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Process Industries - Taking Supplier collaboration to the next level

Closer relationships between OEMs and suppliers create significant value not only for the OEM but also for the suppliers. It seems to be so obvious that collaborating on digitized data is a benefit and will often significantly contribute to an overall efficiency and a shorter time to market. Nevertheless, executives also told, that setting up a global collaboration approach is perceived to be a struggle in itself and there are different barriers that companies face today.

Barriers in collaboration today.
Collaboration between two or more parties also requires a shift in mindset. Collaborative efforts need intensive, cross-functional involvement from both sides, a marked change to the usual working methods at many companies. Strong supplier collaboration is critical for maximizing value and it requires communication and trust and both parties need to understand the value out of such an initiative. It is not only a tool question but rather a process change supported by a strongly integrated Collaboration tool.  Rising number of SKUs require a process where conventional methods such as e-mail, spreadsheets & shared drives that today often result in double maintenance of the same product or version and an overall fragmented information availability are streamlined into one comprehensive tool.

When we at SAP talk about collaboration between an OEM and a supplier/producer there are multiple use cases to consider. When executed correctly, OEMs and suppliers will improve costs by simplifying product development and design, establishing standardized processes, and streamlining their joint journey to market.

  1. Collaborate with Co-Packers and Manufacturers on raw or semi finished goods specifications, documents, drawings, packaging specs to deliver the information needed to co-pack or co produce the products. E.g. premix products sent to suppliers for filling and packaging.

  2. Collaborate with suppliers such as food producers on finished goods specifications (e.g. farmers) to exchange legal and compliance relevant data like agriproducts e.g. strawberries need to be described and specified how they have been treated on the fields and the detailed composition of the products.

  3. Collaborate with design partners on labels, documents and specification information which must be used on label or packaging design. E.g. brand designers wanted to get all information for their design beforehand

  4. Collaborate on packaging data with packaging producers, suppliers and engineers on specifications, labels, packaging designs and materials. E.g. packaging producers need to comply with EU law on plastic taxes.

  5. Customer collaboration on future products where customers are handing in their product briefs or product requirements and the OEM shares the specification data in directly with their customer.

On our way to digitized product data information and a digital thread in process industries

In today’s OEM world the specification data is stored in S4/HANA or in any ERP system most likely. But the big question is how to get this data out to your suppliers in a secure and safe way without just transferring files or sending emails.

Another question is how to get the data back into a database format without re-recorded or manually re-entering it again. Suppliers sometimes don’t have any type of SAP-System or any type of ERP system at all where they store specification data in a digitized way. When leveraging specification collaboration both parties have access to the digitized specification data in the long run. As outlined above specification data – from raw materials, ingredients, and formulas, to packaging and finished goods – can be managed and collaborated on across teams and suppliers.

With SAP Enterprise Product Development Collaboration you are able to manage all these types of collaborations with your suppliers in a seamless way. And with Specification Collaboration specifically you are able to exchange specifications from your enterprise (S4) with your supplier and bring the supplier feedback back into S4.


  • Digitized specification data – no siloed static data anymore

  • Secure and safe data exchange on sensitive data, limiting the data sets which are shown

  • Recorded once used everywhere

  • New way of working together – co producer and suppliers are partners not just producers

  • Simplified product data exchange and product development processes

  • Shared information access for all stakeholders involved in the collaboration – no more fragmented information blocking processes


Stay tuned for more customers examples to come and spread the news. This is a true milestone in digitized data exchange.

If you want to have your own demo just reach out to us.

About the Author

Petra Koepfer-Behncke, VP SAP PLM Process Industries in PLM & Engineering. Driving software PLM in the Cloud, focusing on process industries

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