog their manufacturing counterparts in other markets with enhanced visibility and adaptability across their value chain arising from better collaboration with partners and customers.”

Huge Potential Savings at Supervalue
Supervalue Inc., the leading supermarket chain in the Philippines with 16 stores and five distribution centers, recently extended the reach of mySAP™ SCM. The successful go-live will result in huge potential savings for Supervalue in the long run, as the newly implemented system will allow the supermarket to track actual warehouse stock situations in real-time via radio frequency.

“Islands of product and inventory information are no longer sitting by themselves. SAP’s supply chain management solution integrates our logistics and retail processes, which will enable Supervalue to manage and replenish our inventory at stores according to actual sales and thereby optimizing purchasing decisions. This ultimately results in transparency of data, which provides the key decision-makers and field staff with one single view of inventory situations,” said Arvi Cudala, AVP – Retail Support and Distribution, Supervalue Inc.

“SAP first declared leadership in the supply chain management solutions marketplace last year, when reported software license revenues demonstrated that we had outpaced all other competitors,” concluded Ng Weng Heng, Team Lead for SCM and PLM, SAP Asia. “Our SCM solution has experienced several cycles of product innovation and customer experience over the last 30 years, and as a result has continued to receive strong momentum with customers in Asia Pacific.”
SAP has a portfolio of supply chain management customers in Asia Pacific comprising some of the region’s leading brand names such as Tata Iron and Steel Company Limited and Marico, India; Sharp Corporation, Japan; Unilever East Asia-Pacific and Hewlett-Packard Far East in Singapore.

About mySAP SCM – A Complete Supply Chain Solution

mySAP™ Supply Chain Management, part of the suite of cross-industry solutions within the mySAP.com® e-business platform, transforms the sequential, linear supply chain into an adaptive supply chain network that enables suppliers, manufacturers, distributors, channel partners, and customers to collaborate, share information, plan, and coordinate activities across the network. Adaptive supply chain networks are designed to improve business visibility and enable dynamic collaboration throughout all supply chain processes, from supply chain design to material sourcing, from forecasting demand to scheduling production, managing warehouses, and fulfilling transportation requirements. The “adaptive” capabilities provide improved flexibility and responsiveness while maintaining control of business processes. The “network” element means that information is shared and leveraged based on the knowledge and strengths of trading partners across a multi-tiered supply chain network. For more information on the mySAP SCM solution, see mySAP SCM Fact Sheet at www.sap.com/press/factsheets