SAP/BiosGroup TEAM TO SOLVE SUPPLY NETWORK COMPLEXITY

SAP announced enhancement of mySAP Supply Chain Management (mySAP SCM) to manage adaptive supply chain networks through use of new intelligent agent technology.

Adaptive supply networks are an evolution of supply chains and will uniquely combine global visibility, event management, adaptive planning and execution, and dynamic collaboration. An adaptive supply network will provide business partner integration and dynamic collaboration through portals and exchanges. The new SAP Event Management -- a component of mySAP SCM -- enables global visibility through real-time event coordination and management across a network. In response to these events, intelligent agents will automatically trigger a variety of problem resolution techniques resulting in the optimization of the adaptive supply network. Intelligent agents are the next stage of adaptive planning and execution. The announcement was made at SAPPHIRE, SAP's international e-business conference.

SAP and BiosGroup Inc will team to define and create these adaptive Intelligent Agents. BiosGroup is a consulting and software group that uses complexity science and agent-based concepts to provide technology to create adaptive supply networks. SAP intends to release the first version of intelligent agents during the second quarter of 2002.

The adaptive concept replaces rigid linear supply chains with adaptive supply networks that will result in smarter, faster and more effective management of cross-company manufacturing and logistics to achieve competitive advantage. By continuously gathering demand and supply data from all points within the network and integrating this data into a cohesive environment, the system can compress time passing between demand events and the appropriate supply response. Using an organization of individual intelligent agents, SAP will help firms to build adaptive supply networks flexible enough to sense and respond to changes in their systems' environment.

"The ultimate goal is to create a truly adaptive supply network that can sense and respond to rapidly evolving conditions so that partners can intelligently cooperate to keep demand and supply in close alignment and efficiently coordinate the fulfillment process," said Claus Heinrich, member of the SAP AG executive board. "We believe that intelligent agents will be key to resolving the increasing challenges companies are faced with in participating and managing global adaptive supply networks."

In practice, adaptive supply networks will be able to detect changes in demand behavior at their origin and communicate in real time through the network. Event Management and intelligent agents monitor and coordinate the whole spectrum of supply network activities from sourcing components, to assembly and manufacture of products, to final delivery in order to satisfy customer expectations and achieve high profitability.

"Competition is increasingly becoming supply chain against supply chain," said Barry Wilderman, senior vice president at META Group Inc. "Supply chains need to take into account the increasingly interconnected nature of global business. Current supply chains fall short of expectations because they deal only with isolated parts of the network: The sequential steps may be optimized, but these are not extended across the entire network. SAP and BiosGroup share an ambitious vision that redefines static, linear chains into adaptive supply networks that should provide significant value for users of the system."

"SAP's supply management capabilities and BiosGroup's leading-edge agent-based technology are a perfect fit to make adaptive supply networks a reality," said Dr. Stuart Kauffman, founding general partner and chief scientific officer of BiosGroup. "The supply network of the future will closely resemble complex adaptive systems, where multiple independent agents make local decisions leading to complex interactions. As we have seen from our work with clients like Procter & Gamble Co, intelligent agent technology can reduce out-of-stocks and excess inventory by as much as 75 percent."

The New Elements of the Adaptive Supply Chain Network Solution

Event Management

SAP Event Management with mySAP SCM enables an adaptive network by monitoring and responding to events and processes across the extended value chain. With Supply Chain Event Management, a supply network can be more responsive to shifts along the network by screening out nonproblematic events and triggering automated responses to routine problems, so that employees can focus on value-added activities. Working to preset rules or benchmarks, the applications can respond to process exceptions by running simulations of various resolution scenarios, automatically taking control of the network or sending out alerts to instigate manual intervention.

Intelligent Software Agents

Agent software at nodes within the network communicates between SAP Event Management and other systems regarding status and exception conditions. Internal network rules -- tailored by industry -- determine how the agent software responds and communicates with the broader supply network using specialized agents through an exchange or peer-to-peer links. The agents amass knowledge based on the experience of the network, leading to an increased ability for the agent to predict likely exception situations and automatically implement an efficient response. When supply network anomalies occur that the agents cannot automatically resolve, information is fed to simulation analytics that create alternative solutions from which decision makers can choose.

About BiosGroup

Co-founded in 1996 by Cap Gemini Ernst & Young and Dr. Stuart Kauffman, BiosGroup is the world's leading provider of consulting and software solutions that apply complexity science to a range of commercial, strategic and tactical areas, including supply chain management, e-procurement, risk management and decision support. BiosGroup customers are global 1000 companies and government agencies, including Ford Motor Company, Honda, Invensys, The Nasdaq Stock Market, Procter & Gamble, Societe Generale, Southwest Airlines, Temple-Inland, Unilever, and United Airlines. BiosGroup investors include Cap Gemini Ernst & Young, Procter & Gamble, Ford Venture Capital, BiosGroup officers, employees and Fellows, and the Brookings Institution. BiosGroup headquarters are located in Santa Fe, N.M., and the company has offices in Boston, Denver, London and Paris. Additional information about BiosGroup can be found at www.biosgroup.com/main.html.

About SAP

SAP is a leading provider of e-business software solutions. Through the mySAP.com e-business platform, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. Today, more than 13,500 companies in over 120 countries run more than 30,000 installations of SAP software. With subsidiaries in over 50 countries. Additional information can be found at www.sap.com.

Contact SAP AG, Gerhard Rickes, +49 6227 7-44217, press@sap.com or SAP America Inc, Bill Wohl, 610-661-3311, william.wohl@sap.com.