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SAP – Logistically Logical

Journey Began…

Journey of SAP in the Transportation and Logistics started with incorporation of Transportation solution in R/2 in 1987. Then came the second shot, with Transportation solution becoming part of R/3 in 1993. Then, there was a visible lull in terms of new development in this space. May be this was due to the fact that LES and Transporation in R/3 (now ECC) was doing fairly well in helping shippers / manufacturers carry out logistics operation. The other can be the fact, that logistics was an industry looked as still laggard when it came to adoption of information technology or may be the fact that Logistics space had and still has a fair number of “mom and pop” kind of service providers.

Market changed and so do Solutions

Last few years of 90’s saw a change happening. The change that changed our life “www” – internet. And so even the industry of IT Laggards was trying to change. But what has more drastic impact was the availablity of information. Things which took hours and days to happen now started happening in minutes and seconds. MNC headquartered in US started thinking of JIT with vendors located all across globe. And since there was a business need, there were people who were ready to serve that customer segment.

Then people started thinking a step further, “Optimize” became the buzz word. IT was not new for manufacturing which was already in “Optimization” mode. But certainly Logistics, bit optimistic and bit skeptical, was looking to get optimized. This brought a slew of players in the market. GLogs, i2s of the world had already arrived on the scene and were minting mullah.

Giant wakes from Slumber

When “Optimization and planning” solutions had become topics of boardroom discussions and darlings of CIOs, SAP came up with Advanced Planning and Optimization (APO). For some this was just another horse in the race where i2s of the world were the clear leader or if put it in analyst terms” Best of Breed”. This was first major shift of SAP from ERP solutions to Addons.

Coming back to our Logistics and SAP discussion. SAP came up with APO-TPVS (Transportation Planning and Vehicle Scheduling) in 2001. Though, TPVS was not phenomenal but was good enough to make a mark in the market. TPVS was successful in the manufacturer space. TPVS, though an addon, was still coupled with SAP R/3 at backend.

Things on the sidelines were changing and so there was an urgency within SAP to change its strategy.

To be continued next week…….

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