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Supply Chain Management (SAP SCM)

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The release of SAP IBP6.0, just around the corner, will contain the first release of IBP for Supply and Response.  This will be a landmark in the development of the IBP suite, introducing order level planning capability.  As a result SAP customers will, for the first time, be offered real choices in how they develop their planning application capability. However with choice comes uncertainty, this is especially the case for those who currently run SCM-APO and have developed their supply chain planning processes around this tool set. These organisations should not be alarmed, SAP has committed support of SCM-APO as a component of business suite until at least 2025. However customers should not expect widespread innovation or enhancement. SAP’s vision for IBP however is far broader than delivering a turbo charged version of APO running on HANA. When complete the tool set will, for the first time, provide the basis to integrate strategic, tactical and operational planning, facilitating “full business planning”. IBP is constructed of five modules, two of which; IBP for Sales and Operations and Supply Chain Control Tower, provide end to end planning and monitoring capability. These tools are aimed at supporting management decision making and control, setting the direction for operational plans and supply chain execution. Unsurprisingly, these are also the two modules that SAP focused on first when developing the product.

SCM Roadmap Overview Diagram v3.0.PNG

IBP for Sales and Operations and Supply Chain Control Tower provide end to end planning and monitoring capability

 

Those familiar with SCM-APO will know that this type of decision support is not a strength of the tool, the ability to quickly model alternative options, understand the financial impact and the resulting KPIs are all near the top of the list when clients discuss what they wanted from their APO implementation but have struggled to achieve. The reality is APO continues to offer strong core operational planning engines, but over the years has fallen behind competing products, in terms of decision support, analytics and the user experience. In terms of capability to model large, complex supply chains and to quickly and consistently navigate through multiple views large volumes of data SAP recognised the advantage of waiting for the HANA architecture to be available. Now that it is they have addressed these historical weaknesses head-on with Supply Chain Control Tower (SCT) and IBP for Sales and Operations.


Supply Chain Control Tower

The first thing users will notice with SCT and all IBP modules is that the browser based interface is transformed from the cluttered interface that ECC and SCM users are used to.  It is much more akin to a consumer IT interface, suitable for occasional as well as regular users. The control tower is designed to collate data and events from across the extended supply chain, from planning and execution applications. Giving supply chain controllers an insight both upstream and downstream and across multiple markets and regions within the enterprise. As well as configurable KPIs, alerts are provided to trigger analysis and case management tools available to track interventions.


SCT 1 v1.0.PNG

IBP for Sales and Operations

IBP4.0, released in early 2015, heralded the arrival of a much more complete, mature version of IBP for Sales and Operations.  The application allows organisations to model their existing S&OP process and configure dashboards and analytics to support each step of the decision making cycle.

As well as integration to SCM-APO, and ERP systems to extract operational planning data, it is possible to generate and evaluate demand and supply plans on the fly[1]. In the majority of use cases this will be at an aggregated level, over a longer term horizon, aimed at supporting the strategic and tactical decisions made within a typical S&OP process. However the HANA architecture allows data to be stored at the level of granularity required to be consistent with the operational plan. Simulation capability along with the ability to model the top and bottom line impact of alternative decision options sets the product apart from the any SCM-APO or BI based S&OP support tools. In addition SAP’s collaboration tool JAM, is integrated offering the capability to manage and record the decision making workflow allowing the full S&OP meeting cycle to be systemised. JAM is however licensed as a separate application.

 

In terms of the planner’s user experience IBP for Sales and Operations offers an Excel based user interface for the detailed planning work, data from this interface is stored directly in the IBP HANA data model, offering the presentation style and flexibility that planners demand without compromising data integrity.

S&OP 1 v1.0.PNG

Whilst IBP for Sales and Operations and Supply Chain Control Tower are both now complete, “customer ready” products they are in the early stages of their lifecycle, customers should not underestimate the effort required to establish tight integration to mature SCM and ECC installations and to develop a well-tuned, process orientated data model.


Beyond Supply Chain Control Tower and IBP for Sales and Operations the differentiated capability of the remaining IBP modules is less clear. These modules all directly address functions that are already encompassed, in someway, within SCM-APO or within Enterprise Inventory and Service (formerly SmartOps Inventory Optimisation). There are specific enhanced capabilities in all areas, and the browser UI combined with the Excel plug-in, which is available in all modules will appeal to many customers. However customers who run demand and supply planning within SCM-APO should take care that in the short-term they do not lose capabilities which are tried and tested. For these customers the option exists to pick and choose selected additional capabilities as they mature, but in the short term continue to run core operational planning processes within their SCM-APO environment. The table below summarise the key differentiated capabilities for IBP for Demand, for Inventory and for Supply and Response with alternative, more established SAP solutions.

Table v1.0.PNG

This summary reflects the anticipated solution capability as of the release of IBP6.0.  It is expected that IBP capability within operational planning will develop significantly in subsequent releases throughout 2016 and 2017.

 

Of course one of the key choices facing customers is whether they wish their planning applications to run in the cloud or to run in an on-premise solution. IBP is only currently available as a cloud service whereas the majority of the established SCM and EIS solutions are deployed on-premise.

 

So where does this leave SCM-APO customers?

First and foremost the developing maturity of the IBP tool set, combined with the SAP’s commitment to SCM through to at least 2025 means their customers have choices. Those who identify which elements of IBP offer them a step change in capability and as a result are able to take a step towards “full business planning” will steal a march. It is likely that greatest advantage is to be gained from improved decision support tools followed by selective enhancement of the core planning capabilities. It could be a number of years and several releases before the migration of entire operational planning processes to IBP becomes an option for those with complex supply chains and advanced tools in place today. Furthermore in the end state it is quite likely that some of the very near term functions, such as manufacturing schedule optimisation will continue to be supported outside of IBP. Therefore the ability to weave these processes and solutions together, with consistent data models and integrated processes will become the key to success. Here the HANA integration layer (HCI) and the degree that integration is “out of the box” becomes central to the speed of benefits delivery.

 

Whilst there is no single route that will suit all customers a possible road map could encompass the following phases;

 

SCM Roadmap Steps 1 and 2 v3.0.PNG

SCM Roadmap Steps 3 and 4 v4.0.PNG

 

Organisations will find their own path, many may take a number of smaller steps within any of the phases above or even skip a phase entirely.  Those that recognise the choices that are now available and plot a route which maintains the integrity core planning processes whilst leaving room to benefit from new capabilities as they mature will find the journey most rewarding.

 


[1] Readers should refer to OSS note 2076414 for guidance on the applications required to support this capability



December. A month we once again find ourselves pondering over the mystery of Santa Claus. For centuries Mr Claus has had an unblemished reputation for "delivering to promise". But how is he able to do so? How is he able to manage a complex and globalised supply chain which consistently delights those on the 'nice list' year after year? In this blog we will uncover a major secret underpinning his Supply Chain success...

 

In recent years, due to increasing population levels it is believed Mr Claus has had to expand his production. No longer does he solely rely upon his little helpers but instead he relies upon suppliers outside of the North Pole. Whilst this outsourcing has enabled Santa to ensure he can meet demands, this has also created difficulties as he must effectively collaborate and communicate with external suppliers across the globe to ensure that they are operating efficiently and will be able to deliver the goods required. With SAP's Supply Chain Control Tower, Santa is able to overcome these challenges. The device enables users to communicate in real-time both internally and externally to track performance and communicate with users.

 

Another challenge Santa faces is how to make sense of all the data compiled within each letter? Every year Santa receives billions of requests from boys and girls all over the world, but with every name on the 'naughty' or 'nice' list is a specific order which must effectively fulfilled. Once again, the Control Tower assist Santa in overcoming his challenges. The device integrates all data from various sources into a single view, to improve Santa's accuracy and decision making capabilities. With the help of the Control Tower, Santa no longer needs to maintain his list and 'check it twice'

 

In addition, with help from the Control Tower Santa is able to carry out "what-if" planning analysis across internal and external systems. This enables both Santa and his helpers to test the future impact of their decisions and enables them to compare different scenarios in a simple and flexible manner. For example, with "what-if" capabilities, Santa can check whether supply is guaranteed when snow is on the road.

 

Inventory shortages are one of the most common challenges encountered by firms and for Mr Claus this is no exception. If there is a spike in demand for the latest Star Wars toys, the Control Tower detects this and informs Santa of the change. Santa is able to action and can inform his elves to increase their production volume to ensure those on the "nice list" are given their desired gifts. With the Control Tower's Smart Alert and Exception Management capabilities users can uncover trends and patterns in an adhoc and empowered manner as a result, potential disasters can be overcome.

 

So, whilst time zones may arguably help Santa to ensure he delivers presents to every boy and girl across the world, the critical enables in his is technology. Without Santa's technological advancements, his requirements to deliver presents to billions of people across the world would not be possible. With the Control Tower and its global end-to-end visibility Santa is able to effectively predict, control and monitor his operations and is able to uphold his reputation for delivering superior customer service.

 

 

Christmas Tree.png

At openSAP in 2015, we looked at a number of aspects of digital transformation on openSAP. We started off with Digital Transformation and Its Impact and closed with Leadership in Digital Transformation. To kick start 2016, we’re going to take a closer look at the specifics of Digital Transformation Across the Extended Supply Chain – In a Nutshell

 

Supply Chain Management has been an important element of business in the past and will retain its value throughout the digital transformation and beyond. But how has digitization impacted the supply chain and what do you need to know? There are four main elements affecting the supply chain; resource scarcity, individualized products, sharing economy, and customer centricity.

 

This course will explain how each of these elements is affecting the supply chain and why your business processes and systems need to evolve to remain competitive in the digital economy. Join the content experts and other learners in the course forum to discuss how your business has changed and ask your peers how they’ve overcome obstacles presented by the digital economy.

 

The course begins January 11 and contains four hours of content in total. The forum and assignment will remain open for four weeks to give you the chance to get involved in the discussion and earn your Record of Achievement. Sign up for free today and get ready to start 2016 with a head start on digital transformation across the extended supply chain!




openSAP courses are free of charge and open to everyone. All you need to sign up is a valid email address.


Other courses now open for enrollment

Text Analytics with SAP HANA Platform

Reporting with SAP Business ByDesign

Sustainability Through Digital Transformation

Build Your Own SAP Fiori App in the Cloud – 2016 Edition

SIT (SAP Inside Track) 2015 event was one of the most interesting events one should have ever attended. We can say people who have attended this event for them it would be turning point in their SAP careers and open window for next generation SAP consultants.

 

IT was Saturday perfect sunny day of winter, good weather to go hiking, trekking or just outing with family. But scene at Deloitte Hyderabad office was different, we would passionate SAP Professionals from various IT forms from all levels (approx. 300+) sharp at 8:30 a.m. ready to explore SAP world.( absolutely with no regrets)

 

I liked the Mantra given by speaker from SAP labs: UNLEARN, LEARN, RELEARN

He also mentioned to redefine business processes we need to reimagine business model, following principles I found very useful to do so--Intelligence, Agility, Openness, Individuality, Empathy, Elasticity & Scalability and Continuity.

 

Future of IT was explained with examples in detail presentation, I captured following points thought to be helpful to share:

1. Software=Network by open platform

2. One cannot do it all alone

3. Basis of completion--Consumer experience

4. Cloud first mindset

5. Highly modular and scalable software

6. Software is moving from business documentation to business decision and outcome.

 

With powerful presentation by SAP lab speaker, inspiring messages by Deloitte Senior Managers and motivational speech by Deloitte Director we kick off this event, sessions starting from 10 a.m. for 6 tracks--Finance, Logistics, Development, UX and Mobility, Infrastructure and Data & reporting, in all 36 topics presented by 44 speakers.

 

SAP HANA was all over, covered in all topics, from Logistics perspective some of the interesting topics were:

  • MRP live on HANA S/4, very interesting and useful change over by SAP on MRP. I believe all MRP controller would love this avatar of MRP Live not only providing more information, user friendly screens but all more control.
  • IOT (Internet of things) possibilities with retail--this session really allowed you to stretch your brain capability to extreme levels, rather I would say you enter into different world of possibilities, sharing information between any thing, action based on information share and automation to the extend which we never thought, all mind blowing
  • S/4 HANA new functionality in Logistics and Manufacturing processes--in 40 min these consultants were able to make an impact that this is what we need to run future business
  • ARIBA is the future of procurement, we all new that and read, got to know from lot of sources, but I started believing after this session of PO invoice automation with ARIBA.
  • Enterprise Inventory with service level optimization was one of my interest area where planning is involved to calculate stock to be available just in time, at right place with right quantity, Consultants did their best to present with lot of examples and engage audience with stories, but frankly if you are not MRP guy or planner you will get bore. While I truly enjoyed this session  understanding new possibilities of service level optimization.

I can conclude this event as very successful, well organized, specialized speakers, opportunity to network with industry leaders, sessions selected thoughtfully and arranged in proper sequence, very good infrastructure, SPOC always available for any information, total support from volunteers and yes very important, Yummy food

If my family’s buying habits are any indication, Omni-channel Marketing and Commerce are the two most important things that retailers and consumer product companies should be working on right now. Today being Cyber Monday, Omni-channel Commerce is the topic du jour.

The essence of Omni-channel Commerce is to allow customers to buy products anywhere at anytime and let the customer get the product(s) in the most convenient manner as soon as possible. It certainly takes more than building and deploying a responsive and scalable commerce website and mobile application to support Omni-channel Commerce profitably.

While Omni-channel Commerce is clearly essential for retailers amid the onslaught of Amazon and other pure-play e-tailers, it is also increasingly necessary for consumer products companies and brand owners. Take for example Dollar Shave Club, which is boisterously attacking the mens’ shaving category. It is an unusual and potentially profit-sapping competition for a company like Gillette, a division of P&G, which relies primarily on traditional retail distribution channels. Gillette might lose marketshare and mindshare if it does not respond to competition from the likes of Dollar Shave Club. These type of competitive puzzles abound in many Consumer and Business-to-Business product categories.

The answer clearly for retailers and brand owners is to develop Omni-channel Commerce capabilities, continually experiment and improve those capabilities. They key goal, of course, is to support Omni-channel Commerce profitably. The Webvan debacle of dot com era continues to cast an ominous shadow, however. Fortunately and thanks to the likes of Uber, Google Express, Postmates and Deliv, the last mile ecosystem to support Omni-channel Commerce is getting better, ubiquitous and cheaper.

At the same time, the design and implementation of the rest of the supply chain, including distribution centers, transportation options, inventory placement, is just as crucial to ensure profitable Omni-channel Commerce. The picture below shows a highly simplified supply chain designed to support Omni-channel Commerce (and/or a consumer product company that is operating in an Omni-channel environment).

your-omni-channel-is-only-as-good-as-your-supply-chain.png

It is clear that behind the glossy and responsive website and mobile application is a substantial real world infrastructure that makes Omni-channel Commerce possible. The key, however, is to have a supply chain that can fulfill the promise of Omni-channel Commerce profitably.  Omni-channel Commerce adds a number of complexities that are usually not present in traditional retail or pure e-tail channels, including

  • Order online and pick up from store
  • Product availability in stores for online order fulfillment
  • Integration of non-traditional, low cost last mile delivery options
  • Inventory positioning
  • Retail store as a warehouse
  • Returns processing
  • Short-term inventory rebalancing


High customer acquisition costs and logistics costs continue to make life difficult for pure play e-tailers as they struggle to earn a reasonable return on investment. On the other hand, a well designed and operated Supply Chain for Omni-channel Commerce builds on the strengths of traditional retailers and provides a competitive edge that cannot easily be replicated by pure play e-tailers or category specialists like Dollar Shave Club.

Implementing multi-stage inventory optimization successfully requires centralization, harmonization and cleansing of data. Success involves developing a robust baseline of the current situation and compare against optimization application results.  However, companies can face challenges capturing such robust baseline. For instance, at times, business data reports capture incomplete inventory data such as total and not by product, limited to units of measures or currency, not available in some locations/nodes of the supply chain, or measured in purchasing costs.

 

As shown in the supply chain network graph drawn directly from the data, the ABC Supply Chain Network services five customers from three packaging / finished goods warehouses and supplied by one raw material warehouse. .  Reported inventory data at the raw material warehouse only include total monetary value expressed in currency, not by raw material product nor in units.  While, the processing/finished goods warehouses have inventory data by product in different units of measure, but they are missing the monetary value of such.

 

2015-11-25_13-12-17.png

 

 

In such cases, multi-stage inventory optimization applications like SAP Integrated Business Planning for inventory (http://scn.sap.com/docs/DOC-65688) can help companies capturing incomplete data.  How?

  • SAP integrated Business Planning for inventory offers single-stage inventory optimization that produces target inventory recommendations for selected nodes in the supply chain network.
  • That is, for each individual node of the supply chain with incomplete inventory data, a company can run a single-stage optimization in order to produce the missing data expressed in units, velocity (days of supply) and/or value (currency).
  • With the resulting single-stage optimization data, the company can complete a robust inventory data baseline needed for bench-marking against the results of implementing a multi-stage inventory optimization of its end-to-end supply chain network.

On November 20, as part of our transportation & logistics platform, we have launched the first release of SAP Yard Logistics. Yard Logistics enable companies to connect to activity in the yard, on the docks, and at the gates – improving the flow of goods in and out of the facility. It gives companies visibility to the whole process from the time goods arrived in the yard to the time they were unloaded.

 

SAP Yard Logistics is based on the SAP HANA / Legacy Database and is integrated with the SAP Transportation Management (SAP TM) and SAP Extended Warehouse Management (SAP EWM) applications for a logistics fulfillment platform. The solution helps prioritize shipment arrivals, identify trailer contents, manage yard jockey activity, standardize yard processes, reduce the time needed to allocate vehicles to loads, and avoid unnecessary vehicle movements. Our SAP solution supports mobile users and is integrated with charge calculation and settlement in SAP TM. A graphical layout enables monitoring, visualization of the yard’s actual situation.  By an easy to use desktop and mobile UI the business user is supported in deciding and taking immediate actions known as “see and act “.

 

20-11-2015 10-43-06.png

 

Objectives

  • Increase visibility of all yard processes
  • Improve efficiency for user roles such as dispatchers; truck, train, and vessel drivers; the internal and external workforce; and security
  • Provide planning, execution, and settlement functionality in one central system
  • Integrate with existing business processes

 

Solution

  • Simple-to-adapt yard processes for different means of transports
  • Integration with the SAP Transportation Management (SAP TM) and SAP Extended Warehouse Management applications for a logistics fulfillment platform
  • Integration with charge calculation and settlement in SAP TM
  • Support for mobile users
  • Flexible deployment scenarios

 

Benefits

  • Comprehensive, scalable yard management
  • Faster speed of operation with intuitive UIs and mobile access
  • Reduced paper-based work
  • One central system for all various yards, integrated to existing landscape

 

For more details please refer to http://help.sap.com/yl  or get in contanct with me.

 

Christian Reinhardt

christian.reinhardt@sap.com

Product Owner SAP Yard Logistics

Digitization will reinvent the world economy; individuals, businesses and societies are becoming interconnected in real time, leading to a new Digital Economy that is more collaborative, intelligent, responsive, and efficient with dramatic increases in productivity and economic value.

The Digital Economy will transform the way we live and work, how business runs, and how society functions – and do this in a time frame that is radically shorter than any other major economic transition in history.

 

Over the past few years, networks have evolved that have connected individuals, groups and organizations.  We started with “People Networks” like Facebook and linked in. This was followed by “business Networks” such as the Ariba business network.  The IoT made these networks even more connected by bringing connectivity to literally “everything”.

 

This has resulted in a new digital economy where:

  • Everything is becoming digitized
  • Everything, and everyone is connected
  • Everything is being shared via the cloud
  • Everything is now personalized
  • Everything is directly available

 

There are many examples in business today:

  • Uber is the world’s largest taxi company but owns no taxis.
  • Airbnb is the largest accommodation provider but owns no real estate
  • Alibaba is the world’s largest e-commerce company but owns no inventory
  • Netflix is the world’s largest movie house but owns no cinemas
  • Apple is the world’s largest music distributor but owns no music
  • Amazon is the world’s largest book distributor but owns no books

 

 

To be in a position to capture and create these opportunities, companies must develop an environment in which they can manage information and processes across the extended supply chain.

 

This new evolution of supply chains are more connected, more intelligent, more responsive and more predictive. This transformation has, and will continue to, transform the business processes and systems that are required to remain competitive. It will change how we design, plan, respond, make, ship and operate our products and assets.

 

SAP is conducting a research study to determine where companies are in their journey to "Digitize the Extended Supply Chain" with the goal of determining how companies can capture and leverage big data to determine:

 

  • How far is your enterprise with the Digital Transformation?
  • Where do you get started?
  • What benefits do you expect?

 

 

The findings results will be published in December. 

 

To take part in the discussion click here.

Today, SAP is proud to announce that SAP Transportation Management 9.3 (SAP TM) and SAP Extended Warehouse Management 9.3 (SAP EWM) is now generally available to customers.

 

SAP TM offers customers holistic, end-to-end logistics process support, including integrated planning, orchestration, execution, tracking and settlement of the physical movement of goods across all modes of transport.

 

With the latest release, the application has been extended to enable the transit warehouse scenario as well as introducing group company logistics that enable the establishment of internal logistics acting like service providers. Further innovations cover enhancements in strategic freight management, in load and pallet building as well as resource planning integration for better visibility and planning of the container fleet.

 

SAP EWM offers an end-to-end support for the operational value chain. It is a software system for warehosue management and stock control in all warehousing activities. With SAP EWM 9.3, customers can plan, source, transport and deliver better than ever with the latest innovations.

 

With the introduction of transit warehouse capabilities, logistics companies can manage complex movements of goods from origin, to consolitdation points to destination. It allows to unload, consolidate and load packages instead of products. Further enhancements introduce billing of warehouse services for both, logistics service providers as well as for shippers contracting warehouse services.

 

Additional information on SAP TM and SAP EWM can be found below:

CT.jpg

Gaining real time End 2 End Supply Chain visibility

 

Today, supply chain managers are facing big challenges with complex supply chains in a global environment.

 

Market volatility, demand fluctuation, long lead times, need for fast responsiveness, high service levels are just some of today critical factors.

 

Speed is the key. Not only organizations need to have a real time network visibility, but also they need to identify problems in advance and understand the reasons behind those issues.

 

More and more organizations are looking at the Supply Chain Control Tower as the way to achieve this.

The Supply Chain Control Tower is a single central HUB for visibility, decision-making and action, based on real-time data powered by new in memory and cloud technologies.

 

The Supply Chain Control Tower is not another Business Intelligence tool. It enables companies to identify potential issues in advance, understand their causes and find the best resolution. This is supported by a system of alerts, simulations and recommendations.

 

SAP Supply Chain Control Tower connects data from different systems (in house or external, execution or planning systems; including SAP Integrated Business Planning, SAP Event Management and SAP Transportation Management). For short-term issue handling, it allows organizations to obtain instant insights into demand, inventory and supply across the entire supply chain. It provides predefined real time KPI and dashboards, to have real time supply chain visibility.

 

Since the SAP Supply Chain Control Tower is built on the same platform as SAP Integrated Business Planning (SAP IBP), it can leverage SAP IBP capabilities such as planning and simulation. Comparing different options with what-if analysis and scenario planning, enables better decision making and effective actions (i.e. simulate year end inventory projection by making demand or supply adjustments; make on the fly simulations for inventory value if price changes).

 

SAP Supply Chain Control Tower also takes advantage of IBP usability capabilities such as its Excel plug-in interface for scenario planning. It provides an event resolution mechanism, “Case and Task Management,” in which supply chain users can collaborate on a problem to agree on the path to undertake, start the resolution and monitor the results. It thus enables fast problem resolution, by quickly identifying issues with prioritized alerts.


For more information, visit SAP and SDN.

http://go.sap.com/solution/lob/supply-chain.html

http://go.sap.com/solution/lob/supply-chain/extended-insights.html

http://scn.sap.com/docs/DOC-65781





Voice of Color.jpg

PPG is the company you never knew touched you so many times every day. From soda cans, auto and airplane paint, passport paper, hot wheels, NFL helmets, and smartphones.

PPG is the world’s largest paint company and generates over $15.4 billion dollar in annual revenues as a global supplier of paints, coatings, optical products, specialty materials, glass and fiber glass.


At the Global SAP Inventory Optimization User Group meeting this week, PPG shared their amazing journey to become a “Best-in-Class” Supply Chain.                                               

SUG User Group October 2015.png

*Missing many participants

 

Scott Sinetar, VP Architectural Coatings (think paint cans for homes) inspired us with his view on the criticality of the Supply Chain function to executing the Corporate Strategy. “It will either enable us to meet our objectives or hold us back.” Peter Ten Hagen, Head of Supply Chain and Global Director, Supply Chain and Operations for Automotive Refinish shared techniques to drive “Best-in-Class” Supply Chain governance and adoption.


Scott also shared the challenges of managing PPG’s Supply Chain and industry business challenges:

  • PPG’s Architectural business has expanded 150% through the Akzo Nobel Architectural acquisition.
  • PPG Architectural Coatings is now selling through all three major channels:  big box retailers, company owned stores and a network of dealers.
  • Architectural paints with all the stores, big box retailers is super competitive and sales are highly impacted by weather (wet and hot).
  • PPG has transitioned the company’s profile to focus on Coatings which has meant an aggressive acquisition and divestment strategy, and this has changed their supply chain requirements.
  • The business units each run their own P&L and the company is run in a decentralized manner.  There is not a central supply chain organization, but best practices are shared through a Supply Chain Council that includes representatives from each business unit and key functions.

 

PPG’s Overall Business Scope:

  • 11 Strategic Business Units
  • ~175,000 SKUs

PPG Architectural has ~1,000 stores in the United States and Canada

Peter Ten-Hagen - SCC.pngThe User Group explored how the global enterprise level Supply Chain Council (SCC) improves the supply chain by breaking down the functional silos and eventually enables a more integrated business model.


The approach to driving performance across the entire enterprise involves completing cross business assessments of metrics through a scorecard. The scorecard is reviewed by Executives (red is bad) and the key stakeholders are driven to “You are what you measure.” Business stakeholders are asked to come up with action plans and to self assess their performance against those action plans.

 

The nice part of the SCC is that it provides a path to improvement with formal programs, tools, and support structures for all the supply chain processes. Cross-business sub-teams focus in on establishing best practices for the entire enterprise. These guides are then provided as roadmaps to success.

 

Recently, PPG top executives set a 10 day reduction in inventory challenge.

Luckily, the SCC has a 6-Step Inventory Management Program:

  1. Model
  2. Clean up (unhealthy inventory)
  3. Simplify (your portfolio)
  4. Understand Drivers
  5. Optimize through SAP Inventory Optimization Software
  6. Monitor


And, of course, those that implemented the program had the quantifiable benefit of reduction in Days on Hand. So why not do it!


The keys to PPG’s Supply Chain Transformation success:

  • Secure Executive Sponsorship
  • Keep metrics front and center.
  • Keep Business Unit leadership up to date on initiative progress.
  • Provide a path to success to those who are behind.

 

Thanks to all who attended and contributed to the event, the PPG team for hosting, especially Thomas Oberhauser, Lisa Vincenty, and Dan Kohler for coordinating, and to Scott Sinetar and Peter Ten Hagen for inspiring us to achieve supply chain and business success!

 

*SAP Inventory Optimization Solutions include SAP Enterprise Inventory and Service-level Optimization and SAP Integrated Business Planning for inventory

Following on from the previous blog, which sought to highlight the benefits from implementing Advanced Planning and Optimization (APO)on HANA, in this blog we will seek to explore the technical implications of this transition.

..............

 

As an existing APO customer, under what circumstances should I choose to implement APO on HANA?

  • If you are upgrading to the release of SCM 7.0 Enhancement Pack 03
  • If you are seeking to implement the Supply Chain Info Center
  • If you are facing performance issues in the end-to-end DP, PP/DS, or Back Order Processing in gATP
  • If you are seeking to change your database vendor and move to an inMemory Platform

 

Are there any prerequisites for implementing APO on HANA?

  • SAP HANA runs natively only on Unicode. Unicode conversions can be done during the database migration but preparatory steps are required

 

Additionally, for the migration the following are also required/ recommended:

  • Custom Code Adjustment and Optimization (Required)
  • Data Volume Reduction (Recommended)
  • Evaluation of Restricted Add-Ons, Scenarios, and Processes (Required)
  • Dual-Stack Split (Required if Dual-Stack Source System)

 

Resource Requirements

  • Certified and Experienced Migration Specialist Required

 

How Should I Start?


Step 1: Implement APO on HANA PoC

PoC is a start smart into the HANA world. With APO-on-HANA PoC, you can establish a well-founded argument for a GoLive Decision as it enables users to experience the benefits of a HANA powered system landscape. In addition, as APO has less risky process in comparison ERP, users of APO-on-HANA can minimise risks and be prepared for the next steps.


Step 2: APO on HANA Go-Live Project

In this stage users can profit from the preparation and know how gained in the PoC stage as, due to the previous implementation of APO-on HANA PoC, the Go-Live stage will be smoother and less risky.


Step 3: ERP and Other SAP Modules Go-Live Project (Optional)

In this stage users can minimise risks on their further SuiteonHANA implementations. This is because they can utilize the HANA experience gained from the migration/ update and operations in the APOonHANA Go-Live stage. In addition, in this stage users businesses can benefit from having a faster interaction between their systems, can profit from HW cost savings, and can obtain a positive experience from the Go Live augmentation of ERP. Users can then add additional SAP modules on HANA Go Live.

 

..........


What is the typical time required for the APO on HANA Migration?

There is no fixed amount of time. Yet, in the past the previous customer projects have taken around 6 months. This time period has included preparation, technical upgrades, migration and functional stability testing and performance comparisons.

 

See below for a typical migration project plan for the implementation of APO on HANA.
APO 1.png


In addition, here's an example of a project plan for implementing PoC SCM on HANA in a HEC environment:

APO 2.png

What is the hardware impact of the migration?

Switching to SAP has no impact on application servers or on front end. In addition, the transition has no impact on the data model or the custom extensions used. The only change, however, is the migration of database to SAP HANA Appliance which on the database server side needs special HANA Hardware.

APO 3.png

What is the sizing of SCM on HANA?

Use SAP Note 1793345- Sizing for Suite on HANA to understand sizing guidelines


HANA Appliance Memory

  • Expect a compression factor of 4 (compared to a standard AnyDB
  • Expect a compression factor of 2,5 (compared to a compressed AnyDB)
  • In addition factor 2 for temporary memory usage (e.g. for delta merges, intermediate results, in complex queries etc.)
  • (Source DB/4) x2= Needed HANA Appliance.  For example Source DB with 2 TB (tables plus indexes) (2/4) x 2=1 TB HANA Appliance

 

HANA Appliance CPU & Disks

  • The appliance is configured in such a way that CPU power and the I/O capacity is sufficient

 

What is the scaling of SCM on HANA?

- Scale-up (scale vertically)- Increases the size of the hardware (main memory, number of CPUs)

Ensure: Availability of suitable hardware (up to 4 TB cache)

 

- Scale-out (scale horizontally)- several nodes (servers) are switched together for one database and the data is distributed over the main memories of these different nodes

Ensure:

  • To avoid cross-node joins/ views as cross-node communication is expensive. Table distribution has to be customer/ usage pattern specific
  • Dynamic re-distribution must be allowed
  • Regarding availability of multi node scenarios (scale out) for Suite on HANA please refer to SAP note 1825774

 

 

With SAP HANA, there are both very small and very server clusters:

APO 4.png

How is the migration carried out for APO on HANA?

Below is an example of a one-step migration via database migration option. DMO is supported from SCM 7.0. to SCM 7.13 on HANA

 

APO 5.png

..........


Special thanks to Alexander Greb for sharing his key insights and providing this valuable information.

Feel free to contact Sujeet Acharya (email: sujeet.acharya@sap.com)  if you have any further questions on this topic.


To view the previous blog on the "benefits of implementing APO on HANA", use the link below:


http://scn.sap.com/community/scm/blog/2015/08/25/why-now-is-the-right-time-for-apo-on-hana

All,

 

Working in a Success Factors Sales/Partner Demo system, there is an additional step to add JAM access to the users loaded in BizX. The attached guide goes through the steps to add (or change) users in BizX, and the process to create subsequent JAM users.

 

There is also an embedded video in the document that goes over the steps. Though, if you're not able to view the video, please follow the steps outlined in text in the guide.

 

Thanks,
Jamil

Today, at the International SAP Conference on Extended Supply Chain I listened to a great presentation by Raffaele Gianola, GIS Director, Manufacturing and Supply Chain at Whirlpool EMEA, who presented on the companies demand management and S&OP processes and solutions.

 

Why Integrated Business Planning?

Raffaele explained that 5 factors led to Whirlpool embarking on their IBP journey:

  • Acquisition of the Indesit company put Whirlpool in a position were they had to identify a go forward solution
  • Upgrade of existing systems were long overdue
  • Poor adoption of existing processes & systems by end users
  • Exciting Roadmap for IBP from SAP
  • Wanted to “innovate to simplify” current processes and solutions

 

Implementing IBP Processes

Whirlpool started with a phased approach with the mentality of “aiming high, but starting small”.

Phase 1 focused on the demand management process in 5 countries. This involved:

  • Cleansing of demand data to establish good basis for forecasting
  • Statistical forecasting to enable unbiased input
  • Measure and identify new KPI’s to improve accuracy, bias and stability
  • Foundation of basic services across all phases
  • Baseline of requirements and content by gathering demand planner inputs
  • Connectivity through Hana Cloud enabled interfaces
  • Enrichment through collaboration and augmentation


There was initially a 4 weeks design step which included a design workshop, master data modelling, detailed design and mock ups and a data flow design. This was followed by a 12 week “realization” phase to configure the system, design templates, interfaces and testing of the system. Raffaelle pointed out that  this phase also included training of users on both the tool, “which was minimal” and change management “which took most of the time”. The pilot and go live took a further 3 weeks.


The Roll Out

The company is currently going through an aggressive roll out of 32 further countries in 11 months, based on the templates agreed and tested in the initial pilot countries. They are currently live in the Netherlands, Belgium, Spain, UK and Germany. The rest of the countries will be rolled out by the end of 2015.

Whirlpool.png

 

 

Key Takaways

In conclusion Raffaelle left the audience with several takeaways.

 

  • “IBP is ready for business. Whirlpool has done it, you can too”!
  • “Be ambitious, but it‘d be wise to start small”
  • “A new implementation is an opportunity to simplify processes “
  • “Prototype, prototype, prototype”
  • “The excel based UI of SAP Integrated Business Planning is a great opportunity for smart visualizations to aid planning tasks”
  • Don’t underestimate work required for creation of high quality templates for planning views”

Thanks to Raffaele for a great presentation.

Today, at the International SAP Conference on Extended Supply Chain I listened to a great presentation by Phil Cottrell, from Mondelez Mondolez 1.pngInternational about his companies roll out of S&OP processes.


First Phil provided a little background on Mondelez, who are a “global snacks powerhouse who, in 2014, generated revenue of more than $30 billion”. Thy market products in 165 countries and have approximately 100,000 employees worldwide.




Phil explained that “Nearly 85% of revenues come from the fast-growing snacks cateMondolez 2.png

gories and over 75% of revenues come from outside North America.  The company have household brands such as Cadbury, Oreo, Chips Ahoy, Milka, Toblerone, Trident and Halls.

 










What does Integrated Business Planning mean to Mondelez?

 

Integrated Business Planning (IBP) processes enables Improved Business Results through Integration, alignment and synchronization. Phil explained that Mondelez define IBP as “a process led by senior management that evaluates and revises time-phased projections for demand, supply, new product development, strategic projects and the resulting financial plans”. At Mondelez, this is done on a monthly basis, on a planned 24+ month rolling horizon.


Mondolez see IBP as a decision making process that realigns the tactical plans for all business functions in all geographies to support the company’s business goals and targets.


A primary objective of the process is to reach consensus on a signal operational plan, to which executives of the management team hold themselves accountable, and allocates the critical resource of people, equipment, inventory, materials, time and money to most effectively satisfy customers in a profitable way.

 

Aligning Company Plans Every Month

Mondolez 3.pngAt Mondelez, IBP is a “common sense process for aligning company plans every month”. This involves several steps:

  • The Portfolio Management Review (PMR) assesses the sufficiency of the innovation pipeline and the resources required to execute it.
  • The Demand Review (DR) is a process where sales and marketing determine what we will sell over the next 2 years. Determines where we have gaps in the plan and proposes possible solutions to those gaps. Focuses on controlling demand.
  • The Supply Review (SR) creates a supply plan that solves for the demand created by the DR and PMR. Addresses any potential resource gaps with options and recommendations.
  • The Integrated Reconciliation process quantifies the financial implications of the PMR, DR, and SR output. Identifies any key decisions that need to be made at the MBR.
  • The Management Business Review approves plans proposed in the PMR, DR, and SR. Engages the category leadership team on any decisions that still need to be made. Reviews any other gaps that still exist and assigns actions to close them.

 

Across all steps Mondelez enforces several consistent attributes.

- Planing is done in monthly buckets

- They plan at an aggregate family level

- They have a 24 month horizon with a focus on 4-24

- The processes are executive led to ensure that there is linkage between strategy to tactical

- Monthly Cadence to enable constant replanning based on changes to demand and supply

- Ownership is key , with champions and leads for each step

 

Identified Benefits

Phil highlighted numerous benefits as a result of this deployment.

  • Reduces financial resource requirements in normalizing and aggregating data.
  • Facilitates a “One Number” plan by making the system the single source of the truth.
  • One system eliminates the need to use/maintain multiple reporting mechanisms.
  • Simulation of Volume & Revenue adjustment and Risk & Opportunity scenarios
  • Improves organizational collaboration with transparency of data.
  • Capacity constraints are identified earlier.


Thanks to Phil for a great overview.

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