Yesterday, over 1500 people attended the keynotes of the Logistics and SCM 2014 show by SAPInsider at the MGM Grand in Las Vegas. Ahead of them was the opportunity to learn and listen to 195 sessions and 31 case studies by 165 supply chain experts.
The event was kicked off by Bernd Leukert, the Head of Application Innovation and Member of the Executive Board of SAP. Bernd set the stage for the event by saying that “Business challenges and change has put the end consumer, the digital user, into the center of your business process”, and that “the companies that can manage and be responsive to this change will be the winners”.
Bernd described how, when it comes to supply chain solutions, “SAP is rethinking demand processes, rethinking orchestration, rethinking operations, rethinking logistics and rethinking how decisions are made”.
This was a perfect set up for Hans Thalbauer (SVP of Solution Management for Supply Chain) to continue the discussion with his session entitled “From supply chains to demand networks” , where he introduced the new SAP Supply Chain strategy.
Hans elaborated on the business major business realities faced by today’s companies:
- Volatility in the market, both geographical and demographically due to to the rising middle class in emerging markets, the aging populations in the traditional markets, and the "always on" millennial generation who are informed, connected and empowered.
- Innovative (and disruptive) technologies such as 3d printing, M2M connectivity and the “internet of things” (See a blog the Jetsons Supply Chain which discusses this in more detail).
- Logistics Complexity driven by the volatility and innovation that has, in turn, made the logistics networks must more complex and volatile.
Hans posed the question “What are companies doing to put the customer in the center of the process?” and what this means to a supply chain executives?
He stated that “after numerous discussions with customers it is becoming clear that “businesses need to transform their supply chains to demand networks” that:
- Enables “Always-On” connectivity through end-to-end visibility with real-time what-if decision support to manage the supply chain in real time
- Now more than ever, “Planning Matters” and drives the need for Integrated Business Planning & response management to improve short-term planning results
- Companies must “Be Accessible” to the extended network and ecosystem through flexible and reliable collaboration to orchestrate the global network of partners
- Strive to “Fulfill to Please” by enabling a nimble distribution models to execute the supply chain efficiently
Hans then went on to explain the SAP supply chain strategy and how it is centered on 4 main areas that will transform supply chains to demand networks in the future.
- Supply Chain Monitoring to enable end-to-end visibility and segmentation of customers, products, and suppliers. You can then not only monitors current activity, but also perform what-if simulations and predictive analytics needed by today’s supply chain professional. Hans explained that sustainability is another key aspect of monitoring, as it’s used to ensure compliance with regulations like batch traceability, serialization, and food safety.
- Integrated Business Planning to gain full demand transparency for short-, mid- and long-term on all levels of the Bill-of-Material by leveraging demand sensing and statistical forecasting methods. This then drives a cross departmental Sales & Operations Plan balancing the impact on inventory, service levels and profitability. Hans explained the importance of determining optimal inventory levels at each tier within the supply chain and automatically set targets for operational plans.
- Demand-Driven Supply Network that leverage market and customer Intelligence to benefit from market volatility and avoid waste in the demand network. Establish response orchestration processes to support omni-channel strategies and coordinate the demand fulfillment. And the need to connect the business partners to the Business Network for supply chain collaboration processes to provide the flexibility, visibility and transparency needed to orchestrate the fulfillment.
- Logistics and Order Fulfillment processes to make informed decisions to balance customer service and the cost of delivering that level of Customer Service. This requires aligned integrated distribution and fulfillment processes around speed, efficiency and sustainability, and the ability to connect all the participants of the Logistics Network and track the progress of the delivery.
Thanks to Bernd and Hans for a great session. The audience defiantly left the session informed and energized to learn more over the next few days.
It was a case of “What happens in Vegas, needs to be shared with all their colleagues when they return to work next week”.
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