Partner integration for SAP based ERP systems - A SAP R/3 solution approach

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Article:  Partner integration for SAP based ERP systems - A SAP R/3 solution approach

Summary: This document explains the importance of partner integration in manufacturing industries, along with a solution approach to partner integration for SAP based ERP systems.

Author: Chirag Chandramohan Gowda M

Company: Infosys Limited

Created on: 11August, 2013

Author Bio:

Chirag Chandramohan Gowda M is currently working as SAP Senior Associate Consultant in Infosys Limited, and has expertise in SAP Sales and Distribution processes. He is a post graduate in Management and also a certified associate in Order Fulfillment with SAP ERP 6.0 EHP4. Chirag would like to thank his colleagues Naveen Advani and Siddaram C P for their support and guidance.

Introduction:

In a progressively fast paced, competitive interconnected business landscape efficiency stands tall and provides competitive edge over rival business firms. The most effective way to improve supply chain affiliations in order to stay ahead in this era of volatile market conditions and vary in purchasing power of consumers is to leverage Partner Integration.

Need for Partner Integration in business processes worldwide:

With demands on a supply chain higher than ever, flexibilty and agility are no longer competitive differentiators, they are business necessities. In order to streamline the supply chain process and to meet the changing needs of consumers and to have a competeitive edge over rival firms, most of the business entities are implementing partner integration solutions and prominent needs are noted below :

• To elevate business growth
• Product innovation
• Cost reduction
• Focus on increased quality

Partner integration solutions can be deployed in any industries where :

• Partners
• Vendors
• Suppliers
• Brokers, plays an important role in supply chain, manufacturing and sales processes respectively.

Important benefits of Partner Integration:

• Emphasis on Product innovation in order to meet the increasing change in consumer needs
• Proper demand management
• Focus on capacity planning
• Proper production flow planning
• Effective sales order management

The above laid benefits will result in streamlining the supply chain process, improved ability in interacting with trading partners which helps in maintaining the competitiveness in the marketplace and meet the customer and partner expectations.

Partner integration for SAP based ERP systems: SAP Solution

Manufacturing industries are partnering with vendors, suppliers etc in order to ensure proper prodcution planning, effective inventory management and proper sales order management.

Due to instablity in market conditions and decrease in purchasing power of consumers, today some of the industries are enagaging in make to order process instead of make to stock process.

In Make to Order proces, production orders are caused by sales orders. This means that an ERP system must have a strong integration

between its sales order module and the production-planning module. Sales orders must be translated into production orders. System should be capable enough to monitor the progress of individual production orders so that customers are informed about a particular sales order.

Make to order process is extensively increasing in Manufacturing industries in order cut the raising inventory management costs and meet the customer demands on a planned production basis.

Rise in the need for Partner integration for SAP based ERP systems in manufacturing industries:

Since ,partners play an important role in manufacturing industries in day to day production, inventory and sales activities, it is very important to have the proper systems in place for placing purchase orders, sales orders, shipment documents, invoices etc. In order to ensure smooth and uninterrupted environment between business system and partner systems, there arises the need for Partner integration for SAP based ERP systems.

Typical Business Reasons:

Business firms who have deployed SAP based ERP systems will be receiving order files from various partners in manufacturing industries who will be using different non sap systems to place orders. These order files will be in different file format, and SAP system needs to convert these incoming order files into an inbound Idoc and create sales orders in sap systems

Operational framework for rollout or implementation:

Below diagram portrayes how to create sales orders in SAP ECC from incoming order files from legacy systems and in different file format:

                                                                            Chart created by the author of the document

We need to implement a simple one way Asynchronous link between a  file sender and SAP R/3 system using SAP XI/PI. Custom XML document containing order file information is picked up from the FTP server by file adapter. The Message  is mapped to IDoc –XML format & then routed to the IDoc adapter. The created Inbound IDoc is then posted into the backend R/3 System and sales order will be created by the R/3 system in SAP ECC provided that it has authorization to do so and based upon certain prerequisites in place in SAP ECC.

Solution points portrayed below :

Registered partners places order from non sap systems and in different file format.

SAP PI converts these order files into an Inbound Idoc and saves the order in SAP ECC. If an Inbound Idoc fails, a communication mechansim can be enhanced.

For instance; an email notification can be trigerred and sent to partners along with a partner number,  error number and error message

If an Inbound Idoc is succesfull and an order is created in ECC, then  based upon ATP check rule the acknowledgement is sent to the dealer. Outbound Idoc is created for the same and sent to delaer for accepting the order.

Cross reference data for fields :

A cockpit button can be created and enhanced in order to establish the connection between sap and non sap systems and below basic information can be maintained

• Partner code and Partner name
• Product/Material information
• Email ids can be maintained in the table in order to send email notifications

In order to map the above data a database table or tvarvc variant cna be created and different fields can be created for each table under the cockpit button

Data mapping using SAP PI/XI:

We need to implement a simple one way Asynchronous link between a  file sender and SAP R/3 system using SAP XI/PI. Custom XML document containing partner order file information is picked up from the FTP server by file adapter. The Message  is mapped to IDoc –XML format & then routed to the IDoc adapter. The created Inbound IDoc is then posted into the backend R/3 System and sales order will be created by the R/3 system in SAP ECC provided that it has authorization to do so and based upon certain prerequisites in place in SAP ECC

.

Prerequisites to be in place in SAP ECC :

• Partner numbers and name should be created in the SAP ECC
• Materials to be ordered by the partners should be mapped to the respective partner codes
• A program and t code can be created in order to map or upload the partner name and partner codes, material mapping, email ids mapping etc

Monitoring Mechanism :

Once the implementation is in place, we need to monitor the cockpit button and tables created. Tables should be updated periodically,
preferably launching a background job. Key users should be trained to upload the tables and to make entries in the fields.

Customer sales representatives or the key users should be trained enough to correct the failed inbound Idocs. Access should be provided
only to key users as the cockpit button table entries carry cross reference data.

Error Handling Procedure :

• SLA should be defined to resolve the errors occured
• A repository should be created in order to store the hand document providing the procedures to handle the errors and made accessible to the key business users.
• User trainings should be provided periodically in order make them well acquainted with the process
• Expectations should be set with the business to reslove the errors  and to by pass certain errors.
• A table can be created to store the error messages. In parallel we can create a cockpit button and can insert a table to store the by
  pass error numbers and these errors can be by passed by the business.

Assumptions:

• ERP system should have all the necessary customization in place as that of normal sales order processing:
• Document type, ATP, item category determination, schedule line, shipping point determination, storage location determination, plant
  determination, account determination, customer pricing procedure, pricing procedure determination, incompletion log check etc.

Recommendations :

• Partner integration for SAP based ERP systems can be deployed by any  industries where partners act as an integral part of business processes.
• Partner integration will help business firms for rationalization of supply chain model
• Partner integration will help business firms in reduction of costs
• Partner integration will help business firms to reach out the clients effectively and efficiently

Conclusions:

• SAP ERP system must establish integration between the sales order module and the production planning module in order to transfer sales
  orders into production orders.
• Monitoring of individual production orders must be possible in order to meet the consumer's demands and to keep them informed about the progress of their orders. Production orders must traced back to sales orders.
• SAP ERP system must empower a highly flexible processing of orders in order to meet irregular sales demands.
• SAP ERP system should strongly support the inventory manager and the purchasing department, to ensure an uninterrupted and continuous flow of components and to keep inventories as low as possible.
• Measures should be taken in order to reduce the risk of inefficiency and wastage.

All the entities in the organization and the partners should be involved in the implementation in order to have a complete understanding about the functionality and business processes.