A discussion recorded live at SCM 2014 in Las Vegas featuring insights from Markus Rosemann at SAP.
View the video, and read the edited transcript of this conversation with Markus Rosemann here:
Lauren Bonneau, SAPinsider: Hi, it’s Lauren Bonneau with SAPinsider, live here coming from the SCM 2014 event, I’m here with Markus Rosemann of SAP. Hi Markus, thanks for joining me.
Markus Rosemann, SAP: Hi, nice to be here.
Lauren: Would you first introduce yourself and your role at SAP?
Markus: Sure. So I’m working in solution management, responsible for the area of supply chain execution, and I’m heading up that team, and we care about solutions around transportation management, warehouse management, and supply chain integrity.
Lauren: OK, and so in those areas, throughout supply chain and logistics, what does 2014 have in store, what changes can we expect to see?
Markus: So what we will bring into general availability this year is the supply chain execution platform, so the latest releases of transportation management and extended warehouse management – which are tightly integrated – will go into GA in this year so it will be available for all customers looking into an integrated supply chain execution platform.
Lauren: OK, great. And so during your conversations with customers, and you’re hearing, I’m sure, about their problems, they’re not tight-lipped about them, I would imagine—
Markus: They are not.
Lauren: Can you share with me some of the challenges that you’re hearing, and recurring themes?
Markus: Sure. One of the biggest challenges certainly for the area of logistics and order fulfillment is that it’s very cost-intensive, so also the cost really, in distribution, come from transportation, like on average 10% of the gross domestic product are logistics cost. So cost savings, cost pressure, is definitely an issue for customers in that area, which require optimizations and techniques to actually get those costs down. And on the other side get the visibility into the operation, to really understand what is happening in the supply chain, how does all of that come together so that really the different departments have challenges to understand the entire picture because they only look into their part, whether it is customer service, whether this is transportation, or whether it’s running the warehouse. So this limited visibility is a big challenge for them.
Lauren: OK. And so you mentioned the integrated planning; for this year, are there other specific SAP solutions that are kind of targeted for these specific problems?
Markus: Yes, I mean what we do is actually see this convergence of the different areas so a lot of customers still tend to work in their respective areas in the warehouse, in transportation, disconnected from an overall picture, this is really the big opportunity to bring those closer together, to have that kind of integrated platform for supply chain execution. Having for example the transportation process driving the activities in the warehouse so that you really can load in the best way that you get the transparency about what is happened, what is the next plan, what’s the next arrival of a certain container, what’s the next arrival of a certain truck, so that you can arrange and plan your activities in the warehouse accordingly, so that they’re really working hand in hand and are integrated from an overall perspective. What’s also important on that end is the cost factor, to get the transparency about the cost, so since cost pressure is a huge topic in the supply chain execution areas, how do I get the transparency about those costs, how do I collaborate with the business partners in the value chain with the carriers and the freight forwarders in the best way, and work in the most cost-efficient way?
Lauren: And so could you give me an example or two, possibly, of you a customer that has either had a problem in transportation and implemented TM or another solution, and explain how that helped?
Markus: Yes, sure, on the one hand side there’s certainly the challenge for customers like freight forwarders that really need to integrate those operations and run logistic service provider processes that have warehouses that they run, as well as transportation facilities that they need to run, and bringing those together is really a big advantage. And we saw that for specific service providers that they are able to really integrate those and get the benefit of reduced assets, they need less trailers because they have integrated those processes they have transparency and know how to handle those requirements in the best way, those transportation requirements and efficiently also handled in the warehouse. So that’s just one example, and we certainly have scenarios like service parts management scenarios where really support high-volume operations end-to-end where customer service plays a huge role of having really fulfillment according to the service level that customers require in that area to meet those expectations or even exceed those expectations in the best way. So service levels are very important in that environment and we have big automotive companies, OEMs, that run the entire supply chain for the service parts, utilizing extended warehouse management, for example.
Lauren: I’ve heard of that solution, seems like a popular one.
Markus: It is, it is definitely, it’s one of really high adoptions, so we have more than 500 customers on extended warehouse management, just recently added in last year 200 customers to that, so it’s really a mature solution that is broadly used in various industries for supporting these kinds of scenarios.
Lauren: Great. So you’re here speaking at the event, can you tell us a little bit about your session and the content that you’re going to be providing attendees?
Markus: Sure, so supply chain execution platform, the convergence, is really something which concerns a lot of customers and that’s also what I will talk about in detail, how those different components really come together, what are the integration scenarios between the warehouse and between transportation, how is the handshake between those two components, if you have from transportation planning that starts with the strategic sourcing decisions into planning the orders, bringing them into the warehouse, closing the loop also into freight costs, so that’s really one of the scenarios that we take a closer look in that session, and not to forget about track and trace, which is a very important component of supply chain execution as well, in getting visibility—visibility on the orders, visibility on the status of what’s going on, so that everybody is informed and gets the required visibility to act in the best way. And the session brings all of that together, explains how they work together, and also shows in a demo how seamlessly integrated this process can be run.
Lauren: OK, great. Sometimes a picture is a thousand words, right, I love it in sessions to see demos, it really…
Lauren: My final question for you will be if there was one kind of key takeaway that you want attendees who watched the demo – as they walk out of the room, what do you really want them to think about as they leave?
Markus: I think the most important takeaway is that these processes of warehouse and transportation, track and trace, cannot be regarded, cannot be viewed isolated. It’s an integrated process, while you certainly start to run your warehouse, run your transportation operations, they are interconnected and are even better if you see the convergence of those topics, that’s an important topic that concerns most of our customers and is relevant, is highly relevant, in the whole picture.
Lauren: OK, great. That’s a great takeaway.
Markus: Thank you.
Lauren: Well thank you so much Markus, I appreciate you taking the time to sit down with me and I hope you enjoy the rest of the conference.