Tag Archives: Amazon.com

Subcontracting in SNP and GATP vs. Amazon.com

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How it Works in SCM

Ordinarily we keep our discussions centered on SAP SCM. However, in this post we thought it would be interesting to compare SAP’s approach to getting data from subcontractors to what is the most successful company we know of in managing subcontractors and in performing supply demand matching. This company is Amazon.com.

SAP SCM and Subcontracting

In SAP, subcontractor agreements are brought into SCM through either the CIF and SAP ERP or through SAP SNC, where they are put to use in both SNP – which allocates batched requirements to them, and GATP – which allocates real time requirements to them. This is explained in greater detail in this post.

http://www.scmfocus.com/sapplanning/2008/09/16/subcontracting-in-scm-and-snc/

We thought it would be interesting to compare how Amazon.com does it because we have recently been considering how Amazon.com can serve as a model for other companies that would like to be in the business of matching supply and demand for other companies that do not have the IT expertise, but are good at fulfillment operations. We went to Amazon’s website to see how they accept on hand balances. They seem to provide three ways to add balances. These include:

  1. Use the Add a Product feature on Seller Central to create one product at a time
  2. Use the Seller Desktop, which is a free, easy-to-use desktop application that can be used to manage and upload inventory one product at a time or in bulk.
  3. Use inventory files to create multiple products simultaneously

The first method is for low volume sellers and is not all that interesting to us. However, the second and third method seem to be good for large sellers. Here is the actual URL where you can download the software.

http://webstore.amazon.com/WebStore-Knowledge Center/productinventorymanagementsellerdesktop.htm

As for the file setup, this URL shows the different ways they can accept flat files.

http://simply-amazon.com/content/DecidingHowTo_Integrate.htm

There is nothing new here, XML, Excel and so on.

Conclusion

The main point here is that Amazon shows that integrating subcontractor inventory on hand balances should not be all that difficult. Flat files or XML, or the Seller Desktop can be used to bring in on hand from large and small sellers alike.