Scenarios for Realistic Planning

SAP Inventory Collaboration Hub (SAP ICH) is an Internet-based component that offers better integration of smaller vendors with the planning processes of their customers. The vendors have easy access to inventory and demand information. Master data on plants, vendors, material masters, or data records can easily be transferred from ERP systems into a supply chain management solution, without creating master data in multiple systems. A core interface, contained in plug-ins for SAP R/3 or mySAP ERP and based upon remote function calls (RFC), handles the data transfer.
SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) transfers transaction data on requirements, inventories, scheduling agreement calls, dispatch notifications, or goods receipts quantities from the ERP solution to SAP ICH and vice versa. SAP ICH significantly accelerates the speed of data transfer between the back-end systems of customers and vendors – SAP R/3, mySAP ERP, or third-party solutions. The application can also be integrated into a vendor’s portal, such as SAP NetWeaver Portal. Portal integration offers vendors an advantage: they need only a single link to communicate with their customers. The link also provides access to SAP ICH and functionalities like Supplier Self-Service (SUS) or Collaboration Folders (cFolders).

New process for requirements and inventory planning

Earlier releases of SAP ICH supported processes for supplier-managed inventory and scheduling agreements. The latest release features enhancements that support order processing, dynamic replenishment, and new functionalities.
Posting a goods receipt in an ERP system requires either an order or a schedule line. To perform this task, SAP ICH offers various alternatives: scenarios oriented toward a schedule line (customer initiative) and scenarios oriented toward an order (vendor initiative). SAP ICH supports four scenarios.

1. Schedule line processing

Schedule line processing involves the traditional schedule line processing already familiar to users of SAP R/3. The customer continues to be responsible for planning replenishment. Based upon requirements, schedule line items are generated in the customer’s SAP R/3 system and transferred to the vendor as scheduling agreement calls. This process now occurs with a transfer from SAP NetWeaver XI to SAP ICH as follows. An IDoc is transmitted from the ERP system to SAP NetWeaver XI, where it is converted into an XML document and redirected to SAP ICH. In SAP ICH, the vendor can use a Web browser to view the calls, confirm current calls, compare various versions, or, in the case of a goods issue, generate a dispatch notification. In SAP NetWeaver XI, the dispatch notifications are reconverted into an IDoc and transmitted to the customer’s back-end ERP system.

2. Supplier-managed inventory

The supplier managed inventory (SMI) process involves a procurement process in which the supplier assumes responsibility for replenishment planning. Material requirements planning (MRP) in the customer’s ERP solution now handles only gross requirements, which vendors use to calculate the net requirements in their own back-end systems based upon the gross requirements, inventory levels, and other factors. A standard report in the customer’s ERP system automatically creates IDocs according to specific criteria and transfers them to SAP NetWeaver XI for conversion into XML format and redirection to SAP ICH. Vendors use a Web browser to access SAP Supply Network Planning and compare the planned inflows to data like minimum or maximum limits or specific rounding rules. The XML document on the planned inflows serves as the basis for creating a dispatch notification in SAP ICH. The notification is then transmitted to the customer’s back-end system – just as it is in schedule line processing.

3. Order processing

During order processing, orders are generated in the customer’s ERP system and transmitted to SAP ICH. The vendor can confirm the orders in a Web browser and enter changes to quantities and schedules. Confirmed orders (possibly with modified data) are then returned to the customer’s back-end system. Vendors generate dispatch notifications from these orders.

4. Dynamic replenishment

In this process, customers’ net requirements from back-end systems are automatically compared to inflows from vendors: deviations are displayed. The vendor can either maintain the inflows manually in the Web browser or can have them transferred from the vendor’s back-end system to SAP ICH. This procedure is used to make the net requirements available to the vendor as a forecast within a mid- to long-term horizon while responsibility for the short-term planning horizon lies with the customer. In the other scenario, either the vendor (SMI scenario) or the customer (order scenario) is responsible for planning, but no forecast is communicated to the vendor.

Alert monitoring

SAP ICH continues to provide an alert monitor. The Web-based user interface of SAP ICH can be used to monitor incoming XML messages and planning. If a critical situation develops because a minimum inventory threshold has been reached or will occur shortly, SAP ICH generates an alert and displays it in the alert monitor. The alert monitor formats various alerts according to the applications or objects in which the alerts have occurred.
During the creation of data, SAP ICH checks the material master. If the material master is not present or if its data is invalid or inconsistent, the system automatically generates a validation alert. SAP ICH also generates alerts because of business checks: if a minimum inventory threshold has been reached (inventory alert), for example. SAP ICH also has alerts for unconfirmed calls, overdue dispatch notifications, goods receipts that deviate from the dispatch notification, and the arrival or a new or modified order. E-mail, SMS, fax, or pager can be used to communicate with customers and vendors.
The new functionalities of SAP ICH in mySAP SCM can save costs for customers because users can network with their customers in a very brief time, given the simple installation and configuration of the application. Customers can thus count on a faster ROI.

Anita Leitz
Anita Leitz