Supply Chain Management Based on SAP Systems: Order Management in Manufacturing Companies

253 Pages·2002·7.999 MB·English

by  Prof. Dr. Gerhard Knolmayer, Prof. Dr. Dr. h.c. mult. Peter Mertens, Dipl.-Kfm. Alexander Zeier (auth.)

SAP Excellence
Series editors:
Prof. Dr. Dr. h.c. multo Peter Mertens,
University of Erlangen-Nuremberg
Dr. Peter Zencke,
SAP AG, Walldorf
Springer-Verlag Berlin Heidelberg GmbH
Gerhard Knolmayer · Peter Mertens
Alexander Zeier
Supply Chain Management
Based on SAP Systems
Order Management
in Manufacturing Companies
With 81 Figures
and 19 Tables
t
Springer
Prof. Dr. Gerhard Knolmayer
University of Bern
Institute of Information Systems
Information Engineering Group
Engehaldenstrasse 8
CH-3012 Bern
Switzerland
Prof. Dr. Dr. h.c. multo Peter Mertens
University of Erlangen-Nuremberg
Department of Information Systems I
Lange Gasse 20
D-90403 Nuremberg
Germany
Dipl.-Kfm. Alexander Zeier
University of Erlangen-Nuremberg
Bavarian Information Systems Research Network (FORWIN)
AuBerer Laufer Platz 13-15
D-90403 Nuremberg
Germany
"SAP" and mySAP.com are trademarks of SAP Aktiengesellschaft, Systems, Applications and Pro
ducts in Data Processing, Neurottstrasse 16, 69190 Walldorf, Germany. The publisher gratefully
acknowledges SAP's kind permission to use its trademark in this publication. SAP AG is not the
publisher of this book and is not responsible for it under any aspect of press law.
ISBN 978-3-642-08625-0 ISBN 978-3-540-24816-3 (eBook)
DOI 10.1007/978-3-540-24816-3
Library of Congress Cataloging-in-Publication Data applied for
Die Deutsche Bibliothek - CIP-Einheitsaufnahme
Knolmayer, Gerhard: Supply chain management based on SAP systems: order management in
manufacturing companies / Gerhard Knolmayer; Peter Mertens; Alexander Zeier. - Berlin; Hei
delberg; New York; Barcelona; Hong Kong; London; Milan; Paris; Tokyo: Springer, 2002
(SAP excellence)
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Originally published by Springer-Verlag Berlin Heidelberg New York in 2002
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Preface
In recent years the concept of Supply Chain Management (SCM) has attracted a
great deal of attention. The idea of lean management, which is aimed at preventing
waste within companies, is extended to the complete supply network. Most publi
cations on SCM stress marketing, logistics or organizational issues, whereas the
role of information technology (IT) within SCM is not always accorded the atten
tion it deserves.
A seamless collaboration of SCM software with Enterprise Resource Planning
(ERP) systems is mandatory. All main vendors of ERP systems therefore provide
SCM systems that are similar in many aspects. Because of its leading position in
the ERP market, the mySAP SCM initiative of SAP and its SCM solutions are es
pecially important in the realization of modem information systems (IS). There
fore this book combines the theoretical reasoning behind business administration,
management concepts, and SCM-relevant methods of Operations Research with
descriptions of the procedures and processes implemented in the SAP software
packages Rl3 and APO (Advanced Planner and Optimizer). The book focuses on
intra- and inter-company order management systems. We outline the actual dis
cussions on the state of the art support provided by IT systems for the various
business functions and discuss the interfaces and the cooperative solutions be
tween these different functions from a process viewpoint.
The English version of this book was finished in May 2001. The book refers to
SAP Rl3 Release 4.6 and to SAP APO Release 3.0. It has been substantially en
larged and updated compared with the German edition, which appeared in early
2000. In particular, in the discussion of the concepts of logistics management we
draw more intensively on the American literature and cases.
In an area that is developing as quickly and in as many ways as SCM a book is not
an appropriate medium for a detailed description of the most recent status. There
fore, we consider the aspects of IS development and integration at a fair level of
abstraction, being convinced that interested readers will be able to find more de
tailed information for themselves, for example in white papers, presentation slides
and vendors' manuals. A great deal of detailed information can also be obtained
from the web presentations of vendors, consultancies, and universities. A sum
mary of the most important SCM-related web-sites can be found in the final chap-
VI Preface
ter of this book. With respect to the international readership of this book, all dates
are given according to the ISO 8601 standard, i.e. in the YYYY-MM-DD notation.
This book appears in the series "SAP Excellence" in which additionally the fol
lowing titles are available:
• Appelrath, Hans-Jiirgen; Ritter, Jorg: SAP Rl3 Implementation: Methods and
Tools
• Becker, Jorg; Uhr, Wolfgang; Vering, Oliver: Retail Information Systems
Based on SAP Products
• Buxmann, Peter; Konig, Wolfgang: Inter-organiziational Cooperation with
SAP Systems -Perspectives on Logistics and Service Management
The books in this series are unique, partly because they have been written in close
cooperation with experts at SAP. The authors thus had the privilege of taking part
in frequent discussions giving them access to information not usually available to
writers who are not employed by SAP. On the other hand, our position in the sci
entific community allows us to provide independent views on the various issues.
Special thanks for support in the work of compilation go to Dagmar Fischer-Neeb,
Anja Kutscher and to Christian Baeck, Dr. Heinrich Braun, Albrecht Diener, Dr.
Georg Doll, Ulrich Eisert, Claus Griinewald, Prof Dr. Claus Heinrich, Dr. Martin
Kuhn, Claudius Link, Bernhard Lokowandt, Claus Neugebauer, Andreas Pfaden
hauer, Jorg Rosbach, Ralph Schneider, Martin Wallner, Andreas Wojtyczka, and
Wilhelm Zwerger. Our main contact at SAP was Martin Edelmann, to whom we
are indebted for all the know-how he has shared with us and for his helpful sug
gestions. SAP staff members were always accessible for (sometimes critical) dis
cussions. Many thanks also go to the managers of four companies who provided
help and support in formulating the case studies (cf section 5): Dave Agey of
Colgate-Palmolive, Alfred Haas and Michael Mader of fischerwerke, Volker
Heilmann and Manfred KrUll of the Salzgitter Group, and Johann Thalbauer and
Dr. Klaus Godzik of Wacker Siltronic.
Several members of our own staff have been closely involved in various aspects of
the work on this book; their enthusiasm and support is highly appreciated. In parti
cular, Monika Bartholdi, Andreas Billmeyer, Dr. Heide Briicher, Gerald Butter
wegge, Marc Carena, Irina Depperschmidt, Rainer Endl, Jorg-Michael Friedrich,
Manuel Haag, Alexandra Heeb, Marc Heissenbiittel, Mihael Hohl, Martin Hollaus,
Oliver Klaus, Diego Liechti, Dr. Marco Meier, Dr. Martin Meyer, Marc-Andre
Mittermayer, Corinne Montadon, Dr. Thomas Myrach, Marcel Pfahrer, Michael
Rothlin, Waltraud Ruck, Marius Stadtherr, Reimer Studt, Dr. Momme Stiirken,
Ulf J. Timm, and Konrad Walser each deserve special mention for their support in
compilation of the German and/or the English edition. Valuable hints were given
by Prof. Dr. Georg Disterer, of the University of Applied Sciences in Hanover.
Many improvements to our "Germenglish" formulations were suggested by Janet
Dodsworth. Many thanks go to them, and indeed to all other persons who gave us
suggestions and ideas derived from both theoretical and practical points of view.
Preface VII
Our main hope is that the book will benefit various reader communities in stimu
lating the development of competitive organizational processes and IS. It is direct
ed at managers responsible for IS or for logistics groups and provides an overview
of the recent developments in the intra-and inter-company issues relating to mate
rials, information, and financial flows. We have used the material of this book in
our lectures and seminars at the Universities of Bern, Erlangen-Nuremberg, and
the SCM Executive program at the University of California at Los Angeles; we
also found it highly suitable for practically oriented courses on the design of
information systems.
Bern and Nuremberg,
June 30, 2001 Gerhard Kn01mayer Peter Mertens Alexander Zeier
Table of Contents
1 FUNDAMENTALS OF SUPPLY CHAIN MANAGEMENT ................... 1
1.1 ORDER MANAGEMENT, LOGISTICS, AND SUPPLY CHAIN MANAGEMENT .1
1.2 MAIN TOPICS IN SUPPLY CHAIN MANAGEMENT ....................................... 7
1.2.1 Principles ......................................................................................... 7
1.2.2 Tasks and Competencies ............................................................... 10
1.2.3 Interfaces and Complexity ............................................................. 11
1.2.4 Cooperation ................................................................................... 16
1.2.5 Types of Supply Chain Management ............................................ 19
1.2.6 Methodology of the Supply Chain Council ................................... 21
1.2.7 Potential Benefits and Controlling ................................................ 21
1.2.8 Possible Obstacles ......................................................................... 23
1.3 SOFTWARE SUPPORT FOR SUPPLY CHAIN MANAGEMENT ...................... 26
1.3.1 Enterprise Resource Planning Systems ......................................... 26
1.3.2 Supply Chain Management Systems ............................................. 27
2 APPLICATION SYSTEMS IN THE INDIVIDUAL BUSINESS
FUNCTIONS ............................................................................................... 30
2.1 ENGINEERING ......................................................................................... 30
2.1.1 Development Teams ...................................................................... 31
2.1.2 Concurrent Engineering and Simultaneous Engineering ............... 32
2.1.3 Variant Policies ............................................................................. 35
2.1.4 CAD Systems ................................................................................ 37
2.1.5 Product Data Management ............................................................ 39
2.2 SALES ..................................................................................................... 42
2.2.1 Approaching the Customer ........................................................... .42
2.2.2 Quotation System .......................................................................... 44
2.2.3 Order Entry and Verification ........................................................ .49
2.2.4 High-Level Sales Strategies .......................................................... 51
x
Table o[Contents
2.3 PROCUREMENT ....................................................................................... 55
2.3.1 Sourcing Strategies ........................................................................ 56
2.3.2 Centralized and/or Decentralized Procurement.. ........................... 59
2.3.3 Intra-and Inter-Company Organizational Changes ....................... 60
2.3.4 IS for Procurement ........................................................................ 65
2.4 PRODUCTION .......................................................................................... 76
2.4.l Organizational Structures in Manufacturing ................................. 76
2.4.2 MRP Systems and Beyond ............................................................ 79
2.4.3 Non-traditional Concepts ............................................................... 91
2.5 DISTRIBUTION ......................................................................................... 95
2.5.1 Distribution Types and Tasks ........................................................ 96
2.5.2 Intermediaries in the Distribution Process ..................................... 99
2.5.3 Information Systems in Distribution ........................................... 101
2.6 SERVICE MANAGEMENT ....................................................................... 106
2.6.1 Call Center. .................................................................................. 107
2.6.2 Help Desk .................................................................................... 108
2.6.3 Archiving Systems ...................................................................... 108
2.7 RECYCLING AND DISPOSAL .................................................................. 109
2.7.l Recycling-Oriented Product Development... ............................... I1O
2.7.2 IS for Recycling and Disposal... .................................................. III
3 SAP'S SUPPLY CHAIN MANAGEMENT SYSTEM ........................... 116
3 .1 ADVANCED PLANNER AND OPTIMIZER ................................................. 116
3.1.1 Supply Chain Cockpit ................................................................. 117
3.l.2 Demand Planning ........................................................................ 120
3.l.3 Advanced Planning and Scheduling ............................................ 129
3.1.4 Transportation Planning and Vehicle Scheduling ....................... 142
3.1.5 Available-to-Promise ................................................................... 147
3.2 BUSINESS-TO-BUSINESS PROCUREMENT, ENTERPRISEBUYER .............. 150
3.2.1 Web-supported Autonomous Procurement... ............................... 150
3.2.2 Connecting Catalogs .................................................................... 151
3.3 LOGISTICS EXECUTION SYSTEM ........................................................... 153
3.3.1 Warehouse Management System ................................................. 153
3.3.2 Transport Management System ................................................... 155
Table of Contents Xl
3.4 SYSTEM ARCHITECTURES ..................................................................... 157
3.4.1 Architecture Variants for Hierarchical Planning ......................... 157
3.4.2 Supply Chain Management in Homogeneous
SAP Environments ...................................................................... 163
3.4.3 Supply Chain Management in Heterogeneous
SAP Environments ...................................................................... 165
4 RECENT DEVELOPMENTS IN ORDER AND SUPPLY CHAIN
MANAGEMENT BASED ON SAP SYSTEMS ......................................1 68
4.1 MYSAP .COM SOLUTIONS -EFFECTS OF THE INTERNET ON THE SAP
ENVIRONMENT ...................................................................................... 168
4.2 INTERVIEW WITH PROFESSOR DR. CLAUS HEINRICH ............................ 171
5 CASE STUDIES ON SUPPLY CHAIN MANAGEMENT .•.•.•.•....•.•.•..• 174
5.1 DESCRIPTION ........................................................................................ 174
5.1.1 Colgate-Palmolive Case Study .................................................... 174
5.1.2 fischerwerke Case Study ............................................................. 179
5.1.3 Salzgitter Case Study ................................................................... 185
5.1.4 Wacker Siltronic Case Study ....................................................... 190
5.2 SUMMARy ............................................................................................. 195
6 INTERNET RESOURCES FOR SUPPLY CHAIN MANAGEMENT 197
6.1 PORTALS ............................................................................................... 198
6.2 COMMUNITIES, SOCIETIES, AND PROFESSIONAL ASSOCIATIONS .......... 198
6.3 RESEARCH COMPANIES ......................................................................... 198
6.4 CONSULTANCIES ................................................................................... 198
6.5 VENDORS OF SCM SOFTWARE ............................................................. 199
6.6 UNIVERSITIES ....................................................................................... 200
6.7 JOURNALS ............................................................................................. 200
ABBREVIATIONS ........................................................................................... 215
REFERENCES .................................................................................................. 219
INDEX ................................................................................................................ 237