Supply Chain Management Software Requirements and mySAP SCM E-Book

Andreas Weth

• Herausgeber: GRIN Verlag
• Sprache: Englisch

Veröffentlichungsjahr: 2005

Beschreibung

Master's Thesis from the year 2005 in the subject Computer Science - Commercial Information Technology, grade: 1,7, University of Auckland (Faculty of Computing), course: Master of Computing, language: English, abstract: Supply chain management (SCM) offers business benefits but is a difficult concept to master without the right software support. This dissertation is aimed at academic and IT professionals and SCM decision makers or consultants as it provides insights into SCM software and the leading concepts behind it. A qualitative approach was chosen for answering the research questions which focus on general SCM software principles but also enquire benefits, functionalities and the software architecture of SAP’s SCM 4.1 solution. In addition to that, the differences between what decision makers request and what mySAP SCM 4.1 offers are addressed with the research questions. To answer these research questions, the structure of the dissertation contains a general introduction to SCM software and includes a SCM software market overview. After this part, one major part of the dissertation contains an analysis of the dominant SCM software solution mySAP SCM (Release 4.1). The examination of mySAP SCM 4.1 focuses first on technological aspects (software architecture, technological platform and programming language) before the business benefits and functionalities of this SCM software are examined. After that, the functionalities, business benefits and the architecture of mySAP SCM 4.1 are compared with the SCM software requirements obtained from ten SCM professionals from different industries (automotive, logistics, retail, consumer packaged goods, consulting and education). The analysis of the requirements from SCM decision makers (gathered using a questionnaire) shows that an increase in SCM transparency and a reduction of SCM costs were the main requirements articulated by decision makers. The comparison of the questionnaire with the functionalities, business benefits and the architecture of mySAP SCM 4.1 then illustrates that these requirements can be realised with SAP’s SCM 4.1. Concerning future research in the field of SCM software, it was found out that SCM software will be influenced by the following developments: increasing globalisation together with the internationalisation of SCM, the trend of services oriented architecture and the integration of corporate information systems. Keywords: Supply Chain Management (SCM), Supply Chain Management Software, mySAP SCM 4.1, Supply Chain Operations Reference (SCOR) Model, Enterprise Services Architecture (ESA), Netweaver

Leseprobe

Table of Content

Abbreviations - Acronyms.

Abbreviations - Computing and Programming Names

1. Introduction

1.1 Problem Relevance

1.2 Problem Definition.

1.3 Structure of the Dissertation.

2. Literature Review

2.1 Literature in the Field of Supply Chain Management and Logistics

2.2 Literature in the Field of Supply Chain Management Software

2.3 Literature in the Field of General Business and Management

2.5 Literature Map

3. Research Questions

4. Research Methodology and Methods of Data Collection.

4.1 Methodology

4.2 Questionnaire Design.

4.3 Data Collection and Analysis

5. Introduction to Supply Chain Management Software

5.1 The Need for Supply Chain Management Software.

5.2 The Business Benefits of Using Supply Chain Management Software.

5.3 Supply Chain Management Software Design.

5.4 Market Overview over Supply Chain Management Software Solutions.

6. Analysis of the mySAP SCM 4.1 Software Solution.

6.1 Company Profile SAP.

6.2 Technological Aspects of mySAP SCM 4.1

6.2.1 Software Architecture.

6.2.2 Enterprise Services Architecture.

6.2.3 Technological Platform SAP Netweaver

6.2.4 Programming Language behind mySAP SCM 4.1

6.3 Functionalities and Business Benefits of mySAP SCM 4.1.

6.3.1 SCM Processes and Business Scenarios.

6.3.2 SAP Advanced Planning and Optimization.

6.3.3 SAP Inventory Collaboration Hub.

6.3.4 SAP Event Management

6.3.5 SAP Business Intelligence

6.3.6 SCM Basis

7. Supply Chain Management Software Requests from Decision Makers

7.1 General Information and Demographic Analysis.

7.2 Functionalities offered by mySAP SCM 4.1 and what Decision Makers

7.2.1 The Use of Standard Supply Chain Management Models and the

Acquaintance of Supply Chain Management Software Vendors.

Chapter

7.2.2 Requirements for Supply Chain Functionalities and mySAP SCM 4.1

7.2.3 Requests for Internet related Technology in Supply Chain Management

7.3 Business Benefits of mySAP SCM 4.1 and what Decision Makers

7.3.1 Areas of Business Benefits for Supply Chain Management Software and

7.3.2 Business Benefits of SCM software and mySAP SCM 4.1.

7.4 Requests for SCM Software Architecture and mySAP SCM 4.1

7.4.1 The Requests and Impacts of Software Architecture on Supply Chain

Management and mySAP SCM 4.1

Chapter

7.4.2 The Impacts of Enterprise Services Architecture on Supply Chain

Management and mySAP SCM 4.1

8. Discussion and Interpretation of Results

9. Conclusion

9.1 Summary

9.2 The Future of Supply Chain Management Software

Appendix A - Literature Review.

Appendix B - Questionnaire.

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Supply Chain Management Software Requirements

and mySAP SCM 4.1

Version for participants of the questionnaire (company names and one publication from Gartner Research excluded)

A dissertation submitted in partial fulfilment of the requirements for the degree

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I hereby declare that this dissertation is entirely my own work. Whenever I used the ideas of others, I cited and acknowledged their work within my own text. Any publication of the whole document or excerpts requires the written authorisation of the author. Please contact me by email ( [e-mail]) or telephone [phone]) for further questions.

Oestrich-Winkel, 7 August 2005

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Abstract

Supply chain management (SCM) offers business benefits but is a difficult concept to master without the right software support. This dissertation is aimed at academic and IT professionals and SCM decision makers or consultants as it provides insights into SCM software and the

leading concepts behind it. A qualitative approach was chosen for answering the research questions which focus on general SCM software principles but also enquire benefits, functionalities and the software architecture of SAP’s SCM 4.1 solution. In addition to that, the differences between what decision makers request and what mySAP SCM 4.1 offers are

addressed with the research questions. To answer these research questions, the structure of the dissertation contains a general introduction to SCM software and includes a SCM software market overview. After this part, one major part of the dissertation contains an analysis of the dominant SCM software solution mySAP SCM (Release 4.1). The examination of mySAP SCM

4.1 focuses first on technological aspects (software architecture, technological platform and programming language) before the business benefits and functionalities of this SCM software are examined. After that, the functionalities, business benefits and the architecture of mySAP SCM 4.1 are compared with the SCM software requirements obtained from ten SCM professionals

from different industries (automotive, logistics, retail, consumer packaged goods, consulting and education). The analysis of the requirements from SCM decision makers (gathered using a questionnaire) shows that an increase in SCM transparency and a reduction of SCM costs were the main requirements articulated by decision makers. The comparison of the questionnaire with

the functionalities, business benefits and the architecture of mySAP SCM 4.1 then illustrates that these requirements can be realised with SAP’s SCM 4.1. Concerning future research in the field of

SCM software, it was found out that SCM software will be influenced by the following developments: increasing globalisation together with the internationalisation of SCM, the trend

of services oriented architecture and the integration of corporate information systems.

Keywords:

Supply Chain Management (SCM), Supply Chain Management Software, mySAP SCM 4.1, Supply Chain Operations Reference (SCOR) Model, Enterprise Services Architecture (ESA), Netweaver

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Acknowledgments

I would like to thank my principal supervisor Associate Professor Kay Fielden and my associate supervisor Dr. Noel Bridgeman for the great feedback and the critical discussion of the dissertation. A big thank you goes also to Associate Professor Donald Joyce from Unitec Institute of Technology Auckland and Prof. Susanne Strahringer from European Business School Oestrich-Winkel.

In addition to that, I am also grateful to Gabriele Rogg from The Gartner Group Munich for the information about the SCM software market, to Christoph Erben from Oxford University for directing me towards Oxford’s great online resources and to my cousin Johannes at SAP Walldorf who provided me with mySAP SCM 4.1’s software documentation. A big thank you goes also to Thomas Dünser (Thomas Dünser Consulting) and Peter Burggraaff from Farmers’ Trading Company New Zealand where I learned a lot about the SAP environment.

Finally, thanks a lot to my parents, my brother and sister and especially to my grandfather for sharing insights and ideas about people and countries all around the globe.

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The picture (Fig.1: Sir Edmund Hillary and Tenzing Norgay. Image taken from BBC.co.uk) shows Sir

Edmund Hillary and his Sherpa and Supply Chain Manager Tenzing Norgay who set foot on the top of

Mount Everest in 1953. Norgay and his team sourced 13 tons of equipment from all over the world and

coordinated (without SCM software support) its transportation using over 350 Sherpas through the

highlands of Nepal which was one of the greatest SCM achievements in the twentieth century.

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List of Figures Fig. 1: Sir Edmund Hillary and Tenzing Norgay .......................................5 Fig. 2.1: Supply Chain Operations Reference Model...................................25 Fig. 2.2: Architecture of SAP Netweaver.....................................................29 Fig. 4.1: Data Analysis Framework..............................................................39 Fig. 5.1: Supply Chain Management Software Vendor Performance 1H2003 vs. 1H2004 .........................................................................49 Fig. 5.2: Revenues from the top 10 Supply Chain Software Vendors ..........50 Fig. 6.1: Development of SAP and its Products...........................................53 Fig. 6.2: Supply Chain Systems Architecture...............................................55 Fig. 6.3: Enterprise Application Integration ................................................56 Fig. 6.4: Functionality and Architecture of SAP Netweaver........................59 Fig. 6.5: Packaged Composite Architecture .................................................61 Fig. 6.6: Solution Map mySAP SCM 4.1 Edition 2004..................................64 Fig. 6.7: General System Architecture .........................................................65 Fig. 6.8: Demand Planning Scenario Flow...................................................68 Fig. 6.9: Flow Chart Supplier Managed Inventory Process..........................69 Fig. 6.10: Screenshot APO Detailed Scheduling Planning Board...................71 Fig. 6.11: SAP System Architecture for Supplier Collaboration.....................73 Fig. 6.12: SAP Exchange Infrastructure with SAP ICH..................................74 Fig. 6.13: SAP Event Management ................................................................76 Fig. 6.14: Screenshot Supply Chain Performance Measurement with mySAP SCM 4.1 .............................................................................78 Fig.7.1: SCOR Model including the identified Areas of Business Benefits resulting from the Use of SCM software...................................... 100 8

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Table 9.5 - Supply Chain Management Software - General SCM Software....... 126 Table 9.6 - Supply Chain Management Software - Market Research SCM

Software.......................................................................................... 127 Table 9.7 - Supply Chain Management Software -

SCM Software Architecture ............................................................ 128 Table 9.8 - Supply Chain Management Software -

SCM Software Technology.............................................................. 128 Table 9.9 - Supply Chain Management Software - mySAP SCM...................... 130 Table 9.10 - General Business and Management ............................................... 131 Table 9.11 - Research Methods and Research Design........................................ 132

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Abbreviations - Acronyms

i2 Name of a supply chain management software vendor AG Aktiengesellschaft (joint-stock company)

AMR Advanced Manufacturing Research

APS Advanced Planning Software

APO Advanced Planning and Optimisation

ASN Advanced Ship Notice

ATP Availability to Promise

B2B Business to Business

BI Business Intelligence

BIS Business Information System

BW Business Information Warehouse

CIO Chief Information Officer

CPFR Collaborative Planning, Forecasting and Replenishment

CRM Customer Relationship Management

CRP Collaborative Replenishment Planning

CWMI Common Warehouse Metadata Interchange

DB Relational Data Base

DSS Decision Support System

EAI Enterprise Application Integration

EDI Electronic Data Interchange

EM Event Management

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ERP Enterprise Resource Planning

ESA Enterprise Services Architecture

ICH Inventory Collaboration Hub

IT Information Technology

JDA Name of a software vendor

JSP Java Server Pages

KPI Key Performance Indicator

MM Material Management

mySAP Name of a software family and registered trademark from SAP

OEM Original Equipment Manufacturer

OS Operating System

PCA Packaged Composite Architecture

PP Production Planning

R & D Research and Development

R/3 Release Three

RFC Remote Function Call

RFID Radio Frequency Identification Technology

SAP Systems, Applications and Products in data processing

SAP AG SAP Aktiengesellschaft (see AG)

SC Supply Chain

SCE Supply Chain Execution

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SCOR Supply Chain Operation Reference Model

SCM Supply Chain Management

SCP Supply Chain Planning

SD Sales and Distribution Management

SMI Supplier Managed Inventory

SOA Services Oriented Architecture

TCO Total Cost of Ownership

UMTS Universal Mobile Telecommunications System

W-LAN Wireless Local Area Network

xAPPs Cross Applications

XI Exchange Infrastructure

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Abbreviations - Computing and Programming Names

.net .net technology from Microsoft is an internet based platform and technology solution for a web based IT architecture

ABAP Advanced Business Application Programming. ABAP is a fourth-

BAPI Business Application Programming Interface. BAPI is a standard for a software interface between software objects from SAP.

C++ A standard for an object oriented programming language defined in 1998.

HTTP Hypertext Transfer Protocol. HTTP is a protocol standard which is

popular on the internet and is used for the exchange of data.

IDoc Intermediate Document. IDoc is a protocol standard for exchanging

J2EE Java 2 Platform, Enterprise Edition. J2EE is a programming platform for modular software applications.

Java An object oriented programming language which was released i n

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Netweaver Netweaver is a software architecture developed by SAP. It can be

PHP PHP is a standard script language which is embedded in HTML. It

SOAP It is also protocol standard for creating messaging standards and is a variation of XML.

Visual Basic An event driven programming language from Microsoft which has

Websphere Webshpere is a Java-based platform developed by IBM and is

XML Extensible Markup Language is one of the most important

XMLA XML for Analysis. It is derived from XML and can be seen as a

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1. Introduction

Supply Chain Management (SCM) is still one of the most popular management trends since the end of the eighties. Potential for cost saving and service improvements resulting from improved supply chains are usually very high in most industries, even in heavily service oriented businesses. Hammer (2001) quantified benefits of systematically connecting supply chains in the chemical industry with a potential of inventory reduction of approximately 15%. Imagining the costs of capital resulting from a 15% excess in stock or inventory in a multi billion company, it becomes clear how much money could be saved by SCM optimisation just in the area of inventory management. However, one of the critical factors for successful SCM and SCM optimisation is the right software support. Refocusing on the example in the chemical industry, a 15% reduction in stock can certainly not be coordinated with loose spreadsheets and without SCM software support. For the purposes of SCM, there are different types of software solutions with different functionalities. Business information systems (BIS), decision support systems (DSS), Enterprise Resource Planning (ERP) software and especially SCM software helped executives to make the right decisions and streamline supply chains. As management guru Peter Drucker stated, the decision making process would be much more complex and executives would be far less effective without decision support systems (Drucker, 2004).