mySAP seeks evolution of supply chain management with adaptive supply networks

Orlando, FL  June 14, 2001  At SAPPHIRE, SAP's e-business conference being held in Orlando, Fla., this week, SAP announced that it is making some changes to its mySAP Supply Chain Management (mySAP SCM) system.

The changes are designed to help mySAP SCM become more adaptive, which means including global visibility, event management, adaptive planning and execution, and dynamic collaboration to SCM capabilities through the use of intelligent agents. This new, more complete model of SCM software is what SAP calls adaptive supply networks.

SAP is working on its adaptive supply network with BiosGroup Inc., a consulting and software group. The two companies have teamed to create the proper intelligent agents for such a product. SAP intends to release the first version of intelligent agents during the second quarter of 2002.

The ultimate goal is to create a truly adaptive supply network that can sense and respond to rapidly evolving conditions so that partners can intelligently cooperate to keep demand and supply in close alignment and efficiently coordinate the fulfillment process, said Claus Heinrich, member of the SAP AG executive board. We believe that intelligent agents will be key to resolving the increasing challenges companies are faced with in participating and managing global adaptive supply networks.

In practice, adaptive supply networks will be able to detect changes in demand behavior at their origin and communicate in real time through the network. Event Management and intelligent agents monitor and coordinate the whole spectrum of supply network activities from sourcing components, to assembly and manufacture of products, to final delivery in order to satisfy customer expectations and achieve high profitability.

Competition is increasingly becoming supply chain against supply chain, said Barry Wilderman, senior vice president at META Group Inc. Supply chains need to take into account the increasingly interconnected nature of global business. Current supply chains fall short of expectations because they deal only with isolated parts of the network: The sequential steps may be optimized, but these are not extended across the entire network. SAP and BiosGroup share an ambitious vision that redefines static, linear chains into adaptive supply networks that should provide significant value for users of the system.

SAP's supply management capabilities and BiosGroup's leading-edge agent-based technology are a perfect fit to make adaptive supply networks a reality, said Dr. Stuart Kauffman, founding general partner and chief scientific officer of BiosGroup. The supply network of the future will closely resemble complex adaptive systems, where multiple independent agents make local decisions leading to complex interactions. As we have seen from our work with clients like Procter & Gamble Co., intelligent agent technology can reduce out-of-stocks and excess inventory by as much as 75 percent. 

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