An interview recorded live at SCM 2014 in Vegas featuring Martin Barkman of SAP.
View the video, and read the edited transcript of this conversation with Martin Barkman here:
Lauren Bonneau, SAPinsider: Hi, I’m Lauren Bonneau, I’m with SAPinsider at the SCM CRM 2014 conference, and I’m joined by Martin Barkman of SAP, thanks for joining me Martin!
Martin Barkman, SAP: Thank you.
Lauren: I’d love for you to introduce your role at SAP and spend a couple minutes talking about what your focus area is.
Martin: Certainly. I’m part of a group called solution management, in the supply chain management area, and I manage a group of solutions for SAP that focus on integrated business planning. I joined SAP last year. Prior to that, I was the CEO of a company called SmartOps, which we sold to SAP. We were a partner with SAP for many years, so in some ways, I feel like I’ve been part of SAP dating back to the mid-2000s.
Lauren: And so how is that, just on a personal level, how has that shift gone for you, from having your own company, to working for a company, has it been a welcome shift?
Martin: Absolutely. In fact I think it’s been really positive for everyone that came over because SAP right now has such a heavy emphasis on innovation and newer technologies, and we’re leading edge in many areas, yet we’re of course also a very large company, and that’s very exciting. It’s a very global role that I’m in, and we are of course a very global company.
Lauren: So you said integrated business planning as your area, so does that include everything from forecasting to – can you describe what integrated business planning entails?
Martin: Absolutely. So, what we’ve found is that many companies today have distinct planning processes for their supply chain, and then they also have distinct execution processes, but there’s a disconnect. As supply chains transition to be demand networks, there’s an increasing need for speed. Customers are at the center of what’s driving supply chains, customers today are different than customers 20 years ago, we have of course more of them, particularly with emerging middle classes throughout the world that are buying products, goods, and services. We also see that there’s a much more heavy emphasis on social media and buying through various channels and various technologies, an example would be buying something through your smartphone, and that’s changing the speed at which companies have to be able to plan and re-plan their supply chains, and integrated business planning is the SAP solution area that focuses on not just planning faster but also planning more holistically across the different functional areas of a company.
Lauren: Great, that was a great explanation. OK, so you were here as a speaker also at this event, you had a session earlier today, that I think you said was an overview of the product portfolio. Can you give me a little bit of a snapshot of what your session kind of provided for the attendees?
Martin: Yeah, certainly. It’s an exciting time right now, because as you saw in some of the keynote sessions, SAP is fundamentally changing how it’s packaging and taking its solutions to the market, leveraging SAP technologies in mobile, SAP technologies with HANA, and also with the cloud, and supply chain is no different. We are today announcing our new supply chain strategy, with a heavy emphasis on those technologies and how they solve business problems, again, faster and more comprehensively for companies. So in my session, for integrated business planning, I talked about not just the current solutions we have in this area that we’re very excited about, solutions like Sales and Operations Planning, Enterprise Inventory Optimization, Supply Chain Info Center, but also what we’re doing moving forward with our portfolio of solutions and bringing them into these new platforms on these new technologies, and people were asking a lot of questions and seemed very excited about hearing what our future direction is.
Lauren: You had a line of folks afterward waiting to pick your brain?
Lauren: That’s good, I think it’s always funny how at the end of the sessions you have the question and answer period, and there’s always the people that don’t want to ask their questions in front of other people, right?
Lauren: They want to just talk to you alone. That’s great. That’s always good to hear that people were sticking around and asking questions. So you have another session tomorrow, I believe you said, or maybe the next day, that is a little bit more specific, can you describe that one briefly as well?
Martin: That’s correct. So, in our offering today for integrated business planning, we have two components. One is Sales and Operations Planning, which is looking at an aggregate level across the operation, what are the demand plans in place, what supply capability is existing, and how should one best balance demand with supply in order to maximize revenue and ultimately profitability. That’s the planning side of it, what then has to happen is you have to operationalize that plan and feed it in some way, shape, or form, to the execution systems, otherwise a plan is not a plan if nobody is actually changing the way they run the supply chain. The way we operationalize the plan is through what we call Enterprise Inventory Optimization, and so my discussion on Thursday is to go into detail about Enterprise Inventory Optimization, what makes it different, how do we do it, how are the companies using it. We have a lot of successful examples of companies using these two solutions together, one on the planning side, and then Inventory Optimization to operationalize that plan, ultimately to the point where planning decisions are being made in different and often of course, better ways as a result of having very tactical inventory targets to execute the supply chain against.
Lauren: And would you be willing to share maybe an example of a customer success that you’ve experienced? You have contact with customers and working with them, could you give an example of someone using that particular solution?
Martin: Yeah. There are actually many good examples across different industries. What’s interesting is that this business problem is canonical, it exists in chemical industries, it exists in life sciences industries, distribution industries, consumer packaged goods industries, and the list goes on. We have some really interesting examples, I can think of one in life sciences of a company that’s managing a very large, complex, very SKU-intensive set of products, and what they’re doing is they’re first starting with Sales and Operations Planning and then they’ve connected that to Inventory Optimization where the two go hand-in-hand, ultimately to the point where they’re able to set a plan, execute that plan through inventory targets, and then drive down working capital while simultaneously maintaining very high customer service levels. So what’s also interesting is integrated business planning has some very measurable, very tangible business benefits as well.
Lauren: Can you give me an example of how you would maybe motivate someone in a particular industry who’s describing a certain problem, why that particular solution would be the right fit for them?
Martin: Yeah. The thing that often comes up in discussions is people say it’s not just about technology, it’s about people and process, and I agree, I think they go hand-in-hand, I think what’s interesting about technology enabling a more methodical process and empowering people is that there’s so much innovation, cross-company fertilization and knowledge sharing that goes into the development of a technology solution, so I always encourage companies to say look, before you try to invent or re-invent any kind of planning process, let’s have a discussion about what you’re trying to do so that you can benefit from some of that tribal knowledge that has been accumulated and ultimately manifested itself in the way we’ve set up these solution areas. I think that the three go hand-in-hand, with the right technology tools these processes can run more smoothly and in many cases, faster. So we really enjoy, and in fact the best part of my job is having customer discussions where people are saying look, we want something better, we know technology is not the end-all panacea, per se, but they’re open to looking at our perspective on how we’ve seen companies successfully drive improvements through technology.
Lauren: OK great, I think I loved your use of panacea, I think that’s a perfect place to stop, I appreciate your time Martin, I really do, and enjoy the rest of the conference, good luck with your session on Thursday.
Martin: Thank you, Lauren.