August 4, 2005

"If Wal-Mart happens to be running an ad on a certain date and if they need products on shelves during or after the ad has run, Hasbro, a large toy supplier for Wal-Mart needs to know ahead of time that it might have an issue," says David Adams, business integration manager for Hasbro.

That's just one part of the equation. After learning that there may be a supply chain issue, the goal is to reduce the time it takes to react.

For Hasbro, that's a job for business process management (BPM) software, which it gets from vendor Lombardi and runs atop its enterprise resource planning (ERP) system from SAP.

This is the way, for example, that the RFQ process works at Hasbro. A customer will initiate the process, either via a human signal or through electronic data interchange (EDI) or other system-to-system connectivity.

The signal is registered in SAP and Lombardi picks up the baton from there, acting from configurable rules (including date of request, needed speed of response, order size, supplier location, and so forth) to push the process down Hasbro's supply chain.

For example, one of the steps in the RFQ process could be for a Hasbro planner to intervene to manage an exception. In that case, Lombardi would present the planner with a user interface to do so and then carry on as usual, pushing the next steps back out to, say, a supplier in Hong Kong (Hasbro has no manufacturing facilities of its own in Asia, so its relationships with suppliers there are especially important).

This is where BPM adds value to ERP. "There's no reason for a planner or someone in Hong Kong to manually update the ERP system," says Adams.

That's the niche Lombardi is trying to occupy. Lombardi CEO Rod Favaron says that Hasbro has been known to change and improve its processes five or six times a year. "It's way too hard to modify an ERP system" that often, and on an ad hoc basis that a niche solution can more nimbly support, he says.

"It's this nice, free-flowing process," says Adams, describing the way in which Lombardi and SAP work together.

"Suppliers tell us [through Lombardi] when they can deliver or offer an alternative delivery schedule. We go back to the customer with the data, and hopefully they come back and give us a purchase order [in SAP]."

SAP picks up the transactional load while Lombardi handles BPM across the Hasbro supply chain, but in effect they behave as a single system, even when exceptions are involved.

"Lombardi might notify someone at Hasbro to step into the business process and take action," explains Adams. "We take an action and the outcome [e.g. an alternative date] flows right through to SAP. We let the customer know they'll have product on the date requested."

The bottom line is that BPM is an important enabler of Hasbro's ultimate goal for its relationships with customers. "Service is number one," concludes Adams.

Source: Line 56