pressure to manufacture a critical customer order and alarmed to find
some essential parts are not on hand, what would your organization do?
I've seen lots of inventive fixes, even the shuttling of parts from remote
facilities via private helicopters. Whatever fix you might apply, you
incur expenses or inefficiencies.
On the flip side of this all-too-common manufacturing scenario would
be precise predictors of customer demand and complete visibility across
the full expanse of your supply chain, right down to the replenishment
process. Or imagine customers removing packages from "smart shelves"
that relay stock quantities to SAP software. Having a real-time understanding
of consumer behavior helps companies, especially in the consumer products
and retail industries, optimize all logistics processes, including the
"last hundred meters" of the supply chain race from the retailer's
backroom to display cases and shelves.
When inventory dips below a certain threshold,
for example, the pertinent supply chain partners are notified automatically,
and replenishment runs are triggered. Now imagine that the replenishment
quantities being ordered account for the seasonable variations in customer
demand, regional sales promotions, and an upcoming national ad campaign.
Or picture a retail order precipitating automatic inventory checks and
then optimally apportioning work orders to all relevant suppliers, distributors,
and logistics service providers, and having that retailer then be able
to track the status of things.
The ability to detect and then quickly
respond to unplanned supply chain events or to account for the risks,
opportunities, and variable business conditions that lay ahead are not
untenable, futuristic scenarios. What I'm describing are attributes of
"adaptive supply chain networks." We're seeing a strong, steady
movement among SAP customers and their supply chain partners to transform
their traditional supply chains into intelligent, adaptive networks that
enable them to collaboratively address supply, manufacturing, distribution,
and fulfillment activities with both reactive and proactive measures.
Pressing issues we now see as catalysts
for this transformation include the quest for Available-to-Promise (ATP)
capabilities, lowering of inventory levels, and streamlining of mass customization
and build-to-order efforts. Integration of participating systems and visibility
of orders, plans, supplies, inventory, and shipments are obviously key
prerequisites for supply chain functions like these. So are collaborative
planning capabilities, along with the ability to monitor and assess the
performance of these activities.
SAP offers much of this functionality today.
We offer the underlying integration technology, the industry's strongest
suite of collaborative SCM applications, the event management technology
that makes it possible to detect and manage variability in your supply
network, and the analytic functions to predict and account for future
conditions. Moreover, all mySAP SCM technology is open. mySAP SCM
can be integrated with SAP and non-SAP systems alike.
These offerings have received resounding
endorsements from customers and analysts. I take that to be a testament
to the quality of the technology and to their timing, because it appears
that transforming traditional supply chain processes into more collaborative,
intelligent, and adaptive ones is imperative. Market forces leave
you little choice, and frankly, the cost savings are just too significant
Senior Vice President,
GBU SCM, SAP AG