Feature

Despite challenges, SAP supplier network aims to ease compliance woes

SAP's new cloud-based Product Stewardship Network is helping one manufacturing company manage environmental reporting regulations related to the use of hazardous materials in its supply chain, company officials said.

Weidmüller Interface GmbH & Co., a global manufacturer of industrial electronic components headquartered in Germany, says the online network is set to become a central component of its strategy for dealing with tough government mandates like REACH, a set of European Union regulations that governs the management and safe use of chemicals.

The Product Stewardship Network, which was unveiled last fall, allows product manufacturers and their supply chain partners to come together to collect and manage product sustainability data and other information. Manufacturers increasingly use sustainability data to address customer requirements and comply with regulations such as REACH, according to SAP.

For example, discrete producers of electronics like Weidmüller can potentially use the online community to work with suppliers and ensure that banned substances are excluded from manufacturing processes. Manufacturers can also use the system to help make sure that the proper declarations are made before sending products to another country.

Weidmüller, which worked with SAP to create the virtual community, is in the process of growing the number of suppliers it links to within the network. "We are at the beginning of using it," said Torger Trenner, Weidmüller's environmental manager for product-related issues, "but it [will take some time] to roll it out to our suppliers and to our customers."

Currently, more than 30 companies belong to the fledgling network, according to SAP.

The process of building up a solid member base for the Product Stewardship Network will be challenging because many suppliers are reluctant to share information at first.

"Some suppliers are argumentative," Trenner said. "It is a lot of effort to ask them for information. [They say] 'There’s another company that wants information.' This is a big problem [in general for anyone] in the whole supply chain."

But with the new regulations in place and suppliers increasingly in need of information from one another, Trenner expects negative attitudes toward information sharing to change over time. Eventually, he predicts, even those suppliers dragging their feet will join.

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"Everybody who wants this information can join this platform," he said. "If they upload material declarations to the [network], they only have to do it one time."

Those same challenges in onboarding new suppliers are something customers who use other collaborative tools such as the SAP Supply Network Collaboration (SNC) have expressed. SAP SNC is a Web-based portal that allows supply chains to share information about forecasts, advanced shipping notices, purchase orders, schedules and payment status.

There are three versions of the Product Stewardship Network, according to Scott Bolick, vice president of sustainability strategy at SAP. There is a more limited free version, and two paid versions. The free version includes basic functionality around sharing declarations. The professional edition allows for higher levels of efficiency through capabilities like mass uploads/downloads and analytics. The enterprise edition offers the highest levels of automation and integration into a company's EHSM (environmental health and safety management) system or other PLM/compliance solutions and offers the direct import of regulatory content.

"Once you post the declaration for a given product or a given component, you can decide whether to do that for a select group of suppliers and customers, or allow anyone on the network to share that information," Bolick said. "It enables that 'many to many' declaration sharing."

SAP also plans to unveil functionality that will allow users of the network to search and discover suppliers according to product. The portal will also be integrated with Ariba, a massive network of buyers and sellers that SAP purchased last year for $4.3 billion.


This was first published in February 2013

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