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3/9/2006
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SAP Launches Latest Supply Chain Management Suite

The tool, two years in the making, can manage short-planning cycles, with special consideration taken to maintain high service levels, a typical consideration in the service-parts business.

SAP AG will launch a new version of its supply chain management suite in June, the German business software maker said Thursday.

The new version of mySAP Supply Chain Management (SCM) Version 5.0 comes with industry-specific functions, strengthens demand-driven fulfillment networks, links service and product supply chains and enables companies to create an flexible supply chain network.

The most notable addition to the software platform, service parts management capabilities, also known as the "after-sales market." The software integrates into SAP NetWeaver.

The tools deliver planning and process execution to help companies differentiate between fast- and slow-moving parts. It helps when having to redistribute inventory and supplies from one stocking center to another.

mySCM 5.0 links planning and demand forecasting with enterprise resource planning (ERP) platforms. Sophisticated algorithms process requests. Sales orders arrive and automatically trigger back-office processes to deliver parts, said Hans Thalbauer, SAP's vice president of application and solution management, supply chain.

The tool, two years in the making, can manage short-planning cycles with special consideration taken to maintain high service levels, typical considerations in the service-parts business.

The platform supports cross docking, which means to ship pallets of the same product to one location, where they're unboxed and repackaged and stacked on pallets along with other items headed for the same location.

The application also supports collaboration and supplier managed inventory, where product may ship to the contract manufacturer rather than the customer.

Thalbauer said Caterpillar Logistics Services Inc. and Ford Motor Co. provided feedback for service-part management. "The service is mostly related to the discrete industries," he said. "Automotive, high tech, industry machinery and components can benefit from this package the most, any industry with huge warehouses and service-level agreements."

Caterpillar Logistics, a subsidiary of Caterpillar Inc., provides supply chain services, such as managing parts, for its parent company, as well as third-party service centers worldwide. The company chose mySAP SCM to provide customers with an offering capable of delivering competitive solutions.

Companies with basic service-parts deployments can cut inventory between 10 percent and 30 percent, while raising service levels to approximately 95 percent, according to AMR Research Inc. data.

The service parts management features in mySAP SCM 5.0 will compete with those available in Oracle Corp.'s Oracle Enterprise Asset Management, and Oracle Field Service, which is focused on customers that have service contracts.

SAP said it serves more than 13,600 mySAP SCM customers that run approximately 1,800 advanced planning, optimization and collaboration tools along with supply chain platforms.

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