For manufacturers moving away from SAP Supply Network Collaboration (SNC), the question isn’t simply about what replaces SNC. The bigger question is: what should direct material supplier collaboration look like going forward?
The supply chain environment has changed dramatically. Supply networks are more dynamic than ever with demand, supply constraints and delivery commitments constantly changing. Product lifecycles are getting shorter, while engineering changes, deviations and quality issues create constant disruption to customer commitments and order fulfillment.
What was once relatively steady-state, transaction- and message-based collaboration has become the continuous management of evolving and dynamic situations with suppliers.
Traditional Transaction- and Message-based Collaboration is not working for Direct Materials
Traditional supplier collaboration was designed around the exchange of structured messages for purchase orders, confirmations, ASNs and forecasts using EDI, RosettaNet and IDocs in the case of SAP SNC.
That works well when business follows the expected sequence and both sides agree to what is requested, proposed and promised. But increasingly, a significant portion of supplier collaboration is about managing changes and deviations from what was originally proposed, agreed upon and promised.
A supplier can’t meet a requested date. A component becomes constrained. Demand changes. A product change notice for a component affects a customer order. Inventory at a subcontractor doesn’t match expectations. A quality issue threatens production.
These events break sequence of transactions and messages on which traditional supplier collaboration was built.
Below highlights the Life of a Single Purchase Order and the challenges it can create for suppliers and customers alike.
The transaction may still be in SAP and messages may still flow through collaboration portals and EDI, but the actual collaboration quickly moves to email, spreadsheets, phone calls and meetings.
From Transactions and Messages to Situational Awareness
The answer is to move beyond exchanging transactions and messages and establish shared situational awareness between buyers and suppliers — one that works for proposed and expected, as well as for the changes, deviations and exceptions that are increasingly common in direct materials collaboration.
A line-split proposal for a PO, for example, is not just another supplier message. It should be evaluated against the surrounding situation: available inventory, production requirements, other incoming supply, customer commitments, quality status and possible alternatives.
Buyers and suppliers need to understand not only what happened, but what it means, what is at risk and what needs to happen next.
ZFlow brings the surrounding business context to transactions and messages so both sides of the supply chain can understand the situation, make decisions and coordinate the response.
Direct Material Supplier Collaboration is Much Bigger than PO Collaboration and Subcontracting
The supplier relationship doesn’t begin when a purchase order is issued and end when material is received.
Direct materials collaboration can begin much earlier with engineering, specifications, testing, qualification and production readiness. It continues through planning, purchase orders, VMI, subcontracting and fulfillment — and extends into quality, performance, cost and continuous improvement.
Modern supplier collaboration needs to connect and support the broader relationship, not just automate individual transactions within it.
ZFlow – A Collaboration and Orchestration Layer for Direct Material Collaboration
ZFlow provides the common orchestration layer where suppliers and internal teams can work together across this broader relationship, while SAP remains the transactional system of record.
Instead of separating supplier collaboration across multiple applications, ZFlow provides a common environment for purchase order collaboration, vendor-managed inventory, subcontracting, ASN and receipt processes, supplier development, PPAP, supplier quality, performance assessment, and cost variance — integrated directly with SAP ECC or S/4HANA.
Simplifying Supplier Onboarding and Engagement
Don’t let Direct Materials Supplier Collaboration Be a Tax or a Toll Road
Purchase-order-value and transaction-volume-based pricing models used by traditional procurement and supplier collaboration solutions are poorly aligned with the realities of direct materials collaboration.
Why should your supplier collaboration solution take a larger toll simply because you purchase more from your suppliers or the value of those purchases increases? Transaction-value and transaction-volume-based pricing effectively places a tax on collaboration—one that grows with your business and directly impacts margins.
The value of supplier collaboration comes from supporting change, better decisions and better execution, not from the dollar value of transactions passing through the platform.
Don’t Replace SAP SNC with Another SNC like solution
Moving away from SAP SNC creates an opportunity to reimagine what direct materials supplier collaboration needs to become to support supply chain excellence.
The path forward is not another transaction- and message-oriented collaboration platform. Direct materials collaboration needs to support both predictable processes and continuously evolving situations, exceptions and requirements.
A modern approach should provide:
- A shared, situationally aware orchestration space. Suppliers and cross-functional internal teams — buyers, planners, sourcing, engineering, quality and operations — should work from a shared understanding of what is happening, what is at risk and what needs to happen next.
- Collaboration across the full supplier relationship. The collaboration surface should extend beyond POs, confirmations and subcontracting to engineering, production readiness, planning, fulfillment, quality, performance, cost and continuous improvement.
- Economics that don’t tax collaboration. The cost of the platform shouldn’t be driven by the value or volume of transactions exchanged between buying organizations and their suppliers.
- Deep integration with the enterprise landscape. Collaboration should connect directly with SAP ECC, S/4HANA, planning systems and other enterprise applications, keeping transactions and decisions synchronized with the systems that execute them.
- The flexibility to support what comes next. Every supply chain has unique requirements, and new collaboration needs will continue to emerge. Organizations should be able to configure and introduce new supplier workflows without waiting for another specialized application or product module.
Replacing SAP SNC shouldn’t mean recreating SNC somewhere else. It should be an opportunity to build a more connected, situationally aware and adaptable way of working with direct materials suppliers.
What Does Moving from SAP SNC to ZFlow Look Like?
ZFlow is designed for a phased, low-risk transition from SAP SNC. Prebuilt integration with SAP helps accelerate time to value, while configurable workflows can be adapted to your unique supplier collaboration requirements. There is no need for a big-bang replacement. Start with the scenarios that are most important to your business, such as PO Collaboration, and progressively add VMI, subcontracting, quality, engineering and other supplier collaboration processes as your internal teams and suppliers are ready. Resilient integration and orchestration help keep collaboration processes moving even when individual systems or interfaces experience failures.
Case Studies
Learn how a leading high-tech manufacturer uses ZFlow to support contract manufacturer collaboration