SAP touts new generation of supply chain apps

SAP AG has begun to outline a long-term strategy to benefit customers with supply chain management and manufacturing systems that work together more intelligently and adapt to unexpected problems.

The Walldorf, Germany-based company Tuesday announced that it would devote development resources to create a new generation of collaborative production and supply chain applications that would work together as one system. While sketchy on details, SAP said the suite would connect supply chain management and manufacturing operations, from raw materials procurement to the shipment of the finished good to the customer. The result: improved inventory turns, tighter manufacturing cycle times, better quality management and, ultimately, a cut in ownership costs.

According to SAP spokesman Bill Wohl, this is a statement of vision that will probably require from 18 to 24 months before it results in product enhancements.

"It's less a factor of technological improvements than it is weaving supply chain management into the processes that make up manufacturing solutions," he said. Shop floor personnel have tended to view what they do as different from what supply chain professionals do. "Now we're saying, 'Let's bring them together,' " Wohl said.

One production manager at a North American instrument maker, part of a European-based manufacturing group, said conceptually, this initiative is appealing if it could cut some manual data-sharing processes, such as faxing, out of the manufacturing cycle.

"I'm a small shop operator, but we work for a big company," said the manager, who requested anonymity. "If there was a way that when the product was picked it up it can be relayed to our company in Europe, that would help us out." His operation runs SAP R/3 sales order-entry, materials management and accounting software that ties into the central SAP system in Europe.

One analyst expressed skepticism about SAP's ability to actually deliver on its integration promise. There are many shop floor production systems in existence, and so far, no enterprise resource planning company has successfully integrated its manufacturing or other applications into them in a meaningful way, said David Dobrin, analyst at Cambridge, Mass.-based consultancy B2B Analysts Inc.

"Machines don't fit well to ERP systems," said Dobrin, noting that Baan Co., part of London-based instrumentation and control systems maker Invensys PLC, has already been trying to do something similar to SAP, but has yet to achieve any breakthroughs.

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