What Is It?

SNC is module in SAP APO which is directed to company to company supply chain collaboration. It provides a number of ways, or workflows for collaborating between suppliers and their customers.

These workflows include the following:

• Demand – Forecasts for replenishment planning, and not the broader collaboration forecasting which other tools tends to speak of when addressing forecast collaboration
• Inventory (part of Supplier Managed Inventory – SMI, aka VMI, as well as Supplier Network Inventory (SNI)
• ASNs – Advanced Shipment Notifications
• Purchase Orders
• Replenishment Orders
• Scheduling Agreements
• Work Orders – A SNC specific object designed to track the progress of production
• Subcontracting
• Invoices (invoices and credit memos), enhances traceability and confirmation on the status of payment documents
• Kanban, just like Kanban inside of a factory, but instead between two different entities
• Inbound Delivery Control
• Dynamic Replenishment (compares customer planned and firm demands and supplier receipts)

Some of these workflows are shared in some forms of collaboration supported by SNC and others are left out depending upon the collaboration being performed.

Thought Process Behind SNC

SNC 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. It has not yet taken off as of 2011 because companies have challenges simply integrating supply chain information internally. However, it may become more prevalent in the future.

Supplier Collaboration and the 80/20 Rule

Supplier collaboration does not have to be universal in order to be effective. That is a company does not need to collaborate with all of its supply chain partners in order to use software of this type. Instead a company can simply collaborate with its biggest suppliers. This spreads the effort of the collaboration over a large product base. In fact, the collaboration that has historically been at least semi-effective has been between partners that were were large percentages of each others businesses. One example being the collaboration between Wal-Mart and major CPG companies such as Proctor and Gamble.

Areas of Collaboration

The strongest candidate areas for collaboration include:

• CPFR – Where retailers are collaborating with suppliers to replenish shelves. The textbook case of CPFR is Wal Mart. This would be an example of Replenishment Collaboration
• Large marketing brands such as Nike, or Intel, managing their contract manufacturers. This would be an example of Work Order Collaboration

There are many areas of collaboration, however the success in these two areas – CPFR / Retail Replenishment and Contract Manufacturing have propelled the interest in collaborating in other areas.

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CPFR

The CPFR model presents the aspects in which industries focus. The model provides a basic framework for the flow of information, goods, and services. In the retail industry the “retailer typically fills the buyer role, a manufacturer fills the seller role, and the consumer is the end customer.”[4] The center of the model is represented as the consumer, followed by the middle ring of the retailer, and finally the outside ring being the manufacturer. Each ring of the model represents different functions within the CPFR model. The consumer drives demand for goods and services while the retailer is the provider of goods and services. The manufacturer supplies the retailer stores with product as demand for product is pulled through the supply chain by the end user, being the consumer. -

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SNC Articles

We have a number of SNC articles on this site.

SAP Creates a New Term – SMI

To see how SAP has created a new term to replace a term that has been generally accepted for several years, see this post.

http://www.scmfocus.com/sapplanning/2009/05/16/snc-supplier-managed-inventory-vs-vmi/

Replenishment Collaboration

To understand replenishment collaboration see this post.

http://www.scmfocus.com/sapplanning/2009/05/19/snc-replenishment-collaboration/

How is SNI Different from SMI?

SNC uses two terms that are confusing and not generally used or accepted in industry. This article explains and differentiates between SNI and SMI

http://www.scmfocus.com/sapplanning/2009/05/18/supply-network-inventory-vs-supplier-managed-inventory/

Using SNC to Track Scheduling Agreements

Release processing is how SNC tracks scheduling agreements. This post briefly discusses this.

http://www.scmfocus.com/sapplanning/2009/05/18/snc-release-processing/

Subcontracting in SNC

This post describes subcontracting in SNC

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

What Level of Collaboration?

One of the questions on projects is the degree of collaboration that is actually required. That is, is it

1. EDI
2. Portal
3. Full SNC implementation

Some supply planning projects have collaboration listed as a necessity, but how much collaboration that is necessary is important.

http://wp.me/p9G3d-1vs

SPP and SNC

This post shows the integration of SNC with SPP, SAP’s service parts planning module.

http://www.scmfocus.com/sapplanning/2009/04/23/spp-drp-shipment-and-snc/

Reference

Supplier Collaboration with SAP SNC, Mohammed Hamady and Anita Leitz, SAP Press 2008