In my professional life as SAP Consultant I have explored and worked extensively with SAP’s Advanced Planning and Optimisation or APO (rechristened as SAP SCM with APO being main application component) modules and related SAP ERP modules apart from few other applications in supply chain space. This blog is to pen down my thoughts on how SAP SCM applications have evolved over time and is cross-posted in LinkedIn. In early 2000 life as a functional supply chain consultant was simple, you had SAP R/3 as main ERP application providing supply chain execution with some planning capabilities and newly introduced SAP APO focused on supply chain planning.
Since then SAP invested, developed and came out with multiple supply chain applications like Supply Network Collaboration (SNC), Transport Management (TM), Extended Warehouse Management (EWM) to name a few. Most of these started out as extensions / improvement of core SAP ERP or even APO application but became full-fledged stand-alone applications. One interesting aspect when APO was rebranded as SAP SCM (version 4.0) two other application components were added Inventory Collaboration Hub (pre-cursor of SNC) and Event Management (EM). In fact as SAP Product Management commented here on consolidated platform for easier installation and maintenance. In the next version two more application components were introduced – Forecast & Replenishment (mainly to target Retail clients) and Extended Warehouse Management. Note basic Transport Management functionality was already present in SAP APO as Transport Planning Vehicle Scheduling module. Then in SCM 2007 (also known as 5.1 or is it other way round) Service Parts Planning was introduced and Inventory Collaboration Hub (ICH) got rechristened as Supply Network Collaboration owing to added functionality. Thus SAP SCM application version 5.1 in 2007 kind of consolidated Supply Chain Management application components APO, SNC, SPP, EWM, TM, EM other than what SAP ECC had to offer.
Then came the era of Service Oriented Architecture and SAP joined the bus touting ESA – Enterprise Service Architecture in mid 2007 enabled by SAP Netweaver platform. Around 2005-2006 time frame SAP introduced Business Process Platform concept as unified Netweaver based platform having components of SCM, ERP, CRM, SRM etc. that customers can pick and choose to meet their business process requirements. Even a new IT role was created – Business Process Expert (BPX) with a flair or functional, business process knowledge coupled with technical experience to compose a solution by mashing up from large number of enterprise services. If you are interested then look at this and this in SAP Community Network Wiki. In hindsight this grand vision of BPP turned out to be futuristic and really did not see light of day.
Coming back to the main topic after consolidation in SAP SCM 2007 things started changing quite a bit. First of all there was no formal SAP SCM 6 version but went directly to SAP SCM 7. This is the time when decoupling also started with Transportation Management moving out of SAP SCM. Although EWM was an application component SAP suggested it to be deployed in separate SCM box. Essentially SAP SCM 7 would be APO and SNC application components with SPP brought inside of APO. The trend continued with TM and EWM coming out with subsequent versions 8.0, 9.0, 9.1 and 9.2 (latest). Version 9.1 unified into Supply Chain Execution (SCE) application TM and EWM as application components and some transaction level integration without the need for transaction routing via SAP ERP system. Another application EM though part of SAP SCM becomes stand-alone component that can be deployed and used independent or with SAP SCM, SCE or even ECC applications.
On the other hand some edge applications were getting developed like Sales & Operations Planning (S&OP), Demand Signal Management (DSiM), Supply Chain Performance Management (SCPM) and more technology enabler like Auto ID Infrastructure (AII) and Object Event Repository (OER) to support RFID revolution & EPCGlobal. Safety Stock Planning was one major area where SAP did not invest but had SmartOps as their preferred partner who eventually got bought out by SAP in February 2013. So now erstwhile SmartOps applications like Enterprise Inventory & Service Level Optimisation (EIS) and Enterprise Demand Sensing (EDS) join SAP SCM application list. To see the long list check out SAP Solution Explorer Line of Business Supply Chain.
Now with the advent Suite 4 HANA (S4/HANA) things are becoming interesting, starting with core ERP application where Simple Logistics will be introduced before this year ends. On the other hand SAP is pushing ahead with Integrated Business Platform for Supply Chain Planning processes mostly based on Sales & Operations Planning on HANA and adding EIS capabilities as IBP S&OP, Demand , Supply, Inventory modules. But there is a fundamental difference between IBP applications vis-a-vis SCM, EWM, TM applications. IBP are Cloud-first applications developed as native HANA applications i.e. with no ABAP layer. The code line is mostly SQL Script with some level of customisation possible through proprietary (?) L-script and using SAP UI5 for web browser based user interface. While SCM, EWM, TM are on premise applications running on ABAP AS that can have HANA as DB and can be deployed on SAP Cloud too. The user interface is still SAP GUI or Netweaver Business Client based though some Fiori apps are possible when backend HANA DB is used.
However in the midst of all core Supply Chain Planning & Execution application components like APO, SNC, TM and EWM coupled with SAP ECC Logistics (SD, MM, IM, PP) still rules and will remain as foundation for enterprises going into 2020s. Hopefully by then SAP can materialse the original grand vision of Business Process Platform this time powered by HANA Cloud. Remember SAP has extended support for Business Suite applications till 2025 giving it more time and breathing space to fully develop and get customers adopt to next generation cloud-based business process platform.
PS: You may like to review this presentation I did during Networking Session at TechEd Bangalore 2013.