Running a complex, global enterprise from one large suite of seamlessly integrated applications is a powerful vision, and SAP has done well to implement this vision.  However, organizations that are reliant on supply chain management software from an ERP vendor can find themselves perpetually stalled, never actually achieving the functionality and visibility required for seamless supply chain planning to enable increased service levels, minimized inventory, fact-based decision-making, better handling of demand uncertainty and supply volatility, and product lifecycle management for maximum profitability. It’s important to know the dangers behind SCM-to-SAP integration, and how to avoid them.

SAP ERP-to-SAP SCM Standard Integration

Standard SAP ERP-to-SAP SCM integration provides a complex technological starting point for SAP SCM integration. The integration provides near-real-time transfer of data between ERP and SCM, tightly coupled with the SAP ERP data model. The integration is typically implemented over eight to 24 months using standard SAP project methodology and tools by a team of SAP ERP, SAP SCM and SAP integration and ABAP coding professionals. 

The dangers behind SCM-to-SAP integration are many and varied; some are obvious, while others may remain hidden, then suddenly emerge to put the solution, and associated budget, at risk. 

Cost and efficiency 
Integration with non-SAP data sources typically requires significant customization; as supply chains become increasingly complex and interconnected, a one-data-source integration approach could undermine the solution’s long-term value. As your business processes evolve, there will undoubtedly be the need to integrate and support non-SAP databases. Underestimating the total cost of ownership can result in dramatic budget overruns. 

Scalability and speed 
While SAP ERP-to-SAP SCM integration offers net-change capability (starts with a large initial load, then switches to recognize and send only that data which has changed), the capability does not extend to data sources and targets outside SAP ERP. Additionally, when the integration encounters production volume data for the first time, it will fail as all integration components are run on the same servers that host the ERP and SCM applications. 

Sustainability 
SAP provides a path for standard integration software upgrades but does not include enhancements or connections for non-SAP ERP integration points. Upgrading functions can put a heavy burden on your business, particularly if effective documentation is lacking or the project has changed hands over time. Successive waves of developers creating their own integration processes over time can result in convoluted ‘spaghetti code’ as there is no best-practice way of doing things outside the standard integration scope. 

Flexibility 
While data mapping flexibility exists in the standard SAP approach, there is no corresponding data model flexibility to transform data as neededAdded to this, your integration project needs to support collaboration with supply chain partners. The standard SAP ERP-to-SAP SCM integration is virtually ineffective for inter-enterprise integration, and non-ERP data integration leads to increased custom development. 

Custom Integration without the Custom Effort – the Logility Best-of-Breed Approach

Logility’s templated integration solution delivers custom ERP integrations without the custom effort for best-of-breed supply chain planning and optimization solutions. Rules-based application combines standardized connectors with high-performance, rules-based data transformations and powerful solution management capabilities. 

Logility’s modular integration technology saves time, cost and complexity for customers. Pre-built integration templates deliver better performance, simplified support and reduced cost of ownership, cutting implementation effort by as much as 90% for typical integration projects, and delivering results in 30 to 60 days in most cases. 

It is important not to let an “all-SAP” vision stand in the way of achieving supply chain excellence through SCM software, which should be implemented and reconfigured as quickly as the supply chain evolves. Logility delivers high-performance SAP ERP-to-Logility integrations in less time, at lower cost, and provides long-term value by continually upgrading software components to maintain currency with data model updates over time.

Download our white paper Avoiding Common Pitfalls of SCM-SAP Integration to dive more deeply into the Logility advantage. 

Unraveling from the complexity of supplier disruption, unexpected consumer behaviors, and limited resources, supply chain organizations are looking to learn from the shockwaves of the past year. But this is not the time to focus on everything that went wrong. Priorities need to be set to drive changes that are meaningful to customers and the overall health of the business. 

Yet software giants have seized the recent explosion of technology advancements – such as cloud, predictive analytics, artificial intelligence, machine learning, and automation – to deliver modern, “one size fits all” enterprise resource planning (ERP) systems. Each system promises a wide range of scalable capabilities that can be extended and integrated across the value chain. 

Although comprehensive, these ERP systems are actually a collection of standardized capabilities bundled into a single offering that works best with little to no customization. How can such a monolithic technology support a world of supply chains with unique challenges, goals, and network diversity?

Common Supply Chain Pitfalls Inevitably Emerge   

While most supply chain organizations look to benefit from the acquisition, upgrade, or update of an ERP system, Gartner has estimated that 55% to 75% of all ERP-related initiatives fail to meet expectations. And even if the effort is successful, the function eventually encounters issues ranging from security breaches, go-live delays, and budget overruns, to disrupted operations and data-sharing bottlenecks. 

The limitations of ERP for supply chain may be common, but they are avoidable. A deep partner ecosystem is generally available to help businesses overcome this complexity with a litany of extra services at an additional (and significant) cost. 

Fortunately, it doesn’t have to be this expensive, risky, and inefficient. Companies can expand their search for technology beyond ERP. Doing so helps them define a best-fit strategy for improving supply chain operations and drive more tangible value without the exposure of unnecessary risk and additional complexity. 

For example, organizations can leverage a purpose-built digital supply chain platform that uses data from their existing ERP and matches it to their new data model. This preconfigured integration capability helps ensure a successful and efficient project execution, which typically overperforms a complete migration from a legacy ERP to a more modern one. Companies also have the flexibility to integrate data from many other sources with ease, while maintaining the existing ERP and embedding advancements such as deep artificial intelligence, machine learning, and process automation. 
 
Expanded Options Create Better Transformation Opportunities 

Once business leaders widen their selection scope to include best-of-breed supply chain optimization solutions, the question is no longer about choosing the right ERP vendor. Instead, they are more focused on picking the right building-block solutions and integrating them to optimize their supply chain operations. It becomes apparent that ERP vendors limit their capabilities to serve low maturity supply chains, while the supply chain experts who deliver best-of-breed platforms enable attainment of the highest maturity possible.

Fender, the world’s top maker of stringed instruments and solid-body guitars, is an exceptional example of the power of this extended view. Intending to increase end-to-end visibility and drive measurable global performance, Fender improved its forecast accuracy, inventory control, and supply-flow synchronization. More importantly, it is also minimizing any internal and external constraints on its production capacity. 

After a rapid implementation of Logility’s demand planning, inventory optimization, data management, and life cycle planning solutions, Fender realized an ROI in as little as six months. The flexibility and control of these function-specific solutions allow decision-makers to see how the business changes from one week to the next in the context of its strategic plans. As a result, the company is expanding through organic growth and acquisitions, while meeting the needs of new divisions, products, and markets. 

An Imperative for Supply Chain Transformation 

The debate over ERP and best-of-breed supply chain solutions is certainly still hotly contested – and rightfully so.  

Some risks may be obvious, like any other digital transformation project. But with the proper steps, businesses can realize the advantages of an integrated supply chain management ecosystem without the drawback of custom development and rigid structure of ERP architecture and data. 

Read more about how Fender was able to meet its total supply chain management requirements beyond the limitations of its ERP system here.