16th European Symposium on Computer Aided Process Engineering and 9th International Symposium on Process Systems Engineering W. Marquardt, C. Pantelides (Editors) © 2006 Published by Elsevier B.V.
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Integration of supply chain management and logistics: development of an electronic data interchange for SAP servers Laureano Jiméneza and Raúl Muñozb a
Department of Chemical Engineering, University of Barcelona, Martí i Franquès 1-10, 08028-Barcelona, Spain. E-mail:
[email protected] b Qualitas Information Systems, Diagonal 605, 08028-Barcelona, Spain. E-mail:
[email protected]
Abstract In the global chemical industry it is of crucial importance to keep an up-to-date knowledge map of customers and providers in order to minimize supply chain inefficiencies. ERP (Enterprise Resource Planning) involves coordinating and integrating applications both, within and among companies. In this way, there is a centralized database to manage all the corporate information (financial, production or inventory). This paper describes the architecture of the integrate application and the development of the EBI (Electronic Business Integrator) to connect the Elemica network and SAP (Systems, Applications and Products in Data Processing) servers, market leader in this area. EBI is an integration tool of business applications (Enterprise Application Integration, EAI) based in the ESB technology (Enterprise Service Bus), oriented to the intra and inter company business processes. Elemica is a global network of industrial sectors, including worldwide chemical and pharmaceutical companies, created to expand ERP, which key advantages are connectivity, neutrality and security. SAP is an ERP platform software widely use to have an integrated overview of the business and help to take strategic decisions. The system performance was tested with different scenarios, all including logistic processes: integration of filial companies, relationships of different companies operating ant the same site and integration of pharmaceutical companies. Keywords: supply chain management; enterprise resource planning, electronic data interchange; electronic business integrator.
1. Introduction Most companies had to face the integration of several applications developed at different moments in the departments of their companies. Sooner or later, companies had to achieve the amalgamation of those applications with a minimum impact on their performance. To overcome the problems associated and facilitate scalability, the socalled soft integration of applications is a common approach. In this way, the independence of the different applications is maximized thought the use of the integration technologies that had appear in the last decade. Those applications had received a lot of effort, as they cover the core aspect for B2B (Business to Business), B2C (Business to Consumer) or EAI (Enterprise Application Integration). ERP (Enterprise Resource Planning) is used to supervise the supply chain management, as it allows a centralized database for corporate data that can be managed concurrently
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(store, consult, analyze, update and check for inconsistencies). In this way, there is a unique application to manage information, logistics and finances with all customers, from suppliers to manufacturers, including product planning, purchasing, maintaining inventories, interacting with suppliers, providing customer service and tracking orders. ERP can also include additional application modules, as human resources features. In this way, it is clear that ERP involves coordinating and integrating both within and among companies. 1.1. Systems, Applications and Products in Data Processing (SAP) Virtually all worldwide chemical companies use an ERP system, being SAP (Systems, Applications and Products in Data Processing) the market leader (SAP, 2006). SAP, or any other ERP system, supports the core business processes of many industrial sectors. For the chemical industry, SAP includes the commercial processes (demand and production planning, sales order processing), the manufacturing processes (production and procurement), administration processes (revenue and cost controlling), dangerous goods management, and product safety. As SAP covers a wide range of industrial sectors, there is no generic industry solution, although some of the modules can be reused. The advantage of SAP is that they help to inform companies about their most important areas in a way that they can make more informed (and therefore, better), strategic decisions. 1.2. Elemica Elemica (Elemica, 2006) is a global network for buyers and sellers looking for an ecommerce solution to improve supply chain efficiencies. Elemica was developed to expand ERP in many industrial sectors, including the chemical, pharmaceutical and related suppliers and customers. Elemica focus on three key aspects that are a requisite for the users: connectivity (browser-based ERP), neutrality (founded by 22 leader worldwide industrial partners) and security (confidentiality, encryption data). Their leading position has driven to develop standards for the chemical industry to develop ERP connectivity. The network objective is that this combination of advantages will attract additional buyers and sellers, resulting in a broad collection of potential connections for new customers and suppliers. The aim of Elemica is to be used as a SPOC (Single Point of Contact) for all chemical sectors (petrochemicals, inorganic, intermediates…).
2. Process integration Figure 1 illustrates the differences between EAI and B2B, depending if the applications to be connected/integrated are inside the organization (EAI) or outside the corporation (B2B). Companies provide their applications following different formats (xml, EDI, ebXML, etc…), but do not include the interface to link these applications, and thus the presence of a middleware is required. The level of transformation, routing and the applications of rules to format and move the information between applications has to follow certain standards that are highly dependent of the application (and thus, very time consuming and routinely work). 2.1. Electronic Data Interchange (EDI) The EDI (Electronic Data Interchange) is a procedure for companies and customers to exchange any type of documents and data (sales, finances, accounting, inventory…). EDI extracts data from the different applications used, manages this information (formatting and routing), and therefore if replaces paper order by automatically generated electronic messages between applications (Cash and Konsynski, 1985).
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Using EDI, the information interchanged is very widely, covering from sales (tracking back any purchase order), to financing and accountability (notifications of payments and rejected demands for payment) passing thought inventory control (product planning). The objectives of all EDI systems is to improve the efficiency of the company by minimizing some of the most common problems associated to the supply chain management (out of stock, low inventories, achieve a certain product rotation…). 2.2. Electronic Business Integrator (EBI) To amalgamate processes, within and among companies, the EBI (Electronic Business Integrator) performs the integration at a higher level. To achieve this, the system architecture requires a message broker that controls and administrates the information (Figure 2), several adapters to communicate between the applications using the standard protocols (ftp, share files, MQseries, smtp/pop, http...) and the format required by the external applications (xml, EDIfact, text, database…). The EBI message broker is able to integrate different middleware, databases and applications. The business decisions is ruled using a decision tree, developed by the EBI manager, that is activated by certain events, and then introduced in the expert system that structure the actions to be taken. In this way, the EBI can access on the one hand, the SAP, where the corporate database is installed, and, on the other, Elemica network.
EAI
B2B
Middleware
B2B middleware
Figure 1. Process integration for EAI (Enterprise Application Integration) and B2B (Business to Business).
Figure 2. Architecture of the EBI (Electronic Business Integrator).
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Suppliers
EBI adapte r
EBI message broker
Figure 3. Architecture of the integrated application that manages the purchase orders and delivery of products.
The cases developed in this paper were implemented using EBI, developed by EDICOM to integrate EBI and SAP. The overall structure of the application developed is shown in Figure 3. The system has two external modules: Elemica and SAP. The process, transparent to the user, is performed using EBI and the software tool developed. In this way, many different users can consult many companies connected to the Elemica network, in order to find the best alternative to purchase a certain product. 2.3. Tool requirements The architecture developed allows synchronous applications (i. e., a unique event starts the local and the remote application, thus shortening the timing for the commercial transactions). The capabilities of the tool developed have to cope with the following aspects: • Reliability: the communications among the applications had to follow standard protocols, with special emphasis to management the abnormal situations when data are lost. The option selected is the storage of all data in a persistent memory (in this case, if there is any problem in the transmission of the data, there is no need to generate the data again). All communications are based in secure web services (secure socket layers or similar). • Efficiency and scalability: the system has to be designed specifically to be able to manage a high amount of information concurrently. The work is distributed among different servers, to improve reliability, redundancy, safety and scalability. To achieve this objectives simultaneously, the connection are developed using SLA (Service Level Agreement). • Diagnostic of problems: all the steps of the process are registered and therefore, if any problem occurs, the audit procedure is simplified, as any problem can be tracked easily. • Management and monitoring: the centralized environment developed favors the training and the learning curve of the users. In addition, the maintenance of the system is easier.
3. Case studies The cases developed had some common aspects, all of the related with real-time information available (purchase orders, confirmations of orders, good outputs…). The cases were selected in order to cover a wide range of the casuistic that can be found in the industry and to show the capabilities of the tool developed. All the scenarios tested to verify the advantages of the adapter developed are related with logistic processes. The three scenarios selected are:
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• Relationship of different companies operating at the same site that share some resources (utilities, commodities…) and had a number of material flows that had to be included in the invoices, delivery notes, orders, etc... • Integration of different filial companies: this case is similar to the previous, except that the transport between the sites had to be considered. • Integration of pharmaceutical companies, providers and customers. In this case, the number of products and customers is very high, while there are just a few providers for each raw material. 3.1. EBI application adapter Each component or application needs an adaptor to link its input and output with the BUS (a BUS is any subsystem that transfers power or data between different computer components). The adaptor, called EBI application adapter, allows: • Transform the information from the application data into the desired output format. • Introduce and retrieve data from the BUS thought the EBI message broker. The internal communications of the input adapter with the application is done following one of the standard protocols (ftp, shared files, MQseries, smtp/pop, http...), and according to the format required by the internal application (xml, EDIFACT, txt, database…). The output of the adapter communicates with the EBI message broker using web services. The SAP adapter developed was built in Delphi and C++ (Delphi, 2006). The use of this adapter involves several customizations of the SAP system. It is necessary to use the ALE (Application Link Enable) layer in order to connect both systems, SAP and EBI through the adapter developed. The connection was established using RFC (Remote Function Control) technology. A RFC is a document describing the standards that allows any transfer of information in any type of computer network (i. e. tcp/ip). The RCF used is the API (Application Programming Interface) provided by SAP and described in RFC API (2006). 3.1.1. EBI message broker The most common ways to link EBI with any other application (Figure 4) are: • EBI provides two generic adaptors (EBI application adapter and EBI web adapter) to link any web application with the EBI message broker. • Developing adaptors to link the specific database or application. The adaptors can be reused, without any need to develop new code, as they hide the complexity of the task by transforming (and formatting) the information in a transparent way to the user.
Application
EBI message broker
Application
Transformation of messages Processing rules
Adapter
API
Intelligent routing
Figure 4. Integration of the message broker through API (or other types of adapters).
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Adapter Output - BUS data - BUS event
- Application data - Application event
BUS
Input
Application
Transformation
Figure 5. EDICOM system architecture for the application server.
3.1.2. SAP customization There is no general application, and therefore all ERP systems had to be customized. The intermediate document exchanged between any application, are called IDoc. An Idoc is a standard structure of data for Electronic Data Interchange (EDI) between application programs written for SAP or between SAP applications and external programs (Figure 5). IDocs are used for asynchronous transactions: each IDoc generated exists as a self-contained text file that can be transmitted to the requesting workstation without connecting to the central database. In this case, the messages are managed by the IDOC_OUTPUT_MESTYP (i. e. IDOC_OUTPUT_ORDERS, IDOC_OUTPUT_BLAORD, etc…).
4. Conclusions Integrating EDI and SAP the supply chain management of companies with a high number of invoices is improved and the manpower is reduced, as many validations are performed automatically and mistakes/inconsistencies are detected easily. In addition, the cost of maintenance of the different computer applications is reduced. As a consequence, the efficiency of the operation is increased and a higher capacity to adapt to changes is experienced. Also, as the adaptor is developed according to the SAP and Elemica standards, it can be reused with a low cost (provided that the user has already a SAP to manage their business) and without any transaction cost. In this way, the system works following the principle “connect once, connect to all”. Moreover, it is important to know that SMEs are reluctant to use this technology, as the effort required to perform all the standardization is not covered by the revenues achieved, as typically the SMEs have many customers, and more effort is required to facilitate their inclusion into these initiatives.
References Cash, J., Konsynski, B. 1985, Harvard Business Review, 63 (2), 134-142. Edicom web page, available at http://www.edicomgroup.com/en/index.htm (acccessed February 2006). Elemica web page, available at http://www.elemica.com/ (acccessed February 2006). Delphi web page, available at http://www.borland.com/us/products/delphi/index.html (acccessed February 2006). SAP web page, available at http://www.sap.com/industries/chemicals (acccessed February 2006). Remote Function Control (RFC) Application Programming Interface (API) for Systems, Applications and Products in Data Processing (SAP) web page, available at http://help.sap.com/saphelp_46c/helpdata/en/22/04287a488911d189490000e829fbbd/frameset .htm (acccessed February 2006).
