SAP Beefs Up Logistics Execution Functionality

Adds features that improve inventory visibility and accuracy to enhance warehouse efficiency

Chicago  October 7, 2002  Enterprise software giant SAP has beefed up its logistics execution system (LES), adding features that improve inventory visibility and accuracy to enhance warehouse efficiency.

The solution provider said that the Task and Resource Management (TRM) solution shipping with mySAP Supply Chain Management (mySAP SCM) optimizes warehouse processes, helping customers find, in SAP's words, "the optimal resource to execute the right task at the right time."

To accomplish this, TRM analyzes the warehouse situation in real time and matches resource capabilities and their current location against tasks that need to be performed. Through this optimized task assignment, TRM achieves a maximum interleaving and bundling capability, pick-path reduction and increased warehouse efficiency, SAP said.

With TRM, SAP is entering the functionality domain of material flow computers and forklift control systems, and the provider is trying to show how inventory management, warehouse management and material flow functions can work in an integrated fashion. TRM also provides the option to interface directly to material handling automation equipment to handle complex warehouse processes.

New capabilities in TRM for mobile applications include a transaction composer and a screen size adjustment feature. With the transaction composer, customers can build customized transaction templates by assigning a screen and function module to each individual step. These building blocks can then be sequenced until the final transaction is built. SAP said this functionality reduces the implementation of barcode scanning transactions while offering additional flexibility. TRM also offers dynamic screen size adjustment for mobile tools to make the solution easier to use on handheld and other devices.

Additional logistics functionality in the SAP solution includes tighter integration with event management, providing a monitoring and alerting layer from customer order capture, through decentralized fulfillment, to the customer's proof of delivery. The solution also includes a new certified interface to SAP enterprise systems.

One company already using the logistics functionality with mySAP SCM is ATOMIC, an Austrian manufacturer of sporting goods. The company, known for its winter sports equipment, implemented a mobile scanner solution to improve its inventory management processes. The solution, which went from project kickoff to go live in just three months, enabled ATOMIC to more effectively handle data from goods receipt to removal of stock and helped expedite stock turnover in the company's material warehouses, according to SAP.

"Efficient inventory management means more flexible production," said Dr. Michael Schineis, CEO of ATOMIC. "SAP's radio scanner solution is an important milestone for us as we move toward an integrated paperless information flow."

SAP currently holds 9.2 percent of the logistics applications software market, with 2001 revenue of $95 million in the segment, according to a recent report from IDC. The technology research firm expects the market for logistics software to grow at a compound annual rate of 19.5 percent between 2001 and 2006.

"Due to the economic downturn, companies are looking for ways to reduce costs in an attempt to remain competitive," said Gisela Wilson, director of the product supply chain applications program at IDC. "This reality is driving companies to look for ways to replace profit growth from higher revenue with profit growth due to greater operational efficiencies. For that reason, logistics application software, which automates activities such as distribution resource planning, warehouse management and transportation planning, is becoming increasingly important."

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