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How SAP Uses Emerging Technologies to Help Its Customers Realize Their Dreams

A Q&A with SAP President of Digital Supply Chain Hala Zeine

by Rizal Ahmed, President of Events and Publisher of SAPInsider

November 28, 2018

Q: You’ve had a lot of roles within SAP. Could you tell us a little bit about your path to your current role within SAP?

A: I have always been curious and wanted to understand how companies run. And what better way to do that than to join the world’s largest enterprise software provider and keep switching roles and learning as I go. Every time I felt I got the hang of one part of the business, I quickly moved to another, always taking me out of my comfort zone. I had to deal with new content, new customers, new people, and new topics. I am so lucky that at SAP we foster this curiosity, and I met a lot of people who believed in my abilities, which ultimately led to my current role as head of Digital Supply Chain.

This role is the closet to my heart because I grew up on factory floors. I get to visit warehouses and factories. I was telling one of the chief operation officers of a large manufacturer in Germany that I just love the smells and sounds. I know that seems a little strange, but when you enter a factory there’s a sawdusty smell, or when you go into a production plant or a process industry, there’s the smell of bleach on the floor. I love it.

Q: That’s home for you. Could you tell us what your family did?

A: My grandfather was a Pepsi bottler. He owned a radiator factory and a yeast factory. He also ran a car dealership. I grew up in Amman, Jordan, but, my father worked for Pepsi, and we moved every other year. We went to Cyprus and then on to Egypt and then we moved to the US, which is where I went to university and started my career at SAP.

Q: What are the most important things that you’ve taken from your previous roles to prepare you for your current one?

A: I really believe SAP has some of the best talent. In meetings with SAP groups, I love to listen and see what is really happening. I think the ultimate thing is to realize what is a common purpose that everyone will align behind. At SAP that is normally a customer and a product, and then everyone will be able to apply all his or her energy and intellect toward that purpose. Occasionally, an obstacle gets in the way of our purpose. Everybody knows it’s there, but nobody yet knows how to address it. I find that’s where I come in as a leader; I try to structure where the pain point is — what is happening — and how to get this resolved and give people the confidence to be able to tackle it.

My approach has been consistent across all the different groups that I’ve been involved with – a fine balance between the strategic (why and where we are going) and the practical (how we get there). For example, when I was in CRM, I went in to make sure our compass was aligned to the customer and the product and then asked what is happening. Why is it so difficult? Let’s look at structural things and get them sorted out. I did the same thing when I was in Custom Development, and when I was in Portfolio Management, I always looked at ways the portfolio could work together to ultimately benefit the customer.

Q: I know you’re early in your tenure, but if you would take what you just said and apply it to supply chain manufacturing and that world, what do you think that purpose is?

A: I really feel so blessed and lucky to be in this position currently because supply chain is undergoing such a massive revolution. A lot of people call it the fourth industrial revolution, and it truly is because the way we work in supply chain – the type of data, information, and intelligence we have within the supply chain – is unprecedented. I think the companies that can adapt their processes and ways of working will have a massive competitive advantage compared with the others.

I read somewhere that marketing and sales in the front office is all about creating people’s desire and making them want things — that is, selling the dream, promising the dream, and committing the dream. The R&D and the engineering departments are all about inventing that thing that is going to make your dream come true. Then supply chain is about delivering the dream. We’re all in the business of making dreams come true, so we need to focus on making the lives of those dream makers as simple as possible.

It’s a very stressful job in supply chain where you’re constantly dealing with very tight production schedules, ever-changing customer demand, inventory shortfalls and overruns, and unexpected life events. To remove the stress, the demand chain and supply chain must be well matched to reduce waste due to overproduction. At the same time, if you are underproductive, you’re losing money, as you don’t fulfill customer demand. So, I really think that with the technology that is available we can remove so much of that stress by giving people systems that are intelligent enough to create that resilience in the supply chains that they want.

Q: A lot of our readers are your core SAP ECC and SAP ERP users. Where would you say those customers are in this evolution? Are they in the first stage? Are they in the second stage?

A: The customers I’ve met are really at various stages. For example, Gartner Group publishes every year a list of awards for the top 25 supply chain companies. I was really humbled to see that all 25 of them run SAP software for their supply chains. Companies that are on the cutting edge are using autonomous guided vehicles moving around the warehouses or production facilities, some others are moving away from assembly lines to distributed manufacturing, and others are using 3D printing within their production plants. For example, at SAPPHIRE NOW, I was honored to share the stage as HP Inc. explained how its current generation of printers is being 3D printed by its former 3D printing generation using SAP Manufacturing Execution software.

I also find that the most innovative and willing to take risk are the people at small and medium-sized customers for whom leading digital supply chain technology becomes a differentiation.

So, you can have these large and small high-end customers. And then you have other companies that are scratching their heads and looking at digital transformation as just making a website. And some of these companies are waking up and realizing that they can make a website, but all this data needs to enter their supply chains, and they may have difficulty fulfilling what their customers want. This just happened to me. I ordered a suitcase online from a small shop and received an email to call back the vendor in 24 hours to confirm my order. I missed the email, and the shop canceled my order. Clearly, the shop's website was not connected to the supply chain, so it needed a human interface. As you see, a huge part of the customer experience is how your supply chain reacts.

We recommend to customers to imagine their supply chain of the future; ensure that all data is available in real time; look at major areas such as design, planning, manufacturing transportation, warehouse, and asset management; and connect these functions, suppliers, and customers digitally to perfect reality.

 

It’s a very stressful job in supply chain where you’re constantly dealing with very tight production schedules, ever-changing customer demand, inventory shortfalls and overruns, and unexpected life events. To remove the stress, the demand chain and supply chain must be well matched to reduce waste due to overproduction. At the same time, if you are underproductive, you’re losing money, as you don’t fulfill customer demand. So, I really think that with the technology that is available we can remove so much of that stress by giving people systems that are intelligent enough to create that resilience in the supply chains that they want.

— Hala Zeine, President of Digital Supply Chain, SAP

Q: What are some of the key issues that are stopping some companies from moving to a more advanced stage?

A: The adoption happens at different levels. Some companies are advanced and fall in to the first-generation adoption of technology.

Others might say, this doesn’t apply to me; this may be happening to the rest of the world, but it’s not for me. My orders are still coming in, supply chain is not a core of what I do, or maybe, I just want to outsource it all, so this is just a temporary problem. There are different reasons, but I find those to be excuses because you still must look at your overall management of your end-to-end supply chain beyond just your own boundaries. You must consider your customer, your suppliers, and your partners. When I talk with companies that have this view, these supply chain professionals tend to be at the cutting edge. They know their numbers; they know their key performance indicators (KPIs), and they manage toward customer success. So, I try to get them excited and give them the courage to move.

Q: If you think about the enabling technologies of transforming the supply chain (SAP S/4HANA, SAP Integrated Business Planning, IoT), what are the key journeys or transitions that customers have to complete to build a strong foundation for the future? I imagine one of them is going from SAP ECC to SAP S/4HANA. Is that true? What are the other solution journeys that help enable this foundation?

A: I like to think of it as moving fast and slow. Moving from SAP ECC to SAP S/4HANA takes a bit of time to update your processes and data structures. You see a lot of benefits in performance and lead time, so there’s a lot of value there, but it is quite a journey. You must revisit your business processes. At the same time there are faster things you can do – for example putting an integrated business planning solution on top of any application so that you can get sensing data from a weather forecast to a sales forecast to promotions and anything else impacting the demand to give your planners the full power of machine intelligence to correlate all this information with your supply chain constraints to give you a much more accurate plan.

When you’re putting up a new factory, putting up a new warehouse, or updating a warehouse, it’s a great opportunity to rethink the way that it is managed by bringing in new technology. We also are looking at ways to use blockchain technology. On our cloud platform we have a blockchain as a service. We have a partnership with Hyperledger for this service.

Then if you look at asset management, this is another space in which you can move fast because with asset management every company keeps track of all its equipment. Any time anything comes in to the supply chain, someone had to manually insert it into the system. Why do we have to accept that in 2018? Why don’t we just ask our suppliers and partners to put in their pieces of the bill or material directly themselves? As they deliver the physical goods, they should deliver to us the digital version of that. Why don’t we take this data that we have on the asset and produce a digital twin?  We are inserting IoT everywhere in the Manufacturing Execution Systems, Warehousing, Transportation Management and asset management to give machines a voice and better understand the status.

But you can go one step higher because you know what the material is made of. This is the bill of material that you created along with your business partners and suppliers. Based on the material – the physics and the mathematics of it – you can then assimilate what will happen with an asset based on the data. With this information you can start not only predicting but also prescribing what action you should take before it even happens.

Q: To create a scenario like the digital twin example you mentioned along with asset management and predictive maintenance, what are the key prerequisites? Do you need to implement SAP S/4HANA? Could you do it using a combination of SAP Leonardo technology and analytics?

A: We use an SAP asset management piece in the cloud in which you put in the asset information for the item migrated from your SAP ECC system or another system. You put in the asset structure and information and then connect this to Collaboration using our Asset Intelligence Network. That then allows your business partners to insert their piece of the asset for you, making this information the most accurate that you will get. Then you can produce a digital twin that is based on this dataset. We partnered with ANSYS and announced this at SAPPHIRE NOW to create a digital twin that entangles the digital world with the physical world. It uses IoT, the physics and mathematical modeling of the asset/equipment, to digitally see and inspect the asset as no person can ever do. Based on this functionality, and a lot of machine learning capabilities, we can do predictive maintenance and then prescribe the solution to the customer, digitally repair it, and send the information to the service technician.

Q: So, it’s a suite of cloud-based applications that facilitates time-to-market?

A: Exactly.

Q: How does your organization leverage the cloud to make it easier for organizations to move forward?

A: We have people who have many years of experience. We look at where the cloud can provide a competitive advantage or give us capabilities that we did not have before. For example, a network provider can onboard one time, and then it is available to all its other suppliers. Another example is blockchain and the work we are doing in SAP Global Track and Trace. I can now secure shipment tracking information, whereas previously I could not. If I look at the machine learning algorithms that we include with SAP Predictive Maintenance or SAP Integrated Business Planning, that is an advantage that would have been hard to maintain in an on-premise system. And of course, we need to focus a lot on high availability because these are typically the most mission critical of systems.

Q: Is there anything else you’d like to share with our readers?

A: I do hope that when your readers read this interview, they get the sense that SAP is moving all the supply chain manufacturing processes into the cloud and into the future. We are truly using all the benefits of new technologies and applying them to our existing solutions to give our customers maximum value.

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