Supply Chain Innovation Driving Operational Improvements

Transcription

1 Supply Chai Iovatio Drivig Operatioal Improvemets With global markets showig sigs of growth, compaies are lookig to reduce costs ad improve product availability by upgradig their capabilities for employees, parters ad customers alike. A exclusive survey ad research report from Bloomberg Busiessweek Research Services Bloomberg Busiessweek Research Services 1

2 Table of Cotets Methodology Executive Summary Itroductio First ad Foremost, Forecastig Actual Deploymets Lag Somewhat The Future of Mobile Device Access Aalytics Must Become More Predictive Summary Sposor s Statemet: SAP s Roadmap to the Ultimate i Supply Chai Iovatio Real Time Copyright ad Disclaimer Notices Bloomberg Busiessweek does ot make ay guaratees or warraties as to the accuracy or completeess of this report. Bloomberg Busiessweek shall ot be liable to the user or ayoe else for ay iaccuracy, error or omissio, regardless of cause, or for ay damages resultig therefrom. I o evet will Bloomberg Busiessweek or other compaies or third-party licesors be liable for ay idirect, special or cosequetial damages, icludig but ot limited to lost time, lost moey, lost profits or lost good will, whether i cotract, tort, strict liability or otherwise, ad whether or ot such damages are foresee or uforesee with respect to ay use of this documet. This documet, or ay portio thereof, may ot be reproduced, trasmitted, itroduced ito a retrieval system or distributed without the writte coset of Bloomberg L.P. Copyright 2013 Bloomberg L.P. All rights reserved. The ames of actual compaies ad products metioed herei may be the trademarks of their respective owers. Bloomberg Busiessweek Research Services 2

3 Methodology Bloomberg Busiessweek Research Services (BBRS) lauched a survey ad research program i summer 2012 to discover ad aalyze the views of C-level ad lie-of-busiess executives aroud the world o the drivers of operatioal performace ad ways that decisio-support ca be stregtheed. The survey also queried the executives to ucover what types of ew iformatio techology they are deployig or actively cosiderig to improve their fiacial ad operatioal performace. The goals of this program icluded: Better uderstadig how midsize ad large orgaizatios view the state of their operatioal performace at the preset time, i additio to their plas for the ext few years. Examiig the operatioal performace of five key corporate fuctios: sales, customer service, fiace, operatios/ productio ad supply chai. Better uderstadig the level of ivolvemet of operatioal ad C-level officials i various fuctios outside their primary fuctio. Idetifyig the role of techology i supportig efforts to improve operatioal excellece. This research program icluded both quatitative ad qualitative compoets: A global survey of director-level or above executives at midsize ad large compaies from aroud the world. A total of 318 director-, vice presidet- ad C-level executives respoded to the July 2012 survey. About two-thirds of the respodets are ivolved i supply chai excellece efforts at their orgaizatios, either as their primary or secodary job fuctio. For more iformatio about the demographics of the survey, refer to the Methodology charts, at right. I-depth telephoe iterviews with C-level ad other seior executives at the followig compaies: Barilla Group Freescale Semicoductor Co. Whirlpool Corp. Telephoe iterviews were also coducted with: A research affiliate at MIT, who is former aalyst with AMR Research The chief research officer of ChaiLik Research The presidet of B2B Aalysts BBRS ad the author of this report, Bill Roberts (who is a log-time busiess ad techology freelace writer based i Silico Valley), wish to express their gratitude for the executives ad cosultats who provided their isights. This research project was fuded by a grat from SAP but was writte idepedetly of this sposor. The editorial departmet of Bloomberg Busiessweek magazie was ot ivolved i this project. Respodets by Regio Europe: 29% Asia: 34% Respodets by Compay Size Small* ($100 $499 millio): 15% Medium ($500 $999 millio): 29% *1000 employees or more Respodet by Idustry Sector Other: 23% Busiess Services: 11% Fiacial Services: 16% Respodets by Title *Total exceeds 100% due to roudig Director: 13% C-Level: 33% Maager: 26% Respodets by Primary Fuctio *Total exceeds 100% due to roudig Source: Bloomberg Busiessweek Research Services, 2012 Methodology North America: 37% Eterprise (>$5 billio): 21% Large ($1 $5 billio): 35% Maufacturig/ Idustrial: 34% Retail/Wholesale: 16% Vice Presidet/ Seior VP/ Executive VP/Geeral Maager: 29% Sales: 15% Supply Chai: 26% Customer Service: 15% Fiace: 21% Operatios/ Productio: 24% Bloomberg Busiessweek Research Services 3

4 Executive Summary Supply chai tools are widely ackowledged to be crucial to meetig corporate goals ow ad i the future as supply chais grow more complex, customers become more demadig ad globalizatio accelerates. Two-thirds or more of respodets to the BBRS survey view a doze supply chai tools as importat i meetig these challeges ad makig decisios based o the most up-to-date iformatio. Demad-drive supply forecastig/plaig leads all supply chai tools i level of importace ad level of adoptio. Clearly, gettig this task right is see as key to supply chai maagemet. Although deploymet of supply chai maagemet tools lags the expressed level of importace, adoptio ad upgradig will grow over the ext two years across the board for these tools. Newer supply chai tools that support the creatio of real-time supply chais, such as multi-level ivetory optimizatio, demad sigal repository, sales ad operatios plaig, ad leveragig poit of sale (POS) data are ot widely adopted yet. However, they are recogized as highly importat ad are o track to be adopted more quickly over the ext two years tha most other tools. Mobile access to supply chai tools ad data is gradually happeig. For example, 51 percet of respodets expect employees to have mobile device access to demad ad supply forecastig/plaig data by 2014, up from today s 28 percet, who say it is available ow. Just uder three-fourths (73 percet) of the executives surveyed say supply chai aalytics tools are importat to meetig their compay goals. With 71 percet of respodets sayig aalytics tools eed to be more predictive, it is ot surprisig that early the same portio 73 percet pla to upgrade or replace aalytics tools withi two years to gai these features. Itroductio Supply chais have ever bee as log or as complicated as they are today. The globalizatio tred of the last two decades has drive eve smaller compaies to build exteded supply etworks with the same advatages ejoyed by major corporatios amely, multiple tetacles to source ad maufacture i diverse locatios, to achieve the ability to sell i differet geographies ad to expad the umber of products for the growig ad icreasigly iformed ad coected global middleclass. But these advatages are ot without challeges. The more exteded the supply etwork, the more risks there are from atural disasters ad mamade turmoil. Ad the there is the ecoomy. Although the pace of busiess is acceleratig ad may compaies are doig well, the global ecoomy is still a mixed bag, says Bill Gilmour, director of supply chai systems at Freescale Semicoductor Co. I this milieu, compaies are seekig to create real-time supply chais that eable maagers to make decisios i cotext, with full visibility ito potetial impacts o fiacial targets ad key performace idicators (KPIs). This meas haressig the wealth of big data structured ad ustructured ad turig it ito isights i real time. A exclusive July 2012 survey by Bloomberg Busiessweek Research Services cofirms that compaies are upgradig supply chai capabilities ow ad i the ext two years to add collaboratio ad resposiveess across global etworks. May seek to gai the ability for busiess users to more easily sese, aalyze ad simulate their supply chais i real time ad to better uderstad the fiacial implicatios. Key survey fidigs iclude: Forecastig i a ucertai world remais imperative, with about 80 percet of executives sayig this fuctio is crucial to meetig corporate goals ad achievig success. Although ew tool deploymets still lag, more tha half of respodets say they will have ew or upgraded supply chai tools, such as supply chai aalytics (73 percet) ad supply chai traceability (71 percet), by Newer tools are ot as widely deployed as others yet, but respodets idicate they will adopt these tools at a faster pace tha others. For example, multi-echelo ivetory optimizatio ad demad sigal repositories are o pace to have twice as may users i Bloomberg Busiessweek Research Services 4

5 The supply chai is a very complex problem, which you have to solve i real time, says David Dobri, presidet of B2B Aalysts. Sales operatios ad plaig is where the rubber hits the road. The key eed is to figure out your strategy to alig supply ad demad. Despite the lackluster ecoomy, compaies are refocusig o the requiremets for reewed growth ad market expasio. A majority of the respodets to the BBRS survey are lookig to reduce costs ad improve product availability by upgradig supply chai capabilities. I their quest for more effective supply chai maagemet, maagers wat to better leverage the wealth of data i their supply chais, gai isight ito busiess processes ad achieve deeper visibility ito demad chages. This research report provides isights, examples ad recommedatios o how supply chai professioals ca improve forecastig, roll out tools faster ad better leverage those tools for real-time isights, demad-drive operatios, ad efficiet logistics ad order fulfillmet. First ad Foremost, Forecastig The survey results leave little doubt that executives view supply chai techologies as oe key to meetig goals ad achievig corporate success. The survey asked respodets how importat (o a scale of 1 to 5) each of a doze supply chai tools is to meetig compay goals i 2012 ad how importat each will be i 2014 (see Figure 1, Supply Chai Tools: Key to Achievig Corporate Goals, at right). The importace of all these tools is widely ackowledged. Demad ad supply forecastig/plaig tools topped this list: 77 percet say it is very importat i 2012, ad 80 percet say it will be importat i Those results are i lie with my view of the world, Freescale s Gilmour says. Demad ad supply forecastig is absolutely importat for me. Although warehouse maagemet software received the fewest importat resposes to this questio, with 67 percet, 75 percet say it will be importat i This otable chage i outlook further suggests a replacemet cycle cotiuig i warehouse maagemet as older solutios are replaced with ew, more flexible oes (45 percet will upgrade i the ext two years; 19 percet will replace). I a similar vei, Our ability to forecast is critical, says Jim Keppler, vice presidet of itegrated supply chai ad quality for North America at Whirlpool Corp. The accuracy throughout is importat. Our goal is to have our appliaces i Figure 1 Supply Chai Tools: Key to Achievig Corporate Goals Better demad ad supply forecastig are key cocers. Respodets were asked how importat to achievig their orgaizatio s goals each of these supply chai tools is through (Percet ratig the importace of a tool as a 4 or 5 o a scale of 1 to 5.) Demad ad supply forecastig/plaig Collaboratig with customers ad suppliers 77% 80% 76% 78% Leverage demad data from POS systems ad market research 73% 77% Supply chai aalytics Sales ad operatios plaig Trasportatio ad logistics Multi-echelo ivetory optimizatio Supplier etwork desig Supply etwork traceability Service parts plaig ad logistics Demad sigal repository Warehouse maagemet 73% 76% 72% 72% 73% 71% 76% 71% 72% 70% 69% 74% 68% 67% Source: Bloomberg Busiessweek Research Services, % 75% 77% 79% Bloomberg Busiessweek Research Services 5

6 Figure 2 Forecastig Tools Top a Strog Supply Chai Outlook Today s most widely deployed tools are demad ad supply forecastig/plaig, alog with sales ad operatios plaig. Respodets were asked which of these supply chai solutios is deployed at their orgaizatio ow ad which will be i use by (Percet idicatig solutio was deployed i 2012 or will be i 2014.) Demad ad supply forecastig/plaig Sales ad operatios plaig Supply chai aalytics Trasportatio ad logistics Supplier etwork desig Warehouse maagemet Collaboratig with customers ad suppliers Leverage demad data from POS systems ad market research Supply etwork traceability Multi-echelo ivetory optimizatio 30% Demad sigal repository 28% 33% 38% 38% Service parts plaig ad logistics 51% 51% 48% 46% 45% 45% 17% 26% 19% 14% 16% 17% 22% 29% 19% 18% 22% the right place at the right time for the right cost. Keppler rus a orgaizatio that icludes Whirlpool-owed maufacturig plats ad the supply chai for North America. Itegrated systems tie everythig together, providig ed-to-ed visibility that eables real-time supply chais. After spedig the past two years migratig to a itegrated supply chai model, Whirlpool has bee able to shift betwee 3 percet ad 4 percet of fixed costs to variable costs i North America operatios, Keppler says. Ad ed-to-ed supply chai tools are the keys to this effort. We focused o ivetory reductio, while still beig able to serve the customer, he says. As we ve take ivetory out of the system, we have bee able to cosolidate warehouses ad reduce total warehouse space. The supply chai tool i Figure 1 (o page 5) for which there is the largest differece betwee 2012 ad 2014 is supply etwork traceability; 70 percet of respodets say it is importat ow, ad 79 percet say it will be importat i That otable ie-poit spread would suggest a sigificat ad growig recogitio of the importace of this fuctio ad the tools for accomplishig it. Supply etwork traceability is ot high ow, but it should be, says Larry Lapide, a supply chai research affiliate at the MIT Ceter for Trasportatio & Logistics ad former aalyst at AMR Research (ow part of Garter). Notice it is the biggest chage betwee 2012 ad 2014 i the survey. Traceability is importat to Whirlpool s ability to create a 360-degree view of the customer. If salespeople are callig o customers, Keppler says, it is importat they have easy access to the same product ad order fulfillmet iformatio as everyoe else at Whirlpool. For this reaso, Whirlpool has decided to make additioal ivestmet i this area. Actual Deploymets Lag Somewhat 24% 14% Although supply chai tools are viewed as importat, adoptio Source: Bloomberg Busiessweek Research Services, 2012 ca sometimes lag, accordig to the survey (see Figure 2, Forecastig Tools Top a Strog Supply Chai Outlook, at left). Six of the 12 tools metioed were idetified by 45 percet or more of respodets as deployed today. The most widely deployed tools are demad ad supply forecastig/plaig, alog with sales ad operatios plaig. I both cases, 51 percet of respodets say they are usig them ow. Lookig to 2014, a additioal 22 percet say they will deploy demad ad supply forecastig/plaig, ad aother 18 percet say they will roll out sales ad operatios plaig tools. Eve with the advet of ew tools for various fuctios, demad ad supply forecastig/plaig remais fudametal, MIT s Lapide says. He adds that today s sprawlig, global supply etworks are fraught with geographical hazards icludig atural disasters like tsuamis i Japa ad floods i Thailad. Mamade turmoil such as political upheaval i the Mideast ad Bloomberg Busiessweek Research Services 6

7 Somali pirates add to the risk. Most of the ucertaity used to be o customer demad, so we spet time figurig out how much to make, Lapide says. Now there is more ucertaity about where we will make thigs ad source the parts. So what we have to do really well is to pla. That is why we see a big push for tools to help. The fastest deploymet growth amog the 12 tools i Figure 2 (o page 6) is the two ear the bottom of the list for 2012: multi-echelo ivetory optimizatio ad demad sigal repositories. But by 2014, both will be adopted by early twice as may respodets. This is still more recogitio of the importace of ew tools to support real-time supply chais. Two other tools lower o the list are worth callig out, as well: adoptio of leverage demad data from POS systems ad market research, ad supply etwork traceability. Both will icrease by early 60 percet from 2012 to Achievig real-time visibility everywhere will ot be easy, but supply chai executives clearly have their eyes o the prize. Whirlpool, for example, curretly receives POS data from oly oe of its largest customers. Everywhere else it is limited or o-existet for us, Keppler says. Whirlpool augmets with market research data, its ow historical data ad what it kows about seasoal chages ad has pretty good results that he would like to see get better. I a ideal state, if we had true POS from customers, we could have more of a true pull model, Keppler says. As customer X buys this appliace model, we could add that back ito the productio pla at a SKU level. There is a real sciece to measure the demad sigal ad use that for our productio pla. Figure 3 Upgrade ad Replacemet Forecast Sevety-three percet of respodets say they will upgrade or replace their supply chai aalytics withi the ext two years. Respodets were asked what will be the status of each of the followig supply chai solutios at their orgaizatio by (Bar shows total chagig i 2 years.) Will upgrade i 2 years Supply chai aalytics Supply etwork traceability Demad ad supply forecastig/plaig Sales ad operatios plaig Supplier etwork desig Multi-echelo ivetory optimizatio Will replace i 2 years Leverage demad data from POS systems ad market research 50% 11% Trasportatio ad logistics Warehouse maagemet Collaboratig with customers ad suppliers 46% 11% Demad sigal repository 55% 18% 59% 12% 56% 14% 50% 18% 49% 17% 52% 10% 46% 15% The survey foud evidece of a willigess to sped more o supply chai tools i the resposes to a questio about upgrade ad replacemet plas over the ext two years (see Figure 3, Upgrade ad Replacemet Forecast, at right). 42% Service parts plaig ad logistics 46% 13% 7% At the top of this list: 73 percet say they will upgrade or Source: Bloomberg Busiessweek Research Services, 2012 replace supply chai aalytics withi the ext two years. Over the last six or seve years we ve ivested tremedously i IT to support the supply chai, Freescale s Gilmour says. What we ve doe i the last 12 moths is focus o leveragig the tools ad systems we have ad refiig them, the puttig the aalytics o top to exploit what we have. At Freescale, the emphasis is o diagosig problems i real time, ad that requires ot oly the aalytical capabilities but the operatioal tools ad uderlyig databases, Gilmour adds. If I am a plaer for a product lie ad thigs chage o both the supply ad the demad sides, we ow have the ability to quickly isolate what chaged, what caused it. 41% 16% Bloomberg Busiessweek Research Services 7

8 Figure 4 Steady Growth i Apps for Mobile Devices A little more tha half of respodets say their employees will use mobile devices to access supply chai iformatio by Respodets were asked which of these supply chai tools will be available i 2014 via a mobile device to employees. (Percet shows icremetal peetratio; bar shows total peetratio.) Service parts plaig ad logistics Warehouse maagemet Supply etwork traceability 28% Trasportatio ad logistics % Multi-echelo ivetory optimizatio 35% Leverage demad data from POS systems ad market research 35% 18% Sales ad operatios plaig 39% 47% 19% 24% 12% 18% 29% Certai ew tools that icrease real-time capabilities are also high o this list for replacemet or upgrade by Amog them are supply chai traceability ad multi-echelo ivetory optimizatio, which comes as o surprise to Bill McBeath, chief research officer at ChaiLik Research, a supply chai aalysis firm. Optimizatio is the key. It starts with etwork desig, where you are makig decisios about where to locate factories, warehouses ad distributio ceters. That is actually a type of aalytics, ad it has bee aroud a log time. Ivetory optimizatio is aother. The Future of Mobile Device Access Mobile access to data ad tools might be oe obvious way to improve the real-time capabilities of a supply chai. The survey foud evidece of a steady but cautious move to givig employees, suppliers ad customers this access, askig which of the doze supply chai tools would be accessible via mobile devices ad to whom by 2014 (see Figure 4, Steady Growth i Apps for Mobile Devices, at left). Although the umber of resposes was smaller for these questios (ragig from 51 to 159), amog those aswerig steady movemet is expected toward mobile access. 39% 13% Although there are small variatios from tool to tool, a little more tha half of respodets say employees will have Supply chai aalytics access to a variety of supply chai tools by Service 34% 18% parts plaig ad logistics scores the highest, at 59 percet Demad sigal repository access, with warehouse maagemet ad supply etwork 34% 17% traceability ot far behid, at 57 percet each. Demad ad supply forecastig/plaig Not surprisigly, mobile device accessibility will come more 28% 23% gradually to stakeholders outside the eterprise. About oethird Collaboratig with customers ad suppliers 25% Supplier etwork desig 32% 25% 16% or more of respodets say suppliers will have mobile access to each tool by Access for customers will lag supplier access somewhat. The decisio to expose potetially sesitive iformatio to Source: Bloomberg Busiessweek Research Services, 2012 ay party outside the orgaizatio does ot come easily. May observers say the use of mobile devices with supply chai tools will vary widely, depedig o stakeholder demad ad compay culture. I the area of logistics ad executio, access to mobile devices ad data is already critical ad well established for warehouse workers, truck drivers, purchasig maagers, ad dispatchers ad their maagers. For supply chai plaig, however, the eed for mobile is less clear tha it is for supply chai executio workers. Gilmour says Freescale has yet to fid much use for smartphoes or tablets i the supply chai plaig area beyod receivig alerts whe somethig goes awry which is very useful, he adds. Because of the volume of data we have, supply chai professioals wat to do the actual plaig ad aalytics o their computers i-house, he says. Bloomberg Busiessweek Research Services 8

9 Aalytics Must Become More Predictive Survey respodets registered sigificat cocer about supply chai aalytics today. A majority agrees with each of seve statemets describig some problem with the tools (see Figure 5, Aalytics Tools Today: More Predictive Power, Please, at right). Clearly, aalytics is a pai poit. These aalytics tools are ot very easy to use, says Mauro Viacava, the CIO of Barilla Group, a maker of pasta ad other food products, echoig the survey fidigs. Aother problem, he says: The volume of data is growig quickly. This meas it takes more time to collect, ad it is hard to maage. Viacava recommeds first gettig the uderlyig supply chai tools right before movig o to aalytics. To that ed, Barilla has ivested heavily i supply chai systems ad ed-to-ed itegratio sice Ad it has implemeted the same operatig model worldwide, with oe itegrated supply chai system to maage all coutries. As a result, he says, While we do t have a lot of predictive tools, our aalytics are well used by our supply chai maagers. For our demad forecast, we do have a predictive tool. Freescale s Gilmour agrees that robust uderlyig systems are essetial. Aalytics is the culmiatio of years of ivestmet i the basic tools. You eed the uderlyig databases. They have to be maitaied ad structured i a methodical ad rigorous way. O top of that, you eed techology that eables basic reportig. These are all keys to gettig value from aalytics tools. Figure 5 Aalytics Tools Today: More Predictive Power, Please A majority of those surveyed poit to problems with today s tools, icludig limited predictive capabilities ad a iability to deal with ustructured data. Respodets were asked if aalytics today is a pai poit that eeds to be solved. (Percet who agree.) Our curret supply chai aalytics tools just provide isights about prior performace, but we eed more predictive tools 71% 71% It is critical to iclude ustructured data (social media, setimet aalysis, etc.) as part of our view of supply chai performace 69% 69% We eed to broade access to supply chai aalytics tools to a wider group of decisio-makers, maagers ad professioals 66% 66% Our curret tools require too much IT support to modify 62% 62% Our existig supply chai aalytics tools are too slow; it takes too log to get a aswer 59% 59% The volume of supply chai performace ad operatioal data is growig faster tha our ability to derive valuable isights out of it 57% 57% Our existig supply chai aalytics tools are too hard to use ad do ot provide easily uderstadable iformatio 55% 55% Source: Bloomberg Busiessweek Research Services, July 2012 With some help from third-party aalytics, Freescale supply chai professioals ca ow create data cubes ad the ru their ow algorithms agaist specific scearios. For example, the system ca predict whether a order will be egatively impacted by a semicoductor test house problem i Asia ad, if so, help fid a alterate source. Summary Clearly, the eed for supply chai efficiecy, agility ad iovatio has ever bee greater. Ad the survey shows executives recogize that more supply chai tools are eeded to facilitate itegratio, collaboratio, trasparecy, traceability ad sustaiability i the real-time supply chai for all stakeholders. Despite cotiuig ecoomic ucertaity, compaies are refocusig o the requiremets for reewed growth ad market expasio. A clear majority of executives are lookig to reduce costs ad improve product availability by upgradig their supply chai capabilities. It is likely that may of the respodets would agree with Barilla s Viacava. This is a ever-edig process. Every day you look to be more efficiet ad fid ew ways to improve, he says. The cost of our supply chai is huge, ad it is very importat that it be competitive. Your work is ever fiished. The job is ever doe. Buildig the real-time supply chai is the ext frotier. Bloomberg Busiessweek Research Services 9

10 Sposor s Statemet SAP s Roadmap to the Ultimate i Supply Chai Iovatio Real Time Orgaizatios eed to focus o five areas ad take the steps ecessary to eable realtime supply chai maagemet. SAP offers a suite of products to eable each step. The Bloomberg Busiessweek Research Services survey ad report makes it clear that iovative supply chai tools are widely ackowledged to be crucial to meetig corporate goals ow ad i the future as supply chais grow more complex, customers become more demadig ad globalizatio accelerates. I this cotext, supply chai iovatio is becomig more importat as compaies that have ivested i traditioal tools are ow determied to operate real-time supply chais. Although more tha three-quarters of survey respodets oted that demad ad supply forecastig ad plaig tools are already very importat, ad a majority already has these tools i place, adoptig ewer supply chai tools that support the creatio of real-time supply chais is recogized as highly importat. A real-time supply chai ca sese ad detect ew challeges as they happe. That eables supply chai plaers ad practitioers to make real-time decisios based o the most up-to-date iformatio. Compaies takig this approach view the supply chai as a strategic iitiative. They use their uderstadig of the market ad fluctuatig demad patters to adjust their supply plas i real time. I fact, the Bloomberg Busiessweek Research Services survey foud that the tools required for real-time supply chai maagemet are o a fast track to adoptio withi the ext two years. Amog those real-time supply chai tool eablers targeted for rapid deploymet are multi-level ivetory optimizatio, demad sigal repository, sales ad operatios plaig, ad leveragig poit of sale (POS) data. SAP has idetified five focus areas o the road to a real-time supply chai ad offers a suite of products to eable each step to upgrade orgaizatios capabilities i each area. Perhaps the most critical step is eablig isightful supply chai maagemet. Supply chai busiess decisios eed to be made i a busiess cotext, ot i a silo. Compaies leveragig the wealth of performace data about their supply chais ca eable that real-time aalysis, gai isight ito fragmeted busiess processes ad achieve deeper visibility through alerts based o key performace idicators (KPIs). The result is a trasitio from maagemet by exceptio to maagemet by iformatio a supply chai GPS, if you will. The secod step is trasitioig from traditioal sales ad operatios plaig to sales ad operatios busiess plaig. Compaies caot afford to discoect their sales ad operatios busiess plaig from tactical plaig. Busiess priorities ad operatioal decisios must be balaced agaist a clear uderstadig of their fiacial impact. Usig solutios that combie operatios ad fiacial data, the busiess ca collaboratively create scearios ad simulate the effects of decisios i real time to icrease supply chai profitability.

11 Aother key driver is embracig the cocept of a demaddrive supply chai. The most prevalet supply chai challege is lack of clarity ito what customers wat ad whe they wat it. I a demad-drive model, compaies use POS, social media ad market research data to sese customer demad sigals immediately ad to respod i real time to build that demad ito the plaig processes. This accelerates supply chai processes ad reduces plaig cycle times, workig capital (ivetory) ad lead times. It also provides the opportuity to icrease reveue by avoidig stock outs, icreasig promotio effectiveess ad optimizig ew product lauches. With complex global etworks, esurig efficiet executio i the areas of logistics ad order fulfillmet is more critical tha ever. With icreased supply chai complexity, it becomes more difficult to deliver the perfect order. At the same time, trasportatio costs are risig across more complicated supply chais. Optimizig executio requires real-time visibility ito shippig processes ad track-ad-trace capabilities, alog with automated warehouse ad distributio processes ad advaced trasportatio plaig. What s Iside a Real-Time Supply Chai Maagemet System A cotiuously updated widow ito demad sigals ad customer data, i additio to the ability to icorporate that iformatio ito plaig processes. The ability to sese ad adjust curret supply fulfillmet plas based o the latest demad data. The ability to perform real-time collaborative simulatios to clearly uderstad the operatioal ad fiacial impact of decisios. The ability to be sure decisios map to short-term ad log-term plas. To close the real-time loop, compaies must focus o streamliig the service supply chai. Successfully ruig a itegrated supply chai for service parts busiesses requires real-time visibility ito customers, suppliers ad operatios. This eables compaies to respod swiftly to customer requiremets, procure parts earlier, pla parts ivetory more effectively ad ulock service parts profit potetial. SAP s tightly itegrated supply chai solutios help eable the trasitio to a real-time supply chai. By couplig SAP Supply Chai Maagemet s market-leadig applicatios with powerful SAP aalytics solutios ad game-chagig techologies like the SAP HANA i-memory database platform, compaies will be able to respod quickly to market dyamics with real-time visibility ito customer demad. Mobile device coectivity capabilities ad cloud optios also give compaies costat access to their iformatio ad low-cost, yet highly scalable, deploymet optios. O the frot ed, these mobile solutios, with their userfriedly iterfaces, ca deliver optimizatio to all stages of the supply chai. SAP is also dedicated to providig this techology i a odisruptive way, through side-by-side deploymet optios, ehacemet packages ad rapid-deploymet solutios. Iformatio about these five focus areas first appeared i a article i the Jauary-February-March issue of SAPisider ad is repurposed here with permissio of the publisher, WIS Publishig SAPisider For More Iformatio The road to a real-time supply chai is gettig shorter, ad those who have arrived say it is well worth the jourey. To lear more, visit

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