SAP Supplier InfoNet- An Impressive Application with Lots of Potential to Mitigate Supply Chain Risk
This posting is an update to our previous Supply Chain Matters commentary regarding Ariba, an SAP Company and its announced availability of a new application targeted for supply chain risk management. As we indicated in that original posting, Supply Chain Matters does not elect to echo technology vendor announcements unless we believe it should capture the attention of our readers, and we get the opportunity to drill down on the specifics and functionality. Ariba teamed up with SAP Supplier InfoNet, an internal incubation business unit to provide availability of this cloud-based application. We have since received a detailed briefing on the functionality of this application, and candidly, we were impressed, for a number of reasons.
First, the application itself is not solely targeted to just a sourcing and procurement user base, but other cross-functional users that have responsibility related to broad-based supply chain disruption and risk mitigation. Supply Chain Matters has always advocated that supply chain risk mitigation cannot solely be owned by an individual function such as procurement, but rather cross-functional or cross-business leadership and accountability. SAP Senior Vice president David Charpie who provided our briefing, indicated that this application’s focus includes Director and C-level as well as cross-functional supply chain and operations management users. Bravo for that decision.
Charpie’s prior background was with supply intelligence vendor Open Ratings, and SAP Supplier InfoNet takes that application to much broader and deeper capabilities. After its internal development within SAP, the decision was made to re-cast Supplier InfoNet on the Ariba B2B platform, powered by the SAP HANA database. While this transition is still a work-in-progress, by our lens, there is powerful potential for the ability to gather early-warning and insights on pending and actual supply chain disruption.
What especially stood out for us was:
- A stated ability to provide multi-tier value-chain information visibility and insights. When fully married to the Ariba B2B network, that could prove powerful. When integrated with supply chain response management and planning information, it could provide even more noteworthy potential to manage and respond to major supply disruption.
- Support to allow users to capture many forms of structured and unstructured information to develop a risk profiles among key suppliers. It includes language processing, text analysis as well as social and community-based intelligence capabilities.
- A user-friendly interface that appeared to be rather intuitive with abundant visualization, data summation and heat mapping techniques.
- The ability to currently capture upwards of 160,000 external data sources including industry, government, third-party and other sources. Data can be time and/or supplier weighted. The application supports pre-screening of data and the ability to gather a lot of hidden supplier intelligence, more than a single individual could capture in a normal work week. We even joked that in order to maintain this blog for our readers, this application would quadruple our productivity. Supplier InfoNet can even tap postings of Supply Chain Matters related to risk events.
- A Facebook like data model with the ability of firms to control what data actually gets displaced, along with community management of this data, which could prove beneficial when a major supply disruption is occurring.
- A broader definition of cross-functional performance metrics tied to financial objectives and context.
- The ability to conduct what-if analysis. Supplier InfoNet’s leveraged use of the SAP HANA platform provides for additional capabilities for predictive analytics to be layered across these combined information streams, allowing for a form of machine learning relative to patterns of information that would correlate with expected outcomes
- Configuration for industry-specific requirements with eight industry sectors already configured or in-process and SAP Supplier InfoNet is initially targeted to industries with a complex manufacturing and value-chain profiles.
The issue of pricing of the application is not as clear, and as we suspected, customers will have to sign-up for a separate subscription to utilize SAP Supplier InfoNet. We were not provided pricing specifics other than the subscription model may be predicated on the size of the network. We are certainly interested in hearing from SAP and Ariba customers on their impressions of pricing. We will continue to seek out that information since that may be the Achilles heel to wide-scale adoption.
An open question is obviously how timely all of the functionality of SAP Supplier InfoNet can be eventually incorporated within and on the Ariba Network along with a critical mass of industry-specific supply and value-chain intelligence that firms are willing to share.
Bottom-line- SAP Supplier InfoNet on the Ariba B2B Network has tremendous potential for customers and prospects in the ability to provide early-warning to major supply disruption, to manage all pertinent information when that disruption occurs and to provide more predictive capabilities in supply chain risk mitigation. Let us hope that the SAP bureaucracy does not stymie that attractiveness with elongated milestones and unattractive pricing.
© 2014, The Ferrari Consulting and Research Group LLC and the Supply Chain Matters Blog, All Rights Reserved
Supply Chain Matters had the opportunity to recently attend the 2014 Crossroads Conference hosted by the Massachusetts Institute of Technology (MIT) Center for Transportation and Logistics (CTL). Crossroads is an event that began 10 years ago, and each year we look forward to attending and hearing about leading-edge trends and developments in MIT supply chain focused research and across industry supply chains.
Each year, the agenda shifts in focus and the 2014 conference featured talks on advanced and emerging research occurring among select MIT faculty members. The conference was kicked-off with a presentation from MIT Professor Suzanne Berger, principal author of the book, Making in America, From Innovation to Market. Professor Berger summarized the multi-year research conducted by the MIT Task Force on Production and Innovation. Supply Chain Matters has previously posted our summary of last year’s event that reported on the findings from the MIT PIE Task Force. None the less, the messages continue to have meaning. MIT researchers studied and interviewed over 250 manufacturing start-up firms located in the United States, Germany and China. The principle takeaways summarized by Professor Berger were:
- Industries do require close ties and integration among R&D, product design and manufacturing. The MIT researches identified a meaningful pattern of successful firms that demonstrated specialized expertise in physical manufacturing bundled with specific customer-focused services.
- Of the 250 manufacturing start-ups that were analyzed, most were able to gain funding for initial product design and concept in the first 3 years of the start-up. None were able to scale-up to full volume production in the United States because of the large dollar and process expertise investments required to scale. Industrial ecosystems that were once provided by industrial giants have moved outside of the United States, primarily in Germany and China. While 85 percent of advanced process and material research had roots in an academic institution such as MIT, most migrated to other global areas and according to the researchers and the U.S. continues to lose out on commercialization expertise. Professor Berger joked with the audience that the book could have be renamed to be “Home Alone”.
- U.S. companies have huge pressures from Wall Street for shedding overall assets and focusing on short-term vs. longer-term focused results.
- On the positive side, researchers cited existing U.S. public and private consortiums and partnerships as having a rather positive influence in providing needed expertise and infrastructure to sustain innovative manufacturers.
A rather sobering presentation, Is Cyber Security the Next Risk, was delivered by Dr. Abel Sanchez, Executive Director of the MIT Geospatial Data Center. Sobering is probably an understatement because Dr. Sanchez provided mind-blowing examples of how easy it has become for unscrupulous parties to hack corporate systems today. We are not going to cite the specific statistics in our commentary from concern that such data would become more visible. Suffice to state that the often cited statistic that 50 billion connected devices will exist by 2020 has to be factored against much stronger information security techniques. Dr. Sanchez noted that an internal experiment was conducted within MIT when a single laptop with no security controls, was connected to the internal network for a 24 hour period. A visualization representation of the specific attacks that occurred from all parts of the globe on that single laptop in just that 24 hour period was sobering. Dr. Sanchez’s observation was that for the most part, corporations are not allocating sufficient attention or resources to address information security. Sanchez further pointed to the recent massive credit card security breach that occurred across Target retail stores as a potential benchmark for ascertaining corporate, government and personal security responsibilities.
Other highlights of the 2014 Crossroads event included a presentation from Professor Julie Shah of the MIT Interactive Robots Group depicting factories of the near-future, where robots and humans will work together interactively on flexible work sequencing and scheduling of assembly tasks. The next-generation of robots will be responsive to high-level guidance from humans, and Prof. Shah outlined how assembly work can be coordinated among multiple robots in the not too distant future in applications such as aerospace, automotive or consumer electronics assembly manufacturing. MIT Self-Assembly Lab Director Skylar Tibbits provided insights into 4D Printing application concepts, where the emphasis shifts from the printer to essentially programmable, super high density or molecular “smart” materials which form desired shapes based on individual material properties. In his overview, Tibbits described the notion of materials that can assemble or repair themselves in application areas such as aeronautics, medical devices, pharmaceuticals and other area in the coming 5-10 years.
As always, Crossroads was a thought provoking conference focused on the future concepts of supply chain technology and processes.
A Supply Chain Matters Guest Contribution
by Rich Sherman
In my previous Supply Chain Matters guest contribution, I outlined the concept of Web 3.0 enabling a fundamental transformation in supply chain management from linear, sequential thinking and communication to a demand/supply network, systems thinking, and dynamic communication. As we evolve in the Connected Age, the transformation is emerging as the Smart Supply Network 3.0 (SSN 3.0). It’s an extension of the vision I painted of a Smart Supply Network in my book. Two years later that vision is becoming reality as Web 3.0 is becoming a reality.
Smart Supply Network 3.0
Supply chain problems are caused from the uncertainty, time delays and amplification of variability based on linear communication of demand changes from one function to another and from one organization to another. The parts of the chain don’t work together. They often work against one another. They may be linked physically; but, rarely are they “plugged” into one another.
They don’t have or share data and information about the plans and performance of their operations or their changing demand/supply requirements. They are consistently “out of sync” with one another. As a system of supply responding to demand variation, they generate uncertainty, waste, cost, time delays, over and under stock, increased transportation cost, inefficient capacity utilization, and, well, you name it. In short, supply chain management is managing the complexity of the never ending consequences of unplanned events. The supply chain is a dysfunctional system that increases the cost of all participants in the system.
Web 3.0 will fundamentally transform the supply chain from a dysfunctional chain of unconnected organizations working separately to create inefficiency into a connected system of organizations supported by smart analytics that simultaneously and synchronously respond to variability to increase accuracy, visibility, and velocity.
We have to lose the notion of a “Supply Chain”. It is not a chain. It is not sequential. It is a system. It is omni-directional. Organizations participate in a dynamic network of other organizations to satisfy demand at a consumption point. The organizations in the network are not “links”, they are nodes. They work together in conjunction with other nodes to distribute material and information across the network to satisfy demand at consumption nodes. Connectivity is provided physically by transportation lanes and carriers and information is provided by communications lanes (Web 3.0) and telecommunication carriers. Forget about supply chain, in the 21st century we must operate and manage a Smart Supply Network 3.0.
What does it look like? Simply stated, SSN 3.0 enabled by Web 3.0’s ubiquitous communications network, automatic identification and data collection, location based services, and business intelligence provides end to end predictive and prescriptive analytics, decision support, and transparency that transcend visibility within the system of systems to synchronize the flow of material, services, and information. More accurate timely data, shared simultaneously, enables the organizations comprising the network to work together to optimize resources and physical flow to reduce time, inefficiency and inaccuracy, and cost while increasing service and capacity utilization to serve the demand of the connected consumer and customers across industries. SSN 3.0 is simply the way to operate and lead in the connected age.
Break the chain and jump on the network.
About the Author: Rich Sherman is an internationally recognized researcher and author on trends and issues across supply chain management. He currently serves as a Principal Essentialist at Trissential LLC in their supply chain consulting practice. His book Supply Chain Transformation: Practical Roadmap for Best Practice Results (Wiley, 2012) has received praise by practitioners, academics, and non-supply chain executives as a great read on business transformation.
In October of 2013 Supply Chain Matters introduced our readers to the first signs of advances in item-tracking technology that being a stand-alone sensor in printed electronics. We called attention to Norwegian based Thinfilm Electronics ASA which announced that it had successfully demonstrated a fully functional stand-alone, Smart Sensor label built from printed and organic electronics with low power. We further noted that the announcement pointed to the ability to track and monitor temperature and environment for logistical needs in pharmaceutical supply chains as well as the ability of retailers to have insight on both the temperature, shelf-life and food safety of perishable products.
We have now received word of two other strategic partnership announcements involving Thinfilm’ s product development plans. One announcement outlines a partnership with Temptime, a significant provider of cold-chain related, time-temperature indicators to the healthcare and pharmaceutical industry. Currently, Temptime claims to produce the only temperature sensor for item-level vaccine monitoring that is approved by the World Health Organization (WHO) and the United Nations Children’s Fund (UNICEF). According to the announcement, both companies will collaborate to develop indicators featuring electronic technology that will alert people through digital display if medical or pharmaceutical products have been exposed to potentially damaging temperatures. Terms of this deal include a development-related investment from Temptime and commercial pre-orders for samples that can be shared with customers. While the press release notes that the timing is still to be determined, we believe that samples may well be developed in months.
Another announcement calls for a distribution agreement with PakSense, Inc. in the development of intelligent sensing products specifically designed to monitor perishable goods. PakSense currently provides numerous major food retailers and suppliers with solutions to help monitor the condition of perishable goods. Terms of this agreement authorize PakSense to distribute Thinfilm Smart Labels™ to food suppliers and retailers of produce, meat and seafood in North and South America. In addition, PakSense has submitted pre-orders for the labels, which are targeted for delivery to lead customers in early 2015. The Thinfilm printed electronic labels will indicate if certain temperature ranges have been exceeded, allowing added visibility into temperature variations that may exist within a shipment and will complement PakSense time and temperature monitors. Further indicated is that the ultra-low cost associated with the printed electronics process will now make it possible for PakSense customers to use multiple Thinfilm labels in a shipment at the “item” and “pallet” level. In addition to ThinFilm technology, key components of these smart labels will be provided by several other partners including PST and Acreo.
One of our predictions for 2014 was that the “Internet of Things” will accelerate in momentum, particularly in applications related to broader supply chain visibility. Smart, item-level labels that alert to environmental and other real-time conditions certainly falls under this category and the above announcements point to some exciting potentials in the not too distant future.
We want to alert Supply Chain Matters readers that Bob Ferrari, our Founder and Executive Editor will be featured as a kickoff speaker at an upcoming series of Sales and Operations Planning (S&OP) Executive Breakfast Briefing events sponsored by Steelwedge Software.
This series has been designed to provide attendees with advanced understanding of technology being applied to support the S&OP process, including the important insights for integrating information and more predictive decision-making capabilities for process participants. There will be time allocated for ample interaction with speakers.
Bob Ferrari’s presentation is titled: A Practical Guide to Using Predictive Analysis to Take Your S&OP and IBP Process to the Next Level. In this talk, Bob will address how many S&OP processes become stalled because they are trying to assimilate information that is most external to existing information system or spreadsheet capabilities. S&OP processes are literally drowning in data but starving for decision-making insights. Three significant industry converging forces are coming together to allow S&OP teams the ability to incorporate use of more predictive decision-making as well as to achieve goals for integrated business planning. Along with Bob, both the Boston and Chicago breakfast series events will feature Bruce Richardson, Chief Enterprise Strategist at Salesforce.com as a speaker.
These breakfast series events will be conducted in the following cities with more information and conference registration information provided at the below web links:
Join Bob Ferrari and other distinguished speakers at either of these upcoming Steelwedge focused events for insights on taking your organization’s S&OP process to the next level.
SAP Announces Intent to Acquire Fieldglass for Cloud-Based Contract Labor and Services Technology Support
Yesterday, SAP AG announced its intent to acquire cloud-based procurement contingent labor and services management technology provider Fieldglass. According to the announcement, SAP has plans for combining of the Fieldglass with the existing human resource management capabilities of SAP SuccessFactors capabilities onto the existing Ariba, an SAP Company network platform.
Fieldglass falls under the category of Vendor Management Systems (VMS) and claims to be currently supporting 27,000 suppliers an upwards of $25 billion in spend among different industry settings within its category of support.
Terms for the acquisition were not disclosed and the release indicates that SAP expects to close this transaction in the second quarter of 2014 subject any regulatory or other closing conditions.
This announced acquisition is further evidence of SAP’s intent to strengthen the Ariba B2B platform around broader sourcing and procurement services needs including integrated human resource management.
From the lens of Supply Chain Matters, the fact that the press release includes multiple quotes from the SAP Executive leadership team including CTO Vishuall Sikka, provides evidence that this acquisition was looked upon as strategic intent to broaden the cloud-based functionality support for both SAP and the Ariba Network. The fact that the decision reached this level may be an indicator of how much SAP was willing to pay. The implications of this move will reverberate to other current market participants and will place further emphasis on the overall importance of enterprise and best-of-breed technology vendors having a B2B cloud-based network platform strategy.
Supply Chain Matters has been offered the opportunity to brief with SAP executives regarding this acquisition and we will provide further commentary or comments after completing that briefing. For the time being, existing Ariba and Fieldglass clients are advised to await further specific plans and strategic milestones regarding this acquisition especially regarding the technology platform implications.