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In my SCPM more than just metrics (Part 3: Is SCPM all about strategy, performance, what-if or analysis?) we explored that SAP BusinessObjects Supply Chain Performance Management (SCPM) is about strategy to action but what about risks? We need to make business decisions by understand our risk appetite. Strategy and execution without risks would be a disaster for our business.

 

Is SCPM all about strategy to action? No it is not. It is about understanding not only the performance but also the risk that we face. We can analyze these risks, mitigate them and take action.

 

Let us work with an example understand how we can analyze performance with a focus on risk as well.

 

One of the strategic objectives for the VP of Supply Chain is to ‘Improve Supplier Reliability’. The risk that he faces for this strategic objective is supplier disruptions, all suppliers located in the same geography… He logs on to his scorecard and understands that his strategic objective ‘Improve Supplier Reliability’ is not only underperforming but also facing a high risk.

 

Risk Step 1

 

He then analyzes the risks by observing the aggregated total loss, aggregated expected loss and the mitigation/response cost. He understands that the aggregated expected loss is greater than his risk appetite.

 

Risk Step 2

 

He analyzes all the risks that affect his strategic objective and decides to mitigate the risk ‘Supplier Interruptions’ by ‘Alternative Supplier Sourcing’.  

 

Risk Step 3

 

Post mitigation he has successfully lowered the possibility of occurrence of risk and the aggregated expected loss is within his risk appetite.

 

Risk Step 4

 

 

Using risk enabled Scorecards we can not only monitor performance but also risks. We can analyze these risks on our strategic objectives and mitigate risks if necessary.

 

Conclusion, SCPM is about Improved Supply Chain visibility and efficiency with SCPM, SCPM is more than just metrics (Part 1: Is SCPM all about KPIs/Metrics?), SCPM more than just metrics (Part 2: Is SCPM all about analyzing the past?), SCPM more than just metrics (Part 3: Is SCPM all about strategy, performance, what-if or analysis?) and performance with a focus on risk as well.

 

In my SCPM more than just metrics (Part 2: Is SCPM all about analyzing the past?) we explored how SAP BusinessObjects Supply Chain Performance Management (SCPM) helps us to be pro-active and not just reactive by using what-if-analysis but what about action and execution of strategy and objectives?

 

Is SCPM all about strategy, performance, what-if or analysis? No it is not. It is about strategy to action.

 

Let work with an example understand how strategy to action helps us to close the loop.

 

The KPI POF is underperforming and after our root cause we come to a conclusion that it is because of transit damages.

 

 The VP of Supply Chain creates an initiative ‘Analyze and address transit damages for the foods product line’ and assigns it to the logistics responsible with actions ‘Analyze why transit damages has increased’, ‘Address transit damages’, ‘Proposal to prevent it transit damages in the future’.  The logistics responsible would execute on the initiative and the VP of Supply Chain can track its progress.

 

Using Closed Loop Collaboration in SCPM we can create initiatives and activities, assign a responsible and a target date and track its completion. Hence SCPM is also about strategy to action.

 

Close Loop Collaboration

 

Conclusion, SCPM is about Improved Supply Chain visibility and efficiency with SCPM, SCPM is more than just metrics (Part 1: Is SCPM all about KPIs/Metrics?), SCPM more than just metrics (Part 2: Is SCPM all about analyzing the past?) and strategy to action.

 

In my SCPM is more than just metrics (Part 1: Is SCPM all about KPIs/Metrics?) we explored that SAP BusinessObjects Supply Chain Performance Management (SCPM) is about relationship between KPIs/metrics and analyzing the past to make better business decisions but we need to be proactive not reactive while making these business decisions. We need simulation and we need to understand how external variables affect our business priorities.  

 

Is SCPM all about analyzing the past? No, we can be pro-active and understand how variables (‘% increase in Fuel’, ‘Inflation’, ‘Interest’ ...) affect our priorities and hence take wise business decisions.  

 

Let work with an example understand how we can be proactive.

 

Logistics Costs accounts for high percentage of all company costs. Hence there is an increased focus to reduce logistics cost. To make sound business decisions and understand our risks it would also be important to understand how external factors like ‘inflation’, ‘% increase in fuel’… have an impact logistics cost.

 

Using What-If-Analysis in SCPM we can understand and analyze how variables affect our priorities (logistics cost, POF…) so that we can be proactive and not just reactive.

 

What If Analysis

 

  

Conclusion, SCPM is about Improved Supply Chain visibility and efficiency with SCPM, SCPM is more than just metrics (Part 1: Is SCPM all about KPIs/Metrics?), and simulation and affect of variables on our business priorities.

 

SAP BusinessObjects Supply Chain Performance Management (SCPM) (An adoption of the SCOR model) delivers 400+ KPIs that a business can choose from based on their priorities and relevance. These KPIs can be used to monitor, measure and give visibility on your supply chain.

 

Is SCPM all about KPIs/Metrics? No it is not. It is about the relationship between KPIs – of how one KPI impacts the other.

 

Let work with an example understand how the relationship between KPIs gives us valuable insights.

 

Perfect Order Fulfillment (POF) the KPI according to SCOR is a customer facing KPI which determines if we deliver the order at the right time and in right quantity and quality. POF is an indication of our responsiveness and efficiency.

 

If the KPI POF is below target it may be because we are not delivering the orders in time or not delivering the right quantity or not delivering the right quality. The underlying reason may be because of transit damages, low production schedule achievement, stock outs, violating inventory norms and so on and so forth.

 

Using Impact Analysis in SCPM we can analyze and arrive at the root cause of the issue. Impact Analysis in SCPM is based on the relationship between KPIs.

image

 

Conclusion, SCPM is about Improved Supply Chain visibility and efficiency with SCPM and relationship among KPIs/metrics.

 

In today’s environment uncertainty and unpredictability dominate most Supply Chains because of complexity of the supply network, increasing globalization and a fragmented approach to solve the immediate problems rather than to look at all business functions before making a decision.

 

Supply Chain Costs accounts for around 40% of all company costs. The cost of logistics in emerging economies is much higher than in Europe and US due to the lack of appropriate transportation infrastructure.  Hence an increased focus on efficient supply chains to reduce cost.

 

Also, most companies today spend a lot of time in demand generation rather than to bring about efficiencies in their supply chain. The prime focus is revenue generation and to drive demand via new product launches, marketing existing products, branding and trade promotions.  

 

Supply Chain needs as much focus demand generation as most of this demand generated cannot be fulfilled because the product is not available at the right place, at the right time and in good condition. We must realize that to satisfy the demand we need our products to be available at the right place; at the right time and in good condition with minimal costs and to do this we need to have an efficient Supply Chain.

 

An efficient supply chain not only ensures that we can meet our demand but also gives us the opportunity to reduce costs and to increase our operating margins but we need answers to the following questions:

  • Can we have an efficient supply chain without having a good visibility on our supply chain processes?
  • Can we manage what we cannot measure?  
  • Can we make business decisions in isolation without having a holistic view of our business?  

 

SAP BusinessObjects Supply Chain Performance Management (SCPM) provides end-to-end supply chain visibility, helps companies to measure the right process metrics, to track performance, to diagnose bottlenecks and to give you an overview on all business functions so that business decisions are not taken in isolation.  

  • SCPM uses the balanced scorecard approach to give an overview of all business functions and helps us focus on our priorities. The balanced scorecard approach provides visibility on all functions of the business with priorities.
  • SCPM (An adoption of the SCOR model) delivers 400+ KPIs that a business can choose from based on their priorities and relevance. These KPIs can be used to monitor, measure  and give visibility on your supply chain.
  • SCPM allows companies to leverage standard definitions across the complete organization and compare/benchmark against other companies.
  • SCPM uses Impact Analysis to understand the impact of related metrics (KPIs) and their relationship with one another.

Software for SAP BusinessObjects Supply Chain Performance Management 2.0

Download the software from Service Market Place by following the link below:
http://service.sap.com/swdc > Installations and Upgrades > Installations and Upgrades – A – Z Index > ‘S’ > SAP SUPPLY CHAIN PERFORM. MGMT > SAP SUPPLY CH. PERF. MGMT. 2.0 > Installation > Downloads (Tab) > SAP Supply Chain Performance Management 2.0 Add-On Inst. This will download a Zip file that has the required software components


Download Support Package and Patches by following the link:
http://service.sap.com/swdc > Support Packages and Patches > Support Packages and Patches A – Z Index > ‘S’ > SAP SUPPLY CHAIN PERFORM. MGMT > SAP SUPPLY CH. PERF. MGMT. 2.0 > Enter by Component

SCPM Backend Java

  • SBC BUI NW ADAPTER 3.0 > # OS Independent

SCPM (ABAP + BW) 7.02

  • ANALYT. OPM FOUNDATION 3.0_702 > Support Packages
  • ANALYTICS SCPM 2.0_702 > Support Packages
  • POA SBC 100_702 > Support Packages

SCPM (ABAP + BW) 7.30

  • ANALYT. OPM FOUNDATION 3.0_730 > Support Packages
  • ANALYTICS SCPM 2.0_730 > Support Packages
  • POA SBC 100_730 > Support Packages

 

Software for SAP BusinessObjects Supply Chain Performance Management 1.0

Download the software from Service Market Place by following the link below:
http://service.sap.com/swdc > Installations and Upgrades > Installations and Upgrades – A – Z Index > ‘S’ > SAP SUPPLY CHAIN PERFORM. MGMT > SAP SUPPLY CH. PERF. MGMT. 1.0 > Installation > Downloads (Tab) > SAP Supply Chain Performance Management 1.0 SP1 Inst. This will download a Zip file that has the required software components


Download Support Package and Patches by following the link:
http://service.sap.com/swdc > Support Packages and Patches > Support Packages and Patches A – Z Index > ‘S’ > SAP SUPPLY CHAIN PERFORM. MGMT > SAP SUPPLY CH. PERF. MGMT. 1.0 > Enter by Component

SCPM (ABAP + BW)

  • ANALYTICS OPM FOUNDATION 2.0 > Support Packages
  • ANALYTICS SCPM 1.0 > Support Packages

Frontend (non ABAP) NW

  • ANALYTICS OPM FOUND. UI 2.5 > # OS Independent
  • ANALYTICS SCPM UI 1.0 > # OS Independent

Frontend (JAVA) NW 7.01/7.02

  • ANALYTICS OPM FOUND. UI 2.51 > # OS Independent
  • ANALYTICS SCPM UI 1.0 > # OS Independent

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