Supply Chain Management Software Requirements and mySAP SCM

I hereby declare that this dissertation is entirely my own work. Whenever I used

the ideas of others, I cited and acknowledged their work within my own text. Any publication of the whole document or excerpts requires the written authorisation of the author. Please contact me by email ( aweth@gmx.de) or telephone (+49 179 7891536) for further questions.

Oestrich-Winkel, 7 August 2005

Abstract

Supply chain management (SCM) offers business benefits but is a difficult concept to master without the right software support. This dissertation is aimed at academic and IT professionals and SCM decision makers or consultants as it provides insights into SCM software and the leading concepts behind it. A qualitative approach was chosen for answering the research questions which focus on general SCM software principles but also enquire benefits, functionalities and the software architecture of SAP’s SCM 4.1 solution. In addition to that, the differences between what decision makers request and what mySAP SCM 4.1 offers are addressed with the research questions. To answer these research questions, the structure of the dissertation contains a general introduction to SCM software and includes a SCM software market overview. After this part, one major part of the dissertation contains an analysis of the dominant SCM software solution mySAP SCM (Release 4.1). The examination of mySAP SCM 4.1 focuses first on technological aspects (software architecture, technological platform and programming language) before the business benefits and functionalities of this SCM software are examined. After that, the functionalities, business benefits and the architecture of mySAP SCM 4.1 are compared with the SCM software requirements obtained from ten SCM professionals from different industries (automotive, logistics, retail, consumer packaged goods, consulting and education). The analysis of the requirements from SCM decision makers (gathered using a questionnaire) shows that an increase in SCM transparency and a reduction of SCM costs were the main requirements articulated by decision makers. The comparison of the questionnaire with the functionalities, business benefits and the architecture of mySAP SCM 4.1 then illustrates that these requirements can be realised with SAP’s SCM 4.1. Concerning future research in the field of SCM software, it was found out that SCM software will be influenced by the following developments: increasing globalisation together with the internationalisation of SCM, the trend of services oriented architecture and the integration of corporate information systems.

Keywords:

Supply Chain Management (SCM), Supply Chain Management Software, mySAP SCM 4.1, Supply Chain Operations Reference (SCOR) Model, Enterprise Services Architecture (ESA), Netweaver

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Acknowledgments

I would like to thank my principal supervisor Associate Professor Kay Fielden

and my associate supervisor Dr. Noel Bridgeman for the great feedback and the critical discussion of the dissertation. A big thank you goes also to Associate Professor Donald Joyce from Unitec Institute of Technology Auckland and Prof. Susanne Strahringer from European Business School Oestrich-Winkel.

In addition to that, I am also grateful to Gabriele Rogg from The Gartner Group Munich for the information about the SCM software market, to Christoph Erben from Oxford University for directing me towards Oxford’s great online resources and to my cousin Johannes at SAP Walldorf who provided me with mySAP SCM 4.1’s software documentation. A big thank you goes also to Thomas Dünser (Thomas Dünser Consulting) and Peter Burggraaff from Farmers’ Trading Company New Zealand where I learned a lot about the SAP environment.

Finally, thanks a lot to my parents, my brother and sister and especially to my grandfather for sharing insights and ideas about people and countries all around the globe.

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The picture (Fig.1: Sir Edmund Hillary and Tenzing Norgay. Image taken from BBC.co.uk) shows Sir Edmund Hillary and his Sherpa and Supply Chain Manager Tenzing Norgay who set foot on the top of Mount Everest in 1953. Norgay and his team sourced 13 tons of equipment from all over the world and coordinated (without SCM software support) its transportation using over 350 Sherpas through the highlands of Nepal which was one of the greatest SCM achievements in the twentieth century.

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Table of Contents

  List of Figures  8

  List of Tables  9

  Abbreviations Acronyms  11

  Abbreviations Computing and Programming Names  14

1.  Introduction  16

1.1  Problem Relevance  18

1.2  Problem Definition  19

1.3  Structure of the Dissertation  20

2.  Literature Review  

2.1  Literature in the Field of Supply Chain Management and Logistics  22

2.2  Literature in the Field of Supply Chain Management Software  25

2.3  Literature in the Field of General Business and Management  31

2.4  Literature in the Field of Research Methodologies and Research Design  32

2.5  Literature Map  33

3.  Research Questions  35

4.  Research Methodology and Methods of Data Collection  37

4.1  Methodology  37

4.2  Questionnaire Design  37

4.3  Data Collection and Analysis  39

5.  Introduction to Supply Chain Management Software  42

5.1  The Need for Supply Chain Management Software  42

5.2  The Business Benefits of Using Supply Chain Management Software  43

5.3  Supply Chain Management Software Design  44

5.4  Market Overview over Supply Chain Management Software Solutions  49

6.  Analysis of the mySAP SCM 4 1 Software Solution  53

6.1  Company Profile SAP  53

6.2  Technological Aspects of mySAP SCM 4 1  55

6.2.1  Software Architecture  55

6.2.2  Enterprise Services Architecture  57

6.2.3  Technological Platform SAP Netweaver  59

6.2.4  Programming Language behind mySAP SCM 4 1  63

6.3  Functionalities and Business Benefits of mySAP SCM 4 1  64

6.3.1  SCM Processes and Business Scenarios  67

6.3.2  SAP Advanced Planning and Optimization  71

6.3.3  SAP Inventory Collaboration Hub  73

6.3.4  SAP Event Management  77

  6  

6.3.5  SAP Business Intelligence  78

6.3.6  SCM Basis  80

7.  Supply Chain Management Software Requests from Decision Makers  82

7.1  General Information and Demographic Analysis  82

7.2  Functionalities offered by mySAP SCM 4 1 and what Decision Makers  

  request  86

7.2.1  The Use of Standard Supply Chain Management Models and the  

  Acquaintance of Supply Chain Management Software Vendors  86

7.2.2  Requirements for Supply Chain Functionalities and mySAP SCM 4 1  89

7.2.3  Requests for Internet related Technology in Supply Chain Management  

  Software and mySAP SCM 4 1  94

7.3  Business Benefits of mySAP SCM 4 1 and what Decision Makers request100  

7.3.1  Areas of Business Benefits for Supply Chain Management Software and  

  mySAP SCM 4 1  100

7.3.2  Business Benefits of SCM software and mySAP SCM 4 1  102

7.4  Requests for SCM Software Architecture and mySAP SCM 4 1  105

7.4.1  The Requests and Impacts of Software Architecture on Supply Chain  

  Management and mySAP SCM 4 1  106

7.4.2  The Impacts of Enterprise Services Architecture on Supply Chain  

  Management and mySAP SCM 4 1  109

8.  Discussion and Interpretation of Results  112

9.  Conclusion  120

9.1  Summary  120

9.2  The Future of Supply Chain Management Software  120

  Appendices  122

Appendix A  Literature Review  122

Appendix B  Questionnaire  134

  References  143

  7  

List of Figures

  Architecture of SAP Netweaver 29 Fig 2 2:  

  Supply Chain Management Software Vendor Performance Fig 5 1:  

  Revenues from the top 10 Supply Chain Software Vendors 50 Fig 5 2:  

  Supply Chain Systems Architecture 55 Fig 6 2:  

  Functionality and Architecture of SAP Netweaver 59 Fig 6 4:  

  Packaged Composite Architecture 61 Fig 6 5:  

  Solution Map mySAP SCM 4 1 Edition 2004 64 Fig 6 6:  

  Demand Planning Scenario Flow 68 Fig 6 8:  

  Flow Chart Supplier Managed Inventory Process 69 Fig 6 9:  

  Fig 6 10: Screenshot APO Detailed Scheduling Planning Board  71

  Fig 6 11: SAP System Architecture for Supplier Collaboration  73

  Fig 6 12: SAP Exchange Infrastructure with SAP ICH  74

  Fig 6 13: SAP Event Management  76

  Fig 6 14: Screenshot Supply Chain Performance Measurement with  

  mySAP SCM 4 1  78

  resulting from the Use of SCM software  100

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List of Tables

Table 7 1  Age Distribution of the Participants  82

Table 7 2  Higher Education of the Participants  83

Table 7 3  Company Size Analysis  84

Table 7 4  Locations of Company Sites  84

Table 7 5  The Use of Standard SCM Models in SCM Software  86

Table 7 6  Interest in particular SCM Software Vendors  87

Table 7 7  Reasons for selecting particular Software Vendors  88

Table 7 8  Requests for SCM functionalities from SCM Software  89

Table 7 9  Requests for Forecasting Functionalities in SCM Software  91

Table 7 10  Requests for Technology in SCM Software  95

Table 7 11  Impacts of Technology on SCM  98

Table 7 12  Requested SCM Software Benefits  102

Table 7 13  Benefits of Best Practice Processes in SCM Software  103

Table 7 14  Impact of SCM Software Architecture  104

Table 7 15  The Influence of the Programming Language of SCM Software  104

Table 7 16  Knowledge of particular SCM Software Architectures  105

Table 7 17  Particular SCM Software Architectures  106

Table 7 18  Impacts of SCM Software Architecture  108

Table 7 19  Knowledge of Participants in the Field of Enterprise Services  

  Architecture  109

Table 7 20  The Impacts of Enterprise Services Architecture  110

Table 9 1  Literature Map  121

Table 9 2  SCM and Logistics General SCM  123

Table 9 3  SCM and Logistics Strategic SCM  124

Table 9 4  SCM and Logistics SCM Concepts  125

  9  

Table 9 5  Supply Chain Management Software General SCM Software  126

Table 9 6  Supply Chain Management Software Market Research SCM  

  Software  127

Table 9 7  Supply Chain Management Software  

  SCM Software Architecture  128

Table 9 8  Supply Chain Management Software  

  SCM Software Technology  128

Table 9 9  Supply Chain Management Software mySAP SCM  130

Table 9 10  General Business and Management  131

Table 9 11  Research Methods and Research Design  132

  10  

Abbreviations - Acronyms

i2 AG AMR APS APO ASN ATP B2B BI BIS BW CIO CPFR CRM CRP CWMI DB DSS EAI EDI EM

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ERP Enterprise Resource Planning

ESA ICH IT JDA JSP KPI MM mySAP

OEM

OS PCA PP

R & D

R/3 RFC RFID SAP

SAP AG

SC SCE

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SCOR SCM SCP SD SMI SOA TCO UMTS W-LAN xAPPs

XI

13

Abbreviations - Computing and Programming Names

.net .net technology from Microsoft is an internet based platform and

ABAP

BAPI

C++ HTTP IDoc

J2EE

Java

Netweaver Netweaver is a software architecture developed by SAP. It can be

PHP

SOAP

a variation of XML.

Visual Basic An event driven programming language from Microsoft which has its roots in Basic. Visual Basic for Applications is derived from

Websphere Webshpere is a Java-based platform developed by IBM and is related to XML (see XML below). Websphere can be used for

XML

XMLA

1. Introduction

Supply Chain Management (SCM) is still one of the most popular management trends since the end of the eighties. Potential for cost saving and service improvements resulting from improved supply chains are usually very high in most industries, even in heavily service oriented businesses. Hammer (2001) quantified benefits of systematically connecting supply chains in the chemical industry with a potential of inventory reduction of approximately 15%. Imagining the costs of capital resulting from a 15% excess in stock or inventory in a multi billion company, it becomes clear how much money could be saved by

SCM optimisation just in the area of inventory management. However, one of the

critical factors for successful SCM and SCM optimisation is the right software support. Refocusing on the example in the chemical industry, a 15% reduction in stock can certainly not be coordinated with loose spreadsheets and without SCM software support. For the purposes of SCM, there are different types of software solutions with different functionalities. Business information systems (BIS), decision support systems (DSS), Enterprise Resource Planning (ERP) software and especially SCM software helped executives to make the right decisions and streamline supply chains. As management guru Peter Drucker stated, the decision making process would be much more complex and executives would be far less effective without decision support systems (Drucker, 2004).

Because of that, it was not a great surprise that - together with the increasing importance of SCM management - the software market for supply chain management software solutions became more and more lucrative for software development companies to enter. In addition to that, another factor that has been leading to the growing interest about SCM software: the SCM software market

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had a significantly higher growth rate than the overall markets of BIS and ERP software.

After identifying that SCM software solutions were a suitable research topic, market research from Gartner identified mySAP SCM 4.1 as the SCM software solution with the highest market share (see figures 5.1 and 5.2 and section 5.4 for more information about the SCM software market). This was the reason why this dissertation focuses on mySAP SCM 4.1. However, it transpired that not much information was available which dealt with mySAP SCM 4.1 and other software solut ions from an objective and academic point of view. Most information and analysis of mySAP SCM 4.1 was published through company white papers or white papers of SAP’s suppliers which means this source of information potentially was biased. Therefore further academic research in this area was of high importance.

As a first step for further academic research in the area of mySAP SCM 4.1, this dissertation provides information about SCM software solutions and focuses on the SCM software solution with the highest international market share in 2004 (mySAP SCM 4.1). To understand its functionalities, its architecture and its success, the most important SCM business concepts that lead to its development are illustrated together with information about the SCM software market. In the first chapter of the dissertation, general aspects and background information about the dissertation are further described. Section 1.1 shows the relevance of the topic and is a prerequisite for the actual problem definition stated in section 1.2. After that, the structure of the dissertation is explained in section 1.3.

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1.1 Problem Relevance

Choosing the right SCM software solution for Fortune 500 companies is in most cases a decision linked to several billion US Dollars (including all impacts on customers, suppliers, business processes and the holistic supply chain) that can seal the fate of the company. The water-resistant fabric maker W.L. Gore and Associates sued its consulting company Deloitte Consulting, its software provider PeopleSoft and other companies due to difficulties which occurred during the implementation of a new system installation (Ayers, 2002). As long as there is a free market with different available SCM software solutions, there will always be a problem of choosing the right software solution. This shows the importance of the topic. The question is how do SCM executives obtain suitable information about SCM software solutions?

There are generally three different sources for information about SCM software:

• The Internet

• Consultants

• SCM software vendors

It seems unwise for decision makers thinking about choosing a particular SCM software solution to trust information gained from most articles available on the internet as they are in most cases questionable (except articles acknowledged by vendors) and often do not reveal their sources.

Another source of information for decision makers is provided by consultants or research companies. However, it should also be considered that most consultants or research companies charge a fee for providing information.

The last source decision makers are able to use is information provided by vendors of SCM solutions. In most cases this is subjective and usually does not

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include the basic concepts of SCM management and how they are implemented in these software solutions.

In addition to these three generic sources, this dissertation gives SCM and IT-Executives compressed and objective information about the SCM software market, the functionalities of the highly complex SCM software solution from the market leader and its background concepts.

1.2 Problem Definition

Robert Rubin, the former U. S. secretary of the Treasury under Bill Clinton, argued that there is an increasing need of real time connection from European or

US companies to low-wage environments, especially China or India, as off-

shoring and outsourcing is becoming more and more popular (Rubin, 2004). Nevertheless, outsourcing and off-shoring also leads to a higher amount of coordination and management of these international supply chains. Therefore

SCM software solutions are essential to manage supply chains (SC) spanning

around the globe because it is no longer possible to manage multinational supply chains without IT support.

In addition to that, Poirier (2004) has r eported that some international corporations have already gained competitive advantages by establishing a state of the art SCM and SCM system by using suitable SCM software. Among these companies are for instance Microsoft, Dell, Wal-Mart, Sony and Caterpillar. So assuming a company wants to achieve a competitive advantage and therefore implements a highly efficient SC managed by SCM software, how could this be realised?

Simchi-Levi, Kamnisky and Simchi-Levi (2004) stated that there are two extreme

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approaches for SCM software solutions: SCM software which is based on a standard SCM model or approach and SCM software which is based on a self developed SCM approach. These two approaches will be evaluated later in the dissertation.

In addition to that, different SCM software solutions have different functionalities and software architectures which need to fit to the client’s established business processes and information systems. Therefore there is no

SCM software solution which is seen as the perfect software solution for

managing the supply chains of all Fortune 500 companies. Nevertheless, there is a SCM software solution approach which was used in 2004 by many Fortune 500 companies and has gained a high reputation since 2000 (McBrea, 2004). mySAP

SCM 4.1 from SAP AG was the leading SCM software solution based on

revenues from software licenses in 2004 (see figures 5.1 and 5.2) and was in most cases implemented in a single vendor approach together with the ERP solution from SAP AG. The question is, even if mySAP SCM 4.1 was chosen by most Fortune 500 companies, did decision makers really think their requirements in the fields of functionalities, business benefits and software architecture were fulfilled?

1.3 Structure of the Dissertation

The first chapter of the dissertation includes the problem relevance, the problem definition and the structure of the dissertation. After that, chapter two analyses and describes relevant publications in a literature review. Chapters three and four state the research questions and the research methodology together with the methods of data collection. An introduction to SCM software is given in chapter five before mySAP SCM 4.1 is analysed in chapter six. Then, the outcome of the questionnaire is analysed and compared with mySAP SCM 4.1 in chapter seven. After that, the findings of the dissertation are discussed in chapter 8 and

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information about the future research in this area is stated in chapter 9 together

with a conclusion. Finally all relevant attachments can be found in the

appendices.

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2. Literature Review

Literature from the following areas was considered to be relevant for the research project:

• Supply Chain Management and Logistics

• Supply Chain Management Software.

• General Business and Management Literature

• Research Methodologies and Research Design.

Most academic literature in the field of general introduction to supply chain management - in particular Coyle, Bardi and Langley (2003), Simchi-Levi, Kaminsky and Simchi-Levi (2004) and Wisner, Leong and Tan ( 2005) - also included relevant theories and findings concerning supply chain management software. Nevertheless, publications were placed in the given literature area where the major part of the publication was identified as being relevant. In the following part of this dissertation, an overview of relevant literature in the two most important identified areas (‘Supply Chain Management and Logistics’ and ‘Supply Chain Management Software’) is given in sections 2.1 and 2.2 In addition to that, a literature map in the attachment shows the identified publications in each category and subcategory.

2.1 Literature in the Field of Supply Chain Management and Logistics

Literature in the field of supply chain management and logistics needs to be researched because SCM principles are included in SCM software solutions. SCM software benefits also depend on how these SCM principles are realised in SCM

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software solutions. The beginning of the definition of SCM can be traced back to the 1950s to the concept of physical distribution. Smerck, Wilson and Spychalski published in 1964 the first volume of Physical Distribution Management and indicated the benefits of a SCM system concept (Coyle et al, 2003). According to Gadde and Håkansson (2001), there are benefits to be gained from using an integrated systems approach over a stand-alone SCM solution. This idea induces strong business benefits because data can be shared between different IT systems. The concept of an integrated system is also the basis for the analysis of Enterprise Services Architecture in section 6.2.2 of the dissertation.

Coyle et al (2003) described a supply chain as an extended enterprise along boundaries of individual companies and define SCM as the integration of logistic activities of all companies involved in the supply chain (Coyle et al, 2003). This is a definition typically used by many researchers with an academic focus. However, Lambert (2004, p. 19) defined SCM as “the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders”. This definition includes practical aspects (adding value for customers and other stakeholders) as well as an academic research focus (integration of business processes from end users through original suppliers). Due to the practical aspects of the topic, the SCM definition from Lambert (2004) was chosen for this dissertation. It was already stated that supply chain management is closely related to the discipline of logistics. Nevertheless, for this research project a distinction will not be made between logistics and supply chain management as they include for the most part the same theories and findings.

Sakaguchi, Dibrell and Nicovich (2002) state that the right supply chain management implementation can lead to a competitive advantage. A competitive advantage is defined as a company’s benefit over rival companies, according to

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Porter (1985). Analysing in more depth the main business benefits for supply chain management relating to a competitive advantage, it can be said that these business benefits can be found in the following areas, according to Wisner, Leong, and Tan (2005): Complexity reduction, cost reduction, improved delivery services and increased visibility. In addition to this, Fisher (1997) stated that these benefits can only be realised with the right supply chain processes. These business benefits resulting from supply chain management are analysed in more detail in section 5.2.

The leading research journals concerning SCM and SCM software are the Supply Chain Management Review which has been published since 1997 by Reed Business Information and the Journal of Supply Chain Management – a publication from the Institute of Supply Management (ISM), founded in 1915. Nevertheless, articles concerning supply chain management and logistics are also published in the leading American business journals, in particular in the Harvard Business Review, MIT Sloan Management Review and California Management Review.

As it can be seen in the literature map for the field of ‘Supply Chain Management and Logistics’ in table 9.2, this field can be categorised into the subcategories of general SCM literature (table 9.2), strategic SCM (table 9.3) and SCM concepts (table 9.4). SCM textbooks were identified to be relevant for all three subcategories. The subcategory ‘General SCM Literature’ contains more publications (12 publications) compared with the two other subcategories (strategic SCM: 8 publications; SCM concepts: 7 publications) because the field of general SCM literature is heavily researched.

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2.2 Literature in the Field of Supply Chain Management Software

SAP’s supply chain management software is based on the Supply Chain Operation Reference Model (SCOR). Research question three focuses on the question why this approach was chosen by SAP. This model includes a standardised definition of supply chain processes that was published first in 1997 (Ballou, 2004) and is the current international standard for supply chain processes. The following illustration (figure 2.1) was taken from a publication from Supply Chain Council (2004) and shows the SCOR model. As can be seen from the illustration (figure 2.1), the essential key processes which should be supported by a supply chain management software solution are: plan, source, make, deliver and return.

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Koch (2002) focused on these key processes and stated that planning is a strategic activity to fulfil customer demands and monitoring SCM activities. S ourcing means choosing the right suppliers and developing processes for determining prices, deliveries and payments (Koch, 2002). Managing inventory and monitoring the activities are also key tasks of sourcing. Making is the actual manufacturing process. Together with testing and packaging, all activities are usually monitored concerning productivity and costs. Delivering is defined by Koch (2002) as the actual logistic task. Delivering the product to the customer

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also includes invoicing and choosing the right courier service. Returning means setting up processes for customers to return products with faults (Koch, 2002). Typically these activities include support and repair services. The last business process – return – is in most installations, but not fully included in mySAP SCM

4.1 because quality management can be realised with other modules in ERP

solutions.

The SCOR model also serves as an introduction to basic SCM functionalities which are provided by SAP’s SCM solution. Hence, these findings are also relevant for identifying functionalities of mySAP SCM 4.1 (research question six) and the comparison of these functionalities with what decision makers expect (research questions seven and eight).

Besides the SCOR model, another major SCM standard was identified which is called Collaborative Planning, Forecasting and Replenishment (CPFR). This model is web-based and can be used for joint forecasts developed by suppliers, vendors and clients (Simchi-Levi et al, 2004). However, Simchi-Levi et al (2004) stated that the SCOR model is already used by most companies as a process benchmark and that the CPFR model will not gain a higher market share.

However, most SCM standards are based on the principle to separate planning and operational activities (New & Westbrook, 2004) on a business processes layer. This concept induced a transformation of the linear process of SCM into an adaptive network which integrates customers, manufacturers, retailers, suppliers and general business partners (SAP AG, 2004b). Generally, SCM activities can be divided into SC Collaboration, SC Planning, SC Coordination and SC Execution.

SC Collaboration includes forecasting and replenishment agreements. SC

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Planning is used for simulating or optimising strategic issues and tactical or operational scenarios. Information exchange is realised via SC Coordination and finally simulation and planning results are converted into orders and order fulfilment with SC Execution (SAP AG, 2004b).

Several relevant conference publications and other articles were identified concerning the benefits and functionalities of supply chain management software. Patnayakuni and D’Arcy (2002) stated that there are strong business benefits resulting from a supply chain software implementation. However, they could not prove that short term company performance is directly related to the implementation of supply chain management software. Davenport, Harris, De Long and Jacobson (2001) found that analytic capabilities are critical for a company to execute business processes. Hence, analytic capabilities resulting from SCM software implementations are essential for the long term success of a company. Schary and Ashok (2004) placed in their publication a highlight on the selection of the right supply chain management software and IT infrastructure to realise the benefits of an integrated supply chain management system. Chorafas (2001) analysed these benefits with respect to interoperability with other software applications. Schlegel and Smith (2005) stated that technology i s a major driver for the success of supply chain management systems.

Concerning mySAP SCM 4.1’s business benefits (research questions one and four), functionalities (research question six) and its software architecture (research question five), different a rticles and company white papers were identified and are critically analysed in the dissertation. Taylor (2004b) put a focus on the interoperability between supply chain software with other functional software solutions, in particular software for customer relationship management. Taylor (2004b) also underlined the use of web technology for supply chain management software which seems to be a strong benefit of

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mySAP SCM 4.1. Mentzner (2004) described the main problem many companies face when they implement SCM software solutions. The reason why SCM doesn’t work efficiently is in most cases not the lack of system support but often the designed processes (Coyle et al, 2003). Therefore as a first step, processes should be improved before being implemented. In most cases, the SCOR model is used as a process standard because it provides a standardised process framework which was developed as a benchmark for company’s supply chain processes (Supply Chain Council, 2004). This is another reason why the SCOR framework is used in this dissertation as a basic framework for the analysis of mySAP SCM 4.1’s functionalities and business targets.

Company white papers from SAP describe in detail the software architecture of mySAP SCM 4.1 which is called Netweaver. In addition, also detailed functionalities but only general business benefits are described in SAP’s company White Papers. The most relevant company white papers concerning mySAP SCM 4.1 were SAP AG (2003), SAP AG (2004a) and SAP AG (2004b). In addition to that, SAP AG (2004d) outlined general aspects of SAP’s software platform Netweaver and the main underlying programming language ABAP/4: ABAP/4 stands for Advanced Business Application Programming. It is a fourthgeneration language - indicated by the four – and therefore offers power and flexibility to developers. It is an event driven language so applications can be executed by events occurring in the system or through user interaction. Other programming languages besides ABAP/4, which are often used in the SAP software environment, are Java, Visual Basic and C++. Java especially, can be used in combination with ABAP/4 to build applications which are not limited to certain platforms or operating systems (SAP Developer Network, 2004). Focusing on Netweaver, it can be said that it was developed with the underlying principle

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of services oriented architecture (ESA). The following illustration (figure 2.2) shows the architecture and components of Netweaver.

Netweaver is used for managing, developing, testing, deploying web services and applications based on ABAP or IBM Websphere including Java Platform 2, Enterprise Edition (J2EE) developed by Sun Microsystems (Arif, 2004). It serves as a Web services-based platform for the Enterprise Services Architecture and establishes a link between business processes, people and information across organisational and technical units (SAP AG, 2004b). These findings are analysed in more detail in sections 6.2.2 and 6.2.3 and are necessary for answering research

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