The Ariba Network was initially positioned as an e-invoicing solution, SAP Ariba’s answer to existing initiatives like the Tungsten Network. In 2014 / 2015 SAP Ariba introduced Ariba Collaborative Supply Chain (CSC), later rebranded to SAP Ariba Supply Chain Collaboration (SCC). SCC is an extension of the Ariba Network focusing on integration of the suppliers’ logistic operations into the customers’ supply chain.
Proposition for supplier collaboration
With SCC, SAP Ariba created a competitor for another application in the vast SAP portfolio, SAP Supply Network Collaboration (SNC). But where SNC is an on-premise application connecting one customer to multiple vendors, the cloud application SCC provides a network, enabling vendors to connect with multiple vendors.
SAP Ariba has announced that SCC is their future proposition for supplier collaboration; SNC will still be supported until 2025 but will not be extended with new functionality.
At the start the SCC functionality was limited, but as SAP Ariba followed an aggressive growth path to increase functionality, it has now surpassed SNC. The steep growth path was largely facilitated by using the in-house knowledge and experience gained with SNC, when building similar functions in SCC.
The figure below gives an overview of the messages that can be exchanged between buyer and supplier using the Ariba Network.
Collaborate on various processes
These messages enable buyers and suppliers to collaborate on various processes, like:
- Forecast Collaboration: the buyer shares a forecast with the supplier, whom in return can send a commit stating to what extend he can meet the forecast and potential excess capacity available.
- Purchase Order Collaboration: the buyer publishes a purchase order on the Ariba Network. The supplier submits an order confirmation, and when the goods are shipped, a shipping notification.
- Supplier Managed Inventory (SMI): the buyer shares stock and demand information, based on which the suppliers will deliver, in line with agreed service levels.
- Outsourced Manufacturing (subcontracting): supports real-time visibility in progress of the manufacturing process and component stocks at the manufacturing supplier. Also, information on drop shipments from component suppliers can be shared with the manufacturer.
- Quality Inspection Collaboration: only after inspection results are shared by the supplier and approved by the buyer, the supplier can ship the goods.
These are currently supported processes, but, as said before, SAP Ariba is also developing new features. An example is MRP Exception Collaboration in which exceptions (reschedule-in, reschedule-out, cancellation) from the MRP process of the buyer are shared with the supplier. The supplier can indicate to what extent he is able to meet / accept the exceptions.
For one of its customers, McCoy & Partners is involved in the realization of this new function.
Integrate or not?
Integration between the back-end systems of the buyer and Ariba Network is key. With Cloud Integration Gateway (CIG) SAP Ariba offers an out-of-the-box integration layer that can be easily implemented, while still adhering to high security standards.
And, also suppliers can integrate with the Ariba Network (seller integration) using CIG, thus realizing an EDI-like integration with their customers. Seller integration will only be profitable in case the supplier processes a substantial number of documents (>500 per year) through the Ariba Network.
Other options are made available for suppliers with smaller numbers of documents. These suppliers can easily submit individual documents either via the so-called purchase order flip or available work lists, or make use of (mass) upload functionality.
McCoy & Partners
At McCoy & Partners we have an experienced team of functional and technical consultants in SAP and SAP Ariba applications. We do not only have the capabilities to support an end-to-end implementation of SCC, but also have the actual experience.
- We have successfully connected several of our customers to the Ariba Network (buyer integration), and also supported their suppliers in integrating with the Ariba Network (seller integration)
- We have successfully set-up end-to-end processes involving SAP Ariba SCC. The main success factor here was that we not only had full understanding of the SCC proposition, but also fully understood the requirements and challenges this brought to the part of the process executed in the customer applications communicating with the Ariba Network; ERP (SAP ECC and S/4HANA) and IBP (Integrated Business Planning). We not only did the SCC set-up, but also addressed the necessary changes and fine tuning in ERP and IBP, to realize and efficient and effective end-to-end process.
Want to know more about supplier collaboration? Register for our webinar: SAP Ariba Supply Chain Collaboration, April 9th at 16:00.
Think SAP Ariba, Think McCoy