Supply Chain Management (SAP SCM)

Real use case: Supply Chain Maturity Whitepaper

Kevin Wilson — Mon, 20 May 2013 16:28:35 GMT

I recently published a blog detailing how the supply chain PTP (Procure to Pay) process could benefit from a tightly integrated SAP EDI process. To view the entire blog please read it at http://qdatausa.wordpress.com/2013/05/20/real-use-case-supply-chain-maturity-whitepaper

The blog shows how EDI is a catalyst for achieving that elusive "Perfect Order" which can be defined as:

A) Shipment is:

Accurate according to our order
- On time, Correct quantity, Complete
Communicated to us
- Timely communication, Electronically (EDI) To our specification, Communication matches actual shipment detail
Packaged correctly
Labeled correctly
- Legible, In support of our process

B) Product is:

Good quality
- Damage free
Correctly labeled

C) Regulations:

Comply with safety regulations
Comply with social and environmental regulations
Comply with legal terms and conditions

A “Perfect Order ” completely fulfills ALL the above stipulations.

Looking forward to hearing thoughts and comments around this crucial topic.

Focused Brand Management via Supply Chain Visibility

William Newman — Wed, 15 May 2013 16:37:11 GMT

In the wake of devastating tragedies in Bangladesh and Paskistan over the past 18 months, OEMs are developing action plans and mitigation strategies to avoid collateral brand damage associated with poorly run and often dangerously unsafe external contract manufacturers. During my recent podcast for the IXN (Episode IXN002 on iTunes) I was asked what is the top challenge facing global supply chains. My answer was terrifyingly predictive: brand management and the impact it has on brand sales when a horrific event happens overseas. Two weeks later, over 1,000 workers (mothers, fathers, sisters and brothers) lost their lives in the building collapse at the Rena Plaza factory in Bangladesh. While the death toll rose, Disney was one of the first brands to pull out of the country, and the EU developed a memorandum of understanding that many appareland footwear manufacturers were voluntarily adopting.

This week at SAPPHIRE I sat down with Markus Rosemann, Head of Supply Chain Execution, LOB Solution Management, to discuss this problem. Given the actions of the previous several weeks this issue is top of mind in supply chain operations and risk management functions inside, it was a familiar topic.

Integrated supply chain issues for brand management is a critical success factor because as Rosemann put it, "you cannot lose on this front. How you integrate with your partners is a growing need, not only the process and order level (for example, who was manufacturing on Bangladesh and what percentage of your portfolio), but also the need for the supply network to create visibility." While this has been an issue for years, the impact on brand management today creates a new need to track and trace supplier activity so companies can protect their brand.

While it's great to use massive data analytics to gauge past order histories and manufacturing performance in quality and social audit reviews, how does an OEM get preemptive? "Supply chains can get preemptive with traceability and visibility," claims Rosemann. "Batch investigations can help in this process in pharma for example. SAP was able to bring this into tracking by seconds versus longer reporting times. You can look at this even in capacity balancing: where to source, where to make. It has a business relevance, back to order sourcing and share of portfolio. These questions can all be answered."

Back to my recent podcast, we turned to the nature of integrated approaches which can make the difference in how a company takes on preemptive brand measures. Clearly, SAP enables more and more information to be available in real time and in-memory. With "quick investigation come quick actions," Rosemann submits. "With responsive networks in place companies can help drive decisions like where to go, where is the capacity? These become also risk management concerns. From a brand management perspective, how much damage to the brand is at risk? How well is it recognized that this is a problem for each OEM? How do I plan my supply network to support my business planning? Navigating through the value chain data is like a 'SCM GPS.' Using tools like APO, much of the data is already there in the SAP SCM system."

My conversation with Rosemann then turned to planning, particularly the area of S&OP. "S&OP is based on HANA and real time information is available, in-memory," claims Rosemann. "Tracking and traceability scenarios are being looked at on HANA since these are high volume, real-time transactions. This is a risk mitigation approach. Demand signal management is the look on the other side and this is already offered on HANA." With these tools, Rosemann suggests that OEMs can perform capacity planning and risk balancing in retail from Bangladesh to Mauritania as an example.

Social and sentiment analysis can also play into that from a demand signal management perspective. Social plug-ins can see the sentiment analysis on brands, platform, and customer preferences. So what does this mean having a true voice of the customer in the wake of a horrific supplier event? According to Rosemann, "that is finally changing, best margin is not the only driving force" in industries such as apparel and footwear. "This is an area that we see changing in the market place - demand patterns which are changing, and this can all be viewed inside real-time analytics. We see this as a huge opportunity to leverage the power of HANA, for massive data which can be analyzed and understood. From this, information can be pushed onto strategy, supply planning, and then sourced. This is the real integration and opportunity for a real time supply chain." I agree and none too soon.

(Image courtesy of the NY Times, Reuters)

Supply Chain Blog Series - How Bonfiglioli are “Taking the Road to a Real-Time Supply Chain”

Richard Howells — Tue, 14 May 2013 20:32:07 GMT

Today in Orlando as part of the “Take the Road to a Real-Time Supply Chain” Panel Discussion I had the pleasure of listening to Simone Bonantini, the Sales Logistics Manager for onfiglioli Riduttori S.p.A. discuss how the company are leveraging the SAP APO solution.

Bonfiglioli are an Italian company who design, manufacture and distribute a complete range of gear motors, drive systems and planetary gearboxes to satisfy the most demanding needs for industrial processes, automation, mobile and renewable energy applications.

Mr Bonantini explained how Bonfiglioli used SAP’s rapid deployment solutions for SAP APO Demand Planning and Global Available to Promise to improve their business processes in as little as 17 weeks. They also discussed their centralized and standardized global template approach to roll-out the benefits to other plants. This was key to their “local for Local strategy to produce close to the customer, supplying the most suitable solutions in a rapid and flexible way.

Some of the solution highlights discussed included:

The ability to load and store massive volumes of planning data
The Calculation of planning KPI and Alerts to improve master plan reliability, plan stability, forecast accuracy, and plant reactivity
Improved customer service through ATP checks against product allocation ant the location, customer and product level
Improved system synchronization between SAP ECC, SAP APO, and SAP BO

Some of the key benefits from the deployment include:

Reduced planning activities resources by 68%
Reduced planning & order errors due to quota allocation by 100%
Reduced process timing to evaluate a demand plan modification by 50%
One only system Increased visibility through an advanced information symmetry (plants and subsidiaries)
Readiness of updated planning and statistical data
Control on subsidiaries’ inventory planning

Bonfiglioli are currently rolling out the global template to all BU plants, and have plans to implement a complete supply network planning system in 2104.

Follow supply chain at #sapphirenow @SCMatSAP

Fuel for Supply Chain Services Growth

Sourabh Jain — Mon, 13 May 2013 21:05:25 GMT

The ERP industry is undergoing a radical shift where organizations are reevaluating the ERP service providers of prospective technology providers, and weighting services offerings much heavier, during the software buying cycle.

Prime emphasis goes to feature, function and cost considerations in vendor selection, organizations are placing a much higher prioritization on services offered – including those relative to cloud, ongoing solution maintenance and performance, and training and education.

According to the Gartner report Forecast Analysis: Application Solution Services, Worldwide, 2010-2015, the overall market for enterprise application services will increase from $133.5 billion in 2011 to $170 billion in 2015, representing a 6.7% CAGR, 2010 through 2015.

So what’s fueling the growth of enterprise application services today, especially in terms of supply chain? In the lines to be followed, we will deep dive into few trends driving the demand for supply chain services.

Supply Chain a Top Priority

Organizations across the board, from manufacturers to retailers, have reached an inflection point; they understand their supply chains need to be a strategic, enterprise-level priority in order for their businesses to remain viable. That realization brings amplified investment and executive-level sponsorship to supply chain initiatives including supply chain services.

Since supply chain prioritization has elevated to the C-level, expected business outcomes now include competitive advantage, revenue generation, operational transformation and scalability for future growth. To ensure solutions implemented can meet and exceed an organization’s strategic business goals, it is essential for companies to choose a provider that has a services organization as robust and proven as its solutions.

When evaluating a supply chain services organization, look for a provider that employs domain experts who understand the industries, regions, business challenges, competitors and solution roadmap specific to your organization; and has a track-record of successful deployments specific to each of those.

New Technologies like Cloud / Big Data

One would be hard-pressed to initiate a supply chain services conversation today without talk of the Cloud or Big Data; and rightfully so with benefits like Flexibility. Speed to value. Ongoing solution maintenance and performance. Reduced risk.

For those reasons and more, these newer technologies are one of the strongest contributors to the growth of supply chain services today and will continue to be in the future. Companies of all shapes and sizes are fast realizing that by using these new technologies — and then having the experts most knowledgeable about these technologies running them on a daily basis— the organization can focus on its core business forward while outsourcing the technology part of business.

Dissatisfaction with traditional ERP tools

Next in line contributing to the growth of supply chain services comes down to enterprise technology buying cycles, and the dissatisfaction many organizations are feeling with their ERP systems relative to supply chain management.

For many companies who invested heavily in ERP systems, years have lapsed and they are still waiting to see value relative to their supply chain. That lack of ROI and increasing TCO from ERP, coupled with the greater emphasis on supply chain initiatives as a strategic business priority, has many companies reaching the conclusion that best-of-breed supply chain solutions combined with world-class supply chain services are essential to ensure their organizations, customers and stakeholders receive maximum short-term and long-term value from their supply chain investments.

Looking forward to get more ideas from the community members.

Rgds

Sourabh

Developing an Integrated Supply Chain with SAP

Ashish Saxena — Wed, 17 Apr 2013 16:11:27 GMT

Next week I’ll be delivering a number of sessions at the Logistics & SCM, PLM, Manufacturing, and Procurement 2013 event, April 24-26 in Prague. In particular, I’ll be delivering a session “SAP Supply Chain Management 101: A comprehensive introduction to SAP's operational planning and execution platform”.

http://scm2013.wispubs.com/Prague/Sessions/4391/?tid=986&s=&u=

In preparation for the session, I wanted to provide some further insight into how to develop a more integrated supply chain.

The concept of an integrated supply chain has been around for several years but it has taken a new turn since last year. With the advent of cloud, social media and advanced supply chain systems like SAP, companies are now able to create a low cost, efficient, agile and integrated supply chain.

Let's start with the basics - what is an integrated supply chain? There are numerous definitions floating around but in simplest terms it is "an effective information exchange between supply chain partners (internal and external), in a timely manner and at fast speeds to creating a value chain network".

At the heart of this network is the first key element - information or data - like demand, forecast, operational status, inventory status, order status, exceptions, transportation and more. Data exchange between various supply chain partners allows better visibility of inventory, and supply chain processes & events thereby allowing companies to service their customers better. Industries concerned with food safety, patient safety or sustainability can further collaborate to share additional supply chain data for end-to-end traceability. And, as social platforms are becoming data-rich, their influence is permeating in supply chains as well, as I have explained in my article “Social Media in Supply Chain” (http://csuitepen.wordpress.com/2013/03/22/social-media-in-supply-chain-the-new-frontier/)

The second key element are the supply chain partners. Traditionally companies have viewed supply chain as the one within their organization. In the last decade, when globalization peaked, companies started collaborating with their suppliers and third party service providers. The new integrated supply chain goes beyond these two models by bringing customers, customer service, marketing and IT as enterprise partners. A 2012 CEO study conducted by the IBM Institute of Business Value (http://www-935.ibm.com/services/us/en/c-suite/ceostudy2012/) reveals that CEOs see renewed or new partnerships between Operations, Marketing and IT to build an agile and customer centric organization. Figure 1 provides one of the views of an integrated supply chain of the future.

Figure 1: One view of an Integrated Supply Chain

As there are more partners, there are more complexities driving the need for simplification, timeliness and speed of information exchange – the third element(s). Simplification mostly relates to IT technologies that provide a robust and low cost common platform for the partners to come together. Cloud platform brings these benefits to companies. Unlike the traditional on-premise infrastructure, supply chain technologies are now available as SaaS offerings via cloud. Companies can chose a subscription based model that lowers upfront cost, reduces the burden of maintenance & upgrades, provides reliable service and future scalability, thus reducing the total cost of ownership. Also, SaaS offering via cloud is a multi-tenant model, which implies that a company and its supply chain partners can co-exist leveraging the same system thereby minimizing the need for extensive integration and maximizing data sharing. This data exchange can happen in almost real-time and robust infrastructure capabilities of cloud service providers like IBM ensure faster speeds.

Now that you have a view of an integrated supply chain of the future, the next question is “how to develop one?” It typically starts with a supply chain analysis to identify a company’s capabilities, strengths, weaknesses and opportunities in the context of three key elements of an integrated supply chain: (1) What data is available to them and how effective is information exchange? (2) Who are the supply chain partners and how well are they connected? (3) What IT systems are currently in place and what capabilities do they provide? This particular topic is vast and generally requires an expert to do such an analysis.

After the business analysis, a critical decision for most companies is to select a suitable technology or system that would support the vision of an integrated supply chain. SAP offers an extensive suite of supply chain solutions that help achieve this vision (http://www54.sap.com/lob/scm/software/overview/highlights.html).

SAP Advanced Planning and Optimization (APO) provides advanced planning capabilities for demand planning, production planning, cross-docking, supply network planning and global availability by integrating multiple forms of data including supplier/company/customer forecasts, historical data, POS data, capacity, inventory position and much more. Advanced predictive analytics capabilities allow companies to run simulations for “what-if” scenarios especially for unplanned events

SAP Extended Warehouse Management (EWM) provides basic to advanced warehouse operations capabilities by including labor management, operational KPI cockpit, cross-docking, complex put-away & picking logic, material handling capabilities, voice enablement, and standard integration with APO, SAP Environment Health & Safety (EH&S) and Global Trade Services (GTS)

SAP Transportation Management (TM) provides full suite of transportation capabilities from shipper and logistics service provider perspective. New algorithms and advanced analytics provide effective route and freight planning capabilities, mobile screens for real time updates, and event management to track shipments throughout the supply chain (all the way up to customer delivery)

SAP Supply Network Collaboration (SNC) is a 360-degree collaboration tool that provides a gateway to integrate various supply chain partners. SNC provides a multi-mode communication layer for data exchange and visualization of supply chain events and results. SNC is particularly suitable for APO functions by allowing suppliers, contract manufacturers and distributors to provide their data to the host company. This allows sharing of forecasts and inventory in almost real-time

SAP Track and Trace addresses supply chain traceability with three solutions – Global Batch Traceability (GBT), Auto-ID (AII/OER) and Event Management (EM). GBT enables complex batch genealogy and end-to-end batch tracking, while supporting numerous formats of batch numbers. Auto-ID (AII/OER) enable RFID and other barcode scanning activities and capture serialization of batch data from manufacturing to end customer. OER is the enterprise repository for product tracking and provides reporting for regulatory requirements. Event Management (EM) in the scope of Track and Trace provides visibility of processes and assets involved in the supply chain. Key application of EM is automated exception resolution and alert mechanism, hence creating a responsive supply chain

SAP Sales and Operations Planning (S&OP) provides a unified model of demand, supply chain and financial data to balance supply & demand. Real time simulations allow scenario based decision making and drives cross-functional collaboration in the organization

SAP has additional specialized offerings for supply chain optimization (Figure 2). The ones highlighted above are the key ones that companies worldwide are adopting and realizing benefits of an integrated supply chain.

Figure 2: SAP Supply Chain Solutions (source: SAP)

Furthermore, SAP has made a game changing technological innovation called SAP Hana – an in-memory data platform for real-time analytics and applications. By combining the transactional data and analytical data via in-memory computing, Hana architecture provides “never seen before” type speeds, for example, reducing forecasting process from 8-9 hours to 1-2 hours. Additional information on SAP Hana is available on http://www.saphana.com/community/learn. SAP has announced that its supply chain applications are now powered by Hana.

Lastly, SAP supply chain applications can also be hosted in the cloud. IBM cloud-based solutions for SAP (http://www.ibm.com/cloud-computing/us/en/sap/) incorporate IBM best practices, SAP solution offerings and a robust platform to provide an agile and low cost integrated supply chain.

With the dynamic socio-economic market factors (like emerging middle class & fast growing emerging economies), rapidly changing technology and continued global interdependence, companies are being forced to be more innovative, be more customer centric and be more efficient than ever. In the midst of this race, gain competitive advantage by developing your integrated supply chain.

For more on SAP Supply Chain Management- join me April 24-26 in Prague at Logistics & SCM, PLM, Manufacturing, and Procurement 2013. Also make sure to get the latest event updates by following #SCM2013 on Twitter.

S&OP Optimization: Recent podcast with #SCM2013 speaker Joseph Grobler

Allison Martin — Wed, 27 Mar 2013 18:49:22 GMT

In preparation for our Logistics & SCM, PLM, Manufacturing, and Procurement 2013 event, April 24-26 in Prague, Joseph Grobler, one of our veteran speakers was kind enough to spend a few minutes talking through one of the S&OP planning sessions that will be running at the event.

In this podcast, he provides a brief introduction to sales and operations planning (S&OP) in SAP and then discusses how to achieve more integrated S&OP using standard system functionality. You can listen to the podcast here: http://bit.ly/16XZs1b

For more insights into S&OP optimization, don't miss the upcoming #SCM2013 conference in Prague, April 24-26: http://bit.ly/YIwQlQ where you can find the following sessions covering S&OP:

Best practices for achieving integrated S&OP using standard system functionality
A look at the newest, powered by SAP HANA functionality to support integrated S&OP
How to manage product transitions in your S&OP process
A step-by-step guide to increase supply chain planning agility with scenario planning

I look forward to seeing you there!

-Allison

Industry Week article: Demand-Driven Supply Chains Are In Demand

Andres Botero — Tue, 19 Mar 2013 15:26:47 GMT

SAP's Micheal Lipton wrote a great piece just published last week in Industry Week. Here it is, enjoy!

http://www.industryweek.com/supplier-relationships/demand-driven-supply-chains-are-demand

Emerging Markets and the different stage of adoption of SCM solutions: report from SAP FORUM Colombia

Andres Botero — Tue, 19 Mar 2013 15:20:12 GMT

Hello all,

LatAm is in full swing holding SAP FORUMs, very large events modeled after SAPPHIRE that mix thought leadership, pipeline generation and advancement, and deal closing. Last week I attended the SAP FORUM Colombia held in Bogota and below is a report. I will write from Peru later this week and from Chile in early March.

THE EVENT: SAP FORUM Colombia, 1000+ customer and prospect attendees

SCM PRESENCE:

· - SCM on Hana:
I presented on this topic with an emphasis on the new Sales & Operations solution powered by Hana at the request of the local sales teams -> audience of 250

· - Best in Class Logistics / SCE:
I also provided the content for a local speaker delivering “Best in Class Logistics” -> audience of 200+

INTERESTING & NOTEWORTHY:

· It is good and necesary for global SoMa / Sol Mgt to engage and ensure the appropriatness of content used in the Regions:

o Initially the local resource presenting on Best in Class Logistics/SCE was going to present a slide deck on “TM for LSPs” shown in a different event. This was inappropriate for a large cross-industry audience but the local resource was relatively new to the topic. I am glad we checked with the organization and caught the mistake.

· Adoption in emerging markets is very different

o The emerging markets are just starting in the road to diversification from ERP. From 250 attendees in my session, only 1 said his company had APO. 1 had EWM. 0 had SNC or had ever heard of it. A “delta” conversation on APO, TM, EWM or most non-ERP solutions makes no sense. They need a full solution introduction, even for solutions that are not new. In the case of Hana and SCM, the conversation is not about what Hana brings to APO. It is about what APO does (and does better and faster on Hana)

o Communication about the Value Map seemed to be very effective and well received as this emerging market audience needs to solve issues and has hard currency to spend doing it.

A request

Anurag Tiwari — Mon, 18 Mar 2013 16:32:38 GMT

Dear Experts,

Though I have posted a blog

http://scn.sap.com/community/scm/apo/demand-and-supply-network-planning/blog/2013/03/16/forum-unanswered-questions

in Demand & Supply Network Planning Space but could not find the same cascading here in this forum.

So with this thread I would request you to kindly go through the above blog post.

Thanks & Regards,

Anurag

Data transfer from one to another server..,

Jayaprakash N — Wed, 08 Aug 2012 13:38:17 GMT

Hi All,

I have customize Table with more then 5000 records. now i want to move one to another server(Development to Production) without change anything. it is possible to transfer the data along with table. But I don't know the steps. Kindly suggest me if you knew..

Thanks and Regards,

Jayapranikash N.

Register for Webinar: Sales and Operations Planning: Best Practices for Better Business Agility

Richard Howells — Tue, 17 Jul 2012 15:51:09 GMT

Webinar: Sales and Operations Planning: Best Practices for Better Business Agility

Webinar: August 1, 2012,
at 2:00 p.m. EDT

Sales and operations planning (S&OP) remains an area of particular interest to manufacturers. It has been a highly prioritized application area in IDC’s IT and supply chain survey over the last few years, and it has been a strong topic of discussion with IDC Manufacturing Insights clients in 2012. As Simon Ellis the Practice Director, Supply Chain Strategies for IDC Manufacturing Insights stated in a recent Analyst Connect report (S&OP: Best Practices for Better Business Agility) “Recent IDC Manufacturing Insights surveys certainly support the fact that companies are identifying S&OP as a top priority. This is interesting given that the concept has been around for 25 years”.

Simon went on to say “I think the reemergence of S&OP as a priority has to do primarily with the stress that the global recession put on so many businesses and the realization that in a volatile demand/complex supply business environment, all constituents in the planning process need to be aligned and focused around a consensus view of the business.”

In a recent blog (The Perfect storm is forming for S&OP) SAP wrote about the importance of technology to effectively manage and leverage the big data volumes now available from structured and unstructured sources. We are also seeing the need for increased collaboration across these global networks and the need for speed in sensing, analyzing, simulating and profitably responding to the business dynamics.

And at the eye of the proverbial storm: Global Supply Chains and the Sales & Operations Planning (S&OP) processes that drive them.

Mr. Ellis confirmed this in his Analyst Connect saying “The challenge of "big data" and practical analytics simply reinforces the need for IT capability and an S&OP application that can leverage the massive amounts of available data — both internal, downstream from retail and upstream from collaborating suppliers — to arrive at a better consensus view and, to do it in a timely enough fashion to be useful to the business”.

You can learn more about this discussion and how SAP are addressing these challenges and opportunities by joining IDC and SAP on August 1^st for an interactive discussion of the latest trends and disruptions in supply chain management – and how S&OP has reemerged as a top-of-mind issue.

During this Webinar, Simon Ellis IDC Manufacturing Insights and Krish Mantripragada, Group Vice President Business Analytics & Cloud Applications SAP, will share customer experiences and discuss how best practices in S&OP and advances in technology can help companies run like never before.

You will also hear about SAP Sales and Operations Planning, a next-generation planning application, powered by SAP HANA and delivered on the cloud that can help you bring key stakeholders together in an integrated planning environment that allows them to rapidly translate dynamic fluctuations in customer demand into actionable operational plans for logistics, manufacturing and procurement.

Don't miss out on this hot topic.

You can follow me on twitter @howellsrichard

The Logistics Of The Olympics Is A Marathon, Not A Sprint

Richard Howells — Tue, 17 Jul 2012 15:40:57 GMT

When the Olympic flame is ignited at the Olympic Stadium on July 27, it will have traveled through over 1,000 cities, towns and villages in the United Kingdom. The Olympic torch arrived in the UK from Greece on May 18 and started its 70 day journey from Land’s End to London the very next day. By the time the Olympic flame is lit, it will have been carried by 8,000 touch bearers.

The organizers have overcome a logistical challenge to ensure the Olympic Flame traveled within an hour of 95% of people in the UK, the Isle of Man, Guernsey and Jersey during the 70-day Torch Relay. But this isn’t the only logistics challenge to be overcome at the “Games of the XXX Olympiad.”

To learn more check out the full blog on forbes.com

The Logistics Of The Olympics Is A Marathon, Not A Sprint

What is the loneliest place in the world? ..... 4th place in the Olympics!!

Richard Howells — Tue, 10 Jul 2012 13:45:01 GMT

As a child in the UK, I grew up watching British athletes become the also-rans of Olympic finals. We celebrated “just being there” where “making the podium” was victory and “bronze was the new gold.”

I can imagine nothing worse than to run, swim, ride, shoot, vault or leap your hardest, only to see three of your fiercest competitors on the podium. So from a business perspective, what are some of the lessons learned to be in peak shape for the Olympics? How can you avoid being an onlooker when the abundance of gold, silver and bronze is being handed out?

Check out the full blog on forbes.com:

Fourth Place At The Olympics Is The Loneliest Place In The World

Follow me on twitter @howellsrichard

Anyone for Tennis ? - Learn how Wimbledon Aces Supply Chain Challenges

Richard Howells — Fri, 22 Jun 2012 15:19:47 GMT

As the oldest organized tennis tournament in the world, Wimbledon has become famous for its traditions. Every player must wear white, it always rains, a “Brit” usually has a spectacular failure in the semi-final and of course, the much loved (and often overpriced) strawberries and cream are gorged upon. But this year, more than ever, Wimbledon organizers are facing an astounding “supply and demand” challenge.

Check out my latest blog on forbes.com:

Wimbledon Aces Supply Chain Challenges

Follow me on twitter @howellsrichard

109 Degrees in the Shade at the Gartner Supply Chain Executive Conference 2012

Richard Howells — Fri, 25 May 2012 16:33:58 GMT

This week I was with 1,100+ supply chain professionals in Palm Desert for the Gartner Supply Chain Executive Conference. The theme of the event was “Survive or thrive in an age of uncertainty” and the attendees were mostly Director, VP or SVP supply chain professionals.

The temperature (109 at its highest) was not the only talking point of the event. The hot spots of the events from my perspective were:

The announcement of the Supply Chain top 25
End user keynotes from Unilever, HP, Pfizer and Ford Motor Company
SAP Round Table on Inventory Optimization and Response Management

SAP is HOT in the Gartner Supply Chain Top 25

At the event Gartner released the findings from its eighth annual Supply Chain Top 25. The goal of the Supply Chain Top 25 research initiative is to raise awareness of the supply chain discipline and how it impacts the business. As usual SAP customers rose to the top and by our calculations 20 of the top 25 use SAP software.

The top 25 are as follows:

Apple
Amazon.com
McDonald's
Dell
P&G
The Coca-Cola Company
Intel
Cisco Systems
Walmart
Unilever
Colgate-Palmolive
PepsiCo
Samsung
Nike
Inditex
Starbucks
H&M
Nestle
Research in Motion (RIM)
Catapiller
3M
Johnson & Johnson
Cummins
HP
Kimberly-Clark

Unilever: Delivering Sustainable Profitable Growth through the Supply Chain

Pier Luigi Sigismondi, the Chief Supply Chain Officer of Unilever described how “the company has transformed its supply chain into a globally led, interdependent organization”. This has “allowed Unilever to move from an era of functional excellence to a holistic approach of supply chain management, drive profitable volume growth through engaging the supply chain with the business, and to transform its network into a demand-driven value chain”.

He explained that at the start of this project, “Unilever had a vision of doubling the size of the business in the next 10 years (80b euros) and reduce their environmental impact”. The size of this challenge was highlighted by some of the statistics that were shared:

Unilever have 2b consumer’s every day.
54% of sales are in emerging markets
Sell into 180 countries
1000's of products in the portfolio
280 factories globally with 60% located in low cost countries
480 warehouses
31b euros procured annually

Unilever supply chain transformation

Step 1: Start with the basics: Unilever 1^st focused on:
- Improving brand equity by reducing complaints and product incidents (recalls)
- Enable top line growth – Unilever improved on shelf availability in all regions by 740 basis points.

Step 2: Focus on what is making the real difference?
- Global scale with local agility – e.g.
  - Segmenting the supply chain by portfolio mix, category mix, channel mix and geographical mix.
  - Different routes to market by region
  - Central sourcing with local call offs.
  - Regional logistics hubs for integrated operations for order to cash processes
- Speed – As Pier Luigi stated several times "speed is our currency", and you have got to be 1st to market. Discussed the partnership with Lotus F1 Team and how to bring products to market globally in less than 6 months.
- Partnership with suppliers – Enabling tactical buying to leverage strategic suppliers
  - 48% of innovation pipeline is with partners
  - 1.3 b euros of capacity are committed by partners (Equivalent of 40 factories).
- Sustainable growth (Unilever Sustainable Living Plan) is end to end across the supply chain from raw materials, through manufacturing and transportation through to consumer use and disposal
  - 60% of paper and boards are certified or recycled.
  - 1/4 of agricultural raw materials are sustainably sourced (goal is 100%)
  - Over half of Lipton tea contains rainforest certified tea
  - 600,000 tons of CO2 has been cut out of the supply chain
  - 1/3 of sites produce zero waste
- Building a talent powerhouse – “If you think education is expensive, try ignorance"!!

HP: Agile Supply Chain Management: Optimizing for an Unpredictable World

Tony Prophet, the Senior Vice President of, Operations for Hewlett-Packard Company talked about the multi-year journey his company is on to drive flexibility, speed and leverage its scale as a modern supply chain. As Tony stated, "HP has one of the largest IT supply chains in the world" so the challenge is not trivial when you "deliver 4 servers, 120 PCs and 100 printers EVERY 60 seconds!!"

In mid-2009 HP started an initiative to improve supply chain processes and to date (or up to the end of 2011) have:

Reduced nodes In the network by 25%
Reduced physical network partners by 20%
Reduced total number of suppliers 48%
Reduced factories in the Printing and Personal Systems Division from 80 to 30. These factories are geographically dispersed in America, Mexico, Brazil, Europe and Asia. This broad manufacturing base makes it easier to sell and distribute across the globe.

HP – Leading the way in China

It was particularly interesting to hear about the work that HP have done in China where they have 4 facilities:

Chongqing - domestic PCs, export PCs and printers
Shanghai - PCs and servers
Wuhan - PCs
Shenzhen - Printers

Chongquing was of particular interest as the location (in Central China) was a key strategic decision to insure availability of labor. However, as Tony explained “exporting from central China was the challenge”. HP collaborated with Chinese ministry of rail to improve logistics to the port cities. They also worked with government to build a larger runway in Chongqing. Next step is to have a “Land bridge” through the introduction of a block train from Central China to Europe (38 days by sea, 25 days by rail at a higher cost, but cheaper than air).

Building Resilience across the network

Tony also discussed the work that HP have been doing around risk management and how they fared during the well published natural disasters over the past few years:

Volcano in Iceland April 2010 caused the largest logistics challenge in recent history
- Impact -70% of HP products move by air!!
- Leveraged strong logistics relationships to initiate the continuity processes in place
- Bought charter planes to import from China to open airports in Dubia and ship to Europe from the new hub
Tsunami in Japan march 2011
- Impact - Decimated the physical and energy infrastructure - roads, rail, sea and air
- 1^st assessed the status of employees
- Damage assessment across multiple tiers - Japan has a central role in the HiTech industry at 2nd or 3rd tier (produce 16% of semiconductors, 35% of LCD glass and 85% of resins)
Thailand flood - Oct 2011
- Impact - Much of the hard disk motor manufacturing impacted in the market. This caused an extended impact to the entire supply chain.
- Need to balance efficiency and risk by having alternate sources and have visibility at multiple levels in the network to increase diversity.

HP is currently 24^th in the Gartner Top 25.

Ford Motor Company: Manage the Realities and Plan to Change the Future

Stephen Harley, Executive Director of Ford Motors Materials Planning and Logistics organization explained how Ford have developed a supply chain management competency that has enabled it to navigate a record amount of critical supply situations, including ash clouds, snow, hail, hurricanes, tsunamis, floods, nuclear accidents and, as Steve joked “even a plague of Locusts” .

Steve kicked of his presentation by explaining how, prior to financial crash Ford mortgaged everything (including their Brand) for $27b. The day before this presentation, Ford were again declared "investment grade" and know "own the Ford Oval again".

Steve focused his talk on the value of "daily innovation and how not just to survive, but to thrive" in a complex network of:

6 million cars produced a year
70 plants worldwide
1400 tier 1 suppliers with 4400 manufacturing sites
8900 service parts suppliers
Up to 10 tier supply chain
"Logistic challenges of 34% of suppliers are more than 2500 miles away from a manufacturing site"
Ford manages risk for 50 suppliers and 1500 part numbers.

“One Ford” Strategy

The “one Ford” strategy is a major initiative to change the future through:

Flexible manufacturing strategy
Key area of process discipline across the supply chain
Manage capacity and complexity of suppliers
Improve forecast accuracy
Manage risk by
- Driving the decisions back into the sourcing.
- Drill down with 1st tier suppliers to identify key items and have alternatives
- Fully transparent with 1st tier suppliers to get visibility to their suppliers items
- Recognize employee contributions to managing risk
Deploy "scrambling skills" only when necessary

Pfizer: Managing Highly Flexible Supply Networks to Win in the Global Healthcare Marketplace

Jim Cafone the VP of Supply Network Services continued the theme of managing complex global networks (this time in the healthcare industry). He described the size of the challeng within Pfizer who:

Generate $65 billion in annual revenue
Do business in 150 countries
Manage 89 manufacturing sites
Work with 500 third parties
600 product groups
3000 recipes
35,000 sku's

Segmenting the market

The big challenge that Pfizer faced was "how do you optimize a network that is highly fixed, and highly structured in a regulated industry"?

Pfizer are “winning through supply chain excellence”. Jim stated that “companies compete and win either on agility, cost or service”. He went on to explain how this translates within a particular product line , Lipitor which has over 800 sku's, which is sold in 84 countries that have different regulatory rules and guidelines. Depending on where it is sold it competes on agility, cost, or service. When on patent it is about service. When it competes against generics it's about costs. In emerging markets it is about agility. Therefore, Pfizer segment markets on cost, agility and service.

Supply chain virtualization

Jim also discussed how Pfizer addresses the challenge of how to connect internal and external manufacturing, and any other trading partner in the network. There was a time when everything was done within the 4 walls of Pfizer, but this has shifted to "focus on core and outsource the rest" with a single business ERP platform. And as Jim pointed out “as you move your value chain outside your 4 walls you take on a lot more risk".

Hot Topic: Inventory Optimization and Response Management

SAP hosted a lunch round table on the topic of “Advances in Supply Chain - Inventory Optimization and Response Management”. This session was VERY popular and we way exceeded our goal with 60+ registrants. The session was hosted by Keith Baranowski who discussed the topic with Dave Winstone the Director of Supply Chain, Dow AgroSciences, and Michael Hartman of ICON-SCM. There was an active debate on how Dow utilizes the software and the lessons learned, best practices, and what to consider when such projects are undertaken.

Summary

This was a great event to meet and talk to the top supply chain exeutives, but my favorite quote of all was not supply chain related at all.

"Next year, we will have this event on the sun. It is just as hot, and just as difficult to get to!!"

Richard

You can follow me on twitter @howellsrichard