SAP’s Manufacturing Network debuted this week with a platform designed to let manufacturers and their services providers collaborate on product design, production and procurement.

A new collaboration and procurement network launched this week for manufacturers.

The Manufacturing Network from business operations software provider SAP SE was launched to address the growing need of manufacturers to depend more on widely dispersed networks of services including 3D-printing, original equipment manufacturing and technical certifications, SAP says. The network integrates SAP’s suite of cloud-based distributed manufacturing applications with the procurement services of SAP’s Ariba Network.

The digitally enabled, ‘thinking’ supply chain is a critical journey to take for manufacturers.
Simon Ellis, vice president, supply chain
IDC Manufacturing Insights

As SAP sees it, companies can use the Manufacturing Network to “collaborate in new and innovative ways that transform manufacturing,” by collaborating across the entire manufacturing process—from design, quality control and part production through the procurement process.

“The digitally enabled, ‘thinking’ supply chain is a critical journey to take for manufacturers, because while efficiency and effectiveness gains will enable returns on investment in the short term, new ways of doing business and the new capabilities they enable will be essential for the future,” says Simon Ellis, vice president, supply chain, for research and advisor firm IDC Manufacturing Insights. “In leveraging domain specific networks and the technologies underlying them to drive an end-to-end process, manufacturers can drive better efficiency in their supply chains and use that to improve the customer experience.”

The ways companies can collaborate on the Manufacturing Network include:

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  • Collaborate on design changes;
  • Link design discussions to request for price quotations;
  • Obtain prices from one or more suppliers and initiate the purchasing process;
  • Share data and production processes the purchaser requires to approve part production;
  • Coordinate with all parts suppliers any changes in the approved manufacturing process.

By collaborating on product design and required production standards, individual suppliers can use the network to display technical skills and capabilities to differentiate from other suppliers, SAP says. In addition, suppliers participating in design collaboration can help to cut operating costs by figuring out more efficient manufacturing processes.

Duncan Jones, vice president and principal analyst covering procurement for Forrester Research Inc., says the new network from SAP serves an important trend but may not be the best option for all industries. “SAP Ariba wants to extend its solution from transactional document-based collaboration, mainly for indirect product categories, to the more intimate types of collaboration you get in direct,” he says, referring to the differences between “indirect” goods like materials and equipment used to maintain and operate factories, and the “direct” goods companies incorporate into the products they sell to customers.

“But it’s a big leap from sending purchase orders and invoices—whether via EDI, email or Dropbox-like upload/download services—to collaboration on product design, supply chain planning, quality improvement, etc.,” Jones says. “It’s a great ambition, but the solutions they develop for one high tech manufacturer won’t transfer easily to other industries. Vertical industry specialists such as Exostar (aerospace and defense), Bamboo Rose (apparel and other fashion items) and ICIX (food and beverage) may be better for customers and suppliers in those markets.”

In addition, he says that vendors of product lifecycle management software are out to facilitate collaboration in the product design and sourcing processes. There are also new initiatives, such as shipping company Maersk’s project with IBM Corp. to use blockchain to track shipment progress, he adds. Blockchain technology is an internet-based digital ledger system designed to enable large numbers of participants to maintain secure records of transactions.

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