SAP Excellence Series editors: Prof. Dr. Dr. h.c. Peter Mertens Universitat Erlangen -Niirnberg Dr. Peter Zencke, SAP AG, Walldorf Springer-Verlag Berlin Heidelberg GmbH Peter Buxmann Wolfgang Konig Inter-organizational Cooperation with SAP Systems Perspectives on Logistics and Service Mana~ement With 92 Figures and 1 Table , Springer Prof. Dr. Peter Buxmann Technical University of Freiberg Chair of Information Management Lessingstrasse 45 09599 Freiberg Germany [email protected] prof. Dr. Wolfgang Konig University of Frankfurt Institute of Information Systems Mertonstrasse 17 D-60054 Frankfurt Germany [email protected] ISBN 978-3-662-04220-5 ISBN 978-3-662-04218-2 (eBook) DOI 10.1007/978-3-662-04218-2 Library of Congress Cataloging-in-Publication Data Die Deutsche Bibliothek - CIP-Einheitsaufnahme Buxmann, Peter: Inter-organizational Cooperation with SAP Systems: Perspectives on Logistics and Service Management; with 1 table 1 Peter Buxmann; Wolfgang Konig. - Berlin; Heidelberg; New York; Barcelona; Hong Kong; London; Milan; Paris; Singapore; Tokyo: Springer, 2000 (SAP Excellence) This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illus trations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer-Verlag. Viola tions are liable for prosecution under the German Copyright Law. © Springer-Verlag Berlin Heidelberg 2000 Originally published by Springer-Verlag Berlin Heidelberg New York in 2000 Softcover reprint of the hardcover 1s t edition 2000 The use of general descriptive names, registered names, trademarks, etc. in this publica tion does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Hardcover-Design: Erich Kirchner, Heidelberg SPIN 10756988 42/2202-5 4 3 2 1 0 - Printed On acid-free paper Preface The formation of inter-organizational cooperation is increasingly used to improve the partners' competitive position in a global world economy. This tendency in logistics occurs when members of a supply chain become partners: suppliers, manufacturers, logistics service providers, and finally the end-customers. Supply chain management attempts to optimize the flows of goods and information between companies. Logistics service companies play an increasingly important role in the supply chain. Their task here is no longer restricted to just providing basic logistics services such as transport, warehousing and transshipment. Rather, logistics service providers are increasingly becoming complete providers of service and information. For example, they provide basic services, such as financing for inventory or offer after-sales services. Because of the fundamental importance of the exchange of information for the coordination of the supply chain, logistics service companies are also increasingly becoming information and communications systems specialists. To support logistics processes, SAP provides various systems for the parties in the supply chain. These include modules for the logistics functions in the Rl3 System, such as sales and distribution (SD module) and materials management (MM module), and EDI and Workflow Management to link companies using the Internet. In addition, SAP provides various components to optimize the supply chain. This book concentrates on the business processes linking companies and investigates the opportunities and limits on the use of SAP systems. This book compares the known task requirements to the SAP methodology. Special attention is paid to how SAP supports the function oflogistics service providers. Although this book aims to provide a practical presentation of these concepts and solutions, it does not ignore the scientific foundation. Whereas Chapters I and 2 concentrate on providing a compact representation of the available method VI Preface knowledge, Chapters 3 to 6 show solutions based on SAP systems. The practical orientation is enhanced by the inclusion of case studies: The Schenker Logistics case shows how logistics service providers are increasingly changing to become complete service providers and specialists in the provision and use of information and communications systems (Chapter 7). We use the example of Goodyear to show how modern information and communications systems can support the coordination of logistics between companies (Chapter 8). The use of SAP Rl3 and the Supply Chain Management Initiative are discussed in both cases. This book belongs to the SAP Excellence series, which initially contains the following works: • Appelrath, Hans-Jiirgen; Ritter, Jorg: SAP Rl3 Implementation. Methods and Tools • Becker, Jorg; Uhr, Wolfgang; Vering, Oliver: Retail Information Systems Based on SAP Products • Buxmann, Peter; Konig, Wolfgang: Inter-organizational Cooperation with SAP Systems. Perspectives on Logistics and Service Management • Knolmayer, Gerhard; Mertens, Peter; Zeier, Alexander: Supply Chain Management Based on SAP Systems. Order Processing in Manufacturing Companies A feature of all these works, and thus also this book, is that employees of SAP have recently validated all statements made about the software. We have created under www.wiwi.uni-frankfurt.de/sap a discussion forum to exchange experience gained with the use of SAP systems for the cooperation between companies and, in particular, for the supply chain management. We hope that our readers actively participate in the discussion forum. Finally, we would like to express our thanks to a number of people who supported us in many ways in the production of this book. These include Prof Peter Mertens and Dr. Peter Zencke, the initiators of the SAP Excellence series, and Dr. Franz Hollich, our central contact partner at SAP AG. We also thank our partners for the practical examples, Dr. Joachim Klein and Bernhard Oymann at Schenker Logistics, Jiirgen Herb at Goodyear, and many employees from SAP for their exemplary cooperation. Last but not least, Markus Fricke, Sven Grolik and Claus Hittmeyer, all employees at the Institute for Information Management, earn our grateful thanks for their valuable support in preparing notes for this book. Moreover, we would like to thank Anthony Rudd for translating the manuscript. Peter Buxmann Wolfgang Konig Table of Contents Chapter 1 The Use of Information and Communications Technology to Support Cooperation Between Organizations in Logistics ____________ l 1.1 Forms and Motives of Building Cooperation _____________________________ ) 1.2 Inter-Organizational cooperation in Logistics ____________________________ ) 1.3 Development Stages in Information and Communication Technology ___________________________________________________________________________ 3 1.4 Development Phases in Logistics ______________________________________________ 7 Chapter 2 Inter-Organizational Processes and Cooperation in Logistics Networks 9 2.1 Principles of Materials Logistics _______________________________________________ 10 2.1.1 Subfunctions for Procurement Logistics and Distribution Logistics_ _________________________________________________________________________ 11 2.1.2 Transport Chains and Transport Networks. ___________________________ 13 2.1.3 Planning and Optimization Concepts in Materials Logistics ____ 14 2.2 Principles of the Information Logistics ______________________________________ 25 2.2.1 The Connection between Information and Materials Logistics _________________________________________________________________________ 26 2.2.2 Information-logistical Infrastructure ____________________________________ 30 2.2.3 Electronic Commerce in the Supply Chain __________________________ )4 VIII Table of Contents 2.2.4 Security in Information and Communications Networks ......... 39 2.2.5 Standardization and Network Effects 44 2.3 Supply Chain Management - Specification and Monitoring of Logistics Networks .................................................................4 5 2.3.1 Principles of the Supply Chain Management ........................ 45 2.3.2 Concepts and Instruments of the Supply Chain Management .. 46 2.3.3 Problems with the Control of Supply Chains ........................ 50 2.3.4 Problems with the "Coopetition" of Companies .................... 52 2.4 Modem Tasks for Logistics Service Providers in the Supply Chain. ................................................................................... 52 2.4.1 From Logistics Service to Logistics System Service .............. 52 2.4.2 Service Management as Modem Task Area for Logistics Service Providers ............................................................. 54 2.4.3 The Logistics Service Provider as Supply Chain Manager ...... 56 2.5 Supply Chain Management Systems. ......................................... 57 Chapter 3 mySAP.com .......................................................................... 59 3.1 mySAP.com Marketplace ........................................................ 59 3.2 mySAP.com Workplaces ......................................................... 63 3.3 mySAP.com Components and Business Scenarios. ...................... 65 3.4 mySAP.com Application Hosting ............................................. 66 3.5 mySAP.com Internet Business Framework. ................................ 67 Chapter 4 Support of Inter-Organizational Logistics Processes with the SAP R13 System ............................................................................ 69 4.1 SAP R13 in the Logistics: Overview .......................................... 69 4.2 MM Module Functions ........................................................... 70 4.3 SD Module Functions ............................................................. 72 Table of Contents IX 4.4 SM Module Functions_ ____________________________________________________________ 74 4_5 The Customer Relationship Management-Initiative of SAP __________ 76 4_5_1 SAP Marketing ________________________________________________________________ 76 4_5_2 SAP Sales _______________________________________________________________________ 76 4_5_3 SAP Service_ ____________________________________________________________________ 78 4.5.4 Architecture and Connection of Mobile Components _____________ 78 4_6 Electronic Data Interchange _____________________________________________________ 79 4_6_1 Principles and Potential Use _______________________________________________ 79 4_6_2 ED! with SAP R/3: Possibilities and Limitations ___________________ 81 Chapter 5 Internet Basic Technologies with SAP Systems. __________________________ 83 5 _1 Principles of the SAP Business Framework: Business Components, Business Objects and BAPIs _________________________________ 84 5_2 SAP R/3 Internet Application Components ________________________________ 85 5_2_1 The Internet Application Components Concept. ____________________ 86 5.2.2 Applications on the Basis of the SAP R/3 Internet Application Components ___________________________________________________ 86 5.2.3 Electronic Commerce with SAP R/3: The FAG Kugelfischer Sample Application __________________________________________________________ 89 5.2.4 Internet Application Components - An Assessment. ______________ 92 5.3 ED! over the Internet ______________________________________________________________ 95 Chapter 6 New SAP Systems to Support Supply Chain Management ___________ 99 6_1 SAP Advanced Planner and Optimizer (APO) ____________________________ 99 6_1.1 Overview ________________________________________________________________________ 99 6.1_2 APO Solver _____________________________________________________________________ 101 6_ 1.3 The Supply Chain Cockpit. ________________________________________________ 101