September 2002 | Commentary | Supply Chain Technology

What's Behind mySAP's Technology?

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The technology behind mySAP's Supply Chain Management module—which spans planning, execution, networking, and coordination processes—bears closer review.

mySAP SCM is built upon industry standards such as HTML, XML, and WAP (Wireless Application Protocol). These tools ensure interoperability and flexibility. Part of SAP's flexible optimization strategy is the use of user-specific heuristics.

"Within SAP, heuristics are applied in the initial steps of transportation planning/vehicle scheduling," explains Bob Ferrari, director of SCM product marketing. "For example, a user may establish criteria of 'lowest transportation cost' for the initial heuristics. All outstanding or expected customer orders can then be initially planned, based on the heuristic of lowest total cost.

"This initial planning solution is then modified, step-by-step—for instance, loading an order to another vehicle, or changing the delivery sequence of a vehicle—in subsequent planning," Ferrari says. "In each sequence, an optimizer attempts to minimize the target heuristic 'total cost,' while also taking into account secondary considerations. When planning concludes, the system determines the best feasible solution." mySAP users also can apply initial heuristics when they determine required transportation or carrier capacities over a tactical planning horizon, say one to three months. With this capability, carriers can be notified in advance of required transportation capacity. Carriers also have the added capability of collaborating with the shipper, via the Internet, to acknowledge capacity forecasting needs or tendered shipments.

User-specific optimizers also are a feature within SAP's Transportation Planning/Vehicle Scheduling module. Optimization can be applied to the assigning and/or prioritizing of customers, distribution replenishment, or internal orders. Users have the ability to weigh hard constraints vs. soft constraints. The optimizer treats hard constraints as those that must be met, whereas soft constraints can be worked around to meet a hard constraint. Constraints include items such as:

  • Utilizing overall vehicle capacity.
  • Minimizing penalty costs for early/late/non-delivery of orders.
  • Minimizing fixed and/or variable transportation costs.
  • Selection criteria of private fleet vs. public transportation.
  • Loading and unloading cycle times.
  • Designated transportation lead times.
  • Conforming to a carrier selection guide.

Users can further restrict the time in which the optimizer generates orders for the transportation service provider, depending on the flexibility of their internal processes or needs of their carriers.

LiveCache for High-Speed Processing

SAP also employs liveCache, a state-of-the-art, memory-based computing technology for high-speed processing of very large volumes of data such as bills of material, customer orders, and product costing. Data can be pre-loaded into the planning engine for immediate use. Other benefits of liveCache include:

  • Application logic that can be executed right where the data is stored.
  • Reduced network load.
  • Retrieving relational data structures from the database into application-specific, optimized data representations in main memory. This allows the system to perform optimization and planning tasks in minutes.
  • Semantic synchronization with the SAP database.

SAP will soon release liveCache 7.4. In the new version, "liveCache will act as a standard database as far as backup, recovery, and high-availability are concerned," says Ferrari. "This will provide customers with improvements in backup and recovery performance.

"Ferrari believes that companies are taking a more pragmatic view regarding their selection of software providers, given the reality of today's challenging business environment.

"Companies are looking for providers that support capabilities such as process-level integration—going beyond simple file passing to interactive exchange among logistics planning and execution applications," he says. "Further, they are looking for the ability to dynamically link transaction, planning, order promising, transportation and logistics applications, and adaptive planning—where planning and execution are brought together, and planning cycles are reduced.

"They also want collaborative processes among trading partners, including suppliers, and transportation and third-party logistics providers," he says.

And that's not all. Companies want their software service provider to support complete, real-time visibility to events across both inbound and outbound logistics processes, with built-in monitoring and alerting structures to manage exceptions as they occur."Through utilizing a designated software provider's singular platform and technology base, long-term viability, and global reach, companies can reduce their overall total cost of ownership," Ferrari notes.

Meeting Specific Requirements

SAP tailors its open technology framework to meet the unique requirements of specific industries and companies, Ferrari says."SAP believes that heterogeneous IT environments spanning various technologies, applications, databases, web services, and legacy systems must be leveraged. Additionally, SAP's technology framework is designed to provide application support for either a direct user, a portal, or exchange- based interface."SAP's open technology framework focuses on providing customer flexibility in: supporting both homogeneous and heterogeneous environments through open interfaces, self-contained, stand-alone, or composite application components; replacing SCM applications; extending the value of existing planning or execution applications; and supporting both business improvement as well as business innovation.

Industry Solutions

"SAP's Industry Solutions approach to applications further accommodates customer needs for specific industry requirements," says Ferrari. "Each SAP-designated Industry Business Unit works with specific customers in that industry to champion these requirements to our SCM development groups. SAP Industry Solutions are the result of these specific requirements."Examples of these unique needs include:

  • CPFR and Vendor Managed Inventory process support for the CPG/food and beverage industry.
  • Capable-to-match—descriptive characteristics supporting multi-tier supply network models to prioritize finished goods product demand—for the high-tech industry.
  • Multi-mode order planning—dynamically match inventory on the semi-finished goods level with customer demand—for the mill products industry.
  • Key Resource Scheduling—the ability to build and maintain transport schedules, incorporating operational needs for vehicle availability, capacities, and capabilities—for the oil and gas industry.

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