SAP SCM Planning

What Is It?

Event Management has its precursors in the Alert Manager. It is a module which has the ability to connect up both SCM and SAP ERP, as well as multiple external partner systems into a comprehensive monitoring system that can keep both the company implementing EM as well as their partners up to date on activities in the supply chain.

Its History

Alert management goes back to the origins of SAP SCM, however, the Event Manager is a relatively new module. While housed within SCM, it is less planning than execution oriented. To see the problems EM is attempting to solve see this post:

http://fourthpartylogistics.wordpress.com/2009/05/23/the-problem-scm-event-management-is-attempting-to-solve/

Thought Process Behind EM

EM is part of a larger concept in supply chain management that proposes that the real benefits lie between organizations – so called cross-enterprise integration. This has been a very strong development focus of SAP in SCM for several years now. To read more about this concept – see this post.

http://crossenterpriseresearch.wordpress.com/2009/06/01/cross-enterprise-aspects-of-sap-scm/

Implementation Hurdles

Much like SNC, which we consider its sister module, EM is dependent upon data from a multitude of sources, many outside the implementing company’s control. Therefore the biggest challenge for cross enterprise software like this is always the same:

• Technical Integration Challenges
• Organizational Challenges in Motivating Partner Participation and Compliance
• Documentation

Implementation History

EM is only lightly implemented as of the writing of this post. It also happens to be tackling one of the most difficult areas that there is, which is intracompany coordination and integration. For anyone who doubts this, see this post on the challenges that lay ahead.

http://fourthpartylogistics.wordpress.com/2009/05/23/the-problem-scm-event-management-is-attempting-to-solve/

Documentation

EM is also one of the most lightly documented of all of the SCM modules. The SAP Help documentation is problematic and needs both a re-write and must be made far more comprehensive. We do recommend the book Supply Chain Event Management, however most the book is in German. It does have several English chapters.

This is a good book on the topic, although it is focused on supply chain event management generally and had only briefly mentions of SAP EM.

How to Begin

Event Manager can add value simple monitoring the data that the company controls, and this is the scope we would recommend for the first roll out. Secondly, after a company has a proven internal solution, it is in a better and more credible solution to simple incorporate the partners in the currently existing system.

Precursor

Business is increasingly moving towards an outsourced model. _________________________________________________

Outsourcing Positives

Outsourcing, enhanced by technology, allows a company like Amazon.com to manage the front end experience and to allow other companies perform the fulfillment. This ads value because Amazon’s web shopping and supply demand matching service are so superior to other companies. We document Amazon’s available to promise capability vs. GATP in this post.

http://sapplanning.wordpress.com/2009/05/07/gatp-atp-trees-and-amazon-com/

We discuss subcontracting in GATP and at Amazon.com in this post.

http://sapplanning.wordpress.com/2009/05/15/subcontracting-in-snp-and-gatp-vs-amazon-com/

Outsourcing Negatives

While lauded by various pro-business types, the trend is not all positive. Outsourcing often becomes a way for those companies with strong brands, to spin off functions and jobs to weaker supply chain intermediaries and keep more of the profits for themselves. This can also lead to labor abuses as well as environmental degradation of other countries (i.e. the Nike model where people in Honduras or China get 9 cents for a shirt that sells for $30.) This atrocious behavior is defended as “good capitalism” and anyone who disagrees is told to go and live in Sweden.

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EM = Outsourcing Engine?

One of the issues which decreases the ability to outsource is cross-enterprise information sharing. EM can be seen as an outsourcing enabler. Companies do not feel as if they need to own many of their fulfillment operations as much as they simply need access to the capacity as well as the information about supply chain activity. The poor state of supply chains management at most companies compared to firms that specialize it — most notably UPS, indicate that perhaps outsourcing logistics is a good idea.

Event Management and Fourth Party Logistics Providers

The concept of a fourth party logistics provider is a company that only manages supply chain information, but does not have any logistics assets (i.e. trucks, warehouses, etc..), and essentially specializes in supply chain monitoring. EM enables this new concept and we discuss the concept more fully in this post.

Few Real Outsource Capable Companies

It should be noted that there are few real total supply chain companies like UPS that can be said to handle an entire client’s outsourced supply chain. The third party logistics industry is filled with impostors, most notably Ryder Logistics – which are just trucking companies masquerading as “solution providers.” To handle complete supply chain outsourced clients you must display operational excellence.

Wal Mart as an Outsourced Logistics Provider?

One day, when Wal-Mart’s retail growth begins to slow, they would be a prime candidate to become a third party logistics provider because of their outstanding warehousing and fulfillment capabilities. To learn more about Wal-Mart and fulfillment see this post.

http://sapplanning.wordpress.com/2009/05/19/replenishment-in-sap/

Reference

http://www.amazon.com/Supply-Chain-Event-Management-Erfolgsfaktoren/dp/3790817392/ref=sr