Framework to Integrate 3rd Party Logistics Using RosettaNet PIPs
This document provides an overview of integration of 3rd party logistics (3PL) using the RosettaNet Partner Interface Processes (PIPs). This document also covers the communication process between two trading partners with standard messages having terms and conditions associated with them.
In distributed supply chain of High Tech and Electronic industry, accurate and transparent business to business communication plays an important role for success of business. Better communication helps in reducing errors, cost and inventory throughout the supply chain. To overcome these challenges High Tech and Electronic industry are now members of RosettaNet to enable B2B communication using RosettaNet business process standards. RosettaNet standards and PIPs are widely accepted across the industry which supports the seamless information flow and running the business efficiently. RosettaNet PIPs help to integrate 3PL with your SAP system and standardize the communication process.
RosettaNet is a non-profit standards organization whose objective is to standardize the B2B commerce for exchanging the information. RosettaNet is supported by group of High Tech and Electronic industry. Its standards are used and endorsed by more than 500 companies around the world. Communication between trading partners happen through XML documents.
RosettaNet Partner Interface Processes (PIPs):
RosettaNet Partner Interface Processes (PIPs) defines the business processes between two trading partners which are aligned to supply chain business process of trading partners. PIPs standardized the two business processes of trading partners and interfaced across the entire supply chain. Information is exchanged through XML based messages which includes business logic, message flow and content. There are various scenarios of exchanging information between two partners which are defined by set of schema.
PIPS are categorized in several clusters and segments and within each segment are individual PIPs. All supply chain processes are grouped into clusters and segments. While implementing PIPs partners can select from all segments suit best to business process.
PIPs are categorized in below mentioned clusters:
- Cluster 0: RosettaNet Support
- Cluster 1: Partner Product and Service Review
- Cluster 2: Product Introduction
- Cluster 3: Order Management
- Cluster 4: Inventory Management
- Cluster 5: Marketing Information Management
- Cluster 6: Service and Support
- Cluster 7: Manufacturing
In each cluster there are several defined segments and within each segment individual PIPs are defined.
For complete list of clusters, segments and PIPs, visit http://www.rosettanet.org .
Integrated Solution Approach:
Third Party Logistics provider would be integrated with your SAP system with the support of different systems which enable the seamless communication between two trading partners. All supporting systems plays important role in standardizing the messages that makes them adaptable to both ends. As information flow differs from goods movement physically, to handle this a virtual plant would be created in SAP with reference to 3PL. In 3PL plant there would be inbound and outbound movement of goods so the same needs to be design in SAP. Below mentioned are three important points which play important role to design the solution:
- System Landscape
- Goods and Information/PIP Flow
- System Design for Goods Movement
SAP NetWeaver provides the seamless integration to support the bidirectional communication through RosettaNet PIPs. It integrates people, information and business processes across the organization.
It is adaptable with various commonly used technologies Microsoft .NET, J2EE, IBM WebSphere etc. Below diagram explains basic system integration model:
As explained above, there is bidirectional information flow between 3PL and SAP through standard XML documents which is supported by different systems. This is basic setup between 3PL and SAP ECC, similar set up can be established with different business entities.
Goods and Information/PIP Flow:
3PL would be represented by a virtual plant in SAP so all material movement through 3PL would be updated in SAP through PIPs. As physical movement of goods differs from information flow, below mentioned diagram shows the basic flow of material and information:
All details of physical goods movement would get updated in SAP ECC to respective org units. Information would flow through standard XML documents which are mapped between different systems.
System Design for Goods Movement:
In 3PL there would be inward and outward movement of goods. Information flow can be standardized and simplified with the help of RosettaNet PIPs. There are several PIPs which are available to address the business needs. Business can map PIPs which are essential to manage the business efficiently. Below we would discuss system and few PIPs design in case of inbound and outbound to 3PL:
Inbound to 3PL:
In case of inbound to 3PL, there would be inward movement of goods either from own manufacturing plant of company or third party manufacturer. In both the cases goods will move directly between two physical locations and same information would get updated in SAP ECC. This communication between two trading partners would happen through PIPs. Below diagram depicts the physical movement of goods and PIPs in case of inbound to 3PL:
In this case ASN would be sent by goods supplier to 3PL through 3B2 which contains shipping details. Once 3PL would receive the goods same information would be update in SAP through 4B2. 4C1 PIP is used for inventory reconciliation report to match the inventory on hold and inventory in system. In this we have included few PIPs to demonstrate the business process there are several PIPs which can be used as per business requirement.
Outbound from 3PL:
In case of outbound to 3PL, there would be outward movement of goods either to own warehouse or external customer. Below diagram depicts the physical movement of goods and B2B communication through PIPs:
In this scenario customer would raise an order which would get updated in SAP through PIPs. A delivery request would be raised to 3PL to deliver the goods to end customer using PIPs.
In both the cases, inbound and outbound communication between two trading partners would be handled through the PIPs. RosettaNet PIPs simplify the whole B2B communication which makes the business process flexible, efficient and cost effective.
In High Tech and Electronic industry Integration of 3PL plays important role to optimize the supply chain. Effective communication with 3PL reduces cost, inventory and time to market the product. As explained above in document SAP provides a platform where 3PL could be integrated by implementing RosettaNet PIPs which standardized the communication process between trading partners. This seamless flow of information optimizes your supply chain and gives you competitive advantage in market.