SAP teams with Ford, Caterpillar for SCM

Ford Motor Co. and Caterpillar Inc. in the US have selected SAP AG to develop a supply-chain management system for spare parts using SAP's supply-chain management (SCM) and customer-relationship management (CRM) software, SAP announced Wednesday.

Ford and Caterpillar dealers will be able to check inventories at large parts-supply centers and track their orders from the time the order is placed until it is fulfilled, SAP said. All three companies will be involved in the development process, which will integrate SAP's existing mySAP.com SCM and CRM software products with specific features designed for complex global parts networks.

With this announcement, Ford and Caterpillar have agreed to license SAP's SCM and CRM products. The three companies will now work to develop a logistics system similar to one SAP currently operates with Dr. Ing. h.c. F. Porsche AG for parts logistics management using the SCM software, but optimized for Ford and Caterpillar's large global parts networks.

The mySAP SCM and mySAP CRM software products will receive separate upgrades to handle the challenge of tracking parts around the world, and to manage warehouse logistics problems in inventory cycles at Ford and Caterpillar, said Nils Herzberg, senior vice president. manufacturing sector for SAP in Walldorf, Germany.

SAP said the companies have entered into a long-term relationship to establish a road map for the software, with SAP handling the marketing once the product is completed. Financial terms of the deal were not disclosed, but SAP will own the enhancements and the future product, Herzberg said. The first enhancements probably won't be released for another 12 to 18 months, said Kristen Odeh, director of global consumer systems for Ford. Ford and Caterpillar will help shape the direction of the product through a customer advisory board, she said.

The companies have not decided how the software will be delivered, but there will be Web-based components in the enhancements, said Dave Hoffman, president of Caterpillar Logistics Services Inc., a subsidiary of Caterpillar, which is based in Peoria, Illinois.

Last year, Ford and Caterpillar agreed to an alliance to jointly develop a logistics information system. "This is the next major step in a logistics alliance to develop a next-generation system," Hoffman said.

SAP was selected over Oracle Corp. and i2 Technologies Inc. to provide the software expertise for the joint project. Other companies were involved, but Oracle and i2 were SAP's main competitors, said Hoffman. Ford had not used SAP SCM software before the partnership, but had used SAP's financial software. Caterpillar Logistics currently uses SAP SCM software, which it has tailored to its own needs, Hoffman said.

SAP was chosen in part due to the scalability of its technology, Odeh said. Ford alone has 80 current sites that handle parts distribution for its family of products, including Ford, Lincoln, Land Rover, and other automobiles. The enhancement developed in the initiative will help Ford, based in Dearborn, Michigan, improve turnaround time for parts orders from its dealers, she said.

"We're shaping the industry with this alliance when it comes to parts and service, and enhance our customers' satisfaction by partnering with SAP," Odeh said.

The initiative will be supported by SAP's Global Professional Service Organization, with help from MaxAttention, a new "premium" support offering from the company. MaxAttention provides troubleshooting and configuration assistance above and beyond the standard service agreement, SAP said.

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