Hans Thalbauer, SAP senior vice president, line-of business solutions for supply chain, visited Australia in early June to share SAP’s latest innovations in the supply chain space and the key challenges customers are facing in the market. Eleanor Reader reports.
ISAP: What is the real-time supply chain, and how is SAP enabling this?
Hans Thalbauer: Customers are demanding a supply chain where they can navigate the entire processes to make decisions much faster; what they need to have is an environment that allows them to provide complete end-to-end visibility. Typically, they don’t have the information they need in order to make the decision, so to really overcome these issues, we need to provide solutions that introduce a real-time supply chain environment. This environment gives supply chain professionals the possibility of understanding what is the demand, what are the orders, what will happen if
I change this order, what will happen if the supplier cannot deliver, which kind of orders are impacted and what is the best possible decision for my company to make. We have put the strategy in place that puts the entire supply chain into the real-time environment using SAP HANA.
It all comes down to how we can serve the customer in the best possible way. It is really putting the customer in the centre of the supply chain, which is a big change from the past, where it was more of a push mechanism where you distribute the product and then try to sell them.
ISAP: Are there other innovations or features you have introduced recently to your supply chain solutions?
HT: The last two or three years were completely filled with innovation. If you look back into the history of supply chain at SAP, where we were really focusing on the Advanced Planning and Optimisation solutions, we extended that over time with Warehouse Management solutions and really made a major step forward. We introduced completely new capabilities for performing sales and operation planning.
The reason is we understood that it is not just a function by one unit within the organisational unit within a company, it is a function for the entire enterprise, and with that, it is important that communication and collaboration is supported between the different organisation units.
Lots of companies are telling us that they need more flexibility and the possibility to support the creation of different scenarios. When you introduce new products, you have to think ‘what about the profitability, what about the revenue’, and for that we introduced Excel spreadsheets on top of solutions in order to really make it easy. And we wanted to make it fast; we used HANA, and we used a social network environment as a feature in order to support the communication and collaboration throughout the company.
The second major area for innovation is demand management, where we introduced SAP Demand Signal Management, which allows organisations to capture point of sales data and the market share.
On the execution side, we introduced Transportation Management and tracking capabilities, with the idea of providing a supply chain execution platform, which allows organisations not only to support all the different modes of transportation, but also to support all the different roles involved in transportation management processes.
ISAP: Some industry commentators have suggested that as we currently know it, the ‘supply chain is dead’. What is SAP’s response to this?
HT: I agree that the business has changed. It is an articulate and interesting discussion that suggests in a supply chain everything would move much more into a customer orientation. It is much more related to a demand-driven environment – you could call it “demand chain”. Actually the word ‘chain’ is also a problem, because it is about a network and not a chain. It is a term that has been established over years and years and years, but it has evolved in a different environment.
ISAP: What are the key challenges your customers in the supply chain area are facing?
HT: The volatility in the market, and the increased logistics complexity. Those are the two major topics and are also aspects of customers needing to find answers and solutions.
The volatility in the market is not necessarily a negative thing – it is not just uncertainty in the market, it has also got to do with finding the right opportunities and actually having the capabilities which allow you to address the market in the best possible way.
ISAP: Are there other trends you can highlight in the supply chain area?
HT: What is forcing customers to really change the way how they do business, especially in the context of supply chain management? More companies consider the supply chain as competitive differentiation. The better they can put the customer front and centre in everything they do in the supply chain, the better off they are. So the goal needs to be the most efficient supply chain, which allows you to grow your business and actually bring down the cost.
ISAP: What will the supply chains of the future look like?
HT: What we see from a future perspective is that there is a requirement to provide even more flexibility. I had customers say just recently, “I want to introduce the internet supply chain” – which means, “How can I create an environment which makes it much easier to do business with me? How can I include e-commerce, how can I do the collaboration with my network in a complete different way?”
This article was originally published in Inside SAP Winter 2013.
