Monday, October 26, 2009

SAP Event Management, EDI and Cloud Computing

SAP Event Management (SAP EM) is a powerful solution that I believe will be increasingly popular as companies continue the trend of globalization and employing extended multi-enterprise supply chains and contract manufacturers. Here is a brief description of SAP EM that comes from SAP's wiki:

With the SAP® Event Management application your company can monitor and manage events across your distributed processes involving partners, inventories and assets. It captures events from your system and your partners' systems, analyzes them against it's predefined plan and alerts or workflows a response to the required people to react when deviations are found. It comes integrated with SAP® NetWeaver BI and SAP® Auto-Id Infrastructure (RFID enabled scenarios).

RFID and auto-id solutions using both static systems and mobile handheld computers collect data that are used to report on the shipping status and assembly line progress of various components. This data is fed into SAP EM via EDI or B2B data exchanges.

Multi-enterprise supply chains are inherently risky as you add more variables that can go wrong. Each participant in a multi-enterprise supply chain has its own supply chain and priorities that can become a dependency to your project's success. Include cultural issues, different languages, geo-political uncertainties, taxes, currency exchange rates, laws and regulations to the mix and you have a recipe for excitement and drama.

The management of an extended and multi-enterprise supply chain requires a much higher and advanced level of automation, visibility and management than ever before. SAP EM is a solution well positioned for this role.

I see extended multi-enterprise supply chains as nearly an entity in itself. It is a shared community effort, an organism with many different living parts, a process that requires cooperation from all parties to be successful. In many cases, I think it would be better if SAP EM were a hosted solution in a cloud computing environment that supported the extended multi-enterprise supply chain community, rather than being owned by one particular participant in the process.

Let's now discuss for a moment the role EDI and B2B messages plays in the SAP EM environment. All participants in this extended multi-enterprise supply chain need to be sharing data that informs the other participants as to the progress, schedules and status of their segment of the supply chain process. They need to receive orders, acknowledge the order, order parts, receive parts, manufacture products, ship products, provide advanced shipping notices, invoice etc. This is where EDI and B2B messages come in.

EDI is structured data that is documented in a standardized manner and shared between trading partners. This structured data can be called EDI or B2B (business-to-business) data exchanges. I will use the term EDI to cover both areas. This EDI data is what the participants of the extended multi-enterprise supply chain (I will make up an acronym - EMESC) send to the SAP EM to communicate status and other business data necessary for the supply chain's success.

In the same manner as SAP EM seems to be best suited for a SaaS model in a cloud computing environment because it is a shared process by a community of members, I think the EDI/B2B data exchanges should also be an extension of the EMESC. It does not seem to make sense to have one of the many participants be responsible for the integration, development, operations and support of all participant's EDI exchanges. This responsibility should be owned by the same SaaS provider that supports the hosted SAP EM in a cloud computing environment.

I find the entire concept of SAP Event Management as a solution for tracking the entire supply chain fascinating. It has the same capability to alter the landscape of traditional supply chain management as does Business Network Transformation or SAP EDI in a cloud.

Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.


  1. Well I have followed your articles for a while and I feel these topics are really the future for SAP Supply chain.

    I have few interesting experiencing implementing the SAP Extended Warehouse management- Servicing on Mobile also I have lot of experience working onsite for some clients on SAP AutoID and event management integration with SAP Business Objects. I wish to share them with you in detail sometime soon.
    Here is my linked in Profile link.

    You are anyways there in my Connections.

  2. Kevin,
    Thank you for always picking great topics that are not covered well enough anywhere else.
    I am implementing SAP's Event Management software since its beginning in 2000/2001 and it's still one of SAP's best kept secrets (that's what SAP and others are saying about EM).
    This module can be very powerful, no matter if used to monitor assets (like i.e. trucks, railcars, spare parts), handling units (i.e. pallets, containers), products and their documents (i.e. Shipments, Deliveries, Bill of Ladings, Purchase Orders) in all kinds of different scenarios (i.e. Purchasing, Manufacturing, Delivery, Returns). EM can connect all parties that are involved in a business process (suppliers, manufacturers, customers, carriers, brokers, etc.) and support their collaboration by increasing the visibility of the data related to that process. It comes with a web frontend to enable everybody with access rights and internet access to report and retrieve data. When EM is integrated with ERP, Planning, Data Analysis and/or RFID software it is possible to create a collaborative real-time monitoring tool to make "management-by-exception" a reality.
    Thank you again, Kevin, for writing about Event Management.
    I am looking forward to seeing more companies discover its unique capabilites.
    Please don't hesitate to contact me for any questions.

  3. All the comments are truely on mark. Having been there and done couple of implementations, the capabilities of SAP EM really gives supply chain visibility true dimensions.

    What makes it more interesting is the Service Oriented Architecture (SOA) which SAP offers as ES web services offering for the Process tracking towards SaaS.

    Would be great to hear from people on their SCEM implementation experiences....



  4. Kevin,
    I have always been interested in the intergation between EDI and SAP EM. It just makes plain sense...
    I have done a few IDoc integrations with SAP EM and it completes the picture for the solution. e.g. An outbound PO has only been sent to the vendor when a 997 has functionally acknolwedged it so why not tap in to the IDoc status update to raise the event "PO received by vendor"... It's a great tool and yes, it is still SAP's best kept secret, a term I coined last year during several talks on SAP EM.

    For more info on SAP EM I have now published a book on the topic. See for more details.