Welcome to another edition of the ‘SAP Business Network for Supply Chain: What is ?’ blog series posts where I cover in more detail the scope, capabilities, use cases, and benefits of SAP Business Network for Supply Chain.
This time I will focus on inventory collaboration through the SAP Business Network Supply Chain Collaboration, inventory add-on solution.
If this is your first visit here, I invite you to read past blogs posts on ‘What is SAP Business Network Planning Collaboration’ and ‘What is SAP Business Network Quality Collaboration’.
Inventory collaboration is a best practice within supply chain management that consists of multiple parties within a supply chain working together to optimize inventory levels, improve fill rates, reduce costs, and improve overall supply chain efficiency. Companies embarking on inventory collaboration programs share information and partner to ensure that the right products are available in the right quantities at the right location to minimize excess buffer stock or inventory shortages.
In today’s world, many enterprise buyers deploy supplier-managed inventory (SMI) programs to enable mutually beneficial buyer-supplier collaboration. Suppliers gain visibility into buyers’ current inventory and use it to speed response times, increase fill rates, optimize buyer inventory levels, and reduce excess safety stocks. All this can lead to greater assurance of supply and increased process efficiency.
However, most suppliers can access only current inventory data, and they use inefficient tools – such as e-mail, spreadsheets, and custom portals – to collaborate with buyers and plan fulfillment. This leads to an inability to respond to demand and supply fluctuations and increased lead times, because suppliers must wait for purchase orders to replenish inventory. It also drives up the need for costly urgent orders that result in expedited shipments and unpredictable costs, leaving both buyers and suppliers feeling they are continuously acting in a reactive mode.
This is where the inventory add-on to SAP Business Network Supply Chain Collaboration comes to play.
The inventory add-on for the SAP Business Network Supply Chain Collaboration solution enables companies to optimize inventory levels while improving supply predictability through close collaboration. The result is supply assurance, improved customer satisfaction, and better supplier planning and fulfillment that helps buyers effectively manage working capital, excess inventory, lead times, and carrying costs.
The table below provides a summary of the capabilities offered to both buyers and suppliers
Let’s see the supported scenarios graphically:
SAP Business Network Inventory Collaboration
I want to wrap up this post by sharing some benefits that our customers achieve.
How is the SAP Business Network Inventory Collaboration approach different?
Do you want to learn more ? Check the SAP’s Product Page here.
Stay tuned for my next blog. I will be very much looking forward to knowing how you are collaborating with your trading partners on inventory.
This time I will focus on inventory collaboration through the SAP Business Network Supply Chain Collaboration, inventory add-on solution.
If this is your first visit here, I invite you to read past blogs posts on ‘What is SAP Business Network Planning Collaboration’ and ‘What is SAP Business Network Quality Collaboration’.
Inventory collaboration is a best practice within supply chain management that consists of multiple parties within a supply chain working together to optimize inventory levels, improve fill rates, reduce costs, and improve overall supply chain efficiency. Companies embarking on inventory collaboration programs share information and partner to ensure that the right products are available in the right quantities at the right location to minimize excess buffer stock or inventory shortages.
In today’s world, many enterprise buyers deploy supplier-managed inventory (SMI) programs to enable mutually beneficial buyer-supplier collaboration. Suppliers gain visibility into buyers’ current inventory and use it to speed response times, increase fill rates, optimize buyer inventory levels, and reduce excess safety stocks. All this can lead to greater assurance of supply and increased process efficiency.
However, most suppliers can access only current inventory data, and they use inefficient tools – such as e-mail, spreadsheets, and custom portals – to collaborate with buyers and plan fulfillment. This leads to an inability to respond to demand and supply fluctuations and increased lead times, because suppliers must wait for purchase orders to replenish inventory. It also drives up the need for costly urgent orders that result in expedited shipments and unpredictable costs, leaving both buyers and suppliers feeling they are continuously acting in a reactive mode.
This is where the inventory add-on to SAP Business Network Supply Chain Collaboration comes to play.
The inventory add-on for the SAP Business Network Supply Chain Collaboration solution enables companies to optimize inventory levels while improving supply predictability through close collaboration. The result is supply assurance, improved customer satisfaction, and better supplier planning and fulfillment that helps buyers effectively manage working capital, excess inventory, lead times, and carrying costs.
The table below provides a summary of the capabilities offered to both buyers and suppliers
| For Buyers | For Suppliers |
| - Share demand and forecast plans, stock on hand, and min/max inventory levels with suppliers | - View stock on hand, demand plans across a predefined horizon, and projected stock alerts to facilitate compliance |
| - Integrate supplier-created replenishment plans into the ERP software | - Gain early visibility into customer demand with instant calculation of projected inventory across multiple time buckets |
| - Run an SMI program with standard or consigned stock types | - Plan and execute replenishments against inventory targets – predefined minimum and maximum (min/max) levels – across the planning horizon and share them with buyers |
Let’s see the supported scenarios graphically:
SAP Business Network Inventory Collaboration
I want to wrap up this post by sharing some benefits that our customers achieve.
- Higher supplier responsiveness with early visibility into demand and inventories
- Increased productivity and transactional efficiency across the replenishment cycle
- Improved supplier fill rates, decreased stock-outs, and improved overall inventory levels
- Better management of working capital, less excess inventory, and lower carrying costs
- Optimized inventory levels while improving supply predictability and quality
- Close collaboration on logistics status so the right supply is where it’s needed at the right time
- Improved customer satisfaction and better supplier planning and fulfillment
How is the SAP Business Network Inventory Collaboration approach different?
- Support SMI scheduling agreement releases and supplier replenishment orders with native integration into SAP ECC and SAP S/4.
- Systemically track inventory movements to simplify inventory reconciliation and usage as well as create accurate settlement invoices and consumption reports.
- Provide buyers and planners with proactive inventory exception alerts.
Do you want to learn more ? Check the SAP’s Product Page here.
Stay tuned for my next blog. I will be very much looking forward to knowing how you are collaborating with your trading partners on inventory.
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