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10 Best Practices to Gain Immediate, Actionable Insight into Your Extended Supply Chain

By Kevin Wilson August 7, 2017 by David Carroll

Extended Supply Chains have the following characteristics:

  • Multiple geographies – Where do your customers and partners reside?
  • Multiple languages and currencies
  • Multiple systems – SAP, EDI, Website, portals, …
  • Multiple partners – Carriers, freight forwarders, suppliers, manufacturers, distributors
  • Varying regulations and compliance requirements – What’s needed to ensure we conduct business legally across the globe?

Extended Supply Chain

Various physical events occur, for a product, as it flows through the extended supply chain. Best practices for this process could be listed as follows:

  1. Standard SAP transactions are used to capture transactions across the supply chain. E.g. Purchase Orders, confirmations, ASNs, Invoice receipts, Goods Receipts, …
  2. Use standard SAP solutions to manage the various parts of the supply chain. E.g. SAP ERP for Procure to Pay, Order to Cash, … SAP Ariba for supplier portal interaction, SAP Event Management for Supply Chain Event Management (the core topic of this blog)
  3. All events pertinent to the supply chain are received from all partners. E.g. Carrier status notifications, vendor Advanced Ship Notices, Manufacturer’s manufactured event, …
    1. All exception events affecting the supply chain are received from all partners. A reason for the exception needs to be captured.
  4. Supply chain events are planned from a timing, location and partner E.g. We expect the delivery to be shipped to Warehouse ABC by Plant 1000 on 2/3/2017 @ 400pm.
    1. These plans should be based on actual SAP transaction schedules (E.g. Sales Order schedule line) and the dates are determined based on master data (lead times).
  5. The execution of events (when and where they actually occur) are compared with their corresponding plan to determine any discrepancies. These discrepancies can lead to follow-on activities to take corrective action and root cause analysis.
  6. Monitoring of the Supply Chain plan for events that have not yet occurred, when they should have occurred. This best practice leads to follow-up activities to take corrective action.
  7. Events that span multiple processes should be correlated across all of them to ensure complete end-to-end visibility. E.g. Proof of delivery relates to Outbound Delivery, Shipment and Sales Order
  8. System messages that communicate the event are also planned and need to be measured.g. The EDI X12 856 is the message that tells us a supplier has shipped the product to us (ASN). We would set up a plan to receive the ASN within 4 hours of the physical shipping of the goods, to ensure that we get the ASN prior to receipt of the goods. I.e. The goods are expected to ship at 2:00 PM and we expect to receive the message at 6:00 PM telling us that the goods have shipped.
  9. Manage the Supply Chain by exception – With complete end-to-end visibility into the supply chain, as it’s executing, you are able to proactively identify and react to issues.

Time to Insight – Time from the issue to when we realize that an issue has occurred.

Kevin Wilson Supply Chain 2

Time to Action – Time from the realization that an issue has occurred to when the resolution is actioned.

Kevin Wilson Extended Supply Chain 3

  1. All data flows from SAP to an analytics tool (SAP HANA Analytics) for aggregation and further “opportunity discovery”. i.e. Where can we find ways to improve the future process, by analyzing the effectiveness of past performance.
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