Supply Chain Matters had the opportunity to attend SAP’s Supply Chain Management Summit meeting at SAP North America headquarters. The purpose of this day and a half  summit was to bring SAP’s current supply chain management applications customers together to share information and gain further knowledge on SAP’s various software applications supporting supply chain business processes.  In our initial part one posting, Supply Chain Matters provided commentary on the leadership change within SAP SCM.

We had the opportunity to attend a number of educational sessions during the Summit.  Here are some summary impressions.

A deep-dive session entitled Best Practices in Improving Supply Chain Response Management was rather interesting.  The session facilitators billed their presentation as an educational overview on the role and purpose of response management and stated up-front that the session would not be technical.  The audience however had other needs, and wanted more detailed knowledge on how the newly released SAP Supply Chain Response Management by ICON-SCM would specifically integrate with SAP’s APO and SNC and ERP ECC applications. What became evident is that integration to other existing  SCM applications is still a work-in-progress  What was mentioned is that the initial integration target involves Global Available-To-Promise (gATP).  Also mentioned was that in the interim, customers desiring integration of Response Management to existing SCM or other applications can do so on a custom project management basis.

A session summarizing all the changes incorporated in SAP APO Version 5.0 and 7.0 reinforced that APO customers need to keep abreast of changes, since a lot of enhancements continue to be added.  The key takeaway for APO users is SAP’s message that Release 7.0 provides the staple ECC core release, and that once customers move to 7.0, they will be able to henceforth take advantage of SAP’s less disrupting Enhancement Release Paks which promise to make future upgrades less disruptive.  Eric Simonson of SCM Solution Management demonstrated superb and detailed knowledge of various APO enhancements, and APO customers should keep Eric’s contact data on their smartphones.  One of the other most significant takeaways for SAP customers in life sciences and process industries is that APO has finally addressed comprehensive and detailed support for shelf-life planning, an issue that dates back six years. Supply Chain Matters would be highly interested in speaking with any SAP APO customer who has had experience with this newest shelf-life optimization technology.

There were a series of roundtable luncheons involving customers representing specific industries.  Supply chain Matters sat in on the Life Sciences roundtable that included representation of a broad cross-section of life sciences companies spanning generic drugs, proprietary drugs and pharmaceuticals, medical devices and other ancillary products.  The listing of hot topics and process challenges was quite comprehensive and by our count, the ones most emphasized included lean enablement, extended warehouse management, master data management and reporting, inventory optimization and response management.   To our pleasant surprise, we also discovered that SAP currently sponsors four different forums dedicated to the topic of supply chain tracking and serialization, which is another life sciences challenge given upcoming state and governmental mandates for supply chain drug tracking capabilities. Many life sciences companies are also moving toward extended contract manufacturing, which has added more challenges for visibility and process controls.

By our observation, the most widely attended customer sessions involved Newell Rubbermaid’s use of SAP APO to enhance its S&OP process, and Medtronic’s deployment of SAP Enterprise Inventory Optimization by SmartOps, one of SAP SCM’s other solution extensions.  A lot of learning and watch outs came from both of these presentations. Supply Chain Matters will provide additional comment in subsequent postings.

Overall the Summit was very educational, providing ample time for attendee networking, which is rather important in these times of social media.  Some attendees indicated that they preferred these smaller sized venues, as well as a location that was easy to travel to by automobile, train, or quick plane ride.

In the category of disappointment, was the lack of any definitive knowledge-sharing of how SAP’s ongoing in-memory HANA technology would play a role in SAP’s evolving SCM suite, especially SAP APO. At this year’s Sapphire, SAP Supervisory Board Member Hasso Plattner indicated that APO would be a top priority for HANA. The lack of any education or update was an opportunity lost.

Bob Ferrari

This week, Supply Chain Matters had the opportunity to attend SAP’s Supply Chain Management Summit meeting at SAP North America headquarters. The purpose of this day and a half  summit was to bring SAP’s current supply chain management applications customers together to share information and gain further knowledge on SAP’s various software applications supporting supply chain business processes.  It is part of an outreach program that involves various SAP Business Suite areas, where customers with similar interests can come together. The agenda featured a three hour deep-dive session in select SAP SCM applications including the newly announced Solution Extension, SAP Supply Chain Response Management by ICON-SCM as well as the newly upgraded SAP Transportation Management 8.0.  The most widely attended deep dive was that covering SAP Supply Network Collaboration (SNC).

Day two included quite a number of SAP customer presentations that shared their experiences and implementation learning on specific applications, and included roundtable discussions among specific industry players.  We will highlight our observations from attending certain sessions in a subsequent posting in this series.

In this specific post, we comment on a leadership change within SAP Supply Chain Solutions Management.  Hans Thalbauer is the new Head of Line of Business Solutions for Supply Chain Management, PLM and R&D. Hans replaces Lori Mitchell-Keller, who has now assumed a LOB solution management role for SAP Retail.  In our view, Lori did an extraordinary job of providing added focus and renewal to SAP’s efforts in SCM.  Her leadership in adding the response management solution extension to the product portfolio and for a renewed emphasis on SAP’s supply chain execution offerings is commendable and we wish her well in her new role.

Hans Thalbauer is no stranger to SAP SCM, having previously served in an SCM management role.  This author has had personal experience in working directly with Hans in my previous tenure at SAP, and I can assure the SAP SCM customer community that SCM is in good hands.  Hans was previously managing PLM solutions management, and his knowledge of that domain along with detailed SCM and manufacturing applications knowledge will serve him well. Hans can navigate the halls of Walldorf solutions development teams having resided for multiple years at that facility. He possesses an engaging style and sincerely cares about customer needs.

In subsequent postings, we will highlight some further impressions from the Summit.

Bob Ferrari

As this rather busy week draws to a close, SAP has concluded yet another annual Sapphire Now and ASUG conference. Supply Chain Matters has provided four separate commentaries direct from the conference and readers can reference each at the following links;

Commentary One

Commentary Two

Commentary Three

Commentary Four

In this final posting, we share our summary thoughts and impressions regarding 2011 Sapphire Now.

General observations and positive notes:

• As was last year, SAP obviously invested lots of production support money into Sapphire.  There was video coverage broadcasted live via the Internet, lavish production sets, live bands and talk show formats all expertly designed to present SAP as a world class, enterprise ready company.  That is an obvious positive since on the whole, there really was not a lot of hard news or product announcements generated by the 2011 Sapphire.
• As in the past, SAP’s blogger relations team (Mike Prosceno, Stacy Fish, Andrea Kaufmann, Craig Cmehil and others) performed admirably in providing each of us unfettered access to SAP executives and customers.  Most all of my requested interview requests were accommodated.  This is a world class team, setting the standard for all other technology providers.
• More than other years, supply chain messages, topics and implications were threaded in many of the talks, panels and keynotes.  We noted Hasso Plattner’s declaration that he believes that all of SAP’s business planning applications should be the primary target for rewrite on the HANA platform, and his specific mention of SAP APO as the number one priority. Steve Lucas addressed supply chain business intelligence requirements in his overview of SAP Business Analytics strategic direction.
• While on the subject of HANA, we continue to believe that if successful, conversion of SAP applications and software infrastructure to take maximum advantage of in-memory technology is game changing.  With this year’s Sapphire came a more detailed understanding of extensive and far-reaching this objective really is, as well as the difficult technical challenges that remain for SAP.  That for us is the real takeaway from 2011 Sapphire, what is going on behind the scenes. While SAP often declares itself as an innovative company, the true test of that statement really occurs in the coming months and years.
• Where 2010 was a focus on business reporting business intelligence, 2011-2012 has been characterized with a focus on operational focused business intelligence.  We trust that SAP will follow-through on that objective.
• The few supply chain related presentations seemed well attended indicating heightened interest by SAP customers.
• This year’s Sapphire included a novel micro-discussion format which we tended to like.  Attendees who are interested in the featured topic can attend, and the designated SAP facilitator can not use any PowerPoint or canned presentation.  The facilitator has to know his subject matter and be able to interact with attendees in responding to their questions.  These sessions were planned to accommodate 10-15 attendees, but those in the supply chain area were largely swamped. In one session, a hand count noted over 90 attendees.  We observed a session focused on the new RDS in SAP Procurement having a similar headcount, where two facilitators had their hands full.  The concept of a focus group discussion is great but perhaps the planning and execution will be improved for future Sapphires.
• It was good to note that the SAP SRM applications area has been granted a strategic priority by SAP senior management.  It seems that SAP will no longer tolerate penetration from various other best-of-breed providers in this space.  Expect more aggressive product initiatives as well as a potential acquisition in this area.

In the needs work or concern category:

• The technology gaps among where existing SAP customers are in their systems landscape and where SAP is headed is widening even more, and customers face difficult decisions as to strategic direction and budgets.  Keeping current with SAP NetWeaver, Business Objects and other technologies could be an expensive proposition and as noted, SAP has now put on-demand HANA on the table for long-term consideration. Now, more than ever, supply chain functional and IT teams within SAP shops need to insure close communication and collaboration with the office of the CIO.
• As noted, SAP’s move toward HANA has far-reaching implications particularly in the areas of supply chain planning, execution, response and business intelligence.  The big open question remains the overall timetable, which is, of course, multi-year in nature.  Also announced was SAP’s intention to move HANA to the cloud which has all forms of implications related to data security, response time, and the long-term presence of Business Warehouse (BW). SAP management acknowledges that more concise communication and timetable roadmaps are required to assist customers in their technology and applications upgrade timetables, and we trust that this area will be on particular focus for the remainder of 2011.
• We were disappointed in the continued lack of clarity regarding SAP’s efforts to develop an sales and operations planning (S&OP) support application that leverages HANA capabilities. In the interim, SAP customers are left with an existing sub-standard S&OP support application that requires far too many dependencies on other applications to manage an overall process.
• We remain concerned relative to ongoing synergies among SAP SCM, PLM, Manufacturing  and SRM solution development teams.  After being previously unified, SAP SRM is once again independent with its own set of priorities and strategic deliverables.
• We were somewhat disappointed in customer adoption numbers of SAP Business by Design, SAP’s thrust to support small and mid-market company needs. Accumulating just 500 customers to date, we would have anticipated that this application suite would have far more numbers of adoption.  This is another obvious area of emphasis for SAP in the coming months.

During their keynote presentation, SAP Co-CEO’s Bill McDermott and Jim Hagemann Snabe stressed that SAP continues with the belief that customers have the right to have trusted partners, and that SAP must constantly earn its seat at the table.  In the past, SAP had sometimes embarked on initiatives that were better for SAP’s bottom line. With the declared objective of in-memory computing and HANA, SAP is embarking on a massive objective with far reaching implications.  The open question remains whether customers and supply chains will discover compelling value in these efforts.

Bob Ferrari

This is our fourth in a series of Supply Chain Matters commentaries regarding attendance at this year’s SAP Sapphire Now and ASUG conferences being held in Orlando.  Readers can reference our previous three commentaries at the following links;

Commentary One

Commentary Two

Commentary Three

As we write, day three is winding down with the final concluding evening concert headlined by Sting, yet to come.  As with previous Sapphires, this being our tenth, activities have been a blur.

In this commentary, we will touch upon two other topical areas we outlined in our prelude posting last week.  The First is the SAP Rapid Deployment Solutions (RDS) program and specifically its applicability in the supply chain, manufacturing, supplier relationship management and procurement areas.  Noted in earlier commentaries was the explanation that RDS were designed to help SAP customers get up and running in a major quicker manner, and include fixed cost and fixed scope parameters.

We were fortunate to have the opportunity to speak with Stefan Haenisch, senior vise president of solution assembly and packaging who has leadership responsibility for all of RDS deployment programs for SAP.  There are currently 230 RDS programs underway with 30 percent managed by SAP partners.  We learned that many of the components and elements of RDS come from SAP’s All-In-One programs which helped to develop many of the solution accelerators, best practices and tools that now make-up this new ongoing RDS effort.  We were also pleased to hear that SAP is committed to bring in more partner resources to support these programs, and that partners are bringing new ideas and innovation ideas with their involvement.

For the supply chain area specifically, 3 RDS offerings are in release status (Customer Collaboration, Extended Warehouse Management, and a basic S&OP application. Expected for release later this year are Global Available to Promise and Service Parts Management We were somewhat disappointed to be informed that Supplier Network collaboration (SNC) has slipped into early 2012.  Apparently there are concerns among SAP SCM management teams that there are too many RDS program efforts occurring at the same time. In the procurement area, there is an RDS for Procurement, and judging from an eight deep crowd I observed in a specific microforum dedicated to this subject, there appears to be lots of pent-up interest.

Another goal for us in exploring this year’s conference was the opportunity to view the long anticipated Sales and Operations planning prototype built on the HANA platform.  We were informed that demos were being run on the show floor, but to our chagrin, neither the Business Analytics Theatre nor the Advanced Technology Theatre could accommodate our request. We suspect that this application is still “in the oven’ as it were, since in his technology keynote, Vishal Sikka noted that S&OP would be coming later as a component of the Data Warehousing aspects of HANA.  We believe that this is unfortunate because SAP customers probably are confused as to existence of two separate and different S&OP application initiatives for this area, and which best meets business process needs.  We further suspect that SAP wants to make a big statement in this critical process area, but is trading off valuable time for the most elegant technology approach.  A less onerous application supporting the S&OP process is long overdue.

On the subject of business analytics, we participated in a highly informative interview with Steve Lucas, global senior executive leading SAP’s business analytics business strategies.  Steve acknowledged that this year, every individual SAP analytics product was involved with some major product upgrade or initiative, and that may be overwhelming in terms of customer understanding.  His organization has produced a two-sided visual that provided what we believe is the best high level explanation of the various architectural implications of HANA and business analytics, as well as a methodology for how customers can evaluate their roadmaps and direction toward HANA.  This visual was obviously being test run for customer briefings at Sapphire.  It provided for us, the best visual tool thus far to help understand the true implications of SAP’s direction for HANA and business analytics. Participants in our global blogger briefing all unanimously urged Steve to make this visual more visible for SAP customers as a whole.  Over the coming weeks, we will explore the implications of this direction on analytical capabilities applied to supply chain business processes.

We have to close out this commentary but we leave you with an important and meaningful statement from Steve Lucas.  HANA at the end of the day is a database, a dramatically different form of database that can perform its own calculations and analysis at a far more rapid rate than anyone believed.  That is the game-changing aspect of this direction and it comes with many challenges for SAP and its customers. Its also presents many opportunities for how we can better sense, respond, and adjust global supply chain processes.  Technology marches on, regardless of whether we are ready.

Bob Ferrari

This is our third Supply Chain Matters commentary regarding attendance at this year’s SAP Sapphire Now and ASUG conferences being held in Orlando.  Readers can reference our previous two commentaries at the following links;

Commentary One

Commentary Two

Because of some significant supply chain related news, this commentary comes “on the fly”, and we will elaborate more in our conference summary posting.

Traditionally, day three of Sapphire Now keynotes are dedicated to SAP’s strategic direction and reporting card on technology initiatives, and in our view, this is the real takeaway story for this year’s conference. Significant is not so much as what was happening in front of podiums and cameras, but the significant technology changes that are being orchestrated in SAP technology labs around  the world. Make no mistake, there ar significant technology direction changes underway at SAP.

Vishal Sikka, SAP’s CTO and member of the executive board for technology and innovation, did a superb job of avoiding the usual technology detailed updates by inserting multiple videos declaring testimonials of support for SAP efforts and initial prototyping on HANA based technology in various real world business applications. This was a prelude to the GA release of HANA upcoming in June, and a much more powerful use of messaging, incorporating the voice of customers as the means of communication.  As a side note- many other software providers can benefit from this approach.  We really liked it.

In our summary of last year’s Sapphire, we observed that if successful, SAP’s efforts in in-memory architecture and applications would be a game-changing event for the industry.  This year’s messages, especially those coming from multiple customers, tended to reinforce the potential.  But with anything dramatically new and innovative, the real proof comes in the actual mainstream deployment, and SAP customers seem to be very interested in the potential benefits of HANA.

Vishal again reinforced that the HANA architecture is fundamental to the long-term direction of SAP, and that was reinforced in multiple dimensions by the appearance of Dr. Hasso Plattner, chief technology evangelist and chairmen of the supervisory board of SAP.  Where Vishal leveraged customer testimonials, Plattner directly addressed why SAP is committed to this direction, and more importantly, directly addressed 13 rather candid and direct questions posed by various other customers spanning the direction, benefit, impact and deployment of HANA across the entire SAP suite of software and business applications.

Since this blog is focused on the global supply chain functional and IT teams, we will in this commentary distill some of the more important takeaways for our community.

First, most all of the current customer pilot initiatives and testimonials stem from the IT community.  There were many senior IT executives featured in today’s testimonials.  The ultimate user adoption of HANA will ultimately come from end-user leverage and use, and SAP is still rather distant from that goal.  The potential however remains enormous, particularly in the area of supply chain planning, business intelligence and real-time sensing applications.  That point was driven home in a live demo of a complex ATP check performed by a HANA powered application, which faltered during Hasso’s session.  Hasso assured the audience that it worked earlier.

In his remarks, Hasso declared that within the SAP BusinessSuite, the most strategic effort that SAP can accomplish is to have all planning applications rewritten to take maximum advantage of the capabilities of HANA.  Specifically, Hasso cited SAP APO as the number one priority, with some bantering with Co-CEO Bill McDermott as to whether he agreed.  “It will be faster- trust me, Bill” That is very big news for the SAP Supply Chain installed base community to consider in long-term deployment and future functionality considerations. Vishal also made mention of the again rumored Sales and Operations Planning HANA powered application.  More on this in our later commentaries.

Our impression is that Hasso and the rest of the SAP executive team has set a very aggressive technology direction, described By Hasso himself as the largest technology transformation undertaken by SAP in the last ten years. While many will not be utilizing HANA in the coming months, the longer term potential and implications are significant for the way supply chain response management, fulfillment, execution decisions are performed in the coming years.

It is rather important that SAP customers keep a careful and watchful eye on these efforts, since the technology and functionality gaps could well be significant. For now, gaining a basic understanding of direction and implications should be an agenda item for SAP supply chain teams.

More detailed commentary later, including highlights of an interview held with Steve Lucas, the global sen ior executive leading SAP’s business analytics initiatives.

Bob Ferrari