Supply Chain Management Blogs by Members
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In my previous blog I listed out the issues that face the Supply Chain. In this blog I'll go through how SAP EM can be leveraged to address these issues.

How does SAP EM address the challenges mentioned in part 1 of the blog series?

Visibility: SAP EM provides maximum visibility across the supply chain network.  This visibility allows for the detection of deviations in the demand and supply of goods and services. The various types of visibility addressed by SAP EM are:

  • Process visibility provides an end-to-end view of the status of the supply chain operation. This view can be provided to all partners in the supply chain arena, showing them relevant information, as and when it occurs.
    How well are we doing now? Are there any immediate issues to address? Has an event occurred requiring rescheduling or re-resourcing?
  • Asset and planning visibility gives details of asset location, availability, planning and scheduling for the process to and from each of the partners.
    Where is our product? How much is going to arrive and when? Are we going to run into issues? Do we have sufficient capacity to complete the current process?
  • Reporting visibility recognizes the parameters defined in Service Level Agreements (SLA). Business goals need to be defined and then measured.  These values must be visible to all parties associated with the operation, both inside and outside the company.
    How well are we doing overall? How is Vendor A performing? What percentage of orders will be delivered on time?

Ability to Respond: Through various integrated technologies, such as the SAP Alert Framework and SAP Business Workflow, SAP EM can inform the correct party of an action that needs to be taken when an exception occurs. The correct information is forwarded to the party for action.  For example, SAP EM is tracking the task the machine performs, and the machine breaks down. When the machine fails to finish the task, the event is reported to SAP EM.  A workflow is sent to the planner that also informs the planner that this machine is currently being used in two other processes, and will be used in three additional processes about to commence.  The first two processes that are currently being worked on will be rescheduled and reassigned to another machine. The last three processes will be realigned with the new schedule.

The User Interface is a key to the success of any technical product.  SAP EM provides a simple, easy-to-use web interface for reporting and capturing events.  The alerts and workflows from these events can be sent to the user's company email inbox or remain in SAP, making the product one of the most user friendly in all of the SAP suite.  With SAP EM 9.2 we have the ability to create your own user interface for SAP Fiori.

What value do we derive from SAP EM?

  • Immediate value of SAP EM is high visibility of ongoing processes in the supply chain network.
  • When the process fails to perform as planned, within SAP EM, an exception raises an alert to notify the proper individuals to take action.  By promptly taking action, bottlenecks in the supply chain are resolved quickly.  Customer service is improved.
  • SAP EM minimizes exposure to regulatory requirements, and analyzes processes in detail via the built-in KPIs.
  • Tight integration between events and their schedules leads to proactive monitoring and less reacting to emergency situations.  When the processes are efficiently and effectively monitored, there is no need to buffer inventory for the 'just-in-case' scenario.
  • Another valuable use of SAP EM is the tracking of outsourced, non-core events, being performed by third parties.  Sending these message details through SAP EM are an effective way of monitoring these events, and thereby your outsourced partners.


Time to Action

Manage by Exception

  • Most events are captured from a standard SAP transact based process: If no standard process exists, then SAP EM can fill that gap by directly capturing Events manually from within SAP EM itself.
    • SAP EM performs status tracking: SAP EM uncovers process exceptions, adjusts the process status and initiates an exception handling process
    • SAP EM provides visibility to vertically integrated supply chain processes.  For example, the accounts payable employees have visibility to the status of a purchase order acknowledgment and the buyer will have visibility in to an invoice receipt status.

      A real life look into the benefits of SAP EM for Order-to-Cash Visibility

      The following section lists the benefits received from implementing SAP EM to monitor the Order-to-Cash process.

      • Status Management – At each stage in the business process, it is possible to view the real-time status.  The status of an order at the line item level is updated, in real time, to reflect changes.
        • Improved customer satisfaction through better informed partners (i.e., sales representatives, customers, suppliers, etc.) knowing the current status in real time.
        • Improved customer satisfaction and more efficient customer interaction through the provision of a customer self service portal, by tapping into WIMO (Where is my order?) – single, simplified company interface to the status of an order throughout its life-cycle, delivered over various types of devices
        • Reduced CSR (Customer Service Rep) average handling time due to greater efficiency in locating the status of an order (WIMO is the one stop shop for order status)
        • Improved customer satisfaction through reducing uncertainties.  A CSR can inform a customer when certain events are scheduled to occur.
        • Fewer inbound customer phone calls to inquire on order status. Exposing the order status on the web or proactively via a text or email leads to happy informed customers who tend not to call in to the Service Center to inquire on an order status.

      • Exception Management – SAP EM stores 'The Plan' for the business process (when things are supposed to happen, by whom and where) and measures 'The Plan' against the ‘actual’ values.  Exceptions to the plan are highlighted, in real-time, and can be proactively resolved whether they are exception events or delays in the expected process.
        • Reduction in customer calls to answer concerns.  Real time exception management with no lead time between when the system notices the exception to when it is delivered to the appropriate individual for resolution (reduced time to action) => reduction in total cycle time. Supplier notices the exception before the customer does...
        • Improved customer satisfaction for timely, accurate communication.  SAP EM has the ability to capture exceptions around the message of an event.  For example, the PGI event at 10:00 PM says the PGI occurred at 2:00 PM ...  the PGI event occurred on time, but the message reporting this was several hours late!!! SAP EM helps drive proactive behavior, especially in receiving timely accurate data from the organizations partners. This has a direct, positive impact with the customer.
        • Reduced time to resolution through system automation of known issues.  If exceptions are well categorized and the underlying data (master and transaction) is well formed, then automatic rescheduling and notification is possible => hands off automation to correct certain exceptions.
        • Reduce CSR education effort by leveraging the tight integration between SAP Business Workflow and the SAP Alert Framework allowing easy use of the existing technologies to proactively work exceptions.

      • Process Analytics – SAP EM has tight integration with SAP NetWeaver BW where comprehensive analytics can be performed showing performance of each stage of the process. By deploying SAP EM on top of SAP HANA you could leverage the power of SAP HANA analytics to display real-time process analytics.
        • Improved processes by leveraging business intelligence derived from their actual execution. Departments and individuals can be measured against 'The Plan' and ultimately against their individual SLAs => bottlenecks can be identified and process deficiencies addressed.
          • Vendor scorecards can be enabled through SAP EM
          • Cycle counts are possible for each stage of the business process.
            • Process Cycle Count; Average Cycle Duration:  1.) Total Cycle, 2.) Order Create to Ready, 3.) Order Create to Delivery Create, 4.) Delivery PGI to Invoice Create;
            • Percentage On-time vs. Early vs. Late:  1.) PO Goods Receipt, 2.) Delivery PGI, 3.) Invoice Create, and 4.) Order ready.
        • Reduce uncertainty by knowing how the process is performing as opposed to guessing

      • Visibility – All interested and authorized parties will have visibility to the status and attributes for their processes.
        • Real Time Visibility to the status and exceptions occurring within the process => Better quality information regarding the process.
        • Faster resolution of the root cause => if issues and exceptions are more visible, there is a more prevalent drive to reduce or eliminate them.
        • Improved service levels => fewer surprises occur while the process is executing.

      To summarize, SAP EM is used to monitor your processes, notify you of exceptions, allow you to adjust your process accordingly to gain efficiencies and minimize exceptions, and finally to analyze your performance to learn what is going on in order to take control of your processes.

      • Monitoring takes place through a standard SAP EM web interface.
      • Notification takes place through the SAP Alert Framework (with email, pager, text or fax integration) or through a SAP Business Workflow notification.
      • Adjusting the process takes place through SAP Business Workflow items, activities in SAP EM or kicking off actions in other systems.
      • Analyzing measures the performance in a process, and this takes place in SAP NetWeaver BW or HANA Analytics where Key Performance Indicators (KPI) can be determined

      Remember that SAP EM is SAP's tool to Monitor, Notify, Adjust and Analyze Supply Chain activities...

      In the next blog we will take a look at the history of the SAP EM releases...

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