SAP Makes Two Strategic Moves

SAP AG, the 800-pound gorilla in the enterprise resource planning market, launched a couple of initiatives this week that had the software world buzzing.

First, on Apr. 7, SAP began offering a new version of its R/3 client-server based system to meet the needs of the global trade industry. SAP Global Trade, announced in Yokohama, Japan, is based on the requirements of the Japanese sogo shosha, international trading conglomerates that deal in an array of products including chemicals, oil, energy, machinery, textiles, and food.

The software package provides companies with real-time information on their supply chain, enabling them to make better-informed business decisions. Some functions of the system include logistics, profitability management, risk management, and distribution and foreign trade.

The following day, SAP and Federal Express Corp. jointly announced an integrated software product designed to help manufacturers knit their inventory together with shipping. Under a new alliance Fedex will deliver a new shipping and tracking software application built for R/3 users containing real-time package life-cycle information. "SAP and FedEx have many joint customers that will immediately have the benefit of this cooperation," says Paul Wahl, CEO of SAP America, based in Wayne, Pa.

SAP and FedEx are targeting specific industries for the new integrated system, including PCs and peripherals, medical supplies, telecommunications, luxury goods, semiconductors, and auto parts. "Transportation cannot continue to be a separate and divorced portion of the supply chain," says Rohan Champion, vice president of strategy and alliances at FedEx, Memphis, Tenn.

The first customer of the new integrated SAP/FedEx system is Hewlett-Packard Co.'s Medical Products Group. "For our R/3 users, the solution will simplify every related process step from order entry through shipment and tracking by providing a tight integration with FedEx," says Wade Thompson, an HP distribution process team member. "That, ultimately, should help us serve our medical customers better."

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