The Architect’s World – Episode 48
Intro – A Supply chain story board for xApp Analytics :
With the announcement of the SAP NetWeaver Composition platform, CAF, GP and the Visual Composer now together, it sets the ball rolling for a new breed of integration composition platform that could spawn an entirely new thought process. Per se, one would still experience that there would be a host of CAF & GP fans and a separate bunch of VC fans. As a BPX, it is the business process that would determine the usage of any tools from the composition platform. Consider Org.A, a fictitious Organization that would form part of this blog series that would set out the need to consider the usage of the composition platform to create a whole new breed of xApp Analytics, aligned with SAP’s ideas around “innovation without disruption.” To have the side car to host a bunch of xApp Analytics applications that would form the iTunes of the composite world, I would like to put the context right for this multi-part blog series.
Org.A is a fictitious Organization in the CPG/Retail front established way back in 1966. Org. A is in the business of catering to large Retail chains around the US & EUR geography for manufacturing merchandize items. These items range from cameras, DVD players and TVs. Org. A uses Siebel for CRM Sales and Marketing, SAP R/3 4.6C for Order Management & Inventory (for direct goods) & Ariba Spend Management Suite (Buyer 8.x/ACSN/Sourcing 3.x) for indirect goods procurement. It also uses SAP BW 3.0B for all reporting purposes and has plans to open up limited information to its customers, contractors and sub-contractors. With a well-defined supply-chain process defined within, having strengthened over the years by huge IT investments, Org.A believes it is now time to take a relook at the strengthening of the core processes that have a direct financial impact on the P&L. Its B2b sales channel.
To take an unbiased view of the discovery process, allow me to introduce to you our virtual BPX – Dave Mustaine. Dave has a good understanding of supply chain processes, thanks to the various accounts he has worked for in the past. Has a good grasp of surrounding technologies and the enterprise application space. Loves heavy metal and is a BPX. Our BPX. For Org.A.
Dave will take the MTS and MTO process right from Order capture and entry through manufacturing and Invoice settlement and reporting, exploding each business process as it exists within Org.A today, and use the storyboard to explore the fitment and business applicability of xApp Analytics. To ensure that the storyboard reflect real-life examples, he will consider the enhanced/customized processes in the supply chain of Org.A for the BPX. Below is a way, one could approach the topic from a reality perspective, that details out the processes in detail as follows:
Process 1: Order capture process:
Dave will take the B2B order process of Org.A, for both MTS and MTO items, explore the process in context of Org.A, see where the opportunities for savings/cost advantage lies, map the same as a BPX wrt to the technology layer. Our aim in this series to see how a BPX could approach a process and bring about agility and cost-advantage using xApp Analytics.
Process 2: Order Cancellation process:
In this process, we will explore how the order cancellation process for B2B orders within Org.A and how this could be made into a more efficient process that would help proactive tracking and action with the help of the NetWeaver Composition platform.
Process 3: Order Fraud check process:
Fraud-check processes were put in place in Org.A when it realized that frauds were impacting its revenues to a significant extent. This sub-process would be analyzed to see how a fraud-prevention mechanism can be made into a worth-while candidate for xApp Analytics within Org.A.
Process 4: Order entry process:
The B2b channel, which accounts for a large chunk of sales within EMEA and North America, Org.A realized that there was no systemic track of elements like opportunity losses that could have been converted into profits had there been a logical way of pre-emptive action on behalf of the CSAs. Along with Dave, we would then take a look into the process and see what could be a way forward to bring about simplifying the process for scalability. After all the E SOA Roadmap is out there for five years within Org.A.
Process 5: Order flow process:
Since the B2b channel is disjoint from the underlying ERP system, “near-real-time data” is not good enough. Visibility into the shop-floor for the CSAs could boost customer commitments in a positive way, impacting revenue. In this step, Dave would take a closer look at how the handle would get passed on from the front-sales to the shop-floor and what benefits Org.A may wish to consider with xApp Analytics.
Process 6: Pick Release process:
Various aspects of Picking and Shipping process within Org.A are still done in custom applications and interfaced with ERP as a complex mesh, We will explore the need for information in this process and how it can be used provide more visibility for action.
Process 7: Accessories processing flow:
Considering the nature of the business of Org.A, Dave would try to see how the process can be improved with better insight with knowledge that could let action be taken. This would refer to the accessories that would be bought along with the standard or configured product.
Process 8.1: Standard SKU Order process:
Again, Dave would attempt to analyze as to how the process can be improved with better insight with knowledge that could
Exploring the enhanced Order Management process for xApp Analytics to let action be taken to ensure preventive or corrective action.
Process 8.2: Order verification process:
A semi-automated process, that certainly needs a relook at. It is part of Dave’s charter to explore the process to be made effective and automated.
Process 9: Order Fulfillment process:
Another enhanced process within Org.A, Dave would explore the various systemic issues related to this sub-process to identify IT initiatives for TCO reduction.
Process 10: SKU and BOM Verification process:
As part of the B2B channel, the SKU and BOM verification process online would need to be explored to see what information is needed to bring about process improvement and cost savings.
Process 11: Shop Floor Execution process:
Addressing a custom application space, Dave would try to bring about xApp Analytics on top of a “reverse-engineered” xApp.
Process 11.1: Shop Floor Execution process – MTO:
Explore the usage of xApp Apnalytics for the MTO process within Org.A.
Process 12.1: Refused Order process:
An area linked frequently to frauds and skewed revenue contributions per region, Cost savings and proactive action with xApp Analytics.
Process 13: Customer Exchange process:
Standalone process around Order fulfillment for informed decision-making.
Process 14: Intercompany Receivable process:
Standalone process around Order fulfillment for informed decision-making, between Org.A sister concerns.
Process 15: Customer Invoice Settlement process:
Standalone process around Order fulfillment for informed decision-making and the use of ESA here with CAF.
Heavy Weight Composite Applications definition for use in Org.A Supply Chain:
While one could look at the Composition platform as an integrated suite, choices exist and the approaches could vary from one approach to another in the designing stage. Here, we will take a look at the supply-chain as a holistic solution and try to take the “forest” view instead of a “tree” approach. To get the solutioning around the same be looked at from different approaches and angles, having a direct impact on investments, as a BPX, lets try to lay down a few options for Org.A to choose from. For the same, we will consider the following solutions that would need to be built :
a. A Supply Chain xApp
A “reverse-engineering” approach.
b. A Core-Manufacturing xApp:
A solution using xMII.
c. A GP-driven Order Management xApp:
SLAs will exist in a democracy. How does one create a “controlled-democratic”(get the humor here!) environment?
A B2B Order Import xApp:
A “Medium-weight” xApp, that would address the problems in a holistic manner.
An Application Portfolio Analysis of Org.A:
As a BPX/ESA Architect, one needs to ensure the approaches to a solution, best fitted to the current environment, instead of proposing too much change. An Organization needs to mature and warm up to SAP NetWeaver, if it has to bring about constructive change. Too much grumbling in-house within Org.A makes the need for a practically crafted business solution. A non-disruptive approach is explored with xApp Analytics.
Outro – The Supply chain story board :
Certainly, processes from ERPs are meant to be adapted solutions for any organizations. Some Power Users tend to get carried away with their processes being “Unique” and their ways of working “different”. Expert power owing to PMO positions tend to make some Power Users inflexible, leading to difficulties in the any engagement. A safe bet out is the path dictated by xApp Analytics – would help Dave convince the fund-raisers (The Business Division & end Users) and help him help the Hell-raisers (The Corporate IT teams), get the funding in place with the “Quick-win” approach.
More about the storyboard – I2/APO is also being used for SNP & DP and Org. A is looking at CPFR solution to improve its supply-chain efficiency. Since Org. As Business model is to primarily aggregate demand from its customers and have them manufactured through their contractors ORGC (which uses Oracle 11i as their ERP). Org. A also resorts to sourcing demand for cameras from suppliers in Taiwan & uses the services of a third party solution provider like WWRE. ORGC accepts demand forecast from Org. A on a fortnightly basis and manufactures the same.
Depending on the capacity planning requirements and cost/product efficiency, Org. A sub-contracts certain basis components such as casing & accessories to a subcontractor based in Mexico (for closer proximity to US & tax benefits) & ships them directly to Org. As warehouses based in the US & Europe, which takes care of the basis assembly and stocking. Org. A also uses Ariba spend management for all indirect material which it procures from its suppliers like Boise Cascade through punch-out, and leverages the Commerce Services Network to reach all its EDI and low-end suppliers by fax. ORGB uses PeopleSoft 8.4 SCM & Financials along with HRMS8.8. The Procurement function, demand aggregation is done using PeopleSoft & all Purchase Orders are dispatched to Org. A for manufacture.
Org.A also uses SeeBeyond, BizTalk, Vitria and Webmethods (as various pilots) to build various complex interfaces within the Organization. Owing to four different products, Org. A realizes the need for a single vendor to lower TCO & lower licensing costs. Org. A is also a customer of IBM WebSphere and iPlanet and is using the Application/Web servers provided by these vendors to develop & host various intranet & internet portals across the board. Cost is the major business driver for Org. A to look for a unified platform for all web development activities and be less dependant on a host of local vendors providing skills around these areas. Org. A wishes to leverage its current IT workforce, which comprises largely ABAP. .NET & JAVA skills to reduce manpower cost & reduce costs further by driving the repetitive and new development activities.
Some legacy applications within Org. A will never be termed sunset applications owing to their usefulness & political sensitivity. However, it is evident that some functions need to be exposed as globally useable functions. These business functions need to be more loosely coupled & reused extensively within a private network of operations. Org. A has a host of J2EE applications running & wishes to port them onto a singe platform & leverage a composite application made of all these applications.Org. A now sees the need to use a single, unified, open platform which is scalable across the Organization & help Org.A reduce TCO.
An so, the Journey of our BPX – Dave Mustaine, begins…We will walk along with Dave, as he interacts with the power users (business and technical) of Org.A and puts forth some practical ideas with xApp Analytics. And the Org.A Power users like Megadeth as well..Ain’t it a good mash-up – Speed Metal and NetWeaver?