listen/learn Go to http://fcw.com/webcasts/2011/04/sap-supply-chain-analytics.aspx?tc=page0 for the complete transcript.

Supply Chain AnalysisDigital Dialogue: Webcast Overview

Thestepsandobstaclestotrackingevenasingleitem’s

pathfromsuppliertoenduseraremanifold.Inthedefense

arena,theyareoftenmultiplied,compoundedbysecurity

requirementsandtroopmovementoverremote,treacherous

terrains,suchasthoseinAfghanistanorIraq.Havingaway

tomeasuretheirsupplychains’performancewouldenable

defenseagenciestobettermonitorandadapttheirneeds,said

SteveLeSueur,contributingeditorforCustomMediaat1105

GovernmentInformationGroup,duringanAprilwebcast

aboutsupplychainanalyticsandmanagement.

“Inparticular,I’mtalkingaboutsuchcapabilitiesasan

abilitytoperformroot-causeanalysiswhendisruptionsoccur

aswellasanabilitytoidentifykeytrendsinsupplychainpat-

terns,”hesaid.“Now,thegoal,ofcourse,isnotmeasurement

formeasurement’ssakebuttouseanalyticstoreactfasterto

problemsandrisk,reducecycletimesandimproveoverall

supplychainmanagement.”

Globalizationmightbelinkingpeopleandthingsmore

rapidly,butsupplychainshavebecomemoreintricate,uncer-

tainandunpredictable,saidPatrickSims,principalsolution

engineeratSAP.“Giventhatcomplexity,wehavealotof

fragmentationintermsofourabilitytooptimizewhatwe’re

gettingoutofthemfromapracticalperspective,”hesaid.“We

wouldthinkthatnext-generationsupplychainswouldneedto

bealotmoreflexibleandtoleranttothisunpredictabilityand

uncertainty.Thesupplychainsnolongerenjoythestatusof

staticdesign.Instead,thesupplychainsaregoingtohaveto

modeledandremodeledonaconstantbasis.”

Thebottomline:Supplychainanalyticsthatcompileand

comparedataacrossvariedenvironmentscansignificantly

improvesupplychainmanagementbyreducingcycletimes,

alertingmanagerstoareasofconcernbeforetheybecome

problemsandbalancingsupplybudgets.Toillustratethis,

SimsandthreeofhiscolleaguesatSAPshowedhowanalytics

couldworkintherealworld.

“Everyoneneedstogetthemostoutoftheirsupplychains

andtheirsupplychainnetworks,”Simssaid.“Manyofthe

practicesthatwe’veseenoverthepastseveralyearshave

failedtodeliverthepromisedvalue.Folksreallyneedtobe

abletocoordinateandorganizetheiractivitiesacrossthat

entirefragmentedsupplychaininordertooptimizetheirper-

formance.”

Weaponsystemsmanagershaveadditionalneedfororga-

nizingtheirsupplychainportfoliobecausethey’reworking

withpublicmoneyandundertightregulations,hesaid.

“Obviouslytryingtooptimizethesupplychainsothatwe

canmakeouraircraftandourtanksandourarmorandour

truckslivelonger,ifyouwill,iscertainlysomethingthat’s

key,”Simssaid.“Weaponsystemmanagershaveaverylarge

numberofcomplicatedresponsibilities,andmanyofthose

arereallygearedtowardavariedandextensivebusinessintel-

ligenceproblem….Toensuretheycansuccessfullycarry

outthoseresponsibilities,they’regoingtohavetobeableto

organizetheirportfolioandautomateasmuchastheycan

fromananalyticsandmetricsstandpoint,minimizethechange

managementissuesthatwehaveinthisverycomplexenvi-

ronment,andreally[have]asmuchofaconsolidatedpicture

fromabusinessintelligencestandpointontheentiresupply

chainastheycanget.”

Minimizing Missing Links JimLong,directorofcustomerbusinesscontentatSAP

Labs,usedtheexampleofamade-upcompanyinthesettingof

anactualevent–theearthquakeinJapaninMarch.Kurehaisa

companyinthequakezonethathasa70percentglobalmarket

shareonakeyresinusedtomakebatteriesformobiledevices

suchaslaptopcomputers.Supplychainmanagerswhoseprod-

uctlistcontainssuchdevicesorothercomponentsthatgointo

thebatteriescouldhavealeguponavoidingproblemsifthey

couldknowasithappenedthatKurehawasnotonlyaffected

butsoseverelythatitwasshutdown.Armedwiththisknowl-

edge,managerscantakeswiftactiontoavoidsupplychaindis-

ruptions.

Theorganizationandcompilationofsuchinformationisthe

Speakers: Pat Sims, Solution Engineer, SAP • Jim Long, Director, Customer Content Development, SAP Labs • Ron Needham, Vice President, SAP Labs • Vineet Seth, Senior Director, Product Management and Marketing Moderator: Steve LeSueur, contributing editor, custom media, 1105 Government Information Group

Vendor Sponsored

Visit: http://www.sap.com/industries/defense-security/index.epx or call 1.800.872.1727

goalofSAPLabs’newSupplierInfoNet,billedasacloud-

basedbusinesssocialnetworktopredictsupplierriskandman-

ageoperationalperformance.Thesolutionhasthreeprongs:

pooledKPIbenchmarksthatenablemanagerstocomparetheir

experiencewiththatofotheragencies,theabilitytopredict

troubleusingaggregateddataandmachine-learningtools,and

accesstothesub-tiersupplybase(i.e.,yoursupplier’ssuppli-

ers)topinpointpotentialproblems,Simssaid.Itcollectskey

performanceindicators,accessibleviaInfoNet’scompatibility

withSAPBusinessObjectsBusinessIntelligenceSolutionsand

SupplyChainManagement.Itcomespre-deliveredwithmore

than300KPIsbasedontheSupplychainOperationsReference

(SCOR)modelandcanintegratewithtransactionalsystemsthat

arewithinandoutsideSAP.Thecompany’senterpriseinforma-

tionmanagementtoolsethandlestheextraction,transformation

andloadingfromavarietyofsourcesintoonecohesivereport-

ingdatawarehouse,Simssaid.

“Inourworld,thedefenseworld,thevariousissuesofwho’s

goingtoletyouhaveliveaccesstowhatdifferentsystemsare

certainlyatplay,”headded.“Wewouldcertainlyrecommend

fromacorporatestandpointthatthesupplychainanalystwould

beabletogetatleasttheminimum–someXMLdatafilesor

Webservicefeedsthatwe’dcompileintoanongoing,constant-

lyrunningdatawarehouse.”

InfoNetcrawlstheInternettoaggregatedatasuchasreal-

timenewsalerts,financialreports,governmentdata,regulatory

requirementssuchastheWeaponSystemsAcquisitionReform

Actof2009,geographiccoordinatesanddemographicfigures

suchaswhichentitiesarewomen-orminority-owned.

“Whenitcomestosupplychains,you’dbeamazedwhatin

themodelscandriveapositiveoranegativeprediction,”said

RonNeedham,vicepresidentofSAPLabs,partofthecom-

pany’sGlobalBusinessIncubatorGroup.“Wewantedasmuch

attributeinformationaswecouldcaptureinordertopredict

moreeffectively.”

Customized Coordination TouseInfoNet,supplychainmanagerswouldsetupa

listofallthesupplierstheagencyworkswithandpairtheir

KPIswiththeagency’sowntargets,saidVineetSeth,senior

directorofproductmanagementandmarketingattheLabs.

Forexample,iftheyagencyaspirestoa95percentratefor

on-timedelivery,anysupplierwhomatchesorexceedsthat

isshownonscreeningreen.Conversely,companiesthatrate

85percentorlessarered.Anythinginbetweenisyellow.

Clickingonacompanynamebringsupdetailsstatisticsabout

thesupplierinaboxontheright-handsideofthescreen.

Informationflowsthroughaseriesofnotifications.The

homepagescreendetailsurgentissues,includingwhatsuppli-

erisintrouble,whereitislocated,thecommodityitprovides

andadescriptionoftheproblem,suchasqualityvs.quantity

andseverity.

Supplychainmanagerscancustomizetheirviewsinsev-

eralways.Forinstance,theycanlookatthechainasaheat

map,sonamed“becauseIcanveryquicklyseewherethehot

pocketsareinmysupplybase,”Sethsaid.Inthatconfigura-

tion,suppliersaredepictedasblockswiththesizebasedon

howmuchyouspendwithorearnfromthem.Again,atraffic-

light-coloredsystemshowswhichsuppliersaremissingthe

KPIthreshold.

Putting It All Together Thekeyfeatureoftheanalyticspackage,Simssaid,isthe

abilitytoconstantlymodelandremodelallthedatainyour

supplychainbasedonyourcurrentbusinessandeconomic

realities.“Itwillprovideyoufullvisibilityintothesupply

chain,giveyoutheabilitytogenerateyourownmetrics,iden-

tifythepertinenttoyousupplychainpatternsandtrends,and

dothatallbasedon,atleastasastartingpoint,avarietyof

SCORmodelmetrics.”

Inthefuture,SAPplanstotweakInfoNetsothatitdoesn’t

focussolelyonthenegativebutcanalsohelpforecastwhere

supplyneedsmightincrease.“Wesometimestendtofocus

onbadthingsthatareinthesupplychain,butwealsowant

toconcentrateonpositivenewsaswell,becauseifyouthink

aboutittheflipsideofthissupplierworldisthecustomer

demandssideoftheworld,socanwepredictcustomer

demand,”Simssaid.

Folks really need to be able to coordinate and organize their activities across that entire fragmented supply chain in order to optimize their performance.

– Patrick Sims, principal solution engineer at SAP